Rishi Sunak today refused to rule out further tax hikes - including a huge council tax rise - despite privately boasting he’s a “low-tax Conservative”.
The Chancellor waded into the Tory party’s war over tax after right-winger Jacob Rees-Moggsaid the UK is now taxed as highly as a country can afford.
In a speech to activists last night, Mr Sunak said to huge cheers: “For the record, I’m also a low-tax Conservative.”
And the Daily Express suggested Mr Sunak could unveil a tax cut before the next election to woo voters, after his National Insurance hike brought the tax burden to its highest in decades.
But in the short term, the Chancellor refused to rule out even more tax rises after the hike in NICs from 12% to 13.25%.
That includes widespread hikes to council tax, which has risen by above inflation for years, to pay for social care after just £5.4bn of a £36bn NICs hike was earmarked to fund it.
Asked about a warning from the Local Government Association that a rise will be needed, Mr Sunak said it would be wrong to "pre-empt" the local government finance settlement later in the year.
He told Sky News: "What people should know is we want to put more money into social care, that's why we took the decision we did."
Mr Sunak also declined to deny he is eyeing a tax cut in a couple of years’ time, before the next election.
He told BBC Radio 4's Today programme: "I'm not going to sit here and speculate about future budgets.
"I would like to think that we've been responsible with the public finances and that's something I take very seriously."
It comes after Jacob Rees-Mogg warned Boris Johnson not to hike taxes, claiming the Treasury can squeeze no more from the economy and UK taxation had hit "the limit".
The PM faces a Tory backlash after he could not rule out another tax rise, despite his manifesto-busting hike in National Insurance and breaking the pensions triple lock to plug NHS gaps and pay for social care.
When pressed by the BBC's Andrew Marr on Sunday, Mr Johnson said he would not put up taxes "if he could possibly avoid it".
Speaking at a fringe event at the Conservative Party conference in Manchester, Commons leader Mr Rees-Mogg fumed that the UK was facing "highest tax level since the war" and "we are at the reaches of the reasonableness of the tax burden".
He said: "Even Harold Wilson with 98% tax rates did not manage to get the tax take much about 38% of GDP, so there is an automatic limit of taxpayers own devising."
Mr Sunak insisted the Government is dealing with taxation in a "fair way".
He told LBC Radio: "I think it is entirely Conservative to manage the nation's public finances responsibly and make sure things add up. Remember, we've suffered the biggest economic shock in 300 years.
"Now obviously that's had an impact and, given that we've got commitments that we want want to make - whether it's on the NHS, whether it's more police officers, whether it's levelling up around the country - we want to make sure we can deliver on those, which is why we've taken these decisions, but we've been upfront with people about it and why we're doing it, doing it in what I believe to be a fair way."
Asked about possible future tax rises or reductions, he said: "I never can comment about future tax policy, but, as I said, we've taken the decisions we have in order to do some very specific things that I think people would want us to do, to make sure the NHS can recover from the backlog, to reform social care, and I think people will acknowledge... look, we have experienced this once in a hopefully 300-year economic shock and that's going to have an impact."
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