British finance minister George Osborne’s latest spending plans have a roughly 50 percent chance of success, the head of the country’s non-partisan Institute for Fiscal Studies said on Thursday.
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Town halls are also bracing for more cuts which could affect services that many people rely on, such as rubbish collection and social care for the elderly and children, local government officials have warned.
“It would be churlish of me not to welcome this decision and I strongly welcome it. The public wants certainty over the number of police officers there are to keep their communities safe”.
Mr Hood said the transitional protection meant that there could be “potentially very different amounts of benefit” for people in similar circumstances, depending when their universal credit claim started.
“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 Government has furthered their commitment to regenerating the housing sector by announcing a doubling of the housing budget to over £2 billion a year, making it the biggest house building programme by any government since the 1970s”.
However, while IFS director Paul Johnson said the cuts were “less severe” than expected it was “not the end of austerity” and was “one of the tightest” spending review’s in post-war history.
“The more optimistic outlook and modelling changes from the Office for Budget Responsibility (OBR) have undoubtedly made the Chancellor’s job easier, enabling a far more positive statement than was predicted”.
The additional revenues enabled Mr Osborne to abandon plans to cut tax credits and soften cuts to Whitehall departments.
However Labour say that £1bn is still being taken from working families next year, and over £3bn will be taken by the next Parliament – something the Treasury disputes. That is why he announced a government backed scheme to build 400,000 affordable homes and slapped a higher level of stamp duty on those buying second homes or to let. Then, there is his Northern Powerhouse which received more money for infrastructure and science in today’s statement. However, although the road to the surplus may be slower, the chancellor still has the same fiscal consolidation target in his sights and spending is still going to bear the brunt. In 2010 George Osborne said he would balance the books in five years but he’s not even halfway and borrowing is set to be £73.5bn this year.
But shadow chancellor John McDonnell condemned Mr Osborne’s record, telling MPs that over the last five years there has barely been a target the Chancellor has not missed or ignored.
The Scottish National Party, the third largest parliamentary group, said Osborne had performed a “complete and humiliating U-turn on tax credits”. The cuts are equivalent to 18 per cent, rather than 27 per as had been a anticipated.
Around 2.6 million households across the United Kingdom will be affected by other welfare cuts, the IFS said.
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Johnson is not the only economist to raise questions about the feasibility of Osborne’s tax and spend plans.
