Liz Truss has previously suggested universal benefits such as the state pension should be scrapped because of the “huge expense” to taxpayers of “recycling” their money through the system – prompting fears she could go further still with her plans to cut back the benefits bill.
The proposal, included in her motion to the Liberal Democrat Youth conference in spring 1995, highlighted the “enormous – and rising – cost of pensions and child benefit”, calling for a “search for realistic alternatives to universal benefits”.
Truss, who left the party the next year to join the Conservatives, had added that it was not “socially desirable to pay out universal benefits in the current fashion”, given the “huge expense to the taxpayers of recycling money through the tax system”.
Child benefit was removed for higher-rate taxpayers in 2013 but remains universal for some families earning below the £50,000 threshold who do not qualify for universal credit. All older people qualify for a state pension and winter fuel benefits.
There is no suggestion Truss plans to scrap either benefit, but her earlier views may raise concerns, as she promised to clamp down on the benefits system during her leadership campaign and has already announced plans to cut working age benefits and for “efficiency savings” across all government departments.
The Lib Dem pensions spokesperson, Wendy Chamberlain, said: “We are seeing this government’s true colours. It’s little surprise Liz Truss is refusing to provide help to those who need it most given she has long wanted to scrap the state pension and child benefits.
“The Conservative government could not be more out of touch with the British people. As inflation sky-rockets, interest rates spiral and borrowing surges, they’d rather give tax cuts to banks, massive corporations and billionaires than guarantee support for struggling families and pensioners.”
A No 10 spokesperson said: “The prime minister’s views are not the same as they were 27 years ago.” However, Truss continues to argue that taxpayers’ money should not “recycled” – or collected by the state only to be redistributed back to them.
Kwasi Kwarteng, the chancellor, has already announced plans to cut benefits to encourage more people into the job market, saying that this was part of the government’s plan to “make work pay” by not allowing people to rely solely on welfare as their main form of income.
However, the controversial plan has provoked widespread criticism as it ignores people who are out of work because of illness or disability, while unpaid carers, part-time workers and single parents could be unfairly hit by benefit cuts.
Chris Philp, the chief secretary to the Treasury, said the government had not yet decided if it would increase benefits in line with inflation, despite Rishi Sunak promising to do so when he was chancellor. Philp defended removing the 45p rate of income tax, despite saying it was “true” that it benefited the rich more than the worse off.
Kwarteng, on a visit to Darlington, said it was “premature” to confirm if benefits would rise to match inflation. “We are talking about helping people in the round. It is premature for me to come to a decision on that. But we are absolutely focused on making sure that the most vulnerable in our society are protected through what could be a challenging time,” he said.
Meanwhile, government departments have been asked to look for “efficiency savings” and told they must live within the budget constraints of the current spending review, leading to speculation of a return to austerity.
Philippa Stroud, a Tory peer who helped create and launch universal credit, said of the government’s refusal to confirm an inflation-matching rise: “It’s unnerving, because obviously the previous chancellor had already committed to this uprating. Just the fact that he’s reconsidering it, or he’s not committing to it, makes it feel like this is genuinely up for reconsideration.”
The Joseph Rowntree Foundation, a charity that conducts and funds research aimed at solving poverty in the UK, said it was “shocking” that the government may not increase benefits by inflation. Iain Porter, a senior policy adviser, said: “Many people across the UK will agree it is morally indefensible that the prime minister would choose to give tax cuts to the richest funded on the backs of the poorest in our society.”
James Taylor, director of strategy at the disability equality charity Scope, said: “If the government U-turns on this promise, it would be devastating and lead to disabled people starving and freezing in their own homes. Refusing to increase benefits in line with the true inflation rate would show an utter disdain towards people who need this support.”
Alison Garnham, chief executive of Child Poverty Action Group, said: “Children are already going hungry as costs soar. Unless benefits are uprated to match inflation, they will also become the casualties of a collapsing economy. Struggling families will not forgive a chancellor who comes to them for efficiency savings when their cupboards are already bare.”