UK govt. scraps plans to reduce support for poor workers

British Finance Minister George Osborne has scrapped plans to reduce state support for low-income workers.

Addressing the parliament, he said improved public finances meant he could deliver his overall $18 billion welfare savings without the cuts.

Last month, Osborne was forced to back down on a proposal to reduce the payment of so-called tax credits, which supplement the income of low-paid workers, after it was rejected by the UK’s upper house of parliament.

“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,” he told parliament.

Delivering his combined autumn statement and spending review, Osborne  said higher-than-expected tax revenues and lower interest payments on government debt had opened up an extra £27bn of fiscal wriggle-room, which would allow him to cancel the cuts altogether.

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