The Chancellor of the Exchequer has warned the economic recovery from coronavirus will come at a cost.
Speaking at the Conservative Party’s annual conference in Manchester today (October 4), Rishi Sunak said the UK’s public finances need to be fixed after billions of pounds were spent on coronavirus support measures for businesses and workers.
He also hinted he was not minded to cut taxes anytime soon.
“I have to be blunt with you, our recovery comes with a cost,” he said.
“Our national debt is almost 100 per cent of GDP. So we need to fix our public finances.
“Because strong public finances don't happen by accident, they are a deliberate choice.
“They are a legacy for future generations, and they safeguard against future threats.”
Sunak is due to present his second budget of the year on October 27, and there are reports that he may lower the threshold at which people start repaying their student loans, as well as capital gains tax being aligned more closely with income tax rates. Neither of these policy changes were mentioned in his speech.
The news comes a few weeks after the Prime Minister announced a 1.25 per cent National Insurance increase, dubbed the ‘health and social care levy’ to cover the costs of social care reform.
This broke a Tory party manifesto promise not to raise taxes.
The chancellor hinted the party would not cut taxes in the near future.
Sunak said: "Whilst I know that tax rises are unpopular, some say un-Conservative, I’ll tell you what is un-Conservative: unfunded pledges, reckless borrowing and soaring debt.
“Anyone who tells you that you can borrow more today, and tomorrow will simply sort itself out, doesn’t care about the future.
“So yes, I want tax cuts. But in order to do that, our public finances must be put back on a sustainable footing.
“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.”
Sunak also announced the creation of 2,000 scholarships in artificial intelligence for disadvantaged young people, as well as doubling the number of Turing AI research fellows, a programme funded by the government and created in collaboration with The Alan Turing Institute.
Last week, shadow chancellor Rachel Reeves said tax breaks for private equity managers would be scrapped under a Labour government which would also undertake a wider review of taxation.
Speaking at the party’s annual conference in Brighton on September 27, Reeves said the Labour Party had a “clear mission to recognise and release Britain’s real wealth” and would look at “every single tax break” offered in the UK as part of a wide review if it were voted into power at the next general election.
Reeves said Labour would ensure “those at the top pay their fair share too", and abolish the current system of business rates.