Just last week at parliamentary questions, Truss said: “We have taken decisive action to make sure that people are not facing energy bills of £6,000 for two years. We remember that the opposition are only talking about six months.”
Rachel Reeves, Labour’s shadow chancellor, said: “The Conservatives have lost all credibility. The chancellor said that growth requires ‘confidence and stability’ yet it’s clear that the Tories can’t provide this. There will continue to be a huge cost to families because of the actions of this Tory government.
“We are still flying blind with no OBR forecasts and no clarity of the impact of their mistakes. The humiliating climb-down on their energy plan begs the question yet again – why won’t they bring in a windfall tax on energy producers to help foot the bill? Only Labour offers the leadership and ideas Britain needs to fix the economy and get out of this mess.”
Labour MP Jess Phillips added: “What we have just seen was a crisis newsflash of a Conservative chancellor, not announcing emergency action because of a foreign war, or measures in a global pandemic but measures against itself. Not a virus or a tyrant, the actor in this case was the UK government.”
In his briefing, Hunt said he will “do what’s necessary for economic stability”. Almost all the tax measures in Truss and Kwasi Kwarteng’s mini-budget are to be reversed, Hunt confirmed.
The basic rate of income tax will remain at 20 per cent and will do so indefinitely, and corporation tax will no longer be cut.
Truss said: “The British people rightly want stability, which is why we are addressing the serious challenges we face in worsening economic conditions. We have taken action to chart a new course for growth that supports and delivers for people across the United Kingdom.”
According to the Resolution Foundation, the scale of the tax cuts announced in the mini budget coming into effect next year have been reduced from £500 to £290 for a typical household.
Hunt repeated that he wanted to create “stability” and he would make “whatever tough decisions are necessary to do so”. He claimed the new plan will “cost the tax payer significantly less than planned”.
Alison Garnham, chief executive of the Child Poverty Action Group, warned: “Families up and down the country are now terrified about how they will get through the tough times ahead.
“It’s frankly unthinkable that the poorest kids and families in our society will be forced to pay for the economic mistakes of this government – but today the Chancellor has given families no reassurance about how he will support them.”
Warm this Winter tweeted: “We’re deeply concerned that homes won’t be properly protected from rising energy bills.”
Even with the energy price cap, bills are still double what they were earlier this year. Now, families have no certainty that their bills won’t rise even further from April.
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A spokesperson for the End Fuel Poverty Coalition tweeted: “The country was already facing a financial cliff edge in April due to plans to end other support packages, but this cliff edge has now become even steeper as a result of Jeremy Hunt’s statement.
“Without the energy price guarantee, the government will need to fundamentally reform the energy market alongside providing unprecedented levels of support for energy efficiency schemes and financial support for the most vulnerable.”
Hunt will speak to parliament later this afternoon with the full details of his decisions around the mini-budget.
Campaigners are calling on the chancellor to increase benefits in line with inflation as he sets out his economic policy. Rebecca McDonald, at the Joseph Rowntree Foundation, said: “The basic rate of benefits is already at its lowest in real terms for 40 years and prices are rocketing. The chancellor is moving at pace and should confirm that he will also go ahead with uprating benefits as soon as possible.”
James Taylor, director of disability equality charity Scope, agreed that Hunt should have committed to uprating benefits in line with inflation. He said: “It’s crucial government now acts on concerns of disabled people and restores the confidence and financial stability we need to live our lives.”
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