Treasury officials have presented Jeremy Hunt with money-saving options ahead of the next election, including the possibility of cutting benefits in real terms. The move is said to give the Chancellor room to slash taxes in his Spring Budget next year.
Working Benefits
One of the proposed plans is to halt the lifting of working benefits in line with inflation. Cabinet Minister Mel Stride has suggested that welfare changes could make it more difficult for working-age Brits to receive disability benefits. However, these changes would not come into effect until after the election.
Triple Lock
While the government is committed to the triple lock system, which guarantees an increase in the state pension based on inflation, wages, or 2.5%, the tight public finances leave little room for flexibility. The Treasury currently has the smallest amount of headroom on record, with just £6.5 billion available as of March.
Despite this, a spokesperson for the Department for Work and Pensions has assured that the government is mindful of protecting the most vulnerable. They stated, "In order to protect the most vulnerable from the impact of high inflation, the government increased benefits by over 10% this year. The Secretary of State will conduct his annual review of benefits and state pensions in the Autumn, using the most recent data available."
