Truss refuses to commit to inflation-matching benefits rise

Speaking to BBC Radio 4’s Today programme, Liz Truss indicated that benefits would be raised in line with growth in wages, at 5.4%, rather than inflation. In real terms this would be a cut, leaving the average benefits recipient £214 worse off.  

Inflation, which The Bank of England expects to rise to 11% this month (October), currently sits at 9.9%. The Prime Minister has committed to a triple-lock rise in pensions with inflation, as promised during her leadership campaign, but has told Radio 4 that people receiving welfare are “in a different situation”.

Following a difficult start to the Truss regime, the pound bounced back yesterday (03 October) following the U-turn on the 45p rate of income tax announced by the Treasury.  

Truss and the Chancellor Kwasi Kwarteng are both facing questions regarding their economic plan at the Conservative Party conference in Birmingham this week. 

Another “fiscal event” is expected at the end of October, this one focusing on spending and deregulation. 

Speaking to LBC, Truss said were “going to have to make decisions about how we bring down debt as a proportion of GDP in the medium term … I am very committed to supporting the most vulnerable.” 

“When people are on a fixed income, when they are pensioners, it is quite hard to adjust. I think it’s a different situation for people who are in the position to be able to work  

“What I want to do is make sure that we are helping more people into work.” 

Truss is facing pushback from Tory MPs on this stance, as well as members of her own cabinet, with the leader of the house of commons Penny Mordaunt, telling Times Radio this morning that it “makes sense” for benefits to rise in line with inflation. 

Speaking to LBC, Stephen Crabb, a former Work and Pensions and Welsh Secretary, said that a real terms cut to benefits would be “the wrong choice”. 

Crabb continued: “Certainly when the Government starts signalling it wants wide-ranging spending cuts, there are going to be some pretty gritty conversations with backbenchers about where those spending cuts might fall. 

“Don’t forget the social security uprating this April just gone was only 3% even though the real inflation rate was 6%. 

“The government at the time promised the following April there’d be a correction. It looks like that might be ditched. That would be the wrong choice.”