Taxes look poised to rise in tomorrow’s budget after a key Tory ally of Chancellor Rishi Sunak broke ranks to say they must go up.
Ex-party leader William Hague said there must be hikes on both businesses and individuals to pay the £280bn cost of Covid.
Lord Hague – who was MP for Richmond, Yorkshire, before Mr Sunak took over – wrote in the Daily Telegraph: “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.”
Mr Sunak and Lord Hague are close allies. The rookie Chancellor told the Yorkshire Post last year: “I speak to William a lot, he’s always been an enormous source of advice to me from the first day I was a MP and grappling with the basics…
“If I have a problem and I need some advice or support, he’s on the end of a phone and I’m always very grateful for that.”
The intervention will be helpful in protecting Mr Sunak from a revolt on his own Tory benches.
Tomorrow’s Budget is tipped to freeze beer and fuel duty but cancel a planned rise in the personal allowance for Income Tax.
That will mean working families will be deprived a tax break – though those earning over £50,000 would have benefited much more.
The Chancellor is also tipped to reverse some of the Tories’ Corporation Tax cuts between now and 2024.
But an online sales tax on giants like Amazon is not expected until Autumn at the earliest.
Labour have said this week’s Budget is not the time for a tax rise, even on rich companies – but would back rises over the future.
Business Secretary Kwasi Kwarteng said the Chancellor would have to “balance the books”.
He told Times Radio the Budget would have “unprecedented support”, including extending furlough and potentially VAT cuts.
He added: “Clearly over the course of the Parliament, the Chancellor will be looking to balance, balance the books, try and reduce that deficit.
“But at the moment, the critical question is, how are we going to support businesses? How are we going to support jobs? And I think what the Chancellor has been doing that very effectively”.
Speaking to LBC Radio he went on: “Obviously we have to balance the books over time, but I am a low tax Conservative and the real key Nick is to grow the economy.”