Benefits bill balloons by extra £5.5billion after inflation soars on Labour’s watch

Official figures published earlier today showed inflation creeping up faster than initially projected.

Last month, inflation surged to its highest level in almost a year at 3.5 per cent, up from 3.1 per cent in August, according to the Office for National Statistics (ONS).

Now, analysis by the Institute for Fiscal Studies (IFS), shared with The Telegraph, showed that Britain’s welfare bill could jump by £5.5billion in 2027.

The figure is £2.2billion more than the Treasury has budgeted for, as set out in the Office for Budget Responsibility’s pre-Budget forecasts.

The gap will become a point of tension for the Chancellor ahead of his maiden Budget next Wednesday as John Healey refuses to rule out tax hikes on hard-working Britons.

Helen Whately, the Shadow Work and Pensions Secretary, blasted Labour for “tax rises and red tape”.

She told The Telegraph: “Higher inflation means higher benefit bills, piling more pressure on the public finances while families and businesses are already struggling with rising costs.

“Labour’s tax rises and red tape are driving up costs for businesses.

“At the same time, the Government are handing out billions more in welfare, leaving hardworking taxpayers to foot the bill.”

Kemi Badenoch has repeatedly pushed Andy Burnham to cut welfare and fund Britain’s defences instead.

During a fiery rendition of Prime Minister’s Questions earlier today, the Tory leader warned the Makerfield MP was “going to keep spending more, which means he’s going to keep borrowing more”.

Mrs Badenoch said: “We know where that leads. The only solution to the challenges facing our country is to cut spending and to cut borrowing.

“The out-of-work benefits bill is set to rise by £50billion under this Government. So will the Prime Minister get a grip and cut the welfare bill?”

But Mr Burnham has refused to cave into the Opposition’s demands, while welfare spending is soaring to around £160billion this year alone.

In the Commons earlier today, Mrs Badenoch stressed the total sum is more than the budgets for defence, schools and policing combined.

A spokesman for the Department for Work and Pensions said: “We want to build a welfare system that incentivises work and supports those who need it most, but the system we inherited denied people the support and opportunities they need to move into work.

“We are already changing the system through the Youth Guarantee, narrowing the gap between Universal Credit standard and health rates, restoring face-to-face assessments, and investing a record £3.5billion in employment support for disabled people and those with long-term conditions.

“The Secretary of State for Work and Pensions is required by law to undertake an annual review of the State Pension and working-age benefits, and final figures will be confirmed once this is finished.”