THE ECONOMY AND HEADLINE FIGURES
The Spring Statement was presented by the Chancellor, Rishi Sunak, on 23 March 2022.
When the Chancellor stood up in the Houses of Parliament to deliver his Spring Statement it was against the backdrop of what the Office of Budget Responsibility has called ‘the biggest hit to household finances since comparable records began in 1956-57′. Five months ago, the tone was upbeat and optimistic with a ‘better than expected post-pandemic recovery’ on the horizon. Now the country is facing a debt interest bill of £83bn in the next financial year – the highest on record and four times the amount spent last year. To put this amount into context this figure ‘exceeds the budgets for day-to-day departmental spending on schools, the Home Office and the Ministry of Justice combined (totalling £78.3 billion in 2022-23)’. With domestic interest rates already at a 30-year high, inflation at 6.2% (and set to rise more sharply in April when regulated energy prices are to increase) the Chancellor set out a ‘three-part plan’ aiming to strengthen the economy over the remainder of the Parliament.
The first part of the Plan was for immediate tax cuts and measures to help families with the increased energy bills coming next month when the energy ‘price cap’ is increased. The second part confirmed the introduction of measures intended to promote growth and productivity within the economy with the third part as a reaffirmation of future tax cuts intended to increase the amount of money people have to spend.