George Osborne’s spending plans have taken a hit from leading economists, who say it is unlikely that the chancellor will be able to keep his fiscal promises. The requirement to achieve an outright surplus in that year, enshrined into law last month, is now “completely inflexible”, Johnson said.
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Mr Osborne funded the tax credit u-turn and his decision to protect police budgets from a £ 27 billion windfall resulting from better-than-expected forecast tax receipts and rock-bottom debt interest rates.
But Resolution Foundation Director Torsten Bell said the changes risk undermining the new benefit system and could still leave families worse off.
“This Spending Review is still one of the tightest in post-war history”, he said.
“IFS research today shows that George Osborne has not reversed his welfare cuts, he has just delayed them, and 2.6 million families will still be on average £1,600 worse off by 2020”. “But people raised concerns with me that the speed of getting there was too quick, that we weren’t doing enough to help families in the transition”, he said.
This goes a long way to explaining why he could protect police spending, frontload previously promised additional investment in the NHS and reverse those controversial changes to tax credits which threatened to penalise the very people who are striving to become less dependent on the benevolence of the welfare system.
THE head of the Metropolitan Police has welcomed the news police budgets will not be further cut. “I hear and understand them”.
“We now need to push the Government to get the properly funded police force that we need”.
He said: “Today’s Spending Review has handed down a hard £4.1 billion funding cut over this Spending Review period for our residents and comes on top of nearly £10 billion in further demand-led cost pressures facing councils by the end of the decade”.
To Tory cheers, he told the Commons: “I’ve had representations that these changes to tax credits should be phased in”.
Louis Stephen, the chairman of the city’s Green branch, says he was left disappointed after the Chancellor chose to focus on a raft of other themes in his spending plans.
He said the extra stamp duty, to be introduced next April, would raise nearly a billion pounds by 2021, adding: “We’ll reinvest some of that money in local communities in London and places like Cornwall which are being priced out of home ownership”.
Elected on a manifesto promising to reduce government spending, Osborne’s plan to charge rent is part of a larger scheme to raise £4.5 billion over the next five years from selling government property.
A “victory for Labour” was how John McDonnell, the shadow chancellor, described Osborne’s change of heart.
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The Treasury rejected the IFS’s claim that Universal Credit will push through the savings that tax-credit cuts were meant to deliver, saying the comparison is “not legitimate”.
