Chancellor warns UK has taken 'significant hit' but vows no tax 'horror show'
Video report by ITV News Correspondent Daniel Hewitt
Chancellor Rishi Sunak has sought to reassure the public that there will be "no horror show on tax rises" but warned that the government "can’t carry on doing exactly what we did this year forever".
Prime Minister Boris Johnson and his chancellor sought to placate the new intake of Tories on Wednesday amid disquiet over a series of government U-turns and concerns that future high taxes could be among the unpopular choices needed for the coronavirus recovery.
The PM warned MPs "it's about to get tougher" as Mr Sunak told them there will not be "a horror show of tax rises with no end in sight".
But both warned there will have to be difficult actions in the short term after a period of unprecedented spending but said their party would be able to overcome them.
Asked whether he could assure the public there will be "no horror show" tax rises, Mr Sunak said: “I’ll always be honest with the British people, and what I’d say is our economy has taken a significant hit as a result of the coronavirus."
Speaking at the launch of the government's £2 billion Kickstart programme aimed at helping young people into work following the pandemic, Mr Sunak added: "We’ve put in place an unprecedented support for the economy, their people, their jobs, their homes, their livelihoods, and it’s right that we did that. It’s made the situation better than it already would’ve been.
"In the short term my priority is to drive our recovery forward, to protect and support and create as many jobs as possible. But of course it’s right that over time we have sustainable public finances.
"I think everyone understands we can’t carry on doing exactly what we did this year forever.”
The Prime Minister acknowledged "it’s been tough” at a meeting with his new intake of MPs, many of whom entered parliament in the last election by seizing former Labour strongholds and are said to be “jittery” after a string of U-turns that included the exams fiasco.
“I’ve got to warn you it’s about to get tougher. The waters are about to get choppier. But we are going to deal with it,” he said in a speech in Parliament.
“And when we build back better and faster and greener we will create a platform for the dynamism and innovation and enterprise to flourish and to create new jobs.”
Mr Sunak warned the MPs that the government cannot “simply borrow our way out of any hole”, with his plan to rescue the nation’s finances unclear.
There has been speculation that corporation tax could be raised, capital gains tax increased, pension tax relief cut or aid spending reduced.
Each move would be controversial within wings of the party.
He told the MPs: “We will need to do some difficult things, but I promise you, if we trust one another we will be able to overcome the short-term challenges.
“Now this doesn’t mean a horror show of tax rises with no end in sight. But it does mean treating the British people with respect, being honest with them about the challenges we face, and showing them how we plan to correct our public finances and give our country the dynamic, low-tax economy we all want to see.”
Labour leader Sir Keir Starmer is also opposed to tax rises at this time, instead calling on ministers to get the economy growing again.
His spokesperson said: “With the health crisis still not under control, and it’s been the deepest economic crisis we’ve faced in generations, this is absolutely the wrong time to be talking about tax rises.”