George Osborne just stood up to give the 2015 Autumn Statement in the House of Commons — it’s an update to the government’s tax and spending plans, and the economic projections it’s relying on.
The big news is that changes to tax credits that George Osborne had planned, which cut the overall amount of support that low-income workers got and tapered it more quickly as recipients earned more, are being scrapped completely.
Here’s what he said:
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
After the House of Lords shot down the tax credit plan some people were expecting the government to do a partial u-turn, phasing the changes in — instead they’re being binned.
However, Osborne says the government will still be running a surplus by the end of the parliament, meaning that he’ll have to find savings somewhere else. It’s getting increasingly difficult to work out where that cash can come from.
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