Rishi Sunak warns that Covid bailout "economic shock" will be "exposed" if he "takes away the prime minister's credit card" ahead of this week's crucial spending review
- The Chancellor asked if the Prime Minister needed an elf on the shelf to keep him in check
- Mr. Sunak replied, “I like this idea. I should take his credit card away. & # 39;
- The Chancellor is preparing to release a review of the spending on Wednesday
- Mr. Sunak warned that "people will see the extent of the economic shock openly"
Rishi Sunak warned of tax hikes in the spring as the pandemic's "economic shock" set in on unsustainable government spending.
The Chancellor joked about having an elf on the shelf to make sure Boris Johnson was behaving, adding, "I should take his credit card away."
Mr Sunak made the joke as he prepared to reveal his plan to balance the books and get Britain out of the pandemic in his spending review on Wednesday.
In an interview with the Sunday Times, he pointed out that taxes could rise in the spring and warned that current spending is unsustainable.
"People will see the extent of the economic shock," said the Chancellor.
"We can see the data every month and obviously the shock our economy is currently in is substantial."
The Chancellor made the joke as he prepares to reveal how he plans to balance Britain's books and recover from the pandemic.
The two men are known to have collided on their way out of the economic swamp of the coronavirus
He suggested spending cuts and tax hikes must follow, but said it was a matter of timing while the economy was in trouble.
"While this is happening, it is absolutely right to support the economy and jobs are my number one priority, but – obviously – you cannot keep borrowing at this level indefinitely," he said.
Mr Sunak and Mr Johnson are known to clash on their way out of the coronavirus swamp.
But today the Chancellor made it clear in an interview with Times Radio: “The credit card thing was a joke. We have an incredibly close relationship.
The prime minister has been trying to rule his chancellor over the past few days in order to put more money into green economic projects and the military.
Mr Sunak has suggested that he could impose a public sector wage freeze in his spending review but insisted the nation will not see a return to austerity next week.
He will announce a multi-billion dollar plan on Wednesday to invest in long-term infrastructure projects and fund the fight against the coronavirus pandemic.
Mr. Sunak insisted that it was not time to impose tax hikes "in the fog of enormous economic uncertainty" but did not rule out capping the salaries of millions of public sector workers.
He said a combination of spending cuts and tax hikes is expected after the crisis, but added that while the economy is in trouble it is a "matter of timing".
In an interview prior to his spending review on Wednesday, he mentioned Rocky, an elf-on-the-shelf toy that comes out every December to make sure his two children are behaving
It comes as Downing Street rose to a record high of £ 22.3 billion last month, with the UK expected to hit £ 350 billion for the year given the pandemic.
The Institute for Fiscal Studies previously warned that it would take £ 40 billion in taxes and spending cuts to repay the money.
Paul Johnson, director at the Institute for Fiscal Studies, said the amount borrowed during the pandemic was "the highest outside of WWI and WWII," but said more may be needed in the years to come.
He told the Andrew Marr Show that at some point the UK's position would become "unsustainable" and that taxes would have to be levied, but that it probably would not be in the short term.
"We are probably looking to the mid-2020s, but we need a clear path to achieve this," he said.
“We don't know when this is no longer sustainable, but when and when and if so, the consequences can be really dire.
"The big judgment, and an awfully difficult one, is when to start taking these steps."
When asked if the public should accept tax increases, Mr. Johnson said, “I think that's right.
"I don't think it's right to scare people with the idea that this is going to happen right away, and I think it's absolutely right that the government is clear that in the short term it will do what it has to do, to support jobs and the economy.
"It's really important to get the message right."