Kwasi Kwarteng puts on brave face after being sacked as new Chancellor Jeremy Hunt blasts mini-budget ‘mistakes’
SACKED Chancellor Kwasi Kwarteng was putting a brave face on things this morning after his replacement Jeremy Hunt blasted the “mistakes” made in the mini-budget.
Mr Kwarteng, 47, was yesterday given the boot by Prime Minister Liz Truss after he had held the position for just 38 days.
Despite losing the key position he was all-smiles as he left his home in South East London this morning.
The PM replaced him with Mr Hunt who had served as Foreign Secretary for a year until July 2019 in Theresa May’s administration.
It comes as Mr Hunt looks set to make a U-turn in the Government’s economic strategy as he warned he was facing tough decisions on spending and tax.
In a round of broadcast interviews on Saturday morning he suggested that tax rises could form part of a painful fiscal package designed to restore market confidence in the UK.
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He warned of “difficult decisions” to come as he suggested that taxes could rise and budgets – including on health and defence – would likely be squeezed further in the coming months.
Ms Truss on Friday also ditched her commitment to drop the planned rise in corporation tax from 19 per cent to 25 per cent, after three weeks of turmoil on the financial markets in the wake of Mr Kwarteng’s £43 billion mini-budget tax giveaway.
Mr Hunt hit out at the mini-budget but endorsed the “fundamentals” of the push for growth.
He told Sky News: “It was a mistake when we’re 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.
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“It was a mistake to fly blind and to do these forecasts without giving people the confidence of the Office of Budget Responsibility saying that the sums add up.”
“The Prime Minister’s recognised that, that’s why I’m here.”
The PM said in PMQs on Wednesday she is “absolutely” not planning public spending cuts and wanted to focus instead on how to “spend public money well”.
But the Institute for Fiscal Studies warned cuts would be needed to put the country’s finances on a sustainable path.
Mr Hunt also admitted today there would be tax hikes as he seeks to steady the market after a tumultuous few weeks for Ms Truss’ administration.
TAX RISES
He said: “Some taxes will go up. So it’s going to be difficult. But as we take those difficult decisions, my priority, our values as a Government, will be to protect families, businesses, who are going through a very challenging time.”
The Chancellor, who will meet with Treasury officials later and with Ms Truss at Chequers on Sunday, told BBC Radio 4’s Today programme he now had a “clean slate” on the mini-budget, as he prepares to deliver a highly anticipated fiscal statement on October 31.
“I’m leaving open all possibilities this morning,” he said.
Nonetheless, his comments indicated that cuts to public spending and tax rises could be coming.
“Spending will not rise by as much as people would like and all Government departments are going to have to find more efficiencies than they were planning to.”
“And some taxes will not be cut as quickly as people want.
“Some taxes will go up. So it’s going to be difficult.”
Appearing to rule out an early election, Mr Hunt repeatedly insisted that voters now wanted stability and in 18 months’ time would be able to “judge” Ms Truss at the ballot box.
UNDER-FIRE PM
The Under-fire PM is now battling to keep her job following the biggest political meltdown for 300 years.
At a brief news conference in Downing Street on Friday, the Prime Minister dismissed calls for her resignation, saying she is “absolutely determined to see through what I have promised”.
“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,” she said.
“We will do whatever is necessary to ensure debt is falling as a share of the economy in the medium term.”
But it comes amid multiple reports of Tory MPs and Conservative grandees plotting moves to force her from office even as Cabinet ministers remained publicly loyal to the Prime Minister.
Loyal MPs on Friday night were urging party colleagues to think again about any bid to oust Ms Truss, who is theoretically safe from a leadership vote for another year under the rules of the backbench 1922 Committee.
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Labour leader Sir Keir Starmer referenced former party leader Neil Kinnock’s famous 1985 attack on the left-wing Militant group in Liverpool as he pointed to the “grotesque chaos of a Tory Prime Minister handing out redundancy notices to her own Chancellor”.
Accusing Ms Truss of clinging on to power, Sir Keir said: “There are no historical precedents for what they have done to our economy.”