With the government under market pressure to spell out how it will reduce medium term borrowing, not least in the light of its recently announced tax cuts, the prime minister has this morning refused to rule out a real term cut in benefit payments.
Speaking on the BBC Radio 4 ‘Today’ programme this morning, Truss said, “I do think we need to recognise first of all that people are struggling and it is a difficult time. I have every sympathy with people who are facing increased bills whether it’s on food whether it’s on housing whether it’s on energy”.
However when pressed as to whether the government would increase benefits in line with inflation, Truss was non committal saying, “What we are doing is looking at these issues very carefully and that is an announcement that will be made in due course”.
Although citing her recent energy announcement, Truss said that she was “very committed to supporting the most vulnerable”, the prime minister also said, “We are going to have to make decisions about how we bring back down debt as a proportion of GDP in the medium term.”
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In May this year, then-chancellor Rishi Sunak said benefits would be up-rated by this September’s Consumer Prices Index measure of inflation.
The chancellor yesterday also declined to commit to the up-rating of benefits in line with inflation, albeit the government has given a commitment to do so on pensions, thereby maintaining the so called ‘tripple lock’.
Following the announcement of plans to reverse the planned abolition of the 45p rate of income tax, the decision on benefit levels, now looks like the next political show down for the government.
The Conservative MP Mel Stride, who chairs the Commons Treasury Committee, said it would be “a really tough call to make” if he was asked to vote for uprating benefits in line with wages rather than inflation.
Labour’s shadow chancellor Rachel Reeves said: “The idea that the government can afford to give tax cuts to the wealthiest, but not up-rate benefits in line with inflation, I think is grotesque.”
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