A cut to benefits would batter millions of households – even Tory MPs can’t stomach it
The chancellor’s mini-budget has spooked the markets, stoked a rise in interest rates, and now caused a full-blown and very public cabinet row over whether to cut benefits for millions of working-age families. Some ministers are urging the prime minister to press ahead with the cut and end Britain’s “Benefit Street culture”, while others have spoken out against it. The former Brexit minister David Frost argued that people already feel “insecure going into the autumn”; the Wales secretary, Robert Buckland, argued that a “safety net is an important part of what a one-nation Conservative is about”.
How has it come to this? The row has been sparked by the chancellor’s need to show that he is committed to keeping the public finances on a sustainable path, after announcing £45bn of unfunded tax cuts last month. Achieving this without further U-turns on tax cuts will require Kwasi Kwarteng to announce major spending cuts on a scale we last saw when George Osborne announced an emergency budget in the wake of the financial crisis.
There are lots of ways to cut public spending – from cancelling future infrastructure projects to pencilling in big cuts to public services after the next election. But the option that ministers have been rowing about is to increase working-age benefits next April in line with earnings, rather than the default measure of increasing them in line with prices. In normal times, this would actually boost benefits – our wages generally grow faster than prices. But these are not normal times. With inflation at a 40-year high and likely to remain that way for much of 2023, this policy amounts to a huge cut in working-age benefits.
We are now in a full-blown, and frequently fact-free, row about whether this is the
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