Chancellor Rishi Sunak has announced a cut to fuel duty of 5p per litre, but has resisted calls for him to scrap a planned rise in National Insurance.
In his Spring Statement, Mr Sunak said that he wanted to help families facing a cost-of-living crisis by reducing fuel duty for the next year, as well as scrapping VAT on energy efficiency measures and doubling the Household Support Fund to £1bn. Mr Sunak declined to scrap his previously planned rise in National Insurance, saying the social care levy was necessary to better fund the NHS and the care system.
Instead he raised the threshold for paying National Insurance will increase by £3,000 from July, saying that would help 70% of workers would see a tax cut that was greater than the health levy. He said the move would save people £330 a year and was “the largest single personal tax cut in a decade”.
Read more : rising inflation puts pressure on Chancellor
Earlier Mr Sunak had said the UK’s actions against Russian President Vladimir Putin’s regime are “not cost-free for us at home” and present a “risk” to the recovery. He said the Office for Budget Responsibility (OBR) has recognised there is an “unusually high uncertainty around the outlook”, adding: “It is too early to know the full impact of the Ukraine war on the UK economy.
“But their initial view, combined with high global inflation and continuing supply chain pressures, means the OBR now forecast growth this year of 3.8%. The OBR then expect the economy to grow by 1.8% in 2023, and 2.1%, 1.8% and 1.7% in the following three years.”
Mr Sunak said the lower growth outlook has not affected the country’s “strong jobs performance”. He finished the statement by saying he wanted to reduce income tax from a rate of 20p to 19p by 2024.
Shadow Chancellor Rachel Reeves said Mr Sunak did not understand the scale of the cost of living crisis.
