It was between Christmas and new year that Boris Johnson began to worry about the next crisis. In the preceding weeks, Covid had been the big dividing line with his backbenchers as the prime minister wobbled over further restrictions but was chastened by an angry cabinet and a mass rebellion of his MPs over the light-touch plan B measures. But a cost of living crisis has the potential to be the much more serious matter in 2022, and the prime minister told aides he wanted work to begin on what other mitigations for rising energy prices might be necessary. Despite this, Johnson may have thought he had a few weeks’ grace with his backbenchers and friendly newspapers for having decided against new Covid restrictions. That hope was undone in the first press conference of the year when the prime minister stumbled over a question from the Sun over energy bills and the potential to cut VAT – a key Labour demand. When he entered the chamber for prime minister’s questions the following day, Johnson appeared to have come prepared for a victory parade in front of his MPs for allowing a normal Christmas and new year despite surging Covid cases.
But Angela Rayner, the Labour deputy leader, took him immediately to task on inflation, tax rises and heating bills, and the prime minister made a string of errors in response, denying his own words on inflation and twice radically overstating the warm homes discount, saying it was a rather implausible £140 a week. Time and again his backbenchers howled about the pressures their constituents were facing on fuel, food bills and tax rises. One of his key cabinet loyalists, Jacob Rees-Mogg, had gone rogue in a cabinet meeting on Wednesday, asking for the prime minister to reconsider his plans for a national insurance rise in April, which will come just as a revised price cap is likely to drastically push up energy bills. The chancellor, Rishi Sunak, is not minded to pursue major interventions. And Johnson’s problem is that many of the options open to him will fall short. Of what has been suggested so far, such as an extension of the warm homes discount or even a VAT cut on bills, nothing is likely to make much of a dent in the eye-watering rises consumers are likely to see.
The cost of living crisis has the potential to be immensely damaging politically in a number of ways. Many voters who are not especially vulnerable will now care more about a sky-high energy bill than catching Covid. Labour can draw stark parallels with the start of Johnson’s time in No 10. When voters ask themselves whether they feel better or worse off, for many the answer will be the latter. MPs privately say the opposition has a chance to inflict real damage on this issue, rather than on sleaze scandals or rows over Covid restrictions, both of which can sway disgruntled voters midterm but may not ultimately be what matters in the polling booth. Crucially, the squeeze on voters’ pockets gives MPs opportunity to attack the government over their pet grievances, whether that is net zero, deregulation, tax rises or failure to be sufficiently enthusiastic about Brexit. Each one can be seen as a remedy and attract a caucus of troublemakers. A popular and deft prime minister could find ways to contain and mitigate the pressures, with the support of his backbenchers. But with more difficult decisions on the pandemic and embarrassments over sleaze and rule-breaking likely to come, Johnson’s reputation is sufficiently damaged within his own party to make the task even harder.