Chancellor Jeremy Hunt has announced the Government will 'reverse almost all tax measures' announced in last month's growth plan.
Mr Hunt also said the Government will scrap plans to reduce the basic rate of income tax from 20 percent to 19 percent in April next year.
While the Government will also ditch plans for new VAT-free shopping for international tourists, Mr Hunt said.
Help with energy bills for all households will only last until April, with Mr Hunt announcing a review to look at a “new approach” to target support at those worst off after that.
Jeremy Hunt POOL
Jeremy Hunt has announced the Government will 'reverse almost all tax measures' announced in last month's growth plan Victoria Jones
In an emergency statement he said: “We will reverse almost all the tax measures announced in the growth plan three weeks ago that have not started parliamentary legislation.
“So whilst we will continue with the abolition of the health and social care levy and stamp duty changes, we will no longer be proceeding with the cuts to dividend tax rates, the reversal of off-payroll working reforms introduced in 2017 and 2021, the new VAT-free shopping scheme for non-UK visitors or the freeze on alcohol duty rates.”
Government spending in “some areas” will be cut, the Chancellor confirmed.
Mr Hunt 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.
“But as I promised at the weekend, our priority in making the difficult decisions that lie ahead will always be the most vulnerable and I remain extremely confident about the UK’s long-term economic prospects as we deliver our mission to go for growth.”
The Chancellor added that the UK will “always pay its way.
“Growth requires confidence and stability and the United Kingdom will always pay its way.
“This Government will therefore take whatever tough decisions are necessary to do so.”
Mr Hunt made the comments just days after he was appointed Chancellor following backlash over Kwasi Kwarteng's mini-budget.
Key points of Jeremy Hunt's statement:
- Plans to reduce the basic rate of income tax scrapped
- Basic rate of income tax to remain at 20 percent indefinitely
- Review into help Government is providing with energy bills
- Ditch plans for new VAT-free shopping for international tourists