Boris Johnson said he would unleash the “unique spirit” of the country as he set out on the “difficult” process of reshaping the British economy.
The Prime Minister used his Conservative Party conference speech to say he has the “guts” to reshape society, addressing issues which had been dodged by previous administrations.
With shortages of lorry drivers and other workers hitting supply chains, leading to empty shelves and queues at petrol stations, Mr Johnson defended his strategy of restricting the supply of cheap foreign labour after Brexit.
And despite a looming National Insurance rise for millions of workers in April to fund a £12 billion annual investment in health and social care, Mr Johnson insisted his new approach would ultimately create a “low-tax economy”.
“That’s the direction in which the country is going now – towards a high-wage, high-skilled, high-productivity and, yes, thereby a low-tax economy. That is what the people of this country need and deserve.
“Yes, it will take time, and sometimes it will be difficult, but that is the change that people voted for in 2016.”
Setting out the need for the health tax hike, Mr Johnson said: “We have a huge hole in the public finances, we spent £407 billion on Covid support and our debt now stands at over £2 trillion, and waiting lists will almost certainly go up before they come down.
“Covid pushed out the great bow wave of cases and people did not or could not seek help, and that wave is now coming back – a tide of anxiety washing into every A&E and every GP.
“Your hip replacement, your mother’s surgery … and this is the priority of the British people.”
The rising tax burden has caused concern among the Tories, but Mr Johnson told activists in Manchester: “I can tell you – Margaret Thatcher would not have ignored the meteorite that has just crashed through the public finances.
“She would have wagged her finger and said: ‘More borrowing now is just higher interest rates, and even higher taxes later.'”
The 44-minute keynote address came as the Government implemented its £20-a-week cut in universal credit as the temporary uplift in the benefit over the pandemic ended.
Mr Johnson used his speech, which was largely devoid of major policy announcements, to spell out what his “levelling-up” agenda means.
“The idea in a nutshell is you will find talent, genius, care, imagination and enthusiasm everywhere in this country, all of them evenly distributed – but opportunity is not,” said Mr Johnson.
“Our mission as Conservatives is to promote opportunity with every tool we have.”
He promised a “levelling-up premium” of up to £3,000 to get “the best maths and science teachers to the places that need them most” to boost the life chances of children from poorer areas.
But experts including former education adviser to the Government Sam Freedman denied it was a new policy and said it was a “kind of U-turn” in tweaking a scheme that was previously scrapped.
Setting out his brand of “radical and optimistic” conservatism, Mr Johnson also promised action to address long-standing problems in the supply of housing – an issue which has been contentious in his party, with proposed planning reforms blamed for the Chesham and Amersham by-election defeat in June.
Mr Johnson said it had been a “scandal” that the “dream of home ownership” had receded in the past 20 years.
Mr Johnson said the housing needed could be built “not on green fields, not just jammed in the South East” but on brownfield sites “in places where homes make sense”.
The Prime Minister said Team GB’s second place in the Paralympics medal table demonstrated a country that was “proud to be a trailblazer” and “to judge people not by where they come from but by their spirit, what is inside them”.
“That is the spirit that is the same across this country in every town and village, that can be found in the hearts and minds of kids growing up everywhere, and that is the spirit we are going to unleash,” the Prime Minister said.
Commenting on Mr Johnson’s speech, Labour leader Sir Keir Starmer claimed his jokes are going to “wear thin” when people across the country are hit in the pocket.
Speaking in a pre-recorded interview on ITV’s Peston, Sir Keir said the Prime Minister keeps pretending “he’s just sort of just landed from the moon”, arguing Britain is in a “cost of living” crisis because of the way the Tories have governed.
He said: “The cost-of-living crisis I think is going to unfold as we go through the winter months, it’s going to hit millions of families very, very hard.
“And I think you know that the showman, the jokes are all very well but they’re going to wear thin when people are hit in their wallet and they’re going to be hit very, very hard in their wallet.”
When asked by Robert Peston if he agrees with Mr Johnson’s view that the UK has to move to a high-wage, high-productivity economy, Sir Keir said: “Look, the Prime Minister is playing this game where he’s pretending that he’s just sort of just landed from the moon and he’s looking around and saying, ‘things look pretty awful around here, we need a bit of levelling up, things are so awful’.
“And he and the Tories have been in Government for 11 years, so we’re in this state because of the way that they have governed the country. They have got a lot to answer for here.”
Confederation of British Industry director-general Tony Danker said Mr Johnson warned the economy is at a “fragile moment” and called for more detail of the Prime Minister’s approach.
“The Prime Minister has set out a compelling vision for our economy. High wages, high skills, high investment and high growth,” he said.
“But the PM has only stated his ambition on wages. This needs to be backed up by action on skills, on investment and on productivity.
“Ambition on wages without action on investment and productivity is ultimately just a pathway for higher prices.”