Rishi Sunak announces 5p cut to fuel duty until March 2023
Chancellor Rishi Sunak unveiled his Spring Statement after facing pressure to tackle the cost of living crisis. One of two statements hosted each year, the Spring Statement does not generally announce tax and spending decisions.
The chancellor began his statement by paying tribute to Ukrainian soldiers. He said it was the UK's "moral responsibility" to use its "economic strength" to help Ukraine.
Sunak highlighted the most "significant impact" will be on the cost of living and launched three immediate measures:
Homeowners will pay 0 per cent VAT on energy-saving materials (such as solar panels) for the next five years. Sunak thanked Brexit for this move.
Households are said to save up to £300 per year through such materials.
Targetted support for vulnerable households
The chancellor will double the government's household support fund to £1b from April.
Turning to the tax system, Sunak reiterated his ambition to reduce taxes. He said he will be publishing a tax plan today with a "principled approach."
Sunak raises the National Insurance threshold
The chancellor said the threshold would be raised before people pay National Insurance.
"From this July, people will be able to earn £12,570 a year without paying a single penny of income tax or National Insurance," he announced.
"That's a £6bn personal tax cut for 30 million people across the United Kingdom.
"A tax cut for employees worth over £330 a year."
He added: "The largest increase in a basic rate threshold ever and the largest single personal tax cut in a decade."
In his final announcement, Sunak declared "for the first time in 16 years", the basic rate of income tax will be cut from 20p to 19p.
"A tax cut for workers, for pensioners, for savers. A £5bn tax cut for over 30 million people."
He concluded by saying cutting taxes "is not easy."
"It requires hard work, prioritisation and the willingness to make difficult and often unpopular arguments elsewhere.
"It is only because this government has been prepared to make those difficult but necessary choices to fix our public finances that I can stand here and tell this House that not only are taxes being cut, but that debt is also falling whilst public spending is increasing.
"We can deliver for the British people today and into the future."
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