Yahoo Finance Osborne In U-Turn Over Cuts To Tax Credits
George Osborne has announced he will ditch controversial cuts to police budgets and tax credits.
The Chancellor revealed the major U-turn as he outlined spending plans for the Government over the next five years.
There was a deafening roar from the Tory benches as he announced police forces would escape Whitehall cuts.
"Now (NYSE: DNOW - news) is the time to back our police," Mr Osborne said.
He said he could abandon the controversial cuts of £4.4bn due to improvements in public finances.
Live Updates: Chancellor Scraps Tax Credit Cuts
Mr Osborne said he would still be able to deliver the promised £12bn in welfare cuts over the next five years while balancing the books by the end of the Parliament.
To cheers from the Tory benches, he told the Commons: "I've had representations that these changes to tax credits should be phased in.
"I've listened to the concerns. I hear and understand them.
"And because I've been able to announce today an improvement in the public finances, the simplest thing to do is not to phase these changes in, but to avoid them altogether."
The Chancellor also announced the basic state pension is to rise by £3.35 next year to £119.30 a week.
And local authorities with responsibility for social care to be allowed to levy a new precept of up to 2% on council tax, bringing almost £2bn more into the care system.
There will be permanent exceptions from steel and other industries from green levies.
And the £15m raised each year from VAT on tampons will be used to fund women's health and support charities.
But student maintenance grants for the poorest students are to be scrapped and replaced with loans.
Mr Osborne 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.
On cuts, HM Revenue and Customs is to have to make savings of 18% in its own budget and invest an extra £800m in the fight against tax evasion.
The Cabinet Office budget will be cut by 26%, the Treasury budget by 24% and the cost of all Whitehall administration to be slashed by £1.9bn.
The NHS will have to find £22bn in savings in England while the Department of Health to cut 25% from its Whitehall budget.
The abolition of the cap on student nurse numbers will create up to 10,000 new training places.
The Chancellor also committed to £10bn real terms increase in the health service budget, with the first £6bn delivered up front next year.
This would see the NHS budget to rise from the current £101bn to £120bn by 2020/21.
The Department for Transport is also to see its budget slashed by 37%, but spending on transport schemes is to increase by 50% to £61bn.
Thee will be free 30 hours of childcare for three and four year olds from 2017, but only to parents working more than 16 hours and with incomes of less than £100,000.
Ageing jails including Holloway in London are to closed and the sites sold to allow £1bn to be spent on nine new prisons.
