Spring Statement: Rishi Sunak vows to cut income tax before 2024 election

Chancellor Rishi Sunak has promised to cut the basic rate of income tax by the next general election in 2024.

He also cut fuel duty by 5p and sought to protect lower-earners from the impact of April's National Insurance increase, in his Spring Statement.

But he said inflation would soar to 7.6% this year, amid uncertainty caused by the war in Ukraine.

Labour said Mr Sunak had failed to recognise the impact of the cost of living crisis on families.

The chancellor said the government would "stand by" people hit by rising prices, with a fuel duty cut due to take effect at 6pm, and other measures.

He rejected calls from the opposition and some Tory MPs to scrap April's 1.25% National Insurance increase for workers and employers, which is designed to raise cash for the NHS and social care.

Instead, he raised the threshold at which workers start paying National Insurance from £9,600 to £12,570.

This would amount to "a £6bn personal tax cut for 30 million people across the United Kingdom, a tax cut for employees worth over £330 a year," said the chancellor.

And, in a surprise announcement at the end of his statement, he said his ambition was to cut the basic rate of income tax by 1p in the pound.

"It would clearly be irresponsible to meet this ambition this year," he told MPs, but official forecasts said inflation would be "back under control" and national debt falling by 2024, making a cut possible.

"I can confirm, before the end of this Parliament, in 2024, for the first time in 16 years, the basic rate of income tax will be cut from 20p to 19p in the pound.

"A tax cut for workers, for pensioners, for savers. A £5bn tax cut for 30 million people. It is fully costed and fully paid for in the plan announced today."

Labour's shadow chancellor Rachel Reeves said Mr Sunak had made an "historic mistake" by pressing ahead with the National Insurance increase.

She told MPs: "In eight days, people's energy bills will be rising by 54%, two weeks today the Chancellor's tax hike will start hitting working people and their employers.

"His national insurance tax rise was a bad idea last September and he's admitted it's an even worse one today."

Rishi Sunak has been desperate to present himself as a chancellor who reduces taxes rather than the chancellor who puts them up.

I have counted several main tax cuts in this Spring Statement, including: fuel duty, VAT on energy efficient improvements, the increase to the threshold when workers start paying National Insurance, some discounts on business rates, and the cut to the basic rate of income tax.

And there's a down-payment on more to come before the election, with the publication of a plan to get taxes down further. This is a classic Sunak tactic - if you can't do it now, setting out how you'll do it down the line is the next best thing.

But observers will point to tax increases that are happening with much less fanfare.