Minister suggests benefits may not be uprated in line with inflation

Government departments have been reportedly asked to make plans for efficiency savings

The British government may not hike benefits in line with the rising inflation, treasury secretary Chris Philp has suggested, in a possible U-turn on former chancellor Rishi Sunak’s commitment.

Mr Philp on Wednesday said that the pledge to uprate the benefits in line with inflation was under consideration after reports claimed that different departments were asked to chalk plans for efficiency savings.

He insisted that the government's plans to cut taxes to the benefit of the most wealthy will remain in place.

The former chancellor in May promised to increase benefit and pension payments in April 2023 by the rate of inflation in September. The inflation rate in the UK stands close to 10 per cent.

”We are going to look for efficiencies wherever we can find them,” Mr Philp told ITV’s Peston when asked about his department's saving plans.

He added the objective of the exercise would be to make sure that the government remains within its existing three-year spending limits.

”Those efficiency savings will firstly make sure we do stick to those spending limits,” Mr Philp said, adding: ”It will enable us, within those spending limits which we are going to stick to, to target things which are going to stimulate growth.”

The minister defended the cut to the 45p rate of income tax, which is set to have most benefit for high earners, claiming it was only “one-twentieth” of the “fiscal firepower” that was announced last Friday.

When pressed about the decision on uprating benefits, Mr Philp said: “I am not going to make policy commitments on live TV, it is going to be considered in the normal way.

"We will make a decision and it will be announced I am sure in the first instance to the House of Commons.”

Consumer champion Martin Lewis said he was “very concerned” that the government was not committed to following through on the promise to uplift benefits with inflation.

“Even the dire optics of balancing that against high earner tax cuts, pales compared to the devastating way it’d pull folk into real poverty,” he tweeted.

Liz Truss is under pressure after her tax giveaway mini-budget caused economic turmoil, which forced the Bank of England to intervene in order to prevent a crisis in the UK’s major pension funds.

The Bank of England on Wednesday launched an emergency government bond-buying programme to prevent borrowing costs from spiralling out of control and stave off a “material risk to UK financial stability”.

It comes a day after chancellor Kwasi Kwarteng vowed to push on with the government’s radical borrowing-fuelled £45bn tax cut spree, despite growing calls to change course.