Autumn statement: George Osborne scraps cuts to tax credit and police

In a further shock, Mr Osborne also announced that the frontline police budget was being protected in the wake of the Paris terrorist attacks.

Mr Johnson said the country saw “glimpses of George Osborne the reforming Chancellor”.

Osborne stuck to his commitment of turning a budget deficit into a surplus by 2020 in a mid-year budget update on Wednesday, confounding predictions that he might have to rein in his ambitions for putting public finances in the black.

Mr Johnson also reiterated the IFS’s call that there was an “increasingly urgent need” to work out the fiscal framework for greater powers for Holyrood, saying “we still don’t know how devolution to Scotland is actually going to work”.

“What is clear is that the process of reform and modernisation of West Midlands Police will continue”.

As in the first five years of his austerity push, he plans to protect Britain’s health service, schools and foreign aid from cuts, and he plans to boost defence spending.

“We will be examining the fine print of the statement and the funding allocation for West Midlands Police in December will provide us with more news”.

Its analysis of tax, benefit and minimum wage changes announced by the Chancellor since the election shows that the average loss among households in the bottom half of the income distribution is £650, while there is no average loss at all among the top 50%.

The Chancellor abandoned the bulk of his planned cuts to tax credits but pointed out they “are being phased out anyway as we introduce universal credit”.

The Office of Budget Responsibility’s forecast of better than anticipated economic performance for the United Kingdom gave the Chancellor something like £23 Billion more to deploy – and he spent it.

“This is not the end of austerity”, said Mr Johnson. “Protecting our economic security by taking the hard decisions to live within our means and bring our debts down”.

Responding to the Spending Review, the Labour Shadow Chancellor John McDonnell accused Mr Osborne of betraying the country.

But despite his decision to drop £4.4bn tax credit cuts, Labour now says it is hardly something to cheer about.

Johnson said: “There is no question that the cuts will be less severe than implied in July”.

HM Revenue and Customs is to have to make savings of 18% in its own budget and invest an extra £800m in the fight against tax evasion, while the Department for Transport will see its funding cut by 37%.

He said: “Since 2010, no economy in the G7 has grown faster than Britain”. And that means we can help on tax credits.

The Chancellor’s Autumn Statement is his second most important speech of the year and will start at 12.30pm, setting out his spending proposals and how he will shave billions from government budgets.

Mr Osborne said: “We’ll reinvest some of that money in local communities in London and places like Cornwall which are being priced out of home ownership”. Letters with grim news will no longer be landing on doormats before Christmas.