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Rishi Sunak hit by Cabinet revolt over huge Government spending levels
RISHI Sunak has been hit by a huge Cabinet revolt over bloated Government spending levels.
Senior figures demand action to curb inflation and warn the Chancellor he risks a return to the 1970s if the crisis is not addressed.
Mr Sunak, at a heated Cabinet meeting on Wednesday to sign off his Spring Statement plans, was confronted with demands to ditch last October’s three-year Spending Review.
The massive cash hike saw the NHS budget rocket to £180billion a year, with an additional £150billion of spending across Whitehall.
Policing Minister Kit Malthouse led the charge this week, suggesting the Spending Review be “reopened” in light of the fallout from the Ukraine war and soaring inflation.
He argued that high government spending was no longer sustainable and risked a major debt crisis.
And he was backed up by Brexit minister Jacob Rees-Mogg, who sources say declared: “We are spending too much.”
In a separate row, Boris Johnson took a swipe at the Chancellor’s mini-budget plans in warning “we must do more” to ease the cost of living crisis.
But No 10 insisted the PM and the Chancellor are “as one when it comes to the fiscal plans”.
Meanwhile, experts shred Mr Sunak’s claims to be a tax-cutting Chancellor in a withering assessment of Wednesday’s tax plans.
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The Institute for Fiscal Studies said “almost all workers will be paying more tax in 2025 than they would have been paying” had Mr Sunak not meddled with income tax and national insurance.
IFS boss Paul Johnson claimed rising inflation would ensure tax revenues will go on rising.
He added the squeeze on living standards forecast by the Office for Budget Responsibility meant a median earner on £27,000 a year will be £360 worse off in the next financial year.
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Mr Sunak had claimed raising the threshold for NI to £12,750 represented “the largest single personal tax cut in a decade”.
The IFS chief called him a “fiscal illusionist”, adding: “If he wants to be remembered as a tax-reforming Chancellor, so far he is headed in the wrong direction.”