MICHAEL Gove sparked a morning of fiscal chaos yesterday after suggesting more cash for Brits to pay rent before hinting HS2 cash could be slashed in a bid to save money.
The newly returned Levelling Up chief revealed ministers are weighing up cash bungs, Universal Credit help or targeted tax cuts.
Michael Gove said: ‘I’m sure that some capital spending will be cut’
But he later warned that Chancellor Jeremy Hunt will “have to make decisions which will be painful” in the upcoming budget.
He confirmed that Liz Truss’ costly investment zones were now “under review” – as revealed by Trending In The News on Sunday last week – over environmental concerns.
Mr Gove then admitted the staggering £100bn budget for the new high speed train line could be on the chopping board as the Treasury eyes huge cuts to balance the books.
He told Times Radio: “When we face the particular economic problems that we have at the moment, I’m sure that some capital spending will be cut.
“It will not be easy, it will be painful.”
Downing Street played down his comments, suggesting they would be focusing on keeping the HS2 project within its existing budget rather than slashing the cash.
Mr Gove – brought back into his job last week under new PM Rishi Sunak – refused to say whether the Government would uprate benefits in line with soaring inflation as previously promised.
Ex-Chancellor Lord Hammond said he would be “very surprised” if they didn’t – but that “borrowing” the cash to pay for it was no longer on the table after the markets “tantrum”.
However, he put the nation on notice that if they wanted better public services, they will have to look at tax hikes, telling the BBC: “The reality of the fiscal challenge we face is that if we want public services not just to be maintained but to be improved… Everybody, including ordinary earners, are going to have to pay more tax.”
Yesterday booted Cabinet minister Kit Malthouse and Jacob Rees-Mogg fired warning shots at the new PM not to whack extra costs onto Brits during the cost of living squeeze.
Ex-Business Secretary Mr Rees Mogg told the Sunday Telegraph Britain still has “the highest tax per cent of GDP for 70 years”, adding: “I think there is a natural limit to how much tax an economy will pay.”
And former Education Chief Kit Malthouse warned Mr Hunt to strike “the right balance” to show he wants to balance the books but not “exacerbate” the financial struggles of the nation.
