A year as Chancellor – from mini-budget turmoil to tackling the inflation crisis

Jeremy Hunt was appointed on October 14 2022 with an immediate priority to help restore the country’s battered economic credibility.

Chancellor Jeremy Hunt took control of the nation’s finances a year ago on Saturday, amid political chaos and turmoil in the financial markets caused by former prime minister Liz Truss’s disastrous mini-budget.

His appointment on October 14 last year saw him replace Kwasi Kwarteng, who was sacked after just five weeks in the job, followed swiftly by the resignation of Ms Truss after their aggressive tax-cutting policies crashed the pound, sent borrowing costs soaring and sparked a pension fund crisis.

Previously foreign secretary and health secretary and a former leadership contender, Mr Hunt’s initial task was to help restore the country’s credibility under Prime Minister Rishi Sunak’s government, calling an emergency budget soon after taking on the post.

He announced a raft of tax rises and spending cuts as he attempted to plug a hole in the country’s public finances.

Theo Paphitis
Dragons’ Den star Theo Paphitis said Mr Hunt’s legacy is ‘giving us the largest tax burden since the Second World War’ (Theo Paphitis Retail Group/PA)

In the year that followed, the UK has had to grapple with a crippling cost-of-living crisis, which saw inflation hit a 41-year high of 11.1% in October 2022 as energy and food costs have soared, while mortgage rates jumped to levels not seen for 15 years on the back of 14 interest rate hikes in a row.

The worst of the cost crisis appears to have now abated as price rises have slowed, but there is still some way to go before the Government reaches its target to halve inflation, to 5.4%, by the year end.

Here are the views of some of Britain’s prominent business and industry figures on Mr Hunt’s year in the role and their thoughts on what his future priorities should be.

– Tim Martin, founder and chairman of pub giant JD Wetherspoon

“I think the Government woefully overspent during the pandemic and shortly after.

“So I have some sympathy with Jeremy Hunt and the Government now because I think they have had their hands tied for the past year or so.

“They had no say in that and now seems like they are having to wait before doing what they might want.

“It’s unviable for a government to go too hard on spending or tax cuts when you are in that position.

“But I hope, and think, they are now looking at where they might be able to cut taxes.

Tim Martin
JD Wetherspoon chairman Tim Martin said Mr Hunt needs to cut VAT to support pubs and consumer spending (Jonathan Brady/PA)

“VAT and rates are where they have to be looking if they care about normal people and how they spend money.

“We want parity for pubs with supermarkets and that means bringing down VAT.

“If they want the UK’s pubs to last hundreds of years more it needs the Government to support it when it faces challenges like we are seeing.”

– Dragons’ Den star Theo Paphitis, owner of high street retailers including Ryman Stationary, Robert Dyas and Boux Avenue

“There are massive limitations on what Jeremy Hunt can and can’t do.

“He inherited rampant inflation and a party that is divided in so many ways that it is very difficult to pull together with any authority or give support to anything major.”

“Quite frankly, he has not really done anything but put taxes up; his legacy is going to be giving us the largest tax burden since the Second World War. His job could easily have been done by AI (artificial intelligence).”

Mr Paphitis said that the Government’s focus on bringing down inflation was important, but the approach has not been cohesive.

“Hunt said we are not in a position to give tax cuts because it will put money in people’s pockets, which they will go out and spend, which will fuel inflation.”

But the Government simultaneously announced a further increase in the national living wage, which is essentially “another tax” for employers, according to Mr Paphitis.

Looking ahead, Mr Paphitis said the Government needs to reform business rates, which he said unfairly burdens businesses on the high street while online and technology giants only face a tax on their warehouses.

“We all accept the Exchequer needs revenue, but they seem to be too lazy to change with the times and change the system that is no longer fit for purpose.”

– Sharon Graham, general secretary of trade union Unite

“It has been clear that Mr Hunt wants workers and communities to again pay the price for a crisis not of their making.”

She said she is “struggling to see any successes” of his tenure so far.

“For a party that has flattered itself with a badge of sound economic management, the state we’re in should be a wake-up call to the country at large.

“His personal failure to make the right choices, for example not paying NHS workers an inflation-proof pay rise, has compounded the recruitment and retention crisis within the NHS and this is unforgivable.

“The UK economy is broken, it no longer works for everyday people.

“We have a £2 trillion plus economy, the sixth richest economy in the world.

“How is it acceptable that a significant number of people are merely existing while they pay for a cost-of-living crisis they did nothing to cause?

“We need to see different choices being made to ensure the pie is divided more equally.

“One choice would be a wealth tax on the super rich. As a starter, a 1.5% annual tax on wealth over £10 million would bring in about £17 billion a year.”

Keith Anderson, chief executive of energy firm ScottishPower

“What’s impressed me about Jeremy Hunt is his understanding that investment in green infrastructure can radically unlock growth.

“As Chancellor, he’s acted quickly to use levers like capital allowances to boost growth potential.

“I think we all recognise that we need to speed up this investment. There’s no shortage of companies queuing up to invest in UK infrastructure, but we need to do more to address planning logjams.

“If the Government can halve the time for projects to get spades in the ground, companies like ours will double our investment.”

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