Rishi Sunak has announced today his ‘mini-budget’ ahead of the summer.
In his statement, the Chanellor said the basic rate of income tax will be cut from 20p to 19p in the pound by 2024.
He also said the National Insurance threshold will be raised by £3,000.
This means the amount you earn before you get taxed will now be in line with Income Tax at £12,570.
Torsten Bell, chief exec of the Resolution Foundation, said this could equate to a tax cut of up to £300 for workers.
However, he also added it will help those on higher incomes more, with only £1 in £3 of the benefit going to the bottom half of earners.
The Office for Budget Responsibility says that real living standards won’t reach pre-pandemic levels for two years, but did admit that “public finances have emerged from the pandemic in better shape than expected”.
Labour's Shadow Chancellor and Sunak’s opposite number, Rachel Reeves, said Sunak’s claims were becoming “increasingly incredible”, saying he was like Alice in Wonderland making things up as he went along.
She said: "Inflation is at its highest level for 30 years and rising. Energy prices at record highs. People are worried sick.
"For all his words, it is clear that the Chancellor does not understand the scale of the challenge. He talks about providing security for working families, but his choices are making the cost-of-living crisis worse, not better."
But what does the announcement mean for everyday items such as fuel, alcohol and cigarettes?
Fuel prices in the spring budget
Waitress who lost job in pandemic turns hobby into £14,000 cookie business
Fuel duty has been cut by 5p per litre until March 2023, but it isn’t clear how much of an impact that will have, with the latest data from Experian Catalyst showing that the average cost of petrol on the forecourts on March 22 was 167.3p.
Cutting the fuel duty by 5p will only take this down to 162.3p, meaning that if you fill up a 40-litre fuel tank, this will only save you £2.
In other words, the cut to tax will only see the total cost of a tank of petrol shrink from £66.92 to £64.92 – hardly a change that will help families escape the cost of living crisis.
But good news has emerged from supermarket giant Asda, which announced immediately after the statement that it was cutting the cost of fuel by 6p per litre from tonight, March 23.
If you are looking to get away from fossil fuels and go greener, Sunak also announced he was cutting VAT on all energy-efficiency goods like solar panels and heat pumps for the next five years.
Beer and cigarettes in the Spring Statement
Drinkers need not fear when it comes to the Spring Statement – beer tax will not be increasing as part of the government’s new plans, which great news for those heading to the pubs as all your favourite beverages will be staying the same price.
The same goes for cigarettes, with no changes to the price of a pack of smokes.
But that doesn't mean it’s time for a party just yet, with new data published today revealing that the price of alcohol has increased a lot in the past 12 months.
New data released by the Office for National Statistics has laid bare some big increases in the cost of certain items over the past year since up to February.
The data shows how certain items contribute to our personal cost of living increases, although it only discusses goods we take home – so just beer from the supermarket, not from the pub.
The cost of petrol and diesel has increased by £18.21 per £100 spent in the last 12 months.
Meanwhile, the cost of tobacco and e-cigarette products has increased by £5.39 per £100 spent.
Alcohol has largely gotten away without too sharp a rise, with drinkers only paying £1.57 more per £100 compared to February 2021.
That means that while it's a tough time to be a driver, alcohol has been largely unaffected through either inflation or the Spring Statement.
Source: Read Full Article