The lady is for turning...again! Truss set for benefits U-turn after Tory revolt

10 October 2022, 00:12 | Updated: 10 October 2022, 06:15

Liz Truss is poised for a U-turn on her plans to deliver a real-term cut to benefits amid bitter infighting within the Conservative Party.

The Prime Minister has planned to increase benefits only in line with wages, rather than inflation, which research suggests would push another 450,000 people into poverty.

But with senior Tory MPs including Michael Gove and Grant Shapps showing fierce opposition to her plans for the economy, she has been warned she might lose a vote and suffer political humiliation.

One government source told the Guardian that at least 30 backbenchers would rebel against the proposal, while another said her government would be "forced to cave".

Truss will be seeking to reassert her authority over the party when the Commons returns from recess on Tuesday, and a defeat in the Commons could seriously undermine this.

Already she has made a U-turn over her plan to scrap the 45p top rate of tax - part of a raft of proposed tax cuts which would disproportionately benefit the wealthy and would be funded by increased public borrowing.

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Raising benefits in line with earnings could mean an increase of roughly 5.5`%, compared to September's inflation figure of around 10%. “She gave in on 45p, she’ll have to do so again,” one Tory MP said.

Last week former cabinet minister and influential senior Tory Michael Gove said he would be prepared to vote against Ms Truss and Chancellor Kwasi Kwarteng's "profoundly concerning" mini-budget.

He told Times Radio he would need “a lot of persuading” to change his stance on benefits being raised in line with inflation instead of wages.

Other senior Tories such as Esther McVey, Iain Duncan Smith and Damian Green have also shared the same view, while Shadow Chancellor Rachel Reeves 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.”

Labour shadow minister Jonathan Ashworth said Conservative MPs “have already reached out to me” about blocking any government move to stop benefits rising in line with inflation.

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The shadow work and pensions secretary told Times Radio’s Sunday Morning with Kate McCann and Adam Boulton: “I’m saying to Conservative MPs, some of them have already reached out to me, let’s work together and let’s block this very deep cut in disability benefits, in pension benefits, and benefits for working parents.

“I think there’s a lot of anger on the Conservative side because we know what’s happening more broadly at the moment."

Asked how many MPs have asked for his help and whether Ms Truss should be worried, he said: “I’m not a whip but it’s pretty clear to me that Conservative members of Parliament think this is another unfair, deep cut in the incomes of, as I say, the poorest pensioners or disabled people, parents looking after and caring for a disabled child.

“These cuts should not go ahead, so I will work across Parliament in a nonpartisan way to block these cuts where we can and if can.”

A Department for Work and Pensions spokesperson said: “The secretary of state commences her statutory annual review of benefits and state pensions from late October using the most recent prices and earnings indices available.

“We are committed to looking after the most vulnerable which is why we’ve delivered at least £1,200 of support to families this winter while also saving households an average of £1,000 a year through our energy price guarantee. This support is on top of the annual working-age benefits bill which is over £87billion.”