Rishi Sunak today defended brutal tax hikes saying it would be ‘immoral’ and ‘un-Conservatives’ to let the government’s finances spiral out of control after Covid.
In his first big speech to the Tory conference – watched by Boris Johnson – the Chancellor gave an impassioned justification of his ‘plan’ for the UK’s recovery.
But he also tried to quell rising anxiety about imposing the highest sustained tax burden on the economy by vowing that taxes will be slashed again once the crisis is past.
The set-piece in Manchester confirmed Mr Sunak’s status as a successor to Mr Johnson, with activists forming long queues to squeeze into the hall.
However, he paid a fulsome tribute to the PM saying it was down to him that the Tories were in power with an 80-strong majority.
He also set out his own vision about what the party should stand for, arguing that it must abandon ‘dogma’ to protect future generations from the impact of the pandemic.
‘I believe that mindless ideology is dangerous. I’m a pragmatist,’ he said.
‘I care about what works, not about the purity of any dogma.
‘I believe in fiscal responsibility. Just borrowing more money and stacking up bills for future generations to pay is not just economically irresponsible, it is immoral.’
‘Because it’s not the state’s money it’s your money.’
Mr Sunak also stood by the decision to axe the £20 a week uplift to universal credit, saying: ‘I believe that the only sustainable route out of poverty comes from having a good job.
‘It’s not just the pounds it puts in your pocket, it’s the sense of worth and self-confidence it gives you.’
In his first big speech to the Tory conference – watched by Boris Johnson – the Chancellor gave an impassioned justification of his ‘plan’ for the UK’s recovery
Rishi Sunak (pictured on a visit to a building site in Manchester with Boris Johnson today) has dodged over rumours of a stealth council tax rise to help fill the black hole in social care funding
Mr Sunak and Mr Johnson togged up in hi-vis gear for the visit in Manchester today
In a round of interviews at Tory conference in Manchester, Mr Sunak was asked repeatedly about whether he would approve further tax increases, including a hike to council tax to help fund social care after a warning from local authorities.
The Chancellor sidestepped as he was grilled about the prospect of increasing the levy local authorities can charge, or allowing them to increase the level without holding a referendum.
But he also determinedly refused to kill off speculation that the government has pencilled in a tax cut for before the election if the economy recovers.
Mr Sunak told Sky News he would not ‘pre-empt’ the local government finance settlement later in the year and added to LBC he ‘never can comment about future tax policy’.
He did not rule out an increase to income tax before the next election – but also refused to rule out a cut if there is enough headroom.
Mr Sunak told BBC Breakfast: ‘Recently we did make a significant announcement on tax and it was a difficult decision to make, especially for a Conservative Chancellor and a Conservative Prime Minister.
‘But we took that decision because we wanted to make sure the NHS got the significant funds it requires to help recover strongly from coronavirus.’
Social care costs are partly met from central government funds, but also from councils – who have warned they require £2.6billion a year just to sustain current levels of social care.
Ministers are reportedly looking at letting local authorities increase the social care levy above 3 per cent without the need for a local referendum.
An alternative would be a direct cash injection in the spending review later this month.
Meanwhile, Mr Sunak is committing more than £500million in fresh funding to help people back into work as he seeks to stem the continuing turbulence of the coronavirus pandemic.
He is shifting the focus on to getting people into new or better jobs as the Government comes under sustained pressure over a major squeeze on living standards.
Funding for the new jobs package in his conference speech will not be set out until the spending review and Budget later this month.
Mr Sunak suggested it was his duty as Chancellor to tell the Prime Minister not to overspend after joking that he would cut up Mr Johnson’s ‘credit card’ to rein back his public spending.
‘That was an old thing but I think that’s something all chancellors say as part of our job,’ Mr Sunak told BBC Radio 4’s Today programme.
Mr Sunak was also forced to defend the decision to end the £20-a-week uplift to Universal Credit as families and workers face financial hardship, in a move some Tories have campaigned against.
And he conceded it is likely there will be shortages this Christmas, as the strains of coronavirus are compounded by a shortage of workers stemming from Brexit.
‘We’re seeing supply disruption not just here but in lots of different places and there are things we can try and mitigate and we are,’ Mr Sunak told Today.
In a round of interviews at Tory conference in Manchester this morning, Chancellor Rishi said the government is ready to take ‘short-term’ action to help reduce the pressure
Farmers staged noisy protests outside the Tory gathering in Manchester this morning, after Mr Johnson shrugged off concerns about a mass culling of pigs because of a lack of abattoir staff
‘But we can’t wave a magic wand. There’s nothing I can do about the decision by a country in Asia to shut down a port because of a coronavirus outbreak.’
In his conference speech, Mr Sunak will announce the new funding will be used to help workers leaving the furlough scheme and unemployed over-50s back into work.
The ‘kickstart’ scheme helping young people on Universal Credit will be extended to March next year under the measures and the £3,000 incentive for new apprentices will be extended until the end of January.
But the Chancellor’s speech comes at a difficult time for the economy, with warnings of a cost-of-living crisis for some households who face rising energy bills, price hikes in shops and a cut to Universal Credit.
Household budgets will sustain a further blow next April when national insurance contributions rise by 1.25 per cent to help fund the NHS and social care.
Shadow work and pensions secretary Jonathan Reynolds said the package ‘will do nothing to compensate for the Chancellor’s tax rises, cost-of-living crisis and cuts to Universal Credit which are set to hammer millions of working families’.