UK chancellor Rishi Sunak has told the Conservative conference his party will “always balance the books,” signalling plans to curb public borrowing and debt levels.
Sunak began by reeling off a list of the government’s measures to shore up the economy against the coronavirus crisis, including job support schemes, tax cuts and business loans.
But he stopped short of unveiling fresh policies despite the high profile of the set-piece speech at the Conservatives’ conference, held virtually for the first time.
He said on Monday that supporting jobs and firms remained his priority, but issued another warning no chancellor could protect every job, and that there were “hard choices” to come on public finances.
Much of his speech emphasised measures to help people into new jobs, such as training and apprenticeships, marking a shift in focus from earlier efforts to save existing jobs.
Sunak called the furlough scheme, introduced earlier this year, the “first of its kind” in British history, protecting millions of families’ incomes. Such interventions meant the government “ceased to be distant and abstract” during the crisis, he added.
But he has resisted calls to extend it despite huge political pressure to curb rising unemployment, announcing a less generous replacement scheme last month.
Sunak also spoke of the importance of “personal responsibility” as well as community, free enterprise and the “nobility of work,” stressing such values lay behind the government’s crisis response.
The chancellor then pledged: “Through careful management of our economy, this Conservative government will always balance the books.”
He said the government would bring borrowing and debt levels “back under control” over an unspecified “medium-term.” Doing so was a “sacred responsibility to future generations,” he added.
The government’s spending plans have forced the Treasury to ramp up borrowing. Official figures last month showed government debt stood at £2tn ($2.6tn) in late August, 1.9% larger than the entire UK economy’s output.
It marked the highest debt-to-GDP ratio since 1961, as growth plummeted at the fastest quarterly rate on record when the virus and lockdown hamstrung the economy earlier this year. But with borrowing costs at ultra-low levels and the economy still reeling from the crisis, some economists argue continued stimulus is more important than reining in borrowing.
Prime minister Boris Johnson had also acknowledged there would be “tough times ahead” in the jobs market on Monday. It comes amid uncertainty for thousands of staff at Cineworld, with the company announcing the temporary closure of its UK cinemas on Monday morning.
The government has come under enormous pressure to do more to stave off job losses as the crisis drags on and the furlough scheme is wound down.
Sunak and work and pensions secretary Therese Coffey promised £238m of new support for jobseekers on Monday. Support will include advice on growing sectors, CVs and interviews, according to the department for work and pensions (DWP). It will be targeted at anyone out of work for more than three months.
The furlough scheme wage grants will run out this month, and many firms and experts have warned a replacement “job support scheme” is not generous enough to ensure employers kept staff.
Labour’s shadow chancellor Anneliese Dodds said Sunak “blew his chance to get a grip on Britain’s jobs crisis” by not announcing further measures on Monday.
“The chancellor just spoke for 10 minutes, but he had nothing new to say. No new targeted support for millions facing the furlough cliff edge. Nothing new for the self-employed. Nothing for those excluded so far.”
Carys Roberts, executive director of the left-wing Institute for Public Policy Research (IPPR) think tank, said debt reduction would require tax hikes, with public services “cut to the bone” already after a decade of austerity.
Sunak’s pledge that the government would “stand between the people and danger” would also require more spending to boost Britain’s “inadequate” welfare system, Roberts added. “This is increasingly the elephant in the room,” she said.