The chancellor will give his economic update to the Commons as the cost of living crisis continues.
Image source, HM Treasury
Chancellor Rishi Sunak will unveil his Spring Statement on Wednesday as the country faces increasing pressure from rising energy, fuel and food costs.
He is expected to promise a “stronger, more secure economy” and help for families with the cost of living.
But Labour branded Mr Sunak “the high-tax chancellor”, and said he should use his speech to cancel the planned hike in National Insurance next month.
The chancellor has faced demands from MPs and campaigners for new policies.
Some have called for a cut in fuel duty to help motorists, while others want an increase to the threshold at which people pay National Insurance.
However, the full details of Mr Sunak’s speech will not be known until he takes to the dispatch box at 12:30 GMT.
And BBC economics editor Faisal Islam warned against seeing the economic update as a full budget, saying it would fall far short of a “red book” of measures.
The chancellor is expected to reference the war in Ukraine during his statement, saying it is exacerbating pressures at home.
He will pledge the UK’s “unwavering” support to the country in its fight against Russia, and will add that a stronger British economy is vital in responding to the threat of Russian President Vladimir Putin.
“We will confront this challenge to our values, not just in the arms and resources we send to Ukraine, but in strengthening our economy here at home,” Mr Sunak will say.
“So when I talk about security, yes, I mean responding to the war in Ukraine. But I also mean the security of a faster growing economy, the security of more resilient public finances, and security for working families as we help with the cost of living.”
His statement is also expected to set out government plans “to create a new culture of enterprise”, including more training and investment.
Expectation has been more muted than normal – given the horror of events in Ukraine – but the Spring Statement is still a significant event that matters for all of us.
The decisions he announces at the dispatch box will affect the prices we pay; the pound in our pocket.
Before the conflict, there was already a squeeze on everyone’s wallet coming. Since the outbreak, day by day, the uncertainty around the economy, and the impact of what’s unfolding, has only become more acute.
Although every day brings new calls for more help with rocketing energy bills, the Treasury has been reluctant to move from the extra support they promised already, which was only announced last month.
That’s in part because the Treasury is instinctively cautious with cash.
But also because price rises are so hard to predict and may go on for many, many months.
Labour has attacked the chancellor ahead of his speech – especially over the impending National Insurance rise in April to pay for NHS and social care costs.
Shadow chief secretary to the Treasury, Pat McFadden, said the chancellor should use his speech to scrap the tax.
While Mr Sunak claimed to “believe” in low taxes, he said, the evidence was not there to support this.
Mr McFadden added: “Rishi Sunak has increased taxes more than any chancellor in half a century. It is because the Conservatives are the party of low growth that they are now the party of high tax.”
The SNP has also called for the tax rise to be scrapped, dubbing Mr Sunak “the poverty chancellor” for removing the £20 uplift for universal credit and breaking his pledge to keep the pension triple lock.
The party’s spokeswoman, MP Alison Thewliss, said: “The reality is that the chancellor is not going anywhere near far enough to tackle this crisis and to support families.
“It is essential to reverse Tory cuts and tax hikes and deliver a major boost to incomes – not just tinker around the edges with minor adjustments.”
One of the main rumours circling ahead of the Spring Statement is that a cut to fuel duty will go ahead after more than 50 Tory MPs wrote to the chancellor to make the demand.
Tory MP Robert Halfon, who led the charge, said the country was “heading to a de facto lockdown, where parents can’t afford to take their kids to school [and] where workers can’t afford to commute by car and have to stay at home”.
But the Green Party said cutting fuel duty would not fix the cost of living crisis, and would be the wrong policy at the time of a climate emergency.
Co-leader Adrian Ramsay said: “We absolutely know people need help right now – but cuts to fuel duty aren’t targeted to support the poorest and the greatest numbers of people.”
Instead, the party wants a windfall tax on fossil fuel companies to pay for the restoration and doubling of the universal credit uplift, and to extend emergency fuel payments.
“Our focus should be on an uplift to the incomes of the poorest while ensuring everyone can keep warm in their homes,” Mr Ramsay added.
The Conservative Environment Network of Tory MPs is also making its own request, calling on Mr Sunak to cut VAT for energy-saving products and home installation to 5%.
The group said the move would cut the cost of installing cavity insulation by £142 and loft insulation by £120 for the average household, helping to lower energy bills by up to £399 and £493 at the current energy price cap – and going even further when the rise kicks in.
Tory MP Stephen Crabb said: “Insulating homes is one of the quickest ways to lower people’s energy bills and reduce our reliance on imported energy.
“With millions of draughty British homes and soaring energy bills, we should cut this tax on energy efficiency.”