view original post

UK prime minister Boris Johnson: ‘Margaret Thatcher would not have ignored this meteorite that has just crashed through the public finances. She would have wagged her finger and said that more borrowing now is just higher interest rates and even higher taxes later.’ Photo: Oli Scarff/AFP via Getty

Prime minister Boris Johnson defended the government’s recent decision to increase taxes to plug the black hole in UK finances and looked to a long-term low-tax policy in his speech to the Conservative party conference on Wednesday. 

Without clearly setting out new policies he hailed the COVID vaccine rollout and NHS response to the pandemic, while championing capitalism as a key component of its success. 

“It was capitalism that ensured we had a vaccine in less than a year, and the answer is not to attack the wealth creators, is to encourage them, because they are responsible for the aggregate increase in the country’s wealth that enables us to make this greater improvement and to level up everyone,” he said. 

Speaking on the mounting debt burden he said: “Margaret Thatcher would not have ignored this meteorite that has just crashed through the public finances. She would have wagged her finger and said that more borrowing now is just higher interest rates and even higher taxes later.” 

He said the government would spend time making sure cash for health and social care “goes to the front line and not on needless bureaucracy.

Without mention of the £20-a-week cut to Universal Credit, which kicks in today, he said: “We are not going back to the same old broken model with low wages, low growth, low skills and low productivity, all of it enabled and assisted by uncontrolled immigration.”

On Brexit, Johnson said that freedoms will allow the government to “do things differently,” quipping that exporting British beef to the US would allow the UK to “Build Back Burger.”

Read more: UK exporters miss out on global trade upswing as Brexit bites

Hitting out at regional inequality, a theme of the speech and something the Conservatives have campaigned on, Johnson chastised the UK as one of the most “unbalanced” and “one sided” economies in the world, citing the £640bn ($868.4bn) infrastructure spending announced recently. 

He also hailed home ownership and said he wants to solve the UK’s productivity puzzle by “fixing the broken housing market,” pointing to the 5% mortgage scheme.

Immediate business reaction noted that his words have to be backed up with actions. 

Tony Danker, Confederation of British Industry director-general, said: “The PM has only stated his ambition on wages. This needs to be backed up by action on skills, on investment and on productivity.

“Ambition on wages without action on investment and productivity is ultimately just a pathway for higher prices

“It’s a fragile moment for our economy. So, let’s work in partnership to overcome the short-term challenges and fulfil our long-term potential. It’s time to get around the table, roll up our sleeves and get things done. It’s time to be united.”

Watch: What is inflation and why is it important?