London Daily

Focus on the big picture.
Wednesday, Sep 17, 2025

Chancellor warns of tax rises and squeeze on spending

Chancellor warns of tax rises and squeeze on spending

Difficult decisions will be needed "across the board" on tax and spending, the new chancellor has told the BBC.

Speaking in his first interviews since replacing Kwasi Kwarteng, Jeremy Hunt said some taxes will go up, while government spending may need to fall.

Cutting the top rate of tax and not independently costing measures were mistakes being "put right", he added.

He also insisted he had a "clean slate" after Liz Truss sacked Mr Kwarteng on Friday.

Mr Hunt, a former foreign secretary who had not been part of Ms Truss's cabinet, was made chancellor on Friday as the prime minister sought to restore confidence in her government.

In another dramatic day in Westminster, the PM also scrapped the plan to freeze corporation tax - set out in the 23 September mini-budget - in another major U-turn.

Speaking to the BBC, Mr Hunt signalled a big shift away from the economic policies of Ms Truss and Mr Kwarteng.

"Taxes are not going to come down by as much as people hoped, and some taxes will have to go up," he said. "I'm going to be asking all government departments to find additional efficiency savings."

While he did not say where taxes could rise or public spending be reduced, Mr Hunt did not rule out cuts to NHS spending or rowing back on Ms Truss's pledge to increase defence spending to 3% of GDP.

The chancellor, a Rishi Sunak supporter in the leadership contest, said the government needed to "show the world we have a plan that adds up financially".

Ms Truss, prime minister for just 39 days, is already facing pressure from within her party following September's mini-budget, which included £45bn worth of tax cuts and sparked turbulence in the financial markets.

Mr Hunt said Ms Truss's administration had made "mistakes", adding: "It was wrong to cut the top rate of tax for the very highest earners at a time where we're going to have to be asking for sacrifices from everyone to get through a very difficult period."

And he also said it was wrong to "fly blind" and announce the mini-budget without a forecast from the Office for Budget Responsibility (OBR).

He said both of these were now in the process of "being put right".

The chancellor made a series of other points about the government's mini-budget and discussed possible plans for his new role in his interviews with the BBC:

*  He said he hoped to keep the 1% cut to the basic rate of income tax, but that no decisions had yet been made

*  He said he would keep the energy price guarantee and praised the former chancellor for implementing it

*  He is asking government departments to find "efficiencies", meaning possible cuts to spending

*  He also refused to commit to a pledge by Boris Johnson's government to raise benefits in line with inflation, though he said he was mindful of the needs of the most vulnerable

Meanwhile, Bank of England Governor Andrew Bailey said there had been a "meeting of minds" when he held discussions with Mr Hunt on Friday.

Mr Bailey made the comments after hinting at impending fresh interest rate hikes.

"Inflationary pressures" meant a "stronger response" could be needed from the Bank than previously thought in August, the governor said.

And the Institute for Fiscal Studies warned Mr Hunt had inherited a "difficult and tricky situation", with the public finances "very stretched".

The think tank's director Paul Johnson said: "I think we're going to see even further reversal of tax cuts that we've had, and in addition probably some very tight spending rounds."

Jeremy Hunt arriving at the BBC on Saturday


Despite Mr Hunt's appointment, Ms Truss and her premiership remain under significant pressure.

One Tory MP described the party as being in a "state of despair," but Truss supporter Christopher Chope said "time will tell" if she had done enough to secure her position.

Labour leader Sir Keir Starmer accused the prime minister of "grotesque chaos" following the sacking of Mr Kwarteng and called for a general election.

During a speech in Barnsley a day after the upheaval in Westminster, Sir Keir said Ms Truss was "clinging on", arguing that there was "no historical precedent" for the current situation facing her government.

But Mr Hunt rejected suggestions of a general election, saying the country needs "stability".


