UK Government warned of ‘devastating’ impact of failing to uprate benefits in line with inflation

U-turning on a commitment to increase benefits in line with inflation would lead to disabled people “starving and freezing in their own homes”, a charity has warned.

As the Government looks to cut spending, neither Chancellor Kwasi Kwarteng nor Treasury minister Chris Philp confirmed whether benefits will be increased in line with spiralling inflation.

In May this year, then-chancellor Rishi Sunak said benefits would be uprated by this September’s Consumer Prices Index (CPI), subject to a review by the Work and Pensions Secretary.

Asked during a visit to Darlington if benefits would be uprated in line with inflation, Mr 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.”

Mr Philp told ITV’s Robert Peston that the matter is under consideration.

Pressed, he 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.”

Support

Charities for children and disabled people urged the Government to honour its promise and said people need support “that is realistic and actually enables them to pay the bills”.

Every year, the Work and Pensions Secretary must review the level of benefits.

This takes into account prices and earnings indices from September, and an announcement on changes is usually made in November, coming into effect the following April.

The Social Security Administration Act 1992 sets out that, if prices have increased over the review period, they should increase certain benefits by at least this rate for the next tax year.

This includes disability benefits such as Personal Independence Payment, Attendance Allowance, Disability Living Allowance, Carer’s Allowance, Incapacity Benefit and others.

They may also increase other benefits if they deem it appropriate, “having regard to the national economic situation and any other matters” they consider relevant.

Benefits that fall into this category include Universal Credit, Jobseeker’s Allowance, Employment and Support Allowance and Income Support.

However, the legislation says the Government is not required to increase benefits by an amount that “would be inconsiderable”.

And the Work and Pensions Secretary can adjust the amount of the increase “to round any sum up or down to such extent as he thinks appropriate”, it states.

Legislation

The Government can also introduce legislation to enable a change, as it did when it froze certain benefits for four years in 2016.

James Taylor, director of strategy at disability equality charity Scope, said: “If the government u-turns on this promise, it would be devastating and lead to disabled people starving and freezing in their own homes.”

He said many disabled people have no choice but to rely on benefits, and have seen real-terms cut after cut.

He continued: “Refusing to increase benefits in line with the true inflation rate would show an utter disdain towards people who need this support.

“The government must stick to its promise to increase benefits in line with inflation, and provide much more direct financial support now to disabled people at the sharp end of this crisis.”

Child Poverty Action Group chief executive Alison Garnham said: “Children are already going hungry as costs soar – unless benefits are uprated to match inflation, they will also become the casualties of a collapsing economy.

“Struggling families will not forgive a chancellor who comes to them for efficiency savings when their cupboards are already bare.

“Families have lost enough; they need support that is realistic and actually enables them to pay the bills.”

Horrified

Anastasia Berry, policy manager at the MS Society and policy co-chair of the Disability Benefits Consortium, said the groups are “horrified that the Government is considering breaking a promise to disabled people while at the same time giving a tax break to millionaires”.

She said: “So far the new Government has dangerously overlooked disabled people and it must reaffirm the pledge made earlier this year to raise benefits in line with inflation.

“This should be the bare minimum to support those we know are already at breaking point.”

The Joseph Rowntree Foundation said it is “shocking” that the Government may not uprate benefits by inflation.

Senior policy adviser Iain Porter said: “Many people across the UK will agree it is morally indefensible that the Prime Minister would choose to give tax cuts to the richest funded on the backs of the poorest in our society.

“Those who will lose out if the Government continues down this track include people with low earnings, families with children, carers and people who are sick or disabled.”

The Treasury and the Department for Work and Pensions were both approached for comment.