Liz Truss's new Chancellor has signalled his plan to up-end the Prime Minister's entire econ strategy, in an extraordinary rebuke of the pledges that brought her into office.
By Dominic McGrath/PA
Jeremy Hunt, widely seen now as the most powerful figure in Government, used a series of broadcast interviews on Saturday morning to signal that Ms Truss's immediate economic plan is now defunct as he suggested that tax rises could form part of a painful fiscal package designed to restore market confidence in the UK.
Mr Hunt, a former foreign secretary, was parachuted into Number 11 to replace Kwasi Kwarteng in a bid to restore order to Ms Truss's ailing administration.
In his first full day in office, he warned of "difficult decisions" to come as he suggested that taxes could rise and budgets - including on health and defence - would likely be squeezed further in the coming months.
Chancellor Jeremy Hunt at 10 Downing Street
(Photo by Leon Neal/Getty Images)
Ms Truss on Friday sacked her friend and chancellor Kwasi Kwarteng and ditched her commitment to drop the planned rise in corporation tax from 19% to 25%, after three weeks of turmoil on the financial markets in the wake of Mr Kwarteng's £43 billion mini-budget tax giveaway.
Mr Hunt, twice a Tory leadership contender, wasted no time in criticising the mini-budget but endorsed the "fundamentals" of the push for growth.
Ms Truss on Friday sacked her friend and chancellor Kwasi Kwarteng and ditched her commitment to drop the planned rise in corporation tax from 19% to 25%, after three weeks of turmoil on the financial markets in the wake of Mr Kwarteng's £43 billion mini-budget tax giveaway.
Mr Hunt, twice a Tory leadership contender, wasted no time in criticising the mini-budget but endorsed the "fundamentals" of the push for growth.
He told Sky News: "It was a mistake when we're going to be asking for difficult decisions across the board on tax and spending to cut the rate of tax paid by the very wealthiest.
"It was a mistake to fly blind and to do these forecasts without giving people the confidence of the Office of Budget Responsibility saying that the sums add up. The Prime Minister has recognised that, that's why I'm here."
Allies of Mr Hunt had likened his new role to that of the "chief executive" in Government and on Saturday Mr Hunt acknowledged that the prime minister had effectively relinquished control of the public finances over to him.
The Chancellor, who will meet with Treasury officials later and with Ms Truss at Chequers on Sunday, told BBC Radio 4's Today programme he now had a "clean slate" on the mini-budget, as he prepares to deliver a highly anticipated fiscal statement on October 31.
"I'm leaving open all possibilities this morning," he said. "Nonetheless, his comments indicated that cuts to public spending and tax rises could be coming.
"Spending will not rise by as much as people would like and all Government departments are going to have to find more efficiencies than they were planning to."
"And some taxes will not be cut as quickly as people want. Some taxes will go up. So it's going to be difficult."
Appearing to rule out an early election, Mr Hunt repeatedly insisted that voters now wanted stability and in 18 months' time would be able to "judge" Ms Truss at the ballot box.
But Mr Hunt's comments may only add to the sense among some Tory MPs that Ms Truss is increasingly powerless in Downing Street, with her party split about its next steps.
Jeremy Hunt admits government made mistakes and says some taxes will rise
Jeremy Hunt, who replaced sacked Kwasi Kwarteng as Chancellor, said in his first interview in the role "mistakes had been made"
By Kelly Ashmore
15 OCT 2022
The new Chancellor Jeremy Hunt has admitted 'mistakes were made' over the mini budget in his first interview since taking on his new job. The former leadership candidate replaced Kwasi Kwarteng in Number 11 on Friday, October 14, on another day of turmoil.
Speaking to Sky News on Saturday morning as he started his first full day in the new role, Mr Hunt admitted errors had been made and warned “difficult decisions” lay ahead.
He said: “There were mistakes. It was a mistake when we’re going to be asking for difficult decisions across the board on tax and spending to cut the rate of tax paid by the very wealthiest.
“It was a mistake to fly blind and to do these forecasts without giving people the confidence of the Office of Budget Responsibility saying that the sums add up.
“The Prime Minister’s recognised that, that’s why I’m here.” Mr Hunt was parachuted into the role yesterday after PM Liz Truss fired Kwasi Kwarteng just 38 days after he was appointed as Chancellor.
The ex-health secretary added: "I want to do the right thing for British people. “It’s a big honour to do the job that I’ve been asked to do by the Prime Minister but I want to be honest with people: we have some very difficult decisions ahead.
The new Chancellor Jeremy Hunt has admitted 'mistakes were made' over the mini budget in his first interview since taking on his new job. The former leadership candidate replaced Kwasi Kwarteng in Number 11 on Friday, October 14, on another day of turmoil.
Speaking to Sky News on Saturday morning as he started his first full day in the new role, Mr Hunt admitted errors had been made and warned “difficult decisions” lay ahead.
He said: “There were mistakes. It was a mistake when we’re going to be asking for difficult decisions across the board on tax and spending to cut the rate of tax paid by the very wealthiest.
