DAVID Cameron has warned Rishi Sunak not to press ahead with tax rises in next week’s budget saying they “wouldn’t make any sense at all”.
The former PM compared the Covid crisis to a wartime situation that means the Chancellor should cast normal spending rules out the window.
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And he also threw his weight behind the possibility of using vaccine passports to help businesses reopen and recover from the lockdown.
He told CNN that circumstances today are “very different” to the ones he inherited in the aftermath of the 2008 banking crash.
And he said: “Piling tax increases on top of that before you’ve even opened up the economy wouldn’t make any sense at all.
“I think it’s been right for the government here in the UK and governments around the world to recognise this is more like a sort of wartime situation.”
Mr Cameron said it’s right the Government is looking into the possibility of using vaccine passports to get business going again.
He said: “If we want to open up our economy as rapidly as possible, I think there’ll be a number of different ways and places where people will want to know ‘have you been vaccinated’ before you join this event, this party, this whatever.
“So, I think it’s coming, and I’m very glad that the government is having a serious think about all the moral and ethical and legal dilemmas. They should not close their mind to this.”
In a rare public intervention the ex Tory PM also warned some trade disruption from Brexit will be permanent.
He said: “What we’re seeing now is both some early problems that need to be addressed, but some of them are the consequence of being outside of the single market.
“I hope the government can address as many of the problems and issues as possible, whether that’s problems faced by British fishermen, whether it’s small businesses finding it more difficult to export to EU countries because of the additional bureaucracy.
“I hope they can tackle as many of these problems as possible, but ultimately some of them are because we chose to leave the single market and become a third country.”
Insiders are calling it “two big slices of bread with very thin jam”.
His remarks come after Trending In The News revealed Mr Sunak’s budget next week will be an expensive and painful sandwich of giveaways and tax hikes.
Slice one is a £30billion Covid support bundle that will see furlough, business relief, the Universal Credit uplift and stamp duty holiday all extended to June.
Doing this for three months more, to bring those measures in line with the Government’s programme for coming out of lockdown, leaves “thin jam” — or little to spend elsewhere.
Slice two is a painful package of tax hikes to start raising billions to close the UK’s budget deficit, which will hit £400billion by April.
Experts say that needs reducing by around £30-40billion now to stabilise borrowing and prevent debt from rising as a percentage of national income.
The Institute for Fiscal Studies has said: “Even if the Government was comfortable with stabilising debt at 100 per cent of national income — its highest level since 1960 — it would still need a fiscal tightening worth 2.1 per cent of national income, or £43billion.”
In a bid to prove to the world that Britain’s spending is not out of control, Chancellor Mr Sunak will likely announce a hike in corporation taxes — up to as much as 25 per cent from 19 per cent over a number of years.
Raising capital gains will target the rich, such as second-home owners.
A government source said: “Action needs to be taken now, not in November and not next year, but now.
“The Budget will make a start on that stabilisation. It can’t go the whole way in one fiscal event but it will make a start.”
Covid spending means “thin jam” for other giveaways.
Mr Sunak is under pressure to keep the freeze on fuel duty rises and give a lockdown recovery gift of slashed booze levies plus allocating cash for infrastructure plans in the North.
Labour has insisted: “Now is not the time for tax rises for families or businesses.”
