Autumn Statement 2015 as it happened: George Osborne makes tax credit U-turn and spares police the axe

That concludes our live blog of today's Autumn Review and Spending Review. Continue to follow IBTimes UK's coverage for all the reaction on the day George Osborne made a U-turn over tax credits, spared the Home Office of cuts to policing and guaranteed a half trillion pound investment in the NHS by 2020.

Karim Palant has his say on the new apprenticeship levy:

McDonnell finishes his attack on Osborne after calling his stance on tax credits a "fiasco" and demanding to know the full details on the U-turn.

Geraint Johnes, professor of economics at Lancaster university, gives his take on Osborne's police funding announcement.

"George Osborne is adept at pulling a rabbit out of a hat as a grand finale, and he did not disappoint this year, with the announcement that real terms funding for the police would be protected," the academic said.

"That will doubtless take some of the wind out of the sails of the opposition. They might, instead, wish to focus on elements of the much weaker 'social failures' chunk of the statement."

It's arrived. Read the Autumn Statement and Spending Review:

And now it's over the shadow chancellor John McDonnell. He says the chancellor has "some front" talking about deficit reduction and accuses him of "sheer economic illiteracy".

Osborne closes with: "We were elected as a one nation government and today we deliver the spending review of a one nation government

!The guardians of economic security the protectors of national security, the builders of our better future, this government the mainstream representatives of the people of Britain.!

Osborne says now is "not the time for further police cuts" and announces there will be cuts to budget. "The police protect us and we are going to protect the police," Osborne shouts.

Simon Colvin, Partner at Pinsent Masons law firm, believes cuts to government departments could be achieved by sharing services.

"Increased outsourcing and offshoring, greater use of shared services, and alternative commercial and contract models are likely to be means by which spending can be streamlined, but it's going to require flexibility and willingness to adapt by both government and its suppliers."

Number claiming out-of-work benefits has fallen to just 2.3% - lowest rate since 1975 - and £700m saved from closing prisons will be reinvested in modernising judicial system.

"We're going to open 500 new Free Schools and University Technical Colleges," Osborne announces, before pledging to invest £23bn in school buildings.

The £15m raised from the tampon tax (5%) will be diverted to women's charities that help vulnerable women.

Relive the moment John Bercow told Labour MP Clive Lewis to "take up yoga"

Chancellor increases UK Sport budget by 29% "so we can go for gold in Rio and Tokyo". And:

Karim Palant has his say on the Chancellor's transferring of power to local councils to set business rates:

Britain has a permanent pothole fund! And it's all thanks to the "incessant" lobbying of Northampton North MP Michael Ellis.

The chancellor confirms he will transfer new tax raising powers to local councils to cut rates and make their area "more attractive to business".

Next year the basic state pension will rise by £3.35 to £119.30 a week - the biggest real terms increase in 15 years. It means, Osborne harps, pensioners will be £1,125 better off than they were in 2010.

Osborne commits £101bn to the NHS this year, rising to £120bn in 2020/2021. He says the half trillion pound commitment this parliament is "the largest investment since its creation". There will also be £600m allocated to tackling mental health:

However, there is a sting in the tail as Osborne says the NHS must find £22bn in efficiency saving.

Public spending OBR predictions:
2015-16 £756bn
2016-17 £773bn
2017-18 £787bn
2018-19 £801bn
2019-20 £821bn

Karim Palant, Ed Balls' former head of policy, reacts to Osborne's U-turn on tax credits:

George Osborne makes a U-turn over tax credits. The Chancellor has decided to scrap plans that opponents said would leave families earning £20,000 out of pocket by £1,300.

"We still achieve the £12bn of welfare savings promise – but we have listened to concerns tax credits...the simplest thing to do is not to phase these changes in, but to avoid them altogether."

Bercow is at it again! This time it is Norwich South MP Clive Lewis in the firing line, who is advised to take up yoga:

"Since 2010 no economy in the G7 has grown faster than the UK," says Osborne.

And then he states the GDP growth forecasts:

2015 - 2.4%
2016 - 2.4%
2017 - 2.5%
2018 - 2.4%
2019 - 2.3%
2020 - 2.3%

He goes on to say:

• He will create a surplus "so we don't borrow forever"
• "After longest period of rising debt in modern history, our debt will fall this year and every year that follows"
• Cuts will be "delivered in full and in a way that helps families as we make transition to National Living Wage"
• Britain will spend 0.7% of GDP on development and 2% on defence of the realm

In his opening statement of the Autumn Statement, Osborne pledges to "put security first". He says he will protect the economy by making Britain "live within its means" and national security by "defending interests abroad and protecting citizens at home."

