Government divisions over tax cuts were laid bare on Saturday night with sources close to the Prime Minister clashing over demands for immediate action.
Responding to mounting calls from MPs and ministers for urgent tax cuts to tackle the cost of living and boost growth, one source told MPs to “grow up” and stop behaving like they were in “nursery school”.
The source close to Boris Johnson said: “This isn’t ‘the Government has had a s— week, we need a reset, cut taxes’. This isn’t nursery school. This is grown-up politics, this is government.
“Three weeks ago, the party was screaming that it wanted a big bung to the general public, and now they are screaming about tax cuts. We have got to get back to grown-up politics where things happen slowly, sustainably and when they are doable.”
The source insisted that, while there was “no Tory in the land more committed to tax cuts than Boris … the money isn’t there to cut taxes now”.
The intervention will heighten fears that Mr Johnson considers himself unable to act on his party’s demands for tax cuts because of opposition by Rishi Sunak, the Chancellor.
Boris ‘caught in the headlights’ of the Treasury
A Treasury source said: “Rishi will not deliver reckless, unfunded tax cuts just to save a Prime Minister who is weakened within his party. As a chancellor, you just can’t do that. It’s nonsense policy-making.”
A senior Tory said: “Boris is caught in the headlights of the oncoming Treasury. Sunak seems to be completely locked into Treasury orthodoxy.”
The Telegraph understands that Mr Sunak will refuse to cut taxes unless Mr Johnson identifies government spending that he is willing to cut to fund such a move.
A source close to the Chancellor added that tax cuts now would “add fuel to the inflation fire”.
On Thursday, Mr Johnson insisted that “the overall burden of taxation is now very high – sooner or later, and I would much rather it was sooner than later, that burden must come down”.
Another source familiar with Mr Sunak’s thinking said of Mr Johnson: “I don’t think he understands at all what the burden of tax is. “MPs will be saying that to him, so that’s what he thinks he needs to say. Rishi wants that, too, he just won’t do it with abandon.”
Another source close to Mr Johnson denied that the Prime Minister had rejected urgent tax cuts, saying: “The boss believes it is much better to have more money in families’ pockets than not. He gets that action is necessary and action will be taken.”
In the wake of last week’s confidence vote, which saw 148 MPs vote to oust the Prime Minister, Mr Johnson is facing growing demands to cut taxes as part of an overhaul of the Government’s approach to the economy.
On Saturday, Sajid Javid, the Health Secretary, said Mr Sunak’s planned 1p cut to income tax in 2024 “should be brought forward” if possible, and John Whittingdale, the former Cabinet minister, said: “I would like to see tax cuts going ahead. I think the PM has been given the chance to show he is the right person to lead the country through these difficult times.”
Tories risk ‘political annihilation’ without tax cuts
Jake Berry, the leader of the Northern Research Group of backbenchers, warns that Mr Johnson risks leading the Conservatives towards “political annihilation” if he fails to deliver on policies such as tax cuts. Meanwhile, Tom Tugendhat, a potential leadership contender, warns the Tories are on course to preside over a “tax-and-spend … socialist nightmare”.
A minister said: “We need a proper economic plan. There is a vacuum where our core domestic and economic policies should be.” The minister insisted that personal tax cuts were needed by the autumn.
Last week, Lord Frost, who quit as Cabinet Office minister in December, called for tax cuts as part of a policy overhaul.
But the first source close to Mr Johnson said: “Lord Frost, who had a better opportunity than anyone to do something at the heart of government, walked away and is pontificating like the ultimate armchair general.”
Mr Johnson and Mr Sunak have postponed a joint speech on the economy. Last week a source said that “nothing is written”, amid disagreements between the pair. Aides are working on an equivalent of the “long-term plan” by David Cameron and George Osborne in 2014.
Last week Mr Sunak said: “Tax cuts are the reward for a Government prepared to make difficult choices elsewhere. We are going to get there, but in a responsible way.”