New Chancellor Jeremy Hunt has dramatically scaled back support for household energy bills and ditched tax cuts promised by his predecessor, Kwasi Kwarteng, as he seeks to restore stability following weeks of turmoil on the financial markets.
In an emergency statement, Mr Hunt said the energy price guarantee – which had been due to cap prices for two years – will end in April after which time the Government will look to target help for those most in need.
More “tough” decisions
He said he is abandoning plans to cut the basic rate of tax by 1p – which had been due to be brought forward to April – and that it would remain at 20p in the pound until the country can afford to reduce it.
The cut in dividend tax promised by his predecessor will also go, along with VAT-free shopping for overseas tourists, the freeze on alcohol duty, and the easing of the IR35 rules for the self-employed.
Mr Hunt said the tax measures alone will bring in £32 billion after economists estimated the Government is facing a £60 billion black hole in the public finances.
In a televised statement, the Chancellor – who only took office on Friday – warned of more “tough” decisions to come.
Leadership threats
It comes as Liz Truss’s tenure as prime minister looks to be under threat, with the Scottish Conservative finance spokeswoman saying she only has ‘days left’.
Former culture secretary Nadine Dorries says there is “no unity candidate” to replace her, saying “only one MP has a mandate from party members and from the British public”.
She said the choice for the party is simple: “Back Liz, if not bring back Boris or face a General Election within weeks”.
Reacting to the news on the BBC, several guests struggled to contain themself.
Watch the clip in full below:
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