SOUTHAMPTON-raised chancellor Rishi Sunak has promised future tax cuts as he delivered a mini-budget amid soaring inflation and plunging standards of living.

The chancellor cut fuel duty by five pence per litre for a year and raised the threshold for paying National Insurance.

In his spring statement, he said the basic rate of income tax would be cut from 20p to 19p in the pound in 2024, the year of the next scheduled general election.

But Labour hit out at the chancellor for going ahead with a rise in the National Insurance rate and for not imposing a windfall tax on oil and gas companies.

The statement came as inflation hit a 30-year high of 6.2 per cent and the Office for Budget Responsibility said households faced the biggest fall in living standards since records began.

Ross McNally, chief executive and executive chairman of Hampshire Chamber, said: “Businesses are rightly concerned about the cost-of-living pressures facing their employees and the limited scope right now to respond to higher wage demands.

“We therefore welcome the chancellor’s efforts to make life more affordable for as many people as possible through headline measures such as the immediate five pence a litre cut in fuel duty, the £3,000 rise in the National Insurance threshold and his commitment to cut basic rate income tax by the end of this parliament.

“The household support fund and the announcement of zero VAT applying to energy efficient home improvements will also provide some much-needed mitigation for millions of people.

“From the employer point of view, we are pleased to see his 50 per cent business rates discount for small businesses and commitment to employment and investment allowances.”

He added: “Overall, against such a difficult and challenging world backdrop, Sunak has signalled a direction of travel towards a lower tax economy which will be welcomed by many employers - but he and the government must continue to deliver.”

Michaela Johns, director of Chandlers Ford-based accountants HWB, said: “The chancellor made some key announcements to help create the conditions for business growth in what is one of the most challenging periods we have seen for generations.

“Employees will welcome the rise in the National Insurance threshold and his aim of cutting basic rate income tax by one per cent in 2024 and the increase in the Employment Allowance from £4,000 to £5,000 for small businesses will be welcomed by employers.”

The chancellor said VAT on energy-saving measures such as solar panels and heat pumps would be reduced to zero for five years, while an extra £500million would be available to councils to support vulnerable househodls through the Household Support Fund.

But Labour’s shadow chancellor, Rachel Reeves, said the chancellor had failed to appreciate the challenges people face and was “making the wrong choices for the country”.