Boris Johnson has said he wants to reduce the “aberration” of current high taxes caused by the “fiscal meteorite of COVID” – as he announced plans to help boost homeownership.
The prime minister appealed to the 41% of Tory MPs who voted to oust him on Monday as he tried to make clear the billions of pounds spent on helping people during the pandemic was not the norm and cannot continue.
But in a bid to also appeal to voters, he announced a review into the mortgage market, said there are plans to extend the right to buy council houses and promised “justice” for tenants.
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He blamed the cost-of-living crisis on COVID and the Ukraine war but said the government cannot spend its way out of the situation now we are out of the pandemic.
“The overall burden of taxation is now very high. And sooner or later, and I would much rather it was sooner than later, that burden must come down,” he told an audience at a college in Blackpool.
“It’s an aberration. The burden of tax caused in no small part by the fiscal meteorite of COVID.
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“And it must come down because the answer to the current economic predicament is not more tax and more spending.
“The answer is economic growth. And you can’t spend your way out of inflation and you can’t tax your way into growth.
“So that’s why the time has come for this government to do what it’s been straining at the leash to do for two years, but which has been difficult during the COVID crisis.
“And that is to enact the supply-side reforms that will cut the costs of government, cut costs for business and cut costs for people across the country.”
Mr Johnson announced a series of plans to help increase home ownership, but there was nothing on how to help people deal with current high household bills as he said the government is already helping with a windfall tax on oil and gas companies and a reduction in fuel tax.
Among the plans Mr Johnson announced, were:
• The government is launching a “comprehensive” review of the mortgage market that will report back this autumn to figure out how best to access low deposit mortgages
• The review will look at how other countries do this and claimed this would be “unbolting the door to home ownership”
• In what Mr Johnson called the “home ownership revolution”, he said the government wants to extend the right to buy council and housing association homes and promised there would be a “one for one replacement” of them when they are sold
• There would be “justice” for both private and social housing tenants by “dealing with the scourge of unfair leasehold terms”
• This would “supercharge” leaseholders’ ability to buy their homes’ freehold with up to 90% discounts for those “trapped with egregious escalating ground rents”
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• Housing support will instead go towards a pot to pay mortgages instead of to landlords of housing association homes
• The government is going to “change the rules on welfare” so those in social housing can put their benefits towards a first mortgage instead of rent
• Ministers will “explore discounting lifetime and help to buy ISA savings” from Universal Credit eligibility rules
• For those who then become unemployed, Mr Johnson said the government will let people access support for paying their mortgage earlier than currently allowed
• The review will look at how the government can use the £30 billion housing benefits bill to build more social homes with the potential of turning them into “right to buy” options.
