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Saturday, November 26, 2022

Jeremy Hunt rejects OBR forecasts on Brexit hit to UK economy

Jeremy Hunt has rejected forecasts of Brexit’s hit to the UK economy and that Liz Truss’s mini-budget inflicted long-term damage.

The Chancellor also denied that his autumn statement was an overcorrection that will cost the Tories the next election.

Speaking to Sky’s Beth Rigby Interviews, Hunt repeatedly said he did not “accept” the Office for Budget Responsibility’s prediction that Brexit will cause a 4% GDP reduction in the long term.

“I don’t accept the 4%,” he said, arguing that the fiscal watchdog’s forecast was based on a scenario where no other changes were made that could impact the size of the economy.

He claimed that with the decisions made in last week’s budget, “the recession, the impact on GDP is much less than it would have been. And there’s a lot of growth on the other side”.

“My statement on Thursday showed how we are going to forge a different economy outside the European Union, high skill, high wage, the world’s next Silicon Valley, and with our own regulations.”

“I accept the ones I agree with”

Challenged over whether he only accepts figures he likes, he said: “I accept the ones I agree with and I don’t accept the ones I don’t agree with.

“That one I don’t agree with, because that is saying absent other changes, that could be the impact.”

Hunt expressed regret over the disastrous tax-cutting bonanza by his predecessor Kwasi Kwarteng and former prime minister Truss, but denied it had damaged the economy in the long run.

“I do accept that we’ve had a rocky period in the last couple of months.

“I wish that we hadn’t had what happened with the mini-budget and all the turbulence that happened there.”

£30 billion mistake

However, the Chancellor said he did not “recognise” an estimate by the Resolution Foundation think tank that Truss’s mistakes may have cost the country as much as £30 billion.

“The tax measures in the mini-budget were largely reversed, so I don’t accept that analysis,” he said.

“I don’t believe there was a long-term impact because the measures they introduced were reversed so quickly.”

Hunt refused to apologise for the financial chaos, saying “actions speak louder than words”.

“I think we have demonstrated that we think what happened was wrong. We’ve corrected it and we’ve put the country back on the right track,” he said.

Hunt unveiled £25 billion of tax rises in his autumn budget, causing concern among some Tory backbenchers and accusations that it was an overcorrection from Truss’s tax-slashing plans.

When it was put to him that the budget was bad for the party’s political fortunes, he said: “No, because I actually think in the end, that’s why people vote Conservative, because they trust us on the economy to take difficult decisions. That’s what we’ve done.

“I think what people want from a Conservative government is a team of people who will take the difficult decisions, irrespective of whether it’s good for their political fortunes, because it’s right for the country.”

Related: International press document Britain’s Brexit ‘bregret’

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