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special on the Chancellor's latest Spending Review. George Osborne laid | :00:58. | :01:03. | |
out the coalition spending plans back in 2010, and they took us to | :01:03. | :01:07. | |
April 2015, just before the next election. By which time the | :01:07. | :01:10. | |
government's annual deficit was supposed to have been almost | :01:10. | :01:14. | |
eliminated. But slower economic growth than first predicted means it | :01:14. | :01:17. | |
isn't quite working out like that. The government says it will still be | :01:17. | :01:27. | |
:01:27. | :01:30. | ||
borrowing billions in the financial year 2015 to 2016, and that even to | :01:30. | :01:32. | |
meet its revised deficit reduction plans, they will have to find | :01:32. | :01:34. | |
another 11.5 billion in cuts for that financial year. Hence today's | :01:34. | :01:37. | |
statement. With a general election in May 2015, the Chancellor may not | :01:37. | :01:39. | |
be in the Treasury to implement what he's about to announce. Labour has | :01:39. | :01:43. | |
said if it wins the election, it will reluctantly stick with Mr | :01:43. | :01:49. | |
Osborne's overall spending totals. But it could tinker with where the | :01:49. | :01:51. | |
Chancellor's axe falls. The Chancellor is about to leave the | :01:51. | :01:57. | |
Treasury. That is our live shot there. It's only a short drive from | :01:57. | :02:00. | |
the Treasury across Parliament Square to the House of Commons. | :02:00. | :02:04. | |
There's no waving of the budget box, as there is on budget day here. It's | :02:04. | :02:09. | |
a bit more workmanlike when it comes to a Spending Review. There's been | :02:09. | :02:12. | |
months of argy-bargy between the Treasury and Cabinet ministers over | :02:12. | :02:18. | |
what is to be cut. The most recalcitrant even formed what became | :02:18. | :02:22. | |
known as the National union of ministers, to fight Treasury | :02:22. | :02:27. | |
demands. The remaining differences were resolved at the weekend. Now | :02:27. | :02:34. | |
the Chancellor comes to the Commons to tell us what has been decided. We | :02:34. | :02:39. | |
will have live coverage of his speech and labour's response. The | :02:39. | :02:42. | |
Chancellor gets to his feet and about an hours time. At noon, we | :02:42. | :02:47. | |
will have Prime Minister 's questions. To guide us throughout, | :02:47. | :02:52. | |
we have the BBC's finest in the studio. They paid me to say that! | :02:53. | :02:57. | |
Plus reaction from beyond Westminster. I'm outside Parliament, | :02:57. | :03:01. | |
talking to politicians of all stripes, getting their reaction to | :03:01. | :03:04. | |
today's Spending Review and assessing how it will affect the | :03:04. | :03:11. | |
political landscape. I'm in bustling Bury market in Lancashire, where you | :03:11. | :03:15. | |
can buy just about anything. From gorgeous flowers to the famous black | :03:15. | :03:20. | |
pudding. The Chancellor announces how he is going to cut another �11.5 | :03:20. | :03:24. | |
billion in spending in a few years time. I'll be talking to taxpayers | :03:24. | :03:29. | |
here to find out what they think about his plans. And I will have | :03:30. | :03:33. | |
your e-mails, texts and tweets come and explain what the Chancellor's | :03:33. | :03:38. | |
announcements mean for you. And I'm in our virtual Treasury courtyard, | :03:38. | :03:42. | |
looking at where the cuts might fall and which areas the Chancellor might | :03:42. | :03:52. | |
:03:52. | :03:57. | ||
spare in this �11.5 billion spending squeeze. With me in the studio is | :03:57. | :04:03. | |
Nick Robinson and our business editor, Robert Preston. Let's hear | :04:03. | :04:08. | |
just what the Labour leader, Ed Miliband, had to say as he left his | :04:08. | :04:14. | |
house this morning. Before that, let's get our live pictures of the | :04:14. | :04:24. | |
:04:24. | :04:25. | ||
Chancellor leaving. A BBC employee shouting at him there! He's getting | :04:25. | :04:28. | |
into his vehicle with Danny Alexander, the Chief Secretary. | :04:28. | :04:33. | |
Danny Alexander, the man who had to do the detailed negotiations while | :04:33. | :04:41. | |
the Chancellor looked after the overall situation. It's a nice, | :04:41. | :04:47. | |
sunny day. The car is coming out, as it heads through Parliament Square | :04:47. | :04:53. | |
and to the House of Commons. This is a very political Chancellor, so we | :04:53. | :04:56. | |
