By SYLVIA HUI, Associated Press
LONDON (AP) — Britain’s recent Treasury chief on Saturday acknowledged mistakes made by his predecessor and suggested that he may reverse much of Conservative Prime Minister Liz Truss’ tax-cutting plans in an effort to bring stability to the country after weeks of economic and political turbulence.
Jeremy Hunt, who was brought in Friday to switch Kwasi Kwarteng as Treasury chief and restore order in Truss’ administration, warned of “difficult decisions” to come back. He said taxes could rise and public spending budgets would likely be squeezed further in the approaching months.
Truss on Friday fired Kwarteng and ditched her pledge to scrap a planned increase in corporation tax as she sought to hold on to her job — after just six weeks in office.
Truss, a free-market libertarian, had previously insisted that her tax-cutting plans were what Britain needs to spice up economic growth. But a “mini-budget” that she and Kwarteng unveiled three weeks ago, which promised 45 billion kilos ($50 billion) in tax cuts without explaining how the federal government would pay for them, sent the markets and the British pound tumbling and left her credibility in tatters.
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The policies, which included cutting income tax for those on the very best incomes, were also widely criticized for being tone-deaf within the face of Britain’s cost-of-living crisis.
Hunt said Truss recognizes her mistakes and he’s going to place them right.
“It was mistaken to chop the highest rate of tax for the very highest earners at a time where we’re going to need to be asking for sacrifices from everyone to get through a really difficult period,” Hunt told the BBC Saturday.
“And it was mistaken to fly blind and to announce those plans without reassuring individuals with the discipline of the Office for Budget Responsibility that we actually can afford to pay for them,” he added. “We’ve to indicate the world we have now a plan that adds up financially.”
Hunt also indicated that taxes could rise and “it’ll be difficult.”
“Spending is not going to rise by as much as people would really like and all government departments are going to have to search out more efficiencies than they were planning to. And a few taxes is not going to be cut as quickly as people want,” he said.
Hunt, who twice ran within the Conservative Party’s leadership contests, is an experienced lawmaker who previously served in top government posts including as foreign secretary.
His comments Saturday suggested he may dismantle much of the economic pledges that Truss campaigned for and tried to implement during her first weeks in office.
Truss’ position stays fragile. She has faced heavy pressure from across the political spectrum, including reports that senior members of her Conservative Party were plotting to force her from office.
On Friday she avoided repeated questions on why she should remain in office when she and Kwarteng were equally answerable for the federal government’s economic plan and the fallout it triggered.
“I’m absolutely determined to see through what I even have promised,” she said.
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