Britain’s new Treasury head acknowledged mistakes made by his predecessor on Saturday and hinted that he may undo most of Conservative Prime Minister Liz Truss’ tax-cutting plans in order to restore stability to the country after weeks of economic and political uncertainty.
Jeremy Hunt, who was appointed Treasury Secretary on Friday to replace Kwasi Kwarteng and restore order to Truss’ administration, warned of “tough decisions” ahead. He predicted that taxes will rise and public spending budgets would be more stretched in the coming months.
Truss sacked Kwarteng on Friday and abandoned her vow to repeal a proposed hike in corporation tax in order to keep her job — after only six weeks in office.
Truss, a free-market libertarian, previously claimed that her tax-cutting proposals are just what Britain needs to achieve economic growth. But, three weeks ago, she and Kwarteng published a “mini-budget” that promised 45 billion pounds ($50 billion) in tax cuts without explaining how the government would pay for them, sending markets and the British pound falling and destroying her confidence.
The initiatives, which included lowering income tax rates for the top earners, were widely attacked for being tone-deaf in the face of Britain’s cost-of-living issue.
Truss, according to Hunt, understands her mistakes and intends to correct them.
“It was wrong to cut the top rate of tax for the very richest earners at a time when we’re going to have to ask everyone to make sacrifices to get through a really tough period,” Hunt told the BBC on Saturday.