Watch: Chancellor admits mistakes made and some taxes will rise


Newsletter

Related Articles

0:00
0:00
Close
Hong Kong Industry Group Calls for HK$20 Billion Support Fund to Ease Property Market Stress
Joe Biden’s Post-Presidency Speaking Fees Face Weak Demand amid Corporate Reluctance
Charlie Kirk's murder will break the left's hateful cancel tactics
Kash Patel erupts at ‘buffoon’ Sen. Adam Schiff over Russiagate: ‘You are the biggest fraud’
Homeland Security says Emmy speech ‘fanning the flames of hatred’ after Einbinder’s ‘F— ICE’ remark
Charlie Kirk’s Alleged Assassin Tyler Robinson Faces Death Penalty as Charges Formally Announced
Actor, director, environmentalist Robert Redford dies at 89
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
JD Vance Says There Is “No Unity” with Those Who Celebrate Charlie Kirk’s Killing, and he is right!
Trump sues the 'New York Times' for an astronomical sum of 15 billion dollars
Florida Hospital Welcomes Its Largest-Ever Baby: Annan, Nearly Fourteen Pounds at Birth
U.S. and Britain Poised to Finalize Over $10 Billion in High-Tech, Nuclear and Defense Deals During Trump State Visit
China Finds Nvidia Violated Antitrust Laws in Mellanox Deal, Deepens Trade Tensions with US
US Air Force Begins Modifications on Qatar-Donated Jet Amid Plans to Use It as Air Force One
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
Elon Musk Retakes Lead as World’s Richest After Brief Ellison Surge
U.S. and China Agree on Framework to Shift TikTok to American Ownership
London Daily Podcast: London Massive Pro Democracy Rally, Musk Support, UK Economic Data and Premier League Results Mark Eventful Weekend
This Week in AI: Meta’s Superintelligence Push, xAI’s Ten Billion-Dollar Raise, Genesis AI’s Robotics Ambitions, Microsoft Restructuring, Amazon’s Million-Robot Milestone, and Google’s AlphaGenome Update
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Musk calls for new UK government at huge pro-democracy rally in London, but Britons have been brainwashed to obey instead of fighting for their human rights
Elon Musk responds to post calling for the murder of Erika Kirk, widow of Charlie Kirk: 'Either we fight back or they will kill us'
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
USA: Office Depot Employees Refused to Print Poster in Memory of Charlie Kirk – and Were Fired
Proposed U.S. Bill Would Allow Civil Suits Against Judges Who Release Repeat Violent Offenders
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
French Debt Downgrade Piles Pressure on Macron’s New Prime Minister
US and UK Near Tech, Nuclear and Whisky Deals Ahead of Trump Trip
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
Anesthesiologist Left Operation Mid-Surgery to Have Sex with Nurse
Tens of Thousands of Young Chinese Get Up Every Morning and Go to Work Where They Do Nothing
The New Life of Novak Djokovic
The German Owner of Politico Mathias Döpfner Eyes Further U.S. Media Expansion After Axel Springer Restructuring
Suspect Arrested: Utah Man in Custody for Charlie Kirk’s Fatal Shooting
In a politically motivated trial: Bolsonaro Sentenced to 27 Years for Plotting Coup After 2022 Defeat
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Turkish authorities seize leading broadcaster amid fraud and tax investigation
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
ChatGPT CEO signals policy to alert authorities over suicidal youth after teen’s death
The British legal mafia hit back: Banksy mural of judge beating protester is scrubbed from London court
Surpassing Musk: Larry Ellison becomes the richest man in the world
Embarrassment for Starmer: He fired the ambassador photographed on Epstein’s 'pedophile island'
Manhunt after 'skilled sniper' shot Charlie Kirk. Footage: Suspect running on rooftop during panic
Effective Protest Results: Nepal’s Prime Minister Resigns as Youth-Led Unrest Shakes the Nation
Qatari prime minister says Netanyahu ‘killed any hope’ for Israeli hostages
King Charles and Prince Harry Share First In-Person Moment in 19 Months
×