Chancellor Rishi Sunak has delivered his Spring Statement to the House of Commons, announcing a range of measures intended to tackle the cost of living crisis.

The speech came on the same day inflation rose to a 30-year high of 6.2%. Households are already feeling the pinch of rising prices, and this is set to get worse from April onwards.

Here’s what he said:

Fuel Duty cut

A cut of 5p a litre was announced on fuel duty, taking it from 57.95p to 52.95p a litre for both petrol and diesel. Drivers are still facing soaring prices with the tax cut saving around £3.30 on the cost of filling the tank.

Alex Hasty, director at comparethemarket.com, said: “The Chancellor’s fuel duty cut is a step in the right direction but the rising cost of living is still rendering driving unaffordable for many.

“In practice, this cut will only save drivers around £3.30 a tank. Today’s Spring Statement was a missed opportunity to reduce the costs for drivers further. If you live in a city, you may be able to get by without a car, but for those in more rural areas, cars are essential to get to work, take children to school, or see friends and family.”

Increase in National Insurance threshold

The threshold before which workers will pay National Insurance has been increased by £3,000 to £12,970, putting it on a par with the threshold for paying income tax. However, the planned rise in the rate of National Inusrance is still going ahead from April. But the new announcement increasing the threshold will now offset the increase in tax for around seven in 10 workers.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “The raising of the National Insurance threshold will mitigate some of the financial damage the NI hike does, leaving 70% of people paying less NI than they do this year. However the tipping point comes at just over £40,000, and someone earning £50,000 will still pay £108 more than they do right now.”

VAT cut on energy-efficient home improvements

The VAT rate on green home improvements will be cut from 5% to 0% for five years. This includes measures such as installing ground source heat pumps, insulation or solar panels.

Chris Gardner, co-founder of development lender Atelier, said: “With the cost of building materials surging once again, the Chancellor’s surprise tax cut on energy-saving technology offers a welcome safety valve – both to the construction industry and to homeowners looking to save money on their energy bills.

“The scrapping of VAT on vital, but still comparatively expensive, tech like solar panels and heat source pumps is a logical and popular response to the spike in energy prices that kicks in next week. But it will also offer long-term benefits to homeowners, the environment and UK energy policy.

“Every home fitted with solar panels can be one less home drawing power from Britain’s energy grid, and every home heated by an air source pump means one less boiler burning imported gas.”

Household Support Fund doubled

Local authorities will be given another £500m in the Household Support Fund, taking the fund to £1bn. Councils can use the money to support vulnerable people with payments and grants.

Neil Kadagathur, Co-Founder and CEO of Creditspring, says: “Doubling the Household Support Fund and increasing the national insurance threshold will provide a lifeline for many struggling households who are already at breaking point. However, it’s likely that this support doesn’t go far enough.

“Out of control inflation and the incoming spike in energy costs in April are set to have a devastating impact on households and families across the UK are going to need even more support if they’re going to get through this crisis.”

Future income tax cut

An income tax cut was announced… but we’ll have to wait two years for it. The Chancellor said that from 2024 he will cut income tax by a penny in the pound from 20p to 19p.

Becky O’Connor, head of pensions and savings, interactive investor, summed up the Statement: “While the Chancellor addressed the hard times we are in, it’s a bit early yet to feel fully relieved by these measures in the face of such rampant inflation.

“The Office for Budget Responsibility has forecast average inflation for the year of 7.4%. With price rises so high, the Government’s measures may not quite go far enough for those facing the highest personal inflation rates.”