Rishi Sunak issued a warning today that pandemic levels of spending and borrowing cannot go on forever as he reminded the Conservatives of their “sacred responsibility to future generations”.
In a speech to the virtual Tory Party conference, the Chancellor said he would take action to get debt “back under control” in the medium term.
Mr Sunak’s words, in a brief seven-minute address, will ignite speculation about the likelihood of tax rises and spending cuts in his next Budget.
They implied that the architect of the hugely popular but vastly expensive furlough and Eat Out To Help Out schemes is willing to take the highly controversial measures needed to rebuild the national balance sheet.
“We will protect the public finances,” he said. “Over the medium term getting our borrowing and debt back under control.
“We have a sacred responsibility to future generations to leave the public finances strong, and through careful management of our economy, this Conservative government will always balance the books.”
Earlier the Chancellor was warned by two Tory heavyweights not to delay the painful work to repair the public finances.
Former chancellor Sajid Javid said his successor Mr Sunak should “start heading towards a balanced budget” and claimed there were “billions of savings” to be made in Whitehall.
Former deputy prime minister Lord Heseltine said borrowing “can’t go on” and urged the Chancellor to “take the flak” by announcing some spending cuts and tax rises soon and not hope to “buy your way out of trouble”.
Mr Sunak used his speech to declare his ambition to extend opportunity to more people.
He said the economy was now going through changes as a result of the Covid-19 pandemic and some things would not be the same. He could not protect every job and “the pain of knowing it, only grows with each passing day”, he explained.
But as Chancellor he was committed to “a single priority” “to create, support and extend opportunity to as many people as I can. We will not let talent wither, or waste, we will help all who want it, find new opportunity and develop new skills.”
In an interview in The Sun, Mr Sunak expressed frustration with the 10pm pub and restaurant curfew that has infuriated businesses and triggered rumblings of Tory rebellion.
“It is frustrating, right?” he said. “Everyone is very frustrated and exhausted and tired about all of this.”
He put himself on the side of MPs hoping the country can get back to normal. “I don’t think it’s wrong for people to want to strive for normality and I don’t think it’s wrong for the Government to want that for people.”
Mr Sunak defended his cut-price August eating out scheme after the Prime Minister admitted it “may have helped to spread the virus”.
Asked if he had regrets he said: “No, no, no, no, definitely not. We had an industry that I care deeply about because of employment. It’s over two million people.”
At a fringe event earlier on, Mr Javid called for a “zero based” spending review in which every Cabinet minister would be ordered “to justify every single pound” they spend. “I know from having been chancellor, having run other spending departments, that there are savings to be made [in Whitehall],” he told a Conservative Home debate.
“If you ask the officials for a spreadsheet … you will find programmes that are no longer necessary… or that can be done much more cheaply. That kind of very focused review could produce billions of savings.”
Mr Javid said Mr Sunak should “start heading towards a balanced budget on day to day” but cautioned that it “shouldn’t happen overnight”.
Among reform ideas, he proposed abolishing Police Commissioners. “I think there’s a genuine debate to be had about whether we need to continue with that system,” he said.
Lord Heseltine praised Mr Sunak for being “innovative”, but added: “I’m appalled by the effect it’s having on public finances and it can’t go on.”