Mistakes made in mini-budget, says new chancellor
The new chancellor, Jeremy Hunt, is on Sky News this morning discussing his plans for the position.
He says the Liz Truss administration has made “mistakes” and that there are “difficult decisions ahead”.
I want to do the right thing for British people.
It’s a big honour to do the job that I’ve been asked to do by the prime minister, but 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 course, is coming out of a pandemic and a cost of living crisis.
And the thing that people want, markets want, the country needs now, is stability. 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 on both spending and tax.
There were mistakes. 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.
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.
Miriam Margolyes’ sweary Today performance speaking out against Jeremy Hunt being hailed by some as best moment of the Radio 4 programme’s history:
The Guardian’s economics editor, Larry Elliott, reports on how Kwasi Kwarteng’s fate was sealed by the IMF orthodoxy he rallied against:
In a way, it was appropriate that Kwarteng’s last full day in the job should have been in Washington, because the IMF is the ultimate bastion of the economic orthodoxy the Truss government has been battling against for the past six weeks. Kwarteng’s epitaph as chancellor might well be: I fought the orthodoxy and the orthodoxy won.
The IMF’s unhappiness with the UK first surfaced two weeks before the annual meetings in Washington, when it put out a statement in the wake of September’s tax-cutting mini budget saying the measures were likely to “increase inequality”, and it did not approve of large and unfunded stimulus packages when inflation was so high.
This week, the IMF turned the screw. Tuesday, the day before Kwarteng’s arrival, saw the release of the Fund’s two flagship publications: the world economic outlook and the global financial stability review. Both were critical of the UK, pointing out that the Treasury was adding to the cost of living at the same time as the Bank of England was raising interest rates to bring down inflation. It was, one official put it, like two people fighting over a car’s steering wheel.
Peter Walker asks: If Liz Truss is ousted, who could replace her as prime minister?
Jeremy Hunt’s key points from this morning…
On his first full day as chancellor, Jeremy Hunt has done a series of interviews in which he made the following points:
He refused to commit to increasing benefits in line with inflation. But claimed he is “very sensitive” to the needs of the poorest.
Claimed Liz Truss has “listened” to crisis caused by mini-budget. She will be judged at the next election by what she does over the next 18 months.
Warmed all government departments, including the NHS and defence, will face spending cuts. “Difficult decisions” to come.
Pledged that money that would have been received from the health and social care levy will be protected.
Some taxes will go up. Others will not come down “as much as people hoped”.
The Conservatives are united “around the most important issues” including growth and Brexit.
He will meet with treasury officials later today and with Truss tomorrow.
It was a “mistake” to cut taxes of wealthiest and to “fly blind” without the confidence of the Office of Budget Responsibility.
He declined to give any specific commitments about his fiscal statement on 31 October.
Liz Truss has also paid tribute to the late David Amess (see also 9.06am) on the first anniversary of his murder.
The prime minister said:
Shadow chancellor declares ‘Tory crisis’ after Jeremy Hunt’s first interviews
Rachel Reeves, the shadow chancellor, has responded to Jeremy Hunt’s first interviews by declaring a “Tory crisis – made in Downing Street and paid for by working people”.
She condemned the “contradictory, chaotic messages coming from Downing Street”, which she said are “totally unacceptable”.
The damage has been done. It’s clear they’ve got no plan to clean up their mess. At a time when people’s mortgages are skyrocketing and businesses have no certainty, the contradictory, chaotic messages coming from Downing Street are totally unacceptable.
We don’t just need a new chancellor; we need a Labour government. Only Labour offers the leadership and plan Britain needs to fix this crisis and grow the economy.
Boris Johnson’s former press secretary Will Walden has said that Jeremy Hunt is tantamount to a “caretaker prime minister”.
Trussonomics is clearly “being jumped”, he told Sky News, and Liz Truss “didn’t come close” to calming nerves in yesterday’s press conference. The prime minister’s performance was, he said, “tone deaf” and did not show empathy.
