Treasury says Universal Credit uplift ‘not going to return’ – but No10 insists ‘all options open’

Downing Street today insisted ‘all options’ are being considered to help Britons struggling with the cost-of-living crisis – despite a Treasury minister having earlier ruled out a return of the £20-a-week uplift to Universal Credit seen during the Covid crisis.

In more confusion over how the Government will provide greater help for households in the face of soaring bills – with an extra package of measures expected within weeks – there were further signs of discord between Number 10 and Number 11.

Tory MPs have been calling for a boost to benefits as part of new action to help with the cost of living. 

Simon Clarke, the Chief Secretary to the Treasury, this morning appeared to reject those demands as he outlined how the uplift to Universal Credit had been a ‘temporary response’ provided during the pandemic.

But, asked later whether a fresh uplift to Universal Credit was now not being considered, the Prime Minister’s official spokesman insisted the Government was ‘keeping all our options open’.

The confusion will add to claims of tensions between Boris Johnson and Chancellor Rishi Sunak over how to provide extra help to Britons, and whether support should be funded through a windfall tax on the massive profits of oil and gas companies.

The PM and Mr Sunak are reported to be at odds over how – or even if – such a levy should be implemented and what the proceeds should be spent on.

Simon Clarke, the Chief Secretary to the Treasury, said the £20-a-week uplift to Universal Credit ‘is not going to return’

There are claims of tensions between Boris Johnson and Chancellor Rishi Sunak over how to provide extra help to Britons

Former Conservative leader Sir Iain Duncan Smith, the architect of Universal Credit, is leading calls among Tory MPs for the Government to increase benefit payments to help recipients deal with runaway inflation.

Asked about Sir Iain’s comments, Mr Clarke this morning hinted that further action could come on the taper rate at which people’s benefits are withdrawn as their earnings rise.

But he ruled out a return of the £20-a-week uplift to Universal Credit seen during Covid.

‘We took decisive action back in December with the change to the taper rate, that is to say the rate at which benefits are withdrawn as people’s earnings rise, and we cut that from 63p in the pound to 55p in the pound,’ he told BBC Radio 4’s Today programme.

‘That’s a tax cut worth an average of £1,000 to two million of the lowest earners in society.

‘I know that was something Iain warmly welcomed at the time and which is precisely the kind of authentic Conservative solution to this question that we want to see.’

Pressed on whether the Universal Credit uplift could return, Mr Clarke said: ‘On that question, we were always explicitly clear that was a temporary response to the pandemic.

‘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 we’re facing.’

Former Conservative leader Sir Iain Duncan Smith is leading calls among Tory MPs for the Government to increase benefit payments to help recipients deal with runaway inflation

Asked about Mr Clarke’s comments, the PM’s official spokesman later refused to comment on specific policies but added: ‘My understanding is that we are keeping all our options open.’

The spokesman also said he would not ‘put a particular timescale’ on when the Government could announce a further package of measures to help struggling Britons.

Labour leader Sir Keir Starmer today told reporters that a ‘range of things’ need to be looked at in providing support during the cost-of-living crisis.

‘Reinstating Universal Credit is one of them,’ he said. ‘There’s all sorts of work that needs to be done on benefits as well

‘But the windfall tax is a simple solution which could be voted through Parliament very easily.

‘It’s Labour’s plan, we’ll vote for it if the Government brings it forward, but dithering and delaying is the thing that’s stopping people getting that money to help them with their bills.’

Sir Keir added the proceeds from a windfall tax could be used ‘directly to reduce bills by up to £600 for those who need it most’.