Sunak Hints at UK Benefits Cut After ‘Huge’ Rise in Payments

Sunak Hints at UK Benefits Cut After ‘Huge’ Rise in Payments

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(Bloomberg) — Prime Minister Rishi Sunak said British welfare claimants saw a “huge” rise in their benefits this year, and signalled that real-terms cut could be on the cards ahead of the general election.

Sunak said he wanted to “reassure families” who receive benefits that he was “always going to make sure that we look after the most vulnerable,” after Bloomberg reported he is considering a smaller increase than usual to welfare payments.

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Read More: UK Weighs Curbing Benefits Rise to Give Room for Spring Tax Cuts

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Sunak is facing growing internal pressure from his governing Conservative Party to lower taxes ahead of a general election. But higher interest rates have wiped out fiscal headroom, leaving the government searching for savings elsewhere.

Options drawn up ahead of a fiscal statement on Nov. 22 include breaking with the normal practice of lifting working benefits in line with inflation, people familiar with the plans previously told Bloomberg. The aim is to give Chancellor of the Exchequer Jeremy Hunt the maximum room to cut taxes in his spring budget, they said.

Speaking to reporters in New Delhi, India, where he is attending the G-20 summit, Sunak did not contest the report.

“Benefits this year have gone up by 10%, which is a huge amount, obviously,” Sunak said. That’s equivalent to about £600 ($748) for a typical person on Universal Credit and more than £800 pounds for the state pension, he added. 

Sunak said that on top of welfare payments, the government had offered other types of assistance to the poorest Britons, including with energy bills.

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“There’s lots of different ways to get support to the people who need it,” he said.

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