Julia Lopez MP has welcomed the Chancellor’s Spring Statement setting out measures to support families and businesses with the cost of living.
Hornchurch and Upminster’s MP, Mrs Lopez, said:
"The economy has been recovering well from the pandemic, with record job vacancies and unemployment back to pre-crisis levels. But global inflationary pressures mean that these are not easy times for household budgets, and we know that rising energy costs are having a knock-on effect on prices at the pump and utility bills.
The Chancellor has set out the difficult choices in front of us to manage the public finances responsibly while dealing with those headwinds. That is why he has focused on measures that will make the greatest impact: a 5p cut to fuel duty; the chance to earn up to £12 570 without paying National Insurance (worth £330 a year); and a doubling of the Household Support Fund so that councils can help those households most under pressure.
With local businesses getting back on their feet after covid, I am also really pleased to see the increase in Employment Allowance - a tax cut of £1000 for small businesses. The incoming business rates discount in April will provide real practical support too."
INDIVIDUAL SUPPORT FOR HORNCHURCH & UPMINSTER RESIDENTS
FUEL DUTY
The Chancellor, Rishi Sunak, announced a cut in fuel duty by 5p for twelve months, providing a £5 billion tax cut for drivers together with the freeze. This will save car drivers £100, van drivers £200, and HGV drivers £1,500 this year. 40% of the cut will also benefit businesses and will come into effect from 6pm on 23 March.
NATIONAL INSURANCE
Julia welcomes the increase in threshold at which workers start paying National Insurance to £12,570 from July. This is an increase of £3,000 and is a £6 billion tax cut for nearly 30 million workers and worth over £330 a year starting in July. Around 70% of all workers will be better off even after paying the new Health and Social Care Levy which is being introduced to sustainably fund the NHS and social care. This brings National Insurance in line with the Income Tax personal allowance and means that from July, people will be able to earn £12,570 a year without paying any income tax or national insurance.
HOUSEHOLD SUPPORT FUND
The Government is adding an additional £500 million to the Household Support Fund, helping the move vulnerable families with the cost of living. The fund is distributed through local authorities, including Havering Council, and aims to support 3 to 4 million vulnerable households.
SCRAPPING VAT ON ENERGY SAVING MATERIALS
Now the UK has left the EU, the Government is using its Brexit freedoms to remove the 5% VAT charge on solar panels, heat pumps and insulation over the next five years, reversing the EU’s decision to take wind and water turbines out of scope, and remove complex EU red tape. This provides a £250 million tax cut for energy efficiency.
The above measures build on the government’s existing package of support to help with the cost of living, including:
- £9 billion package to help households with £350 to address rising energy costs via a Council Tax cash rebate for homes in bands A-D, a £200 energy rebate, as well as £144 million discretionary funding for local authorities to support households
- The Energy Price Cap, Winter Fuel Payments, Cold Weather Payments, Warm Homes Discount, and Energy Company Obligation
- Increasing the National Living Wage to £9.50 per hour for those over 23 on 1 April
- Cutting tax for low-income families by reducing the Universal Credit taper rate by 8 pence, from 63p to 55p
- Cutting and freezing alcohol duties
- Permanently increasing the generosity of the Local Housing Allowance for housing benefit
- Investing over £200 million a year to continue the Holiday Activities and Food Programme
- Supporting people into good paying jobs
SUPPORT FOR BUSINESSES
Julia welcomes the announcement to raise the employment allowance to £5,000 – providing a £1,000 tax cut for small businesses. This builds on the 50% business rates discount for retail, hospitality and leisure businesses worth up to £110,000 which will take effect in April. The Government have also increased the Annual Investment Allowance to £1 million, providing full expensing for all SMEs. The Help to Grow: Management scheme also offers businesses generous government-subsidised mini-MBAs worth up to £8,000, and Help to Grow: Digital offers businesses 50% discounts on purchasing new software worth up to £5,000.
TAX PLAN
CAPITAL
The Chancellor has committed to cutting the tax rates on business investment in the Autumn Budget.
PEOPLE
The Government will examine whether the current tax system, including the operation of the Apprenticeship Levy, is doing enough to incentivise employers to invest in training.
IDEAS
The UK will reform R&D tax credits so they are more effective and provide better value for money, expanding the scope of reliefs, and will consider whether to make R&D expenditure more generous.
CUTTING THE BASIC RATE OF INCOME TAX
Julia strongly welcomes the commitment to cutting the basic rate of income tax to 19 pence in 2024 once inflation is under control and debt is falling sustainably. This will provide a tax cut of £5 billion for over 30 million workers, pensioners and savers.
For more information on the Spring Statement, please see the Treasury’s website, here - Chancellor announces tax cuts to support families with cost of living - GOV.UK (www.gov.uk)
