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Tax credit cuts SCRAPED

53Bangla Mirror Desk ::

George Osborne has backed down on controversial tax credit cuts which were due to cost millions of working families thousands each year.
The chancellor had promised to modify his plan to cut tax credits – cuts that would have cost 3m low-income families an average of £1,000 a year. He was facing growing pressure from Tory MPs whose constituents were affected.
But as he delivered his autumn statement on Wednesday, Osborne said higher than expected tax revenues and lower interest payments on government debt had opened up an extra £27bn of fiscal wriggle room, which would allow him to cancel the £4.4bn cuts altogether.
To Tory cheers, he told the Commons: “I’ve had representations that these changes to tax credits should be phased in. 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.”
The chancellor also announced in the government’s spending review for the next four years:
•     There would be no cuts in the police budget.
•    £12bn of cuts to Whitehall budgets including 37% from transport budget and 15% from environment.
•    He will raise an extra £1bn a year by 2020 from a new 3% stamp duty charge on buy-to-let properties and second homes.
•    Women’s charities will receive £15m a year from the so-called “tampon tax” – the VAT levied on sanitary products.
Reversing the tax credit cuts, as well as being an embarrassing climbdown from proposals made four months ago, will mean the chancellor breaches his self-imposed welfare cap, which was meant to limit the cost of social security. Osborne said he would still cut £12bn from the welfare bill, but would do so “in a way that helps families, as we make the transition to our national living wage.”
He said: “We will not be within that lower welfare cap in the first years. But the house should also know that, thanks to our welfare reforms, we meet the cap in the later part of the parliament. Indeed, on the figures published today, we will still achieve the £12bn per year of welfare savings we promised.”
The announcements mark a victory for Jeremy Corbyn and a series of Tory backbenchers and peers who had rejected the cuts to tax credits. Stephen McPartland, the Tory MP for the marginal seat of Stevenage, tweeted: “Delighted chancellor has listened and abolished the changes to tax credits. The victory is his and I can now return to the fold!!!!!!”
The £27bn fiscal wriggle room identified by the Office for Budget Responsibility allowed the chancellor to neutralise another political challenge: proposed cuts to the police budget. Osborne said he had abandoned these altogether.
“Now is the time to back our police and give them the tools do the job. I am today announcing there will be no cuts in the police budget at all. There will be real-terms protection for police funding. The police protect us, and we’re going to protect the police.”
He will raise an extra £1bn a year by 2020 from a new 3% stamp duty charge on buy-to-let properties and second homes, amid growing concerns that buy-to-let landlords are driving up property prices and crowding out local buyers. Osborne said: “This extra stamp duty raises almost £1bn by 2021 – and we’ll reinvest some of that money in local communities in London and places like Cornwall which are being priced out of home ownership.”
In a wide-ranging statement, Osborne also announced £12bn of cuts to government departments to help move Britain “out of the red and into the black”. He promised that efficiency savings and changes in the way Britain is governed would allow the Treasury to continue investing in protected areas including health and education.