Sky’s Sam Coates had a good summary of the confusion in government on how to respond to the cost of living crisis in his report last night.
And the Daily Mirror’s Dan Bloom has a helpful round-up of the options being considered by the government.
In his interviews this morning Malthouse kit, the policing minister, also said that the government was “intrinsically opposed” to the idea of a windfall tax on energy companies. But he also conceded it was a possibility. He told Times Radio:
We are intrinsically opposed to that kind of taxation. We want to see a pattern of investment from that industry that will help us with our medium and long-term energy problems.
But the chancellor reserves the right to take all steps he thinks necessary and he’s in conversation with that industry all the time, I’m sure.
It is hard for ministers to answer questions on this topic in interviews because at the top of government there is a split over whether or not to introduce a windfall tax, and it is not obvious which side will prevail. In the Times Matt Dathan and Steven Swinford said the Treasury is now in favour, but No 10 is opposed. They report:
Treasury officials believe that the levy is “politically unavoidable” but are being blocked by the prime minister’s advisers.
Rishi Sunak, the chancellor, has left the door open on imposing a one-off tax on energy suppliers as he comes under increasing pressure to do more to help people with the cost of living. In conversations with No 10, Treasury officials have argued that while a windfall tax would not raise a significant amount it would send a powerful message to the public that the government was “on their side”.
However, Boris Johnson’s are said to be resisting the move because it would be viewed as an attack on business. One of them said it would be an “ideologically unconservative thing to do”, The Times has been told.
Harry Cole has a similar report in the Sunsaying that the Treasury wanted Conservative MPs to abstain in the vote on Labour’s amendment to the Queen’s speech calling for a windfall tax (an abstention would have allowed the amendment to pass), but that No 10 insisted Tory MPs voted against.
Imposing a windfall tax would be a huge U-turn, and a victory for Labour, which has been pushing hard for one for months. But, for the price of a few days of acute embarrassment, the move would also allow the government to neutralize the Labor party’s main attack line, as well as leaving the opposition without its best-known policy.
Andy Cooke, the new chief inspector of constabulary, has said that the cost of living crisis will trigger an increase in crime and officers should use their “discretion” when deciding whether to prosecute people who steal in order to eat. My colleague Vikram Dodd has the story here.
If you think this does not sound like the sort of statement likely to be endorsed by a Home Office run by Priti Patel, you would be right. Kit Malthouse, the policing minister, was doing the morning intervew round on behalf of the government earlier and he told LBC that he did not agree.
Malthouse said that the idea that an economic shock would automatically lead to an increase in theft was “old-fashioned thinking”. And he said that officers should not be turning a blind eye to people shoplifting to get food. He said:
I’m afraid I find it a bit old-fashioned thinking. We first of all believe the law should be blind and police officers should operate without fear or favor in prosecution of the law.
Secondly it’s not quite right to say that as the economy fluctuates so does crime. We’ve seen economic problems in the past, or not, when crime has risen, or not.
Asked if ministers will ensure police do not ignore shoplifters stealing food, he replied:
Absolutely right. In fact I wrote to chief constables just a year or so ago saying they should not be ignoring those seemingly small crimes.
There will be an urgent question in the Commons at 10.30am on food price inflation. It has been tabled by Labour’s Jim McMahon and an environment minister will respond.
Good morning. One of the unusual features about the current economic crisis facing Britain is that some of the loudest calls for government intervention to help the poor have come from big business. Normally you would expect opposition parties, the charity sectors and papers like the Guardian to be the dominant voices on this side of the debate. But recently we’ve had Lady Sharon Whitechair of John Lewis, calling government intervention on the scale of Covid to alleviate the “shocking” food poverty problem, John Allanthe Tesco chairman, saying that food poverty is at its highest level for a generation and that there is “an overwhelming case for a windfall tax”and Bernard Looney, BP’s chief executive, also defending the windfall tax plan, saying No 10 is wrong to think it would halt his company’s investments in the UK. It is as if blue chip, corporate Britain has got a better grasp of the welfare needs of the country than Boris Johnson’s government.
And we had another example this morning. last night Rishi Sunak, the chancellor, delivered a speech to the CBI’s annual dinner. This morning Tony Danker, director general of the CBI, told the Today program that Sunak did not go far enough, because he did not have a plan “to help the hardest hit now”. Danker said:
There are some choices still to be made. And there are some choices you have to make about what you do now and what you do later.
Look, you have to help the hardest hit now. Helping people with heating bills and eating bills will not fuel inflation.
And you need to stimulate business investment now. That’s not going to overheat the economy now. It’s going to make sure that any downturn in our fortunes is short and shallow because growth is coming soon.
But Danker did welcome the suggestion in Sunak’s speech that a mass, untargeted stimulus now would be inflationary. Danker said:
The thing I think [Sunak] has to leave is mass tax cuts in the economy, mass stimulus in the economy. I agree with him that if you do those things too early in this cycle, then you do risk putting up inflation.
So I think he’s got the principles right. But we didn’t hear last night firm decisions that will help the hardest hit now, that will stimulate business and confidence now and will leave other stuff till later.
Sunak is already under intense pressure to announce some sort of cost of living rescue package soon. I will post more on this as the day goes on.
Here is the agenda for the day.
9am: Kit Malthouse, the policing minister, gives a speech at a drugs summit.
9.30am: Grant Shapps, the transport secretary, takes questions in the Commons.
10am: Michael Gove, the leveling up secretary, gives a speech to the Education Policy Institute.
10.20am: Nadine Dorries, the culture secretary, gives evidence to the Commons culture committee.
11.30am: Downing Street holds a lobby briefing.
12pm: Nicola Sturgeon, Scotland’s first minister, takes questions from MSPs.
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