Virtually all of Liz Truss' economic agenda has been ripped apart by Jeremy Hunt as he fights to restore market confidence and the Tory party's credibility.
The new chancellor was announced on Friday after the value of the pound was sent crashing by his predecessor Kwasi Kwarteng's plans.
They included £45 billion of tax cuts, funded by more public borrowing and benefiting mainly the wealthy, attracting multiple criticisms from the International Monetary Fund.
Amid fears of a crash in gilts - government bonds - Mr Hunt said he would bring forward measures from the government's medium-term fiscal plan to reassure the markets.
He laid his measures out in the House of Commons this afternoon, although earlier in the day he gave an outline of his reforms in an emergency statement - demonstrating the urgency of the situation.
The chancellor told MPs: “We are a country that funds our promises and pays our debts and when that is questioned – as it has been – this government will take the difficult decisions necessary to ensure there is trust and confidence in our national finances.
“That means decisions of eye-watering difficulty.”
He said “every one of those decisions, whether reductions in spending or increases in tax” would be shaped by “compassionate Conservative values”.
Mr Hunt’s delivered his statement in the Commons as Ms Truss watched on, sounding the final death knell for the PM's free market experiment – dubbed “Trussonomics” – which aimed to fuel economic growth with swingeing tax cuts and radical de-regulation.
Ms Truss said the government was taking action to “chart a new course for growth that supports and delivers for people across the United Kingdom”.
What we've learned from the Chancellor's statement to Parliament
Basic rate of income tax will no longer be cut from 20p to 19p
"It is a deeply held Conservative value, a value that I share, that people should keep more of the money they earn," Mr Hunt said earlier today.
But the chancellor has made the case that now is not the time to go ahead with Ms Truss' plan to cut the basic rate of income tax from 20p to 19p.
He said that markets are “rightly demanding commitment to sustainable public finances”, adding: “It is not right to borrow to fund this tax cut.”
Mr Hunt said the plan to lower the rate would be suspended "indefinitely" as the government waits for the economic outlook to improve.
Stamp duty cut going ahead as planned
The government is continuing with its plan to double the threshold at which homebuyers pay the stamp duty tax from £125,000 to £250,000.
For first-time buyers, the threshold will be raised from £300,000 to £425,000, with relief now available for homes under £625,000 instead of the previous £500,000.
Head of policy and campaigns at estate and lettings agent body Propertymark said: “The ex-chancellor Kwarteng’s introduction of the recent review to stamp duty was welcomed and will help to bring people’s budgets in line with rising house prices."
Help with energy bills will be scaled back
The new chancellor has watered down Ms Truss and Mr Kwarteng's plans to support people with their energy bills.
The support package will continue as planned until April next year, instead of for two years as planned.
Mr Hunt has announced a review to find a “new approach” to target support for the most vulnerable after that point.
Government will abolish Health and Social Care Levy and National Insurance rise
The Health and Social Care Levy, planned to come into force in April by former chancellor Rishi Sunak, will still be scrapped as planned.
The 1.25% levy on both earned income and on employers' wage bills - aimed to raise funds for the NHS and adult social care.
According to government figures, nearly 28 million people will keep an extra £330 of their money on average next year thanks to the reversal.
Meanwhile 920,000 businesses are set to save almost £10,000 on average.
The levy was meant to be a replacement of this year's 1.25% point rise in National Insurance, which will return to 2021/22 levels from November 6.
The cap on bankers' bonuses will still be lifted
Proposals to remove a cap on bankers' bonuses appear to have been left untouched by Mr Hunt, who made no mention of a U-turn in his statement.
No VAT free shopping for non-UK visitors
Another of Ms Truss and Mr Kwarteng's proposals torn up by the new chancellor is the introduction of a new VAT-free shopping scheme for non-UK visitors.
Not going ahead with the scheme is worth about £2 billion per year, the Treasury has said.
No freeze on alcohol duty rates
Not going ahead with a freeze planned for a whole year from February will save the Treasury approximately £600 million a year.
Plan to cut dividends tax by 1.25 percentage points to be scrapped
The 1.25 percentage points increase, which took effect in April 2022, will now remain in place and is expected to save around £1 billion a year.
No longer repealing reforms to off-payroll working rules
These reforms, made in 2017 and 2021 to off-payroll working rules (IR35) won't be repealed from April next year as originally planned by Ms Truss.
The Treasury says keeping this on place will cut the cost of the government's growth plan by around £2 billion per year.
Mr Hunt's reversals follow previous U-turns while Mr Kwarteng was still chancellor - scrapping plans to remove the additional rate of income tax and to cancel the planned increase in the corporation tax rate.
Taken together, all of the current changes are estimated to be worth around £32 billion a year.
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