There was a back to school feel in the sunny Downing Street garden on Tuesday night as Tory MPs gathered for a tete-a-tete with colleagues and “the boss”.
Boris Johnson had just seen his legislative agenda, packed with “red meat” for the backbenches, read out by the Prince of Wales at the state opening of Parliament.
But as the Prime Minister attempted to address his MPs, newly reunited after Sir Keir Starmer’s “beergate” police investigation woes, there was persistent heckling from one present.
Time after time, he was interrupted by a barking Dilyn, the Johnsons’ over-eager Jack Russell. So much so that the Prime Minister joked: “Take this dog to a place of execution.”
If the gag drew laughs from the crowd, more serious topics were discussed as Mr Johnson chatted to colleagues in smaller groups about the cost-of-living crunch.
As Jake Berry, a Conservative MP and once a close ally of Mr Johnson who was there, put it to Sky News, the Prime Minister “was showing more than a bit of ankle” on a topic close to Tory hearts: tax cuts.
There is a growing belief among some Conservative MPs that the biggest threat to Mr Johnson’s political mortality is not the furore over lockdown-breaking parties, but the stuttering economy.
“Stagflation” is rearing its head as inflation soars but economic growth shows signs of slowing. Energy bills have almost doubled and will rise again. Recession could come next year – on Thursday, it emerged that the economy actually contracted in March.
All of which has focused minds in Downing Street – both at Number 10 and the Chancellor’s team next door in Number 11 – about what more can be done to help households suffering the squeeze.
The Queen’s Speech had as its opening line that the Government’s “priority” is helping with cost of living and growing the economy, but its 38 Bills did little to help in the coming months.
Moves to diversify energy supply, improve the railway network and drive up productivity could well ease future cost of living concerns, but do not help in the here and now. This means that the focus is now on the near term.
There are three broad areas where thinking is being developed with an eye on the tricky politics of cost concerns.
One involves spending no money and cutting no tax. The Prime Minister has tasked all departments to come up with “non-fiscal” ways to help ease the financial pressures on the public.
There was a “blue sky thinking” recent Cabinet meeting, where people threw in ideas and, as one Tory adviser joked, “auditioned to be Chancellor”.
That has solidified into about a dozen proposals being more carefully worked up, which were the subject of detailed discussion in a Cabinet sub-committee Mr Johnson attended on Tuesday.
One idea is changing the annual requirement of MOT tests for most cars to once every two years instead. Another is raising the cap on how many children a childminder can look after.
An announcement on one of the dozen policies is expected within days. But, as a senior government source has admitted, each move is complicated and takes time to copper-bottom.
Moving faster on energy bills
Then there are ideas to help with one of the most pressing costs on the public: energy bills. The energy cap nearly doubled in April and is expected to shoot up again later this year.
Rishi Sunak, the Chancellor, to date has argued action is not needed yet, since the next increase will not bite until the autumn and predictions for how high the cap will rise are moving around markedly.
He is now working up a package for August, when Ofgem, the energy regulator, will announce the new price cap, but is under pressure – given the overall mood in the country – to move faster.
One minister involved in discussions told The Telegraph: “Number 10 are keen to do something from a political point of view, but Rishi is pushing back because the Treasury doesn’t like spending money.
“Clearly the political pressure is ramping up. They will have to do something.”
One option being looked at is another round of money discounted from council bills, a central part of the £9 billion package of support announced for the spring increase in the energy price cap.
That saw 20 million households get a one-off rebate of £150, providing that their home was in council tax bands A to D.
The method fits Mr Sunak’s preference for help “targeted” at those who need it most while not adding a permanent addition to the Treasury’s yearly outgoings.
And then there is the big box marked “tax”. The Government’s record to date is setting the tax burden on a trajectory where it will hit its highest level for 70 years, while cutting some individual taxes.
The argument, repeated by the Prime Minister on Thursday, about why this is happening, is familiar: the economy is still recovering from a once-in-a-300-year drop and spending is required to fix problems that the Covid pandemic created, such as soaring NHS backlogs.
But with every week, it feels like the political mood music changes a little.
In recent days Damian Green, who heads up the liberal One Nation group of Tory MPs, has backed new tax cuts and Stephen Crabb, a Cabinet minister under David Cameron, has called for extra help.
Both are figures not from the party’s Right, which is normally most vocal on tax matters, signalling how broad support for more action on the Tory benches is becoming.
VAT’s the way to deal with a crisis?
Cutting VAT on energy bills remains on the table and was an idea publicly touted by Mr Johnson during the 2016 EU referendum as something that could happen once the UK gave up its membership. That means it could neatly be declared a “Brexit benefit” by Cabinet ministers.
However, Treasury figures fear it would be both costly to implement and be lost on the public, given that it would cover only a fraction of the energy bills increase.
Another idea, hitting energy companies with a windfall tax, is being looked at by the Chancellor and could fit into a simple “get money from the bad guys for the rest of us” narrative that some voters would cheer.
However, both Mr Johnson and Mr Sunak are instinctively uncomfortable with the idea of raising tax on energy companies as they are also encouraging them to invest to achieve the green revolution – even if some of those firms’ bosses insist they will invest whatever happens.
Then there is the bigger overarching question: if you are going to announce a major tax cut in the autumn Budget, why not do it now with an “emergency Budget”?
The idea of an early Budget is being ruled out for now, with officials and ministers insisting that any such announcement could be kept to fiscal events.
But that idea has not always been followed by this government. Last September, a rise in National Insurance to pay for social care and the NHS was announced before the October Budget. It was due to be announced in July before Mr Johnson had to self-isolate after a Covid “ping”.
Both the Chancellor and the Prime Minister want action to help with the cost of living. Their aides deny any shred of difference between their ambitions. The question is how far and how fast, which is where the complications begin.
As one ally of Mr Sunak told The Telegraph: “It is not a question of having a chat round the Cabinet table and issuing a press release. It’s more complicated than that. There is always a tension between creating the buzz by announcing it and making sure it doesn’t unravel within days.”
It is avoiding the latter, while coming up with the former that Number 10 desires, which is Mr Sunak’s challenge.