Stride asked the chancellor if he had considered increasing social security payments to be in line with the cost of living, instead of pinning the planned increase to inflation figures which are now nearly five months out of date.
However Sunak blamed the computer system used by the Department for Work and Pensions, explaining that there is a “four to five month policy lag between making a decision and implementing it”.
He added: “The wider point is about borrowing and what is responsible. [Increasing public spending] risks stoking inflation even further, harming the people we’re trying to help.
“Someone else could’ve said they’d rather spend the money on the welfare system. That’s absolutely a choice someone else could have made.”
The chancellor also referred to an increase in the taper rate for universal credit, announced in October, which means workers on the benefit get to keep more of their earnings. But he also went ahead with a widely-condemned £20-per-week cut to universal credit in the same month – and now insists cutting taxes is his priority, not increasing welfare funding.
“I think the other policies we’ve got to help people on welfare are the right way to do that,” he told the committee. “The analysis is clear that the actions taken by this government are very progressive.”
UK families are facing the biggest drop in household incomes for 50 years, according to Resolution Foundation analysis, leaving most an average £1,000 worse off per year.
This means the pandemic “may actually have been as good as it gets” in terms of average incomes for at least the first half of the 2020s, the report said.
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Sunak told MPs the predicted drop in living standards – which experts warned could be the biggest fall since records began – is driven entirely by global forces and beyond his control, and that people should not “speculate” about further energy price cap increases later this year.
The government announced a support package – of a £150 council tax rebate for this April followed by a £200 repayable “discount” on energy bills on October – which left anti-poverty experts underwhelmed.
“You’ve made a political decision to plunge 1.3 million people, including half a million children, into absolute poverty,” said Labour MP Angela Eagle. “That is what you’ve chosen to do in your Spring Statement.
“A single person caring for their parents, whose main source of income is £67 in weekly carers’ allowance, are not going to be able to accommodate a huge energy bill are they? You’ve not helped them.
“You’ve cut social security benefits by £12bn in real terms. That doesn’t seem the best way of approaching this vicious increase in the cost of living.”
But Sunak defended his record in government, describing himself as “a chancellor who has had to deal with a pandemic”.
“The choice we had was either to cut public spending or continue to deliver on those plans to improve people’s living standards, but make sure it was paid for,” he said.