This is despite the chancellor’s surprise decision to totally abandon his planned cuts to tax credits.
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Police have welcomed news its funding will not be further cut in yesterday’s government Comprehensive Spending Review.
Martin Couchman, deputy chief executive at the British Hospitality Association (BHA), said: “We are pleased that 98% of businesses will not be paying the apprenticeship levy because of the £15,000 payroll threshold announced in the Autumn Statement”.
On Wednesday Osborne announced he is scrapping plans for £4.4 billion cuts to tax credits, saying the benefit was being phased out to make way for universal credit.
His words echoed those of shadow chancellor John McDonnell, who said: “I’m glad [Mr Osborne] has listened to Labour and seen sense”.
Rather than phasing the cuts in, as he had been expected to do, Mr Osborne said he said he had decided the “simplest thing” was “to avoid them altogether” – despite that meaning he would miss his own target for overall welfare spending in the early years of this parliament.
Its analysis of tax, benefit and minimum wage changes announced by the Chancellor since the election shows that the average loss among households in the bottom half of the income distribution is £650, while there is no average loss at all among the top 50%.
Graham Smith, chairman of the Thames Valley Federation – the body which represents rank-and-file police officers – said he thought the recent Paris terror attacks had “played a part” in Mr Osborne’s decision.
He said: “After five years the deficit has not been eliminated and this year it’s predicted to be over £70bn”.
Instead of increases taking place in October, they will now occur in April of the following year.
Mr Osborne said the outlook had been boosted by the combined effects of better tax receipts and lower debt interest, creating a £27 billion improvement in public finances compared to the July Budget.
The Institute for Fiscal Studies has slammed George Osborne’s spending plans, revealed in this week’s Autumn Statement.
“In short, this is a smoke and mirrors Spending Review from George Osborne, leaving working people worse off and failing to address the big challenges facing the country”. This is fixed, four years out.
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.
Office for Budget Responsibility forecasts GDP of 2.4% in 2015, then 2.4% in 2016, 2.5% in 2017, 2.4% in 2018 and 2.3% in 2019 and 2020.
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The rate is expected to raise to £3bn a year, “with those paying able to get out more than what they put in”, said the chancellor. Today we deliver the Spending Review of a one nation government.
