‘Difficult decisions ahead’: New UK finance minister warns of higher taxes in sign of latest policy U-turn by PM Liz Truss

New Finance Minister Jeremy Hunt is due to announce the government’s medium-term budget plans on October 31, a key test to show investors that it can restore its economic policy credibility

Hunt also acknowledged mistakes made by his predecessor and warned that public spending budgets would likely be squeezed further

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Published: 6:55pm, 15 Oct 2022

Britain’s new finance minister Jeremy Hunt said on Saturday that some taxes will have to go up, signalling another abrupt policy U-turn by Prime Minister Liz Truss who is battling to save her leadership just over a month into her term.

In an attempt to appease financial markets that have been in turmoil for three weeks, Truss fired Kwasi Kwarteng as her chancellor of the exchequer on Friday and scrapped parts of their controversial economic package.

In a hurried news conference soon after dismissing Kwarteng, Truss said the corporation tax rate would increase, abandoning her plan to keep it at current levels, and government spending would rise by less than previously planned.

Big, unfunded tax cuts were a central plank of the prime minister’s original plans, but Hunt said tax increases were on the cards.

In a hurried news conference soon after dismissing Finance Minister Kwasi Kwarteng on Friday, Truss said the corporation tax rate would increase, abandoning her plan to keep it at current levels, and government spending would rise by less than previously planned. Photo: AFP

“We will have some very difficult decisions ahead,” he told Sky News.

“The thing that people want, the markets want, the country needs now, is stability,” Hunt said. “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.”