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Jeremy Hunt Signals The Death Of "Trussonomics" And Admits "Mistakes" Over Mini-Budget

Chancellor Jeremy Hunt has warned of "difficult decisions" to come (Alamy)

4 min read

The new Chancellor Jeremy Hunt has signalled that a complete reversal of Liz Truss's economic plans is incoming, warning of “difficult decisions” to come on spending and tax cuts.

Hunt told the country that “lots of the things that people are hoping for, won't happen,” a day after Liz Truss u-turned on a second major part of her mini-Budget and sacked her chancellor and long-time ally Kwasi Kwarteng. 

He also admitted major errors were made with the infamous "mini-Budget", including the 45p rate tax cut, and failure to make use of an OBR forecast.

Hunt said that he would be asking all departments to find efficiencies and said some taxes “will have to go up” after a turbulent few weeks in the markets triggered by Truss and Kwarteng’s fiscal event last month. It is a stark reversal from the plans for low taxes signalled by Truss throughout her leadership campaign. 

Last month's fiscal statement – where Kwarteng said the government would borrow tens of billions of pounds to fund sweeping tax cuts – was followed by the sharp fall of the pound, rising interest rates, and two major interventions from the Bank of England.

The Chancellor told Sky News: "Spending will not go up as much as people want and there'll be more efficiencies to find and we won't have the speed of tax cuts we're hoping for, and some taxes will have to go up. 

“That's the reality of the very challenging situation we face."

He added: "We have to look at these things in the round and we have to make sure as we take these very difficult decisions, we're honest with people about situation [..]

“We're going to take those difficult decisions."

He similarly told BBC Radio 4 that "there are going to be no easy choices".

"It's going to be very difficult and lots of the things that people are hoping for won't happen. But we will be thinking about the most vulnerable people as we take these decisions," he added. 

The former Foreign Secretary also detailed a number of mistakes he said government had made in recent weeks: “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,” he told Sky. 

"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."

In a dramatic day in Westminster on Friday, the Prime Minister  ditched her commitment to scrap the rise in corporation tax and removed Kwarteng from Number 11 after he was called back early from a trip to the United States, as the pair had come under increasing pressure to change course following turmoil in the markets.  

Truss vowed to carry on and insisted her “mission remains the same”, and said that it was because her plans "went further and faster than markets were expecting" that they had become untenable. 

"We need to act now to reassure the markets of our fiscal discipline. I have therefore decided to keep the increase in corporation tax that was planned by the previous government."

"I have acted decisively today because my priority is ensuring our country's economic stability," she told a Downing Street press briefing. 

But many Tories who have been frustrated with her performance as Prime Minister so far did not seem especially appeased by Friday's concessions from Truss. 

One Tory peer who has said they “cannot support” her leadership told PoliticsHome expressed a continued discomfort with her approach. 

“Trashing the Conservative Party and turning it into an ideological and extreme faction means that many of us who have been members for many years and used to the success of Conservatism resting on pragmatism, non dogma and a One-Nation Policy are inevitably uncomfortable at the moment,” they explained.

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