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Chancellor’s spring statement – live

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Here are all the details as they come in of Rishi Sunak’s response to the cost of living crisis

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What the 5p fuel duty cut will mean

The petrol station at Sainsbury's, Monks Cross, York. Photograph: YorkMix

A 5p per litre cut in fuel duty has been announced by Chancellor Rishi Sunak, writes Neil Lancefield, PA Transport Correspondent.

The reduction will be implemented at 6pm on Wednesday and will last until March 2023.

Motorists have been hit by record pump prices since Russia’s invasion of Ukraine led to an increase in the cost of oil due to supply fears.

Retailers were also accused of failing to pass on a reduction in wholesale costs earlier this month.

Figures from data firm Experian Catalist show the average cost of a litre of petrol at UK forecourts on Tuesday was 167.3p, while diesel was 179.7p.

This is an increase of 18.0p per litre for petrol and 27.0p for diesel over the past month.

Announcing the duty cut in his spring statement, Mr Sunak said the UK Government wanted people to know they will “stand by them” in dealing with rising living costs.

He told MPs: “Today I can announce that for only the second time in 20 years, fuel duty will be cut.

“Not by one, not even by two, but by 5p per litre. The biggest cut to all fuel duty rates – ever.”

He added:

“Together with the freeze, it’s a tax cut this year for hard-working families and businesses worth over £5 billion, and it will take effect from 6pm tonight.”

Fuel duty has been frozen at 57.95p per litre for petrol and diesel since March 2011.

Analysis from the Institute for Fiscal Studies

Here’s some instant analysis from Paul Johnson, director of the Institute for Fiscal Studies…

Sunak promises income tax cut

Photograph: GoSimpleTax on Flickr / YorkMix

Chancellor Rishi Sunak has said he will cut the basic rate of income tax from 20 pence in the pound to 19 before the end of the current Parliament, in 2024.

He told MPs: “A clear goal for Conservative chancellors, and even some Labour ones, has been to cut income tax. The fact this has only happened twice in 20 years tells you how hard it is to do.

“Covid and the war in Ukraine have only added to the difficulty of achieving this by the end of this Parliament.”

He added:

It would clearly be irresponsible to meet this ambition this year – and yet I refuse to let that ambition wither and drift. By 2024, the OBR currently expects inflation to be back under control, debt falling sustainably, and the economy growing. Our fiscal rules are met with a clear safety margin.

So, my final announcement today is this: I can confirm, before the end of this Parliament, in 2024, for the first time in 16 years, the basic rate of income tax will be cut from 20 to 19p in the pound.

A tax cut for workers, for pensioners, for savers. A £5 billion tax cut for 30 million people. It is fully costed and fully paid for in the plan announced today.

Employment Allowance to increase – ‘a tax cut for half a million small businesses’

Rishi Sunak said he would go further to help small businesses reduce their tax bills and make it cheaper to employ staff.

He told MPs: “From April, the employment allowance will increase to £5,000. That’s a new tax cut worth up to £1,000 for half a million small businesses – starting in just two weeks’ time.”

This is what Rishi Sunak said about his tax plans

“A long-term funding solution for the NHS and social care is not incompatible with reducing taxes on working families,” the Chancellor told MPs.

He went on: “Our current plan is to increase the NICs threshold this year by £300, I’m not going to do that – I’m going to increase it by the full £3,000, delivering our promise to fully equalise the NICs and income tax thresholds.

“And not incrementally over many years, but in one go, this year. From this July, people will be able to earn £12,570 a year without paying a single penny of income tax or National Insurance.

“That is a £6 billion tax cut for 30 million people across the UK. A tax cut for employees worth over £330 a year. The largest increase in a basic rate threshold ever. And the largest single personal tax cut in a decade.”

70% of workers ‘to get effective tax cut’ as Sunak lift’s NI threshold by £3,000

Chancellor Rishi Sunak has said the threshold for paying National Insurance will increase by £3,000 from July.

This is a £6bn tax cut for 13 million people, he says – a cut worth £330 a year.

He is today publishing a new “tax plan”, which will “help families with the cost of living”, “create the conditions for higher growth”, and “share the proceeds of growth fairly”.