Sixty Conservative MPs have joined Liz Truss’s Growth Group, imperilling the government’s majority in parliament, as Rishi Sunak was warned by former cabinet ministers “we cannot accept the status quo”.
At a packed fringe meeting during the Conservative party conference, Truss and her supporters held a rally where they pushed for the chancellor to cut corporation tax, build 500,000 new homes and resume fracking to cut energy bills.
Truss made her only public appearance during the gathering of activists in Manchester to suggest the Conservatives were no longer the party of business. She argued the state had become too big, with taxes and spending unsustainably high.
Despite resigning from office nearly a year ago after her disastrous mini-budget, Truss showed no signs of contrition, saying Sunak should be willing to take tough decisions to help grow the economy even if they were unpopular.
Another former disaffected cabinet minister, Ranil Jayawardena, said the Conservative Growth Group of Truss’s allies had grown in size to include 60 MPs – the same size as the government’s majority in the Commons.
Jayawardena called for stamp duty to be scrapped on people’s principal homes, while Jacob Rees-Mogg also argued that what he called the “pernicious” inheritance tax should be scrapped.
The former home secretary Priti Patel said: “We cannot be timid any more, we cannot be risk averse and we cannot accept the status quo.”
It piles pressure on Sunak and his chancellor, Jeremy Hunt, before the king’s speech and autumn statement in November. Hunt acknowledged in his conference speech that “the level of tax is too high”, though added he was focused on tackling the “long-term” challenge of inflation first.
Despite more than 30 Tory MPs last week signing a pledge to vote against any moves to raise the tax burden, Paul Johnson of the Institute for Fiscal Studies thinktank said the chance for tax cuts was “very remote”.
“I don’t think there is space for tax cuts, unless we can think of some pretty radical ways,” Johnson told the Guardian at another conference fringe event in Manchester.
“It’s not just the immediate pressures that we’re seeing in public finances, but we know that we’re going to be needing to spend more on health and pensions, social care and everything going forward as a result of demographic change. So I think the chances of tax cuts are very remote.”
Jake Berry, the Conservative party chairman during Liz Truss’s premiership and one of those who signed the pledge to vote against further tax rises, said he was unafraid of standing up to Rishi Sunak’s administration.
“I think it’s pretty unlikely that the chief whip will kick people out of the Conservative party if they stand by their pledge, not least because there’s 33 who’ve signed already with more to come and that’s more than half of the government’s majority,” Berry told a rally of the New Conservatives group.
“You don’t have to have signed the tax pledge to be able to add up.”
However, new analysis compiled by Labour and shared with the Guardian showed that plans to scrap inheritance tax would benefit wealthy parts of the country.
Residents of two areas in west London – Kensington and Chelsea, and Hammersmith – were found to be liable for £201m in 2019-20 due to inheritance tax compared with just £61m in north-east England.
The next place to benefit most was Surrey West, where inheritance tax in the same year raised £157m. The area overlaps with Hunt’s own constituency of south-west Surrey.
Labour argued that with only 4% of people liable to pay inheritance tax, there were stark regional divides between who would benefit. London and south-east England account for more than 50% of the estimated inheritance tax take, compared with only 8% in the north-east and north-west, 5% in Yorkshire and the Humber, and 10% in the Midlands.