“It was a mistake to fly blind and to do these forecasts without giving people the confidence of the Office of Budget Responsibility saying that the sums add up.
“The Prime Minister’s recognised that, that’s why I’m here.” Mr Hunt was parachuted into the role yesterday after PM Liz Truss fired Kwasi Kwarteng just 38 days after he was appointed as Chancellor.
The ex-health secretary added: "I want to do the right thing for British people. “It’s a big honour to do the job that I’ve been asked to do by the Prime Minister but I want to be honest with people: we have some very difficult decisions ahead.
Prime Minister Liz Truss delivering her keynote speech during the Conservative Party annual conference at the International Convention Centre in Birmingham. Ms Truss has refused to commit to increasing benefits in line with inflation. (Image: PA)
“The last few weeks have been very tough but the context of course is coming out of a pandemic and a cost-of-living crisis. And the thing that people want, markets want, the country needs now, is stability. No Chancellor can control the markets.
“But what I can do is show that we can pay for our tax and spending plans and that is going to need some very difficult decisions on both spending and tax.”
However, the new chancellor declined to give any specifics ahead of the fiscal statement due on October 31.
He added: "The fundamental strategy behind it all, which is that we have to solve the growth paradox if we want well-funded public services like the NHS and to keep taxes low and falling, then we have to increase our growth rate. That is absolutely right and I also would like to be able to cut corporation tax.
“I’m not going to make any specific commitments about specific departments now, or indeed on the tax side about specific taxes because we have to look at these things in the round.
"We have to make sure as we take these very difficult decisions, we’re honest with people about the situation we face.”
“The last few weeks have been very tough but the context of course is coming out of a pandemic and a cost-of-living crisis. And the thing that people want, markets want, the country needs now, is stability. No Chancellor can control the markets.
“But what I can do is show that we can pay for our tax and spending plans and that is going to need some very difficult decisions on both spending and tax.”
However, the new chancellor declined to give any specifics ahead of the fiscal statement due on October 31.
He added: "The fundamental strategy behind it all, which is that we have to solve the growth paradox if we want well-funded public services like the NHS and to keep taxes low and falling, then we have to increase our growth rate. That is absolutely right and I also would like to be able to cut corporation tax.
“I’m not going to make any specific commitments about specific departments now, or indeed on the tax side about specific taxes because we have to look at these things in the round.
"We have to make sure as we take these very difficult decisions, we’re honest with people about the situation we face.”
Tory donors turn on Liz Truss even as Jeremy Hunt rips up disastrous mini-Budget
‘Time is running out’ to remove the prime minister, says top Conservative donor. ‘The more we dig this hole the deeper it is going to be’
Kate Devlin
Whitehall Editor
Conservative donors and business leaders are turning on Liz Truss even after the new chancellor ditched many of her key policies in a bid to save the government.
In his first full day in post, Jeremy Hunt admited there would be tax rises and spending cuts ahead as he urged Tory MPs not to oust her.
He also refused to say if he would keep Ms Truss’s flagship pledges to cut the basic rate of income tax and increase defence spending to 3 per cent of GDP.
Despite his bid to calm nerves, one of the Conservative Party’s most generous donors, John Griffin, said the prime minister was “out of her depth” and called for her to be replaced.
Lord Rose, the Tory peer and chairman of the Asda supermarket chain, described her as a “busted flush” and said the current situation was unsustainable.
‘Time is running out’ to remove the prime minister, says top Conservative donor. ‘The more we dig this hole the deeper it is going to be’
Kate Devlin
Whitehall Editor
Conservative donors and business leaders are turning on Liz Truss even after the new chancellor ditched many of her key policies in a bid to save the government.
In his first full day in post, Jeremy Hunt admited there would be tax rises and spending cuts ahead as he urged Tory MPs not to oust her.
He also refused to say if he would keep Ms Truss’s flagship pledges to cut the basic rate of income tax and increase defence spending to 3 per cent of GDP.
Despite his bid to calm nerves, one of the Conservative Party’s most generous donors, John Griffin, said the prime minister was “out of her depth” and called for her to be replaced.
Lord Rose, the Tory peer and chairman of the Asda supermarket chain, described her as a “busted flush” and said the current situation was unsustainable.
Another major donor, Alexander Temerko, did not call for Ms Truss to go, but said: “I hope that the sense of self-preservation will force the government to cooperate with business to pursue a coordinated, socially responsible economic policy.”
In a highly unusual show of strength, which in turn highlighted the prime minister’s weakness, Mr Hunt admitted the government’s disastrous mini-Budget, which spooked the markets and saw the pound fall to its lowest level in 37 years, “went too far, too fast”.
He said the planned tax cut for the wealthiest and a decision not to publish Office of Budget Responsibility (OBR) calculations has been a mistake, and promised a clean slate.
In comments that infuriated parts of the Tory right, Mr Hunt said “some taxes will go up” as he works to balance the Treasury books.
Reports on Saturday night suggested the chancellor was set to delay Kwasi Kwarteng’s promise to reduce the basic rate of income tax by a year.
