Jeremy Hunt will have to stare down a potential Tory backbench rebellion as he delivers his tax-hiking fiscal statement tomorrow.
The chancellor has warned that the mixture of spending cuts and tax rises is necessary to restore economic credibility, however they may well dent his own credibility in the Tory party.
There are already rumblings that the right of the parliamentary Tory party will strike out against Hunt and Rishi Sunak if the tax hikes are too onerous.
Almost one-third of Conservative MPs voted for Liz Truss’ promises of swingeing tax cuts in the summer leadership contest.
They are now being asked to get behind tax hikes for everyone, which Hunt has said will hit the wealthiest hardest.
Former cabinet minister Esther McVey today told the House of Commons she won’t “support any tax rises unless” HS2 is scrapped.
Truss supporters Simon Clarke and Sir Iain Duncan Smith recently said hiking taxes would choke off growth just as the UK is about to enter a two-year recession.
The National Institute of Economic and Social Research think tank agrees, calling Hunt’s plans a “low growth trap”.
One Tory backbencher told City A.M. that he thought “the tax hikes will be softer” than expected, which would dull any backlash.
“Tomorrow won’t be ideal, but not doomsday,” they said.
Dissenters in the party are being warned that the party is staring into electoral oblivion and must unite if they are to win the next election.
Sunak came into office promising to fix the “mistakes” made by the Truss administration and to unite the party, after months of Tory psychodramas.
Labour leads the Tories in every poll by at least 20 points, with some giving Sir Keir Starmer’s party a 35-point lead.
Adam Hawksbee, interim director of the centre-right think tank Onward, said: “Tory MPs won’t like every measure, but will need to think carefully before rebelling.
“Restoring trust in this government’s competence and delivering the 2019 manifesto are the only route to victory in 2024.”
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