PM pitches new plan for UK economy

Boris Johnson has promised to rejuvenate a flagging economy and make it easier for people to buy homes in his latest reset after just surviving a major revolt against his leadership.

Johnson pledged "fiscal firepower" to help ease a worsening cost-of-living crunch for households, in his first policy speech since Monday's vote of confidence (6 June) when 41 per cent of his own lawmakers voted against him.

But some experts question the new line of attack, saying his ideas to get help more people to buy their homes had been tried before, and failed.

And the economic backdrop is worsening, with Britain heading for stagnation, according to the British Chambers of Commerce (BCC) and the Paris-based Organisation for Economic Co-operation and Development (OECD).

"Over the next few weeks, the government will be setting out reforms to help people cut costs in every area of household expenditure, from food to energy to childcare to transport and housing,"

The prime minister will also address falling rates of home ownership, especially among young people.

Michael Gove, minister for "levelling up" policies meant to tackle regional inequality, said that among the measures was the extension of what was called the "right-to-buy" for people living in social housing and a review of the mortgage market.

Asked whether these were new policies and why some had not worked before, Gove told BBC radio: "On right to buy, you are absolutely correct to say this is an extension of policy that we already have." This time, he said, the government will replace sold social housing with new homes, without giving details.

The Labour Party said Johnson was ignoring the increasingly poor economic outlook.

"No wonder he is unwilling to face the reality that economic growth in the UK will grind to a halt next year," Labour lawmaker Tulip Siddiq said of Johnson's speech.

Johnson has for months been under increasing pressure over "partygate" - lurid details of alcohol-fuelled parties at his Downing Street office and residence during COVID-19 lockdowns.

The growing anger culminated in an ultimately unsuccessful bid to oust him on Monday, which wounded Johnson's authority as managed only a slender victory over rebels in his Conservative Party.

The British leader desperately wants to move on, but his move to try to tackle a cost-of-living crisis comes as economists suggest the country will suffer more than its peers.

The OECD sees zero growth next year - the weakest of any G20 economy apart from Russia - while the BCC expects Britain's economy to shrink 0.2 per cent in the final quarter of this year before growing just 0.6 per cent in 2023 and 1.2 per cent in 2024.

"The downgrade reflects heightened political and economic uncertainty, and rising cost pressures which are limiting smaller firms' abilities to invest," the BCC said.

Johnson also said that the government will cut costs for businesses and households.

"With more affordable energy, childcare, transport, and housing we will protect households, boost productivity and above all increase the rate of growth of the UK," he said.