can expect a lot of politics among the number crunching that has been | :04:56. | :05:03. | |
going on. And a number of little surprises perhaps for the Labour | :05:03. | :05:09. | |
Party will stop maybe just designed to see how Labour reacts. Even the | :05:09. | :05:16. | |
Chancellor has to stop for the buses. I think one of these is one | :05:16. | :05:20. | |
of the new Boris buses, that the Mayor of London said he would bring | :05:20. | :05:24. | |
back. We will leave the Chancellor in the traffic jam. I don't think he | :05:24. | :05:33. | |
will be late. Before we go to our experts in the studio, let's hear | :05:33. | :05:36. | |
what Ed Miliband said in the run-up to this Spending Review this | :05:36. | :05:42. | |
morning. This government has failed, and it's failed so badly that if | :05:42. | :05:47. | |
Labour wins the next election, it will be extremely tough. And it is | :05:47. | :05:50. | |
only responsible for us to promised to reverse cuts if we know exactly | :05:50. | :05:54. | |
where the money is coming from. That is what the British people would | :05:54. | :05:57. | |
expect from us, as a responsible opposition seeking to be in | :05:57. | :06:01. | |
government. But we are also saying that invest now in the things that | :06:01. | :06:08. | |
matter, the things that will get our economy going, construction workers | :06:08. | :06:13. | |
back to work, that would be good for growth and make the choices down the | :06:13. | :06:18. | |
road less painful. Ed Miliband doesn't get to reply and unlike the | :06:18. | :06:22. | |
Budget, it will be the Shadow Chancellor providing -- applying to | :06:23. | :06:28. | |
the Chancellor's statements. Why is the Chancellor doing this? 2015 to | :06:28. | :06:33. | |
2016 is a long way away and he might not even be in power. Indeed, and | :06:33. | :06:37. | |
these are cuts that were not meant to happen, that he didn't foresee | :06:37. | :06:41. | |
happening, that he hoped would never happen. The first answer to your | :06:41. | :06:45. | |
question is simply because the economy has not performed as the | :06:45. | :06:48. | |
hoped and plan for it to do. And therefore the age of austerity, as | :06:49. | :06:54. | |
George Osborne called it, has had to be extended by two yours. Instead of | :06:54. | :07:04. | |
:07:04. | :07:12. | ||
doing deeper cuts for a year, announced it just before the | :07:12. | :07:14. | |
election. It's largely for political reasons. He believed that the voters | :07:14. | :07:16. | |
and the media would pose the question to Labour, the question | :07:16. | :07:19. | |
that he saw Ed Miliband trying to address there. What would you do if | :07:19. | :07:22. | |
you were in government? That is the really deep political reason that we | :07:22. | :07:26. | |
are getting it today. As you suggested, there will be a lot of | :07:26. | :07:32. | |
politics in this speech, designed to say, this is what we do. If we get | :07:32. | :07:36. | |
back into government either on our own or with the Liberal Democrats, | :07:36. | :07:41. | |
keep asking Ed Balls what he'd do. Hasn't Labour shot its box already | :07:41. | :07:44. | |
by beginning the repositioning, implying, Ed Balls has said on | :07:44. | :07:48. | |
various programmes, look, we will reluctantly accept the current | :07:48. | :07:54. | |
spending plans for 2015 to 2016. We may tinker with how we do it but the | :07:54. | :07:58. | |
overall envelope, all right, that is how we will come to power. There | :07:58. | :08:03. | |
were a couple of speeches given by Ed Miliband and Ed Balls. It is | :08:03. | :08:08. | |
clear the spending totals day-to-day, departmental, they will | :08:08. | :08:13. | |
stick to it. Why do I emphasised those words? Because Labour are | :08:13. | :08:18. | |
still saying that if they were in power now, they would borrow more | :08:18. | :08:21. | |
than the government. But they are saying they wouldn't borrow more to | :08:21. | :08:26. | |
reduce the level of cuts needed to run various Whitehall departments. | :08:26. | :08:30. | |
They are saying they would borrow more to invest in infrastructure and | :08:30. | :08:34. | |
building things. Ed Balls has set up to �10 billion more. He doesn't want | :08:34. | :08:44. | |
:08:44. | :08:47. | ||
to put a figure on what that might be in two years time because he | :08:47. | :08:49. | |
