Further reaction now to Chancellor Rishi Sunak's Spring Statement.

Economist Paul Johnson, director of the Institute for Fiscal Studies think tanks, tells the BBC the measures announced today by the chancellor will feel like "small beer" for people on the lowest incomes.

"The thing that was completely missing from this was anything for people on universal credit or state pension," he says.

"That's only going up by 3.1% next month, when inflation will probably be around 8% - so that's going to be a big cut in living standards for those on the very lowest incomes.

"The rest of what he's done, if you put together what he did in February with what he announced today, it really is quite a big package, but unfortunately for him and for our living standards that's undone by the fact we've got this big National insurance rise coming in as well.

"So you put all of that together and there's still going to be a lot of households that are significantly worse off over the next year.

"But what he has done this time round is reduce that impact for low and middle-earners."

Image source, Getty Images

If you missed Chancellor Rishi Sunak's statement earlier, here's a very swift look at some of the key points he announced:

State of the economy and public finances

• The UK economy is forecast to grow by 3.8% this year, according to the Office for Budget Responsibility - a sharp drop from its previous prediction of 6.0%

• The economy is then forecast to grow by 1.8% in 2023 and 2.1% in 2024

Fuel, energy and living costs

• Fuel duty will be cut by 5p per litre until March 2023
• Homeowners installing energy efficiency materials such as solar panels, heat pumps, or insulation will not pay VAT
• Local authorities will get another £500m for the Household Support Fund from April, creating a £1bn fund to help vulnerable households with rising living costs

Taxation

• The income threshold for when people start paying National Insurance will rise to £12,570 in July, which Sunak said was a tax cut for employees worth over £330 a year
• Sunak pledged to cut the basic rate of income tax from 20p to 19p in the pound before the end of this Parliament

And here's the full summary of the main points.

UK households are set to see the biggest drop in their spending power in 2022-23 since records began in 1956, the Office for Budget Responsibility has said.

That's because of rising prices combined with the impact of tax increases.

The OBR predicted UK inflation is now set to average 7.4% this year - the highest since August 1991 - as the Ukraine crisis will further disrupt supply chains and send energy bills soaring.

It had previously forecast Consumer Prices Index inflation to average 4% in 2022.

Real household disposable incomes per person - that's the money people have to spend after covering essentials, and taking into account inflation - are forecast to fall by 2.2 per cent in 2022-23, the biggest fall in a financial year since the Office for National Statistics began keeping records.

Image source, Office for Budget Responsibility

Sunak shows his tax-cutting credentialspublished at 14:08 Greenwich Mean Time 23 March 2022

14:08 GMT 23 March 2022

Laura Kuenssberg
Political editor

Since the government announced the National Insurance tax rise to pay for the NHS and social care, there has been all sorts of political backlash.

So it was a significant moment today when the chancellor raised the point where people pay it.

Having overtly chosen the NI rise, it was an interesting political choice for Rishi Sunak to use the bit of freedom he had to polish up his own credentials as someone who believes in tax cuts.

But in terms of the government explaining it to the public, there is a bit of hokey cokey about it - you can have a bit back here, we will take it there - and I am not so sure that is a coherent ideological message.

There is no question many in the Tory Party will be happy today as they can say, 'look, we are are cutting income tax'.

But that comes with a big caveat: Sunak is promising to cut income tax in two years' time.

And I have never seen a chancellor tie his own future, his successor's future, or the whole party's election campaign at this stage in the election cycle.

Reacting to the Spring Statement, Martin Lewis of Money Saving Expert says he would have liked to have seen more measures to help people cope with the cost of living crisis but he was expecting to see less.

He tells BBC Radio 5 Live the big change announced is to the National Insurance threshold because it protects the people at the lowest end of the pay scale.

He says factoring in the 1.25% NI rise that comes into force in April, people earning under £20,000 could be up to £400 a year better off from this measure alone.

Lewis explains: "From July if you earn £35,000 or less you will pay less NI than you do currently on the same income. If you earn £35,000 or more you will pay more NI than you do currently."

It's now the turn of the SNP to react to the chancellor's statement. The party's Treasury spokesperson Alison Thewliss says it was "not enough", claiming Sunak is "utterly detached" from the reality of people's lives.

Like Labour, she also criticises the rise in National Insurance - which is paid by companies as well as employees - as a "tax on jobs" that many firms will not be able to bear.

She also says he is offering "nothing" today to people who use heating oil or liquefied natural gas for their heating.

And she takes aim at the repayable £200 energy discount set to come into effect in October, which she calls a "heat now, pay later loan".

Labour attacks Sunak from all directionspublished at 13:44 Greenwich Mean Time 23 March 2022

13:44 GMT 23 March 2022

Adam Fleming
Chief political correspondent

The shadow chancellor Rachel Reeves attacked Rishi Sunak from the left, saying he was increasing taxes on workers more than on landlords or investors.

From the right when she accused him of cutting the army at a time of war.

On competence when she said his pandemic loan schemes were riddled with fraud. And from the heart when she said people were “worried sick” by rising bills.

She ended with an extended sketch about “Alice in Sunakland” in an attempt to undermine his image of straight-talking competence.

