The Daily Telegraph
Tax rises are on the way, warns Chancellor
RISHI SUNAK has signalled that tax rises are on the way, saying the Conservatives will not “borrow our way out of any hole”.
The Chancellor said the Government would need to be “flexible” when asked if he might have to break the “triplelock” pledge not to increase income tax, VAT or national insurance in order to balance the books after the pandemic.
He said that if the Tories argued there was “no limit on what we can spend … what is the point of us?”
The 40-year-old also tried to kill off speculation about any rivalry between him and Boris Johnson, by saying he “definitely” did not want the Prime Minister’s job and praised him for having “got it right on the big calls”.
In his speech to the virtual Conservative party Conference, Mr Sunak said “hard choices are everywhere” as he tries to work out how the country will eventually pay for the economic cost of Covid- 1 9 which has s oared past £300 billion.
He said: “We will protect the public finances, over the medium term getting our borrowing and debt back under control. 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.
“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?”
Mr Sunak added: “I have never pretended there is some easy cost-free answer − hard choices are everywhere.”
In a question-and-answer session later, asked whether he might have to break the tax triple-lock manifesto promise, he said the country was facing a “once in a century” event which meant it was unlikely the Government would meet “every single” pledge.
He said: “Most party manifestos contain many, many different pledges and you obviously want to do your best to fulfil as many of them as possible … our manifesto also had some rules around borrowing and debt, so it’s pretty safe to say those are going to be tricky to meet.
“We have to respond flexibly so I think the values and the principles in that manifesto are ones that we believe very strongly in, and continue to.”
The Chancellor’s comments appear to confirm that the Treasury is planning tax rises at some point, having postponed the autumn budget until next year because of the current economic uncertainty. Many economists have urged the Chancellor to cut taxes to stimulate economic growth.
The run-up to the conference has been overshadowed by reports of rivalry between No 10 and No 11, after Mr Sunak appeared to distance himself from Mr Johnson’s lockdown policies by saying people should live “without fear”.
Asked if he eventually wants to move into No 10, he said: “No. Definitely not, seeing what the Prime Minister has to deal with, this is a job hard enough for me to do.”
He added: “We have a close personal friendship which then spreads through the teams where there’s an enormous amount of mutual trust.” Mr Sunak said his two daughters’ “favourite thing in the world” is Mr Johnson’s dog Dilyn. “Our families are very joined at that moment,” he said.
In his speech he went out of his way to praise Mr Johnson, saying: “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.
“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 we need that leadership.”