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Spending Review: Nicola Sturgeon welcomes tax credit U-turn Spending Review: Nicola Sturgeon welcomes tax credit U-turn
(35 minutes later)
Scotland's first minister has welcomed a U-turn by the chancellor on tax credit cuts.Scotland's first minister has welcomed a U-turn by the chancellor on tax credit cuts.
George Osborne announced in his Autumn Statement that he was scrapping plans to save £4.4bn by cutting tax credits.George Osborne announced in his Autumn Statement that he was scrapping plans to save £4.4bn by cutting tax credits.
Nicola Sturgeon tweeted her congratulations to "all of those who kept the pressure on the Chancellor" over the issue.Nicola Sturgeon tweeted her congratulations to "all of those who kept the pressure on the Chancellor" over the issue.
But she said there was now a need to scrutinise the impact of housing benefit cuts.But she said there was now a need to scrutinise the impact of housing benefit cuts.
Mr Osborne told the Commons that he had received representations that the changes to tax credits should be phased in.Mr Osborne told the Commons that he had received representations that the changes to tax credits should be phased in.
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 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."
Balancing the books
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".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 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".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 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". The chancellor said the Scottish government's block grant would reach almost £30bn by 2019-20.
And he said revenues from North Sea oil and gas had fallen by 94%. And he said the spending review included an increase in capital funding for the Scottish government of £1.9bn through the block grant, which he said was an increase of 14% in real terms over five years, in addition to the Scottish government's ability to borrow up to £2.2bn for capital investment.
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. Referring to the Scotland Bill on new devolved powers for Holyrood, he said: "We have delivered our vow to implement the Smith Commission Agreement in full. The Scottish government will now have to make the hard choices that we have had to in order to protect front-line services for the people of Scotland."
Explained: Which government departments will be affected? Mr Osborne also angered SNP MPs in the Commons when he claimed an independent Scottish government would have been forced to make "catastrophic cuts" to public services as the result of a 94% drop in oil and gas revenues.
Analysis: Latest from BBC political editor Laura Kuenssberg 'Sustainable footing'
Douglas Fraser: What might it mean for Scotland?
Special 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 GMT
Speaking ahead of the statement, Scottish Finance Secretary John Swinney insisted that the Conservatives were "engaged in austerity of choice, not necessity".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.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.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.""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."
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."