Iain Duncan Smith calls for benefits to be increased with inflation

Ex Tory leader Iain Duncan Smith calls for benefits to be increased in line with inflation to provide ‘shield’ against cost-of-living crisis

  • Mr Duncan-Smith made the call in a report by the Centre for Social Justice
  • He says that the cut to the Universal Credit taper will be eaten up by inflation
  • It is the latest challenge to the Government’s cost-of-living crisis strategy  

Former Tory leader Sir Iain Duncan Smith has called on the Government to raise benefits in line with inflation to help poorer families cope with the cost-of-living crisis.

In a foreword to a report by his Centre for Social Justice think-tank, Mr Duncan Smith said that the Universal Credit taper cut in April will be eaten up by inflation to still leave claimants worse off.

He suggests that a way to make sure these families are not left behind is ‘an emergency in-year uprating, bringing UC into line with inflation to ensure it covers the true cost of living’.

Universal Credit rose 3.1 per cent for the year at the start of April – despite inflation now running at 9.1 per cent compared to this point last year according to the Consumer Price Index (CPI).

In a foreword to a report by his Centre for Social Justice think-tank, Mr Duncan Smith said that the Universal Credit taper cut in April will be eaten up by inflation to still leave claimants worse off

Mr Duncan Smith told Sky News: ‘During the course of this spike, we should make sure we bring those benefits that are relevant to those people who are in need up to be able to afford to pay bills that are going to be higher’.

The report comes as the CSJ sugggested: ‘Rolling out Universal Support would help to move those on UC with work expectations into work, meaning fewer households depending on UC to shield them from inflation.’

The call comes after staunch Johnson supporter Michael Fabricant also called for benefits to be uprated.

Mr Fabricant tweeted four days ago: ‘Benefits need to be updated much sooner rather than later.

‘As Rishi knows, whether in business or in private life, cash flow is everything and relief needs to be applied now.’ 

These latest interventions come as the Government is under pressure to increase measures to mitigate the inflation crisis – including calls to implement a windfall tax on energy companies who have made record profits.

No10 is reportedly blocking Chancellor Rishi Sunak from imposing the windfall tax because it is ‘un-Conservative’, it emerged on Thursday.

Boris Johnson’s aides are said to be holding out against the levy even though the Treasury believes it is ‘politically unavoidable’.

The standoff between the PM and Chancellor comes after weeks of growing Cabinet tensions over the response to the cost-of-living crisis.

Inflation hit the 40-year high of 9 per cent on Wednesday, with energy and food costs driving the rise. The headline CPI rate is forecast to reach double digits by the end of the year amid the worst squeeze on incomes for a generation. 

However, the government has been trying to hold off announcing a fresh package of support until August when the Autumn cap on gas and electric bills will be set.      

Ministers initially dismissed the prospect of a windfall tax, which has been demanded by Labour to raise £2billion, warning it would harm investment.

However, Mr Sunak pointedly put the idea ‘back on the table’ insisting he would be ‘pragmatic’ about ways to help Britons make ends meet amid soaring bills. 

Boris Johnson’s aides are said to be holding out against the levy even though the Treasury believes it is ‘politically unavoidable’ (pictured, the PM and Rishi Sunak at PMQs yesterday)

The headline CPI inflation rate hit a 40-year high of 9 per cent yesterday, with energy and food costs driving the rise

According to the Times, Treasury officials are convinced a windfall tax is now ‘politically unavoidable’, with internal polling showing it would be very popular with voters even though the money raised might be relatively small.

The department is increasingly convinced that investment in the UK would not be hit after the head of BP said a levy would make no difference to its plans.    

However, No10 aides have stuck to their position that a one-off charge simply because firms are making large profits at the moment is ‘ideologically un-Conservative’. 

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