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UK Government fail to rule out real terms benefits cuts for poorest to pay for tax cuts for the rich

30 Sep 2022 3 minute read
Chancellor of the Exchequer Kwasi Kwarteng. Picture by Aaron Chown / PA Wire

The UK Government has failed to rule out a real terms benefit cut for the poorest in order to pay for the tax cuts for the rich revealed in last week’s mini-budget.

A Conservative former pensions minister says it would be “a travesty” if the Government increased the pensions of the UK’s poorest citizens by less than the consumer price index.

Not lifting benefits in line with inflation would amount to a real terms cut to tens of millions of the poorest in the UK.

The UK Government is scrambling to plug a £45 billion black hole in its finances after markets reacted badly to last week’s tax cuts, including scrapping the higher tax rate for those who earn over £150k completely.

Asked yesterday if benefits would rise with inflation, Chancellor Kwasi Kwarteng said: “It’s premature for me to come to a decision on that, but we are absolutely focused on making sure that the most vulnerable in our society are protected through what could be a challenge.”

Former pensions minister Baroness Altmann responded in the Daily Express: “The pension credit has always been legally required to rise at least in line with earnings inflation, but the Government can choose to do better.

“I believe it must do so. If these poorest older citizens only see their pensions increase by the lower earnings figure, it would be a travesty.

“This is because the Government legislated last year to strip them of their earnings protection and instead replaced it by price inflation up-rating.”

‘Pain’

Baroness Altmann, who served as pensions secretary from 2015 to 2016, added: “I hope the Chancellor recognises that it would be absolutely wrong to betray these pensioners a second time. Many of them are elderly, vulnerable and already struggling to meet rising living costs.

“We owe it to them to make sure they are better protected.”

The Government is trying to reassure markets and voters that the recent economic turmoil is under control.

There have been days of chaos in the financial markets and fears of rocketing mortgage bills sparked by the Chancellor’s mini-budget last week.

On Thursday a charity warned failing to meet a commitment to increase benefits in line with inflation would lead to disabled people “starving and freezing in their own homes”.

Baroness Altmann’s immediate predecessor as pensions minister said those on benefits had “already faced a financial squeeze this year”.

Ex-Liberal Democrat MP Sir Steve Webb said: “People on benefits have already faced a financial squeeze this year, with benefits rising by only 3.1% in April when inflation was about 9%.

“Many will already have tightened their belts and may be relying on credit to manage from week to week,” he added in his letter to The Times’ editor.

“There is only so much pain that these groups can be expected to bear to make the Chancellor’s sums add up.”


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Cathy Jones
Cathy Jones
2 months ago

Once again, the Tories show their hatred for anyone not them.

ENOUGH IS ENOUGH.

TORIES OUT…NOW!

Ex Plaid member
Ex Plaid member
1 month ago
Reply to  Cathy Jones

Just curious what is the mechanism you had in mind ?
I agree but am at a loss for a legal path forward in less than 2 years

The original mark
The original mark
1 month ago

Why worry about legal, the tories don’t?

Jim
Jim
1 month ago

The best protection for wealth and property is not the various arms of the law or even the application of state violence, but is actually a stable and functional society where the vast majority of the people believe they have a genuine vested interest in the maintenance thereof.

These half-baked clowns should reflect on that.

Kerry Davies
Kerry Davies
1 month ago

Billions to millionaires, death to the disabled.
People actually vote for that? Sick.

Kerry Davies
Kerry Davies
1 month ago
Reply to  Kerry Davies

News just in;
EU energy ministers have agreed to impose windfall taxes which could raise £123Bn.

Liz Truss still rules this out.

Mab Meirion
Mab Meirion
1 month ago

50 million bullied, bankrupted, starved, made homeless and put at risk of pneumonia and hypothermia by this fellow and his halloween blow up doll…

Mab Meirion
Mab Meirion
1 month ago
Reply to  Mab Meirion

One thing we now know is that the no 2 at the treasury Andrew Griffith will lie for The Lone Ranger and Tonto without a qualm…

Mab Meirion
Mab Meirion
1 month ago
Reply to  Mab Meirion

Rupert Soames, (grandson of Winston Churchill) the boss of Serco must have given old Fat Shanks’ ear a proper bashing over the antics of the Lone Ranger and Tonto over Serco’s pension problem…talk about treading on toes!

The original mark
The original mark
1 month ago

This feels like the 80s again, very worrying times ahead of us.

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