Liz Truss has refused six times to rule out further mini-Budget U-turns after she ditched the Government’s plans to scrap the top rate of income tax.
The Prime Minister was asked repeatedly if she could rule out other measures being dropped during a bruising interview with LBC Radio’s Nick Ferrari but she did not directly answer the question.
Ms Truss said that she is “absolutely determined” to “press ahead with this growth plan”.
It came amid growing expectations that Kwasi Kwarteng will bring forward the publication of his medium-term fiscal plan.
The Chancellor had been planning to wait until November 23 to publish the blueprint, along with official economic forecasts from the Office for Budget Responsibility, but it is now thought that he will publish them later this month.
The Government is also facing a growing Tory rebellion over suggestions benefits may not rise in line with inflation next year. Ms Truss said that “no decision has been made yet on benefit uprating”.
Follow the latest updates below.
Cabinet minister: ‘Makes sense’ for benefits to rise with inflation
Penny Mordaunt, Leader of the House of Commons, has told Liz Truss that it “makes sense” for benefits to rise in line with inflation.
Speaking to Times Radio, she said: “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.”
Pictured: PM and Chancellor in Birmingham this morning
‘Clearly U-turns are not good for governments’
Damian Green, the Tory former first secretary of state, said that if Liz Truss pursues a policy of not increasing benefits in line with inflation she will be forced into another U-turn.
He told the BBC’s Radio 4 Today programme: “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 are on the wrong track, we’ve had one this week and so let’s avoid the necessity for another.”
Senior Tory MP issues warning to PM on benefits
Damian Green, the former work and pensions secretary, said Liz Truss has “probably not” got the support in the House of Commons to prevent an inflation-linked rise to benefits.
He told BBC Radio 4’s Today programme: “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.
“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 and then say but we’re going to claw hundreds of pounds of that back, it militates against the Government’s own rescue package, so I don’t see the sense of this.”
Asked if the PM could get a non-inflation-linked rise to benefits through the Commons, Mr Green said: “Probably not, 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.
“As I say, cutting the welfare bill can be done a number of ways, there are other ways to do that and of course it illustrates the wider political problem of where do you find cuts, the two biggest government budgets are health and welfare and it’s politically difficult to cut either of those budgets.”
‘We have learned from the feedback’
It was suggested to Liz Truss during her interview with BBC Radio 4’s Today programme that the country has discovered that this “lady is for turning” – a reference to the famous Margaret Thatcher quote – because of the U-turn on income tax.
Ms Truss said that she has a “very clear plan about how we are going to get through this winter” and added: “Is everything the Government [has] done absolutely perfect? No, it is not. I fully acknowledge that and we have learned and we have learned from the feedback that we have received.”
PM refuses to be drawn on bringing forward fiscal plan
Kwasi Kwarteng said in his conference speech yesterday that he will be publishing his medium term fiscal plan “shortly”. Those comments were interpreted as a sign that he will bring forward publication from the previously stated date of November 23.
Liz Truss refused to say if the blueprint will be brought forward.
In an interview recorded yesterday lunchtime, the Prime Minister told the BBC: “We are working very closely with the OBR… that is something the Chancellor is working on.”
Liz Truss defends extra government borrowing
Liz Truss has defended her plans to borrow money to pay for tax cuts.
In an interview with the BBC Radio 4 Today programme which was recorded yesterday lunchtime, Ms Truss said that “this is the right time to take on some extra borrowing” because of the “very severe international situation that we face” – a reference to the war in Ukraine.
The Prime Minister added: “We will bring down debt as a proportion of GDP in the medium term…”
PM fails to rule out introducing austerity measures
Liz Truss was asked if she can rule out introducing austerity measures in the coming years.
The Prime Minister told LBC Radio: “What we are doing this winter is we are borrowing more to cover the cost of the energy price guarantee, to make sure we are able to help people get through this winter and next winter.
“Over time I have committed that we will reduce the debt as a proportion of GDP but that will be over the medium term and the whole point of the mini-Budget we announced is it is about getting the economy growing and the main way I want to help pay down that debt is through economic growth.”
Liz Truss ‘has spoken to Boris Johnson’ since becoming PM
Liz Truss has revealed that she has spoken to Boris Johnson after she took over from him in Number 10.
The Prime Minister told LBC Radio that “I’ve had a few chats with Boris”.
Asked what they talked about, Ms Truss said: “Well, you know, he’s given me the benefit of his experience.”
Ms Truss would not be drawn any further.
PM: ‘No decision has been made’ on benefits
Liz Truss said “no decision has been made” on whether benefits will rise in line with inflation next year.
While there is uncertainty over benefits, the Government has made a cast iron commitment to keep the triple lock on pensions.
