MILLIONS of Brits were today given welcome tax breaks as Rishi Sunak used his Spring Statement to cushion the cost of living onslaught.
The Chancellor slashed fuel duty by a historic 5p while also saving workers £330 by softening the looming National Insurance hike.
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Against a crippling backdrop of rocketing energy, fuel and food prices, the Chancellor set out three immediate steps to help families.
He will cut fuel duty from 6pm tonight, scrap VAT on home insulation costs and double the funding pot for the poorest households.
In a win for workers Mr Sunak also announced an effective £6billion tax cut by raising the threshold for paying NICs by £3,000 in July – offsetting the hike for 70 per cent of earners.
And making a surprise reveal to harden his Tory credentials, he triumphantly pledged to shave a penny off income tax in two years.
But cries for more help with spiralling energy bills and benefits fell on deaf ears as household income plummets the most in one year since records began in the 1950s.
In key Spring Statement announcements:
Better-than-expected finances gave Mr Sunak headroom to once again throw a lifeline to families struggling to pay their bills and put food on the table.
But he was cautious about blowing the entire £20billion windfall and said he had to pull the Treasury coffers onto an even keel after the pandemic.
Mr Sunak ignored a legion of calls to scrap the 1.25 percentage point NICs increase that will see the average earner fork out £252 extra a year.
Instead he raised the NICs threshold from £9,000 to £12,570, letting workers keep more of their cash and disproportionately helping lower earners.
Trumpeting the tax tweak he said: “That’s a £6bn personal tax cut for 30 million people across the United Kingdom. A tax cut for employees worth over £330 a year.
“The largest increase in a basic rate threshold – ever. And the largest single personal tax cut in a decade.”
Economist Paul Johnson said the measure would compensate 70 per cent of workers for next month’s NICs hike, to pay for the NHS.
However the threshold will only be raised in July, leaving the poorest families exposed to the full NICs whack for three months just as energy prices go through the roof.
PUMP ME UP
Drivers were given a welcome break at the petrol pumps as the 57.95p fuel duty was cut by 5p.
Mr Sunak hailed it “the biggest cut to all fuel duty rates ever”, announcing it will kick in at 6pm tonight and last for a year.
It should amount to a saving of 6p a litre at the pumps after VAT is factor in.
It’s a major victory for The Sun’s 12-year Keep It Down campaign and will save motorists around £3.30 every time they fill their cars.
Mr Sunak was left with little choice but to help offset the soaring oil and gas prices driven by Russia’s war on Ukraine.
Figures show the average cost of a litre of petrol today was a record 167.3p, while diesel was 179.7p.
IN FOR A PENNY
Pulling a rabbit from the hat to the cheers of Tory MPs, Mr Sunak announced an eye-catching income tax cut in 2024.
He vowed to knock the basic rate of income tax from 20p to 19p which he claimed was a £5billion tax cut for more than 30million people.
The tax burden is currently at its highest since the Second World War after Mr Sunak whacked workers to pay for the pandemic.
Now grappling with another crisis, he warned that the war in Ukraine will erupt economics shocks back in Britain.
While promising to “stand with Ukraine”, Mr Sunak told MPs: “The actions we have taken to sanction Putin’s regime are not cost free for us at home. The invasion of Ukraine presents a risk to our recovery.”
Mad Vlad’s invasion hiking prices at home as inflation today surged to a 30-year high of 6.2 per cent.
The Chancellor warned this will rise to an average of 7.4 per cent in the coming months.
Vowing to protect families, Mr Sunak told the Commons: “So when I talk about security, yes, I mean responding to the war in Ukraine,” he is poised to tell the House of Commons.
“But I also mean the security of a faster-growing economy, the security of more resilient public finances, and security for working families as we help with the cost of living.”
But critics blasted the Chancellor for not offering up a more generous package as the cost of living puts families under the squeeze.
Labour’s shadow chancellor Rachel Reeves said “it is clear the Chancellor doesn’t get the scale of the challenge.”
Resolution Foundation boss Torsten Bell said: “I really can’t believe this package does next to nothing for those getting hardest hit by rising prices – those who are disabled and not working just got told they are on their own.”
The IFS’ Paul Johnson piled in: “No extra money for health, schools or other public services despite huge increase in inflation. Likely implies big real pay cuts for most public sector workers.”
The Chancellor has already announced a £200 loan for gas and electricity payments from October – although not until the price cap jumps 54 per cent.
Certain households will also get a £150 council tax rebate in April.
The Treasury said the measures announced so far add up to around £21 billion of support this year, taking in the rebate, changes to Universal Credit.
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