Liz Truss refuses to commit to raising benefits in line with inflation despite growing pressure
Liz Truss has refused to commit to raising benefits in line with inflation, despite growing pressure from a cabinet minister and senior Tory MPs.
Speaking to broadcasters in Birmingham, where the Tory party conference is underway, the prime minister said she had “not made a decision” on whether to stick to the benefit uprate promised by her predecessor Boris Johnson.
She added: “Of course, there will be discussions about the way forward on commitments like benefits, on how we deal with future budgets.
“I’m very clear that going into this winter, we do need to help the most vulnerable.”
While Ms Truss has not ruled out a real-terms cuts to benefits, she has said she is “fully committed” to raising pensions in line with inflation.
Politics Hub: Truss and cabinet minister take different lines on benefits
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PM Liz Truss interview in full
When asked about the difference in approach for people on pensions compared to benefits, Ms Truss told LBC’s Nick Ferrari that “people are in a different situation, depending on which stage of life they’re in”.
She added: “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.”
Asked if she will rule out austerity, she said she has committed to reducing debt as a proportion of national income over the medium term.
“Well, I wouldn’t use the term you describe. What I’m talking about is fiscal responsibility,” she added.
Ministers hint at cabinet split
Ms Truss is facing a fresh battle with Conservative MPs over a potential benefits squeeze and cuts to public spending, after already being forced into making a policy U-turn on her tax cuts yesterday.
It is understood that Downing Street is considering increasing Universal Credit using a lower metric, such as the increase in average earnings, instead of inflation.
Penny Mordaunt became the first cabinet minister to openly oppose the idea of not uprating benefits with inflation, telling Times Radio: “I’ve 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.”
The Leader of the House of Commons added: “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.”
Ms Truss refused to be drawn on whether she welcomed those views, telling reporters: “As I’ve said, no decision has been made yet on that issue. And I look forward to having those discussions.”
Ms Mordaunt appears to have taken a different line to Brandon Lewis, the justice secretary – hinting at a cabinet split on the matter.
He refused to give his position when asked about the government’s plans to uprate benefits on Sky News, telling Kay Burley: “There is a process around this that the Department for Work and Pensions, Chloe Smith, the secretary of state, works through.”
He said announcements will be made “over the autumn”, adding: “I’m not going to pre-judge what that will be.”
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Should benefits rise with inflation?
The comments come after a slew of senior Tories called on the PM to row back on cutting public spending in the middle of the cost of living crisis.
On Monday, senior Conservative MP Damian Green told Sky News: “The government should uprate in line with inflation. The previous government said it was going to, so people are expecting this.”
Former transport secretary Grant Shapps has also stepped up the pressure. Asked if he would want to see benefits increased in line with inflation, he said: “Of course, every politician would want to see that.”
Benefits are usually uprated in line with the consumer price index (CPI) rate of inflation from September, with the rise coming into effect the following April.
The Institute for Fiscal Studies estimates that each percentage point rise in CPI adds £1.6 billion to welfare spending.
The latest row comes as the government dramatically dropped its plans to abolish the 45% tax rate on earnings over £150,000 following widespread criticism, including from Tory MPs.
Ms Truss defended the U-turn on Tuesday, saying the government “listens” and the tax cut “wasn’t a core part” of the growth plan.
But she repeatedly refused to say if she trusts her chancellor, Kwasi Kwarteng, when challenged, instead saying the two work “very closely”.
Business
iPhones sold in US will no longer come from China – as Apple reveals impact of Trump’s tariffs
Apple says devices sold in the US will no longer come from China, as the tech giant tries to mitigate the impact of Donald Trump’s tariffs.
Most iPhones will be sourced from India instead, with iPads coming from Vietnam, to prevent dramatic price rises for American consumers.
Unveiling financial results from January to March, the company said the US president’s escalating trade war has had a limited impact on its performance so far.
However, Apple CEO Tim Cook believes the tariffs will add £677m in costs during the current quarter – assuming Trump’s policies don’t change.
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Revenue for the first three months of the year stood at £71.8bn, with earnings of £18.6bn also beating analyst expectations.
High demand for iPhones during this period may have been driven by US shoppers rushing to make purchases before the new tariffs came into force.
But the full impact of any panic buying will only emerge when Apple reports its results from April to June later in the year.
Apple’s reliance on Chinese factories to manufacture its iPhones meant the company was far more exposed to the impact of Trump’s trade war than others.
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After the president unveiled plans to impose reciprocal tariffs on dozens of countries – now largely paused for 90 days – Apple’s stock plunged by 23%, wiping out £582bn of value.
While its share price has recovered slightly, it remains 5% lower than before “Liberation Day”.
Growing tensions between Washington and Beijing are also having an impact on Apple’s sales in China, which fell 2.3% between January and March.
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Is your iPhone data less secure?
Addressing the planned changes to manufacturing, Mr Cook added: “We have a complex supply chain. There’s always risk in the supply chain. What we learned some time ago was that having everything in one location had too much risk with it.”
Devices sold outside of the US will continue to be made in China.
Tesla’s board members have reportedly started a search for someone to replace Elon Musk as CEO.
Several executive search firms were approached to find a successor around a month ago, the Wall Street Journal reported.
But it added that the current status of the succession planning for the electric car-maker was not known.
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Musk jokes about attacks on Tesla cars
Tesla’s chair, Robyn Denholm, later reacted to the report by insisting that any suggestion of an active search was “absolutely false”.
She added that the board was highly confident in Musk’s ability to continue “executing on the exciting growth plan ahead”.
Musk’s net worth has plunged and Tesla stocks have fallen sharply amid a public backlash over his role in Donald Trump’s government. He owns just under 13% of Tesla stock and is the largest shareholder.
The world’s richest man has been leading the Department of Government Efficiency (DOGE), where he has overseen the firing of tens of thousands of government employees.
He has also supported far-right parties in Europe, which has led to protests against Musk and Tesla, which have seen its showrooms and charging stations vandalised across the US and Europe.
President Trump has labelled the vandals “terrorists”.
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Musk pulls back from DOGE role
It comes after Musk said the time he spends with DOGE would “drop significantly” from May and he will dedicate more time to running his companies, such as Tesla, SpaceX and X.
The board members met with Musk and asked him to announce publicly he would spend more time at Tesla, the report said.
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It was unclear if Musk, who is a member of the board, was aware of any attempts to identify a successor, or if his pledge to spend more time at Tesla had affected succession planning, it added.
On Wednesday, Mr Trump said Musk could be part of his administration for as long as he wants.
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“You’re invited to stay as long as you want,” Mr Trump said.
He said Musk had been “treated unfairly” for his role in helping Mr Trump slash the size of the federal government, adding: “You really have sacrificed a lot.”
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