Government help for every home with energy bills will not continue after April, the new Chancellor has announced.

Jeremy Hunt said the current package of support where every household gets £400 discounted from their bills over the winter will go ahead as planned.

But he said it would not be responsible to continue after April.

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In an emergency statement on Monday, Hunt said: “That support will not change.

"Beyond that, it would not be responsible to expose the public finances to volatility in the markets.”

He added there will be a review of what support can be provided if energy costs continue to rise.

He scrapped the tax cuts previously announced by former chancellor Kwasi Kwarteng, who was sacked last week by Prime Minister Liz Truss.

Hunt added: “There will be more difficult decisions, I’m afraid, on tax and spending to get debt falling over the medium term.”

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He added: “Some areas of spending will need to be cut. Our priority will be the most vulnerable.”

The Government said the objective of the review of energy bills support is to “design a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need”.

The Chancellor also said in his statement that any support for businesses will be targeted to those most affected and that the new approach will better incentivise energy efficiency.

On taxes, the Chancellor announced a reversal of almost all of the tax measures set out in the Growth Plan that have not been legislated for in Parliament.

The following tax policies will no longer be taken forward:

  • Cutting the basic rate of income tax to 19% from April 2023.

Hunt said while the Government aims to proceed with the cut in due course, this will only take place when economic conditions allow for it and a change is affordable. The basic rate of income tax will therefore remain at 20% indefinitely. This is worth around £6bn a year. 

  • Cutting dividends tax by 1.25 percentage points from April 2023 is also scrapped.

The Chancellor said the 1.25 percentage points increase, which took effect in April 2022, will now remain in place. This is valued at around £1bn a year. 

  • Freezing alcohol duty rates from February 1, 2023 for a year will not go ahead.

Hunt said not proceeding with the freeze is worth approximately £600m a year.

He said in total the measures will raise £32bn every year.

Derek Mitchell, Citizens Advice Scotland chief executive, said: “Uncertainty around the future of the Energy Price Guarantee will be frightening for consumers who are facing impossible spending choices.

“The CAB network is already seeing a huge demand for advice around the cost of living, energy bills and food insecurity. This is the last thing they needed to hear.

“We need to ensure now that additional support for vulnerable consumers is delivered as soon as possible. Meanwhile, anyone struggling with the cost of living can seek advice from the Citizens Advice network.”