Spring statement: The key points in Chancellor Rishi Sunak’s mini-budget statement
Rishi Sunak has delivered his spring statement mini-budget speech in the Commons and announced some important points – Here’s what you need to know.
- Targeted action on the cost of living with special help for those worse off.
- They’ll be no VAT applied to energy-saving materials including solar panels, heat pumps and insulation for the next five years amid rising energy bills. Working with the EU to ensure this can apply to Northern Ireland because of current “deficiencies” in the Northern Ireland protocol.
- There will be an extra £500m of funding through a doubling of the Household support Fund to £1bn. Local authorities will receive the funding from April.
- The threshold for paying National Insurance will increase by £3,000 from July. It means people will be able to earn £12,750 a year without paying income tax or National Insurance – it’s worth £6bn to 30m people.
- Office for Budget Responsibility: “There is unusually high uncertainty around the outlook” as a result of Russia’s invasion of Ukraine and impact of sanctions.
- OBR forecasts economy will grow by 3.8 per cent in 2022 – compared to 6 per cent predicted during last October’s Budget.
- OBR sees inflation averaging 7.4 per cent this year.
- Sunak says OBR has not accounted for full impact of the war in Ukraine …. “and we should be prepared for the economy and public finances to worsen – potentially significantly. And the cost of borrowing is continuing to rise.
- “In the next financial year, we’re forecast to spend £83bn on debt interest – the highest on record. And almost four times the amount we spent last year.” Highlights need for caution of spending ahead.A new “tax plan” to reduce and reform taxes over term of this parliament will help with the cost of living.
- The health and care levy through NI hike from April will stay.
- Basic rate of income tax will be cut from 20 to 19 pence in the pound before end of this parliament in 2024. Chancellor says it is fully costed and paid for in the plans announced today.
- Chancellor ends his statement saying: “My Tax Plan delivers the biggest net cut to personal taxes in over a quarter of a century.”
PMQs – Rishi Sunak’s Spring Statement – follow live
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