LABOUR has warned it would be “grotesque” if the UK Government pressed ahead with a real-terms cut to benefits.

The UK Government has been unable to confirm whether benefits payments will rise in line with inflation as has been expected.

The row comes amid reports of big cuts to public spending needed to pay for the UK Government’s botched growth strategy and to fund  the tax cuts that remain intact after a U-turn over the 45p rate.

Labour’s shadow chancellor Rachel Reeves said it would be “grotesque” not to increase benefits in line with inflation.

She said: “The idea that the Government can afford to give tax cuts to the wealthiest, but not uprate benefits in line with inflation, I think is grotesque.

“And there are many people who are saying that the Government needs to rethink this one as well.”

Mr Reeves added: “The Prime Minister yesterday refused to say whether people with disabilities, people on universal credit, will see their benefits go up in line with inflation next year.

“That uncertainty for people who are already seeing huge increases in their energy prices in the weekly food shop, it’s a time of huge anxiety. And yet the Government seem to be that cutting taxes for people who are already on big salaries or businesses already making big profits, that seems to be their priority.

“This idea of trickle down economics, which has failed in the past and will fail again, the Government don’t just need to reverse the budget, they need to rethink the whole idea of trickle down economics, which is causing huge anxiety and sent the markets into a panic.”

The Government is also facing internal pressure to raise benefits in line with inflation.

Former Conservative Cabinet minister, Michael Gove, said he would “need a lot of persuading” to move away from a belief that benefits should be rising with inflation.

Speaking about supporting or disagreeing with the Government, Mr Gove told Times Radio: “There may be things in the future, issues that arise, where I might find myself disagreeing with the Government. But on the whole, if you’re an MP, you want to be in a position to be able to warn beforehand rather than being in open dispute.”

Asked if he supports benefits rising with inflation, he said: “That would be my view, but I’m not in the box seat in No 11 at the time.”

Pressed if he would vote against the UK Government if benefits don’t rise with inflation, Mr Gove said: “I will wait to see what the whole package is, but what I don’t want to do… it’s entirely legitimate for anyone to ask any MP, ‘right, OK, what’s your position on x, y, z’.

“Things move, contexts change. My overall belief is Boris’s argument was right, I would need a lot of persuading to move away from that.

“But I wouldn’t want to pre-judge an argument that was put in front of me before that argument was made, because in crises you sometimes have to do things and embrace policies that would in other circumstances be deeply unattractive. But my basic position, my starting position, is yes Boris (Johnson) was right.”

Chief Secretary to the Treasury, Chris Philp, declined to say whether benefits will be uprated in line with inflation next year.

Speaking on ITV’s Good Morning Britain, he said: “There’s a statutory process, a legal process which the Government goes through every year, it’s led by the DWP (Department for Work and Pensions) Secretary (Chloe Smith), it happens as a matter of routine every autumn.

“That will happen this autumn in the normal way and, when the welfare secretary has made – in consultation with other colleagues in Government – a decision, it’ll get announced to Parliament in the normal way.

“I’m not going to pre-empt that by making any sort of commitment one way or the other – it’s up to that process to carry on as normal.”