Rishi Sunak‘s relationship with Boris Johnson ‘completely disintegrated’ to the point where the Chancellor ‘considered resigning’ because of a row over the planned rise in National Insurance contributions, an MP has claimed.
The Tory MP told the Telegraph: ‘Their relationship had completely disintegrated. [Mr Sunak] said he was considering resigning.’
However, a Treasury source told the newspaper that any suggestion Mr Sunak was considering his future as Chancellor was ‘not true’. MailOnline approached the Treasury for comment.
It comes after a Cabinet rift opened up over tax rises as the Tories gathered in Blackpool for their spring conference yesterday.
Rishi Sunak’s relationship with Boris Johnson ‘completely disintegrated’ to the point where the Chancellor ‘considered resigning’ because of a row over the planned rise in National Insurance contributions, an MP has claimed
Mr Johnson was said to have considered scrapping the National Insurance hike earlier this year to stop Tory MPs sending letters of no confidence in his leadership amid ongoing reports of parties in Downing Street.
Eventually, he faced down mounting opposition to the 1.25 percentage point tax rise by insisting, alongside Mr Sunak, it was the ‘right plan’ and it would go ahead in April.
In a joint article, Mr Johnson and Mr Sunak said: ‘We must go ahead with the health and social care levy.’
The rise in National Insurance is due to be announced in the Spring Statement next Wednesday before coming into effect next month.
Some Tory MPs are still calling for it to be scrapped in order to lessen the effects of the cost of living crisis but No10 and No11 have said the rise has been written into law and it is too late to change it.
Yesterday, Mr Sunak doubled down on his decision to hike national insurance, pointing out that even Margaret Thatcher had to raise taxes.
But Jacob Rees-Mogg distanced himself from the issue – saying the ‘abnormally high’ rate of tax had been a decision for the Chancellor. And it came as Oliver Dowden, the Tory party’s co-chairman, said April’s tax rates must be the ‘high water mark’.
National insurance for workers and employers will rise by 1.25 percentage points in April to raise £12billion for health and social care.
It will worsen the cost of living crisis as Britons also face higher inflation, energy bills and council tax.
Speaking to delegates at the spring conference yesterday, Mr Sunak said: ‘I did not get into politics to have to put up people’s taxes. I am a Conservative Chancellor.
‘But I also take seriously my responsibility to you, our kids and to the nation’s finances, making sure we fix the problems. And with coronavirus, our borrowing went up to levels we haven’t seen since World War Two.
‘And our debt was forecast to just keep growing and growing into the future. I didn’t think that was morally right. I didn’t think it was economically responsible.’
The Chancellor added: ‘Much as people forget, Margaret Thatcher and Nigel Lawson had to do some similar things at the start of [their] period.
‘They inherited this huge deficit, which they first had to tackle and Margaret Thatcher was adamant, as was Nigel Lawson, that you have to tackle the deficit first and once you’ve done that, then you can start the work of cutting taxes.
‘So that’s what I’ve had to do and it was not easy – but I do believe it was the right thing to do. But that is done, we’ve made the difficult decisions that we have to make.’
Boris Johnson was said to have been considering scrapping the National Insurance hike earlier this year to stop Tory MPs sending letters of no confidence in his leadership amid ongoing reports of parties in Downing Street
He said: ‘My priority going forward is to cut taxes. I made that very clear. But I want to do that in a responsible and sustainable way. I now believe we are on a path to do that.’
But at a fringe event at the conference, Brexit opportunities minister Mr Rees-Mogg struck a different tone. ‘Taxes are at an abnormally high level,’ he said.
‘The Conservatives need to get back to being a tax-cutting government.
‘We need supply-side reform and government efficiency to ensure growth and pay for tax cuts. But the national insurance rise is a matter for the Chancellor.’
Meanwhile, Mr Dowden said April’s increases must be the ‘high water mark’.
‘As we no longer have to do things like lateral flow tests and all those other things that are costing huge amounts of money, we need to make sure that that is the absolute peak of government spending,’ he added.
Mr Sunak also hinted there may be help for hard-pressed families in his spring statement next Wednesday.