Chancellor Rishi Sunak’s Spring Statement featured measures including a cut to fuel duty and a rise in the National Insurance threshold. Notably absent, however, was any plan to match soaring prices with a rise in benefits.
New figures released today (23 March) by the Office for Budget Responsibility show that inflation is expected to average 7.4 per cent in 2022 and 8 per cent over the coming financial year. Benefits, however, are due for a rise of just 3.1 per cent in April – meaning a real-terms cut for millions of Britons.
Universal Credit, child tax credits and working tax credits are all forecast to be cut by 5.8 per cent in real terms over the next year, while Job Seeker’s Allowance and child tax credits will fall by 5.9 per cent. Carer’s Allowance, meanwhile, will see a real-terms cut of 5.7 per cent.
The government’s planned 3.1 per cent rise in benefits is based on inflation figures from last September, before the war in Ukraine sent oil prices to record highs and threatened to disrupt the global food supply.
In his speech to the House of Commons, Sunak warned that the West’s sanctions against Russia would not be “cost free” and would be reflected in a rising cost of living. For now, however, the government appears content to let Britain’s poorest shoulder that burden.