+Spring Statement Announcement Live Blog+
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Stay tuned…
Security
- Moral responsibility to use economic strength to support Ukraine and impose severe costs on Putin’s regime
- Putin sanctions not cost-free to UK and presents risk to our recovery
Outlook
- OBR has said there is “unusually high uncertainty around our economic output.”
- OBR now forecasts growth this year of 3.8%, then 1.8% next year, followed by 2.1%.
- Lower growth outlook hasn’t affected jobs performance with unemployment forecast to be lower in every year of the forecast
- OBR expect inflation to rise further, averaging 7.4% this year
Energy
- Three immediate measures:
- Fuel duty cut by 5p per litre, biggest cut to fuel duty rates ever
- Cut will last until March next year
- Worth over £5 billion, taking effect from tonight
- VAT cut on homeowners installing energy-saving materials will now pay 0 VAT, something we can only do thanks to Brexit.
- All energy red tape abolished
- Solar panel installation will now be £1,000 cheaper
- Won’t be able to sanction this in Northern Ireland thanks to the protocol, Barnett relief will be sent to Stormont instead
- Doubling household support fund
- Will receive this funding from April
Fiscal rules
- Rishi still meeting his fiscal rules with the above announcements. Borrowing as percentage of GDP still falling.
- Cost of borrowing continuing to rise
- £83 billion of debt interest payments next year, 4 times that of last years
- Treasury will continue to weigh carefully calls for more public spending
Cost of living/tax
- Overarching ambition to reduce taxes by end of this parliament
- Tax plan published today – “principled approach”
- Any extra resources to go on lower taxes not extra spending
- NI Rise:
- If the rise goes, so does the £12 billion NHS funding
- Right that the Health & Care Levy stays
- Not incompatible with reducing taxes
- NI threshold currently £9,900 – current plan to increase by £300 but Rishi instead to increase it by the full £3,000, fully equalising the NI and Tax threshold
- From this July £12,570 earners won’t pay a penny in NI
- £6 billion tax cut
- £330 a year tax cut for workers
- Rishi will review whether current tax system is incentivising training
- R&D is too low as a percentage of GDP, will expand relief
- Employment allowance increased to £5,000, help for small businesses
- Rishi refuses to let ambition of income tax cut “dither and drift”
- Rishi confirms that before the end of this parliament, 2024, basic rate of income tax will be cut by 20p to 19p in the pound
- A £5 billion tax cut for 30 million people
Rishi claims this tax plan represents the biggest cut to taxes for a quarter of a century and surprisingly commends it to the house…