UK Markets closed

UK chancellor deflects tax hike reports, calling jobs his 'overwhelming focus'

Tom Belger
·Finance and policy reporter
·3-min read
Britain's Chancellor of the Exchequer Rishi Sunak visits the headquarters of Octopus Energy, in London, Britain October 5, 2020. Leon Neal/Pool via REUTERS
Chancellor Rishi Sunak defended his government's measures. Photo: Leon Neal/Pool via Reuters

UK chancellor Rishi Sunak has played down speculation over tax rises in Britain, arguing efforts to save jobs were the best way to return the public finances to sustainable levels.

Sunak faced questions over tax hikes and Britain’s borrowing levels in a series of broadcast interviews on Tuesday, the final day of the Conservative party’s virtual annual conference.

The finance minister had said the government would bring borrowing and debt levels “back under control” in his speech to the conference on Monday. Doing so was a “sacred responsibility to future generations,” he told party members.

Asked if that meant tax rises could be on the cards, Sunak told Sky News: “The priority right now is jobs. My overwhelming focus at the moment is trying to protect and support as many jobs as possible.”

He added: “I can’t comment on future tax policy.”

Watch: Chancellor Rishi Sunak speaks of ‘difficult trade-offs’ due to Covid crisis

READ MORE: Sunak says Conservatives will ‘always balance the books’

He said the impact of COVID-19 had been “significant and severe” on the economy, and was forced to defend the Eat Out to Help Out scheme against claims it may have contributed to spreading the coronavirus.

Sunak was also forced to defend his public messaging on policy initiatives, after being asked if including his own name and photo so regularly was “narcissistic” and signalled a desire to be prime minister. “The job I have is hard enough,” he replied.

He said it was important the public knew who he was, raising awareness of the government’s measures and informing public debate.

Sunak doubled down on his emphasis on the need to bring down borrowing in future, however.

He told the BBC borrowing had been essential to support the economy through the crisis, but said levels had been “enormous.”

“Obviously this can't carry on forever. This level of borrowing, which will be record levels pretty much this year, is not sustainable in the long run."

READ MORE: UK government pledges £238m for CV and work advice as unemployment grows

It echoed the chancellor’s message in a short speech that was light on new policy announcements to his party on Monday.

Sunak had begun 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.

Watch: What are the new job support schemes and grants for the self-employed?

But he warned there were “hard choices” to come on public finances. “Through careful management of our economy, this Conservative government will always balance the books.”

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.

But the government has come under enormous pressure to do even more to stave off job losses as the crisis drags on and the furlough scheme is wound down.

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.