Liz 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.
The prime minister is under pressure to set out whether benefit payments will be uprated in line with inflation, or if they will face a real-term cut.
It is understood that Downing Street is considering increasing Universal Credit using a lower metric, such as the increase in average earnings, instead.
While an official decision on benefit payments has still not been made, Welfare Secretary Chloe Smith said one “will be taken in due course”.
Senior Tories have called on the PM to row back on cutting public spending in the middle of the cost of living crisis, with concerns that failing to keep pace with rising prices would leave some of the poorest households worse off.
It comes as the government dramatically dropped its plans to abolish the 45% tax rate on earnings over £150,000 following widespread criticism.
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The policy was announced during the mini-budget near the end of September, which plunged UK markets into turmoil.
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2:16
Pound up after tax U-turn
What are MPs saying?
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Speaking to Sky News, Conservative MP Damian Green said: “The government should uprate in line with inflation. The previous government said it was going to, so people are expecting this.”
Asked if cuts to benefits are the next battle, he replied: “Well, I hope not because I hope the government has clearly started listening.”
Former transport secretary Grant Shapps is also among the senior Tories calling for the government to be transparent about its plans.
Image: Grant Shapps said the government must communicate clearly with the public
Asked if he would want to see benefits increased in line with inflation, he said: “Of course, every politician would want to see that.
“If there is a case whereby we are going to be going through difficult times, then the government must communicate that and be honest with people and explain how and what needs to happen next.”
Former home secretary Priti Patel is set to take aim over the government’s unfunded tax cuts, telling the Conservative Party it will “live or die” by its economic credibility.
According to The Times, she is expected to accuse the PM and Chancellor Kwasi Kwarteng of “spending today with no thought of tomorrow” and will call on Ms Truss to put a “ceiling” on public spending.
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4:01
Is there any way back for Kwarteng?
‘Action was needed urgently’
Despite the discontent within the Conservative Party, Liz Truss has pushed forward with her economic policy, saying the UK must have “the courage of its convictions to put our nation on the path to success”.
Writing in the Telegraph, the prime minister said the struggling economy was a global problem caused by Russia’s President Vladimir Putin and COVID and that there was “no time to waste”.
“Action was needed urgently. People forget the counterfactual of what would have happened had we not acted,” she wrote.
While she dismissed the U-turn on the 45p tax rate cut as a “tiny part of the plan”, reports in The Sun said that the Chairman of the 1922 Committee Sir Graham Brady went to see her at 7pm on Sunday evening.
The PM was then said to have met Chancellor Kwasi Kwarteng for crisis talks, hours before she ditched the tax promise on Monday morning.
Monday was a tumultuous day for the party, with Mr Kwarteng’s keynote conference speech altered at the last minute to acknowledge the U-turn.
Markets bounced back on Monday morning, but financial commentators cautioned that it was likely some respite only.
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1:45
‘We have a plan and we need to deliver it’
What will be happening at the Tory Conference today?
The Conservatives will be hoping for a quiet day on Tuesday ahead of Liz Truss’ speech on Wednesday.
In his first speech as foreign secretary, James Cleverly is expected to focus on the UK helping Ukraine defend itself against Russia.
He will also talk about finding a “mutually beneficial solution” to Brexit issues in Northern Ireland.
New Home Secretary Suella Braverman will also speak on Tuesday, setting out her plans to “redouble efforts to crack down on illegal migration”.
Education Secretary Kit Malthouse, Health Secretary and Deputy PM Therese Coffey, Transport Secretary Anne-Marie Trevelyan and Justice Secretary Brandon Lewis will also address the conference in Birmingham.
The Home Office is looking at what Denmark is doing to cut illegal migration, Sky News understands.
Last month, Home Secretary Shabana Mahmood dispatched officials to the Nordic nation to study its border control and asylum policies, which are considered some of the toughest in Europe.
In particular, officials are understood to be looking at Denmark’s tighter rules on family reunion and restricting most refugees to a temporary stay in the country.
Ms Mahmood will announce a major shake-up of the UK’s immigration system later this month, PA is reporting.
Labour MPs are said to be split on the move.
Some, in so-called Red Wall seats which are seen as vulnerable to challenge from Reform UK, want ministers to go further in the direction Denmark has taken.
But others believe the policies will estrange progressive voters and push the Labour Party too far to the right.
What are Denmark’s migration rules?
Denmark has adopted increasingly restrictive rules in order to deal with migration over the last few years.
In Denmark, most asylum or refugee statuses are temporary. Residency can be revoked once a country is deemed safe.
In order to achieve settlement, asylum seekers are required to be in full-time employment, and the length of time it takes to acquire those rights has been extended.
Denmark also has tougher rules on family reunification – both the sponsor and their partner are required to be at least 24 years old, which the Danish government says is designed to prevent forced marriages.
The sponsor must also not have claimed welfare for three years and must provide a financial guarantee for their partner. Both must also pass a Danish language test.
In 2018, Denmark introduced what it called a ghetto package, a controversial plan to radically alter some residential areas, including by demolishing social housing. Areas with over 1,000 residents were defined as ghettos if more than 50% were “immigrants and their descendants from non-Western countries”.
In 2021, the left of centre government passed a law that allowed refugees arriving on Danish soil to be moved to asylum centres in a partner country – and subsequently agreed with Rwanda to explore setting up a program, although that has been put on hold.
It comes as the government continues to struggle to get immigration under control, with rising numbers of small boat crossings in the Channel over the last few months and a migrant, deported under the UK’s returns deal with France, re-entering the country.
