Autumn statement: IFS warns on tax rises and spending cuts

The Chancellor told ITV1’s Good Morning Britain: “I don’t think it’s a weakness, if you are doing this job, to listen to people and listen to the concerns that are made”.

‘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’.

Shadow Chancellor John McDonnell said he wanted to see the “details” and warned the families on the Universal Credit would “suffer the full cut”. One opposition fox down, he went on to shoot another, declaring that he would not be making heavily trailed cuts to police spending.

Universal Credit itself is already subject to cuts announced in June.

He said: “A swathe of departments will see real-terms cuts”.

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”.

The chancellor surprised many by axing planned changes to tax credits.

Osborne felt he had no choice but to announce cuts to tax credit payouts that would save £5.37 billion a year by the 2020 election. The OBR accepted this argument, and as a result deemed Osborne to be within his welfare cap, the IFS said.

The Office for Budget Responsibility nudged up its economic growth forecasts for the next two years, penciled in more tax income based on a recent recovery in revenues and changed its modeling for tax and social security contributions, which would also increase government income.

Residents in Hertfordshire will be affected by chancellor George Osborne’s spending review.

The Chancellor confirmed plans to double the housing budget with spending partly funded by new rates of Stamp Duty that will be three per cent higher on the purchase of additional properties like buy-to-lets and second homes. In 2010 George Osborne said he would balance the books in five years but he’s not even halfway and borrowing is set to be £73.5bn this year.

Including lower debt costs with government bond yields low, Osborne had a 27 billion-pound windfall to play with, 19 billion pounds of which he used to soften spending cuts. He also pointed out that the government’s commitment to health spending was tiny by historical standards.

On cuts, 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.

The Departments of Energy and Climate Change and Business, Innovation and Skills will be cut by 22%, and Environment by 15%.

As he delivered his annual Autumn Statement and five-year Spending Review to the House of Commons, Mr Osborne insisted he would still be able to hit his target of eliminating the deficit and achieving a £10 billion surplus by 2020, while reducing the welfare bill by £12 billion over the period.

Earlier this month, the Bank of England’s chief economist said that Britain’s housing market was “broken” due to too few new homes being built.