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Government Sets End Of November Date For Benefits Decision Despite Pressure From Tory Rebels

Work and pensions minister Victoria Prentis confirmed the decision on raising benefits by inflation or earnings will not be announced until the end of November (Alamy)

4 min read

A decision on whether to raise benefits in line with inflation or earnings will not be announced until the end of November, Work and Pensions Minister Victoria Prentis has confirmed.

In recent days, Prime Minister Liz Truss has faced significant pressure, including from senior ministers, to guarantee benefits will rise in line with growing inflation rather than wages to prevent welfare claimants facing large real-term cuts in payments.

A clear Cabinet divide on the issue emerged at Conservative party conference last week, after Commons leader Penny Mordaunt and Business Secretary Jacob Rees-Mogg said they backed the inflation rise of welfare payments, but Truss is believed to be opposed to the rise. 

Downing Street insists that Truss is undecided on the issue as the government looks to reduce spending in order to pay for tax cuts that are currently funded by massive public borrowing.

Prentis this morning indicated that a final decision is now expected until the end of November, after Work and Pensions Secretary Chloe Smith has considered average wage data, due this week and new inflation numbers next week.

"[Smith] can't do anything until those figures have come and she will then consider how to, if at all, uprate benefits and what figure to choose,” Prentis told Sky News.

“She has a very wide discretion to do that. We make a decision and we communicate it usually by the end of November.

"It's obviously a really worrying time for people on benefits because they know that inflation is rising. And they want us to make this decision as soon as we possibly can so that they have the security of knowing how their benefits will be next year."

But there is frustration among MPs that the ongoing row over benefit payments could prove damaging to the embattled government, leading to pressure that Truss guarantees sooner rather than later that benefits will rise in line with inflation. 

A number of Tory rebels, emboldened by forcing the U-turn on plans to abolish the top rate of income tax, are now pushing for the government accept the inevitability of an inflation-matched rise and simply get on with it. 

“Just say you're going to raise benefits by inflation, because you're going to have to do it anyway, so just say it and don't don't make us fight for the next three months," a former minister told PoliticsHome.

Former health secretary Sajid Javid, whose resignation recently triggered Boris Johnson's exit from Downing Street, is among prominent backbenchers who believe benefits should rise with inflation. 

"People are going through incredibly challenging times. We can all see that in our community," he told BBC Radio 4's Today programme. 

“I personally believe that benefits must stay in line with inflation."

He also said he would "definitely encourage" Kwasi Kwarteng to bring forward the proposed 23 November date for publishing data from the independent Office for Budget Responsibility. The Chancellor is under pressure to release the data, which the government has now seen, in order to justify his sweeping tax cuts that caused market chaos when announced to the Commons last month. 

“I think the sooner the better, as far as the markets are concerned,” Javid added. 

Baroness Philippa Stroud, Conservative peer and chief executive of the Legatum Institute, warned the government "you don't build growth on the back of the poor".

She told BBC Radio 4 that post-Covid, the £20 uplift in Universal Credit was removed, and the last uprating was below inflation again, so “already you've got welfare at historic lows at this moment in time”.

"The public knows that. They get this sense that there's something not right in the welfare state at this moment in time," Stroud added. 

"So, we would say stop this argument and make sure that we uprate in line with inflation."

But Prentis has said the Tory party should move on from "internal squabbling" as the UK faces a "challenging" winter.

Truss is believed to be mounting a charm offensive this week in order to regain the support of rebellious MPs, many of whom supported Rishi Sunak to become prime minister, in order to shore up her fragile leadership. 

There has been some criticism that Truss mostly appointed her own supporters to government positions, which has exacerbated tensions with the Sunak-backing rebels. 

But Prentis, who supported Sunak for the leadership, dismissed the accustion. 

"I very much backed the other guy over the summer and I'm a member of the government, and I'm pleased to be able to serve in government," she told Times Radio. 

"That's very much what we were elected to do. What we need to do is focus a bit less on internal squabbling and a bit more on helping the country through some really difficult times."

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