RISHI Sunak yesterday laid out his plans to help families through the cost of living crisis in the Spring Statement 2022.
The Chancellor has been under pressure to tackle issues like the energy price cap increase and soaring petrol prices following Russia’s invasion of Ukraine.
In his Spring Statement to the House of Commons, Mr Sunak announced that for only the second time in 20 years, fuel duty will be cut by 5p per litre.
It's good news for millions of motorists facing record fuel prices and a major victory for The Sun's Keep it Down Campaign.
Meanwhile low income households will now be able to get extra help from councils as the Household Support Fund will double.
The Household Support Fund was launched in October to help Brits pay their way through winter amid a cost of living crisis.
Additionally, the Chancellor today slashed VAT on insulation.
In his statement, Mr Sunak said: "I can announce for the next five years homeowners having materials like solar panels, heat pumps, or insulation installed will no longer pay 5% VAT– they will pay zero.
You can follow minute-by-minute updates and Spring Statement reaction and analysis on our live blog below.
- Joseph Gamp
How to get help with your council tax bills
If you don't qualify for the £150 council tax rebate you could still be eligible for other help.
A separate £144million fund has also been launched which local councils can dish out to vulnerable and low income households.
The latest guidance says the support will be worth up to £150 and each council has been given a different amount.
The pot of cash each area gets depends on size and need, so for example Birmingham has £3.6 million, while the Isles of Scilly have £17,550.
You could challenge your council tax band if you think it's wrong so you don't miss out on the cash.
But beware a revaluation of your band could put you in a lower band where you pay MORE council tax, so consider the risks – you can read more in our guide.
If you're not already getting a council tax discount it's worth checking if you're eligible.
Single people are entitled to 25% off their bill, while an adult living with a student can get 50% off.
If you are on a low income or receiving benefits, you could eligible for a reduction on your council tax.
- Joseph Gamp
What has Rishi Sunak said on fuel duty?
Speaking in the House of Commons on March 23, 2022, Sunak revealed a raft of measures to help struggling Brits.
Among those was on fuel duty, with the Chancellor saying: "Today I can announce that for only the second time in 20 years, fuel duty will be cut.
"Not by 1, not even by 2, but by 5 pence per litre. The biggest cut to all fuel duty rates – ever.
"And while some have called for the cut to last until August, I have decided it will be in place until 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 £5bn."
- Joseph Gamp
How much is fuel duty per litre?
The fuel duty tax has been frozen at 57.95p for every litre since March 2011.
However, on March 23, 2022, Sunak announced that it would be cut by 5p per litre from 6pm that evening.
When VAT is factored in, this should equate to 6p off the price of a litre of petrol or diesel.
That means motorists will pay just 52.95p per litre for fuel duty – which is expected to save drivers around £3.30 every time that fill up.
It comes as fuel prices rose to record prices at a time when the cost of living was also set to rise.
However, there are concerns over whether fuel retailers will pass this saving on to motorists.
- Joseph Gamp
What is the Household Support Fund and how do I get the cash?
The £500m pot of cash was dished out to local councils late last year.
Anyone struggling with bills could apply for the cash directly from their local authority – though eligibility and the help you could get varied depending on where you live.
The current fund is still open in some locations, but others have closed the scheme – you can see what help’s still available here.
But the good news is that you’ll be able to get it after March 31 when the current funding ends.
That’s because the chancellor has given an extra £500m to the fund so the money can continue being handed out to hard up Brits from April onwards.
Councils have given out cash for bills, vouchers for supermarkets and more – with help worth up to hundreds of pounds in some cases.
You can check how to apply for the Household Support Fund, by searching for your local council using the gov.uk council finder tool.
As the funding starts from April, you may have to check back then for details of how to apply and what you can get.
- Joseph Gamp
Rishi Sunak avoids change to Universal Credit or benefits in Spring Statement
Campaigners had asked the Chancellor to increase benefits in line with inflation, which today hit more than 6%.
However, benefits weren't mentioned in Mr Sunak's speech in the House of Commons this afternoon.
No new changes to Universal Credit or benefits were revealed in the Spring Statement documents.
However, the Treasury announced a further £12million in funding for HMRC to prevent tax credit fraud and improve Universal Credit transitions.
The Chancellor slashed 8p from the taper rate last year.
It meant almost half a million Brits in work and on benefits saw up to a £1,000 a year boost.
The taper is currently set at 55p for every pound that Universal Credit claimants earn over their work allowance.
- Joseph Gamp
Key spring statement announcements
In key Spring Statement announcements:
- Drivers will pay less for petrol as fuel duty was finally slashed
- Basic income tax rates will be cut from 20p to 19p in two years
- Workers will benefit from key changes to National Insurance
- Funding for poor households was raised by £500million
- The price of a pack of cigarettes will not rise, with no changes to tobacco duty
- Booze will also stay the same price after alcohol duty was left untouched
- Mr Sunak braced for an inflation whack of 7.4 per cent this year
Tax changes for self-employed
If you're self-employed, you'll want to know about how the National Insurance changes will affect you too.