says, perfectly reasonably, we don't know what state the economy will be | :08:49. | :08:52. | |
in then. But he's leaving it open. I'm sure George Osborne will bang on | :08:52. | :08:54. | |
about this, that Labour would indeed spend more and borrow more. But | :08:54. | :08:57. | |
Labour have made it clearer, there will not be money to reverse the | :08:57. | :09:00. | |
sorts of cuts we are hearing today unless they can find a little bit | :09:00. | :09:02. | |
more from one budget to subsidise another, or they announce a tax | :09:02. | :09:07. | |
rise. As we've said, this is just a one-year Spending Review. The | :09:07. | :09:11. | |
Chancellor is looking for �11.5 billion of departmental savings. So | :09:11. | :09:15. | |
where will these cuts be made? It is in the Treasury, just across from | :09:15. | :09:19. | |
the Houses of Parliament, the ministers have been making the big | :09:19. | :09:22. | |
decisions, officials have been crunching the numbers there. At the | :09:22. | :09:28. | |
heart of that building lies the circular courtyard. We built, no | :09:28. | :09:31. | |
expense spared, our own virtual courtyard, where Stephanie Flanders | :09:31. | :09:38. | |
has been doing some of her own number crunching. | :09:38. | :09:42. | |
Treasury here may be virtual but the numbers are all too real. Today's | :09:42. | :09:48. | |
statements about tax year 2015 to 2016. The government spending for | :09:48. | :09:53. | |
that year is forecast to be �745 billion. But we are only talking | :09:54. | :09:58. | |
about one part of that bill, the 314 billion that Whitehall departments | :09:58. | :10:01. | |
get for day-to-day spending on things like schools, transport and | :10:01. | :10:06. | |
the police. So where are the Chancellor's cuts going to come | :10:06. | :10:10. | |
from? Let's start with what their budgets look like next year, April | :10:10. | :10:16. | |
2014. You can see the big spenders are health and education, ranging | :10:16. | :10:19. | |
down to foreign aid and the Home Office. So what might happen to | :10:19. | :10:25. | |
these budgets in 2015, the year covered by today's review? If the | :10:25. | :10:28. | |
Chancellor's savings were spread evenly across all these departments, | :10:29. | :10:34. | |
every minister would be facing an extra 2.3% cut after inflation. But | :10:34. | :10:37. | |
we know that won't happen because the government has again promised to | :10:37. | :10:42. | |
ring fence and protect spending for several departments. So the health | :10:42. | :10:46. | |
budget is protected will stop spending on that won't fall and | :10:46. | :10:50. | |
could show a small rise in real terms. And the education budget will | :10:50. | :10:54. | |
only fall a bit, because most of its budget, but money it spends on | :10:54. | :10:59. | |
schools in England, has been ring-fenced. Foreign aid spending, | :10:59. | :11:03. | |
that will go up. The government has promised it will grow as fast as the | :11:03. | :11:08. | |
economy. But savings fairly evenly on all the other unprotected | :11:08. | :11:12. | |
departments, you can see they'd all be looking at a real terms cut of | :11:12. | :11:17. | |
6.1%. That is on top of the 20% or more they've already found in saving | :11:17. | :11:22. | |
since 2010. But the cuts weren't spread that ease -- evenly in the | :11:22. | :11:25. | |
last Spending Review. The Chancellor follows the same pattern as before, | :11:25. | :11:30. | |
we can expect defence to come off relatively lightly, and another big | :11:30. | :11:34. | |
squeeze the local government, the Home Office and transport. They will | :11:34. | :11:39. | |
have then seen their budget cut by a third in real terms since 2010. But | :11:40. | :11:43. | |
of course, what is missing from this picture is something we've heard a | :11:43. | :11:49. | |
lot about recently. Welfare. In 2015, spending on benefits and tax | :11:49. | :11:56. | |
credit is expected to be �220 billion, and nearly a third of | :11:56. | :11:59. | |
spending. Many in his party would like the Chancellor to find more | :11:59. | :12:05. | |
savings there, but it's not on the agenda today. | :12:05. | :12:10. | |
The Spending Review was a very British event, but it takes place in | :12:10. | :12:14. | |
an international context. We had a real banking scare in China last | :12:14. | :12:18. | |
week, it sent tremors around the world. We've heard the US Federal | :12:18. | :12:22. | |
Reserve saying it's going to begin to withdraw the money that it's been | :12:22. | :12:27. | |
