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Thursday, October 28, 2021

Conservative conference: Boris Johnson refuses to rule out further tax rises

IDBS ART GALLERY

Boris Johnson has refused to rule out raising taxes again, three weeks before the chancellor announces the Budget.

The prime minister declared himself a “zealous opponent of unnecessary tax rises” on the first day of his party’s conference in Manchester.

However, he told Andrew Marr of the BBC that the pandemic had hit the UK economy like a “fiscal meteorite.”

It comes amid concerns about the rising cost of living, with rising energy and food prices, as well as fuel shortages.

Last month, the government announced it would be raising National Insurance to pay for health and social care.

At the time, when asked whether he would rule out additional taxes, Mr Johnson said he could give an “emotional commitment” that he did not want to introduce further rises.

Earlier this year Chancellor Rishi Sunak also froze income tax thresholds – leading to more people paying the levy – and the extra £20 weekly universal credit payment, brought in during the pandemic, is due to end this week.

When asked if he would raise taxes again by Andrew Marr on Sunday, Mr Johnson said, “If I can possibly avoid it, I do not want to raise taxes again.”

“I can tell you that you have no fiercer and more zealous opponent of unnecessary tax rises than me,” the PM continued, “but we have had to deal with a pandemic on a scale that this country has not seen in our lifetimes or for a long time.”

We don’t want to raise taxes, of course, but we will not be irresponsible with the public purse.”

Cabinet members are warning against any further tax increases, with Leader of the House, Jacob Rees-Mogg, telling the Times the UK was taxed “as highly as the country can afford”, and Business Secretary Kwasi Kwarteng saying: “We can’t tax our way to wealth.”

‘Failed, old model’

Mr Johnson was also questioned about job shortages and supply issues in stores and on gas pumps.

The Prime Minister insisted that the shortage of lorry drivers, which is affecting goods delivery, was not limited to the United Kingdom, claiming that similar issues were being experienced in the United States, China, and some European countries.

In addition, he stated that gasoline shortages were a problem “”I understand people’s frustrations, and I understand how infuriating it is when you show up and can’t get any,” he added. However, we are ensuring that we have the necessary backup drivers.”

Mr Johnson chastised those who wanted to “return to the tired, failed old model” of “reaching for the lever known as uncontrolled immigration” to bring people into the country to fill job openings.

But he did not reject comments made by Mr Sunak, who told the Daily Mail the “very real” shortages could affect Christmas.

Instead, the Prime Minister stated that the country was in a “period of adjustment” following Brexit and that the British people should look forward to a future of “better paid, better skilled jobs.”

“What we had for decades was a system in which [sectors like] the road haulage industry… were not investing in truck stops, not improving conditions, not improving pay, and we relied on very hardworking people who were willing to come in, largely from European accession countries, to do that work under those conditions,” Mr Johnson continued.

What you need to do is ensure that people are investing in basic equipment, such as truck stops, as well as better pay.

“When people voted for change [over Brexit] in 2016, and again in 2019, they voted for the end of a broken model of the UK economy that relied on low wages, low skill, and chronic low productivity, and we are moving away from that.”

What’s been happening to wages?

Boris Johnson and Andrew Marr argued about the average wage, with the prime minister claiming that we’re finally seeing “growth in wages, after more than ten years of flatlining,” but Andrew Marr claiming that “in real terms over the last three months wages have gone down, not up.”

So, what’s been going on?

Real wages, which account for rising prices, peaked just before the 2008 financial crisis and will only return to that level in August 2020.

As a result, there has been little overall improvement over the last decade.

Rather than “flatlining,” as Mr Johnson claimed, it was a five-year period of decline followed by growth for the majority of the last five years.

As the economy was shut down and then reopened last year, there were record dips and jumps.

However, the most recent data from the Office for National Statistics indicate that growth may be slowing, with real wages appearing to be lower in July than they were in April.

SourceBBC
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