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His remarks in his first full day in office, following the sacking of his predecessor, Kwasi Kwarteng, came as the public were warned to brace themselves for a higher than expected hike in interest rates.<\/p>\n
Signalling a major shift in economic policy as he took up his position at the heart of Liz Truss’s government, Mr Hunt also said her administration went “too far, too fast” in its efforts to unlock growth.<\/p>\n
Mr Hunt said: “It was a mistake to fly blind and to do these forecasts without giving people the confidence of the Office of Budget Responsibility (OBR) saying that the sums add up. The Prime Minister has recognised that. That’s why I’m here.”<\/p>\n
Mr Hunt stressed his commitment to bringing down debt and pledged to set out “clear and robust plans”. But he warned all government departments will now be asked to “find efficiencies” and he did not rule out cuts to the NHS.<\/p>\n
Last night there were reports Mr Hunt will delay a penny cut in income tax – the key announcement in Ms Truss’s doomed Mini-Budget – to plug a £72billion black hole in the public finances.<\/p>\n
The Chancellor is said to be reviewing every aspect of Mr Kwarteng’s fiscal statement before he delivers his first “proper Budget” on October 31.<\/p>\n
Plans to reduce the basic rate of income tax next April will be pushed back by a year and the cut to 19 percent will now take effect at the time previously proposed by Rishi Sunak.<\/p>\n
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Even after the U-turns on the additional rate of income tax and corporation tax, which will raise £20billion, the Treasury still faces a shortfall of up to £52billion.<\/p>\n
Mr Hunt will meet Richard Hughes, chairman of the OBR, tomorrow, when he will begin ripping up Ms Truss’s economic policy.<\/p>\n
“Everything is on the table,” said a source close to the Chancellor. “He is going to be delaying tax cuts as well as overseeing more aggressive cuts to public spending.<\/p>\n
“What the Prime Minister wants him to do is send a very strong signal that the numbers add up and that has to get the support of the OBR and the Bank of England.<\/p>\n
“The Bank is important because they are going to have to make a decision about raising interest rates just three days after the next budget.”<\/p>\n
The Bank’s governor Andrew Bailey has spoken with Mr Hunt and had an “immediate meeting of minds”. However, he suggested interest rates may have to be raised higher than initially expected.<\/p>\n
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In a speech in Washington, Mr Bailey warned that “stronger” action to tackle inflation than previously anticipated could be required.<\/p>\n
Looking forward to producing his fiscal plan, the Chancellor said: “My focus is on growth underpinned by stability. The drive on growing the economy is right – it means more people can get good jobs, new businesses can thrive and we can secure world-class public services. But we went too far, too fast.<\/p>\n
“We have to be honest with people and we are going to have to take some very difficult decisions both on spending and on tax to get debt falling. But the top of our minds when making these decisions will be how to protect and help struggling families, businesses and people.<\/p>\n
“I will set out clear and robust plans to make sure government spending is as efficient as possible, ensure taxpayer money is well spent and that we have rigorous control over our public finances.”<\/p>\n
Asked if he will shield the NHS from cuts, he said: “We’ve said that we will protect the money that they would have received from the health and social care levy.<\/p>\n
“But we’re also going to have pressure on the tax side. Taxes are not going to come down by as much as people hoped and some taxes will have to go up. We’re going to ask all government departments to find efficiencies.”<\/p>\n
Mr Hunt, who lost to Boris Johnson in the 2019 Tory leadership contest, has returned from the backbenches to take the reins of a crisis-battered Treasury.<\/p>\n
One insider said: “The Tory grown-ups have taken charge and effectively brought in Hunt as Prince Regent. Liz won’t be pushed out just yet but will be kept under remote control until they decide the time is right to sacrifice her.”<\/p>\n
Allies have compared him to a “chief executive” in government. But a Government source said: “Jeremy Hunt is just the man for the job. He has energy, ideas and experience to join the PM in steadying the ship. Together, they will put the UK on the course to growth.”<\/p>\n
Mr Hunt will be keenly aware that Tory MPs and activists who embraced Ms Truss’s vision for economic growth fuelled by low taxes will be alarmed at a change in priorities.<\/p>\n
He told broadcasters: “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.”<\/p>\n
A Conservative insider regretted the Government’s change in direction, saying: “The sad thing for us is it makes us more likely to be a high-tax economy for a very long time.”<\/p>\n