“We are delighted that the cuts are not going to happen but this is also a missed opportunity in that cutting tax credits in tandem with the re-recognition of family responsibility in the tax system would have ensured that families did not lose out”, said Leach. “What that means is that the tax credit taper rate and thresholds remain unchanged”.
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Two Croydon MPs have given their first reactions to George Osborne’s apparent U-turn on cuts to working tax credits.
Opt-outs have been low meaning, the government said, that the number of people saving for their retirement is at its highest point since 1997. He committed £600 million additional funding for mental health, which means that by 2020 significantly more people will have access to talking therapies, perinatal mental health services, and crisis care. “I hear and understand them”, he said.
But the House of Lords, complicated his plans last month by rejecting his proposals to limit the tax credits paid to people who earn very low wages, saving £4.4 billion.
Critics who feared the tax credit reforms would hit working families have welcomed the decision to leave the policy alone. In this parliament I’m protecting it in real terms, ‘ Osborne said, while presenting the review in the House of Commons. “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 said. During the course of the current Parliament, he says that families will see £3bn in total being cut from benefits.
Mr Johnson also warned of an “urgent need” to find a new framework for taxation and spending across the United Kingdom following the devolution of further powers to Scotland, Wales and Northern Ireland.
Mr Osborne’s perceived Spending Review largesse was made possible by a £27bn windfall from a combination of better-than-forecast tax receipts and lower-than-expected debt interest rates.
The Spending Review sets in place new and harsher penalties for tax abuse, as well as action on disguised remuneration schemes and stamp duty avoidance.
Mr Osborne was forced to rethink the plans after peers blocked the move and a string of Tories spoke out publicly criticising the plans.
The IFS said that “genuinely radical” changes to local government financing confirmed on Wednesday could transform the role and funding of councils.
Still, the IFS director said the scale of the chancellor’s austerity drive was less than had been implied before May’s election and again at an emergency budget in July.
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The Department of Business budget will be cut by 17% but science budget will rise to £4.7bn.
