Plaid Cymru call for benefits uplift to help the poorest in next week’s Budget

Plaid Cymru is urging Chancellor Jeremy Hunt to commit to a £25 uplift to help some of the poorest people in Wales to survive the current cost-of-living crisis.

Ahead of the Autumn Budget next Thursday, Plaid Cymru Work and Pensions spokesperson, Hywel Williams has written to the Department for Work and Pensions urging the uplift to benefits, as well as uprating them in line with inflation, and maintaining the triple lock for the state pension.

In his letter to the Secretary of State Mel Stride, Mr Williams called for “practical, immediate reforms which will provide financial and mental relief to thousands of people in Wales who currently fall through the social security net.”

He said that “the Government must go beyond inflation rises and uplift the value of benefits as they did during the Covid-19 pandemic”.

Data

Mr Williams also highlighted Resolution Foundation data showing that even if all benefits are uprated in line with inflation, the real disposable incomes of the poorest may fall by 11 per cent next year, the biggest drop on record and wiping out all income growth accrued over the past twenty years.

In the letter, the MP for Arfon wrote: “Clearly, it is low-income households who are facing the brunt of the increased cost-of-living. They are more likely to spend a greater proportion of their income on essential items, the prices of which have increased at a higher rate.

“The Institute for Fiscal Studies estimated that inflation in October 2022 was 14% for the poorest UK households compared to 10% for the richest.

“Wales in particular has higher levels of poverty.  For example, Wales has the highest number of children in relative income poverty across the nations of the UK at 34%. On the other end of the age spectrum, almost one in five older people in Wales are living in poverty and incomes are shrinking in real terms week by week as the effects of inflation continue.

“In this context it would therefore be unthinkable for the Government to remove support for low-income households.”

Recession

Next weeks Autumn statement comes after official statisticians published data on Friday which indicated the UK may have entered what experts say could be the longest recession in a century.

Figures published by the Office for National Statistics (ONS)  said the economy shrank by 0.2% between July and September and gross domestic product (GDP) fell by 0.6% in September, in part due to the Queen’s funeral.

It added to a 0.2% drop for the full quarter – lower than had been expected as the ONS revised its estimates for July and August.

They are the biggest quarterly and monthly falls since early 2021 when the UK went back into lockdown to combat the Covid-19 virus, the ONS said.

If the economy also shrinks in the final three months of this year – as experts predict – it would push the economy into a recession that could last for two years.

It would also be the first time since 1975 that the UK has gone from one recession to another so quickly, economists at the Resolution Foundation said.

Jeremy Hunt said: “I am under no illusion that there is a tough road ahead – one which will require extremely difficult decisions to restore confidence and economic stability.

“But to achieve long-term sustainable growth, we need to grip inflation, balance the books and get debt falling. There is no other way.”

Worrying

Shadow chancellor Rachel Reeves said the latest GDP figures were  “extremely worrying”.

The Labour MP said: “Today’s numbers are another page of failure in the Tories’ record on growth, and the reality of this failure is family finances crunched, British businesses left behind, and more anxiety for the future.

“We’re already set to be near the bottom of global league tables on growth, but all the Tories offer yet again is austerity.