Following on from Boris Johnson’s rather inconclusive and unhelpful Prime Minister Questions – where Boris often placed his value in humour, as opposed to truth or action – the whole county waited with bated breath to see if Rishi Sunak’s Spring Statement is set to offer aid in the current economic crisis. With inflation and tax and energy hikes causing pressures to every single household in the UK, we look at what the governement may be doing to help us, if anything.
A lot of Sunak’s speech focused on our support of the Ukraine and the unknown cost of it. He then went on to unveil the following measures:
3 immediate measures
- Motorists: for the second time in twenty years, fuel duty is cut by 5p per litre (the biggest ever) – this will be in place until March next year and will take effect from 6 pm tonight. We did however already know this.
Jason Mountford Financial Planning Expert at Irwin Mitchell has reminded us that “As was widely predicted, fuel duty has been cut by 5p per litre, from 6pm tonight until March 2023. For the majority of motorists, this is unlikely to make a major difference to their household budget. On an average car holding 50 litres of fuel, a 5p reduction on petrol costing £1.70 per litre will reduce the cost of a tank by £2.50. This will mean a reduction in cost for most motorists of less than £100 per year.”
- Energy efficiency: homeowners will have to pay 0 VAT on energy saving solutions for their homes, saving on energy in the long run.
- Vulnerable people need targeted support – £500 million in new funding to help people in need – from April. We will update our readers on this as and when we know more.
Doubled NI Tax Threshold
- Cutting taxes. They announced an increased tax threshold by £3 thousand, so people can earn £12, 570 without paying any tax or NI. This is the largest increase in a basic rate threshold.
- Income Tax will be cut by 1 pence in 2024.
Small Business Help
- Review in business investment tax, hospitality and catering to receive huge tax cuts in a week’s time.
- Help to grow schemes already in place
- Employment allowance increased to £5000.
What hasn’t he covered?
He could have scrapped NI hike – he didn’t. Reeves responds that this is the wrong tax at the wrong time.
Most crucially we saw very little in the way of support for our increased energy bills. The only help offered there was to support homeowners – not traditionally the most in need and vulnerable people within our society.
Hargreves Landsdown also remind us that The Chancellor hasn’t offered any extra help with rising costs through Universal Credit.
“People on low incomes have nowhere to go as prices rise, so the decision not to raise Universal Credit will come as a bitter blow. The lower your income, the bigger the percentage of it you spend on essentials, and the harder it is to cut costs when prices rise. Those on Universal Credit have a nightmare trying to make ends meet as prices rise through the roof and benefits are set to rise just 3.1%.
The extra money available through the Household Support Fund will be vital for some. However, what you will be entitled to will depend on the criteria set by your council, so you need to get to grips with how it works, and how to apply. If you’re struggling to make sense of what’s on offer, it’s always worth talking to Citizens Advice, who know the system well and can offer all the guidance you need.”
Jasmine Birtles Comments
Where can we access financial help?