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Liz Truss faces fresh battle with Tory rebels over benefits

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iz Truss said she has to take a “responsible” approach to the public finances, as she faces a fresh battle with Tory rebels over the level of benefits.

The Prime Minister has so far refused to confirm whether benefits will be uprated in line with soaring inflation, meaning some of the poorest households could face a real-terms cut in their income.

Critics who forced Ms Truss and Chancellor Kwasi Kwarteng to perform a humiliating U-turn over the plan to abolish the 45p tax rate for top earners are now stepping up pressure on the Government to confirm that benefits will increase to match rising prices.

Ms Truss said she is “committed to supporting the most vulnerable” but “we have to be fiscally responsible”.

Benefits are usually uprated in line with the consumer price index (CPI) rate of inflation from September, with the rise coming into effect the following April.

The Institute for Fiscal Studies estimates that each percentage point rise in CPI adds £1.6 billion to welfare spending.

Ms Truss told BBC Radio 4’s Today programme: “We are going to have to make decisions about how we bring down debt as a proportion of GDP in the medium term.

“I am very committed to supporting the most vulnerable; in fact, in addition to the energy price guarantee we’re also providing an extra £1,200 to the poorest households.

“So we have to look at these issues in the round, we have to be fiscally responsible.”.

Live updates

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‘People are struggling – we shouldn’t be making them struggle more’ says former minister

Former work and pensions secretary Damian Green said Prime Minister Liz Truss has “probably not” got the support in the House of Commons to prevent an inflation-linked rise to benefits.

“If people are already struggling, and many of these people will be, then making them struggle more is not a sensible response to the problems,” he told BBC Radio 4’s Today programme.

“I completely agree with the Prime Minister when she says you’ve got to see this in the round, but in the round it doesn’t make sense to an extra £1,200 of help for energy bills to the poorest people in the country and then say but we’re going to claw hundreds of pounds of that back, it militates against the Government’s own rescue package, so I don’t see the sense of this.”

Asked “If the Prime Minster doesn’t listen to you on this, could she get this policy through Parliament?”, he said: “Probably not, I think there that will be many of my colleagues who think that when you’re reaching for spending cuts, benefit payments are not the way to do it.

“As I say, cutting the welfare bill can be done a number of ways. There are other ways to do that and it of course illustrates the wider political problem of where do you find cuts? The two biggest Government budgets are health and welfare and it’s politically difficult to cut either of those budgets.”

Asked again if Ms Truss will have to do “another U-turn” if she moves ahead, he added: “Well yes and I’m trying to avoid that I think, clearly U-turns are not good for Governments and they should only do them when they realise that they are on the wrong track. We’ve had one this week and so let’s avoid the necessity for another.”

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Justice Secretary: ‘I think we can win at next election’

Asked about the Government’s plans for uprating benefits, Justice Secretary Brandon Lewis told Sky News: “There is a process around this that the Department for Work and Pensions, Chloe Smith, the Secretary of State, works through that.

“Over the autumn she will make some announcements around that. I’m not going to pre-judge what that will be.”

He added the Government’s “underlying principle” during the Ukraine war and Covid has been to “protect the most vulnerable in society”.

Mr Lewis was earlier asked about suggestions from Tory former cabinet minister Nadine Dorries that a general election is required if Liz Truss wants to break away from the policies put in place under Boris Johnson.

Mr Lewis replied: “No, I think… we’ve had a lot of general elections in a very short period of time and I think we’ve got a couple of years until the next general election. I think the public want to see us particularly at a difficult time – let’s be frank, we are going to go into a very difficult winter for people, that’s why we’ve put this substantial package to protect people from even further challenges with energy prices particularly in place – I think people want to see us get on and deliver on that job.

“That’s how we ensure that at the next general election we can win. I think we can win.”

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Decision on benefits rise ‘will be a really tough call’

Senior Tory MP Mel Stride said he would have to “think long and hard” if asked to vote to increase benefits in line with earnings rather than inflation.

The Treasury Select Committee chairman told BBC Radio 4’s Today programme: “I’d need to see all the details, I’d need to see it in the round, but I’d have to think long and hard about that.

“Because the last time the benefits were uprated – because of the way the mechanism works they’re uprated in April but they’re pegged against the previous September’s inflation – and the way it worked last time was the uprating was just 3.1% because inflation was low the previous September, but of course inflation was much higher than that (in April).

“So we’re coming off the back actually of a kind of quite a strong real-terms squeeze on those benefits already so I think that will be a really tough call to make.”

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U-turn ‘can’t happen again’, Truss warned by senior Tory

Liz Truss was warned on Tuesday by a senior Tory MP that the debacle over the 45p tax cut U-turn “can’t happen again”.

Simon Hoare backed Mel Stride, chairman of the Commons Treasury Committee who welcomed the decision to bring forward from late November forecasts by the Office for Budget Responsibility on the Government’s growth plan.

Mr Hoare, chairman of the Commons Northern Ireland Committee, tweeted: “Absolutely agree with the sentiments of @MelJStride as Chairman of the Treasury Select Committee.

“However I guess we are all still wondering how in the name of Heaven the Govt allowed itself to get into such a mess/hole/row in the first place. It can’t happen again”

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‘We have to be fiscally responsible’ says PM

Prime Minister Liz Truss said there is a need to be “fiscally responsible” amid suggestions benefits will not rise in line with inflation.

Benefits are usually uprated in line with the consumer price index (CPI) rate of inflation from September, with the rise coming into effect the following April.

The Institute for Fiscal Studies estimates that each percentage point rise in CPI adds £1.6 billion to welfare spending.

Ms Truss told BBC Radio 4’s Today programme: “We are going to have to make decisions about how we bring down debt as a proportion of GDP in the medium term.

“I am very committed to supporting the most vulnerable, in fact in addition to the energy price guarantee we’re also providing an extra £1,200 to the poorest households.

“So we have to look at these issues in the round, we have to be fiscally responsible.”

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Dawn rises on second day of Conservative Party Conference

Good morning. Today is Tuesday, October 4 and we’ll be bringing you live updates throughout the day from the second day of the Tory party conference, which comes a day after the Goverment’s abrupt U-turn on cuts to higher income tax.

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