McVey sparks potential Tory budget revolt
Chancellor Jeremy Hunt faces a potential backbench revolt over tough tax rises and spending cuts he will announce in the Autumn Statement.
Mr Hunt is expected to unleash £35 billion of cuts and £25bn of extra taxes as he battles to plug a black hole in the public finances.
The package is likely to include a freeze in income tax thresholds, although he is tipped to make high earners in England pay the 45p top rate once they are paid £125,000 rather than £150,000. Dividend income and capital gains tax are also likely to be targeted.
However, there were early rumblings of discontent on the Tory backbenches. Former cabinet minister Esther McVey warned at PMQs – taken by Deputy PM Dominic Raab – that her support would be conditional on the HS2 rail project between London and the north west of England being scrapped.
Mr Hunt is expected to include an update on the project when he outlines his plans in the Commons chamber at 10.30am on Thursday.
Ms Mcvey told MPs that terminating HS2 would avoid the need for such deep cuts in spending.
“Given that we have the highest burden of taxation in living memory it is clear that the Government’s financial difficulties are caused by overspending and not due to under-taxing,” she said.
“Does the Deputy Prime Minister therefore agree that if the government has got enough money to proceed with HS2 at any cost then it has sufficient money not to increase taxes.
“If, however, it has so little money it has to increase taxes, which is the last thing for a Conservative government to do, then it doesn’t have sufficient money for HS2.
“So can I gently urge the Deputy Prime Minister not to ask Conservative MPs to support any tax rises unless and until this unnecessary vanity project is scrapped, because I for one won’t support them.”
Mr Raab replied: “I understand her opposition to HS2. I think we have got some very difficult decisions to make. They will inevitably involve a balanced approach. I will leave it to the Chancellor to set them out in the Autumn Statement.”
Mr Hunt and Mr Sunak say battling inflation is their top priority but their challenge intensified when new data showed the cost of living had risen to a new 41-year high of 11.1%, well above the 10.7% analysts had expected.