BRITS need to brace for tax rises to get the nation’s finances back in the pink, a top Tory has warned ahead of Rishi Sunak’s budget tomorrow.
William Hague, who is a close ally of the chancellor, said levies on businesses and individuals “have to go up” to pay off the pandemic debt pile.
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And he warned MPs who oppose tax rises because of the current economic climate are buying into “dangerous illusions”.
His intervention on the eve of the budget will be seen as a clear indication of Mr Sunak’s determination to press ahead with new levies.
This morning the business secretary Kwasi Kwarteng admitted the Treasury will need to start clawing back the cash spent on schemes like furlough.
He warned the country can’t “go on spending money forever” but suggested significant tax rises and cuts won’t come until later on this year.
Mr Kwarteng said: “We have got another three years to run in the parliament and the Chancellor will be looking to reduce the deficit.
“For now, I think the real emphasis is on trying to provide critical support.”
He added: “Obviously we have to balance the books over time, but I am a low tax Conservative and the real key is to grow the economy.
“The best remedy for the deficit is to open up the economy, allow people to get on with their lives, allow businesses to start trading again.
“If we stick to the road map there’s every chance that the second half of this year will see the economy grow.
“Through that growth I think we’ll be able to tackle the deficit.”
In tomorrow’s budget the chancellor is expected to:
- Announce he’s extending the furlough scheme until June
- Unveil a £150m scheme to save community pubs and football clubs
- Confirm fuel duty will be frozen for a 10th year in a row
- Pledge a £520m ‘shot in the arm’ for small businesses
- Announce the creation of 250,000 green apprenticeships
- Rule out new green levies like the dreaded meat tax
- Extend the VAT cut for pubs and restaurants until June
Lord Hague urged Tory MPs not to ruin the party’s reputation for financial responsibility by opposing budget-balancing measures.
Writing in the Telegraph, he said “It pains me to say, after spending much of my life arguing for lower taxes, that we have reached the point where at least some business and personal taxes have to go up.
“Conservatives need to remember that for 200 years, from Pitt in 1797 to Thatcher and Cameron in our own day, keeping the country creditworthy has stood them in very good stead.”
The Tory grandee – a former foreign secretary – is a close ally of Mr Sunak and will appear alongside him at a budget event on Friday.
Both men served the same constituency of Richmond, in Yorkshire, with the chancellor taking no the seat from Lord Hague when he stepped down in 2015.
Mr Sunak’s predecessor in No 11, Philip Hammond, warned both tax rises and spending cuts will be needed to get public spending back under control.
He told Times Radio: “We have got to get a balance right between restraining public spending and increasing taxes and we’re going to have to do both.
“Anybody who says the challenge can be met only by increases in taxation, or only by cuts in public spending is not being straight with people.”
Their interventions comes as Mr Sunak is said to be considering a string of tax rises in his budget to help rebalance the books.
The chancellor has shelved plans to hike up fuel duty in a major victory for Trending In The News’s legendary Keep It Down campaign.
But he is said to be eyeing up more cash elsewhere, including from a rise in corporation tax and freezing the tax-free threshold.
Mr Sunak has faced a string of warnings from top Tory backbenchers not to hike taxes tomorrow.
Even ex PM David Cameron, who oversaw the austerity years, weighed in against such a move saying it “wouldn’t make any sense at all”.
But elsewhere the chancellor is also considering further public spending to prop up the struggling economy.
He is set to extend furlough, business relief, the Universal Credit uplift, and stamp duty holiday until June at a cost of £30 billion.
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