Benefits must go up in line with inflation because “you don’t build growth on the back of the poor”, one of the Tory architects of Universal Credit has warned Liz Truss.
The prime minister is considering increasing benefits by average earnings rather than the rate of inflation in a bid to save the public purse around £5 billion.
At the moment, wages are going up by 5.4 per cent, around half the rate of inflation.
That has sparked a furious backlash from Tory MPs, who have threatened to vote against the move.
Baroness Philippa Stroud, the Conservative peer and chief executive of the Legatum Institute think-tank, said on Monday welfare was already “at historic lows”.
Stroud, who helped to set up Universal Credit alongside Iain Duncan Smith, pointed to research by her think tank which showed that 450,000 people would be pushed into poverty if benefits are cut in real terms.
“The public knows that. They get this sense that there’s something not right in the welfare state at this moment in time,” she told BBC Radio 4′s Today programme.
“So, we would say stop this argument and make sure that we uprate in line with inflation.”
The Tory peer added: “You don’t build growth on the back of the poor. Actually, it’s important that at a time when you’re going for growth, you really protect the poorest in this country.”
Sajid Javid, who backed Truss's Tory leadership bi, also said this morning that benefits “must” be raised in line with inflation.
“People are going through incredibly challenging times. We can all see that in our community. So, I personally believe that benefits must stay in line with inflation,” he told Today.
Figures compiled by the Legatum Institute and seen by The Guardian suggest more than 1.5 million more people will be in relative poverty this winter compared with before the pandemic.
The think-tank, which is seen to be on the right, said uprating benefits in line with earnings inflation would result in 450,000 extra people in poverty in 2023-24.
According to The Sunday Times, Truss is expected to cave to pressure from her own MPs and raise benefits as they demand. The newspaper reported cabinet ministers plan to “ambush” her on Tuesday in order to secure the U-turrn.