Although weirdly for the opposition on a day like this, some of the best ammunition comes not from the chancellor’s speech but from the Office for Budget Responsibility which has developed a reputation for delivering fairly brutal assessments of what’s going on with the economy, and those documents were only published as the shadow chancellor was finishing her speech.

During his statement Chancellor Rishi Sunak referenced these eye-watering estimates from the Office for Budget Responsibility on inflation, growth and debt repayments.

• Inflation forecast to average 7.4% this year
• UK growth expectation downgraded to 3.8% this year
• UK to spend £83bn on debt interest in the next year

Image source, HoC

We've just finished hearing Chancellor Rishi Sunak's mini-budget and the response from Labour. Here's a recap of the headline announcements in the Spring Statement.

• Sunak announced the first cut to the basic rate of income tax in 16 years - from 20% to 19% - by the end of Parliament in 2024
• Fuel duty will be cut by 5p a litre from 18:00 GMT until March 2023
• The National Insurance threshold will be raised by £3,000, meaning people must earn £12,570 per year before paying income tax or NI. It’s a tax cut for 30 million people worth over £330 a year, says Sunak
• VAT will be scrapped on home energy-saving measures such as insulation, solar panels and heat pumps
• The Household Support Fund for local councils to help the most vulnerable will be doubled to £1bn from April
• Retail hospitality and leisure sectors will have a 50% discount in business rates up to £110,000

Rachel Reeves says "inflation is back", and in an allusion to the economic situation under a former Tory prime minister in the 1970s, dubs the chancellor "Ted Heath with an Instagram account".

She says he is offering "jam tomorrow, rather than the support that is needed now" - and his plan lacks long-term ideas to boost the productivity of the economy.

Some tax cuts today, more tomorrow?published at 13:26 Greenwich Mean Time 23 March 2022

13:26 GMT 23 March 2022

Adam Fleming
Chief political correspondent

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

So far I have counted four main tax cuts in this Spring Statement: fuel duty, VAT on energy efficient improvements, the increase to the threshold when workers start paying National Insurance and some discounts on business rates.

And there’s a down-payment on more to come before the election, with the publication of a plan to get taxes down further, with the centrepiece being the promise to cut income tax. 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, such as the freezing of the rates of income tax which will push more people into higher bands as their pay goes up.

Image source, HoC

Shadow chancellor Rachel Reeves continues: "The truth is people can no longer afford the Conservatives - working families can't, pensioners can't."

She points to "weak" growth forecasts, and says the Conservatives have to take the blame, having "been in government for 12 years, not 12 hours".

She attacks the chancellor for raising taxes more than any chancellor in the last 50 years.

"The truth is the Conservatives have become the party of low growth and the party of high tax."

The shadow chancellor says Sunak's announcements today follow "12 years of failure on energy efficiency" from the government. Reeves says the VAT cut on energy-saving materials is "wholly inadequate".

Reeves says she understands there are "always difficult" choices to be made, but he is still targeting the wrong people, hitting "millions of the middle" rather than the very wealthiest.

She says Sunak has been "signing cheques to fraudsters", losing £11.8bn to fraud, and is asking taxpayers to pay more "to fill his black hole" in the finances.

Image source, HoC

Rachel Reeves says the squeeze on living standards pre-dates the war in Ukraine and accuses the chancellor of not understanding the "scale of the challenge" facing families.

The shadow chancellor warns that the state pension and other benefits will not rise in line with inflation, meaning more people will "drift into poverty".

She goes on to accuse the chancellor of defending "record profits" for oil and gas companies.

Instead, she says her party's windfall tax policy would have allowed the government to cut VAT on energy bills and make support for vulnerable households more generous.

Rishi Sunak ends his statement, and his Labour counterpart Rachel Reeves gets up to respond.

The shadow chancellor criticises him for not putting a windfall tax on oil and gas companies - which her party has been calling for - which she says would provide "real help to families".

She also says Sunak could have "properly scrapped" the planned rise to National Insurance instead of just tweaking the rates, but didn't.

Image source, PA Media

Concluding his speech, Sunak says cutting taxes "is not easy", saying: "It requires hard work, prioritisation and the willingness to make difficult and often unpopular arguments elsewhere.

"It is only because this government has been prepared to make those difficult but necessary choices to fix our public finances that I can stand here and tell this House that not only are taxes being cut, but that debt is also falling whilst public spending is increasing.

"We can deliver for the British people today and into the future."

Sunak tells the Commons "over time I want to go further", but says tax cuts must be paid for.

However, by 2024, he says the OBR expects inflation to be back under control, debt to fall and the economy growing.

So in his final announcement, he says that 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 over 30 million people."

The chancellor says he wants to make one more announcement for small businesses.

He says the Employment Allowance will increase to £5,000, claiming it is a tax cut worth up to £1,000 for half a million small businesses.

The new amount will come into place in two weeks’ time.

Sunak pledges that the government will reform the generosity of tax credits on the money private firms spend on research and development.

He also says the government will cut tax rates on business investment, with details to be set out at the Budget in the autumn.

Sunak now turns to the issue of employment training in the private sector, which he says will be reviewed as part of the government's new tax plan

He says this will include assessing whether the apprenticeship levy – a tax on the wage bills of major companies introduced in 2017 to pay for skills training - is "doing enough".