Even the promise of tax cuts, the oldest trick in the Tory book, will not save Johnson’s skin

Never mind if the sums don’t add up – in the PM’s world, you can have your cake and eat it, spend more on the living standards crisis and reduce taxes at the same time

As Boris Johnson fights for his political life, he is raising the prospect that his new chancellor Nadhim Zahawi will cut taxes in a way that the now departed Rishi Sunak refused to do. The prime minister told his diminishing band of loyal backbenchers last night that Sunak’s resignation “might make that [tax cuts] easier to deliver.”

In his first media interviews as chancellor today, Zahawi duly did his master’s bidding, saying: "I want to see what more we can do on taxes. I will review everything. I will be the evidence-led chancellor.”  Yet the “evidence”, certainly that which has been provided by the Treasury, will include warnings that hasty tax cuts could fuel rampant inflation, already heading into double figures.

That, along with a desire to balance the nation’s books after spending more than £400bn in the pandemic, was what held Sunak back, creating enormous tension with Johnson. In his resignation letter, Sunak admitted his and Johnson’s approaches were “fundamentally too different”. Unlike Sajid Javid’s, his decision was about policy as well as the PM’s loss of integrity, competence and public trust.

Zahawi also acknowledged the need for “fiscal responsibility” – another message Treasury officials will ram home when they brief the incoming chancellor today. (He pledged repeatedly to “rebuild the economy” and focus on “growth” but I don’t know anyone calling for even lower growth than we have.)

Zahawi’s appointment will test the Treasury’s power as the most influential Whitehall department. As first lord of the Treasury, Johnson can overrule it. The signals from his camp show he intends to do that. The PM’s allies are describing Zahawi as the “adventurous and buccaneering chancellor Britain needs”. In other words, Sunak was holding Johnson back – his latest attempt to “blame someone else”, when he has made more unforced errors than we have seen so far at Wimbledon, most recently in his woeful handling of the Chris Pincher controversy.

Johnson had been due for weeks to make a joint speech with Sunak to try to convince the public the government has a long-term economic plan. The only problem: they couldn’t agree on what to say.

The PM will now try to write Zahawi’s script. Johnson will be desperate to offer his ravenous backbenchers an instant portion of red meat rather than mere promises of tax cuts down the line. One option is a temporary cut in VAT, to show voters the government is doing more to tackle the cost of living crisis. Other tax cuts, perhaps speeding up the 1p cut in income tax Sunak pre-announced for 2024, could be included in the Budget scheduled for October or November. In a Johnson dream world, it might even be doubled to 2p. As part of his “plan for growth,” Zahawi might also scrap the hike in corporation tax from 19 per cent to 25 per cent due to take effect next April.

It’s fair to assume that borrowing will rise by more than Sunak judged wise. As ever, Johnson will not lose sleep over another problem for another time. His sole focus now is surviving another day. If his backbenchers want tax cuts, then they must have them. Never mind if the sums don’t add up; in Johnson’s world, you can have your cake and eat it, spend more on the living standards crisis and reduce taxes.

Yet in the real world, Zahawi might never get to deliver a Budget. If Johnson falls, as I expect he will, Zahawi’s brief spell as chancellor might provide a springboard for his own leadership bid – and useful experience for a minister who joined the cabinet only last September. He might get some brownie points with Tory MPs and activists by remaining loyal to Johnson until the bitter end, unlike Sunak and Javid.

In frantically pressing the button marked “tax cuts,” Johnson is deploying the oldest trick in the Tory book. But it won’t wash with the public, who know that taxes have risen to their highest level since the 1970s. More importantly for him, this last throw of the dice comes too late to halt the moves by Tory MPs to oust him. There have been more resignations today by junior ministers and parliamentary aides, and more backbenchers have called on Johnson to go. The tide has not been stemmed. Further cabinet departures cannot be ruled out, as other ministers wonder how much longer they can defend the indefensible.

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Johnson’s backbench critics are determined to force another vote of confidence in him. That would almost certainly have been delayed until the autumn if the Pincher crisis had not broken out, giving Johnson some much-needed breathing space. But now his enemies are increasingly confident of winning a majority in next week’s elections to the 18-strong executive of the 1922 Committee of Tory MPs, allowing the executive to change the rule preventing another confidence vote within 12 months.

The change could allow such a vote before the Commons starts its summer break on 21 July. That would mean a Tory leader could be chosen over the summer and Johnson’s successor would be able to use the party conference in October as a platform to launch their premiership.

Crucially, the Pincher affair has cost Johnson the support of many Tories who backed him in last month’s confidence vote; only 32 need to switch sides, so it is impossible to see how he survives another vote. Talking up tax cuts is not going to prevent one. The die is surely cast.