"That is a £6 billion tax cut for 30 million people"
Rishi Sunak has unveiled his Spring Statement, announcing several measures to help families with the escalating cost of living crisis.
The Chancellor of the Exchequer vowed to “stand by” British families as he unveiled plans to support households.
Rishi told MPs that having a strong economy is vital in tackling Moscow’s aggression towards Ukraine, and said that the war has had a major impact on the UK economy.
He announced a 5p cut to fuel duty to last for 12 months and a rise in the National Insurance payment threshold by £3,000.
Rishi also announced the scrapping of VAT on energy efficiency measures such as solar panels, heat pumps and insulation installed for five years, and that he is doubling the Household Support Fund to £1 billion.
In his Spring Statement delivered in the House of Commons, Rishi announced that there will be a 5p cut to fuel duty to lower the price at the pumps.
According to Rishi Sunak, the cut will last 12 months.
Fuel duty has been frozen at its current level of 57.95p per litre of fuel since March 2011 and has only been lowered one other time in 20 years.
Rishi said he is publishing a new “tax plan” which will “help families with the cost of living”, “create the conditions for higher growth”, and “share the proceeds of growth fairly”.
He said: “But a long-term funding solution for the NHS and social care is not incompatible with reducing taxes on working families.”
Chancellor Rishi Sunak announces no National Insurance will be paid on earnings below £12,570 bringing it in line with income tax and saving workers around £330 https://t.co/d5l8WHG3SW pic.twitter.com/UmA9vu2r59
— ITV News (@itvnews) March 23, 2022
He went on: “Our current plan is to increase the NICs threshold this year by £300, I’m not going to do that.
“I’m going to increase it by the full £3,000, delivering our promise to fully equalise the NICs and income tax thresholds.
“And not incrementally over many years, but in one go, this year.
“From this July, people will be able to earn £12,570 a year without paying a single penny of income tax or National Insurance.
“That is a £6 billion tax cut for 30 million people across the UK.
“A tax cut for employees worth over £330 a year.
“The largest increase in a basic rate threshold ever. And the largest single personal tax cut in a decade.”
Although the announcements were welcomed, Labour accused Rishi Sunak of not going far enough.
Union leaders were quick to criticise the Chancellor.
Unite general secretary Sharon Graham said: “With inflation at its highest for 30 years, Rishi Sunak’s spring statement just tinkers around the edges of this shocking cost-of-living crisis.
“Workers will still be facing sleepless nights worrying about how to make ends meet, overwhelmed by rocketing prices.”