GEORGE Osborne has scrapped planned cuts to tax credits for millions of low paid workers.

Unveiling his Spending Review in the House of Commons, the Chancellor said he could abandon the controversial tax credit cuts of £4.4 billion due to improvements in public finances.

He said he would still be able to deliver the promised £12 billion in welfare cuts over the next five years while balancing the books by the end of the Parliament.

The move has been welcomed by Bolton North East MP David Crausby, who said the u-turn was “embarrassing” for the Chancellor who only announced the planned cuts in July.

To Tory cheers, Mr Osborne told the Commons: "I've had representations that these changes to tax credits should be phased in.

"I've listened to the concerns. I hear and understand them.

"And 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."

The planned savings ran into trouble last month when they were blocked by The House of Lords and while many felt Mr Osborne would instead bring in phased reductions, they have now been scrapped altogether.

Reacting, Mr Crausby said he was still “very concerned” about where the £12 billion welfare cuts would come from.

He added: “That is a worry, but it is certainly good news for my constituents that tax credit cuts will be scrapped.

“I think this is a real embarrassment for the Chancellor, the one thing you expect from your chancellor is certainty and proof that he knows where he is going, but he has demonstrated neither today.

“But this u-turn is in the interests of people who are having a go, you should not be attacking people who are trying to do a day’s work.”

Mr Crausby added that he believes Mr Osborne is a "poor chancellor" who "deserves" to be embarassed by the u-turn he has performed.