Liz Truss has sidestepped questions about further U-turns as she faces a growing rebellion within her own party against potential benefits cuts.
Cabinet minister Penny Mordaunt broke ranks to call for payments to rise in line with soaring inflation as backbenchers warned the PM that she would struggle to get anything less through parliament.
Unlike the previous government, Ms Truss has refused to confirm her plan for benefits, meaning some of the poorest households could face a real-terms cut in their income.
A day after rebels forced her to backtrack on plans to give the richest a tax cuts, critics now have a battle over benefits in their sights.
In an interview with LBC’s Nick Ferrari, Ms Truss was pressed if there would be further U-turns on the mini-Budget, she said she was determined to press ahead with her plan for economic growth, leading the host to accuse her of not answering the question.
Asked if she could rule out further U-turns, she said it was important to “listen to people and we bring the country with us”, but did not say one way or another.
Ms Truss also told BBC Radio 4’s Today programme her government had to be fiscally responsible. ”We are going to have to make decisions about how we bring down debt as a proportion of GDP in the medium term,” she said.
Ms Truss did, however, again commit to increase pensions in line with prices, but did not commit to raise benefits with inflation.
Benefits are usually uprated in line with the consumer price index (CPI) rate of inflation from September, although the rise does not come into effect until the following April.
The Institute for Fiscal Studies estimates that each percentage point rise in CPI adds £1.6bn to the welfare spending bill.
”I am very committed to supporting the most vulnerable; in fact, in addition to the energy price guarantee we’re also providing an extra £1,200 to the poorest households. So we have to look at these issues in the round, we have to be fiscally responsible.”
Ms Mordaunt, who stood against Ms Truss during the Tory leadership contest this summer, said it “makes sense” to increase benefits in line with inflation.
“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,” she told Times Radio.
Former Tory leaders William Hague and Iain Duncan Smith, along with ex-cabinet ministers Michael Gove and Damian Green, have voiced their concerns about a failure to raise benefits in line with inflation.
Former Tory leader William Hague said the “political reality” meant Ms Truss would have to change course on benefits. “The government will end up being defeated in parliament if it didn’t upgrade benefits with inflation in these difficult circumstances over the coming year,” he said.
Former Tory leader Iain Duncan Smith also condemned the idea of linking benefit to wages –saying it “doesn’t make any sense” to allow a real-terms cut.
“I just don’t see what would be gained by it. I do see what would be gained by making sure [claimants] have enough money throughout the winter,” he said.
Mr Green, former work and pensions secretary, said Ms Truss has “probably not” got the support in the Commons to prevent an inflation-linked rise to benefits.
Asked if the PM could get a real-terms cut through parliament, he said: “Probably not, I think there that will be many of my colleagues who think that when you’re reaching for spending cuts, benefit payments are not the way to do it.
He added: “Clearly U-turns are not good for governments and they should only do them when they realise that they are on the wrong track – we’ve had one this week and so let’s avoid the necessity for another.”
Mel Stride, the Tory chairman of the Treasury select committee, said he would have to “think long and hard” if he was asked to vote to increase them in line with earnings rather than inflation.
Mr Stride told Today: “So we’re coming off the back actually of a kind of quite a strong real-terms squeeze on those benefits already so I think that will be a really tough call to make.”
Cabinet Office minister Brendan Clarke-Smith has told Times Radio that one-off direct payments might be a better to combat poverty this winter than raising benefits in line with inflation.
“It may be that the rise in line with inflation isn’t the right thing. And actually, giving something direct, like a direct payment is a far better way of doing it.”
Chancellor Kwasi Kwarteng has already announced a second U-turn and brought forward his medium-term fiscal plan along with independent forecasts.
The plan which had been due on 23 November could now be unveiled as early as this month.
