Chancellor abandons plans to cut tax credits and police budgets

Cuts which would have cost nearly15,000 Brighton and Hove families up to £1,000 each were ditched in what was described as a “screeching u-turn.”

New homes, new council tax-raising powers, pension increases and £6 billion for the NHS next year were also announced by George Osborne.

But the government came under attack for failing to build council houses and was accused of an “anti-democratic” move to reduce public funding for opposition parties.

The Chancellor was given a surprise windfall from the independent Office of Budget Responsibility which said rising tax funds and falling debt revenues would give the Treasury an extra £27bn over the life of the Parliament.

As a result he said the economy is still on track to reach a surplus of £10bn in 2020, and welfare spending to fall within the self-imposed limit in every year but the next, despite the scrapping of unpopular plans to cut tax credits, which were to save £4.4bn.

Steve Parry, a community activist on welfare issues, said: “I think it’s excellent news, it shows people can actually achieve something.”

The additional money also allowed the Chancellor to shelve planned police budget cuts, having previously asked forces to draw up plans for decreases of up to 40 per cent.

Katy Bourne, Sussex Police and Crime Commissioner, said she was on “quite a high at the moment” in the aftermath of the announcement, and said the announcement would bring “much needed stability” to the force.

This year’s Autumn statement coincided with the five-year Comprehensive Spending Review which sets government departments’ budgets.

The speech itemised spending increases and commitments - including a jump in the state pension to £155 next year - but failed to specify areas in which the axe will have to fall, as budgets shrink by as much as 37% in the case of the Department for Transport.

Local Government grants from Westminster will disappear completely over the lifetime of the parliament, replaced by councils retaining their own business rate revenues. Councils are also now allowed to retain profits from the sale of property.

The chancellor announced 400,000 new homes, including 200,000 which will be available at 80 per cent of market prices for the under-40s, but no council houses will be built.

And in a move which was welcomed in the House of Commons but seen as patronising by some, revenues from the 5% VAT on sanitary products - which is enforced by the EU - have been ringfenced to be spent on women’s health charities and victims of domestic abuse.