RISHI Sunak will deliver his Spring Statement on Wednesday when it’s hoped more help for struggling Brits will be announced.
The Chancellor’s mini budget comes as millions of households face rocketing costs.
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Inflation is rising, putting more pressure on household budgets, and millions of people are facing higher bills within weeks.
The government has been urged to act now to stop more people falling into debt and fuel poverty.
A council tax rebate for four out of five households was announced last month and will be paid out in April.
And a further £200 energy rebate will come in October, though this will have to be repaid in future years, when energy prices have dropped.
So what further help can we expect from Mr Sunak‘s Spring Budget? Here’s what could be announced in his speech on March 23.
Cut to fuel duty
Mr Sunak dropped his biggest hint yet on Sunday that he will slash fuel duty.
It comes as motorists face paying an eye-watering £100 for filling up the average family car.
He told the BBC: “We are the party who has frozen fuel duty for over a decade we we recognise the importance of people being able to filling their cars up and it not be able to be prohibitively expensive.”
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Motoring groups and MPs have called for fuel duty to be lowered by at least 5p a litre.
Nearly 50 MPs signed a letter to him last week urging him to look at a cut as the price of fuel soars.
Political big beasts including ex Cabinet ministers David Davis and Robert Jenrick are backing The Sun’s campaign to slash the tax and cut prices at the pump.
Average prices are at a record 165.9p for petrol and 177.3p for diesel.
The Chancellor has been told to act after France slashed 12p off a litre of petrol, and Ireland followed with 17p.
Delay National Insurance hike
A new levy applied to National Insurance contributions will mean millions of Brits paying more tax from April.
The hike of 1.25% on top of current rates is designed to help cover the soaring costs of social care.
But the exact amount more you’ll pay will depend on how much you earn.
For example someone earning £10,000 a year will pay an extra £6.45 in NICs.
Someone on a £30,000 salary will pay £255 more and anyone making £75,000 a year will pay £818 more in NICs each year.
There have been calls for the NIC rise – first announced last year before the cost of living crisis – to be delayed.
Previously Prime Minister Boris Johnson had ruled this out but that was before the war in Ukraine which looks set to pile more pressure on the cost of living.
The Chancellor insisted it was his “mission” to cut taxes for everyone as soon as he could, but has stopped short of going back on plans.
But according to the Resolution Foundation cancelling the hike in NICs would be less beneficial to those struggling the most.
A boost to Universal Credit and other benefits to keep pace with inflation would give “four times more support”.
Adam Corlett, Principal economist at the think tank said: “Raising benefits by a further five percentage points would deliver four times as much for these families as cancelling the national insurance rise, and should be the Chancellor’s top policy priority.
Raise National Insurance threshold
An increase to the threshold at which National Insurance is paid is another lever the Chancellor has to help those on low incomes.
Mr Sunak today (Monday, March 21) swerved questions on whether he might hike up the threshold at which lower paid Brits start to pay the tax.
You pay National Insurance if you’re 16 or over and either:
- an employee earning above £184 a week
- self-employed and making a profit of £6,515 or more a year
Reducing the threshold would be an effective tax cut for millions of the lowest paid.
The Resolution Foundation said that raising the threshold would deliver more savings to those who needed it compared to axing the NIC hike, though not as much as increasing benefits at the current rate of inflation.
More energy bill help
Millions of Brits will get a £200 rebate on their energy bills in October, though this will have to be repaid over the next five years.
One option for the Treasury is increasing the amount, though the scheme has been criticised for coming far to late as bills will rise by nearly £700 on average in April.
The rebate could double to £400 later this year if the cost of living crisis continues to deepen, the Sun reports.
Another option is delaying the repayment schedule, or exempting poorer households from paying back all the cash.
Under current plans the repayment would start from April 2023 at £40 a year.
But that was in February when the scheme was first announced and based on when energy prices had been expected to return to normal.
Since then the war in Ukraine started and could push bills up further in the Autumn, the next time the energy price cap is reviewed.
Benefits increase
There have been widespread calls for benefit rates to be increased to keep up with the rising cost of living.
Payments will rise by 3.1% next month as part of the annual uprating of benefits, including Universal Credit and the state pension.
Retirees getting the maximum state pension will get an extra £5.55 a week – or nearly £300 a year.
And the basic amount for couples on Universal Credit rise by nearly £16 a month.
But with inflation running at 5.5% and expected to reach higher than 8% this year, it means they are worse off in real terms.
The Resolution Foundation has called for benefits to rise 8.1% to keep up with the rising cost of goods.
The group estimates the cost of such a rise at £9billion, or £3billion if just Universal Credit and tax credits were included.
A rise of 8.1% would see a couple on the basic amount of Universal Credit better off by around £41 each month, or £492 a year.
And the same increase for the state pension highest amount would see retirees get around £14.55 more each week, or around £757 a year.
The government last year scrapped the triple lock used for calculating pensions and removed wages, which were running at around 8% growth because of the pandemic.
Instead the double lock was used to calculate the increase, which was the higher of either inflation in September last year, or 2.5%.
Inflation was 3.1% and the same figure was used to uprate other benefits too.
But with inflation at a 30-year-high many will feel worse off despite the rise.
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