UK swings austerity axe but spares key welfare scheme, police

Britain announced a fresh round of deep cuts to public spending today but dropped a plan to cut welfare payments for the poorest and spared the police from savings after the Paris attacks.

London: Britain announced a fresh round of deep cuts to public spending Wednesday but dropped a plan to cut welfare payments for the poorest and spared the police from savings after the Paris attacks.

Unveiling a budget update, finance minister George Osborne said the government, which is borrowing 73.5 billion pounds this year, is on track to balance its books by 2019-20.

This will be achieved through the most significant belt-tightening in a generation which includes reducing welfare by 12 billion pounds and the budgets of some government departments by up to 37 per cent.

However, Osborne, a leading contender to succeed David Cameron as prime minister when he steps down by 2020, avoided a succession of political beartraps as he announced his plans to a packed House of Commons.

He dropped a plan to cut tax credits -- a benefit payment for low-income working families -- after the House of Lords voted last month against the move in a humiliating defeat for the government.

Opponents of the move, including many within his own centre-right Conservative party as well as the main opposition Labour party under Jeremy Corbyn, said it would have left over three million families worse off.

"I've listened to the concerns. I hear and understand them," Osborne told lawmakers.

"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."

Osborne, finance minister since Cameron took office in 2010, said that the decision was affordable because of projections that tax revenues were set to increase.

Treasury sources indicated that the full ?12 billion of planned welfare savings would still be carried out through reductions to other types of state benefits.

The 44-year-old, effectively Cameron's number two, also sprung a surprise by announcing that police funding would not be cut, defying a widespread expectation among senior officers and commentators.

"Now is not the time for further police cuts," Osborne told the Commons. "The police protect us and we're going to protect the police."

In England and Wales, the number of police has fallen nearly 12 percent since 2010 and senior police figures had warned that a further reduction could hit their ability to prevent a major Paris-style attack in Britain.

Britain's official economic growth forecast was held at 2.4 percent for 2015 but revised up to 2.4 percent for 2016 from 2.3 percent.