The Conservatives still want to cut taxes before the next election, party chairman Nadhim Zahawi has said, amid growing anger from party members over the Autumn Statement.
Tory MPs have told The Telegraph that the decision by Jeremy Hunt, the Chancellor, to raise Britain’s tax burden to the highest level since the Second World War on Thursday was the “economics of a madhouse” that has made the party “more Labour than Labour”.
Polling conducted for The Telegraph by Ipsos UK shows the statement has also failed to reassure voters, with almost half of the public reporting they feel more concerned about the economy and their personal finances than they did beforehand.
Asked whether he hoped the Conservatives would look to reduce taxes again before the next election, Mr Zahawi, the Tory chairman, replied that while ministers “wouldn’t have a hope in hell” of doing so before inflation comes down, “when we come out the other end of that, I’m sure Jeremy Hunt’s priority will be to start looking at what more we can do to help people with the tax burden”.
A Bank of England forecast estimates that inflation will have fallen to around its target level of two per cent by May 2024, when an election could be held.
Mr Zahawi’s comments come despite reluctance from Downing Street to discuss tax cuts, following the market reaction to Liz Truss and Kwasi Kwarteng’s tax-cutting mini-Budget.
Asked about the prospect of tax cuts before polling day, a No 10 spokesman this week said: “I’m not going to comment around an election debate... we’ve set out the plan, which is a credible and fair plan to restore economic stability.”
But in his interview with The Telegraph, the Conservative chairman, who will be responsible for the next general election campaign, said there “isn’t a cigarette paper difference” between ministers who “take collective responsibility that we do want to bear down on the tax burden”.
It comes as:
- Middle-class voters face a further squeeze in the new year, as the Government examines plans for “social tariffs”, which would see the energy bills of vulnerable households subsidised through levies on bills paid by the better-off.
- The Treasury is also considering extending support for low-income homeowners with high mortgage costs, which will make loans available to Universal Credit claimants after three months of difficulty, rather than nine.
- Patrick Minford, a former adviser to Margaret Thatcher, compared Mr Hunt’s tax raid to a “wrecking ball” that will plunge Britain into a prolonged economic slump.
- Jonathan Reynolds, the shadow business secretary, said Labour was capitalising on renewed interest from donors and the business community.
'Our voters feel as if we’ve abandoned them'
In the wake of the Autumn Statement, three Conservative MPs told The Telegraph they had visited constituency associations and been met with hostility from members about the tax increases.
“I had an association dinner the day after the Kwasi and Liz mini-Budget – everybody was full of enthusiasm, they were excited again, they could see Conservative policies coming over the hill and they were cheering,” said one backbencher. In contrast, the atmosphere at a dinner following Mr Hunt’s statement was “unbelievably subdued”, they said.
Jacob Rees-Mogg, the former business secretary, said: “Conservative members are fretful, I think it’s fair to say. They are loyal but fretful.
“They want to support Rishi [Sunak] and they want him to do well, but they are concerned about where we are on the economy.”
Sir Bill Cash, the veteran Tory MP, said there was a “sense of bewilderment by some people at seeing things brought forward that are not at all Conservative economically or politically”.
Another senior Tory MP said the party’s supporters were “furious” about the statement, which they described as “the economics of a madhouse”.
“Our voters feel as if frankly we’ve abandoned them and that we’ve become more Labour than Labour,” they said.
