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Spending Review: Swinney vows to 'protect' vulnerable from cuts Spending Review: Nicola Sturgeon welcomes tax credit U-turn
(35 minutes later)
Scotland's finance secretary John Swinney has said he will do everything he can to protect families from any further austerity measures announced by the chancellor. Scotland's first minister has welcomed a U-turn by the chancellor on tax credit cuts.
George Osborne is giving details of his Autumn Statement and Spending Review. George Osborne announced in his Autumn Statement that he was scrapping plans to save £4.4bn by cutting tax credits.
He is setting out how he intends to make £20bn of spending cuts and £12bn of savings on welfare. Nicola Sturgeon tweeted her congratulations to "all of those who kept the pressure on the Chancellor" over the issue.
The chancellor also used his statement to announce he was scrapping £4.4bn plans to cut tax credits. But she said there was now a need to scrutinise the impact of housing benefit cuts.
Mr Osborne said he had listened to the concerns expressed about the tax credit cuts and decided not to press ahead with them. Mr Osborne told the Commons that he had received representations that the changes to tax credits should be phased in.
The chancellor's proposed cuts, along with a £5bn crackdown on tax avoidance, are intended to help him meet his pledge of eliminate the national deficit without raising personal taxes. But he added: "I've listened to the concerns. I hear and understand them. And 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."
But Mr Swinney, who is also Scotland's deputy first minister, insisted that the Conservatives were "engaged in austerity of choice, not necessity". Scottish Labour leader Kezia Dugdale tweeted that "350,000 Scottish families can rest a little easier this Christmas thanks to Labour pressure on tax credit cuts".
Mr Swinney is due to give details of the Scottish government's budget plans for 2016-17 next month. Mr Osborne set out how he intends to make £20bn of spending cuts and £12bn of savings on welfare, telling MPs that the Spending Review was designed to make Britain "the most prosperous and secure of all the major nations of the world".
He said: "The Scottish government has consistently demonstrated that the UK's deficit and debt can be brought down without the need for huge public spending cuts as set out by the UK government. He also said that the "Vow" on new powers ahead last year's independence referendum had been met in full through the Scotland Bill, and said the "ball was now in the court of the Scottish government".
"We have set out that the public finances can be returned to a sustainable footing alongside increasing public sector net investment." And he said revenues from North Sea oil and gas had fallen by 94%.
Presented by Chancellor George Osborne, the Spending Review sets out what government spending will be over the next four years, while the Autumn Statement is an annual update of government plans for the economy.Presented by Chancellor George Osborne, the Spending Review sets out what government spending will be over the next four years, while the Autumn Statement is an annual update of government plans for the economy.
Explained: Which government departments will be affected?Explained: Which government departments will be affected?
Analysis: Latest from BBC political editor Laura KuenssbergAnalysis: Latest from BBC political editor Laura Kuenssberg
Douglas Fraser: What might it mean for Scotland?Douglas Fraser: What might it mean for Scotland?
Special report: Full in-depth coverage of the Spending Review and Autumn StatementSpecial report: Full in-depth coverage of the Spending Review and Autumn Statement
Watch: The BBC's TV coverage begins on BBC Two and the BBC News Channel at 11:30 GMT, with BBC Radio 5 Live coverage from 11:55 GMTWatch: The BBC's TV coverage begins on BBC Two and the BBC News Channel at 11:30 GMT, with BBC Radio 5 Live coverage from 11:55 GMT
Speaking ahead of the statement, Scottish Finance Secretary John Swinney insisted that the Conservatives were "engaged in austerity of choice, not necessity".
Mr Swinney is due to give details of the Scottish government's budget plans for 2016-17 next month.
He said: "The Scottish government has consistently demonstrated that the UK's deficit and debt can be brought down without the need for huge public spending cuts as set out by the UK government.
"We have set out that the public finances can be returned to a sustainable footing alongside increasing public sector net investment."
Mr Swinney said the likelihood was that the chancellor would make a "significant real-terms cut to Scotland's budget" and added: "What is worse is these cuts will hit the poorest the hardest."Mr Swinney said the likelihood was that the chancellor would make a "significant real-terms cut to Scotland's budget" and added: "What is worse is these cuts will hit the poorest the hardest."
A key element of Mr Osborne's announcements will be his plans for tax credits.
The UK government wants to cut them to save £4.5bn a year from 2016, arguing that most working families will still be better off by 2017, as a result of the introduction of the National Living Wage and changes to income tax thresholds.
Mr Osborne has vowed to press ahead with changes aimed at bringing tax credit spending "under control" despite the House of Lords voting to delay the cuts.Mr Osborne has vowed to press ahead with changes aimed at bringing tax credit spending "under control" despite the House of Lords voting to delay the cuts.
Mr Swinney said: "We will continue to do everything within our power to protect the most vulnerable from the UK government's austerity measures, but we want to use our powers and resources to lift people out of poverty, not just continually mitigate as best we can."Mr Swinney said: "We will continue to do everything within our power to protect the most vulnerable from the UK government's austerity measures, but we want to use our powers and resources to lift people out of poverty, not just continually mitigate as best we can."
With Scotland to get some limited power over income tax from April next year, with the ability to set rates and bands due in 2017, Mr Swinney said in the future Holyrood ministers would be able to "take a distinctive approach to the challenges we face".With Scotland to get some limited power over income tax from April next year, with the ability to set rates and bands due in 2017, Mr Swinney said in the future Holyrood ministers would be able to "take a distinctive approach to the challenges we face".
Looking ahead to his own budget plans for 2016-17, he added: "We will be fair and progressive in our decisions.Looking ahead to his own budget plans for 2016-17, he added: "We will be fair and progressive in our decisions.
"We only hope and call on the Chancellor to take a fair and progressive approach to the Spending Review and end his obsession with needless austerity.""We only hope and call on the Chancellor to take a fair and progressive approach to the Spending Review and end his obsession with needless austerity."
Shadow Scottish secretary Ian Murray also criticised Conservative plans to cut tax credits for working families.
Mr Murray, the only Labour MP in Scotland following the SNP's landslide victory in May's general election, said: "Before the election, the Tories promised that they would not cut tax credits, but their plans will cost three million working families £1,300 a year.
"Scottish Labour is clear that the Chancellor must reverse his decision, but if he does not we would use the new powers available to the Scottish Government to restore the money lost in full."