Boris Johnson News – PM warned he risks losing Red Wall seats ahead of Budget

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Boris Johnson is facing pressure from the Northern Research Group (NRG)

Boris Johnson has been told not to raise business taxes in next week’s Budget by Tory MPs in the North – as new Conservative MPs told Sky News they “won’t be here in four years’ time” if he doesn’t deliver funding for major projects.

Sky News can reveal Mr Johnson will come under intense pressure to adjust the party’s agenda in favour of northern MPs after they secured fresh funding to lobby for their priorities up to the next election.

Number 10 has been informed the Northern Research Group (NRG) secured a six-figure sum to promote their agenda over the needs of more traditional Tory areas.

The group’s leader has told Sky News that the prime minister and chancellor “can’t tax our way out” of the debt accumulated during the pandemic, putting them on a collision course with the Treasury which wants to raise business taxes in the Budget.

The prime minister is being told to prove his commitment to levelling up with a big spending package from Chancellor Rishi Sunak amid worries that investment in the North of England has yet to begin in earnest 14 months after an election manifesto promise.

MPs from the so-called Red Wall of seats, which were long-standing Labour strongholds until the last election, said they wanted Mr Johnson and Mr Sunak to take advantage of ultra low borrowing rates to fund infrastructure projects like the reopening of shuttered railway lines connecting towns with big cities.

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Rishi Sunak is facing pressure to not raise business tax

The chancellor could have more scope to borrow for investment than borrow to fund day-to-day spending, which means next week’s package could see both tax rises and more borrowing.

Mr Sunak has signalled he could raise business tax rates, with a roadmap to raise corporation tax up from the current rate of 21%, mirroring similar proposals in the US.

However northern MPs have said now is not the time for tax rises.

Video: Labour opposes corporation tax increase, says shadow Treasury minister James Murray (The Independent)

Labour opposes corporation tax increase, says shadow Treasury minister James Murray

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Jake Berry is the Tory MP for Rossendale and Darwen in Lancashire and also the chairman of the NRG.

He said: “In order to keep winning seats like this we need to find a way to make sure a lot of that support that’s been very welcome during the pandemic isn’t whipped away in April.

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Jake Berry was minister for the Northern Powerhouse until last year

“We think in the NRG the best way to start paying off record COVID debt is to grow our economy, we can’t cut our way out of this, we can’t tax our way out of this.”

Mr Berry warned any tax rises next week would be a mistake.

“It’s ultimately for the Treasury to make those decisions but I don’t think now is the time to start increasing taxes – because I think it will snuff out the recovery – and Britain is one of the worst-affected places both economically, and in health terms, around the world,” he said.

“The recovery I believe we will see quite quickly could easily be snuffed out by cutting money out of people’s pockets, taking pounds out of people’s pockets here in towns like Darwen and I don’t think what the Treasury should be seeking to do.”

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Sara Britcliffe says she won’t be able to hold her seat in four years’ time if the North isn’t funded properly. Pic: House of Commons

Mr Berry added that raising business taxes in particular would be a mistake: “We want to see a recovery led by high tech engineering and manufacturing. That can be done by government investment and attracting private capital to seed that recovery. That isn’t done by increasing business taxes.”

Mr Berry, who helped Mr Johnson on the 2016 leadership contest and was minister for the Northern Powerhouse until last year, admitted that the meaning of the election promise to “level up” had not been set out by the government.

He said: “I think we need to see real meat on the bones of levelling up. I think it is a great election winning slogan but in truth having won that election, we now owe it to voters including here in Lancashire to repay their support with real changes to their lives.”

Sara Britcliffe became the UK’s youngest Conservative MP when she took the former Labour seat of Hyndburn – near Blackburn – for the Tories in the December 2019 general election.

She told Sky News that securing funding was the key to keeping the seat in Tory hands: “Look around our town centres. It’s very different to what you see in the South. You can walk around the whole constituency. We do need that levelling up to happen. I do hope they deliver on that.

“Because otherwise I won’t be here in four years’ time. We made a promise to the British people and we need to keep it. I think the North can be at the heart of our recovery. We have brilliant manufacturing businesses here and I think that’s something that will grow the economy.”

She also said that the job of levelling up had been delayed: “To keep those voters (from the 2019 election) we need to keep those promises we made to the people. But I think very much obviously with COVID it’s been quite difficult to get on the ground and start that.”