Rishi Sunak has shared a number of economic measures aimed to address the living crisis and rising inflation in the UK.
Delivering his spring mini-budget statement to the House of Commons today (23 March), the Chancellor announced that fuel duty will be cut by 5p per litre, which will come into affect from this evening until March 2023.
He told MPs: "Today I can announce for only the second time in 20 years fuel duty will will be cut. Not by one, not by even by two, but by five pence per litre. The biggest cut to all fuel duty rates ever.
"The cut will be in place till March next year, a full 12 months. Together with the freeze, it's a tax cut this year for hard working families and businesses worth over £5 billion and it will take affect from 6pm tonight."
Other measures include putting another £500 million into the household support fund in order to help with lower income families and to cut VAT on energy saving devices such as solar panels to zero.
Speaking on the topic of energy efficiency, Sunak said: "I can announce for the next 5 years, homeowners having materials like solar panels and heat pumps installed will no longer pay 5% VAT - they will pay 0%.
"A family having a solar panel installed will see tax savings of over £1,000 and savings on their energy bill of over £300 per year."
Doubling the household support fund to £1 billion, the extra funding will be provided to local authorities from April.
Sunak has published a three-part a tax plan, which he described as a 'principled approach' to cutting taxes.
The first part of the plan, outlined in the 2022 spring statement, says: "From July, taxes for working people will fall as National Insurance thresholds rise - so people can earn £12,570 free of tax, saving the typical employee over £330 a year.
"This tax cut means the UK now has some of the most generous tax thresholds in the world."
From April 2023, the second part of the plan will be implemented with tax cuts and longterm reforms to incentivise businesses to invest more in 'capital, people and ideas'.
The final part includes the first cut to the basic rate of income tax in 16 years, comprising a £5 billion tax cut for workers, savers and pensioners, which will come into effect in 2024.
Sunak also discussed 'security' while addressing the ongoing Russia/Ukraine conflict, telling MPs: "We should be prepared for economy and public finances to worsen potentially significantly.
"We will confront this challenge to our values not just in the arms and resources we send to Ukraine, but in strengthening our economy here at home.
"So when I talk about security, yes, I mean responding to the war in Ukraine. But I also mean the security of a faster-growing economy. The security of more resilient public finances. And security for working families as we help with the cost of living."
Words: Daisy Phillipson
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