Mini budget spring statement 2022
This week Rishi Sunk delivered the mini budget that puts billions of pounds back into the pockets of hard-working people. The anticipated Spring Statement sets out measures to boost investment, innovation, and growth. This includes a £1,000 increase to Employment Allowance to benefit around half a million SMEs. But will these changes make the difference that everyone so desperately needs? Here, we take a closer look…
What are the new mini budget changes?
Despite the Chancellor trumpeting his tax-cutting credentials, it seems the Spring Statement only unwound a sixth of the tax rises imposed since February 2020. The decision to go ahead with freezing tax thresholds despite skyrocketing inflation means that over the next three years 2.8million people will be dragged into paying tax, and two million into the higher rate.
- National Insurance threshold – the salary at which it starts to be paid – increased by £3,000 to £12,570 – saving the typical employee over £330 in the year from July.
- No VAT on solar panels, heat pumps, or insulation
- No extra money for defence
- Inflation could hit 9% this year
- Chancellor Rishi Sunak has been delivering his Spring Statement as the costs of fuel, energy, and food soar
- Sunak says 70% of workers will get an effective tax cut as he raises the threshold for paying National Insurance (NI) by £3,000
- 5p cut to fuel duty to come into force this week
- The basic rate of income tax will go from 20% to 19% by the end of Parliament in 2024
- The chancellor’s challenge has been laid bare as prices rose by 6.2% in the 12 months to February – the fastest in 30 years
Are we facing a recession?
Households are facing the real possibility of another recession as Covid, the Russia-Ukraine war and spiraling inflation take their toll. But has the mini-budget helped to ease people’s fear of not being able to keep up with living costs? It’s made some headway but with a recession looming the UK is in desperate need of bigger support.