Senior Tories ask Sunak to raise benefits to help pay energy bills

THE benefits system must be overhauled so that welfare payments are increased every three months and are linked to rising energy bills, a report backed by senior Tories says today.

The Centre for Social Justice is urging Rishi Sunak to call a snap Budget and hand four million people on Universal Credit an inflation-matching boost of £729 over the coming year.

It also wants the Chancellor to restore the amount workers can earn without affecting their benefits to 2015 levels, warning households face a “perfect storm” of rising prices and taxes.

The Telegraph understands the Treasury has signalled “interest” in the proposals, costed at £3.8 billion.

Benefits are increased every April based on inflation. Universal Credit went up 3.1 per cent last month, while prices rose by 9 per cent and the energy price cap by 54 per cent.

Senior Conservatives including former Tory leader Sir Iain Duncan Smith, ex-work and pensions secretary Stephen Crabb and veteran MP Sir Bernard Jenkin have called on the Chancellor to increase benefits payments.

It comes after Therese Coffey, the Work and Pensions Secretary, urged Ofgem to investigate companies for cutting off customers who pay their bills straight out of Universal Credit.

Last month the Government paused the Fuel Direct Scheme to stop energy firms automatically raiing costs.

Ms Coffey said several energy firms had objected to the move and two are telling customers they will no longer offer Fuel Direct payments.