Liz Truss takes on Tory rebels in battle to curb advantages

Mel Stride, the chair of the Tory Treasury committee, told BBC Radio 4’s World at One that more mini-Budget U-turns may be needed.

“There may be further requirements to dissolve some of those positions,” he said.

Esther McVey, the former work and pension secretary, told an occasional event: “I have to say it would be a big mistake not to increase benefits with the cost of living.

“It cannot be that the books are balanced on the back of benefits. That’s not right at all.”

The concern is shared by some around Mrs. Truss’s table. A senior minister said the cabinet would “blow a raspberry” if it tried to block a rise in benefits with inflation.

Another said it was politically unsustainable given the cost of living.

Current government policy, as established by Rishi Sunak when he was chancellor, is to increase benefits in line with September inflation. Some 5.7 million people had Universal Credit in England, Scotland and Wales this summer.

But finance ministers have refused to publicly confirm that the Truss administration will take the same approach, leaving open the possibility that next year’s rise will not match inflation.

As no final decisions have been made, Downing Street would consider a number of different options, including tying benefits to the increase in average earnings, 5.5 percent.

Inflation is almost 10 percent and could run higher depending on the impact of the utility bill freeze.

The Institute for Fiscal Studies said it would cost £7 billion more next year to tie Universal Credit to inflation rather than average earnings.

A decision is needed in November and will take effect from April next year.

There is hope among government figures looking at options that the policy to lower the benefits bill could make more sense with Tory MPs in Red Wall’s traditional Labor heartlands than abolishing the top rate.

On Monday, Mr Rees-Mogg told The Telegraph that the… outrage over the 45p U-turn was “sane and furious that meant nothing”.

He told Chopper’s Politics podcast: “It was a political reality. Sometimes things you want to do don’t get the approval of the nation you hope for and there’s no point in stubbornly holding onto them if there just isn’t the desire and appetite to do them.

“We live in a democracy and politicians have to respond to the democratic will. I’m always for tax cuts, anytime, anywhere.

“This is politics. Tax decisions are often reversed. Governments come up with ideas that when reality hits, it turns out the nation doesn’t want to. So you can take the pasty tax, which was reversed because it just wasn’t going to work and then we won the next general election.”