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.
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.
Warnings of widespread disruption caused by freezing weather have been issued, with temperatures expected to plummet to as low as -16C in some areas.
Snow, ice and fog warnings have been issued, following on from severe weather on Wednesday, with the South West and south of England particularly affected by heavy snow.
All of the warnings are yellow, meaning there is a danger of injury from slips and falls and some disruption to travel expected.
Devon and Cornwall saw roads closed and motorists stationary for “long periods of time”, a joint statement from Devon and Cornwall Police and Devon County Council Highways said.
Snow ploughs became stuck in queues of traffic caused by “minor incidents”, the statement added.
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A yellow warning for snow and ice is in place for northern Scotland until midnight on Thursday and another snow and ice warning is in force for Northern Ireland until 11am on Thursday as sleet and snow showers are set to continue.
Meanwhile, a yellow fog warning has been issued for Northern Ireland until 9am on Thursday.
A further yellow warning for snow and ice affecting Cornwall, much of Wales and parts of northwest England has been issued until 11am on Thursday.
And a yellow ice warning has been issued for parts of southern England and south-east Wales until 10.30am on Thursday.
Travel disruption to road and rail services are likely on Thursday in the warning areas, as well as the potential for accidents in icy places, the forecaster said.
As icy conditions persist, motorists are being urged to stick to major roads that are most likely to have been gritted.
Car insurer RAC said it has seen the highest levels of demand for rescues in a three-day period since December 2022.
The UK may have reached peak obesity and rates could start falling rapidly later this year, Sky News has been told.
Data collected by one of the biggest online sellers of weight loss jabs suggests that so many people are now taking effective medication that the inexorable rise in obesity could start to reverse.
According to Simple Online Pharmacy, which has access to wholesale figures, 500,000 people in the UK are currently taking either Mounjaro or Wegovy – and they can expect to lose 15% to 20% of their weight over a matter of months.
Rebecca Moore, the company’s chief operating officer, said: “Our projections are that around a million people will reverse their obesity in a year.
“We should be at the point now, we believe, where we’re starting to see rates decline.
“We would not be surprised if by the end of this year we’ve seen a really significant decline in obesity.”
The company has supplied the drugs to 200,000 people, who have collectively lost 600 tonnes of their weight.
Demand for medication is growing by 10% to 40% month-on-month, and the company has had to build a walk-in fridge to store enough medication to supply 400 patients an hour.
“The narrative has really shifted in the last few months,” said Ms Moore.
“People are recognising that obesity is a lifelong chronic condition. They’re recognising that this medication is a once-in-a-generation revolutionary technology.
“People are much more open to it and I expect that next year there will be another huge surge in growth.”
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2:33
The weight-loss drug that’s ‘too good’
Latest NHS figures show 27% of adults in England are obese, up from 15% in 1993.
Rates have started to plateau in the last couple of years as public health measures such as the sugar tax take effect.
But there are indications that obesity jabs have already begun to reverse obesity in the US and the same is likely to happen in the UK.
Around 95% of all patients using the medication are buying it privately, at a cost of around £150 a month.
Access on the NHS is poor, with research by Sky News showing just 800 patients had been prescribed Wegovy in specialist clinics four months after the rollout started in December 2023. That’s just 6% of the expected number.
And last month the National Institute for Health and Care Excellence (NICE) bowed to demands from the NHS to restrict access to Mounjaro to just 200,000 of 3.4 million eligible patients over the first three years of the rollout.
Sarah Le Brocq, founder of All About Obesity, sits as a patient representative on the NICE committee.
She said it was “hugely frustrating” that so many patients in need are being denied treatment.
“It’s not the NHS’s fault that they can’t fund these drugs,” she said.
“They need to have that money coming through [from government] because they can’t take it from cancer and put it into obesity.
“We are going to have tiered access. The wealthy can be healthy, but people who really need treatment can’t have it.”
Angela Chesworth had to do a ‘clinical trial’ of treatment on herself to prove to the NHS that the drugs could stop agonising abdominal pains that she suffered several times a week.
Her consultant had agreed that her extra pounds were pulling on scar tissue from previous stomach surgery, but he was powerless to prescribe the treatment.
