Chancellor Jeremy Hunt reversed almost all of his predecessor Kwasi Kwarteng's intentions after three weeks of turmoil for Liz Truss's Government.
The problems started on September 23 when the then-Chancellor Mr Kwarteng slashed income tax and corporation tax, scrapped the cap on bankers' bonuses and raised the threshold for paying stamp duty on homes.
The plans sent markets into a tailspin, with the pound almost at parity with the US dollar for the first time - hitting a record low on September 26.
The Bank of England had to step in to buy government bonds fearing that some pension funds could collapse. However, after Mr Kwarteng was sacked and Mr Hunt was brought in as Chancellor, he immediately began U-turning on the uncosted mini-budget.
Main changes at a glance:
- Plan to cut basic rate income tax from 20% to 19% frozen indefinitely.
- Corporation tax cut from 25% to 19% cancelled.
- Plan to scrap the top rate of income tax (45%) for those earning more than £150,000 cancelled.
- The energy price guarantee, which caps typical energy bills at £2,500, will only remain in place until April 2023 when it will replaced with a new model. It was originally due to last two years.
- 1.25% cuts to dividend tax rates cancelled.
- VAT-free shopping scheme for non-UK visitors scrapped.
- Freeze on alcohol duty rates cancelled.
- Stamp duty cuts.
- Scrapping the rise in national insurance, dubbed the Health and Social Care Levy.
Stamp duty rates:
- There will be no stamp duty to pay on the first £250,000 of any home purchase (up from £125,000).
- First time buyers will get stamp duty relief on homes up to £425,000 (up from £300,000).
- The maximum property value for a first time buyer to receive stamp duty relief is £625,000 (up from £500,000).
Health and Social Care Levy:
All workers over the national insurance earning threshold have been paying an extra 1.25% in NI since April 2022. The increase will be scrapped for the rest of the 2022 and 2023 financial year, from November 6.
From April 2023 it was due to be called the Health and Social Care Levy but essentially was the same thing - a 1.25% deduction in earnings to fund health and social care. However, this has now been scrapped. We explained more about national insurance and what the Health and Social Care Levy was here.
Announcing the changes on Monday, October 17, Mr Hunt said the plans to keep income tax at 20%, not cut corporation tax, and keep the 45% income tax band for high earners will raise about £32billion a year.
Defending his decision to keep income tax at 20%, he said: "It is a deeply-held Conservative value, a value that I share, that people should keep more of the money they earn.
“But at a time when markets are rightly demanding commitments to sustainable public finances it is not right to borrow to fund this tax cut. So I've decided that the basic rate of income tax will remain at 20% and it will do so indefinitely, until economic circumstances allow for it to be cut.”
Explaining the reasons for ending the energy price guarantee in April, rather than letting it run for two years as originally planned, he added: "The biggest single expense in the growth plan was the energy price guarantee. This is a landmark policy supporting millions of people through a difficult winter.
"The support we are providing between now and April next year will not change. But beyond that the Prime Minister and I have agreed it would not be responsible to continue exposing public finances to unlimited volatility in international gas markets.
“So I am announcing today a Treasury-led review into how we support energy bills beyond April next year. The objective is to design a new approach that will cost the taxpayer significantly less than planned, whilst ensuring enough support for those in need. Any support for businesses will be targeted to those most affected and the new approach will better incentivise energy efficiency.”
Since Mr Hunt made his announcement, Liz Truss has resigned as Prime Minister and Rishi Sunak is now in power.
Mr Hunt will announce his medium term fiscal plan on November 17 when cuts to public spending are likely to be announced. Mr Hunt warned of "eye-wateringly" difficult choices to make, with cuts to pensions and benefits predicted.