The new chancellor Jeremy Hunt has announced further changes to the mini-budget taking the axe to most of the policy commitments made by the prime minister, Liz Truss.
In a statement, Hunt said, a central responsiblity for any government is economic stability adding that while no government can control the markets every government can give certainty about the sustainability of the public finances.
Further to the corporation tax increase announced last week Hunt announced further changes.
He said he will reverse almost all the tax measures announced in the growth plan three weeks ago that have not [already started the parliamentary process].
This includes:
Cuts to dividend tax rates
The IR35 tax changes
VAT-free shopping for tourists
The alcohol duty changes
The chancellor also said the 20% basic rate of tax will remain indefinitely with these measures raising an extra £32bn per year for the Treasury.
The planned changes to national insurance and stamp duty are the only tax amendments to have avoided being scrapped.
In a surprise announcement Hunt also said that the energy price guarantee, as originally announced, will only last until April.
He said prime minister, Liz Truss, agreed that it would be wrong to make such a long-term spending commitment, when it is unclear what will happen to energy prices in the future.Hunt said there will then be a review with a more targeted system will then be put in place.
"Any support for businesses will be targeted to those most affected and the new approach will better incentivise energy efficiency" Hunt said.
Looking ahead the chancellor said "There will be more difficult decisions, I’m afraid, on both tax and spending as we deliver our commitment to get debt falling as a share of the economy over the medium term."
"All departments will need to redouble their efforts to find savings and some areas of spending will need to be cut."
11.15am: Chancellor axes plans to cut basic rate of tax and revises energy support package
The new chancellor, Jeremy Hunt, has scarpped a number of measures announced in the mini-budget.
He said that nearly all the tax measures that have not started legislation will be reversed, with the changes to national insurance and stamp duty the only ones to survive.
The freeze on changes to alcohol duty have been scrapped as have plans for VAT-free shopping for tourists.
The basic rate of income tax will remain at 20% for the foreseeable future Hunt said.
Hunt also announced a review of the energy price guarantee beyond April next year.
10.50am: Chancellor to unveil further changes to mini-budget
The new chancellor, Jeremy Hunt, is set to announce further changes to the mini-budget made by his predecessor in September.
Hunt, who has ripped up much of Truss’s economic programme since being appointed as chancellor is expected to initially set out changes this morning via a Treasury statement and TV clip.
He will then address the House of Commons at later today at 3.30pm.
Hunt is expected to roll back more of the unfunded tax cuts and other measures in the mini-budget, including the plans to cut the basic rate of tax by 1p.
In a highly unusual statement, released at 6am UK time, the Treasury said Hunt’s statement would be “bringing forward measures from the medium-term fiscal plan that will support fiscal sustainability”.
The rest of the plan would then be unveiled on 31 October, as scheduled, it said.
The statement added: “This follows the prime minister’s statement on Friday, and further conversations between the prime minister and the chancellor over the weekend, to ensure sustainable public finances underpin economic growth.”
So far, since the mini-budget was announced there have been two major changes to policy with plans to lower the top rate of tax to 40p from 45p scrapped while corporation tax will now be increased to 25% from 19%, rather than left unchanged.