Even with significant cuts to welfare in the long term, additional cuts to Housing Benefit and a less-than-expected loss from throwing out plans to cut tax credits (due to a £1bn miscalculation by the chancellor and OBR in July), the IFS said Osborne only just about managed to stay within his self-imposed welfare cap. The Office for Budget Responsibility has reported that the United Kingdom is £27 billion better off than in July.
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Now that Cameron is prime minister again, this time of a Conservative government, chancellor Osborne has set out a continuing program of cuts and tax increases with the primary aim of eliminating the public sector net borrowing requirement, what the government borrows to fund its programs, and turning it to surplus by 2019/2020.
The Chancellor’s spending review was widely welcomed as an “end to austerity” and a u-turn on the tax credit cuts that would have left 3.3m families £1,100 a year worse off. Everyone interested to hear the expert slay out the realities of the Spending Review can get advance background information as well as the live event via the IFS website here.
“This is not the end of “austerity”.
Two Croydon MPs have given their first reactions to George Osborne’s apparent U-turn on cuts to working tax credits.
The IFS said that “genuinely radical” changes to local government financing confirmed on Wednesday could transform the role and funding of councils.
The IFS said the “genuinely radical” changes will have major effects on funding across the country, with councils’ spending power more dependent on their ability to raise tax locally.
Figures compiled by the House of Commons Library show women are still being hit three times harder than men by changes to welfare spending and taxation, despite the tax credits U-turn.
Shortly after today’s announcement, Steve Reed, Labour MP for Croydon North, suggested pressure from his own party had forced Mr Osborne to abandon the plans.
“Any announcement which provides promising news, both for companies and our future workers, is something to be applauded”, said Babs Murphy, the North & Western Lancashire Chamber of Commerce chief executive.
Concerning the NHS, the Government is to deliver £6 billion up front next year, part of the £8.4 billion a year previously pledged.
However, Mr Osborne said there would be a 50 per cent increase in investment in transport infrastructure to £61 billion, £2 billion for flood protection while the science budget would be protected in real terms.
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Osborne also revealed plans to extend the small business rate relief scheme to 600,000 companies and create 26 new enterprise zones. The working tax credits also have a childcare element for those who pay for childcare through a registered childminder or nursery.
