Deep Tory splits have burst into the open as pressure mounts on Jeremy Hunt to cut taxes in next month’s budget.
Right-wing backbencher John Redwood today urged the government to “get on with it” and said the majority of Conservative backbenchers agree.
But development minister Andrew Mitchell said immediate tax cuts were “extremely hard to justify” and backed the chancellor and Rishi Sunak, who have said tax cuts are unaffordable at the moment.
The clash came in the wake of official figures which confirmed the UK economy flatlined in the final three months of 2022.
Hunt will deliver his Budget on March 15, but has repeatedly insisted that inflation must come down before taxes can be cut.
Supporters of former prime minister Liz Truss have formed the Conservative Growth Group to put pressure on the chancellor and PM to change course.
Redwood, who is a member of the group, said the government should start by cancelling the planned rise in corporation tax - which companies pay on their profits - from 19p to 25p in the pound.
He said: “We want to see sensible, targeted tax cuts that will boost self-employment, boost investment and help solve the problem of recruiting and retaining doctors and other skilled staff, and will add to the idea of growth.
“All the evidence is in the past, when Conservative governments have had the courage to cut corporation tax rates, it raises more money.”
The Wokingham MP also called for VAT to be removed from domestic fuel bills.
He added: “The growth group is gathering strength as we speak. There are dozens of Conservative MPs who take the view that the growth strategy the government has headlined needs some more positive measures behind it.
“I think you’ll find a majority of Conservative backbenchers agree with what I’m saying today - that they want targeted tax cuts and there will be a range of views on which are the best targeted tax cuts to choose.
“The majority believes that you don’t get growth without more realistic tax levels.
“Many are very worried that Britain is in danger of becoming uncompetitive because of the higher taxes the government is wishing to impose.”
But Andrew Mitchell rejected Redwood’s ideas and said taxes could only come down when the government can afford them.
He said: “In the end, if we make tax cuts which are not properly funded, it’s borrowing and it’s taxation deferred for the next generation. Many of us are very concerned about inter-generational fairness in Britain - the position of our children and our grandchildren.
“So I think tax cuts are very important, but they’ve got to be done at the right time and I think that the philosophy and argument that the Chancellor of the Exchequer has set out is absolutely right.
“We will get them when we can, but I think at the moment it’s extremely difficult to justify them.”