LONDON (AP) — Britain’s new treasury chief on Saturday acknowledged mistakes made by his predecessor and suggested he could roll back much of Conservative Prime Minister Liz Truss’s tax cut plans to bring stability. home after weeks of economic and political turmoil. .
Jeremy Hunt, who was appointed on Friday to replace Kwasi Kwarteng as Treasury chief and restore order to the Truss administration, warned of “difficult decisions” ahead. He said taxes could rise and government spending budgets would likely be cut further in the coming months.
Truss fired Kwarteng on Friday and abandoned her promise to scrap a planned corporate tax hike as she sought to keep her job – after just six weeks in office.
Truss, a free-market libertarian, had previously insisted her plans to cut taxes were what Britain needed to boost economic growth. But a ‘mini-budget’ she and Kwarteng unveiled three weeks ago, which promised 45 billion pounds ($50 billion) in tax cuts without explaining how the government would pay for them, sent markets tumbling. and the pound sterling and left its credibility. tattered.
The policies, which included cutting income tax for those on the highest incomes, have also been widely criticized for being deaf to Britain’s cost of living crisis.
Hunt said Truss recognizes his mistakes and will correct them. Hunt is expected to meet with Treasury officials later and Truss on Sunday.
“It was a mistake to cut the top tax rate for the top earners at a time when we’re going to have to ask everyone for sacrifices to get through a very difficult time,” Hunt told the BBC on Saturday. .
“And it was a mistake to fly blind and announce these plans without reassuring people with the discipline of the Office for Budget Responsibility that we can actually afford to pay for them,” he added. . “We need to show the world that we have a plan that adds up financially.”
Hunt also indicated taxes could rise and warned ‘it’s going to be tough’, although he declined to give details on how he plans to balance the books ahead of a full budget statement due October 31. .
“Spending will not increase as much as people would like and all departments will have to find more efficiencies than they had anticipated. And some taxes won’t be reduced as quickly as people want,” he said.
Hunt, who has twice stood in the Conservative Party leadership races, is an experienced lawmaker who has previously held senior government posts, including as foreign secretary.
His comments on Saturday suggested he could dismantle many of the economic promises that Truss had campaigned and tried to implement in his first weeks in office.
Truss’s reversal of his promise to halt a planned corporate tax hike came after an earlier rollback on his plan to cut the top income tax rate for top earners.
His position remains fragile. She faced heavy pressure from all political walks of life, including reports that senior members of her conservative party were plotting to force her out of office.
On Friday, she avoided repeated questions about why she should remain in office when she and Kwarteng were also responsible for the government’s economic plan and the fallout it triggered.
“I am absolutely determined to deliver what I promised,” she said.
When asked on Saturday how long Truss would remain in charge, Hunt said ‘what the country wants now is stability’ and that she would be judged on what she delivers until the next few months. general elections of 2024.
“She has been prime minister for less than five weeks and I would just say this – I think she will be tried in an election,” he said.