Defiant Liz Truss faces a full-scale Tory revolt as she plots to hit millions of poor Brits with a real-terms benefits cut.
This comes at a time when people of all classes are being assaulted from all angles just to get by with millions of workers from all classes worried about how they will survive this winter, with many fearing losing their homes and going cold and hungry.
The Prime Minister is looking at cancelling the vow to raise welfare by inflation of about 10% next April, instead using earnings growth of just over 5%. That will mean real terms cut of 5% for those in receipt of benefits a cut to those not only out of work but those in work who rely on tax credits to make up their wage.
In 2021 2 million families were claiming Child Tax Credit and/or Working Tax Credit, this cut to benefits will hit the working poor hard.
Chancellor Kwasi Kwarteng will bring forward the date of his November 23 plan to cut debt and spending, to as soon as this month.
But even serving minister Penny Mordaunt, who sits in Cabinet, sent a warning shot to the PM. But speaking to Times Radio, Commons leader Penny Mordaunt – who engaged in a bad-tempered battle against Ms Truss for the leadership this summer – said it ‘makes sense’ to increase benefits in line with inflation. She said: ‘We want to make sure that people are looked after and that people can pay their bills.
She added: “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.”
A leading ‘One Nation’ Tory warned Liz Truss would “probably not” not get benefit cuts through Parliament – and will need another humiliating U-turn.
Damian Green, a former deputy PM and Work and Pensions Secretary, told the BBC: “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.”
Other leading Tory voices warning against a benefits cut include ex-minister Michael Gove, Treasury Committee chairman Mel Stride, Blue Collar Tory and former welfare slasher Esther McVey, and former Treasury minister John Glen.
Yet Ms Truss is preparing to press ahead and face down rebels, the Daily Mail reported.
Mr Green 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 give an extra £1,200 of help for energy bills to the poorest people in the country, but then say we’re going to claw hundreds of pounds of that back.
“That militates against the government’s own rescue package.
“I don’t see the sense of this.”
Asked if she’d need to make another U-turn he replied: “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’re on the wrong track. We’ve had one this weekend so let’s avoid the necessity for another.”
Rishi Sunak had promised benefits would rise by inflation – subject to a review on the finer details.
But while Liz Truss has promised to raise pensions by inflation, she told LBC today: “No decision has been made yet on benefit uprating. That decision will be taken in due course.”
Asked if a 70-year-old was more important than a family with children she replied: “I’m not saying that at all.”
Asked if she was listening to Penny Mordaunt, Ms Truss told Sky News: “I’m very clear that going into this winter, we do need to help the most vulnerable.
“In addition to the energy price guarantee we’ve also made sure the most vulnerable households have an extra £1,200 and this Government will always help people get on in life, whilst making sure the most vulnerable are protected.”
Asked if she welcomed Ms Mordaunt’s comments she said: “No decision has been made yet on that issue and I look forward to having those discussions.”
The Institute for Fiscal Studies estimates that each percentage point rise in CPI adds £1.6 billion to welfare spending.
Mel Stride, Tory chairman of the Treasury Select Committee, said he would have to “think long and hard” if asked to vote to increase benefits in line with earnings rather than inflation.
Mr Stride told Today: “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).
The Truss also risked setting another hare running by refusing to ‘speculate’ when challenged on whether the pension age might have to rise beyond 67.
The alarm at the prospect of curbing benefits rises again appears widespread at the top level. One Cabinet minister told MailOnline: ‘Who has been briefing this stuff? Are we really going to do it? I can’t see how it is possibly going to happen.
‘I am a fiscal hawk but even I don’t think you can keep benefits down. We’ve had enough of a row over the top rate of tax – benefits would be even worse.’
Work and Pensions Secretary Chloe Smith is also thought to have significant doubts over the plans. ‘We know that people are struggling with some of the costs that are rising,’ she told conference yesterday. ‘That’s why protecting the most vulnerable is a vital priority for me and this government.’
The reality we face is that this government under Liz Truss is not a government for all of the nation, but for the Oligarchy