DIFFICULT DECISIONS
After effectively dismantling Truss’ bet that tax cuts would spur economic growth and pay for government spending, Hunt said he will go further, including imposing tougher spending controls and some tax hikes. .
“I will ask every government department to find new efficiency savings,” he said, adding that while he wanted to keep the other tax cuts promised by the government, he did not exclude anything in its desire to balance the accounts.
He will set out the details in a financial statement on October 31.
The Sunday Times said the Office for Budget Responsibility’s initial forecast showed a shortfall of 72 billion pounds ($80 billion) in current plans. The newspaper also said Hunt would delay a planned reduction in the basic income tax rate.
The Treasury declined to comment on the report.
Asked if the markets would trust his plans, Hunt told the BBC: “Well, I think, you know, for people who trade in the markets, actions speak louder than words. “
A first test will come on Monday morning when trading in troubled UK government bonds resumes without support from the Bank of England’s emergency bond-buying program, which expired on Friday.
“Basically we went from a loan proposal not too different from the US or Germany to a loan proposal that is more like Italy and Greece,” the former told Sky. Bank of England Deputy Governor Charlie Bean.
“THE PM IS IN CHARGE”
As Hunt seeks to fend off pressure from the financial markets, Truss faces a mutiny within his party.
Reports citing unnamed sources filled the newspapers on Sunday, with Defense Secretary Ben Wallace touted as the Sunday Mirror’s favorite senior lawmaker replacement, and Rishi Sunak – who Truss beat last month in a race to the leadership that elected members of the Conservative Party – named as another possible successor by the Sun on Sunday.
Writing in the Sun, Truss admitted his plans had gone “further and faster than the markets expected”.
“I listened, I understand,” she wrote. “We cannot pave the way to a low-tax, high-growth economy without maintaining market confidence in our commitment to sound currency.”
Conservative lawmaker Robert Halfon said his initial plans made the government look like “libertarian jihadists” who had treated the whole country like laboratory mice on which to conduct ultra-free market experiments.
He told Sky that while he’s not asking for his resignation now, things have to get better.
Hunt was asked whether, given the sweeping change in policy he had overseen, he was now effectively running the government.
“The prime minister is in charge,” he said. “She changed the way we’re going to get there. She didn’t change the destination, which is to grow the country.”