printing, that is pushing up bond yields. And we've got yet another | :12:27. | :12:31. | |
gigantic financial scandal in Italy. The backdrop is not great. | :12:31. | :12:37. | |
Know, the international picture isn't pretty at the moment. We had | :12:37. | :12:40. | |
probably the most powerful player in the international markets, Ben | :12:41. | :12:46. | |
Bonallack, the chairman of the Federal Reserve, talking out loud | :12:46. | :12:51. | |
about ending mass of money creation, quantitative easing, that | :12:51. | :12:56. | |
the US Federal Reserve has been engaging in to prop up the US | :12:56. | :13:01. | |
economy. Investors didn't like what they heard. The price of US Treasury | :13:01. | :13:06. | |
bonds, US government debt fell. That in effect put up the interest rate | :13:06. | :13:11. | |
which the US government pays to borrow. The US government's interest | :13:11. | :13:16. | |
rate is, in a way, the interest rate benchmark for the whole world. If | :13:16. | :13:20. | |
the price that the US government has to pay to borrow goes up, so, too, | :13:20. | :13:26. | |
does the price we have to pay. that has been happening. | :13:26. | :13:30. | |
example, the price of British government debt has fallen and | :13:30. | :13:33. | |
therefore the implied interest rate that the British government has to | :13:33. | :13:40. | |
pay to go up has fallen really quite steeply. It raises the prospect not | :13:40. | :13:44. | |
only of his interest bill going up at a time when he hasn't got a lot | :13:44. | :13:50. | |
of money to spend, but of things that are worse than that. We had an | :13:50. | :13:53. | |
interesting document published by the Bank of England which raised the | :13:53. | :13:57. | |
possibility that because of the fall in all this debt which is held by | :13:57. | :14:02. | |
the banks, there could be quite big losses for the banks and it's now | :14:02. | :14:06. | |
conducting an investigation to find out if the price of that debt would | :14:06. | :14:10. | |
continue to fall in a sharp way, how damaging would that be for our | :14:10. | :14:18. | |
banking system, as it comes out of the last crisis and is attempting to | :14:18. | :14:23. | |
strengthen itself? In China, we know that they have a problem with | :14:23. | :14:27. | |
potentially really big, bad debts from a mass of lending spree that | :14:27. | :14:33. | |
took place over the last few years. The financial backdrop to this very | :14:33. | :14:38. | |
British event is unsettling. Indeed. This Spending Review could be taking | :14:38. | :14:41. | |
place at a time when we are now at the beginning of the end of the | :14:41. | :14:47. | |
cheap money that has been flooding into most Western economies. Along | :14:47. | :14:50. | |
with that comes low interest rates. Today's programme, we will be | :14:50. | :14:52. | |
getting reaction to the Chancellor's statement in Bury | :14:52. | :15:02. | |
:15:02. | :15:04. | ||
market. We are waiting to find out where the Chancellor's knife will | :15:04. | :15:09. | |
fall on spending in a few years' time. I'm joined by a councillor | :15:09. | :15:12. | |
from the Local Government Association. Councils have had their | :15:12. | :15:16. | |
budgets cut quite significantly over the past few years. Can they take | :15:16. | :15:21. | |
another 10%? Councils have lost 20% of their budget. The Prime Minister | :15:21. | :15:25. | |
says that local government is the most efficient of the public sector | :15:25. | :15:29. | |
but a further 10% cut in our budget will mean a loss of essential | :15:29. | :15:36. | |
services that people rely on to have a good quality of life, libraries, | :15:36. | :15:40. | |
museums, Children's Centres and sports centres. | :15:40. | :15:45. | |
There could be a loss of services that matter a lot to local people. | :15:45. | :15:48. | |
The Government says you could downup services more etch feckively. What | :15:48. | :15:54. | |
do you say to that -- effectively? We need Government to remove the | :15:54. | :15:58. | |
ringfencing or spending around health and education, remove | :15:58. | :16:02. | |
bureaucracy and red tape and get out the way so local councils can work | :16:02. | :16:06. | |
together with health and education to join up local services and make | :16:06. | :16:10. | |
them much more efficient, protect jobs and local services that people | :16:10. | :16:13. | |
