Rishi Sunak’s ‘retreat’ on universal credit is no such thing

As the prime minister refuses to say he could live on £118 a week, John Rentoul looks at the reality of a partial U-turn

The chancellor may increase the benefit in the Budget (AFP/Getty)

Rishi Sunak, the chancellor, and Therese Coffey, the work and pensions secretary, are understood to be in talks about a plan to increase universal credit in the Budget next month, as a way of softening the blow of losing the £20-a-week uplift.

I would guess that the prime minister is keen on the Treasury doing something to try to buy off discontent among Conservative MPs on this subject, having avoided taking the risk of putting the £20-a-week cut to the vote in the House of Commons.

The compromise is politically ingenious, in that it can be presented as increasing incentives to work and to work longer hours, while costing relatively little. You can tell it is clever, because it was proposed a month ago by Jonathan Reynolds, Coffey’s Labour shadow. He was looking for a way to move the argument on after the cut came into effect, knowing the opposition’s strong instinct for “bring backery” – he wanted to avoid locking the party into a position of simply arguing for the £20-a-week uplift to be restored. He knows that once the £20 has gone, the best way of using extra resources in the benefits system is not necessarily a flat increase on the basic rate of universal credit.