UK doomed without rethinking Brexit, warns Tory backer

Guy Hands said the Conservative Party is unfit to lead the country

The UK is ‘doomed’ and set to become ‘the sick man of Europe’ because of the way Brexit was negotiated, according to a longtime Tory supporter.

Guy Hands, who runs private equity firm Terra Firma and has been a Brexit critic, warned the UK would face higher taxes, lower benefits and a possible bailout from the International Monetary Fund.

His comments come after a tumultuous period sparked by the mini-budget.

But Mr Hands suggested that the problems facing the UK go back much further.

“The reality is when they did Brexit they had a dream. And the dream was a low-tax, low-profit economy,” he told the BBC’s Today programme. .

Outgoing Prime Minister Liz Truss had tried to push through those policies, he said, but it didn’t work.

‘Once you accept that you can’t actually do this, then the Brexit that has been done is completely hopeless and will only lead Britain into a dire economic state,’ Mr Hands said.

“So I think [if] the conservative party can admit the mistake they made and how they negotiated Brexit and have someone in charge who actually has the intellectual capacity and the authority to renegotiate Brexit there is a possibility of redressing the economy, but without it the economy is frankly doomed.”

However, he added that the Conservative Party was, in his view, not fit to lead the country.

“I think he needs to stop fighting his own internal wars and focus on what needs to be done in the area of ​​the economy and admit some of the mistakes they’ve made over the last six years that frankly put this country on the path to being the sick man of Europe,” he said.

The government has been contacted for comments.

Ms Truss’ mini-budget, unveiled on September 23, has been accused of causing turmoil in financial markets.

The pound plunged to a record low against the dollar and government borrowing costs rose sharply following the statement, which promised deep tax cuts without saying how they would be paid for.

The IMF has also openly criticized the UK government for its plans to cut taxes, warning that such measures were likely to fuel the cost of living crisis.

Last week, new Chancellor Jeremy Hunt canceled most of the mini-budget, a move that was hosted by the IMF.

On Monday morning, the pound appreciated against the dollar and government borrowing costs fell as investors reacted to news of Boris Johnson’s withdrawal from the Tory leadership race.

This leaves Rishi Sunak as the favorite to become prime minister.

Mr Hunt – who is backing Mr Sunak – is due to present the government’s economic tax and spending plan on October 31.

But Mr Hands argued that much more needs to be done to get the economy back on track.

He said that as a businessman he tries to be positive about the investment landscape.

But the reality, he said, is that the country is facing “increasing levels of poverty, and it is poverty that is rising at the economic level”, reaching middle-income households who will find it difficult to pay their mortgages.

He painted a bleak outlook for the economy, saying to expect “a steady increase in taxes, a steady cut in benefits and social services, higher interest rates and possibly the need for an IMF bailout. “.

Mr Hands’ comments come after a warning this weekend from a former Bank of England governor, Lord Mervyn King, who said the UK faced a ‘more difficult’ period of austerity than that which followed the 2008 financial crisis in order to stabilize. the economy.

Lord King said the average person could face “significantly higher taxes” to fund public spending.

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