RISHI SUNAK could see his critical autumn Budget voted down by backbench Tory MPs if the Chancellor presses ahead with tax rises to fund the economic recovery, it has emerged.
Several influential backbench Tory MPs, including Sir Graham Brady and Sir John Redwood, have publicly raised serious concerns over the impact of tax rises on Britons across the country. Behind closed-doors, one former minister has revealed they will vote down a budget involving a hike in tax, and insisted fellow disgruntled parliamentarians are “going absolutely insane” in private group chats.
The coronavirus pandemic has plunged the UK into a recession with national debt rising above £2trillion for the first time since the 1960s.
This has led to reports corporation tax could be raised, capital gains tax increased, and pension tax relief cut.
Leading economists have also told the Treasury select committee an increase income tax, national insurance or VAT could also be necessary.
As divisions grow within the Tory ranks, Mr Sunak and Boris Johnson met with the new crop of Tory MPs elected in December, amid growing fears their constituents in former Labour-held seats could be most affected by economic policy.
The Chancellor told the group there would be “difficult” decisions ahead, but insisted it did not mean “horror show of tax rises”.
Despite the Tories commanding a 79-seat majority in the Commons, there is growing fears the Budget could be voted down.
A former Tory minister told The Telegraph: “I won’t be voting for the Budget, I am not voting to put taxes up on entrepreneurs so people can eat half price f*g burgers.
“Tory MPs are going absolutely insane in the backbench WhatsApp group.”
Sir Graham Brady, the chairman of the Conservative backbench 1922 committee, has told the Chancellor to be “very cautious” about tax increases.
He said: “The necessity is to make sure we don’t make this crisis any worse than it has to be.
“We have to be aware that raising taxes, and raising the wrong types of taxes especially, can be a way in which you stifle economic growth and prospects rather than guaranteeing them.
“I think we should be very, very cautious in exploring tax increases.”
Mr Redwood, the chairman of the 1922 committee’s Treasury group, added the Chancellor should look at “tax cuts, not increases”.
At the crunch meeting with the recruits of Tory MPs on Wednesday, Mr Sunak stressed his aim is to create “dynamic” and “low tax economy”, but insisted he needed to be “honest” with the public about the economic situation.
He said: “We will need to do some difficult things, but I promise you, if we trust one another we will be able to overcome the short term challenges.
“Now this doesn’t mean a horror show of tax rises with no end in sight.
“But it does mean treating the British people with respect, being honest with them about the challenges we face and showing them how we plan to correct our public finances and give our country the dynamic, low tax economy we all want to see.”