Rishi Sunak has ruled out an emergency Budget on the cost-of-living crisis despite hints from Boris Johnson as he came under fire for the lack of action in the Queen’s Speech.
Accused of ‘doing nothing’ for families as he defended the new legislative agenda, the PM set hares running by insisting he and the Chancellor would have ‘more to say’ on the squeeze ‘in the days to come’.
But the Treasury was bemused by the remark – stressing that it is still not clear where energy bills will ‘land’ in October and pouring cold water on the idea of an emergency Budget. One government aide said the premier seemed to have been ‘freelancing’.
Mr Johnson faces growing fury at the lack of action as inflation surges towards 10 per cent and the economy stalls, after merely pointing to the existing £22billion package of help.
He insisted he would make long-term investments rather than try to ease the immediate pain.
Instead the Parliamentary session – kicked off by Prince Charles rather than the Queen for the first time in six decades as she is suffering ‘mobility issues’ – focused on broad reforms with a smattering of crowd-pleasing policies such as bolstering police powers to tackle disruptive protests.
Schools and higher education are being overhauled to help the post-Covid recovery, while owners of unused second homes are expected to be punished, and locals given more power over housing developments.
There is also action to revive high streets, a shake-up to create Great British Railways, and a vehicle for the controversial privatisation of Channel 4 – as well as steps to ensure ‘woke’ attitudes do not hamper free speech at universities.
Debating the new plans in the Commons, Keir Starmer accused Mr Johnson of ‘complacency’ about the plight of ordinary people.
‘The first great challenge our country faces is the cost-of-living crisis. Inflation stands at 7 per cent and rising. Household bills have gone up by hundreds of pounds, the cost of the weekly shop has rocketed and people are seeing their wages run out much earlier in the month and the value of their savings fall.
He added: ‘This Government’s failure to grow the economy over a decade combined with its inertia in the face of spiralling bills means that we are staring down the barrel of something we haven’t seen in decades, a stagflation crisis.’
But Mr Johnson retorted that the government could not ‘spend its way out of this problem’.
He said of the cost-of-living pressures: ‘My right honourable friend the Chancellor and I will be saying more about this in the days to come.
‘But at the same time as we help people, we need the legislative firepower to fix the underlying problems in energy supply, in housing, in infrastructure and in skills which are driving up costs for families across the country.
‘And this Queen’s Speech takes those issues head on. And above all, we are tackling the economic challenges with the best solution of all and that is an ever growing number of high wage, high skill jobs. Jobs, jobs, jobs.’
A Treasury source said: ‘Rishi has always been clear that we would set out plans for support on energy bills for autumn when we know what price cap is going to be.
‘We’re not there yet as we still don’t know where prices are going to land.’
A No10 source said the PM was referring in the House to other potential ways of easing the cost of living, rather than energy bills.
The source pointed out that a number of ideas were floated at Cabinet recently, suggesting they might start to firm up soon.
However, those proposals – such as making MoTs two-yearly – did not involve any extra government spending.
Mr Johnson and Sir Keir have clashed bitterly over Partygate, Beergate and other issues – but appeared to share a joke as they walked from the Commons chamber to hear the speech in the Lords.
Mr Johnson apparently quipped in a reference to the furore engulfing the Labour leader: ‘Did you have a good weekend?’
He also branded Sir Keir the Opposition leader ‘of the moment’ in a jibe at his pledge to resign if he is fined by police for breaching lockdown.
The Prince of Wales read the Queen’s Speech for the first time as the monarch misses the State Opening of Parliament for the first time in almost 60 years.
The Queen, 96, pulled out of the ceremonial occasion – when she spells out the Government’s legislative programme for the forthcoming parliamentary session – as she continued to experience ‘episodic mobility problems’.
In the Queen’s absence, Charles took on the head of state’s major constitutional duty, in a move which will be interpreted as a significant shift in his responsibilities as a king-in-waiting.
The Duke of Cambridge, also a future monarch, attended the State Opening, the first time he has done so, with the royal function of opening a new parliament delegated to both Charles and William by the Queen.
