These days, you always assume asbestos until a lab test on a sample proves otherwise.
To me, that looks like an old asbestos-cement flue thats someone has sealed by stuffing a cylinder of expanded polystyrene up it. The usual options are (a) to leave it undisturbed and protected from damage or (b) get it removed by a licensed contractor.
Having known several people (one of them was my doctor) who have died relatively young from mesothelioma I would strongly discourage you from a DIY attempt to 'cut it back further into loft void'. In my opinion, that's a job that should only be done by licensed professional with the right equipment to contain the dust that will be created.
