New chancellor Jeremy Hunt has said there were “mistakes” in Liz Truss and Kwasi Kwarteng’s mini-budget.
Speaking to Sky News on Saturday, Mr Hunt said: “It was a mistake when we were going to call for tough decisions at all levels on tax and spending to reduce the rate of tax paid by the richest.”
Hunt warns of “difficult decisions”; follow the latest policy
He added that it was a mistake to “fly blind” by not accompanying the “fiscal event” with an economic forecast from the Office for Budget Responsibility, which many believe caused the crisis in financial markets.
On the tax cuts, he said, “We won’t have the speed of the cuts that we expected and some taxes will go up.”
Asked if this would mean a return to austerity, he said: “I don’t think we’re talking about austerity like we had in 2010. But we’re going to have to make tough decisions on both spending and taxes. .”
Mr Hunt was appointed chancellor on Friday, an hour after his predecessor Kwasi Kwarteng was sacked after just 38 days in the job.
While his appointment was welcomed by some Tory MPs as “an experienced pair of hands”, others questioned why Mr Kwarteng was the one to go when he was following the policies Mrs Truss espoused in her campaign of leadership
At a hastily arranged press conference in Downing Street on Friday, the prime minister rejected calls for her to resign, saying she was “absolutely determined to see through what I have promised”.
But announcing another twist, he said: “It’s clear that parts of our mini-budget went further and faster than the markets expected, so the way we’re delivering on our mission now has to change.”
The plans of Mr. Kwarteng to reduce the planned rise in corporation tax from 19% to 25%, so they were being scrapped, he announced, saving the Exchequer £18bn a year.
“The last few weeks have been very hard”
Asked why he agreed to take on the difficult task of sorting out the public finances, the new chancellor said he wants to “do the right thing for the British people”.
But he added: “I want to be honest with people, we have some very difficult decisions ahead of us.
“The last few weeks have been very tough, but the context of this comes out of a pandemic and a cost of living crisis.
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“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 will take some very difficult decisions.”
He said all government departments would have to “find more efficiency than they were thinking of finding”.
However, he declined to give any specific commitments before the October 31 fiscal statement.
Asked if the NHS would still get the money it was promised in the health and social care tax, he said “the government has already committed”.
He added: “I’m not going to make any specific commitments on specific departments now, or indeed on specific taxes, because we have to look at these things in the round. And we have to make sure as we make those decisions very difficult, we are honest with people about the situation we face.”