PM focuses on housing and cost of living for his relaunch

By Chris White

The Prime Minister sought to set aside the political challenges facing his premiership this afternoon with a major speech on plans to alleviate the cost-of-living crisis and help more people onto the housing ladder. 

Ahead of the speech, the RAC was among dozens of organisations calling for the government to do more as the cost of filling up the average tank of petrol at the forecourt hit £100. However, it is clear that there is no easy solution for the government to draw on, with the flagship 5p cut in petrol duty from just 10 weeks ago already swallowed up by rising petrol prices at the pumps.  

In a wide-ranging address in Blackpool, the Prime Minister said that the UK faced some challenging months ahead. Pointing to planned pay strikes by the RMT, he argued that the UK could face a ‘wage-price spiral’ akin to the 1970s, which could force the Bank of England to put up interest rates if workers demanded to be compensated with pay rises for rising prices. 

He also said that the government should reject what he called the “Covid mindset,” that more state spending is the answer to every problem, and instead focus on cutting regulation to unleash growth. What help he was able to promise included several more measures aimed at cutting costs in the coming weeks, from making it easier to become a childminder, to cutting tariffs on imported food.  

The main focus of the speech was the flagship announcement that lower-paid workers will newly be allowed to use housing benefits to make mortgage payments, as well as extending right to buy for housing association tenants.  

Housing benefits cost the taxpayer around £30bn a year, most of which goes to private landlords, and the Prime Minister was clear that stimulating a new generation of homeowners was a better use for this money. It was also a deliberate attempt at another bite at a once popular Conservative policy from the past. 

The historic right to buy policy had always previously been criticised for removing social housing stock from the country’s portfolio, and it was a charge the Levelling Up Secretary, Michael Gove, faced again from the official opposition. Gove vowed there would be a “like-for-like, one-for-one replacement” for any social housing sold to tenants under the scheme.  

However, in the aftermath of the speech it was made clear that there was no new money for the expanded scheme, and instead the money most come from existing spending plans. Both schemes will have significant limitations in their early stages, likely to be confined to a series of pilots. 

The Prime Minister also refused to state the impact this would have on the government’s housebuilding target in answer to question from a journalist and did not give any cast iron guarantees on numbers for the years ahead, despite the last Conservative manifesto making just such a commitment. 

The Prime Minister was keen to trumpet these reforms as an opportunity to make a tangible difference to people’s lives but as ever, the devil with such policies will be in the detail, and will decide the impact that they have. There remain many questions about how the schemes will operate, and business will be keen for clarity. 

However, the challenges that the Prime Minister faces from within his own party could complicate matters, and the planning measures in the Levelling Up and Regeneration Bill (currently being debated in Parliament) could become targets for backbenchers’ red pen. That means these polices, while announced, may well remain in flux for some time to come.