Raab under pressure over lack of action on cost of living crisis | Cost of living

Dominic Raab has come under pressure over the UK government’s failure to come up with policies to tackle the cost of living, while not ruling out higher defence spending.

The deputy prime minister was on Wednesday questioned on the government’s lack of big ideas to deal with the cost of living crisis and high inflation, after a cabinet brainstorming session came up with a string of minor policy tweaks.

Pressed on why he could not name any new policies, Raab told Times Radio: “What I would say is, in fairness, it’s quite right that cabinet discusses, thrashes through, these ideas and the subcommittees of cabinet do.

“I think … people expect us to test our policies very carefully, to thrash them through, and keep coming up with new ways to ease the pressure.”

Later in his broadcast round, Raab did not dismiss a call from Liz Truss, the foreign secretary, for Nato countries to look at higher defence spending in light of the war in Ukraine, after she suggested 2% of national income on defence should be a “a floor, not a ceiling”.

In Tuesday’s brainstorming cabinet, Grant Shapps, the transport secretary, had suggested making MOTs on vehicles once every two years, saving about £40, while Boris Johnson backed proposals to let nursery staff look after more toddlers each to help bring down childcare costs. Other suggestions included cutting green levies on energy bills in spite of the UK’s net zero target, while Kit Malthouse, the policing minister, pushed for more tax cuts, backed by Jacob Rees-Mogg.

The government’s suggestions were criticised by Torsten Bell, director of the Resolution Foundation thinktank, who said it had “lost the plot” if it thought its ideas would make a substantial difference to people’s lives.

“Our problem is a big cost rise for almost everyone that is harder for low/middle income households to bear. So the answer is either reducing that cost rise for, or raising the income of, those households. The benefits system is by far the easiest way to do that. Obviously,” he said.

Raab insisted the government already had a £22bn package to deal with the cost of living and dismissed Labour’s planned windfall tax on oil and gas companies to help bring down energy bills as “disastrous” and damaging to investment.

He pointed to the taper rate of universal credit and the rise in the national living wage. However, the government is under intense pressure over the issue weeks after Rishi Sunak’s spring statement failed to offer substantial help for households at a time when inflation is running at about 7%.

Despite the chancellor’s insistence that the crisis must be solved without any more cash, Truss will give a speech on Wednesday pushing for higher defence spending in light of Russia’s war in Ukraine.

She is due to say the west must prepare for the “long haul” to ensure Russia’s defeat in Ukraine, calling for allies to increase defence spending and supply tanks and warplanes to Kyiv.

Truss also argued that there had been a “generation of under-investment” in the west and the 2% target should be “a floor, not a ceiling”.