Yahoo Finance Osborne Scraps Plan To Cut Tax Credits
George Osborne has announced he will ditch controversial cuts to tax credits after the Lords threw out his plans.
The Chancellor revealed the major U-turn as he outlined spending plans for the Government over the next five years.
He said the tax credit taper rate and thresholds will remain unchanged.
Live Updates: Chancellor Scraps Tax Credit Cuts
Mr Osborne revealed the Government will breach its welfare cap in the first years of this Parliament, but meet it in the later part.
He told MPs the Spending Review was designed to make Britain "the most prosperous and secure of all the major nations of the world".
He said: “Our job is to rebuild Britain - build our finances.
"The forecast I present shows that after the longest period of rising debt in our history, this year our debt will fall and keep falling in every year that follows."
He insisted the long-term economic plan was working.
"We are prepared for the inevitable storms that lie ahead," he insisted.
The deficit would be 3.9% of national income this year, then 2.5% in 2016/17 and 1.2% and 0.2% in subsequent years, before moving to surplus of 0.5% in 2019/20 and 0.6% the following year.
Better tax receipts and lower debt interest meant a £27bn improvement in public finances compared to the July Budget.