Autumn Budget: £25 uplift needed for poorest

Data shows real disposable incomes of the poorest will fall by 11% even if benefits uprated with inflation

Ahead of the Autumn Budget, Plaid Cymru have written to the Department for Work and Pensions urging a £25 uplift to benefits, as well as uprating benefits in line with inflation, and maintaining the triple lock for the state pension.

Plaid Cymru Work and Pensions spokesperson, Hywel Williams MP, in a letter to the Secretary of State Mel Stride MP, called for “practical, immediate reforms which will provide financial and mental relief to thousands of people in Wales who are currently fall through the social security net.” 

He said that “the Government must go beyond inflation rises and uplift the value of benefits as they did during the Covid-19 pandemic”.

Mr Williams pointed to Resolution Foundation data showing that even if all benefits are uprated in line with inflation, the real disposable incomes of the poorest may fall by 11 per cent next year, the biggest drop on record and wiping out all income growth accrued over the past twenty years.

Hywel Williams writes:

“Clearly, it is low-income households who are facing the brunt of the increased cost-of-living. They are more likely to spend a greater proportion of their income on essential items, the prices of which have increased at a higher rate.  The Institute for Fiscal Studies estimated that inflation in October 2022 was 14% for the poorest UK households compared to 10% for the richest.  

“Wales in particular has higher levels of poverty.  For example, Wales has the highest number of children in relative income poverty across the nations of the UK at 34%. On the other end of the age spectrum, almost one in five older people in Wales are living in poverty and incomes are shrinking in real terms week by week as the effects of inflation continue.

“In this context it would therefore be unthinkable for the Government to remove support for low-income households. Rather than reducing the real terms value, or restricting access to social security, I call on your Government to: 

“Provide an immediate £25 uplift for all means tested benefits, including Legacy Benefits. It was wrong for the Government to remove the original £20 uplift to Universal Credit, and this should be reintroduced with an additional £5 to account for the increased cost of living. 

“If benefits are only uprated in line with inflation, it is estimated that the real disposable incomes of the poorest may fall by 11% next year, the biggest drop on record. The Government must go beyond inflation rises and uplift the value of benefits as they did during the Covid-19 pandemic. 

“Uprate all benefits in line with September 2022 CPI. Any decent society should have a social security system which keeps up with the basic cost-of-living. A below inflation rise next year would leave the real value of basic out-of-work support 16% lower in 2023-24 than in 2010-11, and slightly lower than in 1983-84. This would be unacceptable. 

“Maintain the Triple Lock for the State Pension. The real terms value of the UK state pensions compares poorly to other OECD countries and must be increased. The impact of the Triple Lock is cumulative and is therefore ultimately in everybody’s long-term interests. Maintaining the Triple Lock was a 2019 Conservative Manifesto pledge and I hope you will honour this pledge at the Autumn Statement.

“These are practical, immediate reforms which will provide financial and mental relief to thousands of people in Wales who are currently fall through the social security net. 

“I trust that you as the Secretary of State for Work and Pensions will do your utmost to ensure that the poorest and most vulnerable people are properly supported through the cost-of-living crisis. I hope that the Chancellor’s autumn statement will be compassionate, and supportive to those receiving social security.”