'Not yet made that decision': Liz Truss refuses to commit to raising benefits in line with inflation

A day after a u-turn on tax, the PM is facing a new battle over whether benefits will rise in line with inflation, ITV News Political Reporter Shehab Khan reports from the Tory party conference

Liz Truss has said a decision has yet to be made by the government on whether welfare payments will be increased in line with soaring inflation, as the prime minister comes under pressure from senior Conservative rebels.

Penny Mordaunt was among the MPs putting pressure on the PM, declaring on Tuesday she has “always supported” welfare support rising alongside inflation.

The Leader of the House of Commons told Times Radio: “I have always supported, whether it’s pensions, whether it’s our welfare system, keeping pace with inflation.

"It makes sense to do so. That’s what I voted for before and so have a lot of my colleagues."

Despite the clear breach of collective Cabinet responsibility, Ms Truss denied Ms Mourdant must be dismissed for speaking out.

“No she doesn't [need to be sacked], and this is about a decision that we are taking later on this year,” she told ITV News's Political Editor Robert Peston. “And, of course, there'll be more discussions about those decisions.”

She added: “Of course, we will look at the benefits uprating issue, but that's a decision for later on this year.”

Ms Truss said no decisions have yet been made about raising benefits in line with inflation

Ms Truss has committed to increase pensions in line with prices but told LBC radio: “I think it’s a different situation for people who are in the position to be able to work.”

The latest official figures show that 41% of the people who claim Universal Credit (UC) are employed - but are on such a low income they are entitled to claim the benefit.

Women, who research shows often bear the brunt of caring responsibilities for children and ageing relatives, made up 56% of people on UC in July.

The Joseph Rowntree Foundation (JRF) recently calculated that if benefits were raised by about 5.4% in line with earnings, rather than a 10% rise in inflation, its would mean that UC recipients are taking home 15% less now than than they were six years ago.

Katie Schmuecker, principal policy adviser for the JRF, said on Friday: “If the government goes down this track it will be a devastating blow to low earners, families with children, those who are carers, sick or disabled.”

Although the prime minister refused to clarify whether benefits will be uprated, Home Secretary Suella Braverman said on Tuesday she wanted to cut welfare spending.

She told The Telegraph: "I think we have far too many people in this country who are fit to work, who are able to work. and should be working.

"They choose to top up their salaries with tax credits and the [Channel 4 TV series] Benefit Street culture is a feature of modern Britain."

Meanwhile, Justice Secretary Brandon Lewis said he would not "pre-judge" the PM's upcoming announcement on uprating benefits in an interview with ITV News.

But he referred back to pressures the government has faced in recent years, such as the Covid pandemic and war in Ukraine, saying it has "always done everything to protect the most vulnerable in society and that will continue to drive our decisions".

'We've got to look at the whole economic picture and the whole economic package around how it affects people'

Former Work and Pensions Secretary Damian Green said Ms Truss "needs to" meet the commitments that were made by the previous Conservative government, which planned to swell benefits in line with the rate of inflation.

"I think that's particularly important this winter, which we know is going to be tough," he added.

Former Conservative leader Sir Iain Duncan Smith also waded in on the row, arguing that Universal Credit and growth go hand in hand.

He went on to claim the group “most likely to spend the money that you give them” are people on benefits.

Elsewhere, the prime minister ruled out a return to austerity during a round of interviews on Tuesday, telling LBC she has committed to reducing debt as a proportion of national income over the medium term.

'I would strongly recommend them to increase benefits in line with inflation'

“Well, I wouldn’t use the term you describe. What I’m talking about is fiscal responsibility,” she added.

Ms Truss said she took some responsibility for Chancellor Kwasi Kwarteng's doomed plans to abolish the 45% tax rate on earnings over £150,000.

She insisted that “we worked on it together” when asked whose idea it was to scrap the tax.

Chancellor Kwasi Kwarteng and Prime Minister Liz Truss during the Conservative Party conference in Birmingham. Credit: PA

The PM admitted that it had not been an “easy” week but indicated she was sticking with the rest of the tax-cutting package.

She told the Express newspaper: “Our plan for growth is essential to get the British economy moving. Growth is the only way to create jobs, boost wages and fund our vital public services like the NHS.”

In his conference speech on Monday, Mr Kwarteng also conceded it had been a “tough” day as he vowed to “focus on the task in hand”.

He was accused by opposition MPs of “insulting millions of people” as he sought to shrug off the market turmoil that triggered the U-turn as a “little turbulence”.

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Coming a little over a week after the tax cut was announced in the mini-budget and just a month into Ms Truss’s premiership, the U-turn was a massive blow to their authority.

On Tuesday, the chancellor said there are no plans to publish his medium-term fiscal plan early, insisting it will be published on November 23, during an interview with GB News.

It come after he told the conference he would publish details “shortly” on how he planned to bring down public debt as a percentage of GDP over the medium term.

Mr Kwarteng batted away suggestions that he is finding his new role in government difficult, saying that since entering the Cabinet he's "rolled with the punches".

Despite £65 billion of Bank of England action to stave off fresh financial turmoil and the pound having plummeted over his mini-budget on September 23, Mr Kwarteng insisted the Tories will be “serious custodians of the public finances”.

Liz Truss admitted that it had not been an ‘easy’ week but indicated she was sticking with the rest of the tax-cutting package. Credit: PA

But in a sign of continuing disquiet among Conservative MPs, Priti Patel is set to accuse Ms Truss and Mr Kwarteng of “spending today with no thought of tomorrow”.

“I want to see our party regain its credibility by restoring its commitment to sustainable public spending … which is affordable today, tomorrow and for the foreseeable future,” the former home secretary will tell a conference fringe event, according to The Times.

On Tuesday, Suella Braverman used her conference speech to call for the French to stop more boats crossing the English Channel and set out her intention to bring in new laws to make it easier to deport people who come to the UK illegally.

Mr Cleverly declared that Britain has the “strategic endurance” to see Ukraine through to victory over Russian invaders.

The Foreign Secretary said that Ukraine has the UK’s unwavering support in its efforts to push back Vladimir Putin’s forces, adding that “we are players on the pitch” and not just “commentators”.