Former chancellor Rishi Sunak, one of the contenders to be Britain’s next prime minister, has pledged fresh help for households struggling with the cost of living crisis, as his allies stepped up attacks on his rival Liz Truss.
Dominic Raab, the justice secretary and a Sunak supporters, claimed if Truss, the foreign secretary, were to win the Conservative leadership contest and press ahead with an emergency tax-cutting Budget it would be an “electoral suicide note” for the Tories.
This came after Boris Johnson rejected calls to draw up a rapid response to the cost of living crunch involving soaring energy bills during his final weeks as prime minister, with Downing Street insisting big fiscal decisions had to be taken by his successor.
The CBI employers group joined calls by Gordon Brown, the former Labour prime minister, for Johnson to start work now on a package of measures to help the vulnerable.
Sunak declined to provide details of how much new support he would provide to households as prime minister — suggesting he would first need to know the revised level of the UK energy price cap due to take effect this autumn.
But he said: “This winter is going to be extremely tough for families up and down the country, and there is no doubt in my mind that more support will be needed . . . bills are going up by more than anyone expected and the next government will need to act.”
The regulator Ofgem is due to provide details later this month of the revised energy price cap that will be implemented in October. It is predicted it will cap household fuel bills at well in excess of £3,000 per year, compared to £1,971 currently.
Sunak said he would keep any one-off borrowing needed to pay for fresh household support to a minimum by seeking “efficiency savings across Whitehall”.
Truss told the Financial Times last week she favoured tax cuts over “handouts” as the best way to help households, saying she would look at “what more can be done”.
She wants to scrap a rise in national insurance — introduced by Sunak while chancellor — in an emergency Budget earmarked for September.
Raab, writing in The Times, said it was wrong to rule out further direct support for families.
He said: “If we go to the country in September with an emergency Budget that fails to measure up to the task in hand, voters will not forgive us as they see their living standards eroded . . . such a failure will read unmistakenly to the public like an electoral suicide note and, as sure as night follows day, see our great party cast into the impotent oblivion of opposition.”
Meanwhile Johnson, who returned to work on Monday after a holiday in Slovenia, has argued that he does not have the authority to draw up new policies, including any measures on the cost of living crisis, ahead of a handover of power to his successor due on September 5.
“By convention it is not for this prime minister to make major fiscal interventions during this period,” said Downing Street. “It will be for a future prime minister.”
Sunak and Truss have so far proposed limited measures to address the cost of living crunch.
Tony Danker, head of the CBI, said it was not good enough. “The economic situation people and businesses are facing requires all hands to the pump this summer,” he added.
“We simply cannot afford a summer of government inactivity while the leadership contest plays out followed by a slow start from a new prime minister and cabinet.”
Brown said the inflation crisis was causing poverty of the kind he had not expected to see again in his lifetime and urged Johnson to convene the government’s emergency Cobra committee to prepare a response.
He told Sky News that charities were stocking up on duvets, sleeping bags, hot water bottles and blankets “because they know that people can’t afford to heat their homes any more”.
Brown branded as “stupid” Sunak’s windfall tax on North Sea oil and gas companies — introduced to help fund the government’s latest support for households — because it contained generous allowances for investments, cutting its potential yield from £15bn to £5bn per year.
Labour is expected to unveil a plan for helping households later this month.