But since the summer, when she started weekly injections of Mounjaro, she has only had a couple of abdominal cramps and the NHS has now agreed to fund treatment.
“When you know there’s something out there that can help you, but you can’t have that help because of money or somebody who makes the rules, you feel worthless,” she told Sky News.
“Come and live in my shoes and see how I am and see how it affects me and then tell me I’m not worth the money.
“You want me to be part of society, you want me to do a job, you want me to expand the economy?
“I needed help, so it was very frustrating to be told no. And especially by the medical professionals.”
Her husband, Paul, is still having to buy his supply privately, despite being on the cusp of type 2 diabetes. After three months of treatment, he has lost two stone and is now healthy.
“I want to be healthy as long as I possibly can,” he said.
“For the last 15 years of his life my dad did not have good health or a good quality of life. He wasn’t able to get up in the morning quickly and ended up on a mobility scooter because he couldn’t walk far.
“All those things I want to try and avoid.”
The Department of Health said new drugs recommended by NICE need to be funded from existing NHS budgets. A spokesperson added: “We are also acting to tackle [obesity’s] causes, shifting our focus from treatment to prevention as part of our 10 Year Health Plan.”
Grocery shoppers are being warned of more hikes to food costs in the months ahead due to retailers passing on the cost of budget tax rises.
The British Retail Consortium (BRC) warned that food prices will increase by an average of 4.2% in the latter half of the year – piling more pressure on households at a time when consumers are already facing leaps in unavoidable costs including water, council tax and energy bills.
It blamed the impact of budget measures announced by Chancellor Rachel Reeves in October, which businesses have widely denounced as an attack on investment, jobs, and pay.
The retail body spoke up as many top retail brands reported on their Christmas progress ahead of April’s looming surge in costs.
Tesco warned of a £250m annual impact from higher employer National Insurance contributions alone from the next financial year while maintaining its annual profit forecast for 2024/25.
It cheered winning considerable market share over the festive season, leaving the UK’s biggest retailer in its best position since 2016.
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M&S reported robust growth in food sales, by 8.9% on a comparable basis, while growth in clothing and home and beauty was up by almost 2%.
Industry data released earlier this week already revealed Tesco, Sainsbury’s, Lidl and M&S were the big sales winners over Christmas, as far as groceries were concerned. Asda and the Co-op were seen as the main strugglers.
Ocado, which has a retail partnership with M&S, saw the largest growth in the online sphere.
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0:38
Warning of price hikes ahead
Much of the focus, however, is on the future given the volume of complaints within the sector – one of the country’s biggest employers – about the budget measures.
The key message since the fiscal event has been that shoppers will pay a price.
The industry sales data, revealed by Kantar Worldpanel on Tuesday, showed the annual rate of grocery price inflation at 3.7% in the four-week December period, its highest level since March, and a jump on the 2.6% reported for the 12 months to November.
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The BRC’s chief executive, Helen Dickinson, said on Thursday: “As retailers battle the £7bn of increased costs in 2025 from the budget, including higher employer NI (National Insurance), National Living Wage, and new packaging levies, there is little hope of prices going anywhere but up.
“Modelling by the BRC and retail chief financial officers suggest food prices will rise by an average of 4.2% in the latter half of the year, while non-food will return firmly to inflation.
“Government can still take steps to mitigate these price pressures, and it must ensure that its proposed reforms to business rates do not result in any stores paying more in rates than they do already.”
Despite the looming pressure ahead on supermarket margins from the budget, it is clear that grocery chains had a robust Christmas season.
Tesco boss Ken Murphy said: “We delivered our biggest-ever Christmas, with continued market share growth and switching gains.
“Our strong performance reflects the investments we have made, positioning Tesco as the UK’s cheapest full-line grocer for over two years, improving quality across all our ranges, with more than half of this year’s Christmas range new or improved, and providing the best experience for our customers in-store and online.”
His counterpart at M&S, Stuart Machin, said: “The external environment remains challenging, with cost and economic headwinds to navigate, but there is much within our control.
“At M&S, we stay close to our customers and their needs, and with that in mind our investment in trusted value, along with great quality, style and innovation remains our priority.”