Rishi Sunak is facing increasing discontent among Tory MPs over the cost of living crisis, with many believing he will be forced into an embarrassing U-turn over a windfall tax on oil and gas companies.

MPs and Conservative grassroots organisers want more to be done to help families’ budgets after voters turned away from the party at last week’s local elections, one minister said.

The failure of a fresh plan to tackle soaring inflation and energy bills in the Queen’s speech has hardened the views of some Tory MPs against the Chancellor, as well as Boris Johnson.

One minister said the party was “still very angry” and that the Treasury’s targeting of help where it was needed was “poor”, with no extra efforts being made to help those on benefits.

Some Conservative MPs have gone public in calling for a windfall tax. On Thursday Mr Sunak hinted that a U-turn might be on the cards when he said he would be “pragmatic” about the issue.

Robert Halfon, Conservative MP for Harlow, told i: “Most MPs recognise and want more to be done on the cost of living. Many are very concerned the Treasury is not across the challenges ahead. The party is still very angry. A lot of members are very fed up.”

On the prospect of a windfall tax, the minister said: “[Tory] grassroots are aware that more is needed for people on fixed incomes unable to work or trapped in low pay.

“I’d say most are not against the idea of the [windfall] tax but would be unimpressed if we did another U-turn. It adds weight to the idea we have no plan, [just] focused on immediate headlines. Treasury targeting has been poor.”

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But a senior Tory MP warned against a windfall tax, telling i: “We have the highest tax burdens in decades, so perhaps try to use the existing massive amount we extract from taxpayers and businesses before auditioning another tax increase.

“It’s also annoying that they are all over the place again – one minute no, another maybe. The trolley is on the move again. The PM is to blame for not knowing what he wants to do. [But] Rishi should know better playing the populist. People see through this.”

Mr Sunak claimed yesterday that he was unable to increase welfare benefits this year to shield them from the worst effects of the cost of living crisis because of the government’s old computer system.

In an interview with Bloomberg TV, the Chancellor said: “The operation of our welfare system is technically complicated.

“It is not necessarily possible to [increase benefits] for everybody. Many of the systems are built so it can only be done once a year, and the decision was taken quite a while ago.”

Mr Sunak admitted that blaming IT “sounds like an excuse” but insisted he was “constrained somewhat by the operation of the welfare system”.

Because of the way benefits are pegged to inflation from the previous year, millions of people saw an uplift of just 3.1 per cent in April, while inflation soared past 7 per cent.

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