Cost of living: Gove dismisses emergency budget speculation as government insists 'money is finite'

PM's pledge that "we will be saying more and doing more" to tackle soaring costs does not mean an emergency budget is coming
Photo: Danny Nicholson/Flickr/CC BY-ND 2.0

Michael Gove has dismissed suggestions that the government will introduce an “emergency budget” within the coming days to help ease the cost-of-living crisis.

Following Tuesday’s Queen’s Speech, Boris Johnson told the House of Commons that government “will continue to use all our ingenuity and compassion for as long as it takes, and the chancellor and I will be saying more about this in the days to come”.

The statement was widely interpreted as the prime minister hinting at an imminent cost-of-living emergency budget announcement. But Gove quashed the suggestion on Wednesday morning.

Speaking on Sky News, the levelling up secretary agreed that while government will “be saying and doing more” to tackle rising inflation, such action won’t “amount to an emergency budget”.

"It is sometimes the case that the words from a prime minister or minister are overinterpreted,” Gove insisted. 

“We will be saying more and doing more in order to help people with the cost of living challenge we face at the moment, but that doesn't amount to an emergency budget.”

Johnson has recently tasked all government departments with coming up with new ways to tackle the cost-of-living crisis, but said that no extra funds will be allocated for the plans. The levelling up secretary said that government will do “everything we can” to ease the burden of soaring prices. 

Gove's pledge today follows the publication of a report by the National Institute of Economic and Social Research that predicted 1.5 million households will experience difficulties paying food and energy bills over the next year.

The think tank has suggested that government should raise Universal Credit by £25 per week between May and October, as well as give £250 each to 11.3 million lower income households, to help prevent masses of families sliding into poverty.

So far government cost-of-living assistance measures have included reducing the Universal Credit taper rate, a one-off council tax rebate of £150 for people living in council tax bands A-D during the month of April, and a doubling of the household support fund to £1bn, to help the country’s lowest earners meet the cost of essentials.  

“We keep under review a range of things that we can do both short term and long term to help people,” Gove said.

‘Money is finite’

Gove’s comments came after the PM’s spokesperson defended the lack of new measures in the Queen’s Speech to tackle the cost-of-living crisis, insisting that there was only a “finite” amount the government could offer in support.

“People broadly understand that we've already acted to address some of the immediate challenges facing the public,” they said.

They added: “It's important for the public to understand that our capacity to inject money is finite and we have to make some key decisions about how we use that funding.

Boris Johnson has also defended the government’s position, writing in his introduction to the government’s legislative agenda that “no country is immune and no government can realistically shield everyone from the impact”.

But numerous charities and think tanks, as well as opposition parties, have criticised the government’s lack of additional measures.

“The cost-of-living crisis is an emergency the UK government should be dealing with right now,” said Dan Paskins, director of UK Impact at charity Save the Children.

“Families we work with are skipping meals, rationing their power and taking on unsustainable levels of debt. But again, instead of taking serious action, ministers have buried their heads in the sand," he added.

Save the Children said the government needed to “commit to increasing benefits in line with inflation” either before or at the autumn budget, calling it an “essential step”.

Their sentiments were echoed by Greenpeace, whose UK head of politics, Rebecca Newsom, said the Queen’s Speech showed the government was “throwing in the towel on some of the biggest challenges our country faces and pandering instead to the whims of his backbenchers”.

“There's not a single extra penny of support for households struggling with energy bills and no serious plan to fix our heat-wasting homes and get the country off fossil gas,” she said.

“Instead, the prime minister is trying to bring back police state measures to criminalise activists while threatening to scrap vital environmental protections along with so-called red tape.”

Liberal Democrat leader Ed Davey said the government’s legislative agenda “does nothing to help the millions of families and pensioners facing soaring bills and eye-watering inflation”.

Alain Tolhurst is chief reporter and Noa Hoffman is a reporter for CSW's sister title PoliticsHome, where a version of this story first appeared


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