Speaker of the House John Bercow reprimands SNP MP Brendan MAcNeil: "You may be a cheeky chappy but you are also an exceptionally noisy one!"

On relations with Russia, Cameron said: "There are opportunities for sensible discussions with Russia about agenda in Syria and...a government that represents the people of Syria."

And commenting on the downed Russian fighter jet over Turkish air space, Cameron said the "facts are not clear" but it was important to "respect Turkey's rights to protect air space".

Islington South and Finsbury MP Emily Thornberry asks the prime minister if it is in the interests of her constituents that he cuts the Met Police.

Cameron says that "still too many people are carrying knives", which is not only against the law but an "enormous danger to themselves and others."

"When it comes to policing, what we have seen is an increase in Neighbourhood Policing and the Met has done a good job at cutting back office costs and putting officers back on our streets."

Cameron admits air strikes alone will not conquer Islamic State adding he will add more detail to Britain's involvement tomorrow:

On a topic mentioned by IBTimes UK columnist Lydia Smith, Cameron has said George Osborne will pledge money towards women's charities, adding his government has a "good record on helping women and the crime of violence against women".

Labour leader Jeremy Corbyn is tackling Cameron's record on green issues and the loss of 1,000 jobs in the solar panel industry. The prime minister responds saying he has trebled wind power, will build the country's first nuclear power station in decades as well as doubling investment on renewable energy in this parliament. Cameron adds that 1m homes in last parliament were fitted with solar panels but that the cost cost of manufacturing has plummeted, hence the subsidy.

David Cameron starts PMQs by paying tribute to his private secretary Chris Martin, who died of cancer this morning aged 42.

The prime minister described him as "loyal, hard working, and the most dedicated public servant I have ever come across" and as something "between a father and a brother".

The chancellor has vowed to press ahead with cuts to policing but will go on to boost counter-terrorism funding by 30% in the wake of the terrorist attacks in Paris on 13 November.

In a letter to Home Secretary Theresa May, Police Federation chairman Steve White warned her not to "put a price on public safety".

"We all need to work together to combat terrorism, but pulling the rug from under the police service will not do this. Government must not sleepwalk into disaster," he wrote. White went on to write the federation welcomed the additional £2bn funding and recruitment plans for an extra 1900 staff for MI5, MI6 and GCHQ but that the union was "bitterly disappointed" there was no mention of policing.

"The cuts have so far resulted in the loss of 17,000 police officers and almost the equivalent number of support staff. The impact of this is already being felt across communities and officers are telling us they are struggling to cope as it is. Any further cuts could seriously jeopardise public safety."

Away from Downing Street and near the Treasury, artist Artist Kaya Mar holds a painting depicting Chancellor George Osborne and former Prime Minister Margaret Thatcher. Reading between the lines, he thinks Osborne's tax credits will go down as his Thatcher's poll tax moment. The artist is well known for his satirical paintings of leaders.

There has been some car trouble outside Number 10 ahead of the Autumn Statement:

In his first tweet ahead of the big announcement, George Osborne claims his plan will "deliver national and economic security."

Today's Spending Review will deliver economic and national security - the foundations for everything we do #SR15 pic.twitter.com/Fgstmgfm48

— George Osborne (@George_Osborne) November 25, 2015

Independent think tank, The Institute for Fiscal Studies (IFS), will be providing a live analysis of the Autumn Statement and Spending Review from 1pm GMT. Click the link for the livestream.

Ahead of the Autumn Statement we've put together a short observation highlighting some key issues #SR2015: https://t.co/39yxWJLXXd

— IFS (@TheIFS) November 24, 2015

Departments face cuts of between 25% and 40% in today's Spending Review but economists have warned that further austerity could actually increase the deficit.

Dr Kevin Albertson, Reader in Economics at Manchester Metropolitan University, explains: "In the term of the coalition government (2010-2015) the Chancellor instigated imposed cuts in the public sector and the economy began to slow – many economists would then argue that he took his foot off the austerity brake at some point in 2012, despite Osborne having stated he had no 'plan B'. The same might happen again.

