Jeremy Hunt says taxes will rise and ‘difficult’ cuts are needed after mini-Budget ‘mistakes’

Also refused to commit to PM’s pledged 1p cut in income tax and to raise defence spending to 3 per cent

Liz Truss’s new chancellor Jeremy Hunt has said taxes will rise and warned of “difficult”spending cuts ahead, in an extraordinary series of interviews just hours after taking up the post.

He also refused to commit to the prime minister’s pledged 1p cut in income tax and to raise defence spending to 3 per cent as he admitted that “mistakes” were made in last month’s mini-Budget.

In a unexpected moment, his attempts to set out his economic strategy were momentarily derailed as the actress Miriam Margolyes told the Today programme that when she saw him enter the studio she told him: “‘You’ve got a hell of a job, best of luck.’ And what I really want to say was, ‘F*** you, bastard.’”

“But you can’t say that,” she added, live on air.

In a move that risks inflaming the Tory right, Mr Hunt suggested in multiple interviews that there would be tax rises ahead as he works to balance the Treasury books.

He twice said that "some taxes will go up".

And he suggested the planned 1p cut to income tax could be dumped. He “very much” hoped the government could keep the measure, he said, but would not make a decision before he had looked at everything in the round.

He also appeared to junk Ms Truss’s pledge to increase defence spending to 3 per cent, saying that would depend on the state of the economy.

Mr Hunt became chancellor after Ms Truss brutally sacked her first choice, Kwasi Kwarteng in a bid to save her flailing premiership.

The prime minister also announced a U-turn on her flagship plans to cut the rate of corporation tax.

On Sky News, Mr Hunt denied that the UK was returning to an era of austerity, but admitted that “difficult” decisions needed to be made on spending.

“I don’t think we’re talking about austerity in the way we had it in 2010 when I was also in the Cabinet,” he said.

“But we are talking about very difficult decisions in budgets where there is already a great deal of pressure.”

He made clear he was now implementing his economic plans, not that of Mr Kwarteng and Ms Truss, which was due to be outlined on Halloween. Asked if he now knew “the plan” to calm the markets, which were spooked after Mr Kwarteng’s mini budget, Mr Hunt said: “That’s what I am going to go and work out with my officials.”

Asked if he would have a “clean slate” when it comes to the mini-budget, Mr Hunt said: “Yes.”

He refused to get into specifics on taxes or to commit to benefits rising in line with inflation, although he said a number of times that his was a “compassionate Conservative government”.

However, the new Chancellor signalled that the NHS will not be immune from difficult decisions on public spending.

He said two mistakes had been made in the mini-Budget. The planned tax cut for the wealthiest and a decision to “fly blind” and not have the Office of Budget Responsibility (IOBR) “saying that the sums add up”.

On the prime minister’s future, he insisted she had “listened”, adding: “I think the last thing people want now is more political instability.” Ms Truss became prime minister last month after Tory MPs ousted Boris Johnson following a series of scandals over partygate among others. With his appointment, Mr Hunt become the fourth chancellor in four months.

Mr Hunt is due to meet with Treasury officials later on Saturday and with Liz Truss on Sunday at Chequers.

But his plans prompted a backlash from Thatcherite Tory MP John Redwood, who tweeted: "You cannot tax your way to higher growth. If you tax too much you end up borrowing more as you have a worse slowdown."

And Lord Rose, the chairman of Asda, suggested Mr Hunt’s efforts were in vain as the “current situation is completely untenable and cannot be sustained”.

“In my view the prime minister is now a busted flush,” he said.