Osborne Reloaded: Biggest U-turn of the year

Former Chancellor George Osborne in Matrix attire

Chancellor George Osborne back on track to claim the mantle of Prime Minister David Cameron as he dropped his controversial tax credit cuts and slimming police budgets….reports Asian Lite News

Chancellor George Osborne in Matrix attire
Chancellor George Osborne in Matrix attire

The chancellor who is behind London Mayor Boris Johnson and Home Secretary Theresa May in the Tory leadership race will now gather more support. But the opposition claims victory for the chancellor’s U-turn.

Labour Leader Jeremy Corbyn and his Shadow Chancellor John McDonnell smell success for their political strategy. McDonnell said last month that Labour would “not make political capital” out of a full U-turn if the Chancellor caved in to widespread anger over the issue.

Osborne said the nation’s finances were in better shape than expected and he could abandon the controversial plans ‘altogether’. The chancellor vowed to ‘deliver economic and national security’ as he set out plans to slash spending by £20billion to get Britain back into the black by 2020.

The Chancellor is using a Commons Statement to announce the cuts, while promising billions extra for the NHS, defence and foreign aid. But in the wake of the Paris terror attacks he revealed he would not go ahead with any cuts to police budgets in England and Wales. The NHS, defence, foreign aid and housing are the big winners, but transport, justice and the environment will bear the brunt, with families braced for big hikes in council tax bills to plug the gap caused by smaller grants from Whitehall.


Mr Osborne told the Commons that he had ‘listened to the concerns’ and understood them.

‘To secure our economic security and national security provide the foundations for every thing we want built for Britain,” said Osborne. “So we leave to the next generations a stronger economy than the one we inherited.’”

‘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,’ he added.

The Chancellor said higher than predicted tax receipts and lower interest rates meant the Office for Budget Responsibility estimated that public finances would be £27billion better off over the course of the Parliament than it forecast at the time of the post-election Budget in July.

Major announcements in the speech:  

  • £20billion cut from Whitehall budgets, though the NHS, defence, foreign aid and schools are protected
  • Scrapping plans to cut £4.4billion from tax credits which would have left 13million people hundreds of pounds worse off
  • Britain will spend 2 per cent of GDP on defence and 0.7 per cent on foreign aid
  • £3.8billion extra for the NHS next year as part of an additional £8billion by 2020
  • State pension to rise by £3.35 a week to £119.30 from April in a boost for 13 million
  • £12billion more for the Ministry of Defence to spend building up an arsenal of weapons stealth fighters, warships and tanks
  • A 30 per cent increase in counter-terrorism funding, and 1,900 extra spies to be recruited for MI5, MI6 and GCHQ
  • A big package of new powers for councils, including new enterprise zones and 12billion for the Local Growth Fund
  • Council tax bills to rise by 2 per cent to pay for social care for the elderly
  • £15million raised from VAT on sanitary products to be given to women’s health charities until the EU agrees to scrap the ‘tampon tax’
  • £6billion of childcare support for working families earning less than £100,000
  • Holloway Women’s Prison to close as part of plan to sell-off old, crumbling jails
  • Stamp duty will be 3 per cent higher on second homes and buy to let – raising an extra billion by 2021


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