Rishi Sunak under pressure from Cabinet to cut tax

Jacob Rees-Mogg, the minister for Brexit opportunities and government efficiency, broadly expressed support for the comments, and also pushed the idea of ​​unilateral tariff reductions. “Jacob is a big supporter of unilateral action of tariffs,” a government source told the FinancialTimes.

Another confirmed that Mr Johnson was sympathetic to the move, adding: “The Department for International Trade aren’t fans.”

Spokesmen for Mr Rees-Mogg and Mr Malthouse declined to comment.

Figures in the room insisted there had been no row, with the meeting being discursive as ministers proposed ideas for lowering the cost of living.

Questioned about the plans on TalkTV, Mr Johnson dismissed claims that the Government was intervening too late. He insisted Cabinet ministers were doing “everything in our power” to ease the crisis.

“We’re helping people by cutting council tax, by making sure that we support people who are facing particular hardship [and] putting more money into local councils to give them the funds that they need,” he said.

But Torsten Bell, chief executive of the Resolution Foundation think tank, said: “If the ‘answers’ being proposed to a massive and immediate energy-driven cost of living crisis are long-term regulatory reforms of childcare and MOTs, then we have lost the plot.”

Pressure on the Government to go further remains, not least from the Tory benches, as the tax burden continues to rise while energy bills and food prices soar.

‘They should cancel the tax rises’

There were fresh calls on Tuesday for tax cuts from Tory MPs who once sat in Cabinet.

John Redwood, the former Welsh secretary, told The Telegraph: “They should cancel the tax rises. How many more times do we have to tell them?

“Something big on their tax rises has just hit in the form of these increases in energy and petrol bills. It’s like a tax rise, so the Government shouldn’t double it up with tax rises of their own.”

David Davis, the former Brexit secretary, said of the new figures on tax receipts: “This yet again demonstrates how totally unnecessary the National Insurance Contributions increase is. Every single forecast has been over-pessimistic. The one thing that will make the tax take go down is tax increases. Yet again, we have evidence the Treasury does not understand dynamic taxes.”

Danielle Boxhall, of the lobby group Taxpayers’ Alliance, said: “With inflation rising, the Chancellor’s tax break freeze is effectively a stealth tax on unsuspecting taxpayers already facing the highest tax burden in 70 years.

“The Treasury should link thresholds with inflation or wage growth to avoid fiscal drag, and give taxpayers and businesses some much-needed respite.”

Mr Johnson and Mr Sunak are understood to have clashed in recent months over spending.

The Chancellor is determined not to sign off new increases in spending, given the scale of UK debt after propping up the economy during the Covid pandemic. But in recent months, Number 10 has been pushing for further interventions to help with the cost of living crisis, with some proposals stonewalled by the Treasury.

During the Cabinet meeting, Mr Sunak is understood to have spelled out the £22 billion package of support already announced by the Treasury, including a 5p cut in fuel duty.

He also warned against public spending increases, amid fears it could “lock in” the unusually high inflation rates being seen in this country and across the world this year.

The Office for Budget Responsibility, the independent government forecaster, has warned that inflation could reach nine per cent by the end of the year.

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