rely on. Thank you very much Mr Khan. That's the council view here | :16:13. | :16:17. | |
in Bury market. The council is very involved in the running of this | :16:17. | :16:21. | |
market which boasts something like nine million visitors a year, that's | :16:21. | :16:27. | |
a lot of people. There are over 370 stalls and, as you look around here, | :16:27. | :16:30. | |
it's buzzing. But is the picture that rosy for local businesses? | :16:30. | :16:35. | |
Well, let's catch up with Bill Thompson who is standing by the hog | :16:35. | :16:40. | |
roast stand. I understand that will be going at 2 o'clock. Is it good | :16:40. | :16:46. | |
for business here at the moment? Well, obviously market day in Bury | :16:46. | :16:51. | |
is always very busy. The Federation of Market businesses would like to | :16:51. | :16:58. | |
see more done. We have wrote to Chancellor to ask how things will be | :16:58. | :17:02. | |
financed. We have been advocating for many years to get away from the | :17:02. | :17:07. | |
big high street banks to give alternatives to small businesses who | :17:07. | :17:10. | |
can grow businesses. Without small businesses growing, the country | :17:10. | :17:14. | |
isn't going to rebirth itself. structure would you like to see to | :17:14. | :17:19. | |
help businesses in the region? brink banking, the road and rail | :17:19. | :17:24. | |
network -- the British banking. The HS 2 has been looked at. The road | :17:24. | :17:28. | |
network needs looking at and the Broadband issue in rural areas | :17:29. | :17:31. | |
because there are very few businesses because there is no | :17:31. | :17:34. | |
access to the Internet and Broadband. | :17:34. | :17:37. | |
Phil Thompson, thank you very much. We also want to hear what you think. | :17:37. | :17:45. | |
Our viewers. Who best to gauge reaction but from our expert, good | :17:45. | :17:51. | |
morning to you from BBC Money Box live? People can contact us at | :17:51. | :17:58. | |
Twitter, they can e-mail us at haveyoursay and the text is 61124. | :17:58. | :18:03. | |
Many suggestions for cuts coming in. Sue from Twickenham says why does | :18:03. | :18:08. | |
the Government persist in ringfencing overseas aid at the | :18:08. | :18:14. | |
expense of Britain. HS2 another popular target and Trident, people | :18:14. | :18:19. | |
want to get rid of that. My favourite, Paul, I said what should | :18:19. | :18:24. | |
you cut and he said treasury biscuits! I wonder how much would be | :18:24. | :18:29. | |
raised if they managed to cut out the biscuit budget. They spend �3 | :18:29. | :18:33. | |
million a year on biscuits in Whitehall we are told. That's a lot | :18:33. | :18:38. | |
of biscuits. What do we already know? There is speculation that | :18:38. | :18:41. | |
Winter Fuel Payments to UK pensioners living overseas may be | :18:41. | :18:45. | |
cut if they live in warmer countries. Some can claim it even in | :18:45. | :18:49. | |
the tropics. Public sector pay, could be further cuts in that which | :18:49. | :18:53. | |
would be very bad news for the public sector workers watching and | :18:53. | :18:58. | |
possibly an overall cap on welfare payments, so even if people can | :18:58. | :19:01. | |
claim benefits, ultimately the Government will say no more than a | :19:01. | :19:05. | |
certain amount. A difficult thing to do, but there 'll probably be a | :19:05. | :19:09. | |
consultation on that. Paul, thank you very much. Keep contacting us | :19:09. | :19:12. | |
over the next hour or so. We'll hear from the Chancellor in about 45 | :19:12. | :19:19. | |
minutes. Back to you, Andrew. Thanks, Jo Co. Bring us back a jumbo | :19:19. | :19:25. | |
chicken, never mind the biscuits. �7 quid! I'll grab one. Lunch sorted | :19:25. | :19:29. | |
for tomorrow! A quick reminder that you can get | :19:29. | :19:32. | |
the latest on the spending review on the BBC website. You can find the | :19:32. | :19:37. | |
link to the live page at www.bbc.co.uk/economy. You will find | :19:37. | :19:40. | |
in-depth coverage there and, if you are out and about today, you can | :19:40. | :19:46. | |
still follow all the latest developments and BBC analysis with | :19:46. | :19:52. | |
BBC correspondents on Twitter. Go to BBC News and subscribe to the | :19:52. | :19:57. | |
spending review Twitter list. It's free. Go on, do it! | :19:57. | :20:01. | |
If you are just joining us, you are watching our special coverage of the | :20:01. | :20:04. | |
