Rishi: My duty to balance books

He signals tax hikes and warns – we can’t keep on borrowing

RISHI Sunak warned of tax rises yesterday saying he shouldered a ‘sacred’ duty to balance the books for future generations.

The Chancellor admitted ‘hard choices’ lay ahead to avoid the national debt piling up ‘for ever and a day’.

In his first Tory party conference speech, he told those hit by the pandemic not to give up hope since ‘ the overwhelming might of the British state will be placed at your service’.

But he insisted the Government could not ‘simply borrow our way out of any hole’ and would need to break manifesto pledges given the ‘once in a century’ nature of the crisis.

‘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.

‘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 costfree answer. Hard choices are everywhere.’

At a fringe event following his speech, Mr Sunak declined to commit to Tory manifesto pledges on spending and taxation, including the triple lock promise not to hike income tax, VAT and national insurance.

He said: ‘Most party manifestos and most elections contain many, many, many different pledges and you obviously want to do your best to fulfil as many of them as possible. Is this a once-in-a-century-type situation? It is.

‘our manifesto also had some rules around borrowing and debt right? It’s pretty safe to say those are going to be tricky to meet at the moment and probably in time. That will be challenging to meet those given what’s happened. Without question this is a once-in-a-century episode so we have to respond flexibly.’

Mr Sunak said that the ‘mismatch’ between public spending and tax revenues could not go on, adding that balancing the books was ‘economically and morally’ the right thing to do.

He added: ‘What we cannot have is a situation where years past this crisis we are still borrowing huge amounts of money every year, that is the thing we cannot do with debt rising just for ever and a day. So when we get through this, we need to take stock of the situation and make sure those things line up.

‘We want to make sure our next generation don’t inherit a poor set of public finances.’

He also warned that the record debt mountain means the country is now vulnerable to small changes in interest rates.

Asked what keeps him awake at night, Mr Sunak told the fringe event: ‘It’s people losing their job.’

Earlier in his conference speech, Mr Sunak said the country was only part-way through the crisis, adding: ‘What began in March as a health emergency has grown and now reaches deep into our economy and society.

‘Not only does it endanger lives, but jobs and education. It separates friends and family.’

The Chancellor said the ‘pain of knowing’ that he cannot save every job or business ‘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.’

Mr Sunak also tried to defuse tensions with his Downing Street neighbour by insisting he did not want Boris Johnson’s job.

The pair’s relationship has come under strain over differences on how the coronavirus crisis should be handled. But Mr Sunak offered an olive branch yesterday as he insisted that ‘on the big calls’ Mr Johnson had got it right.

Asked if he eventually wants the keys to No 10, he replied: ‘No. Definitely not seeing what the Prime Minister has to deal with, this is a job hard enough for me to do.

‘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.’