UK PM Liz Truss hints at benefits cuts, courts fresh Tory rebellion

When people are on a fixed income, when they are pensioners, it is quite hard to adjust. It's a different situation for people who are in the position to be able to work, said Liz Truss

Prime Minister Liz Truss said she’s yet to decide whether welfare payments in the UK should be increased in line with inflation, an issue that threatens to spark another bitter row with her disgruntled Conservative MPs.

“No decision has been made yet on benefit uprating,” Truss said in an interview with LBC Radio. She said pensioners would see their payments rise in line with inflation, but wouldn’t commit to the same for other welfare recipients.

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

The benefits decision has the potential to explode into another major political headache for Truss, with many senior MPs already having said she should stick to the pledge made by her predecessor Boris Johnson’s administration to boost them in line with soaring UK inflation.

Truss on Monday was forced to U-turn on a significant part of her economic plan —  abolition of the 45 pence top rate of income tax. The government has also been forced to bring forward a medium-term plan for public finances from November 23 in a bid to calm markets.

That’s emboldened rebels in her party, and members of her Cabinet privately say she will struggle to push through key parts of her economic revolution for Britain — a package of reforms aimed at boosting economic growth — because her authority in the party is already too damaged. It’s a remarkable turnaround for a prime minister who took office less than a month ago.

In the LBC interview, Truss repeatedly declined to rule out reversing course on other parts of her program, including her plans to end a cap on bankers’ bonuses. When asked if austerity measures were on the way to curb public spending, she said there would be a focus on fiscal responsibility.

In a sign of the opposition she will face on the benefits issue, Cabinet Minister Penny Mordaunt earlier told Times Radio that the payments should be protected.

“I’ve always supported —  whether it’s pensions, whether it’s our welfare system — keeping pace with inflation,” she said. “It makes sense to do so. That’s what I voted for before.”

Michael Gove, the former minister who has become an unofficial recruiting sergeant for unhappy Tories, also told Times Radio he would “need a lot of persuading” to back benefits not being uprated in line with inflation. Gove was one of the most high-profile critics of the 45p tax plan, which Truss had to shelve.

Truss said she recognizes the need to “win over hearts and minds” among her MPs, in the face of opposition from 

figures such as Gove.

“What the last 24 hours has shown is that I’m somebody who has a clear plan, has a clear direction, but is prepared to listen and is prepared to do things differently, if that is what is required,” Truss told BBC radio in a separate interview.