The former cabinet minister Michael Gove has heavily criticised Liz Truss’s plans for tax cuts for the rich, saying her unfunded £45bn package had the “wrong values” and was not Conservative.
His intervention came as pressure from Tory MPs mounted for Ms Truss to perform a U-turn on controversial plans to axe the 45p income tax band, which gifts an average £10,000 to the 600,000 highest earners in the UK at a time when ministers are eyeing real-terms cuts to welfare benefits.
One former minister told The Independent the government would struggle to get the cut through the Commons when it comes before MPs in the new year, in what would be a virtually unprecedented rebellion against a Budget measure.
“The sensible thing to do might be to put it off, say that they will do it, but in a few years. Give themselves wriggle room,” he said.
Grant Shapps, the former transport secretary, joined Mr Gove in warning against the “politically tin-eared” plans.
Writing in The Times, he said that the government should not be making “big giveaways to those who need them least… not least because it is being paid for with borrowed money.”
And there was a furious response from backbenchers to Tory chair Jake Berry’s warning that rebels would be stripped of the whip, with one former minister telling The Independent: “A threat to expel people who won’t go along with this bats**t crazy cock-up is, frankly, bonkers.”
With many backbenchers already despairing over their prospects at the next election and little sign of Ms Truss compromising on the issue, a successful rebellion was “entirely possible”, said the ex-minister, adding: “Anyone trying to hold on to their constituency – or anyone thinking about their next job – won’t want blood on their hands from this.”
Conservative MP for Lewes, Maria Caulfield, tweeted on Sunday evening, saying: “I can’t support the 45p tax removal when nurses are struggling to pay their bills.”
She tagged Mr Berry in her comment, continuing: “If Tory party don’t want this working class MP, fair enough.”
In a defensive TV interview on the first day of the Conservative conference in Birmingham, the prime minister confirmed reports that she was reviewing the pledge made by former chancellor Rishi Sunak of an inflation-matching rise of around 10 per cent to working-age benefits, and did not rule out cuts to public services.
She blamed communications blunders for the panic in the markets triggered by chancellor Kwasi Kwarteng’s mini-Budget last week.
But she told the BBC’s Laura Kuenssberg that she stood by his plans, including the income tax cut and the scrapping of the cap on bankers’ bonuses.
Mr Kwarteng himself is expected to stick to his guns in a speech to conference on Monday that will be closely watched in the financial markets.
But former chancellor George Osborne said it was “touch and go whether the chancellor can survive”, telling Channel 4’s Andrew Neil Show it would be “curtains” if his speech went badly.
Johnson loyalist Nadine Dorries turned on the PM, accusing her of “throwing the chancellor under a bus” after Ms Truss revealed that cabinet had not been consulted on the 45p move and described it as “a decision the chancellor made”.
Another former minister told The Independent the attempt to distance herself from the controversial policy was “weird”, as it was “unthinkable” that she had not signed off on it.
But both Downing Street and the Treasury dismissed suggestions of a rift between the pair, with a No 10 source saying they were “completely united” and a source close to Kwarteng describing them as being “in lockstep on this”.
While denying he was a “rebel leader”, Mr Gove did not rule out voting against the abolition of the 45p band.
And other senior Tories stepped up the pressure for a U-turn, with backbencher Richard Graham saying the cut should be “pushed into the long grass” and former cabinet minister Julian Smith warning: “We cannot clap for carers one month and cut tax for millionaires months later.”
A total of at least 11 Tory MPs have now come out publicly against the change, with many more voicing loud discontent behind the scenes.
Mr Gove said he was “worried” that Truss and Kwarteng were “betting too much on tax cuts when we are borrowing to pay for them”.
And he said: “That is not conservative in my view.” Conservatives must “stay true” to the one-nation values that had won Mr Johnson a majority in 2019, including caring for the most vulnerable in society, he said.
The former education secretary told Kuenssberg that “a number of mistakes” in the Budget needed correcting.
And, in a clear sign of concern at Ms Truss’s rejection of calls to alter course, he added: “There is an inadequate realisation at the top of government of the scale of change required.
“When people are suffering… cutting tax for the wealthiest displays the wrong values.”
Mr Gove, who has never voted against the government before, refused to say if he would do so when the 45p cut comes before the Commons. But asked if Ms Truss should U-turn, he replied: “Yes. I think the 40 to 45p tax cut is wrong.”
The chair of the One Nation caucus of Tory MPs, Damian Green, told a meeting on the fringe of the conference that, if the Conservatives were to become viewed as the party of the rich, then “funnily enough, most people won’t vote for us and we lose”.
He said centrist Tories “will not be backward” in raising a strong voice against the measure, but added that rebels were only in “the early stages of discussion” on tactics.
Speaking after a week of market turmoil that saw interventions from the Bank of England and the International Monetary Fund, Ms Truss insisted that the tax cuts were part of a “ very clear plan” to tackle the problem of persistent sluggish growth in the UK, to be unveiled next month.
“We had to act on taxation… to make sure the economy didn’t slow down any further,” she told Kuenssberg.
“What the government is trying to avoid is a serious economic slowdown that would have real difficulties for people.
“I understand their worries about what has happened this week, but I stand by the package we announced and I stand by the fact that we announced it quickly.
“But I do accept that we should have laid the ground better. I’ve learned from that and I will make sure that in future we do a better job of laying the ground.”
The PM refused to commit to ensuring that Kwarteng’s medium-term fiscal plan, due for publication on 23 November, would deliver inflation-level rises in funding for public services.
“What I’m going to do is make sure we get value for money for the taxpayer,” she said. “But I’m very, very committed to making sure we’ve got excellent frontline public services.”
Shadow chancellor Rachel Reeves accused the PM of failing to understand the “anxiety and fear” felt by people facing huge increases in their mortgage repayments.
“This is a crisis made in Downing Street, but it is ordinary working people who are paying the price,” she said.
“The prime minister and the chancellor are doing some sort of mad experiment with the UK economy and trickle-down economics. It has failed before and it will fail again.”
Liberal Democrat leader Ed Davey said: “Conservative MPs must for once do their patriotic duty and vote down the prime minister’s unfunded tax cuts for big banks and billionaires.”
