Osborne’s road to Damascus moment

CHANCELLOR George Osborne stunned everyone on Wednesday when he delivered his Autumn Budget Statement by abandoning cuts to tax credits altogether. No one looked more astonished than Ian Duncan Smith, the Secretary for Work and Pensions.

This will leave thousands of families across Britain relieved, and looking forward to a much happier Christmas and New Year.

The old cynics among us were waiting to hear about plans to divert the cutting scythe elsewhere but Osborne declared that he has found the £4.4 billion funding to continue with the tax credits unchanged because there is a hitherto unmentioned £27 billion surplus in available Government funds — due to his careful management of the economy. This does beg the question: why were the cuts proposed in the first place? Was it malice or was it ignorance?

It does show the Tories are making up their policies as they go along and are being forced to backtrack on all their major policies — and are deeply divided amongst themselves.

They are divided over Europe, over supporting the United States’ ever more dangerous war plans in Syria and now over how safe it is to crush low-paid workers too harshly.

Osborne’s U-turn also shows once again the real effects of having a proper parliamentary opposition in both chambers of Parliament.

But there is still plenty to campaign against. Osborne announced plans to hand billions to private developers to build 400,000 new homes in England.

This will do nothing to ease the growing housing crisis because none of these new homes will be available to the low-income people who need them most. Only the wealthiest people will be able to afford to buy them, and many will be bought to rent at exorbitant rates or purely as an investment, not for living in.

He is again shoring up the housing bubble that is sustaining Britain’s economy on the back of wind, water, fairy dust and bad debt, amongst increasing evidence that the bubble may be about to burst.

During the past week statistics have shown that Asian and Russian luxury homebuyers are deserting London’s property market amid economic uncertainty in emerging economies.

Property buyers from Asia made up 26 per cent of those buying homes in wealthy areas of London, such as Kensington, Chelsea and Belgravia, in the first three-quarters of last year. That figure has dropped to six per cent over the first nine months of 2015.

On Wednesday Osborne also announced that spending on schools and defence will go up — but police, local councils and other areas face big cuts. It looks as though this is where he will be seeking to make up the £4.4 billion he has been unable to cut from tax credits.

Osborne said he hopes to raise £5 billion in a fresh crackdown on tax avoidance as part of his efforts to balance the nation’s books by the next election in 2020.

He told MPs the Spending Review was designed to make Britain “the most prosperous and secure of all the major nations of the world”. He revised up slightly Britain’s economic growth forecasts for next year to 2.4 per cent. But the Government will have to borrow another £73.5 billion in the current fiscal year.

A much better way of cutting the cost of tax credits to the Treasury would be if general wages would rise to a level where bosses paid their workers enough to live on. But this will not happened until the anti-union laws are abolished and free collective bargaining is restored nationally and in every work place.