New Chancellor Jeremy Hunt has scrapped the tax cuts planned in Kwasi Kwarteng's mini-Budget and announced that energy bill support will only last until April.
In an emergency statement today, Mr Hunt said the Government would scrap plans to reduce the basic rate of income tax from 20% to 19% in April next year.
He said help with energy bills for all households - Prime Minister Liz Truss's flagship policy - will only last until April. There will be a review to look at a “new approach” to target support at those worst off after that.
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The cut in dividend tax promised by Mr Kwarteng 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 would bring in £32bn. Economists had estimated the Government was facing a £60 billion black hole in the public finances.
In his televised statement, Mr Hunt warned of more “tough” decisions to come.
“Governments cannot eliminate volatility in markets but they can play their part and we will do so,” he said.
As Mr Hunt announced plans to scrap the interest rate cut, he said: "It is a deeply held Conservative value - a value that I share - that people should keep more of the money that they earn.
"But at a time when markets are rightly demanding commitments to sustainable public finances, it is not right to borrow to fund this tax cut."
Nicola Sturgeon responded on Twitter: "Another reminder of the many demands made of @scotgov to immediately match this without any consideration of cost and impact. Thank goodness we didn’t act so rashly."
