The UK Chancellor of the Exchequer George Osborne is pressing for state benefits to be frozen for two years to save £10 billion from the welfare budget.
The Treasury is considering further cuts in the welfare budget as inflation has been rising faster than average earnings across the country.
The move, which was resisted strongly by the Liberal Democrat Party a year ago, is being considered and could be announced by Osborne in December.
Osborne warned earlier this year in his budget that slower economic growth would mean he would have to save more from welfare budget to ensure more important areas like schools and hospitals avoid further cuts.
Treasury sources said that the announcement in autumn may include even deeper cuts if the Treasury fails to meet its debt.
Alison Garnham, chief executive of the Child Poverty Action Group, called the proposal “disgraceful” and said the policy could harm the most vulnerable people in the society.
"Breaking the link between benefits and living standards would be breaking the link with decency. In hard times the values of a civilized society must ensure the most vulnerable families are protected”, she added.
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