Chancellor Jeremy Hunt plans to cut energy bills support as MPs question how long Liz Truss can survive as PM

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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. The Government will then look to target help for those most in need.

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.

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The cut in dividend tax previously promised 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.

Chancellor Jeremy Hunt speaking to the nation from the Treasury in London. Picture: Marc Ward/PA WireChancellor Jeremy Hunt speaking to the nation from the Treasury in London. Picture: Marc Ward/PA Wire
Chancellor Jeremy Hunt speaking to the nation from the Treasury in London. Picture: Marc Ward/PA Wire

Mr Hunt said the tax measures alone will bring in £32bn after economists estimated the Government is facing a £60bn 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. He said: "Governments cannot eliminate volatility in markets but they can play their part and we will do so.”

Mr Hunt said he will continue with the decision to reverse the increase in national insurance contributions and a reduction in stamp duty, which are already going through Parliament.

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Joining in with the debate on the Yorkshire Evening Post’s Facebook page, Stuart Pickin said: “He has just put millions of people into debt by cutting the £2,500 price cap from April so the energy companies can put up power supply to whatever they want. Why can't they do a one-off tax on these power companies? Guess that will never happen ‘cos they want the rich to get richer and the poor to get poorer. I've voted Conservative for years but not anymore.”

But reader Ian Farmer observed: “Labour have the same energy plan for six months and nothing afterwards.”

Mr Hunt’s statement represents an unprecedented overturning of the plans set out just over three weeks ago by Mr Kwarteng, with the enthusiastic backing of Liz Truss. The mini-budget package of unfunded tax cuts totalling £45bn caused chaos on the markets. The reaction has since forced the Prime Minister into a series of U-turns.

The position set out by the new Chancellor sounded the final death knell for Ms Truss’ free market experiment – dubbed "Trussonomics" – to kick-start economic growth through a programme of swingeing tax cuts and radical de-regulation.

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It has left Tory MPs questioning how much longer Ms Truss can remain in office now that the central plank of her campaign in the leadership contest to succeed Boris Johnson has gone. And readers discussing whether Ms Truss was actually in charge any more were scathing.

Jason Andreoli said: “What a sham this lot are. You couldn't trust any of them to be in charge of a church picnic, never mind a government.”

Andrew Lister said: “Wouldn't leave her in charge of our pooch, joke she is still there.”

Tommy Cooper said: “I wouldn't put her in charge of my three-year-old’s birthday party, never mind the Conservative party.”