Jeremy Hunt arrives at his home in London after he was appointed Chancellor of the Exchequer following the resignation of Kwasi Kwarteng. Picture date: Friday October 14, 2022.
Aaron Chown | Pa Images | Getty Images
Britain’s recent finance minister Jeremy Hunt said on Saturday that some taxes could have to go up, signaling one other abrupt policy U-turn by Prime Minister Liz Truss who’s battling to save lots of her leadership just over a month into her term.
In an try to appease financial markets which have been in turmoil for 3 weeks, Truss fired Kwasi Kwarteng as her chancellor of the exchequer on Friday and scrapped parts of their controversial economic package.
In a hurried news conference shortly after dismissing Kwarteng, Truss said the corporation tax rate would increase, abandoning her plan to maintain it at current levels, and government spending would rise by lower than previously planned.
Big, unfunded tax cuts were a central plank of Truss’s original plans, but Hunt said tax increases were on the cards.
“We could have some very difficult decisions ahead,” he told Sky News.
“The thing that folks want, the markets want, the country needs now, is stability,” Hunt said. “No chancellor can control the markets. But what I can do is show that we are able to pay for our tax and spending plans and that’s going to wish some very difficult decisions on each spending and tax.”
Hunt is because of announce the federal government’s medium-term budget plans on Oct. 31, a key test of its ability to point out investors that it could actually restore its economic policy credibility.
He said spending wouldn’t rise by as much as people would love and all government departments were going to have to seek out more efficiencies than they were planning.
“Some taxes won’t be cut as quickly as people want, and a few taxes will go up. So it is going to be difficult,” he said.
Kwarteng’s Sept. 23 fiscal statement prompted a backlash in financial markets that was so ferocious that the Bank of England needed to intervene to forestall pension funds being caught up within the chaos as borrowing costs surged.
Hunt said he agreed with Truss’s fundamental approach of in search of to spark economic growth but the way in which she and Kwarteng went about it had not worked.
“There have been mistakes. It was a mistake when we will be asking for difficult decisions across the board on tax and spending to chop the speed of tax paid by the very wealthiest,” he said.
“It was a mistake to fly blind and to do these forecasts without giving people the arrogance of the Office of Budget Responsibility saying that the sums add up. The prime minister has recognized that, that is why I’m here.”
Truss was because of spend the weekend attempting to shore up her flagging support inside the Conservative Party, with newspapers quoting lawmakers who questioned her ability to remain within the job.
On Monday, the British government bond market faces a test when it should function for the primary time without the emergency buying support provided by the BoE since Sept. 28. Gilt prices fell sharply late on Friday after Truss’s news conference.
