Raising taxes before pandemic is over 'makes no sense', David Cameron warns Rishi Sunak

It would not make “any sense at all” to raise taxes in next week’s Budget while the UK is still in the grip of the coronavirus pandemic, David Cameron has warned Rishi Sunak.

Mr Cameron said any tax rises must wait until the UK has emerged from all lockdown measures and urged ministers to consider the pandemic a “wartime situation”.

Speaking to CNN, the former Prime Minister defended his own austerity measures while in Government after the 2008 financial crisis, but said the same policy would be damaging now.

“Today we do face very different circumstances,” he said.

“So piling, say, 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 Sunak will deliver his Budget next week, and is expected to announce an increase in corporation tax, which will be staggered across the course of this Parliament, reaching between 23 and 25 per cent by 2024.

The prospect of increases in fuel duty and income tax has also been floated in conversations between Mr Sunak and Tory backbenchers, but it is expected that any fuel tax increase has now been abandoned.

Conservative MPs and the Labour front bench have united to oppose the potential corporation tax increases, which they warn would choke off the post-pandemic recovery.

Sir Keir Starmer has warned against any increases in taxes while the pandemic continues, while Mel Stride, the chairman of the Treasury select committee, has said Downing Street will face widespread revolt on the Tory back benches if Mr Sunak increases capital gains tax, threatening investor incomes.

Boris Johnson’s press secretary, Allegra Stratton, said on Thursday that the Budget will be treated as a confidence issue, suggesting that any Tories who vote against it will lose the Conservative whip.

In his interview, Mr Cameron also backed the prospect of vaccine certificates being used in the UK to open up venues as lockdown eases.

Warning that ministers should not “close their mind” to the idea of passports for events, Mr Cameron 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.”

Mr Johnson has announced that vaccine certificates will be the subject of a Government review.

Ministers have previously ruled out the schemes for domestic use amid concerns they could be discriminatory, but have since acknowledged they could play a part in the UK’s recovery.