Jeremy Hunt warns of making ‘difficult decisions’ on spending and tax – as he admits government went ‘too far, too fast’
Jeremy Hunt has admitted the government went “too far, too fast” and that he will have to take some “very difficult decisions” on spending and tax to get the economy back up and running.
Earlier, the new chancellor admitted there “were mistakes” in Liz Truss and Kwasi Kwarteng’s mini-budget in an interview with Sky News.
But in an apparent bid to restore trust in the government’s handling of the economy, Mr Hunt released a statement on Saturday night saying his focus is on “growth underpinned by stability”.
“The drive on growing the economy is right – it means more people can get good jobs, new businesses can thrive and we can secure world-class public services. But we went too far, too fast,” he said.
He appeared to warn the public that the road ahead will not be easy, saying the government has to “be honest with people”.
“We are going to have to take some very difficult decisions both on spending and on tax to get debt falling but the top of our minds when making these decisions will be how to protect and help struggling families, businesses and people,” he said.
“I will set out clear and robust plans to make sure government spending is as efficient as possible, ensure taxpayer money is well spent and that we have rigorous control over our public finances.”
Mr Hunt was appointed as the new chancellor on Friday, following Mr Kwarteng’s sacking after just 38 days in the job.
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Hunt: There were mistakes
While some Tory MPs welcomed the new appointment as “an experienced pair of hands”, others questioned why Mr Kwarteng was the one who had to go when he was pursuing policies Ms Truss espoused in her leadership campaign.
Meanwhile, the Sunday Times is reporting that Mr Hunt will delay a planned 1p reduction to the basic rate of income tax by one year after the country’s fiscal watchdog warned that the public finances were in a worse state than expected.
Soaring interest rates
It comes as the Bank of England (BoE) said interest rates will have to be raised higher than initially hoped in the face of inflationary pressure.
In August, the bank said it expected the rate of inflation to peak at 13% this year – and remain above 10% for a few months before falling.
But now, BoE governor Andrew Bailey says the realities of inflation might require a stronger interest rates response from the central bank.
Jeremy Hunt and Andrew Bailey. Pic: HM Treasury
Mr Bailey said he spoke to Mr Hunt on Friday and had a “meeting of minds” on the issue of “fiscal sustainability”.
Taking questions in Washington, he said: “I can tell you that I spoke to Jeremy Hunt, the new chancellor, yesterday. I can tell you that there was a very clear and immediate meeting of minds between us about the importance of fiscal sustainability and the importance of taking measures to do that.”
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He continued: “It’s not appropriate for me to constrain the choices he makes but the very clear message I would give and it is a clear message for everybody, including a clear message for markets.
“I can tell you there is a very clear and immediate meeting of minds on the importance of stability and sustainability.”
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‘Mistakes’ in mini-budget
Reflecting on the government’s recent mini-budget, Mr Hunt told Sky News that “it was a mistake when we were 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 added that it was also an error to “fly blind” by not accompanying the “fiscal event” with an economic forecast by the Office for Budget Responsibility, which many argue sent the financial markets into turmoil.
On tax cuts, he said: “We won’t have the speed of tax cuts we were hoping for and some taxes will go up.”
Asked if this would mean a return to austerity, he replied: “I don’t think we’re talking about austerity in the way we had it in 2010. But we’re going to have to take tough decisions on both spending and tax.”
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‘It was a mistake to fly blind’
Mr Hunt’s appointment has so far failed to dampen speculation of an imminent coup against Ms Truss.
Rishi Sunak, the defeated leadership contender and former chancellor, as well as Defence Secretary Ben Wallace, have been among the names flagged as potential replacements.
Elsewhere, there was speculation that including the Ministry of Defence (MoD) in any round of spending cuts could spark a clash with Mr Wallace.
A MoD source said he will hold Ms Truss to the pledges made.
Ms Truss promised to increase defence spending to 3% of GDP by 2030 in the wake of the war in Ukraine.
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World
‘Widespread sexual violence’ took place during Hamas’s 7 October attacks, report by Israeli experts says
A newly released report led by Israeli legal and gender experts presents detailed evidence alleging “widespread and systematic” sexual violence during the Hamas-led terror attack on 7 October.
Warning: This story contains descriptions of rape and sexual violence
The findings, published by the Dinah Project, argue that these acts amount to conflict-related sexual violence (CRSV), and assert that “Hamas used sexual violence as a tactical weapon of war”.
The report draws on 18 months of investigation and is based on survivor testimonies, eyewitness accounts, and interviews with first responders, morgue personnel and healthcare professionals.
According to the Dinah Project, the documented patterns – such as forced nudity, gang rapes, genital mutilation, and threats of forced marriage – indicate a deliberate and coordinated use of sexual violence by Hamas operatives during the attack.