spending review coming live from Westminster here in the heart of | :20:04. | :20:10. | |
London. Let's join Matthew am Ralls wall loo outside the House of | :20:10. | :20:16. | |
Commons. Thank you very much. We haven't heard the words green shoots | :20:16. | :20:21. | |
from the Chancellor, but he's said the economy is of of intensive care. | :20:21. | :20:25. | |
What is the real picture? We have pulled together some of the key | :20:25. | :20:28. | |
indicators of recent weeks to get a better idea of how the economy is | :20:28. | :20:38. | |
:20:38. | :20:38. | ||
Apology for the loss of subtitles for 81 seconds | :20:38. | :21:59. | |
That's the economic backdrop. Let's discuss the politics of this. With | :21:59. | :22:04. | |
me here is Harriet Baldwin, Cathy Jamieson and Stephen Williams. Thank | :22:04. | :22:08. | |
you all for being here with me. Harriet Baldwin first of all, the | :22:08. | :22:12. | |
very fact that we are having this spending review, is it an admission | :22:12. | :22:17. | |
of failure. In 2010, George Osborne said we'd be finished by 2015? | :22:17. | :22:20. | |
what we are doing is healing an economy that was in a difficult | :22:20. | :22:24. | |
state with a big budget deficit and what we have encountered is problems | :22:24. | :22:28. | |
in the eurozone which have slowed things down and so yes, I would | :22:28. | :22:31. | |
agree, the economy has not been as strong as we'd have liked it over | :22:31. | :22:35. | |
the last couple of years. The signs, as you say saw, is that we are going | :22:36. | :22:39. | |
from the rescue phase into a more sustainable recovery and I hope what | :22:39. | :22:42. | |
we'll hear today from the Chancellor is more initiatives that will back | :22:42. | :22:46. | |
that. Isn't the truth that you have been blown off course because you | :22:46. | :22:50. | |
are good at cutting Government spending in departments, but growth | :22:50. | :22:54. | |
has alluded you, you have a one-legged strategy? Job growth has | :22:54. | :22:58. | |
been very strong, so there are more people working today than ever in UK | :22:58. | :23:02. | |
history. We have had 1. 3 million jobs that have been created in the | :23:02. | :23:06. | |
private sectorment so I think that's an important part of examining how | :23:06. | :23:10. | |
the economy's done. We have to see a higher rate of growth. You saw the | :23:10. | :23:16. | |
figures out there? The survey data suggests those are more positive in | :23:16. | :23:19. | |
terms of the forward looking numbers, but the survey data in | :23:19. | :23:24. | |
terms to have outlook and the positive Septemberment amongst some | :23:24. | :23:27. | |
of the sectors, which are very important, are significant, and I | :23:27. | :23:32. | |
hope the Chancellor will back it with more infrastructure spending. | :23:32. | :23:36. | |
Cathy Jamieson, we have heard your leader accept that the �11. 5 | :23:36. | :23:39. | |
billion, that spending cut envelope will be the starting point if you | :23:39. | :23:43. | |
win the election. You have opposed for three years every cut. Now you | :23:43. | :23:46. | |
have thrown in the towel and the Government's right on the deficit, | :23:46. | :23:51. | |
aren't they? The aren we are having the spending review is that the | :23:51. | :23:54. | |
Chancellor's got it wrong on the strategy, he hasn't achieved the | :23:54. | :23:58. | |
growth figures he promised or cut the deficit and he's borrowing more | :23:58. | :24:01. | |
than planned. As a responsible opposition, looking to be in | :24:01. | :24:05. | |
Government, what we have said is that we will have to accept the | :24:05. | :24:08. | |
overall spending envelope for the first year, but we'd not have done | :24:08. | :24:12. | |
what the Chancellor's done up to now and we'd make different choices. | :24:13. | :24:16. | |
What are the different choices? You have been talking about Universal | :24:16. | :24:20. | |
benefits. Are they going to go? have mentioned particularly the | :24:20. | :24:24. | |
issue about the onetering fuel allowances for the wealthiest of | :24:24. | :24:30. | |
pension pensioners. What about bus passes, free TV licences? We have | :24:30. | :24:34. | |
heard Ed Balls and Ed Miliband indicate those are not on the | :24:34. | :24:37. | |
agenda. The important point for the figures was that it showed that | :24:37. | :24:42. | |
manufacturing... Why not if you are talking about fairness? It's about | :24:42. | :24:48. | |
