Sajid Javid warns Boris Johnson not to go for ‘self-defeating’ tax rises to balance books in wake of coronavirus economic crisis
Sajid Javid quit as Boris Johnson’s chancellor earlier this year
Sajid Javid has warned Boris Johnson not to raise taxes to try to repair the public finances in the wake of the coronavirus crisis.
The former chancellor told Sky News it would be “self-defeating” to hike levies, as he urged the Prime Minister to “stick with the economic model that we know works“.
The intervention comes days after Mr Johnson said the Government had “absolutely no intention of returning” to a programme of public spending cuts to try to balance the books.
He told MPs when pressed on austerity: “That is not going to be our approach.”
The Office for Budget Responsibility last month estimated that the string of measures introduced by Mr Javid’s successor Rishi Sunak to contain the economic damage of the pandemic could cost the Treasury more than £100bn in extra borrowing this year.
"That's going to be critical, that we stick with the economic model that we know works" - Sajid Javid
But Mr Javid, who dramatically quit earlier this year amid a row with Number 10, said introducing tax rises to balance the books would "strangle any economic recovery".
He told Sky: "Many things will change as a result of this crisis. One thing that shouldn't change is our understanding of the economic model that leads to the highest growth rate possible which is still going to be a free-enterprise, low tax, competitive economy.
"This is the best way to make sure that we are earning enough as a country to pay for the public services we all rely on.
"It was true then, and it's true now. And that's going to be critical, that we stick with the economic model that we know works."
Amid fierce Cabinet debate over the easing of the nationwide Covid-19 lockdown, Mr Javid meanwhile urged the Prime Minister to focus on “relaxing” measures “as much as you can”.
The Conservative MP said: "Running the economy hot you could say, in a way that you are trying to take into account, not just the sort of necessity to control the virus, but also the wider impact on society - those job losses, those opportunities foregone, particularly for younger people.
"The rise of domestic violence, child abuse, of mental health cases. All of that needs to be taken into account."
The intervention comes after the Bank of England warned that the UK is set to enter the worst recession for 300 years, with output plunging by close to 30% in the first half of 2020.
Overall, it predicted that the UK economy would shrink by 14% this year and Britain would face “a substantial increase in unemployment”.
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