Reeves: Tories doing nothing on cost-of-living crisis as PM “shrug his shoulders”

Rachel Reeves has warned that “people are worried sick about how they’ll pay their bills and do their weekly food shop” amid the cost-of-living crisis and that “all this Tory Prime Minister does is shrug his shoulders”.

Commenting after Gordon Brown called on Boris Johnson and the Tory leadership candidates to agree an emergency Budget, the No 10 spokesperson said measures had already been announced and that Johnson is abiding by the convention not make significant fiscal interventions in his final weeks as Prime Minister.

“An economic crisis like this requires strong leadership and urgent action – but instead we have a Tory party that’s lost control and are stuck with two continuity candidates who can only offer more of the same,” Reeves said this afternoon.

“Labour would start by scrapping tax breaks on oil and gas producers and providing more help to people who are struggling to pay their energy bills. Only a Labour government can tackle this crisis and deliver the stronger, more-secure economy that Britain needs.”

Writing in The Observer on Sunday, Gordon Brown told readers: “The reality is grim and undeniable: a financial timebomb will explode for families in October as a second round of fuel price rises in six months sends shock waves through every household and pushes millions over the edge.”

A report, commissioned by the former Prime Minister and carried out by Professor Donald Hirsch at Loughborough University, found that 35 million people in 13 million households across the country are under threat of experiencing fuel poverty in October – an “unprecedented 49.6% of the population”, Brown wrote.

The research found that the one-off £1,200 support from the government for low-income households will not compensate for three major blows to incomes in the year up to October 2022: the loss of the £20-a-week benefit uplift, the rise in the energy price cap and an annual uprating out of line with inflation forecasts.

The Bank of England recently warned that inflation, which is currently at 9.4%, could peak at more than 13% and stay at “very elevated levels” throughout much of the next year before eventually returning to its 2% target in 2024.

During a Sky News interview this morning, Brown urged the Tories to take “the action that is necessary” to combat the cost-of-living crisis or to “make way for Keir Starmer”, who he argued is “ready and waiting to do good things”.

“It is ridiculous, at the time of this crisis, that the Prime Minister and the Chancellor have both been on holiday, the Foreign Secretary and Rishi Sunak the former Chancellor [are] on the campaign trail, and nobody seems in charge,” he said.

Downing Street said today that the “bigger challenges” for family budgets “are coming towards the end of the year” and this would be a matter for either Liz Truss or Rishi Sunak to decide whether to take action to help.

The spokesperson said Johnson was due to speak to Nadhim Zahawi later this week, to ensure with the Chancellor that support coming later this year was “on track”, but insisted it would be inappropriate for him to make major financial changes.

“Clearly these global pressures mean challenging times for the public. The government recognised that the end of the year will present wider challenges with things like changes to the [energy] price cap,” the spokesperson said this afternoon.

“That is why, at the start of the summer, we introduced a number of measures to help the public. Clearly some of the global pressures have increased since that was announced. By convention it is not for this Prime Minister to make major fiscal interventions during this period. It will be for a future Prime Minister.”