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Charities praise Osborne's Autumn Statement tax credit U-turn

27 November 2015

AP

Suited: George Osborne leaves the Treasury for the House of Commons to deliver the Autumn Statement, on Wednesday morning

Suited: George Osborne leaves the Treasury for the House of Commons to deliver the Autumn Statement, on Wednesday morning

CHRISTIAN charities have welcomed the announcement by the Chancellor of the Exchequer, George Osborne, that he is to scrap tax-credit cuts “altogether”. The move was viewed as an unprecedented climb-down during the combined Spending Review and Autumn Statement on Wednesday.

Mr Osborne’s earlier proposal to cut tax credits for working families, which would have saved more than £4.4 billion a year by 2020, was rejected by the House of Lords last month (News, 30 October).

Speaking in the House of Commons on Wednesday, Mr Osborne said that he had “listened to the concerns” over the cuts, which can now be “phased out” because of “improved” public finances. The Office for Budget Responsibility has reported that the UK is £27 billion better off than in July.

Nola Leach, chief executive of CARE, a public-policy charity, said that the decision was a “victory for families”. The Chancellor should now look more closely at advancing tax-credit reform by “re-recognising family responsibility” in the tax system.

The Children’s Society also welcomed the move, though it warned Mr Osborne that he must do the “right thing for tomorrow” and reconsider the Welfare Reform and Work Bill, which will reach committee stage on 2 December. The Bill as it stands prevents parents from getting tax-credit support for more than two children. “Further cuts and freezes would push children into poverty, and make everyday family life much harder,” the chief executive of the charity, Matthew Reed, said.

The Spending Review sets the departmental spending limits for the next four years, and was combined with the annual Autumn Statement, which gives details of Government plans on taxation and deficit reduction for the coming year. Mr Osborne said that the £12 billion of welfare savings will be delivered “in full”, and in a way that “helps families as we make our way to a National Living wage”. The Department of Work and Pensions budget is to be cut by 14 per cent, however.

Total spending is to rise from £756 billion this year to £821 billion by 2019-20.

Introducing the Spending Review, Mr Osborne said that the Government would put national and economic “security first”. “Our job is to rebuild Britain, our defences, and our society,” he said. He later announced that cuts to the police budget had also been scrapped. The Home Secretary, Theresa May, secured a 30-per-cent increase in spending on counter-terrorism activities.

Mr Osborne also promised to address the “crisis of home ownership in our country” by pushing nearly £7 billion into improving the housing sector.

The campaign group Housing Justice praised the Chancellor for recognising the housing crisis, for committing public funds to increase housebuilding, and for making shared ownership “more accessible”. Its chief executive, Alison Gelder, said, however, that the numbers of homes on offer was “tiny” compared to the size of the problem.

Among other announcements was confirmation that the £15 million a year raised by taxing sanitary-wear would fund women’s health charities; and financial support for education, including childcare, would increase by £10 billion. There are to be 500 new free schools and university technical colleges; and sixth-form colleges will be able to come academies “so they no longer have to pay VAT”.

Concerning the NHS, the Government is to deliver £6 billion up front next year, part of the £8.4 billion a year previously pledged.

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