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…