"However, cuts reduce economic growth, which reduces the tax take. Therefore, depending on the scale of the relative contraction in the economy as austerity begins to bite, the deficit might actually increase. According to the IMF this might be the situation in which the UK finds itself. If this is the case, cuts on the scale the chancellor proposes risk economic contraction and increased borrowing."

IBTimes UK columnist Lydia Smith says Osborne's cuts will affect women "disproportionately hard" as more front-line women's services face closure. "Austerity is the very reason these services are struggling to stay afloat," she says.

Read the full piece here - Autumn Statement 2015: George Osborne's cuts will condemn women to violence on White Ribbon Day

If the FTSE 100 is anything to go by, investors are clambering over themselves to get hold of shares in the country's top house builders:

"The FTSE managed to eke out a 30 point jump as Wednesday got underway. The reason is likely some pre-Autumn Statement excitement; whilst most sectors are likely to suffer under George Osborne's giant scissors, the UK housing stocks may get a lift as the Chancellor recommits to 'solving' the current homes shortage," said Connor Campbell, financial analyst at Spreadex.

"Already the likes of Barratt Developments, Berkeley Group Holdings and Bellway have jumped around 2% this morning, emblematic of the rest of the sector, with potentially more gains to come."

Political Twitter is already having some fun ahead of the Autumn Statement. Meanwhile, everyone's favourite former Apprentice contestant keeps it controversial.

Morning. Forgive the following re-post but it's as traditional as Osborne shifting his deficit targets. #spendingreview

— David Schneider (@davidschneider) November 25, 2015

Spending review tomorrow. Time to cut foreign aid and reallocate it to the Home Office. #spendingreview

— Katie Hopkins (@KTHopkins) November 24, 2015

Analysts are predicting Osborne will pull a "pensions rabbit" from his hat today (the chancellor will almost certainly not wear a hat). Francois Barker, head of pensions at law firm Eversheds, will be keeping an eye on pensions tax relief.

"The key question in everybody's mind is how is the government is going to respond to its consultation on reforming the current system of pensions tax relief. A radical reform of the current system, which could see pensions treated in the same way as ISAs for tax purposes, would be portrayed as saving tens of billions of pounds in tax relief.

"It would have a massive impact on pension plans, employers, trustees and providers, but there are significant concerns that it could actually deter pension saving (if savers have to contribute out of taxed income) and not promote it as the Government has suggested."

For the history/head wear buffs out there, the last chancellor to wear a hat on Budget day was apparently Selwyn Lloyd in 1962:

Connor Campbell, senior market analyst at www.spreadex.com, predicts housing stocks will rise on Osborne's promise to build 400,000 subsidised homes by the end of the decade.

"Whilst the all the Autumn Statement headlines have focused on the oncoming cuts, housing stocks are likely to benefit from the Osborne's reaffirmed promise to 'fix' the growing homes shortage," he said.

"Movements in pension, motor and oil stocks, meanwhile, could be dependent on announcements in regards to reform and fuel duty respectively. Finally there is the case of Osborne's infamous rabbits; out of his big red hat the Chancellor has pulled National Savings and Investments pensioner bonds, stamp duty reform, 'Help to Buy' ISAs and the living wage in the last few 'statements.'

"There may not be much wiggle room for Osborne to work with this time around, so it will be interesting to see what, if anything, he uses to sweeten another austere mini-budget."

The Office for Budget Responsibility (OBR) is expected to revise up its forecast for the deficit this financial year, from £69.5bn to as much as £74bn. This comes after the October deficit soared 16% on last year. The fiscal watchdog also believes the government will borrow more this year, blowing a hole in Osborne's plans for a budget surplus in 2020.

Emma Boggis of the Sport and Recreation Alliance has warned of sports facility closures and recreational sport becoming more expensive under cuts announced in the Spending Review.

She told BBC Radio 4's Today programme that cuts to the department of Culture, Media and Sport would have a "significant impact" on sport and recreation. It was important for continued investment in sport, she said, but not at the expense of the arts.

There are reports that low-earning families that would have lost £1,300 under Osborne's original tax credit reform will instead lose £300 after the House of Lords sent plans back to the House of Commons.

In his Mansion House speech earlier this year, George Osborne announced he would enshrine into law that Britain would run a budget surplus during "normal times".

But as BBC political editor Laura Kuenssberg told Radio 4 this morning, his £10bn target could be under threat and the chancellor could revise that figure lower.