Jeremy Hunt considers cutting benefits to fund tax cuts ahead of next election

Treasury officials explore options to halt working benefits increase in line with inflation

Jeremy Hunt, the Chancellor of the Exchequer, is considering the possibility of cutting benefits in real terms to create space for tax cuts ahead of the upcoming general election. Treasury officials have presented money-saving options to Hunt, including the suspension of working benefits increases in line with inflation. This strategic move would allow the Chancellor to allocate maximum funds for tax reductions in the Spring Budget next year.

Cabinet Minister warns of potential difficulties in accessing disability benefits

Mel Stride, a Cabinet Minister, recently stated that welfare reforms could make it harder for working-age individuals in Britain to access disability benefits. While the proposed changes would not come into effect until after the next election, it is worth noting that the number of people too ill to work has risen to nearly three million in the aftermath of the pandemic.

Government committed to the triple lock system for state pensions

Ministers have reiterated their commitment to the so-called triple lock system, which guarantees that state pensions increase by the highest of: inflation, wage growth, or 2.5%. However, the Chancellor faces challenges in managing public finances. As of March, Treasury had the smallest headroom on record, with only £6.5 billion available.

Government justifies past benefit increases

In response to criticisms regarding potential benefit cuts, a Department for Work and Pensions spokesperson stated that the government had already raised benefits by over 10% this year to protect vulnerable individuals from the impact of high inflation. The Secretary of State will conduct the statutory annual review of benefits and state pensions in the Autumn using the most up-to-date data.