Jeremy Hunt: There were mistakes in mini-budget – and some taxes will go up

Published

2 years ago

October 17, 2022

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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.”

The comments signal a plan to up-end the prime minister’s entire economic strategy, in an extraordinary rebuke of the pledges that brought her into office.

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?

Rob Powell

Political correspondent

@robpowellnews

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.

“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.”

Mr Hunt’s comments may only add to the sense among some Tory MPs that Ms Truss is increasingly powerless in Downing Street.

Will Walden, Boris Johnson’s director of communications when he was mayor of London, called Mr Hunt an effective “caretaker prime minister”, while former Conservative leader Lord Hague warned Ms Truss’s premiership “hangs by a thread”.

Heated messages shared in Conservative Party WhatsApp groups after Ms Truss’s hastily-arranged Downing Street press conference show the party is divided about the next steps, with some MPs calling for the PM to be replaced by Rishi Sunak or Penny Mordaunt.

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World

Is wider war in the Middle East now inevitable?

Published

20 mins ago

September 29, 2024

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Is wider war in the Middle East now inevitable?

The pictures from Beirut are unnerving to say the least, the predictions for the immediate future even more so.

With the dust still settling from this game-changing assassination of Hassan Nasrallah, there are pressing questions crying out for answers.

Most of all, is the Middle East about to erupt into a regional conflict that threatens us all? That’s been the warning for almost a year, so is it about to happen?

Not if America and its allies can help it.

Follow latest: Iran warns Israel will ‘regret their actions’

Hezbollah is a designated terrorist organisation for the US, UK and other Western nations. It has killed hundreds of their citizens over the years.

There is no doubt President Joe Biden has felt what he called a “measure of justice” that Nasrallah has been killed.

But there is also a fear of what comes next. From the president down we are hearing urgent calls for de-escalation and a diplomatic solution. And the US has rushed military assets to ward off Hezbollah’s patrons in Iran doing their worst. But will that be enough?

US-led diplomacy to contain the Middle East crisis has failed.

A senior Middle Eastern diplomat told Sky News the assassination is a kick in the teeth for the US president.

“For all the bombs and billions he has given the Israelis,” he said, “the least they could have done for him in the last weeks of his presidency was a ceasefire in the region”.

With diplomacy stalled, what happens next depends on both Iran and Israel.

For its part, Iran may feel it has no alternative but to weigh in. It may fear the massive missile arsenal it supplied is so jeopardised it must intervene and save Hezbollah.

Iranians have long regarded Hezbollah as an insurance policy for the day Israel might attack Iran itself. If it sees its ally close to total collapse, might it then weigh in?

If it does, Israel’s allies led by America might feel compelled to come to its defence. The full scale war feared for almost a year could engulf the region.

But there are good reasons for Iran not to rush to action.

The Middle East seems a dangerous and unpredictable place but certain rules and assumptions apply, even in all its chaos.

For all their fanaticism, the ayatollahs of Tehran are pragmatic and seek the preservation of their grip on power above all. That has been a rule of the Middle Eastern jungle since they seized power 45 years ago.

Is it pragmatic or wise to up the ante and more directly support Hezbollah, when it is at its weakest? The Iranian regime is not that strong either, crippled economically by sanctions and mismanagement, and socially and politically by months of civil unrest, albeit now quashed.

There are limits too to what Iran could achieve with direct military intervention anyway in a war that is 2,000km from its borders. The Iranians may conclude this round in the war against Israel is over. They think in long time spans, after all. Time to regroup and move on to fight another day?

There will no doubt be days more of sound and fury, like we have seldom seen before. The mourning and funerals of Nasrallah and his lieutenants are likely to be the focus of intense anger and will raise tensions. But what happens afterwards?

That also comes down to Israel.

It may now feel it has the wind in its sails and seize the moment to invade Lebanon on the ground to push Hezbollah back from the border. That would be an extremely dangerous moment too, potentially drawing in supportive militia and Iranian forces based in Syria.

The hills of southern Lebanon are a treacherous country for a military like Israel’s that relies on infantry and tanks. They could be drawn into a lengthy and punishing campaign that could then destabilise the region.

Then there is Lebanon itself. An uneasy compromise between the warring factions of its civil war in the 1970s and 80s has held for decades but its always fragile status quo is now threatened. The chessboard of its multi-denominational politics has potentially been upended by the removal of its most powerful player.

If Lebanon descends back into factional fighting, regional stability will be undermined too.

The Middle East is in grave danger of further escalation. Western and regional diplomats are working round the clock to pull it back from the brink but recent efforts have all ended in failure and neither Israel nor Hezbollah seem to be listening.

World

Hezbollah leader Hassan Nasrallah killed after Beirut airstrikes, Israeli army says

Published

12 hours ago

September 28, 2024

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Hezbollah leader Hassan Nasrallah killed after Beirut airstrikes, Israeli army says

Hezbollah leader Hassan Nasrallah has been killed after airstrikes in Beirut, the Israeli army has said.

Recent weeks have seen Israel unleash a barrage of strikes against Lebanon after it turned its attention to the conflict at its northern border.

On Friday, Israel targeted the capital Beirut with a series of attacks claiming to have struck the headquarters of Hezbollah.

Israel-Hezbollah latest

The Israel Defence Forces (IDF) said it carried out a “precise strike” on Hezbollah’s “central headquarters”, which it claimed was “embedded under residential buildings in the heart of the Dahieh in Beirut”.

