This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.bbc.co.uk/news/business-34930317

The article has changed 5 times. There is an RSS feed of changes available.

Version 0 Version 1
Very significant spending cuts to come, think tank warns Very significant spending cuts to come, think tank warns
(35 minutes later)
"Very significant" government spending cuts will still be imposed before the next general election, an influential think tank has warned."Very significant" government spending cuts will still be imposed before the next general election, an influential think tank has warned.
Paul Johnson, director of the Institute for Fiscal Studies, said that George Osborne's Spending Review on Wednesday was "not the end of austerity".Paul Johnson, director of the Institute for Fiscal Studies, said that George Osborne's Spending Review on Wednesday was "not the end of austerity".
"This Spending Review is still one of the tightest in post-war history," he said."This Spending Review is still one of the tightest in post-war history," he said.
The chancellor surprised many by axing planned changes to tax credits.The chancellor surprised many by axing planned changes to tax credits.
However, Mr Osborne said Spending Review was not an end to "difficult decisions", but that higher than expected tax receipts and better public finances had provided some room to move. Mr Osborne said the Spending Review was not an end to "difficult decisions", but that higher than expected tax receipts and better public finances had provided some room to manoeuvre.
'50-50 shot''50-50 shot'
Despite the Chancellor's decision to abandon changes to tax credit planned for next year, Mr Johnson said the long-term cost of the move would be nil.Despite the Chancellor's decision to abandon changes to tax credit planned for next year, Mr Johnson said the long-term cost of the move would be nil.
"Why? Because the equivalent cuts to Universal Credit, now legislated, were left untouched," he said. "The long-term generosity of the welfare system will be cut just as much as was ever intended.""Why? Because the equivalent cuts to Universal Credit, now legislated, were left untouched," he said. "The long-term generosity of the welfare system will be cut just as much as was ever intended."
The IFS estimated that 2.6m families would be an average of £1,600 a year worse off under the new system of Universal Credit than they would be under existing tax credits, but 1.9m would be £1,400 better off.
Universal Credit is a new welfare payment that merges a number of benefits into one. It is being phased in over the next few years, starting in different regions at different times.
The IFS director said that Mr Osborne would "need his luck to hold out" given the Chancellor's self-imposed target of achieving a surplus in 2019-20.The IFS director said that Mr Osborne would "need his luck to hold out" given the Chancellor's self-imposed target of achieving a surplus in 2019-20.
"If he is unlucky - and that's almost a 50-50 shot - he will have either to revisit these spending decisions, raise taxes, or abandon the target," he said."If he is unlucky - and that's almost a 50-50 shot - he will have either to revisit these spending decisions, raise taxes, or abandon the target," he said.
The think tank, which conducts independent economic analysis, also highlighted the tax rises contained in the statement.The think tank, which conducts independent economic analysis, also highlighted the tax rises contained in the statement.
'Ill-designed''Ill-designed'
They include the apprenticeship levy on large employers that will raise £3bn, the £1.7bn from a 2% levy on council tax to pay for more social care; and the near-£1bn to be generated by higher stamp duty for second homes and buy-to-let properties.They include the apprenticeship levy on large employers that will raise £3bn, the £1.7bn from a 2% levy on council tax to pay for more social care; and the near-£1bn to be generated by higher stamp duty for second homes and buy-to-let properties.
Mr Johnson said the stamp duty move was "ill-designed" because it reintroduced a cliff edge that Mr Osborne had abolished just a year ago.Mr Johnson said the stamp duty move was "ill-designed" because it reintroduced a cliff edge that Mr Osborne had abolished just a year ago.
The IFS also mentioned other spending cuts, such as the 40% reduction in capital grants for housing associations by 2017-18.The IFS also mentioned other spending cuts, such as the 40% reduction in capital grants for housing associations by 2017-18.
Wednesday's statement revealed glimpses of Mr Osborne's desire to reform the public finances, it said.Wednesday's statement revealed glimpses of Mr Osborne's desire to reform the public finances, it said.
"He really is cutting spending on non-pension benefits to its lowest level relative to national income for about 30 years," Mr Johnson said."He really is cutting spending on non-pension benefits to its lowest level relative to national income for about 30 years," Mr Johnson said.
"The changes to local government financing and devolution are genuinely radical and could transform both the role of local government and the UK's fiscal architecture.""The changes to local government financing and devolution are genuinely radical and could transform both the role of local government and the UK's fiscal architecture."