Temporary increase to state benefit is not returning, says junior finance minister

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REUTERS/Paul Childs/File Photo

Chief Secretary to the Treasury Simon Clarke today (23) denied the possibility of temporary increase in state benefits, adding that the inflation picture is hugely concerning but the government has confidence in the Bank of England to get it right.

Clarke said that the government is not going to bring back a temporary increase to state benefits, introduced at the height of the coronavirus pandemic, as part of plans to tackle a cost-of-living crisis.

“We were always explicitly clear that this was a temporary response to the pandemic,” Clarke told BBC Radio.

“That is not going to return. The question is how we best now look at the next range of solutions to deal with the challenges.”

Last year, the government cut the “taper rate” for claimants of Universal Credit, the amount they lose as they increase their earnings from work, and Clarke said this was “precisely the kind of authentic Conservative solution to this question that we want to see”.

Britain increased Universal Credit, a benefit for unemployed and low-paid people, by 20 pounds a week during the COVID-19 pandemic, but the extra payment ended in October last year in a move that affected 4.4 million households.

Some have called for it to be reinstated as surging inflation leaves many struggling to pay rising food, fuel and energy bills.

British inflation surged last month to its highest annual rate since 1982, pressuring Chancellor Rishi Sunak to offer more help to households and the Bank of England to keep raising interest rates despite a risk of recession.

“The inflation picture is what is hugely concerning and is making waves across both America and Europe as well. And that’s because this is a truly global problem,” Clarke told LBC Radio.

“We absolutely have confidence in the independent Bank of England to get this right and it’s vitally important that we don’t compromise their independence.”