Gordon Brown demands emergency budget before ‘financial timebomb’on August 7, 2022 at 2:26 pm

Former Labour prime minister Gordon Brown has called for an emergency budget before the UK hits a “financial timebomb” this autumn.

Mr Brown said millions would be pushed “over the edge” if the government does not address the cost of living crisis.

Conservative leadership rivals Liz Truss and Rishi Sunak have clashed over how they will address high inflation.

He wants them to agree an emergency budget with PM Boris Johnson this week, or for parliament to be recalled.

Writing in the Observer, Mr Brown said: “The reality is grim and undeniable: a financial timebomb will explode for families in October as a second round of fuel price rises in six months sends shock waves through every household and pushes millions over the edge.”

A new report commissioned by Mr Brown, carried out by Professor Donald Hirsch from Loughborough University, found that 35 million people in 13 million households across the UK are under threat of fuel poverty in October.

This is “an unprecedented 49.6% of the population of the United Kingdom”, said Mr Brown.

Findings from the report suggest the additional one-off £1,200 support for low-income households will fail to compensate for three major blows to income from October 2021 to October 2022.

The loss of the £20-a-week benefits uplift, the rise in the energy price cap and an annual uprating out of line with inflation forecasts all mean the worst-off families will find it hard to bridge the gap.

Mr Brown told BBC Radio 4’s World at One that action is needed promptly to ensure the benefits system – and the computers that operate it – are able to get help to people before October.

He said there is a vacuum at the centre of government, with both Mr Johnson and Chancellor Nadhim Zahawi on holiday.

“Not enough thinking is being done about the major social crisis,” he added.

If elected as the next Tory leader, Ms Truss has promised to reverse some of former chancellor Mr Sunak’s tax rises, including the rise in National Insurance contributions.

Meanwhile, Mr Sunak said the Tories can “kiss goodbye” to winning the next elections if inflation is not under brought under control quickly.

The Bank of England has warned inflation – currently 9.4% – could peak at more than 13% and stay at “very elevated levels” throughout much of next year, before eventually returning to its 2% target in 2024.