Rishi Sunak has cut fuel duty and said he will cut income tax by 2024 but kept the national insurance rise in his Spring Statement, today.
The Chancellor said he was cutting duty on fuel at the pumps by 5p a litre as motorists face huge increases in the price of petrol and diesel.
And he promised he would cut the basic rate income tax before the next election from 20p to 19p in the pound.
He didn’t budge however, on calls to scrap the planned increase in National Insurance, which kicks in from April but he is to increase the threshold at which NI is paid.
He said keeping the 1.5% increase, to fund health and care services, was necessary.
He said: “It is right that the health and care levy stays.”
Sunak announced National Insurance starting thresholds will rise to £12,570 from July.
He said it will benefit 2.4 million working people in Scotland with a typical employee saving over £330 a year.
It is not, however, enough to prevent a “rising tide of poverty” it has been warned, by those dealing with people in financial crisis.
Citizens Advice said much more is needed.
Derek Mitchell, Citizens Advice Scotland, Chief Executive, said: “People are facing a cost of living crisis that will squeeze household budgets to breaking point and beyond.
“It’s vital to understand that this crisis has been brewing for some time, with 1.8 million people in Scotland seeing their finances worsen during the pandemic.
“One in three of us already find energy bills too high even before the record rise in prices due in April, and the knock-on effect of that is almost half a million people cutting back on food to afford energy bills.
“Some of the measures announced today by the Chancellor will provide some respite, however in reality it won’t be enough to halt a rising tide of poverty that could sweep millions across the U.K. into debt and destitution. Put simply much more needs to be done than has been announced today.”
On cutting fuel duty ,the Chancellor said it was only the second time in 20 years it has been cut.
Motoring organisations welcomed the cut but said it must be passed on to motorists and businesses.
Edmund King, AA president, said: “The AA welcomes the cut in fuel duty. However, we are concerned that the benefit will be lost unless retailers pass it on and reflect a fair price at the pumps. Average pump prices yesterday hit new records- despite the fall in wholesale costs.”
He noted that prices have rocketed by 20p a litre since the start of the year.
When the Chancellor had made his announcements an Opposition MP could be heard shouting out: "Is that it?"
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