Spring Statement 2022: Sunak raises NI threshold as OBR warns families face record fall in real income

Chancellor hails his ‘largest ever tax cut’ as OBR projects ‘biggest fall in living standards’ on record

Rishi Sunak says UK should prepare for economy to worsen 'potentially significantly'

Rishi Sunak has delivered his mini-Budget to give people a helping hand with their finances as inflation hits a 30-year high.

The chancellor announced a 5p fuel duty cut and a rise in the National Insurance threshold by £3,000. He also announced that the OBR expects inflation to rise further this year, to 7.4%.

The rate of Consumer Price Index inflation jumped to 6.2 per cent in February, from 5.5 per cent in January, the ONS said on Wednesday morning.

People will have an extra £3,000 that they will not pay national insurance on, under the “largest ever” tax cut announced by Mr Sunak.

He said the government’s cut to fuel duty would represent the “biggest cut to fuel duty rates ever”. Labour criticised Mr Sunak for “not understanding the scale of the challenge.”

The Office for Budget Responsibility revealed that the rise in inflation to a predicted 40-year high this year would trigger “the biggest fall in living standards in any single financial year since ONS records began in 1956-7”.

Key Points

• Households face 'unprecedented fall in living standards’
• Energy bills may be £1,500 higher by end of year – OBR
• Bottom half of earners only get 1/3 of new support – RF
• Basic rate of income tax to be cut to 19p by 2024, Rishi Sunak says
• Inflation rises to 6.2% in February from 5.5% in January, ONS says
• Charts show how UK inflation has accelerated

[23 March 2022 12:11 · Holly Bancroft]

Boris Johnson: ‘It looks like P&O broke the law and we will take them to court’

Speaking about the P&O sacking scandal, prime minister Boris Johnson has said that it “looks like the company concerned has broken the law.”

He said that “we will take steps to protect all mariners working in UK waters to make sure they are all paid the living wage.”

Mr Johnson promised to take action in the courts, saying: “We will be taking action therefore, and we will be encouraging workers to take action.”

(PA)

[23 March 2022 12:14 · Holly Bancroft]

Rishi Sunak had admitted the financial outlook is ‘challenging’ due to soaring inflation

Chancellor Rishi Sunak has told the cabinet that the financial outlook is “challenging” because of soaring inflation and the Russian invasion of Ukraine, Downing Street has said.

Mr Sunak provided the update ahead of his Spring Statement at 12:3pm today.

A statement provided by No 10 on Mr Sunak’s briefing said: “The Chancellor provided an update on the economic and fiscal picture, and described the outlook as challenging given the global shocks we are facing as a result of the conflict in Ukraine and rising inflation.

“He said that throughout the pandemic, the Government has shown the British people we are on their side and we will continue to stand by them through the uncertainty that we now face.

“He described how the sensible management of the public finances enabled the Government to step in and help people with £9 billion of support for their energy bills in February.

“He said that this Government would continue to take a responsible and sustainable approach in order to be able to grow a stronger, more secure economy for the future.”

[23 March 2022 12:16 · Adam Forrest]

Boris Johnson says P&O did break law and government ‘will take them to court’ despite Grayling exemption

Speaking at prime minister’s questions, Boris Johnson has said it appeared P&O Ferries had “broken the law” by sacking 800 workers without notice – vowing that the government would “take them to court”.

“It looks to me as though the company has broken the law, and we will be taking action therefore, and we will be encouraging workers to take action,” the prime minister told the Commons at PMQs.

Mr Johnson said the company concerned had a duty to notify the government about the sackings “45 days before they take action of that kind.”

Read more here:

[23 March 2022 12:22 · Holly Bancroft]

Starmer accuses Boris Johnson of ‘half-a****, blustering waffle'

Sir Keir Starmer asked Boris Johnson how P&O workers “are expected to take a crumb of comfort from [the PM’s] half-a****, blustering waffle today”.

He criticised Mr Johnson for ordering his MPs to abstain on a vote to ban firing and rehiring on Monday. He said that government had “advanced warning” of the P&O’s mass sackings, and accused them of “not lifting a finger to stop it.”

[23 March 2022 12:32 · Holly Bancroft]

Spring Statement coming up

Chancellor Rishi Sunak is due to begin his Spring Statement in the next few moments.

Mr Sunak will be expected to use his speech to address the rising cost of living crisis in the UK.

Here is what he could announce in his speech:

[23 March 2022 12:38 · Holly Bancroft]

Resolution Foundation predicts bigger announcements than expected in Spring Statement

Torsten Bell, from the think tank the Resolution Foundation, has hinted that Rishi Sunak’s spring statement could contain more announcements than people expect.

Writing on Twitter, Mr Bell said: “We’ll get bigger policy announcements than people are expecting at 12:30pm - fuel duty cut and national assurance threshold rise are the certainties.

“Question is whether they are combined with anything targeted at those who will be hardest hit by the cost of living surge.”

[23 March 2022 12:47 · Holly Bancroft]

Rishi Sunak is up

Rishi Sunak has opened his Spring Statement by addressing the war in Ukraine. He said: “What they call the inherent weakness of open societies and free economies, we know is our strength.

“We will strengthen our economy here at home. When I talk about security, I mean responding to the war in Ukraine, but I also mean the security of a more resilient economy.

“Today’s statement delivers a stronger more secure economy for the United Kingdom.”

(Reuters)

[23 March 2022 12:50 · Holly Bancroft]

OBR expect inflation to rise further

Sanctions to Russia “are not cost free to us at home”, Rishi Sunak has admitted. “The OBR has said specifically that there is unusually high uncertainty about the outlook.. their initial view means that the OBR now forecasts growth this year of 3.8 %”

The Office for Budget Responsibility expect inflation to rise further, to an average of 7.4% this year.

[23 March 2022 12:51 · Holly Bancroft]

Fuel duty cut by 5p - Sunak

Chancellor Rishi Sunak has announced a 5p cut to fuel duty until March 2023, saying it represents the “biggest cut to fuel duty rates ever”.

[23 March 2022 12:53 · Holly Bancroft]

VAT scrapped for green energy for home owners

The chancellor has announced that homeowners who install heat pumps, insulation and solar panels will pay zero VAT. This will not apply in Northern Ireland however.