The Government must have “all hands to the pump” to address the cost-of-living crisis ahead of the autumn, business leaders have warned.
Tony Danker, director general of the Confederation of British Industry (CBI), joined former prime minister Gordon Brown’s call for swift intervention to address rising energy costs.
But Downing Street said Boris Johnson had no plans to introduce major new fiscal measures before the end of his premiership.
We simply cannot afford a summer of Government inactivity while the leadership contest plays out— Tony Danker, director-general of the CBI
Mr Danker said: “The economic situation people and businesses are facing requires all hands to the pump this summer.
“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.
“The Prime Minister and Chancellor should be taking the next few weeks to grip the emerging crisis and the planning required to tackle it. This will also give their successor – whomever that may be – the very best chance of getting quickly out of the blocks.”
He added that the Prime Minister and the candidates vying to replace him – Rishi Sunak and Liz Truss – should “come together to agree a common pledge to support people and help quell fears”.
The CBI also called for top civil servants to be directed to draft options to help struggling households ahead of a new prime minister being selected.
The Prime Minister’s official spokesman said Mr Johnson – who is back in No 10 following his holiday in Slovenia – would be speaking to Chancellor Nadhim Zahawi to ensure that support measures due to come into effect later in the year remained on track.
But the spokesman added that any further measures would be a matter for Mr Johnson’s successor once the Tory leadership contest concludes.
“The Government recognised that the end of the year will present wider challenges with things like changes to the (energy) price cap,” the spokesman said.
“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.”
Responding to this, Labour’s shadow chancellor Rachel Reeves said: “People are worried sick about how they’ll pay their bills and do their weekly food shop, and all this Tory Prime Minister does is shrug his shoulders.
“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.
“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.”
Writing for the Daily Record newspaper on Monday, former Labour prime minister Mr Brown issued a plea for “urgent measures” to cover further rises in fuel bills amid “millions standing on the edge of a financial precipice”.
Mr Brown added: “The facts right now are grim: four in every five pensioners, four in every five single parents and four in every five large families face fuel poverty – that’s when their energy bills come to more than 10 per cent of their weekly incomes.
“About 35 million people in 13.5 million households are under threat of fuel poverty in October – that’s an unprecedented 49.6% of the UK.”
He warned that if no action is taken ahead of a further price rise in January, the number of fuel poor in the UK could reach 39 million people in 15 million households.
Mr Brown said: “Cobra, the UK Government’s disaster emergency committee, should be in permanent session to deal with the coming fuel and energy crisis.
“Even if Boris Johnson has gone on holiday, his deputies should be negotiating to buy new oil and gas supplies from other countries and urgently creating the extra storage capacity we currently lack.
“We should be persuading homes and buildings – as Germany is now doing – to cut back on energy usage wherever possible in the hope we can prevent formal rationing.”
He also said that Mr Johnson, Mr Sunak and Ms Truss should get together to plan and agree an immediate budget to prevent a “winter heating catastrophe”.
Cobra, or COBR (Cabinet Office Briefing Rooms), is a UK Government civil contingencies committee which meets to discuss matters of national emergency or major disruption.
