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Johnson and Sunak Try to Reassure Tories Over Tax ‘Horror’

Johnson and Sunak Try to Reassure U.K. Tories Over Tax ‘Horror’

U.K. Prime Minister Boris Johnson sought to win back the trust of his own colleagues after weeks of criticism and policy reversals left his coronavirus strategy in disarray.

As lawmakers returned to Westminster after the summer break, the premier appealed directly to Conservative members of Parliament to help persuade the public to go to work and get the economy back to normal.

Johnson and Sunak Try to Reassure Tories Over Tax ‘Horror’

Chancellor of the Exchequer Rishi Sunak promised Tories there would be no “horror show” of tax rises, but left himself room for temporary hikes to pay off the pandemic debts in the future.

Together, Johnson and Sunak -- the double act at the top of the British government -- spent much of Wednesday in a series of face-to-face meetings with Tories who have been anxious about their handling of the virus crisis. Many Conservatives are worried that potential tax rises will stifle an economy that’s already deep in recession.

Yet even as the prime minister set about trying to regain the initiative, his government announced yet another policy U-turn, this time on plans to ease lockdown restrictions in parts of northwestern England.

In recent weeks, Johnson’s team has reversed policies on issues including school exam grading, the wearing of face coverings in shops and in schools, its contact-tracing program to contain the spread of the virus.

Another U-Turn

The latest reversal is a blow to the credibility of Johnson’s broader pandemic strategy and will add to the impression that his government is not in control as he seeks desperately to revive the stalled economy and get the public back to work.

The government has also delayed its public information campaign encouraging people to return to their workplaces, according to a report in the Telegraph newspaper. It was due to start this week, but now won’t start until next week at the earliest, the newspaper said, without saying how it got the information.

Johnson’s team is said to be divided over how strongly to encourage workers back, with some concerned about the rising spread of the virus, the Telegraph reported.

On Thursday, in its latest bid to better control the spread of coronavirus, Johnson’s government announced 500 million pounds ($668 million) of new spending on virus testing that delivers quick results, starting a community trial in Salford and expanding existing trials in Southampton and Hampshire.

‘Every New Innovation’

An improved testing system is key to Johnson’s plan to return the country to normalcy, for it can be used to spot local outbreaks and avoid widespread lockdowns.

“Testing is a vital line of defense in combating this pandemic,” Health Secretary Matt Hancock said in a statement. “We need to use every new innovation at our disposal to expand the use of testing, and build the mass testing capability that can help suppress the virus and enable more of the things that make life worth living.”

In a private meeting Wednesday inside Parliament, Johnson told MPs that, as community leaders, they should urge their constituents to return to workplaces as soon as possible so the country can get moving again, two people present at the meeting said.

Earlier in the day, Sunak promised there won’t be “a horror show of tax rises with no end in sight,” after Tory colleagues warned that increasing taxes would stifle the already ailing economy.

Cautious

Sunak’s careful wording suggested he’s not ruling out temporary tax increases to pay off the vast debts racked up during the pandemic, but is still committed to the party’s goal of maintaining a low-tax economy in the longer run.

“We will need to do some difficult things,” Sunak told MPs. He said the Tory party needs to “be honest” with the British public about “the challenges we face,” while “showing them how we plan to correct our public finances and give our country the dynamic, low tax economy we all want to see.”

The depth of continuing concern among Tory MPs was emphasized on Thursday when Graham Brady, chairman of the influential 1922 committee of rank-and-file Tory lawmakers, called for more “consistency” from ministers and warned Sunak over his fiscal plans.

“We should be very, very cautious in exploring tax rises,” Brady told BBC radio. “We have to be aware that raising taxes, and raising the wrong types of taxes especially, can be a way in which you stifle economic growth and prospects rather than guaranteeing them.”

The cost of responding to the pandemic has sent the U.K.’s national debt to more than 2 trillion pounds for the first time in history.

©2020 Bloomberg L.P.