Rishi Sunak is facing demands to increase social security benefits now to help those struggling the with cost of living crisis.
After a speech to the CBI conference on Wednesday night Sunak has come under fire for making only vague promises to look after the vulnerable as heating and eating costs rise.
Sunak was branded the ‘computer says no’ chancellor after he made the lame excuse that IT problems meant that he could not raise benefits before next April.
The chancellor used his speech to call on businesses to “invest, train and innovate more” and promised a tax cut awaits in the next budget in the Autumn.
But that led to a furious response from business leaders to take immediate action.
CBI chief Tony Danker, who hosted Sunak’s City dinner, blasted: “What are we waiting for? I’m struggling to see why we wait longer.”
Meanwhile poverty campaigners have renewed calls for benefits to be increased.
Benefits only rose by 3.1 per cent in April when inflation was already six percent, leaving millions worse off..
Now with the figure running at nine per cent charities want benefits to increase now to help people struggling with the cost of living, particularly energy bills.
Richard Lane, from the debt charity Stepchange charity, said: “While we don’t doubt that policymakers are aware of the problem, at present the measures being taken to plug the gap are simply not sufficient to help many households avoid incurring debt as a result of the rising cost of living.”
Last month, Citizens Advice called on ministers to increase benefits in line with the current rate of inflation, a call echoed by Labour shadow chancellor Rachel Reeves.
Economists think would be little effect on the public finances and that the £250 billion welfare bill is already budgeted for.
Robert Joyce, deputy director at the Institute for Fiscal Studies said: “There is pressure on the government to fast-track the rise but there has been a reluctance to do something so far.”
Tory MPs are demanding tax cuts but that would do little to help the very poorest and other backbenchers are urging the Treasury to bring benefit and pension rises forward to help the nation’s most vulnerable.
Labour’s demand for a £2 billion windfall tax on the oil and energy giants has not been ruled out and there are reports that the chancellor could repeat the £200 fuel discount loan for households ahead of another expected price cap rise in October.
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