‘It feels like game over’: From the Guardian’s political editor, Pippa Crerar:
Within minutes of the announcement that she had made it to the final two in the Tory leadership contest in July, Liz Truss sent Tory MPs a message on social media.
“Thank you for putting your trust in me,” she tweeted. “I’m ready to hit the ground from day one.” Her post was quickly deleted and the word “running” was added in.
But her initial message could not have been more prescient.
Ever since she took over as prime minister just 38 days ago, Truss’s premiership has been hurtling downwards towards the hard earth of economic reality. She is now fighting for her political survival.
That is after a chaotic 24 hours during which Truss and her chancellor insisted publicly they were sticking to the plan not to put up corporation tax – even as officials were privately briefing the exact opposite.
Kwasi Kwarteng’s middle-of-the-night dash back from Washington confirmed the situation had reached crisis point. As the sun rose over Westminster, rumours he was about to be sacked were already spreading. One No 10 insider claimed Truss already knew she wanted him to “carry the can” over the mini-budget disaster – while he was telling reporters he wasn’t going anywhere.
Truss will be hoping that sacking Kwarteng as chancellor will take the heat off her, at the very least buying her some valuable time to try to steady the mutinous Tory ship. But as his departure letter – and her reply – showed, their radical plan to rip up the economy to boost growth was very much a joint endeavour.
Kwarteng stressed to the prime minister that it was “your” vision, while she responded that “we share the same vision”.
Despite the finger pointing, the pair have been on the same ideological journey for years, with the ill-fated budget fleshed out over coffee and biscotti in Kwarteng’s Greenwich home way back in August.
The rest of the article is here:
The Labour leader, Keir Starmer, has joined tributes to David Amess, a year after the Conservative MP’s murder.
The 69-year-old was stabbed to death while meeting constituents in Leigh-on-Sea in Essex on 15 October 2021.
Kwarteng says Truss has only bought herself ‘a few weeks’ by sacking him
On today’s front page of the Times, Kwasi Kwarteng says Liz Truss has only bought herself “a few weeks” by sacking him as chancellor and reversing the mini-budget.
Actor Miriam Margolyes says ‘Fuck you, bastard’ about Jeremy Hunt live on air
Actor Miriam Margolyes said she wanted to tell Jeremy Hunt ‘Fuck you, bastard’ after appearing on Radio 4 immediately after the new chancellor.
Speaking on the Today programme at the end of an interview about the death of Robbie Coltrane, she said:
When I saw him [Hunt] there, I just said: ‘What a hell of a job, the best of luck.’
And what I really wanted to say was: ‘Fuck you, bastard,’ but you can’t say that.
Hunt insists Truss won leadership election ‘fair and square’ but admits: ‘Some people, including me, didn’t vote for the PM’
How long will Liz Truss be PM, Hunt is asked? “I think what the country wants now is sustainability.”
He adds: “When we are judged at a general election we will be judged by what we deliver over the next 18 months.”
He said he does not want to “pretend it’s not been a very difficult few weeks”, but claims Conservatives are united in parliament around growth and Brexit success.
We had a leadership election. Some people, including me, didn’t vote for the prime minister, but we recognise she won it fair and square.
Hunt insists Truss “has listened” after the mini-budget fallout.
Hunt says UK already has debt at 97% of GDP and tax cuts must be ‘sustainable’
On the pledge to cut personal income tax, he says he “very much” hopes it can be cut, but that he needs to look at everything “in the round”.
Insists tax cuts must be sustainable and funded.
UK already has debt at 97% of GDP, he says, the highest level of debt since the 1960s.
There are going to be no easy choices, it’s going to be very difficult.
He adds: “Lots of things people are hoping for won’t happen, but we will be thinking about the most vulnerable as we take these decisions.”
“Of course” Britain needs to support the war in Ukraine but the Ministry of Defence will also face cuts, Hunt says.
He says he cannot guarantee the PM’s pledge to grow defence spending.