BUSINESS leaders have welcomed the government’s “screeching handbrake turn” after new chancellor Jeremy Hunt scrapped almost all the measures in the controversial mini-budget.

In an emergency statement yesterday, Mr Hunt said the basic rate of income tax would not be cut next year and would instead stay at 20p indefinitely.

Government help with energy bills, which was due to last two years for households, will instead end in April, with a review to find a “new approach” that will “cost the taxpayer significantly less”.

And Mr Hunt warned of "eye-watering" decisions on public spending and tax. 

Dorset Chamber chief executive Ian Girling said: “The new chancellor’s statement represented a screeching handbrake turn on the original, poorly thought out mini-budget which has badly backfired.

“Some businesses in Dorset will welcome the outbreak of common-sense although the reinstatement of the Corporation Tax increase is a major concern, and some may be disappointment by the U-turns on alcohol duty and dividend rates.

“The renewed commitment to energy price caps for the consumer and businesses is welcome although there is now a very real sense of foreboding about prospects for support beyond April of next year.

“More generally, although this statement may have helped provide a modicum of confidence, there are still serious question marks about the future of this government and its credibility.”

Coles Miller Solicitors managing partner Neil Andrews said: “Jeremy Hunt has reversed Kwasi Kwarteng’s mini-budget in under a month.

“It’s like the ‘80s TV show Dallas, in which Bobby Ewing’s ‘coming back from the dead’ shower scene allowed scriptwriters to reverse 12 months of storyline in an instant.

“The mini-budget was a gamble on growth. Kwarteng pushed all the nation’s chips into the middle, he went all in…and lost. Now we’re all paying for his mistake with higher interest rates. Only savers will be smiling right now.

“There has been a string of excuses – leaving the British public fuming at the Conservative government and wanting change straight away. The political instability doesn’t seem to be over yet.

“Jeremy Hunt’s actions to steady the markets will hopefully work but the damage has already been done.

“Business wants a degree of certainty to invest and build growth. We need to get back to stability. Tax rises and public spending cuts will leave us all poorer but we can start to plan again.”

Mr Hunt told the House of Commons on Monday: “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.”