Chancellor Jeremy Hunt refused to rule out a new North Sea windfall tax or scrapping pensions triple lock as he warned of the "eye-watering difficulty" which lies ahead.
Labour and the Lib Dems have called for another raid on the North Sea to help the UK balance the books and calm the current economic turmoil.
Responding in parliament yesterday, Mr Hunt said that "nothing is off the table".
Today he will confront the Cabinet with a demand to find new spending cuts to restore Britain’s economic credibility.
Heated exchange
After watching Mr Hunt rip-up up Liz Truss’s tax plans in Parliament yesterday, Labour shadow Chancellor Rachel Reeves renewed the party's push for higher North Sea taxation.
She said: "Today, the chancellor has scaled back help with energy bills for families and pensioners. It prompts the question yet again: why will the Government not bring in a proper windfall tax on energy producers to help foot the bill for consumers, and when will the current chancellor publish in full the government’s estimates of the windfall profits of the energy giants over the next two years?"
Lib Dem leader Ed Davey echoed the Labour calls, adding: "The chancellor refuses to undo one of the government’s biggest injustices: their failure to impose a proper windfall tax on the record profits of the oil and gas companies, earned only because Putin is killing innocent Ukrainians," he said.
"After so many U-turns, surely the chancellor can persuade the Prime Minister to do one more. Will he introduce a proper windfall tax and help struggling families?
Mr Hunt responded by saying that "nothing is off the table".
He added: "Let me tell the right hon. Gentleman that I am not against the principle of taxing profits that are genuine windfalls, but as he will know well, the energy industry is very cyclical and there are businesses that have periods of feast and famine.
"We have to be very careful that we do not tax companies in a way that drives away investment."
'Check your sums'
Ryan Crighton, Policy Director at Aberdeen & Grampian Chamber of Commerce, today urged the chancellor to "check his sums" before ruling in another raid on the North Sea.
He said: "One of the few financial projections released with the mini-budget was confirmation that the windfall tax already in place will raise £28billion, before its sunset clause kicks in at the end of 2025.
"And that is on top of the £22million North Sea firms are already paying per day in corporation tax.
"Therefore, any suggestions that our offshore energy companies are not paying their way in this crisis are well wide of the mark, in my view.
"The Chancellor has a number of options available to him, but taxing the North Sea into oblivion should be bottom of the list.
"We need to increase our domestic energy supply and we need to get a handle on inflation. Making exploration and production in the North Sea less attractive with even higher taxes achieves neither. And that is why it would be the wrong approach."