Rishi Sunak splashed the cash as he handed back half the £12billion National Insurance hike, slashed 5p off fuel duty, and promised the basic rate of tax will drop by 2024 – but Britons still face the worst fall in living standards for nearly 70 years.
Unveiling a mini-Budget for the cost-of-living crisis, the Chancellor declared that the fuel duty reduction will last until March next year to help Britons cope with soaring prices.
In a bigger-than-anticipated move, he declared that the threshold for paying NICs will soar to £12,570 from July, bringing it into line with the personal allowance for tax.
He said that was equivalent to a £6billion tax cut for 30million workers – half the value of the new social care levy that Labour, many Tories and businesses had been demanding he scrapped before it take effect next month.
And he pledged that the basic rate of tax will fall by a penny to 19p by 2024 – the first cut in 16 years and worth more than £5billion or an average of £170 a worker.
Mr Sunak also said he will scrap VAT on energy efficiency measures such as solar panels, heat pumps and insulation installed for five years.
The Household Support Fund for struggling families is being doubled to £1billion.
However, despite the Chancellor trumpeting his tax-cutting credentials, the Office for Budget Responsibility said that the Spring Statement only unwound a sixth of the tax rises imposed since February 2020.
The tax burden is on course to be the highest since Clement Attlee was PM after the Second World War.
The decision to go ahead with freezing tax thresholds despite skyrocketing inflation means that over the next three years 2.8million people will be dragged into paying tax, and two million into the higher rate.
Source: Daily Mail UK
