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The chancellor has promised to “always balance the books”, despite increased spending in the wake of the Covid-19 pandemic.
In a speech to party members, Rishi Sunak said that conservatives had a “sacred duty” to “make public finances strong.”
He promised to use the “overwhelming power of the British state” to help people find new jobs.
But he said debt and spending should be controlled “in the medium term.”
In an online speech at the Conservatives party’s annual conference, he said, “I will not stop trying to find ways to support people and businesses.”
However, he added that the party could not argue that “there is no limit to what we can spend,” nor that “we can simply borrow our way out of any hole.”
Mr. Sunak cited the leave plan and its successor, the employment support plan, as examples of government actions to support employment during the crisis.
However, he said that while the government “will continue to strive to be creative” in supporting employment, it will also have to be “pragmatic.”
He told members that “no chancellor” could save every job or business, adding changes to the economy due to Covid-19 “cannot be ignored.”
Official figures released in September show the government borrowing £ 35.9 billion in the previous month, its highest amount for August since records began in 1993.
Loans between April and August amounted to 173.7 billion pounds as ministers spent billions on coronavirus-related plans to support the economy.
Sunak willing to ignore reputation for big spending
The government’s indebtedness is at stratospheric levels due to the pandemic.
It is not clear precisely what the chancellor means, who promises to have it under control in the “medium term.”
There wasn’t even a whisper of how that could be done.
Treasury sources suggested that it is unlikely to happen around the time of the next election, probably in 2024.
But while the first months in office of the chancellor have been characterized by enormous spending at the crisis level, that is a characteristic that he is willing to ignore.
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In an interview after his speech, the chancellor said that government debt, which topped 2 trillion pounds for the first time in history in August, was vulnerable to increases in borrowing costs.
“Now that we have so much debt, it doesn’t take much for ‘ow!’ Suddenly: we have to get X billion pounds a year to pay higher interest, “he said.
Sunak, who has been touted as a possible future Conservative leader, also said he did not want to become prime minister and described his “close personal friendship” with Boris Johnson.
When asked if he eventually wants to replace Johnson, he replied: “No. Definitely, regardless of what the prime minister has to deal with, this is a tough enough job for me.”
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Ministers have promised additional support to help people find a new job.
In response to his speech, Shadow Chancellor Anneliese Dodds said Sunak “had nothing to say” to millions of people whose jobs were at risk.
He told reporters that more “targeted support” was needed for sectors of the economy that have been hit hardest by restrictions during the pandemic.
“Unfortunately, today there was nothing from the chancellor to suggest that he understood the magnitude of the labor crisis we are facing,” he added.
Dame Carolyn Fairbairn, CEO of business lobby CBI, said the best way to balance the books was by “protecting the resilience of our economy.”
He added that the costs of the pandemic had fallen “deep and unevenly,” saying it was vital to protect at-risk sectors such as aviation, manufacturing and hospitality.
