British Prime Minister Boris Johnson has faced fresh Tory demands to cut taxes and bring forward a summer support package to help the most vulnerable households.
MPs voted 312 to 229, majority 83, to approve the Queen's Speech and give the go-ahead to a legislative programme which includes implementing measures to boost energy security and regenerate areas across England.
But the sixth and final day of the Queen's Speech debate once again saw calls from the Prime Minister's own backbenchers to change course and respond to cost-of-living increases as inflation hit a 40-year high.
Despite the Tory pressure, Labour's amendment calling for an emergency budget was defeated by 312 votes to 229, majority 83, while Liberal Democrat and SNP proposals were also rejected.
Conservative former cabinet minister Chris Grayling told the debate: "I am pretty supportive of much of what this Government has done, how it has gone about dealing with a range of issues that have arisen.
"But I would like to make one very simple point to the minister and his colleagues. You cannot achieve growth by over-taxing our economy.
"The decisions that have been taken on tax have been taken. But the direction of travel needs to change and it needs to change soon."
Conservative Sir Bernard Jenkin, MP for Harwich and North Essex, said a £13.5 billion 'summer package' of support is required, telling MPs: "We must all recognise the cost-of-living crisis - yes crisis."
He said: "A summer package to rescue the most vulnerable households is needed to avoid real financial distress and personal anguish and to support economic demand of the most vulnerable households, or we are creating possibly a worse recession than is already expected."
Sir Bernard added: "Like after the unforeseen Covid crisis, the Treasury must adapt to this unexpected war in Europe and accept this new global energy and economic crisis also requires a very substantial policy response."
He suggested the £20 uplift in Universal Credit "should immediately be restored", adding: "The abolition of VAT on domestic fuel would abolish a regressive tax which actually hurts the poorest households the most, we can do this now we're outside the EU."
Tory former minister Sir Edward Leigh did not agree with other MPs' criticisms of coming Government business, telling them: "In time, we can have an interesting debate about Channel 4 privatisation, about foie gras and about conversion therapy, but these are not the overwhelming priorities of the British people at the moment.
"What they are concerned about is the cost-of-living crisis."
Shadow chancellor Rachel Reeves had earlier branded the Government "out of touch" and "out of ideas" as she called for an emergency budget to help struggling households.
She added: "Their decisions have left those with the least fearing for the future. The Tories cannot be trusted with public money and have handed billions to their friends, their donors and to fraudsters.
"We need an emergency budget with a windfall tax to keep energy bills down. We need a government that takes growth seriously."
Responding, Chief Secretary to the Treasury Simon Clarke said: "Far from the dire forecasts about unemployment from 2020 being realised, instead we see unemployment has fallen back to just 3.7%, below pre-pandemic levels and the lowest since 1974.
"That 12 million jobs and incomes were protected during a pandemic, that unemployment is now lower than before the pandemic, that we were the fastest growing economy in the G7 last year, is all thanks to the careful economic stewardship of ... the Chancellor and this Conservative Government."
After the votes, Liberal Democrat Leader Ed Davey bemoaned the decision by MPs to reject his party's amendment - which proposed reducing the top rate of VAT from 20% to 17.5%. He said in a statement: "Cutting VAT would put money straight back into people's pockets, and the Chancellor could do it at the stroke of a pen.
"Rishi Sunak's refusal to do so while cashing in billions in extra VAT receipts is a betrayal of pensioners and families feeling the pain of soaring prices."