Bank of England governor Andrew Bailey has warned that inflationary pressures could mean a higher-than-expected hike in interest rates soon.
Mr Hunt denied Britain was returning to an era of austerity but admitted “difficult” decisions would have to be made on spending, refusing to commit to raising benefits in line with inflation and signalling that the NHS would not be immune from the squeeze.
On the prime minister’s future, Mr Hunt insisted she had “listened” and warned against removing her from office, saying “I think the last thing people want now is more political instability”.
But Mr Griffin, founder of the Addison Lee taxi firm and who has given £4m to the Tories since 2013, said that the chaotic scenes on Friday, when Ms Truss sacked her first chancellor and announced a major U-turn on corporation tax, showed she was “out of her depth”.
He compared Ms Truss to Theresa May, ousted by the party in 2019, and said: “We are back in the same mode now. And in the end people are going to see sense. Time is running out. The more we dig this hole the deeper it is going to be. We need to all sit down now – senior members of society from all parties – to look at this. This is a moment in history and we have to really do what is right.”
Mr Griffin, who was highly critical of Boris Johnson over Partygate, also suggested that the former prime minister was the best person to replace Ms Truss. “It would be nice if there was someone else in prospect,” he said, “but we have to look closely at where our best chances lie.”
Lord Rose, the former boss of Marks & Spencer, who sits in the House of Lords as a Conservative peer, suggested Mr Hunt’s efforts were in vain because the “current situation is completely untenable and cannot be sustained”.
“In my view the prime minister is now a busted flush,” he told the BBC’s Today programme.
Tory MPs agreed that Mr Hunt’s intervention was not enough to save Ms Truss. “She can’t lead us into the next election, everyone knows that – it is just whether she goes in the short term or the long term,” said one.
Senior Tories were said to be plotting to swiftly oust the prime minister, with some reported to want defence secretary Ben Wallace to replace her in Downing Street.
There were reports on Mr Hunt is due to meet Ms Truss on Sunday at Chequers.
In a highly unusual show of strength, which in turn highlighted the prime minister’s weakness, Mr Hunt admitted the government’s disastrous mini-Budget, which spooked the markets and saw the pound fall to its lowest level in 37 years, “went too far, too fast”.
He said the planned tax cut for the wealthiest and a decision not to publish Office of Budget Responsibility (OBR) calculations has been a mistake, and promised a clean slate.
In comments that infuriated parts of the Tory right, Mr Hunt said “some taxes will go up” as he works to balance the Treasury books.
Reports on Saturday night suggested the chancellor was set to delay Kwasi Kwarteng’s promise to reduce the basic rate of income tax by a year.
Bank of England governor Andrew Bailey has warned that inflationary pressures could mean a higher-than-expected hike in interest rates soon.
Mr Hunt denied Britain was returning to an era of austerity but admitted “difficult” decisions would have to be made on spending, refusing to commit to raising benefits in line with inflation and signalling that the NHS would not be immune from the squeeze.
On the prime minister’s future, Mr Hunt insisted she had “listened” and warned against removing her from office, saying “I think the last thing people want now is more political instability”.
But Mr Griffin, founder of the Addison Lee taxi firm and who has given £4m to the Tories since 2013, said that the chaotic scenes on Friday, when Ms Truss sacked her first chancellor and announced a major U-turn on corporation tax, showed she was “out of her depth”.
He compared Ms Truss to Theresa May, ousted by the party in 2019, and said: “We are back in the same mode now. And in the end people are going to see sense. Time is running out. The more we dig this hole the deeper it is going to be. We need to all sit down now – senior members of society from all parties – to look at this. This is a moment in history and we have to really do what is right.”
Mr Griffin, who was highly critical of Boris Johnson over Partygate, also suggested that the former prime minister was the best person to replace Ms Truss. “It would be nice if there was someone else in prospect,” he said, “but we have to look closely at where our best chances lie.”
Lord Rose, the former boss of Marks & Spencer, who sits in the House of Lords as a Conservative peer, suggested Mr Hunt’s efforts were in vain because the “current situation is completely untenable and cannot be sustained”.
“In my view the prime minister is now a busted flush,” he told the BBC’s Today programme.
Tory MPs agreed that Mr Hunt’s intervention was not enough to save Ms Truss. “She can’t lead us into the next election, everyone knows that – it is just whether she goes in the short term or the long term,” said one.
Senior Tories were said to be plotting to swiftly oust the prime minister, with some reported to want defence secretary Ben Wallace to replace her in Downing Street.
There were reports on Mr Hunt is due to meet Ms Truss on Sunday at Chequers.
But his plans almost immediately prompted a backlash from Thatcherite Tory MP John Redwood, who tweeted: “You cannot tax your way to higher growth. If you tax too much you end up borrowing more as you have a worse slowdown.”
A government source said: “The PM is committed to delivering the higher growth, better-paid jobs and greater opportunities the country needs and deserves.”
A government source said: “The PM is committed to delivering the higher growth, better-paid jobs and greater opportunities the country needs and deserves.”
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