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Boris Johnson Allies Insist They Warned Of Cost-Of-Living Deadlock As No 10 Resists Urgent Intervention

Boris Johnson Allies Insist They Warned Of Cost-Of-Living Deadlock As No 10 Resists Urgent Intervention

Boris Johnson arrives at Downing Street (Alamy)

4 min read

Boris Johnson's caretaker government is resisting growing pressure to take action on the cost-living crisis before his successor takes over in early September, but allies of the outgoing prime minister insist they warned his hands would be tied over new support this summer.

The huge pressure facing households in the coming months came into even sharper focus on Tuesday morning when energy specialists Cornwall Insight predicted that the energy cap would increase to to £3,582.02 in October, before rising again to £4,266.48 in early 2023.

However, Downing Street argues the fact that Johnson is being replaced in less than four weeks means he cannot take further major steps to protect households from the growing crisis.

On Monday his spokesperson said that convention prevented the outgoing Prime Minister from making a "major fiscal intervention", and that it would be up to either Tory leadership hopefuls Liz Truss or Rishi Sunak to decide what steps to take once they enter Number 10.

One government source went even further, telling PoliticsHome that Johnson’s opponents were warned while moving to oust him that triggering a Conservative party leadership contest this summer would leave a vacuum within government at the same time as the cost-of-living crisis.

The Liberal Democrats today called on the Prime Minister to recall Parliament, with leader Ed Davey accusing Johnson and Chancellor Nadhim Zahawi of a "deafening silence" while “people are worried sick about the next staggering rise in energy bills which is just round the corner".

Davey has also called on the government to take the radical step of paying for the upcoming energy bill hike. He told The Guardian that doing so would cost £36bn a year, but would be paid for partly by an expanded windfall tax on the profits of major energy companies.

Martin Lewis, the influential personal finance expert, repeated his call for the government to take action immediately, warning that the "zombie" administration must "wake up" before the arrival of the new Prime Minister on 5 September.

Truss and Sunak are both under pressure to escalate their plans to tackle the cost-of-living crisis, with the Foreign Secretary in particular accused of recognising the scale of the crisis that is on the horizon.

A former Secretary of State told PoliticsHome that there was a "reality gap" between the language of the leadership campaigns and the challenges facing the British people, and that Truss or Sunak being forced to spend large amounts of money to help them was "unavoidable".

“There is a reality gap between the language being used and what looks like is coming down the track very quickly," the senior Tory MP said.

Senior Conservative MP Bernard Jenkin, who chairs the liaison committee, wrote for The House that the next Prime Minister would have to introduce a fresh package of support for low-income households or "they will simply run out of cash".

He said that failure by Truss or Sunak to provide further support would result in "dire economic and electoral consequences".

"The leadership election has enabled a fruitful debate about whether now is the right time to introduce tax cuts, but whoever is prime minister will have to prioritise the plight of low-income households during this difficult winter," Jenkin said.

Truss and Sunak have continued their bitter war of words over their plans for the economy, with the Sunak campaign accusing the Foreign Secretary of being "divorced from reality".

"Under her plans Liz will get £1,800 of support whilst hard working families will get as little as £60, while facing the same rises in bills," said a source on the former Chancellor's campaign.

"Liz’s plan will not touch the sides for the majority of British families this winter and pensioners will get no help whatsoever."

Sunak last night pledged to provide people with more cost-of-living support as he becomes Prime Minister, in a move that the Truss campaign described as a major U-turn.

Truss has been under pressure to commit to creating additional support for households as soon as she enters Downing Street after telling the Financial Times last week that her government would not address the cost-of-living crisis through "handouts".

This morning she appeared to refuse to do so, telling reporters: "What I don't believe in is taxing people to the highest level in 70 years, and then giving them their own money back.”

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