Rishi Sunak lowers fuel duty by 5p and promises income tax cut
Rishi Sunak has cut fuel duty by 5p a litre, raised the threshold at which workers start paying national insurance by £3,000 a year and announced a future 1p reduction in income tax in response to the fastest rise in the cost of living in three decades.
On a day when the annual inflation rate rose to 6.2%, the chancellor said income tax would be cut from 20p to 19p in 2024, while his £6bn national insurance initiative would offset the impact of across-the-board price increases.
The chancellor used his spring mini budget to announce an immediate fuel duty cut for motorists and a £330-a-year cut per worker in NI for those struggling to make ends meet. VAT on energy efficiency products was cut from 5% to zero.
Sunak had been under strong pressure from some Tory MPs to scrap his planned rise in employers and employees national insurance contributions but said it was important to repair the damage to the public finances caused by the coronavirus pandemic.
Two years to the day after the announcement of the first Covid-19 lockdown, the chancellor admitted the Russian invasion of Ukraine would lead to slower than expected growth and higher inflation this year than previously forecast.
The independent office for budget responsibility said it was now pencilling in growth of 3.8% for the UK this year, compared with the 6% it had been forecasting when Sunak announced his budget last October.
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