Chancellor’s Autumn Statement: No police cuts and tax credit U-turn

Chancellor of the Exchequer George Osborne
Chancellor of the Exchequer George Osborne
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George Osborne today ruled out further cuts to police budgets in a surprise move during his Spending Review.

Lancashire police and other forces around the country had been lobbying against massive expected cuts as the Government aims to make wide-ranging savings in Britain’s finances.

But the Chancellor today stunned Parliament during his Autumn Statement by saying there would be no further cuts.

He said: “Now is the time to back our police and give them the tools to do the job.

“There will be no cuts in the police budget all,” he added to cheers and loud applause.

There had been fears there would be widespread cuts to the police budget.

Lancashire chief constable Steve Finnigan said originally projected £24.8m cuts – later recalculated at £8m – on top of £74m already saved over the past five years could have made the force “unviable” after 2020.

Meanwhile, the Chancellor said he could abandon planned tax credit cuts for working families of £4.4bn due to improvements in public finances.

He said he would still be able to deliver the promised £12bn in welfare cuts over the next five years while balancing the books by the end of the Parliament.

“I’ve had representations that these changes to tax credits should be phased in,” he told the Commons.

“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.”

Other key policies in Mr Osborne’s speech included:

*Basic state pension to rise by £3.35 to £119.30 a week

*An increase in the NHS budget including £6bn next year but also £22bn in “efficiency savings”

*£600m extra funding in mental health

*Loans for new medical students and 10,000 new training places

*Arts Council funding will be increased to maintain free museum entry

*29% rise in budget for UK Sport

*80000 public sector jobs to go

*£15m raised from VAT placed on sanitary products each year – the controversial ‘tampon tax’ – will be ploughed into women’s charities, including domestic abuse refuges

*Stamp duty land tax on buy-to-let property purchases to be increased by 3%

*Department for Environment, Food and Rural Affairs’ day-to-day budget falls by 15%

*£2bn to protect 300,000 homes from flooding

*Protection for national parks and forests

*Deficit is to be 3.9% of national income this year, then 2.5% in 2016-17 and 1.2% and 0.2% in subsequent years, before moving to surplus of 0.5% in 2019-20 and 0.6% the following year

*Department for Energy and Climate Change’s day-to-day spending will fall by 22%.

*Department for Transport’s operational budget will fall by 37% but capital spending will increase by 50% to £61bn

*26 new or extended Enterprise Zones including 15 in towns and rural areas across the country

*Local authorities will be able to levy a 2% council tax precept to pay for social care

David Morris, Conservative MP for Morecambe and Lunesdale, said: “No police cuts, no tax credit cuts, yet the Labour party said we’d be cutting everything to the quick.

“There was a lot of politicisation because the Police and Crime Commissioner elections are coming up.

“It was scaremongering. All they do is frighten people. My inbox is full every time they say there’s going to be a cut.”

Cat Smith, Labour MP for Lancaster and Fleetwood, said: “George Osborne is opening a deficit with the future. His choices today will leave future generations to pick up the bill.

“I welcome any U-turn George Osborne is willing to make on cuts to tax credits and policing budgets which have been key campaigns I have been fighting over the past weeks and months.

“Sadly those on Universal Credit will still see their living standards squeezed and when we have already lost 17,000 police officers no further cuts to policing doesn’t mean much to those police staff who have lost their jobs already.

“In addition deep cuts are being made to many departments that will have harmful consequences. Cuts to the Department of Transport and Environment, Food and Rural Affairs, for example, will have a detrimental impact on services and jobs locally.

“I’m concerned that, despite promises from the Prime Minister that he would have balanced the books by now the deficit is set to be almost £70bn this year and that manufacturing output is still more that 6% below its pre-crisis level. The UK’s current account deficit reached the highest level ever recorded last year - 5.1%.“