This month the government increased benefit payments by just 3.1 per cent – tied to economic figures recorded last September – despite forecasts that inflation could reach above 8 per cent within weeks as campaigners warn that families are already being forced to choose between food and heating their homes.
Both the chancellor and the prime minister told MPs the government was choosing to focus on getting more people into work rather than increasing their spending on the welfare system, while Sunak admitted the Department for Work and Pensions’ system creates a “four to five-month lag” between benefits decisions and implementing them.
Ministers have pointed to the Household Support Fund, a cash pot recently increased by £500m for local authorities to support people in need through ad-hoc vouchers or grants, as a way they are helping people in poverty through the cost of living crisis.
But this is a “measly sum that does not come close to addressing the gap between rising costs and the falling value of support”, Sarygulov said. The think tank’s report outlined that the benefits increase amounts to a real-terms cut as the cost of essentials soars.
While people who voted for Labour in the 2019 general election were more likely (83 per cent) to back the idea that benefits should pay enough to cover essentials, the research showed cross-party consensus and 68 per cent of Conservative voters also in support.
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Bright Blue analysts also called on ministers to increase the value of the Warm Home Discount to match the rise in energy bills, warning that many more households will “struggle and become much poorer” without further government intervention.
Responding to the study, a government spokesperson said: “We recognise the pressures people are facing with the cost of living, which is why we’re providing support worth £22bn across the next financial year.
“This includes putting an average of £1,000 more per year into the pockets of working families via changes to universal credit, cutting fuel duty and helping households with their energy bills.
“We have also boosted the minimum wage by more than £1,000 a year for full-time workers and are raising national insurance thresholds so people keep more of what they earn, while our £1bn Household Support Fund is helping the most vulnerable with essential costs.”