Jeremy Hunt calls for spending cuts amid doubts about ‘triple lockdown’ on pensions

Jeremy Hunt, Britain’s new Chancellor, has urged his fellow cabinet ministers to cut spending in their departments as the government has expressed doubts about the future of the “triple lockdown” on Britain’s pensions.

Hunt urged ministers to find savings at a cabinet meeting on Tuesday as he faces a budget deficit of around £40bn.

Downing Street said the Chancellor had “made it clear that overall public spending would continue to rise, but government departments remain urged to find ways to save taxpayers’ money.”

At a time when inflation is hovering around 10 percent, small nominal increases in departmental spending equate to real cuts.

The Downing Street spokesman said the planned savings were necessary as UK public spending had reached almost £1trillion a year, but insisted they would “not affect the service the public is receiving”.

The spokesman added that Prime Minister Liz Truss could not guarantee she would maintain the UK’s triple lockdown, under which the state pension increases by 2.5 per cent each year according to whichever is the highest of inflation, income or an increase.

Truss said just two weeks ago she remains “committed” to the promise made in the 2019 Tory election manifesto.

But the spokesman said on Tuesday that given the broader review of public spending at this time, neither the prime minister nor the chancellor could make “commitments on individual policy areas”.

“We are very aware of how many vulnerable pensioners there are. And indeed, our priority before this budget will be to ensure we continue to protect the most vulnerable in society,” he said.

“It is not right at this point to pre-empt a collective work that needs to be done government-wide for all spending.”

The spending cut measures, which will be part of a government spending statement Hunt has promised for October 31, come as the new Chancellor seeks to stabilize Britain’s public finances and calm financial markets.

His appointment by Truss on Friday capped three weeks of turmoil in gilts and sterling markets following last month’s financial report. But subsequent about-faces have eroded Truss’s agenda and left her future at Downing Street hanging in the balance.

Truss opened Tuesday’s cabinet meeting by repeating her acknowledgment that the government had gone “too far and too fast” on the “mini” budget – although she said this had been exacerbated by global factors such as inflation.

She said she acted to ensure economic stability but remained fully committed to her “growth agenda”. She added that the Oct. 31 plan would require “difficult decisions.”

Downing Street added the government is sticking to its promise to increase defense spending to 3% of gross domestic product by 2030. Defense Secretary Ben Wallace has threatened to resign if that promise is not kept.

However, the spokesman hinted that there could be alternative ways to meet the defense spending target – potentially implying slower increases in the mid-2020s than previously planned.

“The form of this increase will be set out in the usual way in future spending reviews,” he said. “How we get to this 3 percent will be designed in cooperation with MoD and Treasury.”