Today, housing. Soon: childcare, energy and transport. Boris Johnson has a plan and he wants people to know about it – most of all those Tory MPs who sat in judgement on him in recent days.
So during his speech in Blackpool the PM had an important argument to make.
There are huge economic headwinds confronting Britain, he said, because of the war in Ukraine and Britain’s failure to invest in the energy generation sector. But splashing more public cash isn’t the answer, he argued, because the country can’t afford it and there is a growing risk that the cost of paying the interest on our debts – already over £70bn a year – spirals out of control. How Lawsonian.
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Instead, he suggested, the answer to the cost of living from here on in is, to use the ugly jargon, supply side reform – a phrase many use as code for deregulation which, Tories hope, will unleash market forces to drive down prices. A series of such deregulatory plans starting with housing today will be rolled out in the coming days.
It is an ambitious vision designed to appeal to classic dry Tories.
But it must be put in context.
Mr Johnson’s new-found caution about splashing more cash and preaching about the dangers of debt interest costs comes two weeks after he splurged more than £21bn putting money direct in millions of people’s bank accounts and off energy bills. In other words, two weeks ago he was happy to sign off an approach directly contradictory to today’s rhetoric – but now asks us to believe he won’t do this again. We will see.
Secondly today’s housing plans were not classic supply side deregulation. In fact they place greater burdens on the private sector, potentially distorting the market. The right to buy policy will generate more costs for the taxpayer as the proceeds from discounted sales of housing association stock fail to cover the costs of new building, money the government has decided will be taken from other “levelling up projects”.
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PM says tax ‘must come down’
Meanwhile, the Johnsonian plan to allow people to use benefit payments to fund their mortgage costs is an additional layer of government regulation and set of burdens on the mortgage sector which believes it is not in its commercial interest to lend to this group at the moment – in the past Tories would have criticised Labour for such a market distortion. Not today.
Then there is the question of whether any of the plans – today or in the coming weeks – are politically deliverable. To make a discernible difference to spiralling prices will take major and controversial change which inevitably involves winners and losers. Is Mr Johnson politically tough enough to deliver this after 148 Tory MPs voted against him – more than could wipe out his majority over three times over – and many will take slow grind legislation that will only take effect in many months time if not years.
Mr Johnson assumed today’s audience was jittery Conservative MPs wanting to hear crowd-pleasing ideas that show echoes of Thatcherism. Maybe his is right. But surely his real and most important audience – the public – will be waiting to see what actually happens now. And that not might be very much.
