Rishi Sunak Draws Up Plans to Boost U.K. Welfare Payments

U.K. finance minister Rishi Sunak is in talks over extra help for welfare claimants, in a sign he will bow to pressure to do more for people who have lost jobs and income.

The chancellor of the exchequer has already topped up weekly payments to the low-paid and unemployed in the pandemic, but the arrangement is due to come to an end after a year in April.

Despite growing calls to extend the 20-pound ($27) per week increase to Universal Credit payments, no firm decision has yet been taken, according to people familiar with the matter. Ministers are weighing options including one-off bonuses of as much as 1,000 pounds, and extending the weekly raise by as much as a year, the people said.

Prime Minister Boris Johnson’s Conservative administration is sensitive to allegations that it’s neglecting the poorest and most disadvantaged members of society in the pandemic. He has been repeatedly criticized for failing to ensure children from the most disadvantaged homes receive free meals during lockdown.

Pressure

On Monday, the U.K.’s main opposition Labour Party sought to turn up the heat by forcing a vote in Parliament on extending the existing higher level of Universal Credit, which is worth more than 1,000 pounds ($1,355) a year to some of the country’s poorest families.

Johnson instructed his lawmakers to abstain in the non-binding vote, which Labour won by 278-0.

It’s a tricky balancing act for Sunak. After forking out more than 280 billion pounds to fight the pandemic and help businesses and workers weather successive economic lockdowns, he’s repeatedly stressed the need to get the public finances in order. Johnson last week suggested it’s his preference not to extend the payments.

“I think most people in this country would rather see a focus on jobs and a growth in wages than focusing on welfare, but clearly we have to keep all these things under review,” Johnson told members of Parliament’s Liaison Committee.

Asked again on Monday about the issue, he said in a pooled television interview that all measures are “constantly under review” and “we want to support people throughout the pandemic.”

But Johnson and Sunak also face pressure from within his own Conservative Party, with some 50 Members of Parliament from the influential Northern Research Group urging him to extend the Universal Credit uplift for as long as coronavirus restrictions are in place.

©2021 Bloomberg L.P.

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