Boris Johnson buys time for himself with a cost-of-living package

Boris Johnson began his political “reset” week surveying the cabinet desk and noting that most of his ministers were too young to remember the UK’s economic pain in the 1970s.

Johnson said he was determined to avoid a repeat of that decade’s stagnant inflation and high unemployment – but his comments were a reminder that he was plotting a comeback in the near term. an economic storm.

He emerges after a decisive week in a less precarious position than many had expected, even if the standard of success – as Labor leader Sir Keir Starmer put it this week – has been put “lower than snake belly”.

Johnson’s allies are relieved that “only” four more Tory MPs have initially called for the prime minister to drop the track Sue Gray’s damn account about drinking culture and the pandemic of breaking the law in Downing Street, although criticism grew throughout Friday.

A snap YouGov . Poll showed that 59% of people believe that the prime minister should resign, only 30% say that he should keep his role. But one former cabinet member said: “He will never give up.”

Meanwhile, Prime Minister Rishi Sunak’s £15 billion rescue package for households struggling with spiraling energy bills – funded by a wind energy tax that Johnson once strongly opposed – bought the prime minister some breathing space.

“You don’t need a focus group telling you it’s going to land well,” said one Johnson ally. “It’s a really good example of correct, mature politics.”

The Resolution Fund’s research arm says the countermeasures to rising energy bills are “well targeted” and currently “highly progressive”; Sunak spoke about the real pain of the poorest in society belatedly.

The £400 all-household subsidy shows he has no eye on wealthier Tory voters, some of whom – like Sunak – own more than one home and would enjoy multiple payments . Sunak says he will donate his to charity.

Johnson was initially opposed to the wind tax plan, initially proposed by the opposition Labor Party, arguing that he would incur a lot of political pain – especially from right-wing Tory MPs – to ensure only had an additional £2 billion in revenue.

Kwasi Kwarteng, business secretary, Liz Truss, foreign minister, and Jacob Rees-Mogg, Cabinet Office minister, were among those arguing that the prime minister should cut taxes, not raise them.

Only if Sunak reassured the prime minister that wind taxes on North Sea oil companies could rise by £5bn this year – and that he could extract £3bn – £4bn more from “extraordinary returns” of generators – Johnson endorsed the plan.

An ally of the prime minister said: “The profits must be worth the pain. Sunak now has a lucrative new tax revenue stream until December 2025, at which point his “energy profit tax” will expire.

The financial details are important because the promise of tax cuts is Johnson and Sunak’s best hope in keeping the resilient Tory MPs around and delivering a brighter future for voters at the election. next election, scheduled for 2024.

Sunak on Friday argued that raising money from energy companies was a “pragmatic” way to fund at least part of its £15 billion spending package while making “minimal” impact. for inflation.

The Prime Minister has included in the figure £30bn a “gap” in the election year: a delay will still allow him to meet his financial rules and show he is in control of borrowing.

Tory MPs have their eyes on that war chest now and will put enormous pressure on Sunak to use his Fall Budget to start cutting income tax.

However, the prime minister, whose damaged reputation has been partially repaired by a well-received energy package, may want to deliver but will worry about the risk of adding fuel to the inflationary fire.

Meanwhile, on Friday, he said he was willing to spend more to help people further if the cost of living crisis intensifies further. “I am always prepared to deal with the real situation, what is happening with the economy,” he said.

However, Johnson’s political space may be short-lived. Next month, the Conservatives will seek to secure seats in two by-elections and voters will likely be unhappy with their verdict on his recent performance.

Bookmakers offer Labor favorites odds to win Wakefield’s “red wall”, while Liberal Democrats bet to topple a 24,000 Tory majority within Tiverton’s “green wall” and Honiton.

“There are concerns about the Prime Minister,” said a Conservative MP in the western country, a sign that Johnson may have survived this week, but his performance anxiety has not gone away. pass away.

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