Britain’s new Finance Minister has acknowledged mistakes made by his predecessor and suggested that he may reverse much of Conservative Prime Minister Liz Truss’ tax-cutting plans in order to bring stability to the country after weeks of economic and political turbulence.
Jeremy Hunt, who was brought in Friday to replace Kwasi Kwarteng as Treasury chief and restore order in Truss’ administration, warned of “difficult decisions” to come. Hunt said taxes could rise and public spending budgets would likely be squeezed further in the coming months.
Truss on Friday fired Kwarteng and ditched her pledge to scrap a planned increase in corporation tax as she sought to hang on to her job — after just six weeks in office.
Truss, a free-market libertarian, had previously insisted that her tax-cutting plans were what Britain needs to boost economic growth. But a “mini-budget” that she and Kwarteng unveiled three weeks ago, which promised 45 billion pounds ($50 billion) in tax cuts without explaining how the government would pay for them, sent the markets and the British pound tumbling and left her credibility in tatters.
The policies, which included cutting income tax for those on the highest incomes, were also widely criticized for being tone-deaf in the face of Britain’s cost-of-living crisis.