Chancellor Rishi Sunak has delivered the Spring Statement that includes a reduction in fuel duty on petrol and diesel amid rising costs for the UK supply chain.
Speaking in the House of Commons, Sunak announced a number of measures as part of the statement, which includes a tax cut for nearly 30 million UK workers via a rise in National Insurance thresholds.
Sunak also announced that fuel duty for petrol and diesel will be cut by 5p per litre from 6pm on 23rd March to help drivers across the UK with rising costs – a tax cut worth £2.4 billion. The government claimed that this is the biggest cut ever on all fuel duty rates and means a one-car family will now save on average £100.
The basic rate of income tax will also be cut by 1p in the pound in 2024. The cut is worth £5 billion for workers, savers and pensioners and will be the first cut to the basic rate in 16 years.
The Chancellor also set out a series of measures “to help businesses boost investment, innovation, and growth”, including a £1,000 increase to Employment Allowance expected to benefit around half a million smaller firms.
‘Immediate help with the rising cost of living’
Delivering the Spring Statement, Sunak said: “This statement puts billions back into the pockets of people across the UK and delivers the biggest net cut to personal taxes in over a quarter of a century.
“Like our actions against Russia, I have been able to do this because of our strong economy and the difficult but responsible decisions I have had to make to rebuild our finances following the pandemic.
“Cutting taxes means people have immediate help with the rising cost of living, businesses have better conditions to invest and grow tomorrow, and people keep more of what they earn for years to come.”
Strengthening the supply chain
Commenting on the Spring Statement, director of policy at Logistics UK Elizabeth de Jong said that the decision to cut fuel duty will help logistics businesses to afford to stay operational amid inflationary pressures.
She said: “With average fuel prices reaching the highest level on record and rising inflation, there has been an unsustainable burden on logistics businesses which operate on very narrow margins of around 1%. The Chancellor’s decision today will help to ensure operators can continue to afford supplying the nation with all the goods it needs, including food, medicine and other essential items.
“Fuel is the single biggest expense incurred by logistics operators, accounting for a third of the annual operating cost of an HGV. The cut in fuel duty of 5ppl will result in an average saving of £2,356 per year per 44-tonne truck. This move will help to strengthen the UK’s supply chain during a time of ongoing financial and operational challenges.”