The small print in the Spring Statement papers states that while raising the National Insurance threshold will mean a tax cut for those employed worth over £330, the equivalent saving for the average self-employed worker will be worth over £250.
But lower earning self-employed earners will also benefit from another measure hidden in the documents.
Brits paying Class 2 National Insurance Contributions – which is what you'll currently pay if your profits are £6,515 or more a year – will see changes to how they're charged the tax from the 2022/23 financial year onwards.
They will not pay the levy on profits if they earn £11,908 or less for the 2022/23 tax year – but the tax will kick in if your profits go beyond this threshold.
School heads 'disappointed' in lack of education funding in statement
Headteachers have said they are "disappointed" by the Government's decision not to increase education funding in the spring statement.
Mary Bousted, joint general secretary of the NEU teaching union, said if the Government is serious about protecting living standards, it should reverse the real terms cuts to teacher pay.
Reacting to Chancellor Rishi Sunak's statement to MPs, she said: "Instead, with RPI inflation reaching 8.2% and in the midst of the worst cost-of-living crisis in decades, the Government plans yet more real terms pay cuts for teachers."
Dr Bousted said the Government plans pay rises for more experienced teachers of 3% in September 2022 and 2% in September 2023, but she claimed those "paltry increases" are well below current and expected inflation rates.
"With inflation so high, the impact of this year's pay cut on living standards could be even worse than last year's teacher pay freeze," she said.
"Enough is enough. More pay cuts will increase the already serious teacher recruitment and retention problems that are clearly impacting negatively on children and young people's education. The Government's plan to inflict more real terms pay cuts is a damaging and dogmatic political choice."
She also said that Mr Sunak's decision not to increase education funding to account for inflation signals "a return to the austerity of the 2010s".
Living standards set for biggest fall in 66 years, says OBR
Households face the biggest fall in living standards on record despite Rishi Sunak promising tax cuts for millions of workers to address soaring inflation and the economic impact of the war in Ukraine.
The Chancellor shielded lower earners from the impact of the forthcoming national insurance hike, slashed 5p off fuel duty and promised to cut income tax by 1p in 2024.
But economic growth forecasts were downgraded and inflation is set to reach its highest level for 40 years, leading to household disposable incomes falling by 2.2% per person in 2022-23.
The Office for Budget Responsibility (OBR) downgraded growth in gross domestic product – a measure of the size of the economy – from the 6% forecast for this year at the time of the Budget in October to 3.8%.
Next year's growth forecast has been downgraded from 2.1% to 1.8%.
Inflation is forecast to hit 8.7% in the fourth quarter of 2022 and to average 7.4% over the year, with wages failing to keep pace with rising prices.
The OBR said inflation – combined with rising taxes – will "weigh heavily on living standards in the coming 12 months".
- Joseph Gamp
Major changes to tax system announced today
The Spring Statement also included major changes to the tax system, in a bid to tackle the cost of living crisis.
Mr Sunak announced that the earnings threshold at which people start paying National Insurance tax will be raised from £9,500 to £12,500.
It means hundreds of thousands of families will pay less – and some of the very lowest earners will dodge the extra charge altogether.
The government is also doubling the Household Support Fund to £1billion.
That means the schemes can be extended beyond the initial March 31 closing date.
- Joseph Gamp
What has been announced today?
- Fuel duty cut by 5p per litre – saving families £3.30 every time they fill up their tank – from 6pm TONIGHT
- National Insurance threshold to rise from £9,500 to £12,500 – worth over £330 a year – from JULY
- Income tax rates will be cut from 20p to 19p in 2024
- VAT slashed to 0% for insulation, heat pumps and solar panels in Brexit boost – comes in from April 2022 for five years
- Extra £500million for hard-up Brits through the Household Support Fund – from April
Fuel duty cut begins NOW
The cut to fuel duty of 5p per litre will apply from 6pm this evening.
It comes as petrol prices have soared to new record highs, with a litre of unleaded now costing 167.3p and diesel 179.7p, according to the RAC.
Graphic: How prices for key goods and services are rising
Prices are rising on average by 6.2%, but certain items are going up by more.
Here are the rates for clothing, utility bills, food and drink.
Workers face more tax on earnings in 2025, warns IFS
The Institute for Fiscal Studies has warned workers face paying more tax on earnings in 2025 despite Chancellor Rishi Sunak's cuts in his spring statement.
Director Paul Johnson said: "If he wants to be remembered as a tax-reforming chancellor, so far he is headed in the wrong direction.
"The combination of increased NI rates and a reduced income tax rate will make the tax system both less equitable and less efficient."
Sanctions on Russia 'are not cost-free for the UK' warns Sunak
Standing up to Russia and providing support for Ukraine will not be "cost-free" for the UK economy, Rishi Sunak has warned.
The Chancellor pitched his spring statement on Wednesday on the issue of security, as he said a strong economy at home meant being able to fight threats – such as Vladimir Putin – abroad.
Mr Sunak told the Commons the sanctions imposed on Russia were "of unprecedented scale and scope" and that the UK had a "moral responsibility" to help Ukraine.
