Ms. Truss faces a new struggle with Conservative MPs over a possible benefits squeeze and cuts to public spending, after being forced to reverse course on her tax cuts.
Liz Truss states that she had “absolutely no shame” in reversing the government’s decision to eliminate the 45p higher rate of tax.
The prime minister explained that she “quickly made the decision” to eliminate the initiative, which was “becoming a distraction” from the rest of the government’s economic objectives.
Suella Braverman, however, told a Conservative Party fringe event hosted by The Telegraph that she was “extremely unhappy” by the policy reversal, adding that “parts of our parliamentary party practically conducted a coup.”
Ms. Truss’s U-turn occurred on Monday morning, more than a week after the 23 September mini-budget.
The tax cut for the wealthiest 1% was one of several tax-cutting plans in the government’s mini-budget that sparked market turbulence over the last week, with the pound reaching historic lows versus the dollar.
Tory MPs and the general public reacted angrily to the idea, and Labour surged to polling leads not seen since the early 2000s.
Ms. Truss told that eliminating the 45p tax rate for anyone earning more than £150,000 was not a government priority.
Ms. Truss stated, “I listened to people, and I believe there is absolutely no shame in a leader listening to people and responding.” “That’s the type of person I am, and I’ve always been completely forthright and honest with others.
Everything I’ve done as prime minister, though, has been geared toward helping people get through a very harsh winter and very challenging circumstances, and strengthening our country for the future.
Yesterday, upon announcing the U-turn, Chancellor Kwasi Kwarteng stated, “We have listened.”
In an earlier aired round on Tuesday morning, the prime minister repeatedly declined to say whether she trusted the chancellor in the wake of the 45p tax rate reversal, instead stating that the two work “extremely closely.”
Ms. Truss was also asked whether she favors indexing benefit increases to inflation, to which she responded, “a decision will be taken in due course.”
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.
The prime minister has not ruled out benefit cuts in real terms.
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 emphasized multiple times on Tuesday morning that “no decision has been made” amid mounting demand to clarify her stance on the subject.
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.
Sir Iain Duncan Smith, a former leader of the Conservative Party, stated following Ms. Truss’s interview that it “makes no sense” to not index benefits to inflation.
He told a Conservative party fringe event in Birmingham that he quit as labor and pensions secretary in 2016 under previous Conservative PM David Cameron because the government had “lost the plot” over welfare system cuts and that it “would be a disaster to do that again.”
Brandon Lewis hesitated to voice his view, saying to Kay Burley, “There is a procedure surrounding this that the Department for Work and Pensions, secretary of state Chloe Smith goes through.”
He stated that announcements will be made “during the fall,” adding, “I cannot predict what they will be.”
