Will Liz Truss cave in to pressure from her Cabinet and perform another U-turn over the benefits rate?
- The PM faces a showdown with ministers at this week’s Cabinet meeting
- She is planning to increase benefits in line with increase in earnings, not inflation
- Now Truss could avert revolt by abandoning increase in universal credit by 5.5%
Benefits are set to be increased to match inflation as Liz Truss gives in to pressure from her Cabinet.
The Prime Minister faces a showdown with ministers at this week’s Cabinet meeting over her plan to save billions from the welfare bill by increasing benefits in line with the increase in earnings, not the larger inflation rate.
She had already been warned by Commons leader Penny Mordaunt that the Government should not ‘try to help people with one hand and take away with the other’, while Welsh Secretary Sir Robert Buckland spoke about the importance of a ‘safety net’ for people in need.
Now it is expected that Miss Truss will avert a revolt by abandoning her proposal to increase universal credit only in line with earnings, a hike of 5.5 per cent. Instead, the payment will be uprated next year in line with inflation, meaning a rise of about 10 per cent.
Benefits are set to be increased to match inflation as Liz Truss gives in to pressure from her Cabinet
One Cabinet minister told The Sunday Times that it was ‘not a political reality’ for Miss Truss to go back on Boris Johnson’s commitment to increase benefits to match inflation.
Another said she would be forced to U-turn when it became clear the Government could not win a vote in the Commons on the issue. ‘She can either get ahead of this now and make it go away or we will be dragged kicking and screaming towards another screeching U-turn when they realise it’s a game of arithmetic and the numbers will not stack up,’ the minister said.
A No 10 source insisted Miss Truss had not yet made up her mind.
‘The PM is genuinely undecided about this and there’s a process to go through. It’s wrong to suggest she’s digging in on a position, because there’s nothing to dig in on. She’s in listening mode in general.’
In another sign of the disquiet caused by the benefits plan in the wake of Kwasi Kwarteng’s controversial mini-Budget, some Tories are said to have contacted Labour MPs privately to discuss how they can sabotage it.
Shadow work and pensions spokesman Jonathan Ashworth told Times Radio yesterday: ‘By not going ahead with inflation-proofing these benefits, Liz Truss is making herself the captain of the anti-growth coalition. I’m saying to Conservative MPs, some of them have already reached out to me, let’s work together and let’s block these very deep cuts in disability benefits and pension benefits and benefits for working parents.’
The Prime Minister faces a showdown with ministers at this week’s Cabinet meeting over her plan to save billions from the welfare bill by increasing benefits in line with the increase in earnings, not the larger inflation rate
Asked how many MPs have asked for his help and whether Miss Truss should be worried, he replied: ‘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 non-partisan way to block these cuts where we can and if can.’
The Department for Work and Pensions carries out a formal review every autumn based on the Consumer Prices Index rate of inflation as it stood in September, and the increase comes into effect the following April. However, ministers can choose to base the rise on the current rate of wages increases instead of inflation.
By contrast, the Government has committed to keeping the pensions triple lock, meaning benefits will rise in line with inflation next year.
Chancellor of the Duchy of Lancaster Nadhim Zahawi told Sky News: ‘There’s a process. The actual data from September is still not fully collated.’
But he added: ‘The one thing I would tell your viewers is Liz Truss will always be on the side of helping the most vulnerable. We have Cabinet collective responsibility and when we make a decision on universal credit, on the benefits uplift, then we’ll be right behind them.’