Prime Minister Boris Johnson will face Parliament today for the first time since his narrow confidence vote victory on Monday.
Backers of the PM are expected to stage a noisy show of support, but tensions are running high behind the scenes after 40% of Tory MPs voted to oust him.
Mr Johnson survived by 211 votes to 148, but critics warned he has been severely wounded by the scale of the rebellion and could be gone by the end of the year.
Revelations from the Sue Gray report into lockdown parties in Downing Street prompted the vote, but MPs have also expressed unhappiness across a broader range of issues.
This includes the promised legislation to override the Northern Ireland Protocol with the EU, and concerns over the high levels of tax and spending.
Could tax go down?
Mr Johnson insisted on Tuesday that it remained a “fundamental Conservative instinct” to cut taxes, while Chancellor Rishi Sunak reaffirmed his intention to reduce taxes for businesses in the autumn.
In a speech to the Onward think tank, Mr Sunak said he would be bringing forward a range of measures later this year to incentivise investment, according to extracts released by the Treasury.
His pledge came following criticism from groups including the Confederation of British Industry and Federation of Small Businesses that his cost of living support package announced last month did not include any help for cash-strapped businesses.
In his address, he explained that only by the government and the market working together to drive up productivity would it be possible to build a “sustainably high-growth, high-wage economy” in the UK.
He said: “But we must be honest about the longstanding weaknesses hampering our ability to achieve that … specifically in investment, skills and innovation.
“The growth and productivity challenge is a shared problem. Government and the market need to crack it together.”
Mr Sunak said his plan for economic growth was based around three priorities – capital, people and ideas.
He added: “So in the autumn we will be setting out a range of tax cuts and reforms to incentivise businesses to invest more, train more and innovate more.
“Because getting this right won’t just mean the ‘economy’ improves, but real places too.”
The Prime Minister’s insistence that the cutting taxes remains “fundamental” to the Tory party came after former Brexit minister Lord Frost called for previously announced rises to national insurance and corporation tax to be reversed, warning they were “not Conservative” and were “undermining growth and prosperity”.
His view that the Government needs to move on to a tax cutting agenda in order to shore up Mr Johnson’s leadership is reportedly shared by some in the Cabinet.
Meanwhile, The Daily Telegraph reported that allies of the Prime Minister were urging him to replace Mr Sunak with former foreign secretary Jeremy Hunt.
Mr Hunt – who was runner-up to Mr Johnson in the 2019 leadership election and is expected to stand again if there is another contest – infuriated some in the Cabinet when he announced he would be voting for “change” in the confidence vote.
However, the Telegraph said proponents of the idea argue that bringing back his rival into the Cabinet would help stabilise Mr Johnson’s leadership, heal rifts within the party and bind Mr Hunt to the Prime Minister’s agenda.
Is Boris Johnson safe from another confidence vote?
Under current party rules, Mr Johnson is now safe from another formal confidence vote, although the backbench 1922 Committee could potentially rewrite the regulations if there is renewed pressure for change.
Former YouGov president Peter Kellner seemingly suggested the rules should be changed so that ministers and their aides could not take part in confidence votes, but there appears to be no appetite at the moment among the rebels for another move against the Prime Minister.
Although two tricky by-elections are coming up in Wakefield, West Yorkshire, and in Tiverton and Honiton, Devon, as it is feared they could fall to the Labour and the Liberal Democrats respectively.
A double defeat could serve as a catalyst for renewed demands for a change of leadership at the top of the party.
Despite the speculation, Cabinet ally Business Secretary Kwasi Kwarteng said he was “pretty confident” that Mr Johnson would still lead the Tories into the next general election.
He told Channel 4 News on Tuesday: “I’m pretty confident he will but lots of things happen in politics, I’m 100% behind him.
“As far as this particular Prime Minister is concerned, he has been written off dozens of times. He’s somebody who’s extremely resilient and is extremely focused on delivering what matters to people.”