Spring Statement 2022: Baachu Summary

Baskar Sundaram
Baskar Sundaram

Key Points

As part of today's Spring Statement, the Chancellor has made the following announcements.

  • The full documents can be found here.
  • A summary can be read here.
  • The Business Support Factsheet can be found here. 

Economy

  • Initial Office for Budget Responsibility forecast:  economy will grow by 3.8 per cent this year.  Projections are for growth of 1.8 per cent in 2023, and then 2.1 per cent, 1.8 per cent and 1.7 per cent in the following three years.
  • OBR predicts inflation will hit 7.4 per cent by the end of the year.
  • UK's underlying debt is expected to fall from 83.5 per cent of GDP in the next financial year to 79.8 per cent in 2026-27.

Tax & National Insurance

  • Basic rate of income tax cut from 20p to 19p by end of Parliament (2024).
  • National Insurance starting thresholds will rise to £12,570 from July.
  • Fuel duty cut by 5p per litre until March 2023.
  • VAT on energy saving materials such as solar panels, heating pumps and roof insulation cut from 5 per cent to zero for five years.
  • Two new business rates reliefs will be brought forward by a year to come into effect in April 2022. There will be no business rates due on a range of green technology used to decarbonise buildings, including solar panels and batteries, whilst eligible heat networks will also receive 100 per cent relief.
  • Tax Plan published. Consultations launched with results announced in the Autumn.  Government will cut tax rates on business investment and reform the generosity of tax credits on the money private firms spend on research and development. 
  • Will examine how the tax system – including the operation of the Apprenticeship Levy – can be used to encourage employers to invest in adult training.
  • £1,000 increase to Employment Allowance to benefit around half a million smaller firms.
  • Read the Tax Plan here.

Government Efficiency

  • New Efficiency and Value for Money Committee will be set up to cut £5.5 billion worth of cross-Whitehall waste – with savings used to fund public services.

  • Detail of drive on government efficiency savings can be found here.

Levelling Up

  • Fresh set of infrastructure projects as government opens the second round of the £4.8 billion Levelling Up Fund. It will continue to focus on regeneration, transport and cultural investments.

Cost of Living

  • Household support fund – administered by councils to support vulnerable households – will be doubled to £1 billion from April.

     

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