Spring 2022 Statement: OVERVIEW as Rishi Sunak Cuts Fuel Duty and VAT on Energy Saving Devices

Chancellor of the Exchequer Rishi Sunak leaves 11 Downing Street for the House of Commons.

But he acknowledged the impact of inflation, which has reached a 30-year high, and global economic uncertainty caused by Vladimir Putin’s invasion of Ukraine.

The Office of Budget Responsibility (OBR) cut gross domestic product growth, a measure of the size of an economy, from the 6% forecast for this year at the time of budgeting in October to just 3.8%.

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Spring statement: Rishi Sunak called for action as households set to ‘tax…

Mr Sunak said it was “still too early to know the full impact of the war in Ukraine on the UK economy” but the OBR acknowledged there was “unusually high uncertainty” about the economic outlook.

The cost-of-living crisis fueled by rising fuel and energy prices was set to worsen in April due to a 1.25 percentage point increase in National Insurance to fund the NHS and Social Security.

But Mr Sunak has unveiled a £6bn plan to raise the threshold at which people start paying National Insurance Contributions (NIC) by £3,000 to £12,570 from July.

Mr Sunak said it was “a £6 billion personal tax cut for 30 million people in the United Kingdom, over £330 a year employee tax cut”.

Mr. Sunak said that about 70% of workers will receive a lower tax than the increase expected in April.

And he promised further support in 2024, promising to cut the base income tax rate from 20p to 19p – “a £5bn tax cut for more than 30m people”.

Rising energy, commodity and food prices pushed inflation up 6.2% in the 12 months to February, Office for National Statistics (ONS) data showed on Wednesday morning, hours before Mr Sunak’s speech in the House of Commons.

You can follow updates from the Spring Statement on our live blog.

Last update: Wednesday, March 23, 2022, 14:03

Chancellor Rishi Sunak announced a 5 pence per liter tax cut on fuel.

The reduction will be implemented at 18:00 on Wednesday and will last until March 2023.

Asda was the first major retailer to confirm a 6p per liter price cut for gasoline and diesel.

Car enthusiasts have been hit by record pump prices as Russia’s invasion of Ukraine pushed up the price of oil due to supply concerns.

Retailers were also accused of failing to cut wholesale prices earlier this month.

Data from Experian Catalist shows that the average cost of a liter of petrol at UK gas stations on Tuesday was 167.3p, while diesel was 179.7p.

This is an increase of 18.0 pence per liter for petrol and 27.0 pence for diesel over the last month.

Hello and welcome to one of the highlights of the Westminster calendar of the year, the Spring Statement.

Rishi Sunak will present his economic report at approximately 1230 GMT.

Chancellor of the Exchequer Rishi Sunak leaves 11 Downing Street for the House of Commons in London to deliver his spring statement.

Ahead of the spring announcement, Iceland’s managing director Richard Walker said efforts to lower supermarket prices are “relentless” as he called for action on fuel prices.

“It’s incredibly disturbing. We hear that some food bank users are turning away from potatoes and root vegetables because they can’t afford the energy to boil them,” he said on BBC Radio 4’s Today programme.

Mr. Sunak is expected to link the strengthening of the British economy to countering Russian President Vladimir Putin’s invasion of Ukraine, but he is under pressure from a domestic crisis.

“So when I talk about security, yes, I mean the reaction to the war in Ukraine,” he told the House of Commons.

“But I also mean the security of a faster growing economy, the security of more resilient public finances, and the security of working families as we help cover the cost of living.”

The Financial Times said on Tuesday evening that forecasts in the statement would show the deficit this year to be better than expected at £20bn.

However, the newspaper reported that Mr. Sunak plans to set aside most of this windfall money rather than invest the entire amount into lowering the cost of living.

Pump prices hit a new record high ahead of Chancellor Rishi Sunak’s possible announcement of a cut in fuel duties in his spring announcement.

Data from Experian Catalist shows that the average cost of a liter of petrol at UK gas stations on Tuesday was 167.3p, while diesel was 179.7p.

This is an increase of 18.0 pence per liter for petrol and 27.0 pence for diesel over the last month.

Oil prices rose immediately after Russia’s invasion of Ukraine.

This resulted in an initial increase in wholesale costs for fuel retailers, although prices have eased in the past week.

The fuel duty is currently levied at 57.95p per liter for petrol and diesel, with 20% VAT charged on top of the total price.

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