Jeremy Hunt has said he regrets the turbulence caused by Liz Truss’s mini-budget but he does not believe it inflicted long-term economic damage.
The independent Resolution Foundation estimated the mistakes made by the former prime minister cost the UK £30bn while Paul Johnson, the director of the Institute of Fiscal Studies, called it one of a series of economic “own goals” that has led to the UK’s bleak outlook.
But Mr Hunt told Sky News’ Beth Rigby Interviews programme: “I don’t recognise those Resolution Foundation figures.”
He added: “I don’t believe there was a long term impact because the measures they introduced were reversed so quickly.
“I think what the world wanted to see was that the United Kingdom was not going to spend money it didn’t have and was committed to repaying its debts. And Rishi Sunak and myself have given them that reassurance.”
However, he said he accepts “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”, he said.
When Ms Truss announced a raft of unfunded tax cuts in September, it contributed to the financial chaos which sent the markets into freefall, the value of the pound plummeting, mortgage rates soaring and forced the Bank of England to intervene to stop pension funds collapsing.
This ultimately led to her downfall as Mr Hunt was drafted in to reverse almost all the economic policies that won her the Tory leadership election triggered by Boris Johnson’s resignation.
Mr Hunt declined to apologise for the turmoil, 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.
The chancellor presented his highly-anticipated autumn statement to parliament last Thursday, littered with stealth taxes and curbs on government spending amounting to £55bn in an attempt to plug the black hole in the public finances.
The measures will see around 55% of households worse off, according to the Treasury’s own analysis, while the independent Office for Budget Responsibility (OBR) warned the disposable incomes of UK households would fall by 7.1% over the next two years – the biggest drop on record.
Mr Hunt has accepted “challenging times” lie ahead but insisted his tax hikes were not “just misery for misery sake”.
“It was to make sure that we really have that bright future that everyone wants,” he said.
He repeated his insistence that the problems facing the UK economy are global, as he dismissed forecasts about the hit to trade caused by Brexit.
The OBR have forecast Brexit will cause a 4% GDP reduction over the longer term, amounting to about £100 billion in lost trade and approximately £40 billion in tax revenue.
But Mr Hunt said he did not accept these figures.
“I don’t accept Brexit is the cause of the big economic difficulties we face,” he said.
“Brexit is a choice that Britain as a country made. And whether we will make a success of it or not is a choice that we now have to make.
“The biggest reason for the decline in our economic picture is high international energy prices.”
Mr Hunt was speaking in Birmingham after meeting apprentices working on the HS2 programme.
Some Conservative MPs have spoke out against the expensive project, with senior backbencher Esther McVey saying she won’t back his tax rises unless the project is scrapped.
However, Mr Hunt said the project was integral to the Conservative’s levelling up agenda.
“We aren’t going to compromise on the really big projects that make a difference to our economy. And HS2 is one of those.”