Kwasi Kwarteng and Liz Truss are facing calls for a second u-turn after suggestions that he will not keep the promised increase to benefit payments to keep up with inflation.

The move, promised by Rishi Sunak when he was chancellor, could be scrapped by the Government as part of its attempt to cut spending in order to convince the markets that it has a long-term plan to get spending and borrowing under control.

This could set up a further rebellion on the Conservative backbenches after Michael Gove yesterday said that he opposed scrapping the uplift in benefit payments, which would be an effective cut to the income for vulnerable groups.

Ms Gove this week was one of the leading voices opposing abolishing the top rate of tax, which the Chancellor and Ms Truss scrapped yesterday.

Britain's Chancellor of the Exchequer Kwasi Kwarteng delivers his keynote address on the second day of the annual Conservative Party Conference in Birmingham, central England, on October 3, 2022. (Photo by Oli SCARFF / AFP) (Photo by OLI SCARFF/AFP via Getty Images)

The former levelling up secretary told Times Radio that he would “need a lot of persuading” to move away from a belief that benefits should be rising with inflation.

Mr Kwarteng today declined to say whether benefits would see the promised uplift, saying that he is “not committed to any spending” during an interview on LBC radio on Monday morning.

Pressed on the issue of benefits uprating, Mr Kwarteng told LBC: “I’m not going to comment on spending today.

“What we are focused on is the growth plan, we have got a medium-term plan which will set out more spending policies in the near future.”

Chief Secretary to the Treasury Chris Philp also declined to say whether benefits will be uprated in line with inflation next year.

Shadow chancellor Rachel Reeves said on Monday it would be “grotesque” not to increase benefits in line with inflation.

She said: “The idea that the Government can afford to give tax cuts to the wealthiest, but not uprate benefits in line with inflation, I think is grotesque.

“And there are many people who are saying that the Government needs to rethink this one as well.”

She added that the Government needs not just to reverse the budget, but to “rethink the whole idea of trickle-down economics, which is causing huge anxiety and sent the markets into a panic”.

Former Treasury chief secretary David Gauke told a fringe event at the Tory conference: “I cannot see how they can refuse to increase in line with inflation given the pledges that have been made and given the current situation of a very significant cost-of-living crisis.”

Katy Chakrabortty, head of policy and advocacy at Oxfam GB, said: “We are pleased that the Government has stopped, listened and understood that cutting taxes for the richest during a cost-of-living crisis is not the way to go.

“It needs to keep listening and provide urgent support to people facing poverty in the UK and those facing famine in other parts of the world.

“It is essential that ministers don’t seek to balance the books on the backs of people struggling to pay the bills and feed their families – public services, welfare and aid are all needed now more than ever.”

The Joseph Rowntree Foundation said the Government must urgently reassure those on the lowest incomes that it “won’t renege” on its promise to raise benefits in line with inflation.

Principal policy adviser Katie Schmuecker said: “Liz Truss [...] must be clear that she won’t target cuts at those on the lowest incomes.”

Government urged to back benefit increases following tax u-turn