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calendar icon11 Sep 2023

Government ‘considering benefits cuts’

The government is considering a move which will amount to a cut in benefits, sources close to the UK chancellor, Jeremy Hunt, have told Bloomberg.

Benefit cuts to allow for lower taxes

One of the options Mr Hunt is reportedly considering unveiling in his fiscal statement on 22 November is raising benefits at a level below the rate of inflation. This would effectively mean benefits would be worth less than they are now.

The anonymous sources said the move would allow Mr Hunt to free up money for tax reductions ahead of the general election that is widely expected next year.

Government non-committal

A statement from the government said the most vulnerable had been protected with a 10% rise in benefits this year and a decision on next year’s uplift will be made “using the most recent data available”.

There must be a general election by January 2025 and Prime Minister Rishi Sunak is coming under increasing pressure from within his party to cut taxes.

Double standards?

The government may open itself up to criticism though, especially as it has pledged to stick to the state pension triple-lock guarantee. This means payments to pensioners – who are generally wealthier and more likely to vote Tory – will go up by the highest of three figures:

  • the rate of inflation
  • the average rise in wages
  • 2.5%
Avatar of Rebecca Routledge

Rebecca Routledge

A qualified journalist for over 15 years with a background in financial services. Rebecca is Money Wellness’s consumer champion, helping you improve your financial wellbeing by providing information on everything from income maximisation to budgeting and saving tips.

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