Sunak faces open revolt over refusal to back tax cuts

Rishi Sunak will attempt to get back on the front foot with a benefits crackdown after a torrid first day of his annual party conference in which he came under pressure from senior Conservatives over tax cuts and HS2.

After an unhelpful intervention from senior cabinet minister Michael Gove – who said he wanted taxes to come down before the election – the PM was forced to resist calls to pledge pre-poll giveaways.

He also faced fresh calls to commit to the northern leg of HS2 from his own former levelling up minister who quit the department just last month, and the former Tory party chairman.

It came as:

In extraordinary admissions, even ultra-loyalist Tory rising star Ben Houchen, who backed Mr Johnson over Partygate, publicly suggested the Conservatives might not win the next election, while party chairman Greg Hands branded them “underdogs”.

Chancellor Jeremy Hunt will on Monday pledge to crack down on benefit claimants who refuse to take “active steps” to move into work. At the same time, he will say the government will raise the national living wage to at least £11 an hour, boosting the salaries of two million workers.

Mr Sunak said the measures would send “a clear message to hardworking taxpayers across the country; our Conservative government is on your side” and that “hard work should pay”.

The Tory leader attempted to present himself as the “change” candidate in a pre-conference interview, repeatedly using the word and saying he was “going to do things differently”.

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Earlier, levelling up secretary Mr Gove told Sky he wanted to see “the tax burden reduced before the next election”. He also called for tax cuts on working families, following reports the government was looking at inheritance tax reform.

Asked about Mr Gove’s comment, the PM refused to commit to pre-election tax cuts. He told the BBC’s Sunday With Laura Kuenssberg: “The best tax cut we can give people is to halve inflation.”

Former home secretary Dame Priti Patel also called for tax cuts “sooner” rather than later, while Sir Iain Duncan Smith confirmed he had signed a pledge with more than 30 other Tory MPs vowing to vote against the autumn statement if it contains any tax rises.

Senior Tory Lord Pickles, the former party chairman, told GB News that the tax burden will remain high “for a long time” and warned Mr Sunak that he needed to give voters “some hope”.

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Ms Truss is set to appear at a fringe event on Monday – dubbed the “great British growth rally” – where she will call for tax cuts alongside former ministers Ms Patel and Jacob Rees-Mogg.

The former PM will urge Mr Sunak to position the Tories as the “party of business again” by slashing corporation tax from 25 per cent to 19 per cent.

“We must not normalise the raiding of businesses’ coffers,” Ms Truss will say, claiming companies were moving abroad because of the “huge tax burden” while small businesses were shutting down because they were “drowning in red tape”.

But as fresh infighting emerged, Mr Houchen, the Tory mayor of Tees Valley, took aim at Ms Truss and her “posturing” allies for vowing to vote against the autumn statement if it contains any tax rises. The influential red waller said: “I think it’s unhelpful because, for me, I just saw that as political posturing.”

Mr Houchen added: “You’re not really influencing policy, but what you have done is you’ve just set up another 24 hours of narrative of a group of Conservative MPs are not happy and they are telling the prime minister to do A, B and C.”

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Business secretary Kemi Badenoch also rejected Ms Truss’s call to cut corporation tax to 19 per cent. “Lots of people talk about corporation tax as if it’s a silver bullet, but we still have the lowest in the G7,” she told The Sunday Times.

Mr Sunak also came under mounting pressure from northern Tories over HS2 on the first day of the conference in Manchester, after both his former levelling up minister Dehenna Davison and ex-Tory chairman Jake Berry joined demands for the northern leg to be built in full.

In his BBC interview, Mr Sunak again refused to confirm the fate of the route to Manchester. But Ms Davison called for the PM to “crack on” with the Birmingham to Manchester route after The Independent revealed that Mr Sunak and Mr Hunt were in talks to axe Phase 2.

Ms Davison told Times Radio she wanted to see the “right” decision on HS2 and that “the northern section is actually prioritised”.

Mr Sunak insisted that the UK was not a “laughing stock” despite uncertainty for business over HS2 – but business secretary Ms Badenoch admitted international investors had raised concerns.

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Meanwhile, Mr Gove cranked up the pressure on Mr Sunak on his small boats policy by backing the “option” of quitting the European Convention on Human Rights (ECHR).

At a fringe event for the Onward think tank, Mr Gove said they should “keep every option open” when asked about Ms Badenoch agreeing with Suella Braverman that the move has to be “on the table”.

But Mr Gove clashed with senior Tory moderate Tom Tugendhat – Mr Sunak’s security minister – who said it would spark fresh post-Brexit problems with the EU. Mr Tugendhat said: “I’m always open to ideas – I’d like to know the answers which go along with them … What happens to the Good Friday Agreement?”

There was the sign of more trouble for Mr Sunak when Nadine Dorries, who had been expected to stay clear of conference, revealed she was heading to Manchester after all. Ms Dorries also shared an Opinium poll showing voters think Mr Johnson was a better PM than any other Tory leader since 2010.

Tory MPs were warned to “look for another job” if their majorities are less than 8,000. Strategist Frank Luntz said some Conservatives will be shocked on election day at the scale of the backlash against them.