But he said measures taken against the Russian president and his regime were "not cost-free for us at home" and presented a "risk" to the recovery.
Mr Sunak told MPs: "The sorrow we feel for (Ukraine's) suffering, and admiration for their bravery, is only matched by the gratitude we feel for the security in which we live. And what underpins that security is the strength of our economy."
He said: "We should be in no doubt, behind Putin's invasion is a dangerous calculation: that democracies are divided, politically weak and economically insecure – incapable of making tough long-term decisions to strengthen our economies.
"This calculation is mistaken."
But he said it was too early to yet know the impact the invasion – and subsequent western support – would have on the economy.
- Joseph Gamp
IFS says Rishi has 'failed to help very poorest families'
The Institute for Fiscal Studies said Chancellor Rishi Sunak has failed to help the "very poorest" despite warnings of the biggest hit to living standards since the 1950s.
After the spring statement, IFS director Paul Johnson said that "what really stands out today is what's missing".
"In the face of what the OBR calls the biggest hit to household finances since comparable records began in 1956-57 he has done nothing more for those dependent on benefits, the very poorest, besides a small amount of extra cash for local authorities to dispense at their discretion," Mr Johnson said.
"Their benefits will rise by just 3.1% for the coming financial year. Their cost of living could well rise by 10%."
- Joseph Gamp
Everything announced in Rishi Sunak’s Spring Statement
The Chancellor has announced extra help for millions of Brits struggling with the cost of living crisis, including:
- Drivers will pay less for petrol as fuel duty will be finally slashed
- Income tax rates will be cut from 20p to 19p in two years
- Workers will benefit from key changes to National Insurance
- Funding for poor households was raised by £500million
- VAT cut on insulation making energy improvements cheaper
'Postcode lottery'
An extra £500m for the Household Support Fund is not something to sniff at.
But is it the ideal way to get money to those who need it? Not necessarily.
The Sun's head of consumer tweeted: "We've written about the Household Support Fund a lot.
"It's a complete postcode lottery.
"I'm really glad that people can get this help but it MASSIVELY varies.
"This is confusing and I think lots don't know how it works or how to apply."
Laura Suter from AJ Bell also points out similar flaws:
“The Chancellor boosted previously-announced help for people struggling the most, by increasing the £500m fund available for local councils to dish out to those most in need.
"This will frustrate lots of people who called for more direct and automatic support for households.
"By allocating the cash to local councils it means people have to be aware that help is available and actively apply, rather than the money being handed to those who would benefit the most.”
Pay rise for workers
Millions of workers will get a £1,000 pay rise from next month, it was confirmed in the Spring Statement.
The planned minimum wage hike in April will go ahead, boosting pay packets.
The hike had already been announced but the Treasury confirmed the rise in today's Spring Statement documents.
Not generous enough
Critics have blasted the Chancellor for not offering up a more generous package as the cost of living puts families under the squeeze.
Labour's shadow chancellor Rachel Reeves said "it is clear the Chancellor doesn’t get the scale of the challenge."
Resolution Foundation boss Torsten Bell said: "I really can’t believe this package does next to nothing for those getting hardest hit by rising prices – those who are disabled and not working just got told they are on their own."
The IFS' Paul Johnson piled in: "No extra money for health, schools or other public services despite huge increase in inflation. Likely implies big real pay cuts for most public sector workers."
Mr Sunak's Budget comes against a crippling backdrop of rocketing energy, fuel and food prices.
What was announced in Rishi Sunak's Spring Statement today?
To recap, here's what help the Chancellor offered millions of Brits struggling with the cost of living crisis:
- Doubling the Household Support Fund to £1billion
- Huge changes to National Insurance worth £330 to low earners
- Cutting income tax for basic rate taxpayers
- Slashing VAT for home insulation, solar panels and more
- Freezing duty on alcohol so price of booze doesn't go up
- Giving millions of workers a pay rise of £1,000 a year
- Freezing tax on cigarettes and tobacco products
- Lynsey Barber
Who are the Spring Statement winners and losers?
We've crunched the numbers and can reveal who might be better off and who might not be…
Here's the verdict.
- Lynsey Barber
What do Sun readers think of Rishi's Spring Statement?
We asked on The Sun's Facebook Money page: "What do you want to say to Rishi after today's Budget?"
Many had some, ahem, choice words…
- "The budget of a man who has NEVER lived in the real world on wanted for anything."
- "Can't say it does much for the low paid and those on any benefits, legacy or otherwise."
- "I'm insulted by the scraps he's chucked us."
- "Not enough, Rishi."
Got something to say about today's Spring Statement announcements? Tell us on Facebook.
How much is the new fuel duty?
We've got a handy chart so you can see at a glance..
So what actually IS fuel duty? We explain all here…
Supermarkets slash fuel costs
Asda and Sainsbury’s have said they are cutting fuel prices by 6p per litre from 6pm tonight after the Spring Statement announcement.
Fuel duty was slashed by 5p per litre by the Chancellor and will come in at the same time.
More here
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