Autumn Statement and Spending Review: Tax credits, pension changes and energy

However, while IFS director Paul Johnson said the cuts were “less severe” than expected it was “not the end of austerity” and was “one of the tightest” spending review’s in post-war history.

The third budget of the year from British finance minister George Osborne heralds large cuts in government spending, according to experts.

Some of his other big measures included £600 million extra into mental health over the next five years, and £22 billion of what he calls NHS “efficiency savings”.

In real terms police in England and Wales will get an increase of £900m by 2020 to keep up with inflation, but the West Midlands Police and Crime Commissioner, David Jamieson, seems less than happy.

Despite this largesse, the chancellor said he will still reach his target of eliminating the budget deficit by 2020 and reduce the public debt.

County council leader Carl Les said: “While we are always reluctant to raise council tax we will have to consider this step if we are to protect the most vulnerable in our society”.

In one of the most dramatic moments of his Autumn Statement, the Chancellor said he would leave the tax credit arrangements untouched, an indication that his crushing defeat in the House of Lords had a significant influence on his approach to welfare.

He said: “We are pleased for the people of London that the government has decided not to cut overall spending on the police”.

The Chancellor also unveiled plans to abolish uniform business rates and allow councils to cut rates in order to attract businesses.

‘Our job is to rebuild Britain…so that Britain becomes the most prosperous and secure of all the nations in the world, ‘ added Osborne, who is widely seen as a potential successor to Cameron.

Shadow chancellor John McDonnell questioned whether Mr Osborne would be able to deliver on his package, telling MPs: “Over the last five years there has barely been a target the Chancellor has set he hasn’t missed or hasn’t ignored”.

But Mr McDonnell was howled down by Tory backbenchers after producing a copy of Chairman Mao’s Little Red Book and suggesting the Chancellor could learn from the Chinese revolutionary.

Fortunately for Osborne, the Office for Budget Responsibility recently forecast that the Government would have to borrow £8 billion less than had been originally predicted over the course of this Parliament.

“I’ve had representations that these changes to tax credits should be phased in”.

More stamp duty for buy-to-let landlords and second home owners.

Families now pay a levy of about £36 a year on their bills to fund a scheme called the Energy Company Obligation, but it will be replaced with a cheaper supplier, reducing the levy.

Mr Osborne said the Spending Review was not an end to “difficult decisions”, but that higher than expected tax receipts and better public finances had provided some room to manoeuvre.