Hunt ditches entire Truss program in bid to save U.K. credibility

Chancellor of the Exchequer Jeremy Hunt ripped up what was left of Prime Minister Liz Truss’s controversial economic program, scrapping tax cuts and removing support for household energy bills in an effort to restore order to the U.K. public finances.

After the backlash against Truss’s plan pushed up borrowing costs for the U.K. government, the package of £32 billion (US$36 billion) is less than half of what economists say the government may need to put government debt on a stable trajectory after soaring inflation and sputtering growth gutted tax revenue. 

Together with earlier U-turns, the decisions reverse almost all of the £45 billion in tax cuts and giveaways Truss announced in September, raising questions about whether she can survive in office. The only major changes left from that announcement are those that are already part way through legislation, on national insurance contributions and stamp duty. Hunt signaled he’s likely to make more severe spending cuts in the weeks ahead.

“There will be more difficult decisions, I’m afraid, on both tax and spending as we deliver our commitment to get debt falling as a share of the economy over the medium term,” Hunt said, adding that the priority will be on protecting “the most vulnerable.”