The Daily Telegraph

‘We must take decisions of eye-watering difficulty’

♦ Chancellor will not rule out windfall tax or scrapping pensions triple lock ♦ Change to bills cap could see families’ energy costs hit £5,000 next spring ♦ PM’S hold on power precarious as Tory rebels speed up plots to oust her

- By Ben Riley-smith Political Editor

JEREMY HUNT will today confront the Cabinet with a demand to find new spending cuts to restore Britain’s economic credibilit­y after he ripped up Liz Truss’s tax plans.

The Chancellor yesterday warned MPS that decisions of “eye-watering difficulty” were needed and declined to rule out a windfall tax or scrapping the pensions triple lock.

The Daily Telegraph understand­s that Mr Hunt will ask that savings are even found in the health and defence budgets, despite the protestati­ons of his Cabinet colleagues.

The about-turns left the Prime Minister in a precarious position, with Labour mocking her failure to address MPS yesterday and Tory rebels speeding up plots to oust her from No10.

Last night, Ms Truss said “sorry” for the first time for “mistakes” in economic policy, but vowed to fight on, telling the BBC: “I will lead the Conservati­ves into the next general election.”

Sir Graham Brady, the 1922 Committee chairman, met Ms Truss in private yesterday. He is expected by some senior Tories to communicat­e the scale of party discontent to her in another meeting in the next 36 hours.

Mr Hunt yesterday tore up her minibudget, including scaling back a promise to freeze household energy bills for two years. They will now only be capped until April 2023.

The change means that households could see annual energy bills hitting £5,000 next spring, at the same time as mortgage rates are likely to soar.

Markets reacted positively to the Chancellor’s announceme­nt.

The Government’s 10-year and 30-year borrowing costs fell by the most of any day on record, while the pound climbed 2 per cent against the dollar to break above $1.14.

The Chancellor denied “austerity 2.0” would be imposed on the country, but think tanks warned spending cuts worth tens of billions of pounds were still needed to balance the books.

Mr Hunt told the Commons: “We are a country that funds our promises and pays our debts and when that is questioned, as it has been, this Government will take the difficult decisions necessary to ensure there is trust and confidence in our national finances.

“That means decisions of eye-watering difficulty.

“But I give the House and the public this assurance – every single one of those decisions, whether reductions in spending or increases in tax, will be shaped through core compassion­ate Conservati­ve values that will prioritise the needs of the most vulnerable.”

A Treasury source said of today’s Cabinet meeting: “Health and defence won’t be exempt from finding savings.

“No department will be ring-fenced. That message will be delivered to the Cabinet.”

Mel Stride, a senior Conservati­ve MP, suggested Mr Hunt was “under halfway” to plugging the fiscal hole and predicted public spending cuts to health, social care and pensions.

He told BBC Radio 4’s PM programme: “I think the OBR [Office for Budget Responsibi­lity] is probably sitting on a figure for that fiscal hole of about £70billion or £72billion.

“So he’s still got another £40billion to go, he’s under halfway….. Without leaning into spending in a meaningful way, it’s very difficult to see how he’s going to close that gap down”. Mr Hunt’s interventi­on, which abandoned all new tax cuts except for the reductions in National Insurance and stamp duty, piled further political pressure on Ms Truss. The Prime Minister was accused of ducking scrutiny as she declined to speak in an economic debate in the Commons, with Sir Keir Starmer joking: “The lady’s not for turning up.”

Two more Conservati­ve MPS went public with calls for Ms Truss to resign, taking the total to five. More are expected in the coming days.

Sir Charles Walker, a Tory veteran stepping down at the next election, called the Government “catastroph­ically incompeten­t” and Ms Truss’s position “untenable”.

Angela Richardson, the Tory MP for Guildford, said it would be “better for the party and for the country to have a change in leadership at the top”.

Sir Graham Brady, chairman of the 1922 Committee, held talks with Ms Truss yesterday, with the contents kept secret. His previous interventi­ons have hastened the resignatio­ns of past prime ministers.

The 1922 Committee executive members have singled out Prime Minister’s Questions tomorrow as a key moment for Ms Truss to reassert authority.

Mr Hunt ruled out standing for prime minister, saying: “I rule it out, Mrs Hunt rules it out, three Hunt children rule it out.” Speaking to Sky News about the Prime Minister, the Chancellor urged Tory MPS to “give her a chance”.

Ms Truss held informal talks with Cabinet ministers over drinks in Downing Street last night, with their support now critical to keeping her in post.

The Daily Telegraph can disclose that Kemi Badenoch, the Internatio­nal Trade Secretary, stressed the need for clear government communicat­ions after a challengin­g few weeks.

She said the policy reversals would have to be explained in public to avoid more political “instabilit­y”. A source close to Ms Badenoch insisted that she remained loyal to Ms Truss.

Tory rebels at the end of last week were predicting Ms Truss would be gone by Christmas, but some believe she now faces a battle to reach the end of the week.

Her defenders dismiss such talk, insisting she is not considerin­g a resignatio­n and warning that a snap election could follow her being ousted from Downing Street. But the party mood is turning, according to recent surveys.

This newspaper can reveal that a poll of Tory members suggests that if the summer leadership vote was held again, Rishi Sunak, not Ms Truss, would be elected. The survey by JL Partners was of 500 Tory members and weighted for the last leadership result.

Of those members with a view, 60 per cent said they would vote for Mr Sunak and 40 per cent for Ms Truss.

After a day of public silence, the Prime Minister granted an interview to the BBC in which she apologised for missteps in her first six weeks in office.

Ms Truss said: “First of all, I do want to accept responsibi­lity and say sorry for the mistakes that have been made.

“I wanted to act, to help people with their energy bills, to deal with the issue of high taxes, but we went too far and too fast. I have acknowledg­ed that.

“I have put in place a new Chancellor with a new strategy to restore economic stability. Now what I am focused on is delivering for the public.”

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 ?? ?? Jeremy Hunt, the Chancellor, denied ‘austerity 2.0’ would be imposed on the country
Jeremy Hunt, the Chancellor, denied ‘austerity 2.0’ would be imposed on the country

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