Home News Dilemma For Liz Truss – Should Benefits Rise In Line With Inflation (9.9%) Or Workers’ Wages?

Dilemma For Liz Truss – Should Benefits Rise In Line With Inflation (9.9%) Or Workers’ Wages?

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Both former PM Boris Johnson and Chancellor Rishi Sunak  promised that benefits would rise with inflation. However, speaking in her first BBC interview since her U-turn on plans to scrap the 45p rate of tax for higher earners, PM Liz Truss has refused to say whether this Tory pledge would be honoured.

Certain benefits, including disability benefits and carer’s allowance, must increase in line with inflation by law. However, for working-age benefits like universal credit the PM said that no decision had yet been made on whether a rise will be linked to prices or wages. However, it is reported that the PM has been making clear she wants to uprate benefits in line with earnings rather than inflation next year, meaning a real-terms reduction. Senior sources argue it would be unfair to go beyond what workers are receiving, and the move will save the government around £7billion.

The benefits that would see a real-term pay cut if they were to rise in line with average earning s and not inflation are:

  • Income based job seekers allowance
  • Income related employment & support allowance
  • Income Support
  • Tax Credits (Child Tax Credit & Working Tax Credit)
  • Housing Benefits
  • Council Tax Support
  • Social Fund (Sure Start Maternity Grant, Funeral Payment, Cold Weather Payment)
  • Universal Credit

Many Tory MPs from Red Wall constituencies have said that failing to keep benefits in line with rising prices would leave some of the poorest households in their areas facing a real-terms massive cut in their incomes.  This would come as energy, food and housing costs are soaring.

However,  Tory MPs from more affluent areas say it does not seem fair for those on benefits to get inflation-linked increases of as much as 10%, while public and private sector workers are offered pay rises of 2% to 4%.  They say that workers are likewise facing huge hikes to their everyday living costs – and earning are not keeping pace. One Cabinet member, Suella Braverman,  made an outspoken appearance on the conference fringe, condemned the UK’s ‘Benefit Street culture’.

This comes as it has been revealed that departing Conservative ministers including Boris Johnson and Rishi Sunak are in line for redundancy payments totalling more than £410,000. Under the Ministerial and Other Pensions and Salaries Act 1991, those resigning from office are entitled to 25 per cent of the annual salaries they were paid when holding that office.

 

1 comment

Bethan October 5, 2022 - 4:12 pm

Liz truss should NOT DISCRIMINATE AGAINST THE DISABLED OR THE ELDERLY
MAYBE SHE SHOULD LIVE IN OUR SHOES
WHILST THEY PARTY AND SPEND £10000.00
SHE SHOULD TRY IT ON THE OTHER SIDE OF THE COIN

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