Tax credits U-turn welcomed in Lancashire

Mr Osborne surprised MPs by ditching plans to cut tax credits and by announcing that he was protecting police budgets.

He said: “I and others have been lobbying the Home Secretary hard in recent weeks with concerns over the levels of cuts to police funding we had been told to expect”.

“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”.

Mr Johnson said: “He’s got a bit lucky with some of the changes to tax receipt forecasts”.

And while the ditching of tax credit cuts means no family will take an “immediate cash hit”, the long-term generosity of the welfare system “will be cut just as much as was ever intended, as new claimants will receive significantly lower benefits than they would have done before the July changes”, said Mr Johnson. “Now is the time to back our police and to give them the tools to do the job”.

“There will be no cuts in the police budget at all”.

However, the Chancellor said there would be a 50% increase in capital investment in transport infrastructure to £61 billion and £2 billion for flood protection, while the science budget would be protected in real terms.

“Today is a good day for our communities and Thames Valley Police but we must also remember that we are still in times of austerity and we will continue to have some hard choices to make about how we allocate our resources according to local priorities”.

“The government is still planning deep cuts to in work benefits”.

“Since the cuts were announced in the summer, parents have faced increasing anxiety over losing the tax credits they rely upon so heavily”.

Meanwhile, Labour highlighted research indicating that the bulk of Mr Osborne’s welfare cuts would fall on women.

“Osborne’s U-turn on his plans to scrap tax credits is to be welcomed but it should never have been on the table in the first place”.

Mr Johnson said the Chancellor had effectively abandoned his cap on annual spending on welfare, which will be breached in each of the next three years.

He said the Autumn statement was nothing but a “smoke and mirrors” review and failed to address the big challenges facing the country.

He will also provide local authorities and the private sector with 4 billion pounds to increase the number of homes available to buy under the government’s shared ownership schemes by 135,000 before 2020/21.

He said: “I think the pressure that has been exerted upon him has forced him into this”.

He said: “After five years the deficit has not been eliminated and this year it’s predicted to be over £70bn”.

The Scottish National Party, the third largest parliamentary group, said Osborne had performed a “complete and humiliating U-turn on tax credits”.

At the IFS’s traditional postmortem into the chancellor’s budget decisions, Johnson said: “This is not the end of austerity”.