New U.K. Finance Minister Admits Mistakes, Warns Of Tax Rises

Jeremy Hunt, the new U.K. Chancellor appointed by Prime Minister Liz Truss admitted on Saturday that mistakes were made by his predecessor and signaled a reversal of his tax-cutting approach.

Hunt was appointed after Truss sacked her friend Kwasi Kwarteng in an attempt to calm the ongoing economic and political crisis.

A former Conservative Party leadership contender-Hunt, who is dubbed as the most powerful man in the U.K. government as Truss battles to win back her credibility, has also indicated that spending cuts would have to be brought in across all state departments to deal with the tough economic climate.

He acknowledged that the mini-budget tabled by Kwarteng at the end of last month had “two mistakes” – cutting the 45-pence rate of tax for highest earners, an announcement since reversed, and announcing the tax-cutting package without independent costings by the Office for Budget Responsibility.

"The way we went about it clearly wasn't right and that's why I'm sitting here now," he told the BBC.

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

It indicates a reversal of Truss’ central theme of lowering taxes on which she had campaigned to win the Conservative Party leadership race against former Chancellor Rishi Sunak.

This means the turbulence at the very top of the U.K. government is far from over, with disgruntled Tory rebels and Sunak loyalists defiantly against the new leader amid her various U-turns. The fact that she fired Kwarteng just 38 days into the job for announcing policies in the mini-budget that she campaigned for is being seen as an attempt to shift the blame entirely on him for the financial markets chaos that ensued.

Conservative MP Andrew Bridgen, who backed Sunak in the leadership race, said he believes there would 'be a challenge to Truss in the next few weeks'.

"Dissatisfaction is so high in the parliamentary party. Removing Kwasi Kwarteng when he implemented the policies she asked him to do won't engender loyalty to her," he said.

Former Conservative leader William Hague meanwhile said Truss' leadership is 'hanging by a thread'. According to party insiders, it is hard to find Tory MPs who do not believe that Truss’ days at 10 Downing Street are numbered.

"We can't possibly force another Prime Minister out of office, we've just got to calm down and try to give the prime minister our support," said Tory MP and Truss supporter Christopher Chope.

Truss herself has insisted that she would stay on as Prime Minister to get the economy growing.

"I'm absolutely determined to see through what I promised – to deliver a higher growth, more prosperous United Kingdom to see us through the storm we face," she said at the Downing Street press conference on Friday – branded the shortest in recent history during which she brushed off questions about her resignation.

It came at the end of a dramatic day of events, which began with Kwarteng flying back early from his Washington trip and ending one of the shortest runs at 11 Downing Street as the U.K.’s Treasury chief in history.