British Prime Minister Boris Johnson has vowed to reshape the UK economy towards a “high-wage,” “low-tax” system, despite his recent decision to raise taxes in violation of his own election pledge.
Speaking at the annual conference of the ruling Conservative Party on Wednesday, Johnson said his economic vision can be achieved through controlled immigration and investment.
“That’s the direction in which the country is going now—towards a high-wage, high-skilled, high-productivity and, yes, thereby a low-tax economy. That is what the people of this country need and deserve,” he said, adding that it was what British voters wanted when they voted for Brexit in 2016.
Johnson described his low-tax vision for the economy less than one month after he raised taxes to pay for the cost of social care, in breach of a pledge he personally made in the Conservative Party’s election manifesto in 2019.
He said on Wednesday the tax hike was necessary to plug the “huge hole” in Britain’s public finances.
“We have a huge hole in the public finances, we spent £407 billion [$550 billion] on COVID support and our debt now stands at over £2 trillion [$2.7 trillion], and waiting lists will almost certainly go up before they come down,” he said.
Johnson said even former Conservative Prime Minister Margaret Thatcher, known for cutting government spending and taxation, would have approved of his tax decision.
“I can tell you, Margaret Thatcher would not have ignored the meteorite that has just crashed through the public finances. She would have wagged her finger and said, ‘More borrowing now is just higher interest rates, and even higher taxes later.’”
Johnson said that, in order to deliver his vision for reshaping the economy, “we will get on with our job of uniting and levelling up across the UK.”
“The idea in a nutshell is you will find talent, genius, care, imagination, and enthusiasm everywhere in this country, all of them evenly distributed—but opportunity is not,” he said. “Our mission as Conservatives is to promote opportunity with every tool we have.”
The Confederation of British Industry (CBI), a leading business group, welcomed Johnson’s vision for the economy.
“The prime minister has set out a compelling vision for our economy. High wages, high skills, high investment, and high growth,” said CBI Director-General Tony Danker.
But he said Johnson’s ambition for higher wages “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,” he said.
