Stephen Metcalfe, MP for South Basildon & East Thurrock, welcomes the tax cuts in the Spring Statement by the Chancellor Rishi Sunak.
The Chancellor has introduced a range of measures to continue to support middle and low income households and support everyone with the cost of living through a variety of tax cuts.
Particularly welcome is the rise in the National Insurance Contribution (NIC) threshold by £3,000 to £12,570 saving the average taxpayer £330 a year and the 5 pence per litre cut in fuel duty, saving motorists £5 billion.
Whilst we have introduced unprecedented spending packages to help individuals and businesses through the coronavirus pandemic, we are now starting to see the knock-on effect of Putin’s illegal invasion of Ukraine on our economy. This has led to a squeeze on the cost of living for everyone.
It should be noted that sanctions are not cost free – and the Office for Budget Responsibility (OBR) has stated that there is unusually high uncertainty about the future and with inflation growing due to the squeeze on our cost of living, our money does not go as far as it did a few months ago. This means that whilst Government tax revenues were higher than predicted the money no longer goes as far.
Whilst leadership is not always about making the popular decisions it is important we look to the future when making immediate decisions. To this end, a windfall tax on energy companies would hinder investment and in turn stifle growth in the energy sector. We need growth to generate jobs and level up, which we are doing, and the measures put in place within the statement today, deliver this.
Stephen Metcalfe said: “I want to be clear that we as a Government, understand that the money we spend is tax payers money and it is always a privilege not a right to spend this money on your behalf.
As a traditional Conservative I believe in the value of a low tax and high growth economy. Whilst this has had to be halted for the short term, I am hopeful that this statement today will lead to a fast-growing economy and lead us back to a position where we can be more fiscally flexible.
Therefore, I am happy to see the promise of a tax cut in 2024 – seeing the lower income tax rate being reduced to 19 per cent. As well as a new Plan for Tax being put in place which will help families, ensure the economy has the conditions for growth, and that the proceeds of growth are shared.
Finally, I have always championed STEM in Parliament and the widening of R&D tax credits so they include data, cloud computing, and pure maths will improve the ability of small businesses to expand into the STEM industries.”
We have already introduced various mechanisms to assist people with the cost of living:
- A council tax rebate of £150, assisting over 20 million homes including 95 per cent of all rented property.
- An energy bill rebate of £200 for all households.
Today the Chancellor announced further measures to help households and families with the cost of living:
- National Insurance Contribution threshold raised by £3,000 to £12,570 saving £330 per the average taxpayer each year, saving £6 billion for 13 million people and ensure around 70 per cent of workers will see a reduction in their overall tax bill. Additionally, this tax cut will directly reward work.
- A reduction in fuel duty by 5 pence per litre, coming into force at 6pm this evening. This is the biggest cut ever and only the second cut in the last 20 years. This will stay in place for a full 12 months and will save motorists £5 billion.
- A reduction to zero per cent VAT on energy saving material, such as solar panels, heat pumps, wind and water turbines. We will also abolish all red tape put on us by the EU in relation to the taxation of energy saving material. This will provide tax savings worth £1,000 on installation and £300 on energy Bills.
- Doubling the Household Support Fund to £1 billion – and local councils will receive this funding from April.