Reported incidents span at least six locations, including the Nova music festival, and several kibbutzim in southern Israel.
A destroyed car near the police station in Sderot, following the 7 October attacks by Hamas. Pic: AP
One section of the report describes victims “found fully or partially naked from the waist down, with their hands tied behind their backs and/or to structures such as trees and poles, and shot”.
At the Nova music festival and surrounding areas, the investigators found “reasonable grounds to believe” that multiple women were raped or gang-raped before being killed.
The report’s findings are consistent with earlier investigations by the United Nations and the International Criminal Court (ICC).
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The UN’s Special Representative on Sexual Violence in Conflict previously concluded that there were “reasonable grounds to believe” CRSV took place during the attack.
Destroyed vehicles near the grounds of the Supernova electronic music festival. Pic: AP
Significantly, the Dinah Project urges the international community to officially recognise the use of sexual violence by Hamas as a deliberate strategy of war and calls on the United Nations to add Hamas to its list of parties responsible for conflict-related sexual violence.
Listen to The World with Richard Engel and Yalda Hakim every Wednesday
The nature and scale of sexual violence on 7 October have been a subject of intense controversy, with some accusing parties of weaponising the narrative for political ends.
This report seeks to confront what its authors call “denial, misinformation, and global silence,” and to provide justice for the victims.
Hamas has denied that its fighters have used sexual violence and mistreated female hostages.
World
Israeli soldiers ‘psychologically broken’ after ‘confronting the reality’ in Gaza, UN expert says
A UN expert has said some young soldiers in the Israeli Defence Forces are being left “psychologically broken” after “confront[ing] the reality among the rubble” when serving in Gaza.
Francesca Albanese, the UN Human Rights Council’s special rapporteur on the occupied Palestinian territories, was responding to a Sky News interview with an Israeli solider who described arbitrary killing of civilians in Gaza.
She told The World with Yalda Hakim that “many” of the young people fighting in Gaza are “haunted by what they have seen, what they have done”.
“It doesn’t make sense,” Ms Albanese said. “This is not a war, this is an assault against civilians and this is producing a fracture in many of them.
“As that soldier’s testimony reveals, especially the youngest among the soldiers have been convinced this is a form of patriotism, of defending Israel and Israeli society against this opaque but very hard felt enemy, which is Hamas.
“But the thing is that they’ve come to confront the reality among the rubble of Gaza.”
An Israeli soldier directs a tank near the border with the Gaza Strip, in southern Israel. Pic: AP
Being in Gaza is “probably this is the first time the Israeli soldiers are awakening to this,” she added. “And they don’t make sense of this because their attachment to being part of the IDF, which is embedded in their national ideology, is too strong.
“This is why they are psychologically broken.”
Jonathan Conricus, a former IDF spokesman who is now a senior fellow at the Foundation for Defence of Democracies, said he believes the Sky News interview with the former IDF solider “reflects one part of how ugly, difficult and horrible fighting in a densely populated, urban terrain is”.
“I think [the ex-soldier] is reflecting on how difficult it is to fight in such an area and what the challenges are on the battlefield,” he said.
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Ex-IDF spokesperson: ‘No distinction between military and civilians’
‘An economy of genocide’
Ms Albanese, one of dozens of independent UN-mandated experts, also said her most recent report for the human rights council has identified “an economy of genocide” in Israel.
The system, she told Hakim, is made up of more than 60 private sector companies “that have become enmeshed in the economy of occupation […] that have Israel displace the Palestinians and replace them with settlers, settlements and infrastructure Israel runs.”
Israel has rejected allegations of genocide in Gaza, citing its right to defend itself after Hamas’s attack on 7 October 2023.
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‘Israel has shifted towards economy of genocide’
The companies named in Ms Albanese’s report are in, but not limited to, the financial sector, big tech and the military industry.
“These companies can be held responsible for being directed linked to, or contributing, or causing human rights impacts,” she said. “We’re not talking of human rights violations, we are talking of crimes.”
“Some of the companies have engaged in good faith, others have not,” Ms Albanese said.
Read more:
Israeli soldier describes arbitrary killing of civilians in Gaza
British surgeons on life in Gaza
Listen to The World with Richard Engel and Yalda Hakim every Wednesday
The companies she has named include American technology giant Palantir, which has issued a statement to Sky News.
It said it is “not true” that Palantir “is the (or a) developer of the ‘Gospel’ – the AI-assisted targeting software allegedly used by the IDF in Gaza, and that we are involved with the ‘Lavender’ database used by the IDF for targeting cross-referencing”.
“Both capabilities are independent of and pre-ate Palantir’s announced partnership with the Israeli Defence Ministry,” the statement added.
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