Lord Hague tells Tories to prepare for tax rises

Some business and personal taxes “have to go up”, Lord Hague, the former Conservative leader and close ally of Rishi Sunak, the Chancellor, has warned.

In a new article for The Telegraph, Lord Hague writes that people who oppose some form of tax rises in the current climate are buying into “dangerous illusions”.

The intervention the day before Mr Sunak stands up to deliver his Budget will raise eyebrows, given the fierce debate about tax rises in the party and the pair’s close relationship.

Mr Sunak took over Lord Hague’s seat of Richmond, Yorks, when the latter stepped down as a Tory MP in 2015. Both men will appear at the Budget event together on Friday.

“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,” Lord Hague writes.

He adds: "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 Chancellor has been mulling over a string of tax rises or raids for his Budget but has faced warnings from prominent Conservative backbenchers and even David Cameron.

Such public support from a prominent Tory grandee as Lord Hague will only further speculation Mr Sunak is preparing to defy calls not to raise taxes, or at least indicate rises are coming soon.

The Telegraph can reveal Mr Sunak will announce a £300 million funding boost to save summer sports such as cricket and tennis from the Covid-triggered cash squeeze.

Tens of millions of pounds are expected to go to the England and Wales Cricket Board (ECB), allowing it to protect grassroots cricket and ease the return of fans into grounds.

Lord Ian Botham, the former England cricket captain, told The Telegraph: “Everyone in the cricketing world will be delighted. It’s been a tough time for the sport.”

Mr Sunak is also preparing to spend £408 million to help museums, theatres and galleries in England to reopen once coronavirus restrictions start to ease, it was reported on Monday night.

The Chancellor will also announce a new scheme to help 130,000 small businesses expand by funding improvements in their digital operations and offering MBA-like business training.

One part of the scheme, dubbed “Help to Grow”, will offer vouchers of up to £5,000 for businesses to buy new software to improve their online operations.

Another will see 30,000 small company leaders offered training at some of the UK’s finest business schools and mentoring so they can improve their plans for growth.

A Treasury source said the £520 million scheme is one of the “big bets” in the Budget and was inspired by Mr Sunak’s own experience of taking an MBA course at Stanford University in America.

Boris Johnson said on Monday that he believed a "strong, jobs-led recovery" was coming, adding: “I think [it] could be much stronger than many of the pessimists have been saying over the last six months or so."

Mr Sunak, in a video shared on Twitter, also offered notes of optimism amid frank warnings about the state of the economy, saying: “We have to believe there is light at the end of the tunnel now.”

Sajid Javid, the former Tory chancellor, offered supportive comments to the Treasury about the need to face the realities of Britain’s pandemic-triggered government spending surge.

He told The Telegraph: “Rishi will know that if he doesn’t set out a credible plan now, excessive debt will impact the ability of future governments to properly fund our public services and act as a burden on future generations. We need to be fiscally ready for the next crisis that comes along.”

Meanwhile, figures from 20 think tanks, academic bodies and campaign groups have written to the Chancellor calling for a review of stamp duty and council tax.

They include individuals from the Centre for Progressive Policy, Bright Blue and the Centre for Policy Studies.