Downing Street has rejected calls for Boris Johnson to summon an emergency COBRA meeting to deal with the cost of living crisis.
Gordon Brown, the former Labour prime minister, has called for Mr Johnson to meet with his two potential successors and thrash out a financial package of measures before energy bills soar in October.
He said people will go cold and hungry this winter if urgent action isn’t taken now, telling Sky News he was seeing poverty in his hometown in Fife “that I did not expect to see ever again in my lifetime“.
Politics Hub: Brown slams ‘vacuum’ at heart of government
A leading business group, the CBI, also urged Mr Johnson to “act now” as they set out four actions the government could take to ease the impact of the crisis.
But the prime minister’s spokesman said that although the government recognises the challenges facing struggling households, “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.”
He also defended Mr Johnson for going on holiday as the Bank of England warned of a looming recession, saying the public understand it’s “not unusual for ministers to take time off during recess”.
Mr Johnson and Chancellor Nadhim Zahawi faced criticism for being missing in action amid grim forecasts that the UK is heading for the worst financial crisis since the 2008 crash, with interests rates soaring to their highest level in 27 years.
The PM’s spokesperson said Mr Johnson – who is now back in No 10 after his holiday in Slovenia – had spoken to Mr Zahawi while on his break to discuss measures that will be coming in this year.
He suggested Mr Johnson had no plans to sit down with Liz Truss or Rishi Sunak, saying: “Both candidates have spoken about new things they would introduce.”
But the CBI have urged him to think again, to “end the August power vacuum”.
The organisation wants the current PM to bring together the two leadership candidates to agree a way forward before the new energy price cap is announced later this month.
It is also suggesting to put the Office for Budget Responsibility on official notice that an emergency budget is likely in September.
Tony Danker, CBI Director-General, 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.”
Ms Truss has pledged to reverse the national insurance tax rise immediately if she becomes prime minister, while Mr Sunak has promised a VAT cut on energy bills.
But critics say neither of their plans go far enough and new measures must be agreed now to stop a winter crisis.
Demanding further intervention from the government, Mr Brown set out his own vision for dealing with the cost of living crisis, including changing the windfall tax to get more money out of oil and gas companies, a cap on energy bills and reforming the benefits system.
Ms Truss and Mr Sunak continue to clash over their plans for the economy.
Mr Sunak launched a fresh attack on his opponent’s plan for tax cuts in an emergency budget, describing it as a “big bung” for large businesses and the better-off that would do little to help those most in need over the coming winter.
Northern Ireland Secretary Brandon Lewis – who is backing Ms Truss, the foreign secretary – said they would look to do “whatever we can” to help people under pressure from rising inflation.
“She’s willing to do more to help people but her focus is around doing it in a way that puts more money in people’s pockets, creating a high-growth economy with higher wages, more people in work,” he said.
“So rather than having handouts, what we do is have a low-tax economy that’s driving growth and therefore with people having more money in their pockets, they’re better placed to deal with some of the challenges that we see.”