In another major government U-turn, new Chancellor Jeremy Hunt has scrapped almost all the measures announced in September’s mini-Budget by predecessor Kwasi Kwarteng, apart from the cut to National Insurance and cuts to stamp duty.

He issued an emergency statement this morning ahead of a planned House of Commons statement this afternoon.

He said he was announcing the measures on Monday morning to provide confidence and stability but will provide fuller details in the Commons later.

He says the plans he announced will avoid uncertainty ahead of the full fiscal plan announcement due at the end of the month.

Mr Hunt said: "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."

Significantly, he is scrapping the headline-grabbing plans to reduce the basic rate of income tax from 20% to 19% in April next year.

The measure was announced by former chancellor Kwasi Kwarteng in September's mini-budget – when he said it would benefit more than 31 million people. But the move had been forecast to cost the Treasury almost £5.3bn in 2023-24.

Mr Hunt said that it is not right to borrow to fund the tax cut. He added that the rate will remain indefinitely at 20p until economic circumstances allow it to be cut.

The energy price guarantee – which had been due to cap prices for two years - will also be scaled back from next year with help with energy bills for all households only lasting until April.

Mr Hunt said there will be a review led by the Treasury into how households and businesses are helped with energy bills from then. He said the objective was to design a new approach to save taxpayers money while targeting support to those most in need.

Mr Hunt also announced: "We will no longer be proceeding with the cuts to dividend tax rates, the reversal of off-payroll working reforms (IR35), the new VAT-free shopping scheme for non-UK visitors or the freeze on alcohol duty rates."

The Chancellor 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.