Boris Johnson had pledged to increase benefits by inflation, but his replacement in 10 Downing Street seemed less committed. Liz Truss is under pressure from Conservative Party convention attendees to alter her course of action.
Despite mounting pressure from a cabinet minister and top Conservative lawmakers, Liz Truss has declined to commit to indexing benefit increases to inflation.
The prime minister stated to broadcasters in Birmingham, where the Tory party conference is currently being held, that she had “not taken a judgment” on whether or not to honor the increase in benefits promised by her predecessor Boris Johnson.
She continued, “Of course, there will be debates regarding the future of promises such as benefits and how we will handle future budgets.
“It is very evident that we must assist the most vulnerable as we head towards winter”
While Ms. Truss has not excluded benefit reductions in real terms, she has stated that she is “totally committed” to indexing pension increases to inflation.
Ms. Truss told LBC’s Nick Ferrari that “people are in different situations depending on their stage of life” when asked about the difference in attitude for pensioners vs those receiving welfare.
She continued, “It is quite difficult for folks on a fixed income, such as retirees, to adjust. People who are in a position to work face a distinct circumstance, in my opinion.”
When asked if she will rule out austerity, she stated that she is dedicated to reducing the debt-to-income ratio over the medium term.
“I wouldn’t employ the term you describe. I’m referring to budgetary responsibility,” she continued.
Ministers hint at a possible cabinet split
After being forced to make a policy U-turn on her tax reforms yesterday, Ms. Truss is now engaged in a fresh struggle with Conservative MPs over a potential benefits squeeze and cuts to public spending.
Downing Street is rumored to be considering boosting Universal Credit using a lesser criterion, such as the increase in average earnings, as opposed to inflation.
Penny Mordaunt was the first cabinet minister to explicitly oppose not increasing benefits with inflation. She stated on Times Radio, “I’ve always advocated – whether it’s pensions or our welfare system – maintaining pace with inflation. It makes sense to do so. This is what I voted for previously.”
The Leader of the House of Commons continued, “We want to ensure that individuals are taken care of and can pay their bills. We are not interested in helping people with one hand and taking from them with the other.”
Ms. Truss hesitated to say whether she welcomed these opinions, telling reporters, “As I’ve already stated, no judgment has yet been made on this matter. And I eagerly anticipate these debates.”
Ms. Mordaunt appears to have chosen a different stance from justice secretary Brandon Lewis, suggesting a cabinet rift on the issue.
He hesitated to voice his stance, telling Kay Burley, “There is a procedure that the Department for Work and Pensions, Chloe Smith, goes through.”
He stated that announcements will be made “during the fall,” adding, “I cannot predict what they will be.”
Amid the cost-of-living crisis, several prominent Tories have urged the prime minister to reverse his decision to cut public spending.
On Monday, leading Conservative legislator Damian Green stated to Sky News, “The government should raise taxes in pace with inflation.” The previous administration promised to do so, thus the public anticipates this.”
Additionally, former transport secretary Grant Shapps has increased the pressure. When asked if he would like to see benefits adjusted for inflation, he responded, “Of course, every politician would want to see that.”
Benefits are typically indexed to the consumer price index (CPI) inflation rate beginning in September, with the increase taking effect the following April.
The Institute for Fiscal Studies estimates that each percentage point increase in the CPI increases welfare spending by £1.6 billion.
Following considerable criticism, particularly from Conservative legislators, the government has abruptly abandoned its intentions to eliminate the 45% tax rate on incomes beyond £150,000.
Ms. Truss justified the U-turn on Tuesday, stating that the government “listens” and that the tax cut “wasn’t a central component” of the development plan.
When asked, she continually hesitated to clarify whether she trusts her chancellor, Kwasi Kwarteng, instead stating that the two work “extremely closely.”
