What is the Spring Statement? When is Rishi Sunak’s next announcement and how can I watch the Spring Statement?

The last announcement the Chancellor Rishi Sunak made was the 2021 Autumn Budget five months ago.

Mr Sunak revealed what was considered at the time as a post-Covid Budget, involving tax increases that he said were crucial due to the vast public spending the government was forced to introduce amidst the Covid-19 pandemic.

Since his announcement, a lot has happened which has affected the cost of living and the UK’s economic status, particularly due to Russia’s invasion of Ukraine.

The impact of the crisis includes the UK’s inflation rate, high energy prices, rising fuel costs and the rocketing price of food.

What will Rishi Sunak’s Spring Statement involve, when will he announce it and how can you watch it live?

Here is everything you need to know so far.

What is the Spring Statement?

The Budget is a significant annual event during which the Chancellor of the Exchequer, Rishi Sunak, lays out the UK’s economic position and reviews taxation.

These Budget announcements have been delivered for hundreds of years since Parliament was first formed.

They have been presented in the spring with an individual pre-Budget announcement in the autumn from the year 1998.

But during Theresa May’s leadership, Chancellor Philip Hammond switched the dates around during his term, creating what is now known as a Spring Statement.

Budget announcements usually consist of two parts: a summary of the economic climate and a detailed analysis of the taxation changes needed to raise the necessary amount of money.

The announcement generally lasts between an hour and two hours.

When is the Spring Statement 2022?

The Spring Budget this year is expected to take place on Wednesday, March 23, just a few days before Ofgem’s energy price cap is set to increase.

It will also coincide with the Office for National Statistics’ (ONS) announcement of the Consumer Price Index (CPI) for February 2022.

No time has been confirmed for the Spring Statement but Rishi Sunak is likely to deliver his announcement at the House of Commons at around 12pm.

How can I watch the Spring Statement?

The Budget announcement will air live on various news outlets including BBC Parliament at 12.35pm and Sky News at 12.30pm.

What is Rishi Sunak expected to announce?

The main focus of Wednesday’s Spring Statement is how the Chancellor will support households throughout the rising cost of living.

He is also expected to respond to an analysis presented by the Office for Budget Responsibility (OBR), which is said to be published on the same day as the Spring Statement.

According to the PA news agency, there are a few options that can offset the cost of living crisis.

1 - Fuel duty cuts

Potentially one of the simplest ways to support households with the rising cost of living could be through a cut to fuel duty.

The government has frozen duty for 11 years, however, there are now calls for a cut as oil prices have hit record highs as a result of the invasion of Ukraine and prices at petrol stations have rocketed to record levels.

Labour has found that the average family is faced with an annual increase of £386 on the cost of petrol and is calling for a cut to be funded by a windfall tax on energy firms.

2 - National insurance

Another idea is to put the previously announced national insurance rise on hold.

Both Mr Sunak and Prime Minister Boris Johnson have previously confirmed that an increase would not be delayed as the extra cash would be used to fund the care sector.

To help with the cost of living crisis, the Chancellor could instead decide not to go ahead with the rise but offset it with a cut in income tax, however, this may create tension among business leaders, with businesses having to match national insurance payments by employees.

Alternatively, the Chancellor could shift the thresholds for when the payments are made instead of scrapping the planned national insurance rise altogether. The Resolution Foundation has suggested the threshold be lifted from £9,568 to £12,500.

3 - VAT

While the government hasn’t discussed reducing VAT across the board, Mr Sunak could offer some support to the hospitality sector to make sure households can still enjoy themselves.

The government has been due to increase VAT for hospitality businesses from 12.5 per cent to 20 per cent from April 1, cutting them back to five per cent during the pandemic.

But pub bosses, including JD Wetherspoon chief Tim Martin, have warned that food and drink prices could increase if the planned rise goes ahead.

A decision to pause the latest proposed increase could help people spending money on eating out, event tickets and holiday accommodation.

However, this move would mainly benefit businesses in the sector to help them cope with soaring inflation rather than directly benefiting their customers.

4 - Benefits

Another option would be to uprate benefits to put more money in the pockets of low and middle income households.

The Resolution Foundation is requesting for a five percentage point rise to keep up with inflation, calling it the most effective way to directly support families who have been the most affected.

It said that this move would deliver four times more support to the bottom half of the income distribution per pound spent than scrapping the rise in national insurance contributions.

5 - Energy bills

Rishi Sunak has already revealed his plans to help with rising energy bills, with a £200 loan to every single family to cut their gas and electricity payments from October - but not until the price cap jumps 54 per cent.

Households will have to pay back the £200 energy bill rebate over four instalments from next year when energy prices are expected to fall. But if energy prices do not fall, the timing for when payments start should be delayed.