Despite desperate calls 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 return from recess on Tuesday. Fresh threats of moves to oust Truss if it deepens were also discussed by MPs at the weekend, while senior Tories, including former chancellor George Osborne, warned the Conservatives risked being wiped out at the next election to launch a “policy experiment”. At the peer circuit on Sunday, government whips were warned that dozens of Tory supporters would rebel against benefits rising in line with earnings – around 5.5% – rather than September inflation, which is around 10%. Although a formal vote is not required, it is believed that an amendment will be tabled to the Finance Bill which would force all MPs to show their hands. The concern extends across the length of the party, with some elements in the cabinet believed to be pressing Truss to respond to rising inflation. One government source put the number of supporters who would revolt at least 30, while another said 10 would be “forced to retreat”. Truss’ move last week to bring back the top tax rate after the chancellor, Kwasi Kwarteng, announced it would be scrapped in the mini-budget gave heart to some Tory MPs that they can force another rise. “It was down to 45p, it should do it again,” said one. In a sign Truss is softening her stance, a No 10 source insisted “nothing has been decided” and added: “He will listen.” It came as new analysis from a Conservative think tank, seen exclusively by the Guardian, showed that low-income households with children or people with disabilities would bear the brunt of any move to upgrade Universal Credit and other working-age benefits in line with earnings despite inflation. Such a move would swell UK relative poverty rates to their highest level already this century, the Legatum Institute said, as the cost of living crisis leaves millions struggling to pay their energy bills and put food on the table regularly. Legatum has estimated that more than 1.5 million more people in the UK will be in relative poverty this winter than before the Covid pandemic, even after the government’s energy support packages. Actual benefit cuts next April will increase the total number to 16 million, almost a quarter of the UK population. chart Tory peer Lady Stroud, chief executive of Legatum, urged ministers to fully increase benefits. “If they don’t … it would lead many on low incomes to a winter of impossible choices between heating their homes, putting food on the table or fueling their car to go to work,” he said. Conservatives from all wings of the party are furious Truss is poised to ditch Boris Johnson’s promise, made in May, to fully increase benefits, potentially leaving millions of low-income families hundreds of pounds worse off amid a cost-of-living crisis. Those who have publicly opposed cutting benefits in real terms include Commons leader Penny Mordaunt, former chief Brexit negotiator Lord Frost and former culture secretary Nadine Dorries, who called the cuts “harsh” and “a the right”. “. Stephen Crabb, a Conservative 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 an increase in poverty and hardship at the worst possible time”. The welfare budget came under fire from ministers after it became clear the government would have to cut billions from public spending following its disastrous mini-budget last month. Earnings-based upgrading would save the Treasury around £5 billion, an option condemned by anti-poverty campaigners as “morally unacceptable”. Archie Bland and Nimo Omer take you to the top stories and what they mean, free every weekday morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. Analysis by the Legatum Institute found the earnings-related benefit upgrade and not – as is usually the case – September price inflation will drive 450,000 more people into poverty in 2023-2024. Of these, 350,000 would be in working households and 250,000 in families that included a person with a disability. Such a cut would also result in a quarter of a million more people being pushed into “deep poverty,” defined as an income of at least 50 percent below the official poverty line. People in deep poverty are almost in destitution, facing a constant struggle to afford basic items such as food, energy, clothing and hygiene. Legatum also modeled the impact of an even more severe cut in real terms – freezing benefits at their levels in 2022. This would push an extra 1 million 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 rose in line with wages and not with inflation. An analysis by consultants 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 out by £458 and couples with children £640 worse off. With the Conservatives in the polls hovering around 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 was held tomorrow, the Tories would face “total annihilation”, while Osborne believed voters would judge the prime minister’s “political experiment” harshly. “I think a Tory wipeout is probably on the cards, but we’ve got two years to run,” he told Channel 4. But Nadhim Zahawi, the chancellor of the Duchy of Lancaster, called on colleagues to pull together and warned that cross-party division would only hinder the implementation of policies, leading to defeat. He said the Conservatives had 24 months to win back confidence, suggesting an election would be held in October 2024. A spokesman for the Department for Work and Pensions said: “The Secretary of State starts her annual review of benefits and state pensions from the end of October using the latest price and earnings indices. “We are committed to looking after the most vulnerable and that is why we have provided at least £1,200 of support to families this winter, while also saving households an average of £1,000 a year through the energy price guarantee. This support is on top of the annual working age benefit bill of more than £87bn.
