Newspaper column 12 October 2022 - Why we should increase benefit payments in line with inflation

 

We all know that the Government will have to make some difficult decisions to balance the books due to the cost of the package of tax cuts and increased borrowing. It has been suggested that one way to do this could be by freezing benefits or increasing them by less than the inflation rate.

This week the Prime Minister has confirmed that she will not be making a decision on whether to raise benefits in line with inflation until November.

At a time when we are all in the middle of a cost-of-living crisis, I am disappointed to hear this. I do not understand why the Prime Minister and her Cabinet once again seem to be set on picking another fight with its back benchers.

Earlier this year, then Chancellor Rishi Sunak and former Prime Minister Boris Johnson made a firm commitment that benefits would rise in line with inflation from next year. I believe that when a promise is made it should be honoured.

The way in which the current legislation works means there will always be a time lag between the announcement in Autumn of the inflation rate, and the increase to benefits at the beginning of the next financial year, the following April. I understand this does cause a reduction in real time for the lowest-income households.

In April this year benefits were uprated by 3.1%, which was much lower than inflation at the time of the increase, which was around 9%. This meant that benefit rates for 2022/23 were worth less in real terms than the 2021/22 rates, and this is why a rise in line with inflation is crucial for the next year, hence the previous PM and Chancellor’s commitment to do so.

This is a promise that I believe should be kept and I do not understand why the new Prime Minister is not fulfilling that commitment. It is not right that low-income households should be hit hardest by rising inflation when we are already facing a cost of living crisis.

If the Government is giving tax breaks to people in work, it shouldn’t then try to balance the books by taking money away from people on benefits.

Contrary to what some senior figures in Government, have said, this isn’t as simple as people needing to go out and get a job. A lot of people in Mid Cornwall on Universal Credit are in work and this is a top-up of their wages so that they can afford to make ends meet. I believe that it is very important that the Government continues to support households in St Austell & Newquay in this way. 

In fact, over the last 10 years the benefits system has undergone a radical overhaul which ensures that work always pays. It has helped those people trapped in a cycle of dependency on legacy benefits, such as Jobseeker’s Allowance and Employment and Support Allowance (ESA), break free and these benefits are gradually being phased out in favour of Universal Credit, which you can claim while working and which does not stop abruptly once you earn a certain amount of money, but instead tapers off to make the transition easier.

Yes, while there will always be a small number of people who do not want to work, the vast majority of people on benefits are also on them because they cannot work due to disabilities, have low paid jobs, or are unable to work additional hours.

 

To punish the most vulnerable people is simply wrong. Of course, we want to see more people in work. We also want people to be able to work more hours and get better paid jobs, and the system is there to help them do that.

I see first-hand the fantastic work of the Department for Work and Pensions staff in the St Austell & Newquay constituency to support people into work and more people than ever are now in employment. Helping people into jobs is the best way to support families in the long term.

However, we have to acknowledge the huge pressure that everyone is feeling at the moment, particularly for households on benefits as that is where the pressure is felt the most.

I believe the right thing to do will be to continue to help and support those households through the coming months, including by fulfilling the promise to raise their benefits in line with inflation. This is something I will continue to raise with the Government.

If you require my assistance with this matter or any other, please do get in touch with my office on 01726 829379 or email – office@stevedouble.org.uk

Newspaper column 05/10/22 - The Government listens to criticism...

 

Earlier this week the Chancellor made the decision to scrap the abolition of the 45p tax rate. From the moment it was announced I have made my views against this plan very clear and have always maintained that I believed it was a mistake.

I have been in constant contact with Ministers raising my concerns, and those of my constituents, about the cutting of the 45% tax band for those earning over £150,000.

I made no secret of the fact that I was concerned about the scrapping of the 45p tax rate and the impact this measure may have on inflation and interest rates in the coming months. My thoughts were shared by a number of constituents.

I, and many other MPs across the country, have made representations to the Government and are pleased the Chancellor has listened to those concerns and decided against pushing ahead with this. This shows the Government is willing to admit when they have got it wrong and are prepared to listen and change, and that is something I welcome.

I know that the scrapping of the 45p tax rate has overshadowed some of the very positive announcements in the budget, especially the support for both households and businesses with energy costs.

The Energy Price Guarantee will provide further support for households by limiting the amount the billpayer can be charged per unit of gas or electricity, so the exact bill amount will continue to be influenced by how much energy is used.

The scheme will also ensure a typical household pays an average £2,500 a year for their energy, and save a household £1,400 a year on average usage.

While the Energy Bill Relief Scheme will discount wholesale gas and electricity prices for all businesses, charities, schools and hospitals, which face excessively high energy bills over the winter period.

I also welcome the reversal of the National Insurance health and care levy and cut in the basic rate of income tax which will put more money into the pockets of everyone in work.

I do believe that simplifying our tax system and removing the higher rate tax band is the right thing to do, however I want to make clear that it has got to be at the right time when our economy is growing, and public finances are in a better position.

I do believe that now is the completely wrong time when so many households are going to be facing huge financial pressures in the coming months to pay their bills. As households up and down the country face increasing bills, this is the wrong time to be cutting taxes for the wealthiest.

The fact the Government has decided to scrap this plan shows that MPs have represented their constituents and because of this the Government has changed tact. I have done my job as MP, representing constituents’ concerns, and am pleased to have been able to persuade the Government to change their policy.

I understand that some people will be frustrated by the recent events and now look forward to working with my colleagues in Westminster to gain back the public’s trust and show that we remain the best people to be able to run this country, especially in the coming months ahead.

As always, my office is available for any constituents needing help, advice or guidance. Please do get in touch if I can help – tel. 01726 829379, email – office@stevedouble.org.uk

ENDS