As reports revealed that inflation hit a 30 year high, Chancellor Rishi Sunak gave his Spring Statement in the House of Commons on March 23 2022.
The February figure from Official National of Statistics showed that the rate of inflation hit 6.2 per cent and Bank of England expect it to reach 7.4 by April.
This comes at a time where the UK is hurling towards a cost of living crisis as energy, fuel and food costs are rocketing.
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Consumer champion Martin Lewis has been offering his expert advice to people in a way to save money but has now admitted he has "no more tools" and it comes down to the Government to give support and an answer as many will be choosing between heating their homes or eating.
Today, Mr Sunak gave his Spring Statement. After taking a moment to pay tribute to soldiers in the Ukraine army, he went on to reveal the Conservative's plan to tackle national insurance, taxes, fuel prices and energy costs.
Cut to fuel duty
The Chancellor announced that fuel duty will be cut by 5p per litre.
He called it "the biggest cut to all fuel duty rates ever".
This will remain in place until March 2023 and come into force from 6pm today.
The average price of a litre of petrol has risen more than 40p since last year, now reaching around £1.78 a litre, while diesel prices are up by nearly 50p a litre.
Increase to the National Insurance threshold
The opposition was urging him to scrap the National Insurance rise that is due to hit in April, but instead the Chancellor announced it would be continuing it's levy but will be changing the threshold to help those on low incomes.
Sunak argued the health and social care levy is "needed now" and rather than scrap the 1.25 per cent rise, he confirmed that if you earn up to £12,570 a year, you will not have to pay any National Insurance or Income Tax.
National Insurance is paid by employees and employers and the money goes towards benefits, state support for people and health and care and services in devolved nations.
The extra 1.25 per cent has been triggered by the cost of the pandemic.
Martin Lewis called it a 'good call' in a tweet, pointing out it is a gain of £330 a year.
VAT scrapped on green home improvements
Sunak acknowledged that energy bills are rising to a staggering amount and said that if homes can be heated more efficiently, it can bring the costs down in the long term.
In the Spring statement, the Chancellor confirmed that VAT will be abolished on energy saving materials for homeowners, claiming they could save £1,000 on tax.
Speaking to MP's he said: “Homeowners who have solar panels, heat pumps and insulation installed will no longer pay 5 per cent VAT – they will pay zero.”
Basic rate of tax reduced by 1p
Towards the end of his statement, followed by cheers from his side, Sunak announced that "for the first time in 16 years" the basic rate of tax will be reduced.
The basic rate of income tax will be reduced from 20p to 19p in 2024, just in time for the next general election.
