In its analysis of the chancellor’s autumn statement and spending review, the IFS said approximately 2.6 million working families will be on average £1,600 a year worse off as a result of benefit changes. “It will have reassured millions of working families that were set to be significantly worse off next April”.
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After the House of Lords defeat, many expected Osborne to phase in the cuts.
“However, this is not the full and fair reversal we demanded, as he is still taking £1bn from working families next year – and over £3bn by the end of the Parliament – as tax credits are replaced by Universal Credit”.
Mr Hood said: “The things that lose you transitional protection are acquiring or losing a partner – so if I move from being a single to a couple in the system – that loses you transitional protection”.
The government has to seek approval from parliament to breach the cap, potentially setting up an uncomfortable debate on welfare policy.
“I’ve had representations that these changes to tax credits should be phased in”, Mr Osborne told the Commons to jubilant cheers from Tory backbenchers.
Croydon is one of a number of boroughs in the country that has already begun to roll out UC.
The Treasury confirmed that there will be a cut from £5,000 to £2,500 in the amount of additional income a tax credit claimant can earn without losing benefits – known as the “income rise disregard”.
Cuts to Britain’s welfare and police budgets will not go ahead following widespread criticism of the United Kingdom government’s plans. 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.
Gavin Barwell, Conservative MP for Croydon Central, has been asked for comment.
The Spending Review sets the departmental spending limits for the next four years, and was combined with the annual Autumn Statement, which gives details of Government plans on taxation and deficit reduction for the coming year.
Chancellor George Osborne has insisted that his U-turn on tax credits was not a sign of “weakness”.
Police chiefs had warned that rumoured cuts to force budgets of up to 20% would hamper their attempts to foil terror attacks on the UK.
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.
TUC general secretary Frances O’Grady said: “The Chancellor has been forced into a spectacular climbdown on tax credits”. “That growth has not been fuelled by an irresponsible banking boom, like in the last decade”, he said, “we’re determined that this will be an economic recovery for all, felt in all parts of our nation”.
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He said Office for Budget Responsibility forecasts showed GDP growing “robustly every year”, living standards rising and more than one million extra jobs being created over five years.
