Mr Osborne was also pushed by Sky’s Eamonn Holmes on why he did not disclose his plans to scrap the tax credit cuts and not to slash the police budget earlier to end the outcry, saying he didn’t just come up with it “lying in bed” the night before the Spending Review. “This Spending Review is still one of the tightest in post-war history”, he said.
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As he delivered his annual Autumn Statement and five-year Spending Review to the House of Commons, Mr Osborne insisted he would still be able to hit his target of eliminating the deficit and achieving a £10 billion surplus by 2020, while reducing the welfare bill by £12 billion over the period.
Osborne says the combination of lower debt interest payments and a £27bn improvement in public finances compared to the Budget will lead to this improvement.
Addressing delegates at the University of London’s (UoL) Senate House Library, IFS director Paul Johnson said that the Autumn Statement did not represent a change in government economic policy. From 2017, we will fund 30 hours of free childcare for working families with three and four year olds.
The Government gives quite a lot of money to working people with low wages in the form of tax credits; far more than they give to unemployed people on Jobseekers’ Allowance.
The age of austerity is not over and around 2.6 million working families will lose an average of £1,600 a year under the UK Government’s welfare changes, according to Britain’s most respected economic think tank.
The Institute for Fiscal Studies is running a streamed briefing on the Spending Review at 13.00 today, 26th November.
The two systems are “entirely different” and “the suggestion that tax credit-cuts have somehow been postponed or transferred into Universal Credit is completely misleading”, it said in a statement.
But the small print of his spending plans reveals £1 billion will still be cut from tax credits next year.
Fleshing out plans announced by Prime Minister David Cameron last month, Osborne will pledge 2.3 billion pounds of government support for private developers with the aim of building 200,000 homes which will be made available to first time buyers at a discount.
Mr Johnson said: “He’s got a bit lucky with some of the changes to tax receipt forecasts”.
He said expenditure is due to fall from 40.9% of national income in 2014-15 to just 36.5% in 2019-20.
“I have always been an advocate for fairer school funding and am delighted that the schools budget has been protected in real terms. The gap with what one might have expected, based on the Conservative manifesto, is substantially greater”.
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They include the apprenticeship levy on large employers that will raise £3bn, the £1.7bn from a 2% levy on council tax to pay for more social care; and the near-£1bn to be generated by higher stamp duty for second homes and buy-to-let properties.
