Tory plot to halt benefit cuts after U-turn over top tax rate

Humiliated chancellor also forced to move date of key fiscal statement

- Jessica Elgot, Helena Horton, Richard Partington

Conservative MPs are plotting to avert a squeeze on welfare after Liz Truss was forced into two humiliating U-turns on plans to abolish the top rate of income tax and the date of a new mini-budget.

The Guardian understands that the chancellor, Kwasi Kwarteng, will speed up plans for a new fiscal statement, expected to be focused on spending and deregulation.

It will now take place later this month, rather than 23 November, accompanied by new forecasts from the Office for Budget Responsibility, in another move designed to restore market stability.

Senior MPs warned of rebellions over reductions in public spending, especially on benefits, which the chancellor has declined to rule out.

The threat came as the Institute for Fiscal Studies (IFS) and the Resolution Foundation said significant cuts in public spending would be required in the absence of further U-turns on policies announced in the mini-budget last month.

In a brief and abashed Tory conference speech, Kwarteng admitted it had been a "tough day" hours after rowing back on the tax cut for high earners. He said his economic plan had caused "a little turbulence".

Kwarteng said the government was committed to its radical agenda - and would move soon to deregulate sectors including childcare, agriculture, immigration, planning and financial services. But he also said the government would take fiscal discipline seriously. They were "absolutely committed to being serious custodians of the public purse".

Truss and Kwarteng decided to ditch the cut to the 45% tax rate the night before the conference when the scale of rebellion by MPs showed it would not survive a Commons vote.