Liz Truss is poised for another major U-turn as Tory MPs warned she would lose a vote on cutting benefits in real terms, while new research showed the move could push an extra 450,000 people into the poverty
Despite desperate pleas for party unity from senior ministers after weeks of bitter infighting, the welfare row threatened to overshadow the prime minister’s bid to reassert her authority when the Commons returns from recess this Tuesday.
MPs also discussed fresh threats of moves to oust Truss if he collapses over the weekend, while senior Tories, including former chancellor George Osborne, warned the Tories were at risk of a elimination in the next election to embark on a “politics”. experiment”.
During the meeting of peers on Sunday, it was warned that dozens of Tory MPs would rebel against the increase in benefits in line with earnings, around 5.5%, rather than the figure of September inflation, which is around 10%.
Although a formal vote is not required, an amendment to the Finance Bill is believed to be tabled which would require all MPs to show their hands.
The unrest extends throughout the party, with some cabinet figures believed to be pushing Truss to match rising inflation. One government source put the number of MPs who would rebel at at least 30, while another said 10 would be “forced to give in”.
Truss’s move last week to restore the top rate of tax after the chancellor, Kwasi Kwarteng, announced it would be scrapped in the mini-budget has given some Tory MPs the courage to force another cut. “She caved at 45p, she’ll have to do it again,” said one.
In a sign Truss was softening her stance, a No 10 source insisted “nothing has been decided” and added: “She will listen.”
It came as new analysis by a Tory think tank, seen exclusively by the Guardian, showed that low-income households with children or disabled people would bear the brunt of any move to increase universal credit and other benefits for the ‘working age in line with income. more than inflation.
The move would push Britain’s relative poverty rates to their highest level this century, the Legatum Institute said, as the cost-of-living crisis leaves millions struggling to pay energy bills and put food on at the table regularly.
Legatum estimates that more than 1.5 million more people in the UK will be in relative poverty this winter compared to before the Covid pandemic, even after the government’s energy support packages. Benefit cuts in real terms next April would push the overall figure to 16 million, almost a quarter of the UK population.
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Lady Stroud, the chief executive of Legatum, urged ministers to increase benefits in full. “Failure to do so … would consign many on low incomes to a winter of impossible choices between heating their home, putting food on the table or fueling their car to go to work,” he said.
Conservatives from all wings of the party are angry. Truss is set to abandon Boris Johnson’s May pledge to increase benefits in full, which could leave millions of low-income families hundreds of pounds worse off amid a cost-of-living crisis . .
Those who have publicly opposed a real cut in benefits include Commons leader Penny Mordaunt, former chief Brexit negotiator Lord Frost and former culture secretary Nadine Dorries, who called the cuts “cruel” and “a lunge to the right.” “.
Stephen Crabb, Tory MP and former work and pensions secretary, said Legatum’s findings were “further evidence that cuts to benefits in real terms will inevitably lead to increased poverty and hardship, at the worst possible time “.
The welfare budget was targeted by ministers after it became clear the government would have to cut billions from public spending following its disastrous mini-budget last month. The rise in income would save the Treasury around £5bn, an option condemned by anti-poverty campaigners as “morally indefensible”.
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Analysis by the Legatum Institute found that raising benefits in line with income rather than, as is the convention, September price inflation would push 450,000 more people into poverty by 2023-24. Of these, 350,000 would be in households where someone works, and 250,000 in families that include a disabled person.
This cut would also put a quarter of a million more people in “deep poverty,” defined as an income at least 50 percent below the official poverty line. People in deep poverty are in a situation of near destitution and face a constant struggle to pay for basic necessities such as food, energy, clothing and toiletries.
Legatum also modeled the impact of an even more severe cut in real terms: freezing benefits at their 2022 levels. This would push one million more people into relative poverty next year, including 700,000 people in deep poverty .
The findings were echoed in a separate study by the charity Child Poverty Action Group (CPAG), which concluded that 200,000 children, almost all in families where one parent works, would be in poverty if benefits were increased in line with wages rather than inflation.
An analysis by consultancy Policy in Practice estimated that low-income families would be almost £400 a year worse off as a result of the cuts in real terms. The cut is even bigger for some groups, with working households losing £458 and couples with children £640 worse off.
Given the Tories’ poll ratings, which are about 30 points behind Labour, some have warned that Truss could lead the party to electoral annihilation.
Dorries told the BBC on Sunday that if an election were held tomorrow, the Tories would face a “complete wipeout”, while Osborne believed voters would judge the Prime Minister’s “political experiment” harshly. “I think there is a Tory ouster, but we have two years to run,” he told Channel 4.
However, Nadhim Zahawi, the chancellor of the Duchy of Lancaster, called on colleagues to come together and warned that division between parties would only make it harder to deliver policies, leading to defeat . He said the Conservatives had 24 months to regain confidence, suggesting an election would be in October 2024.
A spokesman for the Department for Work and Pensions said: “The Secretary of State starts her statutory annual review of state pensions and benefits from the end of October using the most recent prices and earnings indices available.
“We’re committed to looking after the most vulnerable, which is why we’ve delivered at least £1,200 worth of support to families this winter, while saving households an average of £1,000 a year thanks to our price guarantee energy This support is on top of the annual working age benefit bill, which is in excess of £87 billion.