George Osborne’s spending review was a political masterclass, neutralising the biggest threats to the Government’s and his own reputation - tax credits and police budgets - and seemingly keeping a steady hand on the economic tiller. Tory backbenchers cheered, but plenty of people will be hit. As experts look for the devil in the detail, here are five changes already causing alarm.
1. Grants abolished for nurses
Student nurses are to have their grants cut and will instead have to take out loans to pay for their tuition fees. A saving of up to £800m a year for the Government, some would-be nurses have already been put off. Katie, who planned to enrol on a postgraduate diploma in adult nursing next year, told HuffPost UK: "The NHS are crying out for nurses, more so those who have a bit of life experience behind them. But these cuts look to have more than out priced many of us."
2. Tax credits protected - for now
The reversal of cuts to tax credits will avoid almost all the immediate losses next April, on average a £1,300 hit per family on the top-up benefit for workers. But as the Chancellor said: “Tax credits are being phased out anyway as we introduce Universal Credit.” So the Universal Credit - all welfare payments rolled into one - is likely to contain the cut when implemented in 2020. The Resolution Foundation says that by 2020 more than 3 million households are still set to lose an average of £1,000 from the £3.5bn cut. “Pain tomorrow is better than pain today – but it is still pain,” said Torsten Bell, director of the Resolution Foundation.
3. Free childcare limited
A flagship pledge of 30 hours of free childcare for three and four year olds has been scaled-back, meaning it will only available to parents working more than 16 hours a week when it launches in 2017. It will also no longer apply to families with incomes of more than £100,000. The biggest victims? Single parents working part-time. The Family and Childcare Trust warned of a “new barrier to work for those parents”. “We urge the Government to re-examine these criteria so that all working families can benefit from this generous offer,” said chief executive Julia Margo.
4. Housing benefit crackdown
A cap on housing benefit for new tenants in the social rented sector was announced. The reform will mean that housing benefit will “no longer fully subsidise families to live in social houses that many working families cannot afford”, official documents said as it bring rules in line with the private sector. The disability charity Mencap warned: “This could seriously impact on people with a learning disability living in social housing and specialist supported housing, jeopardising their ability to live independently in their communities."
5. "£56 added to the tank"
Tucked away in the Autumn Statement “scorecard” is a saving of around a quarter of a billion pounds every year by retaining the diesel supplement in the company car tax until 2021, when new cars will have to be cleaner. This will cost the average BMW 3 Series driver in a company car £182 if they are the basic rate taxpayer, and £365 for higher rate taxpayers. Treasury sources said that £126 would be deducted by employers via National Insurance - but that is still a fuel tax hike of £56. Not a great message to send “hard-working families”.