Tory MPs in London warned Philip Hammond today that it would be “unfair and unacceptable” to hit the capital with higher council tax bills.
The alarm was raised after the Treasury admitted its officials were engaged in “blue-sky thinking” about potential tax hikes on fuel and homes.
The Chancellor must raise billions in new taxes if he is to meet demands to ease the pay cap on the public sector without resorting to extra borrowing.
Options include putting up council tax on “the biggest homes” by up to 10 per cent. The Treasury had looked at imposing an upper band on higher-value homes but this was shelved.
Senior MP Bob Blackman warned: “If you introduce extra council tax bands it would affect London and the South East and almost nowhere else. It would be seen as unfair and unacceptable.”
A Conservative MP in the capital said: “I hope the Chancellor will not accept any measure that targets one region where people see too much of their income swallowed in housing costs.”
The party previously attacked Labour and the Lib-Dems for planning a “mansion tax” dubbed a “tax on London”.