The Chancellor of the Exchequer is due to make a major announcement this week which will affect the finances of every citizen and household in the UK. Rishi Sunak's spring statement will reportedly be set to slash fuel duty as Boris Johnson begins to pursue long-term measures to guard against future energy bill pressures.
There are also suggestions that the Chancellor may cut fuel duty by as much as 5p per litre to help support families and businesses through the current cost of living crisis. It comes as forecourt prices soar in the wake of Russia's invasion of Ukraine with the average price of petrol now standing at a record 165.9p per litre and 177.3 per litre for diesel.
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“My priority over the rest of this Parliament is to cut people’s taxes. That is my mission,” Mr Sunak said. Speaking to The Mail on Sunday, Mr Sunak alluded to a realignment of spending, rather than any big new allocations.
“Let’s not be spending any more money – let’s make sure the money we’re spending is spent really well,” he told the paper. “That’s got to be the focus, because otherwise it’s hard to cut taxes.”
The statement which will be made on Wednesday, March 23, will also reportedly see the Chancellor potentially raise the threshold at which people start paying national insurance, the Mirror reports. The move could potentially take 150,000 people to opt-out of paying next month's planned 1.25 percentage increase on NI.
The increase in April is set up to help pay for clearing the NHS backlog which came as a result of the pandemic. But, Mr Sunak could delay the introduction of the increase. He could also increase Universal Credit and other benefits.
Despite inflation heading for 8 per cent, the current benefit increase is only set at 3.1 per cent for April. Changes affecting this could include more increase or the removal of the £20 a week uplift. Mr Sunak could reportedly introduce more of the government's plan to get more people into the workforce.
Further changes to gas and electricity bills could see increases to the £150 Council Tax rebate being handed to Band A to D homes next month, or he could delay the repayment of the £200 discount planned for October. He is also considering to provide more financial help for parents who pay for childcare.
“The current level of waste across government is simply not acceptable – which is why we’re doubling down on wasteful spending and launching an efficiency drive to make £5.5 billion worth of savings,” Mr Sunak said.
Around £800 million was expected to come from a review of "Quangos" or arm's lengths bodies which are publicly funded organisations that are not entirely controlled by the government. The Income Tax personal allowance and 40p rate threshold will freeze at £12,570 and £50,270 which the IFS think tanks warns will lead to more than £20bn in 'stealth' taxes.
The Spring Statement is essentially a ‘mini-Budget’ by the Chancellor on the situation facing the economy and does not include the same tax and spending powers as a Budget.
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