Tory Civil War Erupts As Jeremy Hunt And Liz Truss Clash Over Tax Hikes
Liz Truss was forced to make Jeremy Hunt chancellor during her short-lived term as prime minister.
The bitter Tory civil war has erupted again after Liz Truss condemned Jeremy Hunt's decision to increase corporation tax in the Budget.
A spokesman for the former prime minister said it will cost the Treasury money and pointed to chemical giant Astra Zeneca's decision to build a new plant in Ireland, where the rate is much lower than the UK.
It came after the chancellor hit out at the "mistakes" made in last October's disastrous mini-budget.
Appearing in front of the Treasury select committee this morning, Hunt - who has appointed chancellor during Truss's short-lived time as prime minister - said: "It’s now clear that you can’t fund tax cuts through borrowing."
That was a swipe at his predecessor Kwasi Kwarteng's botched plan to slash income tax for the rich and reverse plans to hike corporation tax to 25% - a move Hunt confirmed in the Budget earlier this month.
Responding to Hunt's comments, Truss's spokesman said: “Liz was always clear that you can’t deliver economic growth and thus reduce borrowing by hiking taxes.
"Raising corporation tax from 19% to 25% looks like a pretty bad mistake right now when you consider how a firm like Astra Zeneca is locating its new plant in Ireland, where corporation tax is half the rate now being levied by the British government.
"The Treasury looks like it will lose revenue as a result of that decision."
Tory MPs have also hit out at the chancellor's decision, warning that it will damage the economy.
