Philip Hammond has been warned by No 10 Downing Street that next month’s Budget ‘has to be perfect’ – because a defeat on any of its measures could lead to the downfall of Theresa May.

The loss of the Government’s majority in the snap Election means the Chancellor is plotting a ‘safety first’ statement on November 22 – drawing up crowd-pleasing policies such as a crackdown on the tax-dodges used by multinational tech giants.

He is also examining ways to squeeze more out of motorists, including a possible hike in levies on diesel vehicles.

Philip Hammond has been warned by No 10 Downing Street that next month’s Budget ‘has to be perfect’ – because a defeat on any of its measures could lead to the downfall of Theresa May

Mr Hammond is likely to face a backlash from big businesses if he targets them, with firms already privately complaining they have been ‘squeezed enough’ as part of an agenda which bosses describe as ‘Corbyn lite’.

But the Chancellor’s aides calculate that it is safer to target the City than risk a repeat of the fiasco in March, when Mr Hammond was forced to U-turn over plans for National Insurance hikes for the self-employed after MPs made their anger clear.

It comes as the fraught relationship between Mrs May and Mr Hammond has once again come under scrutiny, with one report claiming last week that they ‘can’t bear’ to be left alone together in the same room.