In his Spring Statement update to the Commons, Rishi Sunak said he would “stand by” households by launching an immediate cut in fuel duty and raising the threshold at which workers begin to pay national insurance contributions.
The Chancellor announced:
- A 5p fuel duty cut
- A rise in the National Insurance threshold by £3,000
- Zero VAT on the installation of energy-efficient materials in homes such as solar panels, heat pumps and insulation
He also told a packed House of Commons that the Office for Budget Responsibility (OBR) expects inflation to rise further this year, to 7.4 per cent. The OBR announced that the rise in inflation to a 40-year high this year is expected to reduce real household disposable incomes (RHDI) on a per-person basis by 2.2 per cent in 2022-23. They report that this will be the “biggest fall in living standards in any single financial year since Office of National Statistics (ONS) records began in 1956-57”.
The OBR states that the underlying source of the reduction in disposable incomes comes from several sources, including:
- The failure of nominal earnings growth to keep pace with rising inflation
- The increases in global prices of goods
- The hike in energy prices
However, the Chancellor has offered very little in his statement to help with these increasing costs. The trade unions have responded to the Spring Statement vociferously.
Sharon Graham, Unite General Secretary said:
“With inflation at its highest for 30 years, Rishi Sunak’s Spring Statement just tinkers around the edges of this shocking cost-of-living crisis.
“Workers will still be facing sleepless nights worrying about how to make ends meet, overwhelmed by rocketing prices.”
“His Spring Statement does nothing to tackle the corporate elite, the billionaires who stash their loot but sack UK workers by Zoom. Once again, ordinary working people bear the broadest burden while the super-rich get off scot-free.
“That is why I’m calling on the government to join Unite in our new workers’ commission on profiteering because it’s not just the big six energy firms who have made money from this crisis.
Gary Smith, GMB General Secretary, said:
“It’s time Rishi Sunak stopped fretting about being the next Tory leader and focused on providing real help for working people when they need it.
“His talk of tax cuts in the distant future may win votes from his backbenchers, but it does nothing to help people now.
“We’re in the grip of the worst cost of living crisis for 30 years, driven by an utterly predictable energy squeeze.
“With inflation out of control and getting worse people are crying out for help with their skyrocketing bills.
Christina McAnea, UNISON General Secretary said:
“The government has merely tinkered around the edges of the living standards crisis. Tweaking tax thresholds will boost the coffers of the wealthy, not provide help to those in most need.
“Promises to reduce taxes in future won’t cut the mustard with families living a financial hell now. Financial pain at the pumps won’t end with a few pence off fuel duty. Less affluent households are being driven off the roads.
“Cheaper solar panels won’t put food on the table for families worried about where their next meal is coming from. Money is tight for millions of working people across the UK, many employed in essential public services.
“The chancellor had the wriggle room to deliver widespread relief across NHS, care, council, police and school services. It’s outrageous he chose not to.