News Analysis: More magic as Osborne unveils Britain's four-year spending plan

Britain's Chancellor George Osborne earned plaudits Wednesday from supporters for the surprises he managed to spring as he outlined the government's spending program for the next four years.

But opponents, like Labours' shadow chancellor John McDonnell, accused Osborne of "betraying" voters by failing to eliminate the deficit and get debt falling.

The spending review, outlined in Osborne's autumn statement to Parliament, spells out how the government will spend taxpayers' money over the period to the next general election in 2020, ending the term of office with a surplus.

No sooner had Osborne sat down after delivering his speech to a noisy and crowded House of Commons, political commentators were quick off the mark. They were eager to point out Osborne was laying down his marker to be Britain's next prime minister when David Cameron quits Number 10 Downing Street ahead of the next election.

Osborne's chances of moving from Number 11 Downing Street will depend on how the details of his spending review will be viewed by the British public, commentators say.

Osborne, known for spectacularly performing political magic by pulling rabbits out of hats, did it again. In his spring budget he announced a new legal minimum working wage. This time, the rabbit was an apparent u-turn on a controversial plan to make drastic changes to a tax credits, paid to low income families.

Critics on all sides of Parliament, including a number of members from Osborne's own Conservative Party, had warned that worse-off families stood to lose over 1,500 U.S. dollars a year under the planned shake-up. Members of the upper chamber, the House of Lords, rebelled and rejected the changes to top tax credits, prompting the re-think by the Treasury.

Those opposed to the changes had hoped to hear the Chancellor announce a slower introduction of tax credits.

Instead he has scrapped the tax credit changes altogether, though he insisted there still must be savings of at least 18 billion U.S. dollars in Britain's welfare budget.

Labour's McDonnell, described the way Osborne had handled the tax credit changes as a "fiasco".

The main opposition Labour Party still contend that cuts in spending will continue to hit the poorest the hardest while high earners escape Osborne's spending axe.

With defense and police budgets protected, again following protests in the wake of the recent attacks in Paris, Osborne won praise from the Conservative back benches.

Hailing Britain's determination to run the country at a surplus, Osborne said: "Today, I can confirm that the four-year public spending plans that I set out are forecast to deliver that surplus, so we don't borrow forever and are ready for whatever storms lie ahead."

Away from Parliament reaction was mixed.

Carolyn Fairbairn, director general of the Confederation of British Industry, welcomed the Chancellor's review. "This was a good spending review for longer-term investment in the economy. Businesses will be pleased to see the chancellor staying the course on deficit reduction, his commitment to an industrial strategy, and the emphasis on nurturing a vibrant business community," she commented.

There was a more muted message from Frances O'Grady, general secretary of the Trades Union Congress that represents millions of working people. Responding to Osborne's spending review, she said: "The Chancellor has been forced into a spectacular climb-down on tax credits. But by the end of the parliament many working people will still suffer big losses because he is keeping planned cuts to Universal Credit."

"If the Chancellor really wants to battle for blue-collar Britain, he needs to recognise the importance of investment in public services, genuinely affordable housing, and a fairly shared recovery," she added. "Without that commitment he will still be remembered as the butcher and not the builder he says he wants to be."

The big question over the coming days and weeks will be whether Osborne has performed enough magic to earn him the right to be the front-runner for the keys to Number 10. Endit