Rishi Sunak has braced the nation for tax hikes, warning there will be no “easy cost-free answer” to the economic crisis unleashed by coronavirus.
In his first Conservative Party conference speech as Chancellor, Mr Sunak said there were “hard choices” ahead and warned the government could not “simply borrow our way out of any hole”.
Hinting at future tax rises, Mr Sunak said the Tories had a “sacred duty” to “leave the public finances strong” and vowed to “balance the books”.
Watch my Conservative Party Conference speech live here👇https://t.co/395A6DMR6S
— Rishi Sunak (@RishiSunak) October 5, 2020
The Treasury has so far committed more than £190 billion to help people, firms and services to weather the pandemic, but elements of that support – including the furlough scheme, which ends this month – are now being withdrawn.
He said though that, although the government would “keep striving to be creative” on employment support, he would also have to be “pragmatic”.
He told members that “no chancellor” would be able to save every job or business, adding changes to the economy due to Covid-19 “can’t be ignored”.
Mr Sunak said: “We are now seeing our economy go through changes as a result of coronavirus that can’t be ignored.
“I have always said I couldn’t protect every job or every business. No chancellor could.
“And even though I have said it, the pain of knowing it, only grows with each passing day.”
He added: “I am committing myself to a single priority – to create, support and extend opportunity to as many people as I can.
“Because even if this moment is more difficult than any you have ever faced, even if it feels like there is no hope, I am telling you that there is, and that the overwhelming might of the British state will be placed at your service.”
Balancing the books will either require spending cuts or tax rises in the future and Mr Sunak acknowledged there would have to be action in the medium term.
“We have a sacred responsibility to future generations to leave the public finances strong, and through careful management of our economy, this Conservative Government will always balance the books,” he said.
'We believe in the unbreakable bond of union that unites the four nations of our United Kingdom', Rishi Sunak tells #CPC20
— Dan O'Donoghue (@MrDanDonoghue) October 5, 2020
“If instead we argue there is no limit on what we can spend, that we can simply borrow our way out of any hole, what is the point in us?
“I have never pretended there is some easy, cost-free answer. Hard choices are everywhere.”
‘Britain risks worst unemployment crisis in decades’
Shadow chancellor Anneliese Dodds, responding to the speech, said: “The Chancellor spoke for just 10 minutes today – and he had nothing to say to the millions of people whose jobs are now at risk because of his policies.
“Britain risks the worst unemployment crisis in decades and Rishi Sunak’s name will be all over it.”
Confederation of British Industry director-general Dame Carolyn Fairbairn said extra support should be considered for parts of the economy that were being badly hit by lockdown measures.
“Protecting our economy’s ability to recover is the best route to balancing the books,” she said.
Meanwhile, the Chancellor also sought sought to quell Westminster rumours of a rift between the Downing Street neighbours.
He said: “I’ve seen up close the burden the prime minister carries.
“We all know he has an ability to connect with people in a way few politicians manage.
“It is a special and rare quality.
“But what the commentators don’t see, the thing I see, is the concern and care he feels for people every day, for the wellbeing of every person in our country.
“Yes, it’s been difficult, challenges are part of the job, but on the big calls, in the big moments, Boris Johnson has got it right and that is the leadership that we need.”