Raise benefits in line with inflation before next April, Government told

Campaigners have warned leaders not to ‘abandon children when they need support the most’, with figures showing inflation reached 10.1% in September.

Jemma Crew
Wednesday 19 October 2022 18:00 BST
Ministers are facing calls to stick by the former chancellor’s pledge to uprate welfare payments in line with inflation (Dominic Lipinski/PA)
Ministers are facing calls to stick by the former chancellor’s pledge to uprate welfare payments in line with inflation (Dominic Lipinski/PA)

The Government has been urged to bring forward increases to benefits rather than wait until next April to ensure the poorest families do not go hungry or cold this winter.

Campaigners have warned leaders not to “abandon children when they need support the most”, with ministers facing calls to stick by the former chancellor’s pledge to uprate welfare payments in line with inflation.

In May, Rishi Sunak said benefits would be uprated by this September’s Consumer Prices Index (CPI), subject to a review by the Work and Pensions Secretary.

Figures published on Wednesday by the Office for National Statistics (ONS) show this to be 10.1%.

The Government has so far not ruled out taking a different course, with reports suggesting benefits could instead go up in line with the average increase in workers’ pay.

New Chancellor Jeremy Hunt said he will prioritise help for the vulnerable after the inflation increase was revealed.

The Joseph Rowntree Foundation said Mr Hunt should confirm today if benefits will be uprated in line with Wednesday’s CPI figure – and the Government should bring increases forward to help people over winter.

Chief economist Rebecca McDonald said: “It is morally indefensible that the Government should still be considering leaving people with even less ability to pay for what they need, when their own party pledged to make sure the value of benefits keeps up with prices only months ago.

“The Chancellor has it in his power to assuage the fears of millions, by confirming today that benefits will be uprated in full and ahead of April.”

Becca Lyon, head of child poverty at Save the Children, said parents the charity supports are breaking down in tears when opening empty cupboards and skipping meals so they can feed their children.

She said: “The UK Government has an opportunity to provide some much-needed reassurance to help parents and their children through this crisis and must commit to uprating benefits in line with inflation right now.

“It cannot wait until April – targeted support for low-income families is needed now to ensure children do not go hungry or cold this winter.”

Alison Garnham, chief executive of the Child Poverty Action Group, said it is critical benefits rise in line with inflation.

“Government must not abandon children when they need support the most,” she added.

The Government did not say, when asked, when its decision will be announced.

Former chancellor Kwasi Kwarteng previously said it would be announced during his medium-term fiscal plan on October 31 – but neither the Treasury nor the Department for Work and Pensions was able to confirm if Mr Hunt will stick to this arrangement.

The Institute for Fiscal Studies said that, even if the Government uprates benefits in line with inflation, their real value would be 6% below pre-pandemic levels – equivalent to almost £500 per year for the average out-of-work claimant.

Research economist Heidi Karjalainen said: “This is a consequence of below-inflation increases in April this year, when benefit rates failed to keep pace with an accelerating rate of inflation.

“The situation for benefit recipients’ living standards next April could be even more difficult depending on the design of the energy support package in place from next April.”

It said the Government should use more up-to-date information to uprate benefits, to avoid claimants waiting long periods for payments to catch up with prices.

The Government must not abandon disabled people at this critical time

James Taylor, Scope

Jack Leslie, senior economist at the Resolution Foundation, said family incomes will continue to “fall sharply” next year.

On uprating benefits and pensions, he said: “While the significant Treasury savings may look tempting in the context of its attempts to fill its fiscal hole, the cost to 10 million working-age families and almost every pensioner would be huge amid the deepest cost-of-living crisis for half a century.”

Disability charities said a decision not to uprate benefits by inflation would be “disastrous” for struggling households.

James Taylor, director of strategy at disability equality charity Scope, said: “The Government must not abandon disabled people at this critical time.”

Gemma Hope, director of policy at Leonard Cheshire, added: “The Government must stick to its words and support those in the greatest need.”

The chairman of the Work and Pensions Committee, Sir Stephen Timms, who has written to Mr Hunt asking to meet before the end of the month, said the approach to benefits “remains shrouded in uncertainty”.

He said: “With the decision this week to end the energy price guarantee after just six months adding to the unpredictability about the future, it is now more urgent than ever for the Chancellor to give some much-needed reassurance to people by guaranteeing that benefits will rise with inflation as previously pledged.”

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