Speaking to Sky News deputy political editor Sam Coates, the senior campaigner said it was “very clear” there will now be a recession in the UK. But he warned ministers that if they “try to hit us too hard with tax rises, they will actually push us deeper into recession” – which also means worse prospects for the Tories at the next general election. Instead, he called on Mr Sunak and his chancellor Jeremy Hunt to implement policies that “ensure the economy grows” and consider “modest” spending cuts in departmental budgets while protecting the most vulnerable. Politics Live: Sunak takes on Williamson at PMQs Mr Hunt will present the statement to the Commons next Thursday as the new government seeks to plug a budget black hole in the public finances estimated to be as much as £60 billion. A number of rumors are floating around Westminster about what projects could tackle the problem and what taxes could be raised.
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But the Treasury and Number 10 declined to comment on the speculation. Asked what he was most concerned about, Sir Iain told Sam Coates: “We’ve got to get growth. We’re going to go into recession, that’s pretty clear now, and the question now is how deep the recession goes. “If it’s deep and we don’t get out until 2024 or even 2025, our electoral chances are very slim. [the government] they need to do everything they can to get us back to growth very quickly.” “Big problems” for Sunak Sir Iain, who led the Tories between 2001 and 2003, said raising taxes would be counterproductive to achieving growth and the deficit would “actually grow, not shrink”. However, he accepted the prime minister had “big problems”, adding: “He’s going to have to look for spending reductions, spending cuts, a lot of it county-wise – that’s normal – and after COVID, there’s probably some areas he can go into.” “But it also needs to protect other sectors, such as people on very low incomes, benefits and pensions, so those sectors are likely to be excluded.” So what would be the party’s reaction if ministers went ahead with tax increases? “It will be a deep concern if we go overboard with tax increases because, as I say, it is absolutely a fact that tax increases will make the recession deeper,” Sir Iain said. “It won’t do particularly well because many people and economists also believe it will be a [problematic] decision to make. I think he should focus on finding the costs [cuts].”
