PMQs – Rishi Sunak’s Spring Statement – follow live
Rishi Sunak, the chancellor, is starting his spring statement now.
Sunak says he will cut basic rate of income tax by 1p in the pound in 2024
Sunak says income tax has only been cut twice in 20 years.
Sunak says before the end of this parliament, in 2024, the basic rate of income tax will be cut from 20p in the pound to 19p in the pound.
He says this is fully costed in the plans announced today.
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Sunak says a new tax cut for small businesses, an allowance for workers they employ will save them up to £1000.
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Sunak says the business rates discount coming into effect next month for retail, hospitality and leisure businesses will save them up to £110,000.
A typical pub will save £5,000, he says.
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Sunak says R&D tax credits are being reformed.
And in the autumn he will decide whether to make the R&D expenditure credit more generous.
Sunak says in the autumn he will cut tax rates on business investment.
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70% of workers get tax cut from £6bn plan to lift NI threshold
Sunak discusses the national insurance threshold that was set to go up by £300 but instead will go up by £3000 – which will be equivalent to the income tax threshold.
That’s a £6bn tax cut for 13 million people – or a tax cut that amounts to £330 a year for people – it the biggest tax cut for a decade.
And he says 70% of workers will have their taxes cut by more than they pay for the new levy, he says.
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Growth in 2022 and 2023 cut
UK economic growth this year, and next year, will be slower than forecast at last autumn’s budget, as headwinds hit the economy (rising inflation, the Ukraine war). – the guardian
Our March 2022 GDP forecast. Full forecast published after the Chancellor’s #SpringStatement speech pic.twitter.com/YFc9c5SSA9
— Office for Budget Responsibility (@OBR_UK) March 23, 2022
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Govt new tax plan
Sunak says he’s committed to cutting taxes by the end of this parliament. Today he is publishing a tax plan. He says the govt will continue to be disciplined. The new plan will built a strong economy by reforming taxes in three ways: it will help families, created the conditions for higher growth and share the proceeds of growth fairly.
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Rishi says underlying debt is falling but small changes to the economic outlook could wipe out this headroom. He says this year the govt will be spending £83bn on debt interest. This is the highest amount on record and almost four times what was spent last year.
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Sunak says he is putting another £500m into the household support fund, which allows councils to help poorer families.
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Sunak cuts VAT on energy-saving devices to zero
Sunak says the government can now cut VAT on energy efficiency measures.
Sunak says VAT being cut to zero on energy-saving devices, like solar panels.
This could cut the cost of having a solar panel installed by £1,000.
Northern Ireland will not get this because of the protocol, he says. But he says Northern Ireland will get equivalent funding.
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Sunak cuts fuel duty by 5p per litre, at cost of £5bn
Sunak says he is announcing three measures to help with energy costs.
Fuel duty is being cut by 5p per litre, Sunak says.
He says this is the biggest cut to fuel duty ever. It will be in place until March next year.
It is worth over £5bn.
And it will take effect from 6pm
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Sunak says OBR forecasts growth at 3.8% this year
Sunak says these actions are “not cost free”.
The invasion poses a risk to the UK recovery, he says.
The UK came into this with a strong recovery. But the OBR says its initial view is that is now forecasts growht of 3.8% this year, followed by 1.8% in 2023, 2.1% in 2024, 1.8% in 2025 and 1.7% in 2026.
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