Chancellor Jeremy Hunt has announced that he will be withdrawing the universal energy price guarantee in April.

The energy price guarantee, which meant the typical UK household would pay no more than £2,500 per year on energy, was initially announced as a two-year scheme by Prime Minister Liz Truss.

However, Mr Hunt announced that help with energy bills for all households will only last until April in a statement, in which he essentially cancelled the mini-Budget announced by his predecessor Kwasi Kwarteng three weeks ago.

The Chancellor said a review would take place to look at a “new approach” to target support at those worst off after that.

Lancashire Telegraph: PAPA (Image: PA)

Mr Hunt set out his financial plan for the future in an emergency statement this morning.

The Chancellor announced the Government will scrap plans to reduce the basic rate of income tax from 20% to 19% in April next year, a move that had been forecast would cost the Exchequer almost £5.3 billion in 2023-24.

He also confirmed the Government will ditch plans for new VAT-free shopping for international tourists.

It comes days after Liz Truss announced another financial U-turn as she reversed plans to stop a planned increase in Corporation Tax.

Government sources had predicted that, while abandoning the plan was likely, they did not see corporation tax rising to the previously suggested 25%.

However, in her conference, Ms Truss said: “It is clear that parts of our mini-budget went further and faster than markets were expecting so the way we are delivering our mission right now has to change.”

Cost of living support for energy bills

Government support is available to help people pay their energy bills.

Households will start receiving money off their energy bills from October, with the discount made in six instalments.

A discount of £66 will be applied to energy bills in October and November, rising to £67 each month from December through to March 2023.