Conservative peer who helped to set up universal credit system calls for urgent benefits increase

Exclusive: Baroness Stroud says ‘We have the opportunity to intervene’ amid cost of living crisis

Baroness Stroud has called for action to tackle the rising cost of living (BBC)

A Conservative peer who helped set up the universal credit system has called on the government to urgently increase benefits in line with inflation as the cost of living crisis bites.

Baroness Stroud, a former adviser to Iain Duncan Smith, also told The Independent that she thought the £20-per-week uplift, which was removed last autumn, should be restored by the Treasury.

“We’re sitting on a cost of living crisis; we have the opportunity to intervene; we have done so in the past under difficult situations when it affected everybody,” the Tory peer said. “But if governments have a responsibility to do anything, it is to act on behalf of vulnerable people. This is a moment to do that.”

Lady Stroud’s comments come amid escalating pressure on Boris Johnson and Rishi Sunak to introduce further support for families struggling with surging energy bills and food prices.

On Wednesday it was revealed that inflation had soared to 9 per cent in the 12 months to April, hitting a 40-year high, as the chancellor admitted: “The next few months will be tough.”

Last month, however, Mr Sunak came under intense fire for rejecting calls to raise benefits by more than 3.1 per cent – a figure based on inflation rates in September 2021 – as prices surged. Without ministerial intervention, benefits will not be increased again until April 2023.

Speaking to The Independent, Lady Stroud, who is CEO of the Legatum Institute think tank, said: “I just genuinely think the benefits should be uprated in line with the current inflation – they should be brought forward.

“That would be entirely possibly to do. The defence has been made that it can’t be done immediately. I have spoken with DWP officials, who’ve said [an increase in] universal credit can be done immediately.

“I know the legacy benefits are much harder to do,” she added. “You could do a one-off payment for the equivalent value for those on legacy.”

Without action, Lady Stroud said households in which people receive out-of-work benefits, have disabilities, or are single parents with young children “will have to start making choices”.

“We’re going to start seeing very, very difficult choices being made. We’ve already started seeing very difficult choices being made,” she said.

Last year, the Conservative peer was among a chorus of voices urging the government not to remove the £20-per-week uplift to universal credit – a measure introduced at the onset of the Covid pandemic.

Rishi Sunak admitted on Wednesday: ‘The next few months will be tough’ (PA)

She stressed that the initial introduction of the uplift was a “recognition that the levels of welfare are too low”, adding: “If it wasn’t right for groups of people during Covid, it can’t be right now.”

Pressed on whether the measure should be reintroduced, Lady Stroud replied: “I never though it should be taken away, and I think it should be restored.

“The fact we were able to bring it in so swiftly at the time of the pandemic demonstrates just how easy it would be to restore it now.”

Earlier this week, Lord Lamont, a former Conservative chancellor, urged the government to restore the measure, joining senior Tory MPs including Jake Berry, the chair of the influential Northern Research Group.

“It’s now or never; now is the time for the government to act. Urgency is required; people can’t wait to the November Budget to pay their bills,” he said.

Speaking on Friday as calls grew for the government to alleviate the pressure on struggling households, Mr Johnson told reporters he was “not going to pretend we can magic away every single expense that people are going to face as a result of the global spike in energy prices”.

But he added: “Be in no doubt, this will come down, we will get people through it. We will use the firepower we’ve built up to put our arms around people, just as we did during the pandemic.”