Tax credits U-turn welcomed in Lancashire

Lancashire County Council's deputy leader, County Coun David Borrow
Lancashire County Council's deputy leader, County Coun David Borrow
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LANCASHIRE’s pensioners and workers on tax credits emerged as the biggest winners as Chancellor George Osborne delivered his Autumn Statement and Spending Review.

But local councils are still waiting for full details of their own budget needs when the local government settlement is announced next month.

Speaking in the Commons, the Chancellor said he could abandon the controversial tax credit cuts of £4.4 billion due to improvements in public finances.

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

Mr Osborne announced that pensions would rise by £3.35 from next year.

But he also announced massive cuts to Government departments’ budgets.

Preston, Chorley and other councils are still waiting to see the full impact of how the cuts will trickle down to local level.

One of the measures announced was the ability for local councils to raise a two per cent “precept” to pay for social care.

Coun David Borrow (below), deputy leader of Lancashire County Council, welcomed the proposal, but said the exact benefits depended on the settlement from the Government in a few weeks time.

He said: “We are currently using all our resources to try and balance the books over the next couple of years, so it is something we will have to look at.”

Coun Peter Wilson, Deputy Leader of Chorley Council, said: “The inevitable cuts to local government are another vindication of our decision this week to radically reform how public services are being delivered in Chorley.

“We’ll have to work through the detail over the coming weeks and wait for the budget settlement but as expected we are once again being hit hard.”

A spokesman for Preston Council said: “The council is already in a programme of cutting its budget by £3.6m a year by 2017-18.

“Further budget cuts are expected and full details will become clearer when the local government settlement is announced in mid December.”

Fylde MP Mark Menzies has welcomed support for pensioners and the police in the Chancellor of the Exchequer’s Autumn Statement.

Mr Menzies said: “Older people in this country have worked hard all their lives and deserve to be able to live with dignity and peace as they reach pension age.

“This Government has proven in the past its strong support for pensioners and this rise in the basic rate, the largest in 15 years, shows we are committed to making life better for our older generation.”

The Autumn Statement also saw the Chancellor announce there would be no reduction in police budgets, following months of speculation over expected cuts.

Mr Menzies added: “I know the local constabulary in Lancashire has been extremely vocal in its opposition to cuts in police budgets and local MPs recently met with the Policing Minister to raise our concerns.

“I am glad the Government has listened to us and protected frontline police services. This comes at the same time as vital investment in state-of-the-art mobile communications for emergency services, new technology at our borders, and a 30 per cent rise in the counter-terrorism budget.”

John Lyon, managing director of Lancashire local contractor accountancy firm ICS, said “Pensioners and those receiving tax credits emerged as the big winners in the Autumn Statement, with a dramatic U-turn on tax credit cuts, while the basic pension will rise to £119.30 per week.”

The Chancellor said his Spending Review was designed to make Britain “the most prosperous and secure of all the major nations of the world”.

He said Office for Budget Responsibility forecasts showed GDP growing “robustly every year”, living standards rising and more than one million extra jobs being created over five years.

The OBR had also certified that the Government’s economic plan will deliver on the commitment to reach a surplus by 2019/20 and reduce the debt to GDP ratio every year of this Parliament.

The Chancellor confirmed plans to double the housing budget with spending partly funded by new rates of Stamp Duty that will be three per cent higher on the purchase of additional properties like buy-to-lets and second homes.

But s hadow chancellor John McDonnell condemned Mr Osborne’s record, telling MPs that over the last five years there has barely been a target the Chancellor has not missed or ignored.

He said Mr Osborne’s handling of tax credits had been a “fiasco” and said it was essential to see the detail.

“This is not the full and fair reversal that we pleaded for,” he added. Mr Osborne said that over the course of the Parliament the Government would borrow £8 billion less than previously forecast while spending £12 billion more on capital investment.

The borrowing forecast for this year has been cut from £74.1 billion to £73.5 billion, falling to £49.9 billion, £24.8 billion and £4.6 billion in subsequent years, reaching a surplus of £10.1 billion in 2019/20 and £14.7 billion in 2020/21.

The Chancellor said that on average day-to-day spending for departments would fall by an average of 0.78% a year compared to 2% in the last parliament.

But with health, schools, defence and overseas aid all protected, it meant big cuts for other Whitehall departments.

The Department for Transport will see its operational budget cut by 37 per cent, Energy and Climate Change, Business, Innovation and Skills 22 per cent, and Environment 15 per cent.

However, Mr Osborne said there would be a 50 per cent increase in investment in transport infrastructure to £61 billion, and £2 billion for flood protection.