Jeremy Hunt: There were mistakes in mini-budget – and some taxes will go up
The 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 be asking for difficult decisions across the board on tax and spending to cut the rate of tax paid by the very wealthiest.”
Hunt warns of ‘difficult decisions’ – follow politics latest
He added that it was 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.”
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 who had to go when he was pursuing policies Ms Truss espoused in her leadership campaign.
At a hastily-arranged news conference in Downing Street on Friday, the prime minister dismissed calls for her resignation, saying she was “absolutely determined to see through what I have promised”.
But announcing another U-turn, she said: “It is clear that parts of our mini-budget went further and faster than markets were expecting, so the way we are delivering our mission right now has to change.”
Mr Kwarteng’s plans to drop the planned rise in corporation tax from 19% to 25%, were therefore being scrapped, she announced, saving the Exchequer £18bn a year.
Is Jeremy Hunt now more powerful than the PM?
Jeremy Hunt has confirmed that Prime Minister Liz Truss’s economic vision is not only dead, but that the immediate actions of this administration will be to do almost exactly the opposite of what the prime minister promised during the summer leadership campaign.
This was a cold, hard reality check from a chancellor who is being upfront about the fact that his primary purpose is to put out the fires started by the government he’s just joined and restore some semblance of credibility to the UK economy.
Some taxes will rise, some will be cut more slowly than expected, and public spending will be trimmed with every department asked to find savings.
Does this mean pushing back the 2023 cut to the basic rate of income tax? Can the Ministry of Defence still expect its funding increase? Is there any chance of public sector pay rises reaching anywhere near inflation?
Politically, there is an argument to be made that Jeremy Hunt is now more powerful than the prime minister.
‘The last few weeks have been very tough’
Asked why he agreed to take on the difficult job of sorting out the public finances, the new chancellor said he wants to “do the right thing by the British people”.
But he added: “I want to be honest with people, we have some very difficult decisions ahead.
“The last few weeks have been very tough, but the context of that is coming 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 is going to need some very difficult decisions.”
He said that all government departments would have to “find more efficiencies than they were planning to find”.
However, he declined to give any specific commitments ahead of the fiscal statement on October 31.
Asked if the NHS will still get the money that was promised in the health and social care levy, he said “the government’s already made that commitment”.
He added: “I’m not going to make any specific commitments about specific departments now, or indeed on the tax side about specific taxes because 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 the situation we face.”
‘This is a disaster’
David Lammy, the shadow foreign secretary, questioned how cuts can be made given the pressure public services are under.
He said the market turmoil seen in recent weeks is a “crisis made in Number 10” and called for a general election.
He said: “As you listen to Jeremy Hunt what you hear is despite long queues in the NHS, it’s now set to get worse, despite rising class sizes in Britain we can expect our education to get worse, and with crime soaring across many communities in the country, we need police officers.
“Are they are now going to back-pedal on those undertakings that they’ve previously made?
“This is a disaster and the only way to deal with a disaster is a general election and to set our country on a certain path for the next five years.”
He claimed Ms Truss had “no mandate” for her policies.
“We cannot live in an oligarchy effectively where the Conservatives choose who leads them and as a consequence gives us a prime minister with no mandate at all to make, now, the swingeing cuts that we’re about to see.”
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Donald Trump has threatened Russia with more sanctions after a series of deadly strikes across Ukraine, as he said of Vladimir Putin: “What the hell happened to him?”
The US president appeared aghast at the conduct of his counterpart in the Kremlin after drone and missile attacks in Kyiv and other Ukrainian cities left 12 people dead and dozens more injured.
Trump criticises Putin – latest updates
Speaking to reporters at an airport in New Jersey ahead of a flight back to Washington, Mr Trump said: “I’m not happy with Putin. I don’t know what’s wrong with him.”
“He’s killing a lot of people,” he added. “I’m not happy about that.”
Mr Trump – who said he’s “always gotten along with” Mr Putin – told reporters he would consider more sanctions against Moscow.
“He’s sending rockets into cities and killing people, and I don’t like it at all,” he said.
Ukraine said the barrage of strikes overnight into Sunday was the biggest aerial attack of the war so far, with 367 drones and missiles fired by Russian forces.
It came despite Mr Trump repeatedly talking up the chances of a peace agreement. He even spoke to Mr Putin on the phone for two hours last week.
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Hundreds of drones fired at Ukraine
‘Shameful’ attacks
Volodymyr Zelenskyy has said Ukraine is ready to sign a ceasefire deal, and suggested Russia isn’t serious about signing one.
In a statement after the latest attacks on his country, he urged the US and other national leaders to increase the pressure on Mr Putin, saying silence “only encourages” him.
Mr Trump’s envoy for the country, Keith Kellogg, later demanded a ceasefire, describing the Russian attacks as “shameful”.
Three children were among those killed in the attacks, explosions shaking the cities of Kyiv, Odesa, and Mykolaiv.
Ukrainian siblings Tamara, 12, Stanislav, eight, and Roman, 17, were killed in Russian airstrikes. Pic: X/@Mariana_Betsa
Before the onslaught, Russia said it had faced a Ukrainian drone attack on Sunday. It said around 100 were intercepted and destroyed near Moscow and in central and southern regions.
The violence has escalated despite Russia and Ukraine completing the exchange of 1,000 prisoners each over the past three days.
Donald Trump says he will delay the imposition of 50% tariffs on goods entering the United States from the European Union until July, as the two sides attempt to negotiate a trade deal.
It comes after the president of the European Commission, Ursula von der Leyen, said in a post on social media site X that she had spoken to Mr Trump and expressed that they needed until 9 July to “reach a good deal”.
The US president had last Friday threatened to bring in the 50% tariffs from 1 June, as European leaders said they were ready to respond with their own measures.
But Mr Trump has now said that date has been put back to 9 July to allow more time for negotiations with the 27-member bloc, with the phone call appearing to smooth over tensions for now at least.
Speaking on Sunday before boarding Air Force One for Washington DC, Mr Trump told reporters that he had spoken to Ms Von der Leyen and she “wants to get down to serious negotiations” and she vowed to “rapidly get together and see if we can work something out”.
The US president, in comments on his Truth Social platform, had reignited fears last Friday of a trade war between the two powers when he said talks were “going nowhere” and the bloc was “very difficult to deal with”.
Mr Trump told the media in Morristown, New Jersey, on Sunday that Ms Von der Leyen “just called me… and she asked for an extension in the June 1st date. And she said she wants to get down to serious negotiation”.
“We had a very nice call and I agreed to move it. I believe July 9th would be the date. That was the date she requested. She said we will rapidly get together and see if we can work something out,” the US president added.
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Shortly after, he wrote on Truth Social: “I agreed to the extension – July 9, 2025 – It was my privilege to do so.”
On his so-called “liberation day” last month, Mr Trump unleashed tariffs on many of America’s trade partners. But since then he’s backed down in a spiralling tit-for-tat tariff face-off with China, and struck a deal with the UK.
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Much of his most incendiary rhetoric on trade has been directed at Brussels, though, even going as far as to claim the EU was created to rip the US off.
Responding to his 50% tariff threat, EU trade chief Maros Sefcovic said: “EU-US trade is unmatched and must be guided by mutual respect, not threats.
“We stand ready to defend our interests.”
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