The new chancellor, Jeremy Hunt, has shredded Liz Truss’s economic plans in one of the most astonishing U-turns in modern political history, including slashing the energy price freeze that the prime minister had repeatedly championed.
Hunt reversed almost all of the platform for Truss’s leadership victory, including the majority of her tax cuts, and hinted a fresh windfall tax was in his sights, a move the prime minister had previously said she would not countenance.
The chancellor also refused tor ule out cuts to totemic Conservative pledges, including defence spending and the pensions triple lock.
Truss declined to appear at the dispatch box in parliament yesterday despite calls from Labour, leading one cabinet minister to clarify she was not hiding under a desk”.
With her premiership in grave doubt, Downing Street sources told the Guardian that Truss met Sir Graham Brady, the powerful chair of the 1922 Committee, where they discussed the scale of MPs’ anger. A new poll from Redfield Wilton gave Labour a 36-point lead, the largest of any political party from any polling company since October 1997.
In a statement yesterday morning, Hunt said the 20p tax rate would remain indefinitely and reversed a swathe of other tax measures, including changes to dividend taxes, a VAT-free shopping scheme and a freeze on some alcohol duties.
But the biggest shock came when the chancellor said he would no longer guarantee energy prices for the next two winters and that more targeted measures would replace the universal guarantee from next spring after a Treasury review.
It means the average energy bill will rise to more than 4,000 a year from April, according to a leading forecaster, and analysts said it could lead to arise of almost five percentage points in the annual inflation rate. Inflation stands at 9.9% and is expected to rise slightly when the September figure is revealed tomorrow.
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