‘Lack of urgency’ from government on cost of living crisis, senior Tory MP says

PM refuses to be drawn on further action government could take

Ashley Cowburn
Political Correspondent
Thursday 12 May 2022 21:31
Comments
Johnson refuses to be drawn on further government action to tackle cost of living crisis

Senior Conservative MP David Davis has claimed there is a “lack of urgency” from the government in tackling the cost of living crisis.

The remarks come as Boris Johnson sidestepped questions over support for families, with opposition MPs demanding an emergency budget amid rocketing energy bills and levels of inflation at a 30-year high.

Speaking to The Independent, Mr Davis, a former cabinet minister, said: “I do think there is a lack of urgency. The problem is, for some, the cost of living crisis is biting already.”

Calling for action “before the summer”, he also claimed ministers had received bad advice, as he highlighted last year’s forecasts on tax receipts and Bank of England inflation forecasts in 2021.

Mr Davis said the “ideal outcome” would be for the government to revoke April’s manifesto-busting tax increase immediately, adding: “The trouble with that is it’s embarrassing. But you know what, I think the public would welcome it.”

David Gauke, a former Conservative cabinet minister, also suggested on Thursday the cost of living crisis could get “much worse” if the UK ends up in a trade war with the EU amid an ongoing bust-up over the Northern Ireland protocol.

Their remarks follow a cabinet away day in Staffordshire, with Mr Johnson telling senior ministers that the cost of living pressures “must be at the forefront of all work to help continue to support people during a difficult financial period”.

But when pressed after the meeting on further support, the prime minister refused to be drawn on what further action the government might take to address the crisis – despite telling MPs on Tuesday further support would come in “days”.

Instead, Mr Johnson only told reporters what measures had already been announced, including the reduction in national insurance thresholds in July. “I’m not going to anticipate anything more that we may do,” he added.

Responding to the prime minister’s comments, Labour’s shadow chancellor, Rachel Reeves, said: “We don’t need more talk from the government – we need an emergency budget now, and a proper plan for growth.”

As pressure builds on the government to implement a windfall tax on oil and gas companies to help relieve some of the pressures on families, Mr Johnson did not rule out the measure, despite repeating his view it would deter green investment.

Rishi Sunak, the chancellor, who has reportedly told officials at the Treasury to examine plans for a levy, added that while not “naturally attracted” to a windfall tax, he was “pragmatic” about the idea.

“But what I do know is that these companies are making a significant amount of profit at the moment because of these very elevated prices,” he told the BBC.

“What I want to see is significant investment back into the UK economy to support jobs, to support energy security, and I want to see that investment soon. If that doesn’t happen, then no options are off the table.”

Mr Gauke, a former Conservative work and pensions secretary, also told the BBC Radio 4’s World at One that while “not ideal”, he suspected the government would end up taxing the exceptional profits of oil and gas companies.

“I think increasingly it seems the oil companies are kind of reconciled to the fact that they’re going to get hit with this at some point or other,” he added. “So, it’s not ideal, but I suspect in the end that they will turn to those oil and gas companies and pick up an element of what are exceptional profits.”

Asked whether a trade war with the EU would have a significant impact on the cost of living, he said: “Potentially, it very much would do”.

“We did at least get a deal, albeit a thin deal, but the risk if we go full head of steam into ripping up the Northern Ireland Protocol is that essentially we start seeing tariffs and quotas on our own goods – that we enter into a tit-for-tat relationship and the situation gets worse,” he added.

“That does have a real cost for ordinary people, it will make our economy weaker, it will damage investment, it will damage productivity, and that will play out into living standards.”

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