The Tories are on the brink of a war over tax

April is followed by May, of course – when, as it happens, the Conservatives face some pretty tricky local elections. Countless natural Tories, if not already exasperated by lingering lockdown measures, will be infuriated by higher taxes just as the broader cost of living is going up. Even if they can’t stomach Sir Keir Starmer, they could refuse to vote in their millions, paving the way for a slew of Labour and Liberal Democrat gains.

For months, leadership rivals have been plotting and positioning. A wicked cost-of-living crisis in April, followed by a hammering from voters in May, and Johnson’s premiership could be openly challenged from within his own party.

The Prime Minister understands the political potency is this upcoming energy price hike. Kwasi Kwarteng, the Business Secretary, last week held crisis meetings with various energy companies ahead of Ofgem’s announcement of the higher price cap in early February. This coming week, the Prime Minister takes personal charge of these talks.

Johnson is coming under pressure from backbenchers to act – not least Tory “red wall” MPs, those who won traditional Labour seats across the North and Midlands in 2019. Previously ultra-loyal for the most part, these new members are now flexing their muscles, knowing that spiralling energy costs are particularly painful for low-income voters across some of the UK’s poorest regions.

Manufacturing firms – also disproportionately located within former Labour constituencies – suffer in particular when energy costs are high, endangering countless “red wall” jobs, including those of local MPs.

Calls for Johnson to cut or at least reduce the 25pc or so of household energy costs that are diverted towards subsidies for renewable energy are getting louder. But that would undermine his seemingly sacred “Cop26” green agenda. At the very least, the Prime Minister is being told by many of his own side he simply must prevail upon Sunak to cut the 5pc VAT rate currently levied on energy bills.

Were the UK still within the European Union, Johnson wouldn’t be permitted to simply declare his government will make energy “VAT zero-rated”. Now we’ve left, he can.

Scrapping VAT on energy won’t solve the issue of spiralling household energy bills – it’s only 5pc after all. But 5pc on £2,000 is a hundred quid.

And that, for the vast majority of households is, in a phrase Rees-Mogg would never use, better than a kick in the teeth.

Follow Liam on Twitter: @liamhalligan and listen to Planet Normal, his weekly podcast with fellow columnist Allison Pearson, featuring news and views from beyond the bubble, using the audio player below, Apple Podcasts, Spotify or your preferred podcast app.

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