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Liz Truss refuses to rule out real-terms benefit cuts Liz Truss refuses to rule out real-terms benefit cuts
(32 minutes later)
Liz Truss has refused to rule out real-terms benefit cuts to help pay for her government's tax-cutting growth plan.Liz Truss has refused to rule out real-terms benefit cuts to help pay for her government's tax-cutting growth plan.
The PM's predecessor, Boris Johnson, promised to increase benefits in line with inflation.The PM's predecessor, Boris Johnson, promised to increase benefits in line with inflation.
But asked whether she would maintain the commitment, Ms Truss told the BBC the government had to be "fiscally responsible" and bring debt down.But asked whether she would maintain the commitment, Ms Truss told the BBC the government had to be "fiscally responsible" and bring debt down.
She said the government was listening and does "reflect on where we could have done things better".She said the government was listening and does "reflect on where we could have done things better".
Speaking in her first BBC interview since the U-turn on plans to scrap the 45p rate of tax for higher earners, she reiterated that the government could have laid the groundwork better for the measure.Speaking in her first BBC interview since the U-turn on plans to scrap the 45p rate of tax for higher earners, she reiterated that the government could have laid the groundwork better for the measure.
The PM is facing opposition from some Tory MPs over how the government will pay for its growth package.The PM is facing opposition from some Tory MPs over how the government will pay for its growth package.
Chancellor Kwasi Kwarteng's tax-cutting mini-budget on 23 September saw the pound's value plummet, borrowing costs soar, and the Bank of England bail out pension funds.Chancellor Kwasi Kwarteng's tax-cutting mini-budget on 23 September saw the pound's value plummet, borrowing costs soar, and the Bank of England bail out pension funds.
Kwarteng to set out debt plan earlier than plannedKwarteng to set out debt plan earlier than planned
Chancellor U-turns on plans to scrap top tax rateChancellor U-turns on plans to scrap top tax rate
On Monday, following a growing backlash from Tory MPs, Mr Kwarteng announced the government was dropping its plan to scrap the top rate of tax.On Monday, following a growing backlash from Tory MPs, Mr Kwarteng announced the government was dropping its plan to scrap the top rate of tax.
The chancellor also confirmed he would bring forward his medium-term fiscal plan, which will outline how the government plans to cut the UK's debt, "shortly" rather than at the end of November.The chancellor also confirmed he would bring forward his medium-term fiscal plan, which will outline how the government plans to cut the UK's debt, "shortly" rather than at the end of November.
Speaking to Radio 4's Today programme, Ms Truss insisted scrapping the top rate of tax had not been a "core part" of her economic growth package.Speaking to Radio 4's Today programme, Ms Truss insisted scrapping the top rate of tax had not been a "core part" of her economic growth package.
She also said it showed she was leading a "listening government" that was responding to voters' concerns.She also said it showed she was leading a "listening government" that was responding to voters' concerns.
Asked about whether she would commit to increasing benefits in line with inflation, Ms Truss said: "We are going to have to make decisions about how we bring back down debt as a proportion of GDP in the medium term."Asked about whether she would commit to increasing benefits in line with inflation, Ms Truss said: "We are going to have to make decisions about how we bring back down debt as a proportion of GDP in the medium term."
She added that she was "very committed to supporting the most vulnerable", including providing an extra £1,200 to the poorest households.She added that she was "very committed to supporting the most vulnerable", including providing an extra £1,200 to the poorest households.
"So we have to look at these issues in the round. We have to be fiscally responsible.""So we have to look at these issues in the round. We have to be fiscally responsible."
However, Commons leader Penny Mordaunt told Times Radio it "makes sense" to increase benefits in line with inflation.
"We want to make sure that people are looked after and that people can pay their bills. We are not about trying to help people with one hand and take away with another," the cabinet minister said.
Chancellor Kwasi Kwarteng has acknowledged the "turbulence" caused by his mini-budgetChancellor Kwasi Kwarteng has acknowledged the "turbulence" caused by his mini-budget
In May this year, then-chancellor Rishi Sunak said benefits would be uprated by this September's Consumer Prices Index measure of inflation, which is currently 8.6%, subject to a review by the work and pensions secretary. In May this year, then-chancellor Rishi Sunak said benefits would be uprated by this September's Consumer Prices Index measure of inflation, subject to a review by the work and pensions secretary.