Some 648 people crossed the Channel to Britain in nine boats on Friday, according to Home Office figures, bringing the total for the year to 38,223.
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1:47
Have billions been ‘wasted’ on asylum hotels?
Ms Mahmood wants deterrents in place to stop migrants seeking to enter the country via unauthorised routes.
She also wants to make it easier to remove those who are found to have no right to stay in the UK.
Sources told the PA news agency she was eager to meet her Danish counterpart, Rasmus Stoklund, the country’s immigration minister, at the earliest possible convenience.
Image: Home Secretary Shabana Mahmood. Pic: PA
Speaking on BBC Radio 4, Mr Stoklund likened Danish society to “the hobbits in The Lord Of The Rings” and said people coming to the country who do not contribute positively would not be welcome.
Mr Stoklund said: “We are a small country. We live peacefully and quietly with each other. I guess you could compare us to the hobbits in The Lord Of The Rings.”
“We expect people who come here to participate and contribute positively, and if they don’t they aren’t welcome.”
The split in Labour was apparent from public comments by MPs today.
Stoke-on-Trent Central Labour MP Gareth Snell told Radio 4’s Today programme that any change bringing “fairness” to an asylum system that his constituents “don’t trust” was “worth exploring”.
But Nottingham East MP Nadia Whittome, who is a member of the party’s Socialist Campaign Group caucus, said: “I think these are policies of the far right. I don’t think anyone wants to see a Labour government flirting with them.”
It started with a strong espresso in a simple cafe on a side street in north London.
Several Algerian men were inside, a few others were outside on the pavement, smoking.
I’d been told the wanted prisoner might be in Finsbury Park, so I ordered a coffee and asked if they’d seen him.
Image: Spotting a man resembling the suspect, Tom and camera operator Josh Masters gave chase
They were happy to tell me that some of them knew Brahim Kaddour-Cherif – the 24-year-old offender who was on the run.
One of the customers revealed to me that he’d actually seen him the night before.
“He wants to hand himself to police,” the friend said candidly.
This was the beginning of the end of a high-profile manhunt.
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The Algerian convicted sex offender had been at large since 29 October, after he was mistakenly released from HMP Wandsworth in south London.
Within an hour of meeting the friend in the cafe, he had followed myself and camera operator Josh Masters to a nearby street.
Image: Kaddour-Cherif was accidentally freed five days after the wrongful release of convicted sex offender Hadush Kebatu (pictured). They were both arrested separately in Finsbury Park. Pic: Crown Prosecution Service/PA
We weren’t yet filming – he didn’t want any attention or fuss surrounding him.
“Follow me, he’s in the park,” the man told me.
“Follow – but not too close.”
We did.
I was in the same park a few weeks ago after fugitive Hadush Kebatu, the Ethiopian sex offender – also wrongly released from prison – was arrested in Finsbury Park.
It was odd to be back in the same spot in such similar circumstances.
As he led us through the park past joggers, young families and people playing tennis, the man headed for the gates near Finsbury Park station.
All of a sudden, two police officers ran past us.
The Met had received a tip-off from a member of the public.
It was frantic. Undercover officers, uniformed cops, screeching tyres and blaring sirens. We were in the middle of the manhunt.
As they scoured the streets at speed, we walked by some of the Algerian men I’d seen in the cafe.
Image: Kaddour-Cherif walked up to a nearby police van as Tom continued to question him
One man near the group was wearing green tracksuit bottoms, a beanie hat and had glasses on.
“It’s him, it’s him,” one of the other men said to me, gesturing towards him.
The man in the beanie then quickly turned on his heel and walked off.
“It’s him, it’s him,” another guy agreed.
The suspect was walking off while the police were still searching the nearby streets.
Josh and I caught up with him and I asked directly: “Are you Brahim?”
You may have watched the exchange in the Sky News video – he was in denial, evasive and pretended the suspect had pedalled off on a Lime bike.
I can only guess he knew the game was up, but for whatever reason, he was keeping up the lie.
Image: Police moved in to handcuff him and used their phones to check an image of the wanted man from one of Sky News’ online platforms
Image: Once his identity was confirmed, Kaddour-Cherif was put into the back of the police van
Moments later, one of the bystanders told me “it is him” – with added urgency.
Only the prisoner knows why he then walked up to the nearby police van – officers quickly moved to handcuff him and tell him why he was being arrested.
Over the next 10 minutes, he became agitated. His story changed as I repeatedly asked if he had been the man inside HMP Wandsworth.
Officers needed confirmation too – one quickly pulled out a smartphone and checked an image of the wanted man from one of Sky News’ online platforms.
Nadjib had been on the lookout for the convicted sex offender, who had been spending time in different parts of north London since his release from HMP Wandsworth.
He even had a folded-up newspaper clipping in his pocket so that he could check the picture himself.
He told Sky News he was “very happy when he got arrested”.
“I don’t like the sex offenders,” he said.
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“I know him from the community. He has been around here every night since he was released from prison.”
Image: Nadjib (L) told Sky’s Tom Parmenter he had been looking out for the offender
Not only did he tip the police off about the prisoner’s whereabouts, but he also witnessed the other high-profile manhunt that ended in the same park last month.
Ethiopian asylum seeker Hadush Kebatu was also arrested in Finsbury Park after a 48-hour manhunt in the capital. He was then deported to Ethiopia.
Image: Brahim Kaddour-Cherif
“When he [Kebatu] got arrested in the park I was there,” Nadjib said.
I asked him why both men ended up in the same park in north London.
“Because the community, he came here for the community of Algerians,” he said.
Several Algerian people that I spoke to on Friday told me how shameful they thought it was that this sex offender was still on the run.