MPs and benefit claimants are to receive bumper payments this week to help cushion them from the cost-of-living crisis.

Rachel Reeves last week ruled out blanket measures to help families cope with the energy emergency triggered by the war in Iran.

But MPs are now set to receive a £3,300 ‘cost of living’ adjustment as part of a 5 per cent pay rise.

The payment will apply to ministers as well as backbenchers, meaning it will be received by senior figures including Sir Keir Starmer and the Chancellor.

Unelected members of the House of Lords will also benefit from the hike, taking their tax-free attendance allowance to £390 a day.

Meanwhile, millions of benefit claimants will see their handouts rise by 6.2 per cent – double the rate of inflation.

And next week thousands of jobless families will receive windfalls worth thousands each when Labour scraps the two-child benefit cap. 

William Yarwood, of the TaxPayers’ Alliance, warned that Britain risks becoming a ‘two-tier society’ in which ordinary workers have to shoulder an increasingly unsustainable burden to protect the lifestyles of others.

‘Taxpayers are exhausted from having to repeatedly broaden their shoulders as ministers demand ever more from fewer and fewer people,’ he said.

‘Britain is rapidly becoming a two-tier society, with politicians and benefit claimants protected from economic struggles while a shrinking class of working productive taxpayers shoulder an increasing burden.’

He added: ‘Benefits should be frozen, not increased, given the economic difficulties. And MPs’ pay should be linked to GDP per capita to ensure that politicians’ living standards track the broader population’s.’

Restore Britain MP Rupert Lowe, who donates his salary to local charities, said his Great Yarmouth constituents would be the ‘only taxpayers in the country who will benefit from this MP pay hike’.

He added: ‘I actually wouldn’t mind paying MPs more if they delivered the goods – sadly, we all know that is not the case. The system is entirely broken – designed to protect the cheats, the indolent and the fraudsters. That’s just the MPs.

‘Cut tax, cut the size of the state, cut waste. Brutally. That is the only way to actually get inflation down and tackle the cost of living.’

The 5 per cent pay rise for MPs is far in excess of the current 3 per cent inflation rate. It is also well above the 3.3 per cent offered to nurses.

The Independent Parliamentary Standards Authority signed off the increase to £98,599 earlier this month, claiming that the job is getting more ‘complex’ with more ‘intimidation’.

The quango also signalled that salaries for politicians will continue to rise fast, to reach £110,000 by 2029. The decision contributes to a growing divide in pay.

Official figures this month revealed that while average pay in the public sector rose by 5.9 per cent in the three months to January, the figure for the private sector was just 3.3 per cent.

The main rate of Universal Credit, Britain’s biggest benefit, will rise by almost twice that figure, with 6.5million claimants enjoying a 6.2 per cent increase.

The £1.9billion cost is due to be funded by curbs on the ‘health element’ of the benefit.

But the Tories criticised the decision to use the savings from this to fund higher welfare payments elsewhere.

Next week, Labour will abolish the two-child benefit cap at a cost of £3.5billion a year. The cap limited means-tested benefits such as Universal Credit and child tax credit payments to the first two children, costing families a typical £3,455 in lost benefits for each additional child.

Critics of the cap claim it has worsened child poverty, including among low-paid workers with big families. But analysis of official figures shows ditching it will hand thousands of pounds a year in extra benefits to almost 200,000 large families in which no one goes out to work.

Figures suggest the move could result in the largest affected families qualifying for more than £10,000 a year in additional benefits.

Education Secretary Bridget Phillipson yesterday said that ending the ‘awful’ cap would help with the cost of living.

She told Sky News: ‘There are big cost of living pressures we know that families are facing. And that’s why we are taking action.’

She said measures coming in from this month, alongside the lifting of the cap, included help on energy bills, expanding breakfast clubs and expanding childcare, in order to ‘back the British people’.

Ms Phillipson said the minimum wage is also being increased to help the low paid. And the new state pension will rise by 4.8 per cent next week as a result of the triple lock introduced by the last government.