Mr Kwarteng has declined to commit to the policy, though the government has pledged to increase state pension contributions in line with inflation.Mr Kwarteng has declined to commit to the policy, though the government has pledged to increase state pension contributions in line with inflation.
Failing to keep benefits in line with rising prices would leave some of the poorest households facing a real-terms cut in their incomes.Failing to keep benefits in line with rising prices would leave some of the poorest households facing a real-terms cut in their incomes.
Conservative MP Mel Stride, who chairs the Commons Treasury Committee, said it would be "a really tough call to make" if he was asked to vote for uprating benefits in line with wages rather than inflation.
He told BBC Radio 4's Today programme he "would have to think long and hard about that" because of the "strong real-terms squeeze on those benefits already".
Former Work and Pensions Secretary Damian Green told the programme the policy would "probably not" get through the Commons.
"I think that there will be many of my colleagues who think that when you're reaching for spending cuts, benefit payments are not the way to do it," the Tory MP said.
Former cabinet minister Michael Gove told Times Radio he would need "a lot of persuading" to stop benefits from rising in line with inflation, while former Housing Secretary Esther McVey said it would be a "huge mistake" not to give a cost of living increase to benefit payments.Former cabinet minister Michael Gove told Times Radio he would need "a lot of persuading" to stop benefits from rising in line with inflation, while former Housing Secretary Esther McVey said it would be a "huge mistake" not to give a cost of living increase to benefit payments.
"[It] cannot be that the books are balanced on the back of benefits," she added.
Former Work and Pensions Secretary Damian Green told LBC that a freeze or cut in benefits would not get through the Commons.
The Joseph Rowntree Foundation said the government must urgently reassure those on the lowest incomes that it "won't renege" on its promise to raise benefits in line with inflation.The Joseph Rowntree Foundation said the government must urgently reassure those on the lowest incomes that it "won't renege" on its promise to raise benefits in line with inflation.
Principal policy adviser Katie Schmuecker said: "Liz Truss felt able to give that assurance to pensioners, now she must be clear that she won't target cuts at those on the lowest incomes who have been struggling for months to feed their families, cook hot food and heat their homes."Principal policy adviser Katie Schmuecker said: "Liz Truss felt able to give that assurance to pensioners, now she must be clear that she won't target cuts at those on the lowest incomes who have been struggling for months to feed their families, cook hot food and heat their homes."
Labour's shadow chancellor Rachel Reeves said: "The idea that the government can afford to give tax cuts to the wealthiest, but not uprate benefits in line with inflation, I think is grotesque."Labour's shadow chancellor Rachel Reeves said: "The idea that the government can afford to give tax cuts to the wealthiest, but not uprate benefits in line with inflation, I think is grotesque."
Liz Truss' claims on the economy fact-checkedLiz Truss' claims on the economy fact-checked
Government's U-turn won't be forgottenGovernment's U-turn won't be forgotten
Meanwhile, former Home Secretary Priti Patel is set to accuse Ms Truss and Mr Kwarteng of "spending today with no thought of tomorrow" at a fringe event at the Conservative Party Conference on Tuesday, according to The Times.Meanwhile, former Home Secretary Priti Patel is set to accuse Ms Truss and Mr Kwarteng of "spending today with no thought of tomorrow" at a fringe event at the Conservative Party Conference on Tuesday, according to The Times.
"I want to see our party regain its credibility by restoring its commitment to sustainable public spending," she is expected to say."I want to see our party regain its credibility by restoring its commitment to sustainable public spending," she is expected to say.
"Right now, we have got into a pattern of borrowing huge amounts to fix today's urgent problems or generate short-term populist headlines."Right now, we have got into a pattern of borrowing huge amounts to fix today's urgent problems or generate short-term populist headlines.
"Each time, it seems that there's a good case, but what does this mean for future generations?""Each time, it seems that there's a good case, but what does this mean for future generations?"