The SNP Westminster leader criticised the Conservative handling of the economy and labelled cuts to corporation tax “bonkers”.
Speaking exclusively to The Scotsman, Mr Blackford also backed his Holyrood colleagues to “find a way” through any rifts caused by the Gender Recognition Reform Bill.
His comments come fresh from Deputy First Minister John Swinney announcing a further £615 million in cuts in Scotland in this week’s emergency budget review, in addition to the £560m outlined in September.
Health budget cuts, worth £400m, come ahead of an extremely challenging winter for the NHS and have been labelled “downright dangerous” by opposition parties.
Mr Swinney conceded on Thursday that tax rises in Scotland were “of course an option”, in the face of the severe economic challenge.
Pushed on whether he would support tax rises, Mr Blackford claimed he would, including through expansions of levies on oil and gas profits to help with the cost-of-living crisis.
He explained: “I think if you said to people, would it be necessary to increase taxes in order to cover appropriate spending on public services, and the answer would be yes.
"At the end of the day, you want to get to a situation where your taxation policy is working. Nobody wants high tax per se, you have to have fair taxation, and the people have got an expectation of the public services that should be delivered.
“You have to fund that. If you want to have excellence in healthcare, if you want excellence in education, it has to be paid for. This idea that you’ve got this mantra that you get from the Tory right that tax rates must be driven down, that isn't the way to delivering wealth and prosperity.
“When you hear the Tories talking about cutting corporation tax, for example, it's bonkers.”
Mr Blackford spoke fresh from his party holding an opposition day debate on Wednesday on the mini-budget, where it was warned Prime Minister Rishi Sunak’s plans would "take a wrecking ball to public services".
With the Treasury estimating a £50 billion black hole in the public purse, Mr Blackford insisted his party would not implement austerity in the same situation.
He said: “The problem we have got and the difference between our government in Edinburgh and the government here in London, is that we have to balance a budget, we have no meaningful opportunities to take on debt.
“So, if you look at the inflationary impact on our budget, the impact on the Scottish budget is to knock real-time spending by £1.7bn, that's huge.
“The Chancellor has got the opportunity in an appropriate manner to borrow. If you're going to take cash out of the pockets of the poorest, then you're going to constrain the ability of the economy to grow.
“If you give somebody on £150,000-plus a tax cut, it's not necessarily going to benefit the economy. If you're going to make the lives of ordinary people tougher, because their money is going to go less far, then you're going to depress demand and you're back to making the same mistakes that we did after the financial crisis.”
Mr Blackford said his party had a “program for growth”, with energy at the centre of it.
He said: “We've got a plan for green energy, we’re increasing Scotland's green energy output fivefold. So going from 12 to 80 gigawatts, creating 385,000 jobs, more than we currently have in oil and gas. Creating the opportunities to deliver that high-value, high-wage, high-investment company, none of that exists in Westminster.”
Despite a brief poll bounce for the incoming Prime Minister, the Ross, Skye and Lochaber MP also dismissed the idea Mr Sunak’s takeover would make things harder for the SNP.
He pointed to the Tories having five prime ministers in seven years, all of which he stressed Scotland did not vote for.
Mr Blackford said: "Whether you’re talking about Rishi Sunak, Boris Johnson, David Cameron or Theresa May, they're not listening to people in Scotland and it's just another out-of-touch Tory leader.
"Let’s focus on what he's going to do because all the briefings we've seen this week are that austerity 2.0 is coming. What's going to happen to social security benefits? What's going to happen to the triple lock? What's going to happen to public spending?
"So there are lots of things I would worry about. I suppose having had the chaos of Liz Truss and the lasting damage that she has caused, the fact that mortgage rates are now materially higher and she has to take a lot of the blame for what has happened.
“But this is a Tory Prime Minister that's still going to make the wrong policy choices. When I gave them the opportunity at Prime Minister's Questions to think about how we could raise funds, take away the exemption from non-doms, make sure you've got a meaningful tax on those companies that are benefiting from the energy crisis. There are things he could be doing to bring in revenue, but what he shouldn’t be doing is balancing the books on the back of the poor.”
SNP Westminster leader since 2017, Mr Blackford also stressed his support for the GRA Bill in the wake of former minister Ash Regan’s resignation.
The Edinburgh Eastern representative stepped down from her role as community safety minister just hours before the stage one vote on the Bill, saying her “conscience” could not allow her to back the proposed changes. In total, nine SNP MSPs defied the whip with seven, including Ms Regan, voting against the plans and two abstaining.
Mr Blackford said: “I think at the end of the day it’s a matter for Holyrood, it’s not a legislative matter for here, and I know that my colleagues will find a way through this”.
Ms Regan had stressed earlier this week that Nicola Sturgeon was “well aware” of concerns held around plans to reform the Gender Recognition Act.
Asked if he was surprised by Ms Regan’s resignation, Mr Blackford pointed to the Act being in the manifesto.
He said: “It was a manifesto commitment on behalf of the SNP, and I’m proud of the liberal agenda in Scotland. I’m proud of how Scotland has changed ever since the evolution of the Scottish Parliament, this is part of that journey. You’ve always got to find a way through this and I know that our colleagues in the party in Edinburgh will do that.”
Mr Blackford had committed in June to launching an external review of support available to SNP staff as he apologised at the time for a party member being exposed to sexual misconduct
SNP MP Patrick Grady, who was found by an independent panel to have touched and stroked the neck, hair and back of a colleague 17 years younger than him at a social event in 2016, received a suspension from Westminster for two days.
Asked about the incident, Mr Blackford said he had demanded “zero tolerance” of all bad behaviour.
He said: “There has to be zero tolerance of any kind of bad behaviour, whether you are talking about sexual, bullying, any kind of bad behaviour.
"This place has to improve across all levels, and as SNP Westminster leader I’ve been very enthusiastic of participating in reviews in this place, making sure that the ICGS [Independent Complaints and Grievance Scheme] system works.
“We, as the SNP, have got a responsibility to make sure that we've got best in class, best in practise policies for that as well.
“Obviously on the back of what has happened, I've committed to a review, which is in the early stages as well.
“I, as the group leader, I am responsible for staff. I’ve got a major responsibility of making sure that the well-being of staff of all staff are taken very seriously.”
Mr Blackford also urged Westminster to keep working to make things better, insisting people can’t stop talking about harassment issues.
He said: “It can’t be, every day, every week, every month, you've got to make sure that you've got the systems in place, and you know, on the basis of the learning.
“We always must make sure that we're reviewing and that we can improve the processes, for the benefit of staff first and foremost, but we're going to make sure the system works for everybody.”