Asked during an interview on LBC Radio why “pensioners more important than those who are on benefits”, Ms Truss said: “Well I committed during the leadership election campaign, that we will protect the triple lock, which means that pensioners get either 2.5 per cent, prices or wages, whichever is the higher. And it’s very difficult when you are a pensioner to adjust your income in any way.
“People are facing higher prices. Of course, what we’re doing on the energy price guarantee will help people with those prices. Now… no decision has been made yet on benefit uprating.”
PM refuses six times to rule out further mini-Budget U-turns
Liz Truss has refused six times to rule out further mini-Budget U-turns.
Here is the full exchange between the Prime Minister and LBC Radio’s Nick Ferrari:
NF: “Will there be more U-turns on this budget?”
PM: “I’m absolutely determined…”
NF: “…on this budget. Mini budget…”
PM: “…to press ahead with this growth plan. The vast majority of it we’ve already…”
NF: “Respectfully, that’s not answering… will there be more U-turns on this mini budget? You’ve got Ben Houchen saying you need to reverse the policy regarding bankers’ bonuses.”
PM: “Well, that is not part of this mini-Budget. This mini-Budget is all about how do we help on energy bills…”
NF: “But will there be more U-turns?”
PM: “I’m determined to carry on…”
NF: “So you can’t rule it out…”
PM: “…with this growth package. That’s what’s important, but it’s also important, Nick, that we do listen to people and we bring the country with us.”
NF: “Right. So there could be more U-turns?”
PM: “I’m not saying that at all and we’ve already implemented, you know, we’ve already implemented the biggest part of the package. The biggest part of the package, if you remember, people were facing energy bills of up to £6,000. We have fixed that. This October, we have made sure that the typical family isn’t paying more than £2,500. That was the biggest part of this package.”
Tax cut not a ‘major part’ of mini-Budget
Liz Truss has insisted that the policy to scrap the 45p rate of income tax “wasn’t a major part of the package”.
In an interview with LBC Radio, the Prime Minister said “me and the Chancellor” had come up with the original policy which has now been ditched.
PM: ‘Abolishing 45p tax rate was only a tiny part of our big plans’
Liz Truss has written for The Telegraph today as she argued that the 45p income tax cut was just “a tiny part of the plan”.
The Prime Minister said scrapping the 45p additional rate had “become an unnecessary distraction” and “that is why the Chancellor and I decided to no longer proceed with it”.
Ms Truss said that “in order to get Britain moving, we need to have the courage of our convictions”.
She also said that “a Conservatives, we have fallen out of the habit of making Conservative arguments”.
Cabinet ministers: Ditching link between benefits and inflation a ‘non-starter’
The Telegraph can reveal there is unease at the top of Government over the suggestion that benefits may not rise in line with inflation next year.
Some Cabinet ministers are understood to believe that refusing to increase benefits by inflation is a “non-starter”.
But No 10, considering the options, is preparing to question whether it is fair for people on benefits to get inflation-linked rises while scores of workers get real-terms pay cuts.
‘I think we will deliver the rest of that package’
Brandon Lewis, the Justice Secretary, said the Government intends to implement the rest of its mini-Budget after yesterday’s income tax U-turn – but he was unable to rule out further U-turns.
Asked if he could rule out another U-turn, Mr Lewis told Sky News: “Well look, as I say, in government you are always looking at what you can do, what you can do better, what you can deliver better for people in the future.
“But I think we have got a package that is a strong package. It is a package that says to the world that the UK is open for business so I think we will deliver the rest of that package as it is.”
Senior Tory MP expresses concerns on benefits
Mel Stride, the 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.
He told BBC Radio 4’s Today programme: “I’d need to see all the details, I’d need to see it in the round, but I’d have to think long and hard about that.
“Because 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 per cent because inflation was low the previous September, but of course inflation was much higher than that (in April).
“So we’re coming off the back actually of a kind of quite a strong real-terms squeeze on those benefits already so I think that will be a really tough call to make.”
PM: ‘We have to be fiscally responsible’
Liz Truss has said there is a need to be “fiscally responsible” amid suggestions benefits will not rise in line with inflation next year.
The Prime Minister told BBC Radio 4’s Today programme: “We are 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, in fact in addition to the energy price guarantee we’re also 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.”
Good morning and welcome to day three of Conservative Party conference here in Birmingham.
It promises to be another busy start to the day after yesterday’s early U-turn on scrapping the top rate of income tax, with Liz Truss doing a round of morning media interviews.
There will then be a series of big speeches this afternoon, including from Suella Braverman, the Home Secretary.
I will be on hand to bring you all of the latest developments as they happen.