Chancellor unveils Spring Statement
Rishi Sunak unveiled the governments Spring Statement during today’s Prime Minsters Questions.
Before the chancellor announced the full plan, he said the UK has a “moral responsibility” to support Ukraine with our “economic strength” which includes both, economic and humanitarian aid as well as further Russian sanctions.
Mr Sunak said the Office for Budget Responsibility has suggested the “initial view” is that the UK economy will grow by 3.8% by the end of this year.
The chancellor has stated that the most noticeable impact will be the cost of living as he blamed COVID for high goods and energy prices.
He has said the OBR predicts inflation will hit 7.4% by the end of the year.
The chancellor added VAT on energy-saving materials would be scrapped which included insulation, solar panels and heat pumps.
The first item on the agenda was a 5p cut to fuel duty, described as “the biggest cut to all fuel duty rates ever”
The cut will come into force from tonight at 18:00 until March next year.
The Chancellor then announced that the governments household support fund will be doubled from April to £1bn, the money will be allocated to councils to support vulnerable households.
Mr Sunak reiterated his “ambitions” to reduce taxes, stating he would be publishing a tax plan later today with a “principled approach” to cutting taxes over parliament.
He said the first step would help struggling families before the plan would focus on conditions for “higher growth”
Moments later, the chancellor announced that the government would raise the threshold for the amount of people that earn money before being required to 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 Nation Insurance”, he said.
“That’s a £6bn personal tax cut for 30 million people across the United Kingdom”, he added.
Mr Sunak then made an announcement for small businesses, stating the Employment Allowance will increase to £5,000, claiming it will be a tax cut for half a million small businesses worth up to £1,000.
The new figure will come into play within two weeks, he said.
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