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
Jair Bolsonaro: Brazilian Supreme Court judges vote to convict ex-president of attempting a coup
The majority of a panel of Brazilian Supreme Court judges have voted to convict the country’s former president Jair Bolsonaro of attempting a coup after his 2022 election defeat.
The far-right politician, who ruled Brazil between 2019 and 2022, was found guilty on five counts by three members of a five-justice panel.
Just one of the five judges has acquitted Bolsonaro and when the final one has voted, the panel will decide on the former president’s sentence – which could amount to decades in prison.
The five counts were trying to stage a coup, being part of an armed criminal organisation, attempted violent abolition of the democratic rule of law, being implicated in violence, and posing a serious threat to the state’s assets and listed heritage.
Pic: AP
The 70-year-old, who has denied any wrongdoing, is currently under house arrest at his home in Brasilia.
His lawyers have said they will appeal the verdict.
The ruling will deepen political divisions in Brazil and is also likely to prompt a backlash from the United States government.
Bolsonaro ally Donald Trump has already called the case a “witch hunt”, slapped Brazil with tariff hikes and revoked US visas for most members of Brazil’s high court.
Bolsonaro is the first former Brazilian president to be convicted of attempting a coup.
He has not attended the court proceedings, and on Thursday he was seen at his garage at his property, but did not talk to the media.
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Justice Carmen Lucia. Pic: AP
Justice Alexandre de Moraes, who is overseeing the case, said on Tuesday that Bolsonaro was the leader of a coup plot and of a criminal organisation, and voted in favour of convicting him. Justices Flavio Dino, Carmen Lucia and Cristiano Zanin sided with Justice Moraes in the trial.
On Wednesday, another justice, Luiz Fux, disagreed and voted to acquit the ex-president of all charges.
Justice Lucia said she was convinced by the evidence the attorney general’s office put forward against Bolsonaro.
She said: “He is the instigator, the leader of an organisation that orchestrated every possible move to maintain or seize power.”
The far-right politician had been previously banned from running for office until 2030 in a different case.
He is expected to choose an heir who is likely to challenge President Luiz Inacio Lula da Silva next year.
World
Qatari PM says Israel ‘killed any hope’ of releasing hostages as criticism over Doha attack intensifies
Qatar’s prime minister said Israel has “killed any hope” of seeing more hostages returned from Gaza after carrying out an attack targeting Hamas leadership in his country.
Sheikh Mohammed bin Abdulrahman Al Thani intensified his criticism of Israeli Prime Minister Benjamin Netanyahu over Tuesday’s unprecedented strike on Qatar, which killed at least six people.
“I was meeting one of the hostage’s families the morning of the attack,” Sheikh Mohammed told CNN in an interview aired late Wednesday.
“They are counting on this [ceasefire] mediation, they have no other hope for that.”
Sheikh Mohammed added that he thought Netanyahu had “just killed any hope for those hostages”.
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Ceasefire talks left in ‘tatters’
A total of 48 Israeli hostages captured during Hamas’ 7 October attacks on southern Israel have not been returned home.
With its attack in Qatar, Israel had sought to kill the political leaders of the Islamist group Hamas.
Hamas has said its top leaders survived the airstrike, but five members were killed, including the son of its exiled Gaza chief and top negotiator Khalil al Hayya.
The Israeli military operation in Doha has been widely condemned internationally and was particularly sensitive as Qatar has been mediating negotiations to bring about a ceasefire in the war in Gaza.
US President Donald Trump reportedly held a heated phone call with Mr Netanyahu after the attack, telling him his decision to target Hamas leadership in Qatar was not wise, according to The Wall Street Journal.
There has been no immediate acknowledgement of the remarks from Mr Netanyahu, however, he’s continued to defend the strikes and threatened further action against Qatar.
“I say to Qatar and all nations who harbour terrorists, you either expel them or you bring them to justice,” Mr Netanyahu said. “Because if you don’t, we will.”
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Trump has ‘heated call’ with Netanyahu over Qatar strike
A senior figure in the Qatari government, Dr Majed Al-Ansari, was the one to announce to the world on X that America’s call to alert them to the attack came 10 minutes after the first explosion sounded in Doha.
Dr Al-Ansari, who serves as Qatar’s foreign ministry spokesperson, recounted the moment of the attack to Sky News’ correspondent Sally Lockwood.
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“I was coming home to my family and the moment I stepped out of the car I started hearing the loud noises that can only be compared to bombs,” he said.
“Being a diplomat and working for the foreign ministry throughout the mediation that we have conducted, I immediately knew that that meant that something terrible has happened.
“I can’t tell you enough how as a father living here in Qatar, that moment was a moment of reckoning for me and for all my countrymen and people who reside here in Qatar, where our lives were at risk because of the narcissistic and personal ambitions of a political operator who wants to throw the whole region into chaos.”
Donald Trump had a heated phone call with Israeli Prime Minister Benjamin Netanyahu after his military targeted Hamas inside Qatar, according to a report.
The American president told Mr Netanyahu on Tuesday that the decision to strike inside the US ally’s territory was not wise, The Wall Street Journal reported, citing senior administration officials.
The Israeli prime minister responded by saying he had a brief window to launch the airstrike and took the opportunity, according to the newspaper.
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Anger over Israeli strikes on Qatar
A second call between the two leaders later that day was cordial, with Mr Trump asking Mr Netanyahu if the attack had been successful, the publication added.
Israel attempted to kill the political leaders of the Islamist group Hamas with the attack in the Qatari capital Doha on Tuesday.
Hamas has said its top leaders survived the airstrike, but five members were killed, including the son of its exiled Gaza chief and top negotiator Khalil al Hayya.
The Israeli military operation in Doha has been widely condemned internationally and was particularly sensitive as Qatar has been hosting and mediating in negotiations which are trying to bring about a ceasefire in the war in Gaza.
On Wednesday, Mr Netanyahu warned Qatar to either expel Hamas officials or “bring them to justice. Because if you don’t, we will”.
Qatar has hit back at him, saying his comments about the Gulf nation hosting a Hamas office were “reckless”.
Donald Trump with Benjamin Netanyahu at the White House earlier this year. Pic: Reuters
Meanwhile, the Israeli ambassador to the US, Yechiel Leiter, has said that if Israel failed to kill Hamas leaders on Tuesday, it would succeed next time.
“We have put terrorists on notice, wherever they may be… we’re going to pursue them, and we’re going to destroy those who will destroy us,” he said.
The airstrike took place shortly after Hamas claimed responsibility for Monday’s shooting at a bus stop on the outskirts of Jerusalem that killed six people.
Read more:
Analysis: Israel has crossed a huge diplomatic red line
In another development, Sir Keir Starmer has had talks with Israeli President Isaac Herzog in Downing Street, with Mr Herzog saying they argued during a “tough meeting”.
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PM meets Israeli president
PM condemns Israeli action
The prime minister has condemned the Israeli attack in Qatar, and raised the matter with the president, saying it was “completely unacceptable”.
“He said the strikes were a flagrant violation of a key partner’s sovereignty and do nothing to secure the peace we all desperately want to see,” a Downing Street spokesperson said.
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Israel has been angered by Britain’s plans to join several other Western countries, including France and Canada, in recognising a Palestinian state later this month – unless Israel meets conditions including a ceasefire in Gaza.
“Things were said that were tough and strong, and clearly we can argue, because when allies meet, they can argue. We are both democracies,” Mr Herzog said at an event at Chatham House.
He also proposed offering a “fact-finding mission” to Israel, “sitting with us and studying the situation in Gaza on the humanitarian level”.
“Because we have full answers, and we are fully transparent,” he said.
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