Chancellor George Osborne has scrapped plans for tax credits cuts, and pledged increases to police funding, after months of speculation that both areas would see damaging cuts.
While millions of low-paid workers were expecting to have their benefits slashed in April, today’s surprise U-turn as part of the government’s Spending Review means his £4.4bn tax credit cuts will not go ahead.
It comes after October’s embarrassing defeat in the House of Lords when peers voted to delay the welfare crackdown.
Read: Horror over tax credit cuts: Salford mums already skip meals to feed their kids
Osborne told the House of Commons today: “I’ve had representations that these changes to tax credits should be phased in. I’ve listened to the concerns. I hear and understand them.
“And because I’ve been able to announce today an improvement in the public finances, the simplest thing to do is not to phase these changes in, but to avoid them altogether.
“Tax credits are being phased out anyway as we introduce universal credit. What that means is that the tax credit taper rate and thresholds remain unchanged.”
Changes due to come into force in April 2016 would have lowered the threshold where tax credits are withdrawn from £6,420 to £3,850.
But the plan sparked a voter backlash and stark warning from the Institute for Fiscal Studies who found that 3 million families would lose £1,000 a year.
Osborne also backed down on expected cuts to police budgets as part of the Spending Review.
He said: “Now is not the time for further police cuts. Now is the time to back our police and give them the tools do the job.
“I am today announcing there will be no cuts in the police budget at all.
“There will be real terms protection for police funding.
“The police protect us, and we’re going to protect the police.”
Local MP Barbara Keeley had pleaded for a rethink on planned cuts to police budgets in the wake of a string of shootings across Salford in recent months.
Greater Manchester Police’s current budget is £542m – made up of £106m from council tax, and £436m from the Police Allocation Fund.
Speaking to SalfordOnline.com, the new Chief Constable of Greater Manchester Police Ian Hopkins said: “When I arrived in 2008 we had 8,200 officers.
“By 31 March 2019 we’ll have just 5,000, and that’s before I know what the Spending Review is going to say.”
Government departments in transport, energy and climate change, business and social affairs will all have to find double-digit savings as part of Osborne’s £20bn spending reductions announced today.
Also announced today is a £7bn programme to help build 400,000 affordable homes across the country.
