Leader - Taxing times for an embattled Johnson
Boris Johnson gave perhaps as clear a signal as could be expected from him at the start of a Conservative Party Conference that Chancellor Rishi Sunak will unveil more tax rises in his Budget later this month.
The Prime Minister yesterday told the BBC's Andrew Marr he was a "zealous opponent of unnecessary tax rises" but that the pandemic had hit the UK economy like a "fiscal meteorite". Of course no prime minister would ever describe themselves as a proponent of unnecessary tax rises. The message is clear: tax rises are necessary because of the impact of coronavirus.
By the end of August, the surge in government borrowing had brought public sector net debt to £2.2 trillion, which at around 97.6 per cent of GDP was its highest level since 1963.
Borrowing on this scale is clearly unsustainable but the tax burden is already high. Last month the Government announced a rise in national insurance, despite this being a breach of the 2019 Tory manifesto.
Mr Sunak also froze income tax thresholds and the extra £20 weekly universal credit payment brought in during the pandemic is due to end this week. Later this month the Chancellor is expected to announce a rise in VAT – which would also be a breach of the 2019 manifesto.
In fairness, the authors of that manifesto were as unaware as anyone else of the impending pandemic and its economic fallout. Many people will understand the need for tax rises, but Jacob Rees-Mogg, the Leader of the House of Commons, gave an indication of the battle Mr Johnson will face within his own party when he said yesterday the UK was "taxed as highly as the country can afford".
Mr Johnson is also taking flak over continued supply problems. In an effort to reassure the public ahead of Christmas, he said he felt “very sure” this festive season would not be as bad as last year. He said the country was going through a "period of adjustment" post-Brexit and needed to look to a future of "better paid, better skilled jobs".
If this transition was hard before it has been made immeasurably more so by the pandemic. In Manchester this week, Mr Johnson must begin to set out how he plans to get through it and carry both his party and the country with him.