Over 5,000,000 households to get up to £470 payment increase next year
Jeremy Hunt has said the government will increase Universal Credit, which bundles most benefits into one, slightly above inflation.
Hunt, who even after Rishi Sunak’s cabinet reshuffle stayed on as Britain’s bearer of bad news, unveiled his new budget to the House of Commons this afternoon.
‘Rather than a recession, the economy has grown,’ the chancellor told MPs to cheers, ‘but the work is not done.’
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The chancellor increased (or as it’s often called, uprate) benefits by the September inflation rate of 6.7%.
This applies to working-age, means-tested benefits, such as Universal Credit and disability benefits.
That’s an ‘average increase of £470 a year for five and a half million households’,’ the chancellor said.
It was assumed that as he tightens the government’s purse strings, Hunt would only do this by 4.6%, last month’s slightly slowed down inflation rate.
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‘I will therefore increase the local housing allowance rate to the 30th percentile of local market rents,’ he told the Commons.
‘This will give 1,600,000 households an average of £800 of support next year.’
But this still means welfare cheques won’t catch up to what they were before the pandemic until at least 2026, amounting to a real-term cut.
Sam Ray-Chaudhuri, of the Institute for Fiscal Studies (IFS) think-tank, said yesterday: ‘They would never get back to where they were without subsequent changes in policy.
Opposition politicians and campaigners have spent months calling on the government to thaw out unemployment and disability benefits as costs of food and other necessities continue to climb.
As much as inflation is in no way near the nauseating double-digit highs it was last October – now standing at 4.6% – experts stress this means prices are rising, just not as fast as before.
Food inflation, among the biggest driving forces of higher prices, has slowed in recent months but is still at 10.1%.
The Treasury said in a statement on X: ‘This will support families during these challenging economic times.
‘This will support families during these challenging economic times.’
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