Rishi Sunak is facing a growing Tory rebellion over his plan to hike taxes to help plug the £55 billion hole in the public finances.
Chancellor Jeremy Hunt will set out his and the prime minister’s strategy for dealing with the economy crisis in Thursday’s autumn statement.
HuffPost UK has been told that taxes will go up by around £25 billion while public spending will be cut by £35 billion.
Hunt this morning confirmed that everyone in the country will see the amount of tax they pay increase under the plan.
But appearing on Sky News, former Treasury secretary Simon Clarke - who was sacked as levelling up secretary by Sunak when he became PM - said he was opposed to tax rises.
His comments follow those of former Tory leader Iain Duncan Smith, who said putting up taxes will make the looming recession even worse.
Clarke said: “It is absolutely right that we balance the books. I would urge Jeremy that we do as much as we can from spending reductions as opposed to tax increases, noting that tax is clearly at a very high level.
“Faced with the recession risk that we all know exists at the moment, I think the best pro-growth option would be to reduce spending rather than to increase taxes.”
Clarke, who backed Liz Truss against Sunak in last summer’s Tory leadership contest, also urged the prime minister to stick to his predecessor plan to increase defence spending to 3% of gross domestic product by 2030.
He added: “One of the reasons that I supported Liz in the summer is that I believe very strongly that with the tax burden at a 70-year high we need to be extremely careful about further increasing the challenges facing businesses and households.
“That is something which I know Jeremy, as an entrepreneur, will be very conscious of.”
Clarke’s comments demonstrate the challenge both Sunak and Hunt will have in getting their plans through the House of Commons, with many Tory MPs deeply uncomfortable at the prospect of more tax rises.
But the chancellor insisted there was no alternative if the government is to get the economy back on track.
He said: “We are going to see everyone paying more tax, we’re going to see spending cuts.
“But I think it’s very important to say that we are a resilient country, we’ve faced bigger challenges in our past, and we’re also a compassionate country, so we will introduce a plan which will see us through the very choppy waters that we’re in economically.
“But we’ll make sure that we protect the most vulnerable, and in particular deal with the single biggest worry for people on low incomes, which is the rising cost of their weekly shop and rising energy prices.””