The first wave of attacks shook windows across the city and sent thick clouds of smoke billowing into the air.

While Israel stressed it had been a “precise” strike, preliminary figures from Lebanon’s health ministry confirmed at least six other people were killed and 91 were wounded.

Israel said Nasrallah was the intended target and initially there were claims he had survived.

However, after several hours of confusion, his death was confirmed by Israel.

“Hassan Nasrallah will no longer be able to terrorise the world,” the IDF said.

Hours later, a defiant Hezbollah confirmed Nasrallah’s death but vowed their fight with Israel would continue after confirming they had fired upon sites in northern Israel.

“The leadership of Hezbollah pledges to the highest, holiest, and most precious martyr in our path full of sacrifices and martyrs to continue its jihad in confronting the enemy, supporting Gaza and Palestine, and defending Lebanon and its steadfast and honourable people,” they said.

Alongside claiming to have killed Nasrallah, the IDF said it had killed a number of other commanders, including Ali Karaki, the commander of the southern front.

The country’s military said the strike was carried out while Hezbollah leadership met at their underground headquarters in Dahieh.

In the aftermath of the most recent attacks, an Israeli military spokesperson declined to comment on whether US-made Mark 84 heavy bombs were used in the strike against Nasrallah.

“The strike was conducted while Hezbollah’s senior chain of command were operating from the headquarters and advancing terrorist activities against the citizens of the State of Israel,” Lieutenant Colonel Nadav Shoshani said in a media briefing.

He continued: “We hope this will change Hezbollah’s actions.”

He added the number of civilian casualties was unclear but blamed Hezbollah for positioning itself in residential areas.

“We’ve seen Hezbollah carry out attacks against us for a year. It’s safe to assume that they are going to continue carrying out their attacks against us or try to,” he said.

Meanwhile, Iran said it was in constant contact with Hezbollah and other allies to determine its “next step”, but Reuters reported the country’s supreme leader was transferred to a secure location in light of the latest attack.

Speaking after the attack, Ayatollah Ali Khamenei called on Muslims “to stand by the people of Lebanon and the proud Hezbollah” and said: “The fate of this region will be determined by the forces of resistance, with Hezbollah at the forefront,” state media reported.

Nasrallah’s death will be a blow to Hezbollah as it continues to reel from a campaign of escalating Israeli attacks.

Nasrallah is latest Hezbollah leader to fall

While Nasrallah’s death is certainly the most high-profile of recent attacks, it continues a trend of Israel targeting Hezbollah’s leadership structure.

Also on Saturday, in the early hours of the morning, the commander of the group’s missile unit and his deputy were killed in another Israeli attack in southern Lebanon.

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Then, in a separate strike overnight on Friday, the IDF said it killed the head of Hamas’s network in southern Syria.

This followed the deaths of other senior commanders, including Muhammad Qabisi, earlier in the month.

World

Muriel Furrer: Swiss teenage cyclist dies after crash at world championships

Published

12 hours ago

September 28, 2024

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Muriel Furrer: Swiss teenage cyclist dies after crash at world championships

A Swiss teenage cyclist with “a bright future ahead of her” has died a day after suffering a serious head injury at the world championships.

Muriel Furrer crashed while competing on rain-slicked roads in the junior women’s road race in her home country.

The 18-year-old rider fell heavily on Thursday in a forest area south of the city of Zurich and was airlifted to hospital by helicopter, reportedly in a critical condition.

Race organisers announced on Friday she had died.

They said in a statement: “Muriel Furrer sadly passed away today at Zurich University Hospital.”

The UCI governing body for world cycling paid tribute to her in a statement on its website, entitled “The cycling world mourns the loss of Muriel Furrer”.

It read: “It is with great sadness that the Union Cycliste Internationale (UCI) and the Organising Committee of the 2024 UCI Road and Para-cycling Road World Championships today learned the tragic news of the death of young Swiss cyclist Muriel Furrer.

“With the passing of Muriel Furrer, the international cycling community loses a rider with a bright future ahead of her. We offer sincere condolences to Muriel Furrer’s family, friends and her Federation Swiss Cycling.”

Swiss Cycling said in a post on X: “Our hearts are broken, we have no words. It is with a heavy heart and infinite sadness that we have to say goodbye to Muriel Furrer today.

“We are losing a warm-hearted and wonderful young woman who always had a smile on her face. There is no understanding, only pain and sadness.”

At a news conference, a director of the Swiss organising committee Olivier Senn said he could not confirm exactly where the crash happened.

Police and the public prosecutor’s office were investigating the incident, Mr Senn said.

Furrer had finished in 44th position in the junior women’s time trial earlier in the week.

The rider’s family has asked for the championships – which last for nine days – to continue, said UCI sports director Peter van den Abeele.

The women’s and men’s elite races, scheduled for Saturday and Sunday respectively, will use the same stretch of road where the fatal crash happened.

A UCI gala event scheduled for Saturday evening has been cancelled, along with public events to mark races planned for Friday.

Second Swiss cyclist death

Furrer is the second Swiss cyclist to die in just over a year after crashing on home roads.

At the Tour de Suisse in June 2023, Gino Mader went off the road and down a ravine during a descent. The 26-year-old died from his injuries the next day.

“Obviously it is another tragic death,” Mr Senn said. “There are a lot of similarities, similar feelings. Today is about Muriel.”