'Honest' Jeremy Hunt warns some taxes will rise and spending will be squeezed

On his first full day in the job, the new chancellor has signalled a dramatic reversal of the policies of his predecessor. ITV News Political Correspondent Carl Dinnen reports.

In a bid to be "honest" with the British public, new chancellor Jeremy Hunt has admitted that some taxes will rise and public spending will be squeezed.

Mr Hunt, who was parachuted into Number 11 in an attempt to restore order to Liz Truss’s ailing administration, also told ITV News that "mistakes" had been made in last month's mini-budget.

Ms Truss’s premiership remains in peril after she sacked former chancellor Kwasi Kwarteng and ditched a major chunk of the mini-budget in an extraordinary gamble to stay in power.

On Saturday, Mr Hunt gave ITV News a preview of his economic plan.

"We're going to have to make difficult decisions on spending - it won't go up by as much as people want," Mr Hunt, twice a Tory leadership contender and a former foreign secretary, said.

"There are going to be difficult decisions on tax as well - some taxes won't come down as quickly as thought, some taxes will go up."

The new chancellor also criticised Mr Kwarteng's mini-budget, saying his predecessor should not have announced such sweeping tax cuts without an independent forecast.

On raising benefits - a major sticking point for the Conservatives - Mr Hunt would not commit to a 10% increase in order to match inflation.

Mr Hunt warns of 'difficult decisions' ahead

"I would love to do it if we can, but I’m not going to make that commitment now, just like I’m not going to make commitments on any front," he said.

He said his highly anticipated fiscal statement on October 31 now amounts to a de facto “proper” budget. “We’re going to be talking about tax. We’re going to be talking about spending, we’re going to be talking about medium and long-term plans.”

After three weeks of market turmoil in the wake of Mr Kwarteng’s £43 billion mini-budget tax giveaway, Ms Truss U-turned on her commitment to drop the planned rise in corporation tax from 19% to 25%. The deduction had been a central plank of her leadership campaign.

Subsequently, multiple reports emerged of Tory MPs and Conservative grandees plotting moves to force the PM from office, even as Cabinet ministers remained publicly loyal to her.

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To many observers, it appeared that the end could be nigh for the prime minister after only a few weeks in the job. Former Conservative leader Lord Hague warned that Ms Truss’s premiership “hangs by a thread”, while Conservative former chancellor Lord Hammond said the events of the past weeks had wrecked the party’s reputation for fiscal discipline.

Mr Hunt, however, told ITV News he wants the PM to "survive".

"The last thing this country wants is another period of prolonged political stability," he said.

Loyal MPs on Friday night were urging party colleagues to think again about any bid to oust Ms Truss, who is theoretically safe from a leadership vote for another year under the rules of the backbench 1922 Committee.

Robert Peston asks Mr Hunt whether, given Ms Truss' vulnerability, he has become the strongest chancellor ever

Welsh secretary Sir Robert Buckland, appearing on BBC Radio 4’s Any Questions programme, warned: “I think if we start with gay abandon, throwing another prime minister to the wolves, we’re going to be faced with more delay, more debate, more instability.” But even the staunchly loyal MP Sir Christopher Chope had some harsh words for his party leader, after defending her on Thursday and ruling out any reversal. “I feel let down, very badly let down. And I expressed disbelief at what I heard today because it’s totally inconsistent with everything that the prime minister stood for when she was elected,” he told BBC Newsnight.

Jeremy Hunt 'may have steadied the ship a little bit but it's still sinking as far as [Liz Truss] is concerned,' ITV News Political Correspondent Carl Dinnen says

The promise of a new direction, yet again, for the Conservative government also appeared to cause unrest among the party’s free marketeers. Thatcherite Tory MP John Redwood offered an early warning to the new chancellor, tweeting: “You cannot tax your way to higher growth. If you tax too much you end up borrowing more as you have a worse slowdown.”

Labour leader Sir Keir Starmer reached into his own party’s factional disputes of yesteryear in a swipe at the “grotesque chaos” of the Truss government.

In a speech in Barnsley, he referenced former party leader Neil Kinnock’s famous 1985 attack on the left-wing Militant group in Liverpool as he pointed to the “grotesque chaos of a Tory Prime Minister handing out redundancy notices to her own chancellor”.

Accusing Ms Truss of clinging on to power, Sir Keir said: “There are no historical precedents for what they have done to our economy.”