Last week in the Autumn Statement George Osborne made headlines with a series of attention-grabbing spending promises.
However, as is often the case with this Chancellor, within hours of his statement his promises were unravelling.
The Government’s forced U-turn, due to Labour pressure, on cuts to tax credits sounded like good news at first but within hours the independent Institute for Fiscal Affairs confirmed that because of the plans announced by the Chancellor, around 2.6 million working families will be on average, £1,600 a year worse off.
This is because tax credits are being replaced by Universal Credit in the next five years and Universal Credit is unaffected by any of the changes announced last week.
So working families in Shields will still lose out when they move to the new system.
The Conservatives’ changes are regressive and will make the poorest worse off instead of better.
The Chancellor also announced huge cuts to funding for Local Government and dangerous cuts of £22bn to our NHS by 2020.
These cuts will only add to the strain on our local authority and put patient care at risk.
The creation of a local enterprise zone was a positive announcement for businesses in our area but this was tempered by the fact that the Government delayed the long-awaited overhaul of Business Rates for at least another year whilst raising them in the meantime.
This is not good news for our local high streets. In the past, readers will know I held a debate in Parliament about the shop vacancies we have in King Street.
In that debate I spoke about how many of the retailers who had left our town were doing so because of high business rates imposed by central Government.
The Chancellor also confirmed that local councils would now be able to retain more business rates to make up for cuts from central government.
I, and many other MPs across the region, have expressed that this will not be of benefit to the North East, where incomes and property values are lower.
While a London authority can raise over £100million in business rates, a 10% increase in already-high business rates would bring in only £4 million for South Tyneside Council, which does not cover the loss in funds from Central Government.
The reality is the Government have failed. In 2010, George Osborne said the deficit would be eradicated this year, but he is falling short of the mark, with a deficit of over £90billion, and as always it is the British public and our services that will suffer.