Jeremy Hunt has announced he is creating an economic advisory council to assist the government as it seeks to repair the damage caused by last month’s mini-budget.

The council’s membership will include Rupert Harrison, who was chief of staff to former chancellor George Osbourne during the austerity era of 2010-2015, and Karen Ward, who advised former chancellor Philip Hammond after Brexit, and now works for investment bank JP Morgan.

Announcing the measure in the Commons, the new chancellor said the group will provide “more independent expert advice” to ministers.

But the Liberal Democrats said the panel should be made up of housing and debt charities instead of only asset managers.

The panel will also comprise two former members of the Bank of England’s Monetary Policy Committee: Gertjan Vlieghe, who is now chief economist at US hedge fund Element Capital, and Sushil Wadhwani, chief investment officer for asset management company PGIM Wadhwani.

Lib Dem Treasury spokesperson Sarah Olney said: “An advisory panel of purely wealthy asset managers in the middle of a cost-of-living crisis proves just how out of touch this Conservative government is.”

Mr Hunt made the announcement in the Commons hours after tearing up the bulk of the economic strategy that brought Liz Truss into office as prime minister just six weeks ago.

The PM was in the chamber for around half an hour as he spoke, after ducking an urgent question from Labour earlier.

Hinting at a potential further U-turn as he took questions from MPs for two hours, Mr Hunt also said he is “not against the principle” of windfall taxes – something Ms Truss was opposed to.

Responding to a question from Lib Dem leader Sir Ed Davey, he said: “I am not against the principle of taxing profits that are genuine windfalls.

“We have said that nothing is off the table.”

In a further diversion from Ms Truss’ policies, Mr Hunt failed to commit to spending 3% of GDP on defence – a key pledge made by the prime minister during the Conservative leadership race.

He also failed to promise the triple pension lock will stay – a policy which formed part of the Conservative’s 2019 manifesto – and failed to guarantee benefits will increase in line with inflation.

Mr Hunt said he is not making “firm commitments” on any individual elements of tax and spending.

“I’m not making any commitments on any individual policy areas, but every decision we take, will be taken through the prism of what matters most, to the most vulnerable,” he said.

Mr Hunt was in the Commons to set out further details of his economic plan, after reversing “almost all” of his predecessor’s tax cuts and scaling back the energy bills freeze package.

The changes Mr Hunt has announced include:

• No cuts to dividend tax rates
• Repeal of the easing of IR35 rules for the self-employed introduced in 2017 and 2021
• No new VAT-free shopping scheme for overseas visitors to the UK
• No freeze on alcohol duty rates
• Basic rate of income tax to remain at 20%, not reduce to 19% from April 2023
• Energy price guarantee only until April 2023.

He told MPs growth requires “confidence and stability”.

Tories are ‘out of credibility and out of chancellors’

However Shadow chancellor Rachel Reeves warned the “damage has been done” despite the “humiliating U-turns”.

She said of Mr Hunt: “The fourth in four months of chaos and fiasco as this Conservative Government spirals down the political plughole. But the damage has been done.

“This is a Tory crisis made in Downing Street but ordinary working people are paying the price.

“All that is left after these humiliating U-turns are higher mortgages for working people and higher bonuses for bankers. And their climb-down on energy support begs the question yet again – why won’t they extend a windfall tax on energy producers to help foot the bill?”

Ms Truss became prime minister after winning the Tory leadership contest on the back of promises to dramatically cut tax and upend the status quo in the Treasury.

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But Ms Truss and Kwasi Kwarteng’s tax-slashing mini-budget unleashed turbulence in the financial markets, leading to Mr Kwarteng’s dramatic sacking as chancellor and the installation of Mr Hunt in an effort to reassure investors.

Truss’ position ‘is untenable’

Some Tory MPs are now calling for Ms Truss to go, with senior Conservative MP Sir Charles Walker telling Sky News’ political editor Beth Rigby: “I think her position is untenable.

“She has put colleagues, the country, through a huge amount of unnecessary pain and upset and worry.”

Sky News understands that Ms Truss met Sir Graham Brady, the influential chairman of the 1922 Committee of backbench Conservative MPs, for what is said to have been a planned meeting during Labour’s urgent question earlier.

Conservative MPs who are disgruntled with Ms Truss’s leadership are able to submit letters of no confidence in her to Sir Graham. It is thought that if many letters are received, Sir Graham could have a mandate to change the rules of the leadership election process.

The prime minister is also meeting the One Nation group of Tory MPs in Westminster tonight.

Meanwhile, Senior Conservative MP Mel Stride indicated that Tory MPs will be discussing Liz Truss’s position at a dinner on Monday evening organised to discuss economic policy.

He told BBC Radio 4’s PM programme: “Will we be discussing other matters? I’m afraid that everybody’s discussing other matters.”