Pensions and benefits to be cut? Fears grow after Rishi Sunak says 'difficult decisions' need to be made
26 October 2022, 17:05 | Updated: 26 October 2022, 17:07
Fears have grown that pensions and benefits could be cut after Downing Street failed to rule the move out.
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Liz Truss had pledged state pensions would rise by 10.1% to increase with inflation but on Wednesday Rishi Sunak’s press secretary declined to commit to it.
She said the new Prime Minister wanted to "do what is right and compassionate" but added: "I'm not getting into speculation on what is going to happen."
"A lot of these things have to be discussed with the Prime Minister and the Chancellor I’m not going to speculate on what is and isn’t going to be in the Budget," she said.
"I'm not going to comment on what decisions are going to be made. The PM's only been in office for the last 24 hours."
Failing to raise the new state pension in line with inflation could leave recipients £443 worse off from April.
Liberal Democrat Wendy Chamberlain branded No10's refusal to commit to a policy as "endless hokey cokey" that left pensioners and struggling families "in a desperate limbo".
It is believed the policy will be set out in the autumn statement, which has now been pushed back from October 31 to November 17.
Jeremy Hunt's key financial statement was delayed three weeks to allow for "difficult decisions" to be made about how to plug the £40 billion black hole in the country's finances.
He is expected to unleash spending cuts to plug the monster gap in the public purse.
Mr Hunt was due to make a speech on Halloween, outlining his fiscal plans in more detail after his initial preview steadied the markets in the aftermath of a disastrous mini-Budget from his predecessor Kwasi Kwarteng.
But at the first meeting of new Prime Minister Rishi Sunak's Cabinet, it was agreed to delay the plans to ensure they were "based on the most accurate possible economic forecasts".
Mr Hunt said afterwards: "I want to confirm that it will demonstrate debt falling over the medium term which is really important for people to understand.
"But it's also extremely important that that statement is based on the most accurate possible economic forecasts and forecasts of public finances.
"And for that reason the Prime Minister and I have decided it is prudent to make that statement on November 17 when it will be upgraded to a full autumn statement."
Mr Hunt said he discussed the move with Bank of England Governor Andrew Bailey on Tuesday night, adding he "understands the reasons for doing that and I'll continue to work very closely with him".
Listen to Rishi Sunak's first PMQs live on Global Player.
Read more: Rishi's team to 'fix' Britain: Continuity Cabinet sees return of Hunt, Gove and Braverman
Liz Truss first appointed Kwasi Kwarteng as Chancellor when she became Prime Minister.
His first move was to announce a mini-Budget that sent the markets into turmoil.
The value of the pound plummeted as economists were spooked by the government's plan to borrow more in order to fund tax cuts.
Mr Kwarteng was due to make a further statement in November, and later moved it to October 31 as the markets showed no sign of steadying - but then he was sacked and Mr Hunt was brought in with an alternative plan that calmed the economy.
Shortly after that Ms Truss herself stepped down, and Mr Sunak was brought in less than a week later.
Mr Sunak was formally made Prime Minister on Tuesday.
His new-look Cabinet met for the first time at 9.30am on Wednesday, when they agreed to delay the statement.
The new Prime Minister culled nearly a dozen of Liz Truss's top-tier ministers on Tuesday, including Jacob Rees-Mogg, while reviving the careers of a host of big names, including Suella Braverman, Dominic Raab and Michael Gove.
Mr Sunak pledged to "fix" Britain with his continuity Cabinet.