The monarch is understood to have watched proceedings on television, and will have her regular audience with the PM tomorrow.
Aside from the pomp and ceremony, the Speech marks the start of a critical phase for Mr Johnson as he looks to restore his political fortunes.
The PM has so far clung on despite Partygate and the dismal local election results, but the Tories are trailing Labour in the polls and the success of these policies are likely to decide who secures power at the next election.
In comments ahead of the speech, Mr Johnson delivered a strong hint that he has abandoned the idea of calling an early election as storm clouds gather over the UK economy, saying the programme will need the full two years to complete.
And in his introduction to the programme, Mr Johnson said: ‘While we can be proud of what we have achieved, the economic aftershocks of COVID-19 and the biggest war in Europe since 1945 mean huge disruptions to the global economy, with people in every major country facing real pressures in the cost of living. No country is immune and no government can realistically shield everyone from the impact.
‘It is right that we continue doing whatever we can to ease the burdens people are grappling with now, supporting the hardest hit with £22 billion of help to address the cost of living and cutting hundreds of pounds off household bills.
‘But we must also remember that for every pound of taxpayer’s money we spend on reducing bills now, it is a pound we are not investing in bringing down bills and prices over the longer term.
‘And that if anything, this moment makes clear our best remedy lies in urgently delivering on our mission to turbo charge the economy, create jobs and spread opportunity across the country.’
Liberal Democrat leader Sir Ed Davey said the Queen’s Speech ‘does nothing to help the millions of families and pensioners facing soaring bills and eye watering inflation’.
‘The Conservatives have failed to deliver a cut to VAT that would have saved families an average of £600, failed to help pensioners and failed to help the most vulnerable in our society,’ he said.
‘The Conservatives are continuing to neglect rural communities. There was nothing in these plans to support farmers on the brink, to tackle soaring ambulance waiting times and GP shortages, or to stop the dumping of filthy sewage into our river and seas.
‘It shows a Prime Minister refusing to listen to the clear message sent by voters at last week’s local elections who are fed up of being taken for granted by this Conservative Government.’
Shevaun Haviland, Director General of the British Chambers of Commerce, said: ‘An emergency budget is needed to provide firms with the breathing space they need to raise productivity and strengthen the economy.
‘The costs crises facing firms and people in the street are two sides of the same coin. If we can ease the pressure on businesses then they can keep a lid on the price rises being driven by surging energy bills, staff shortages and higher taxes.
‘Only after an emergency budget will some of the legislation set out in the Queen’s Speech have a chance to drive our economy forward.
The CBI said firms looking for the Government to address the cost-of-living crisis by growing the economy will be encouraged by the ambition in the speech.
Matthew Fell, chief UK policy director, said: ‘Ahead of the autumn budget, the Government should remain laser focused on unlocking the investment needed to grow the economy and address the cost-of-living crisis.’
Cost-of-living
The Queen’s Speech promises to ‘grow and strengthen the economy and help ease the cost-of-living crisis for families’.
But the package of legislation merely reiterates measures that have already been announced – and decried by critics as not going far enough.
In his introduction, Mr Johnson said the government will do ‘whatever we can to ease the burdens people are grappling with’.
But he added: ‘We must also remember that for every pound of taxpayer’s money we spend on reducing bills now, it is a pound we are not investing in bringing down bills and prices over the longer term. And that if anything, this moment makes clear our best remedy lies in urgently delivering on our mission to turbo charge the economy, create jobs and spread opportunity across the country.’
The briefing notes highlight that the government has provided £22billion of support to families in 2022-23, and ‘will not hesitate to take further steps to support households if needed’.
Officials stressed that helping people into work was the ‘best approach’ to easing the misery, pointing to education and training policies.
The only nod to soaring energy bills is the Energy Security Bill, which the government says will ‘deliver the transition to cheaper, cleaner and more secure energy’.
However, there has been mounting speculation that Rishi Sunak could bring forward an emergency Budget to take the edge off inflation – which is on track to reach 10 per cent in the coming months.
There have been calls for measures such as suspending VAT on heating bills and making the £200 loan a grant.
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