Rishi Sunak’s spring statement labelled ‘cloud cuckoo land’ by Lord Heseltine

Rishi Sunak’s spring statement has been labelled “cloud cuckoo land” by the former Conservative deputy prime minister Michael Heseltine.

Lord Heseltine also predicted a “very difficult period” over the next 12 months for Boris Johnson’s govenrment amid the ongoing police probe over parties in No 10 and the worsening cost-of-living crisis.

The peer’s remarks comes amid intense criticism of the chancellor’s help to the most vulnerable at the spring statement last week, with surging energy costs and inflation diminishing people’s spending power.

According to the latest analysis, five million households will be forced to spend at least 10 per cent of their budget on energy bills after Friday’s price cap — even after Mr Sunak’s recent interventions are taken into account.

Lord Heseltine, who said there were “no plans” for more productive investment, also said talk of tax cuts and cutting public spending was “simply not real”.

But asked on LBC radio by presenter Andrew Marr for his thoughts on the chancellor’s spring statement, which did not land with “universal enthusiasm”, Lord Heseltine replied: “No and nor can it, it’s cloud cuckoo land.

“As the chancellor has said that public finances are in a difficult situation, the debt is rising and inflation is likely to force up interests are so, all this talk about tax cuts and cutting public expenditure and all this sort of thing is simply not real in the present circumstances.

He added: “What is needed is a strategic plan to battle our way through by increasing the scale of the economy and economic activity and more productive investment. But there are no plans expect in a limited number of places.”

During the spring statement, Mr Sunak vowed to cut the basic rate of income tax from 20 to 19 pence in the pound before the end of the current Parliament, in 2024.

“It would clearly be irresponsible to meet this ambition this year — and yet I refuse to let that ambition wither and drift,” he told MPs at the time.

“By 2024, the OBR currently expects inflation to be back under control, debt falling sustainably, and the economy growing. Our fiscal rules are met with a clear safety margin.

After the Metropolitan Police issued an initial batch of 20 fixed-penalty notices over the No 10 partygate scandal, the Conservative grandee Lord Heseletine suggested there was a “very difficult period ahead” for the government.

Downing Street has vowed to reveal whether the prime minister recieves a fine for his participation in the events, but Lord Heseltine said: “It’s not the fine that is the problem, is the lying to the House of Commons.”

He added: “And it looks now as though that is all going to tie up with the local election campaigns in a couple of month’s time. So there's a very difficult period ahead for the government.

“And the one thing that I'm as sure as I can be from any experience I have is that the next twelve months with the cost of living rises and the reduction in living standards is going to be, very, very difficult for the government. “