the cost involved in doing that, for one thing, but also bus passes, you | :24:48. | :24:52. | |
know, enables people to get around, it helps people with mobility and so | :24:52. | :24:56. | |
on. To go back to the figures, manufacturing and construction | :24:56. | :25:01. | |
sectors are not performing performing as well as we'd have | :25:01. | :25:06. | |
thought. Some unemployment figures show that it's beginning to work? | :25:06. | :25:11. | |
The sales figures showed improvements in manufacturing and | :25:11. | :25:16. | |
that's why we need structure. accept that for the ordinary family | :25:16. | :25:21. | |
out there watch, Stephen, things could not be tougher in terms of the | :25:21. | :25:27. | |
disposable income? Lowest living standards for a decade? It's a very | :25:27. | :25:31. | |
difficult time for the people out there. We have to make sure all the | :25:31. | :25:36. | |
cuts we are making, which are necessary, are cushioning for the | :25:36. | :25:40. | |
poorest in society and the richest will bear the brunt of the tax rises | :25:40. | :25:44. | |
and changes. We have got a Conservative Chancellor, a Lib Dem | :25:44. | :25:46. | |
can Chief Secretary, Lib Dem Business Secretary working together | :25:46. | :25:55. | |
to try and get growth going in the economy. But a huge part of the | :25:55. | :26:00. | |
budget is cuts. Why have you opposed cuts? Sweeping changes have been | :26:00. | :26:04. | |
made. We need time for the changes to bed down and what we, as the | :26:04. | :26:07. | |
Liberal Democrats have said, we don't want to ask for more from the | :26:07. | :26:11. | |
poorest in society until we have taken more off the rich. That's why | :26:11. | :26:15. | |
we are in favour of the mansion tax. We can't get agreement with | :26:15. | :26:19. | |
coalition partners on that issue, so we have agreed to park welfare | :26:19. | :26:23. | |
reform and tax rises on the rich and that will be an issue on the next | :26:23. | :26:29. | |
general election. In one sentence, more cuts to come? All the | :26:29. | :26:37. | |
projections, �23 or �24 billion for more savings in 2016, 2017, tax | :26:37. | :26:41. | |
rises, isn't that the reality of what we'll face? We have tried to | :26:41. | :26:45. | |
make sure we have given a tax cut to people in work by raising the | :26:45. | :26:49. | |
personal threshold. 2015-16, the year we are talking about this year, | :26:49. | :26:54. | |
we are looking a at a deficit of still �80 billion so it will be | :26:54. | :26:56. | |
spending control for some time to come I think. | :26:56. | :27:00. | |
There we have to leave it. Thank you all very much. From here, back to | :27:00. | :27:05. | |
you in the studio. It's coming up to midday here on BBC | :27:05. | :27:10. | |
Two and the BBC News Channel. In a moment, we'll cross live to the | :27:10. | :27:13. | |
House of Commons for Prime Minister's Questions after which the | :27:13. | :27:15. | |
Chancellor will get to his feet straight after the Prime Minister, | :27:15. | :27:20. | |
to deliver the spending review. Beautiful shot there of the Palace | :27:20. | :27:23. | |
of Westminster in what is a reasonable summers' day. Not many in | :27:23. | :27:28. | |
London so far, but this is a decent one. Stephanie Flanders joins us to | :27:28. | :27:34. | |
make up the BBC's three newsbling tiers assembling round the table on | :27:34. | :27:38. | |
occasions like this. If he's looking for another �11 billion of cuts, | :27:38. | :27:42. | |
Stephanie, does this mean he's assuming that even by 2015, there | :27:42. | :27:46. | |
won't be much of a recovery? You are quite right that all of the numbers | :27:46. | :27:50. | |
we are talking about today and all of the numbers the Chancellor's had | :27:50. | :27:53. | |
to work from in thinking whether or not we needed to have further | :27:53. | :27:56. | |
austerity are all based on what the office of budget responsibility | :27:56. | :28:00. | |
thinks is going to happen to the economy. They started off, when he | :28:00. | :28:04. | |
was writing his first plans in 2010, with a fairly pessimistic view of | :28:04. | :28:08. | |
what the recovery would be like. They knew it might not be a normal | :28:08. | :28:12. | |
recovery because we had a massive financial crisis. It turned out that | :28:12. | :28:15. | |
that obviously things were much worse. They now have - the reason | :28:15. | :28:20. | |
why we are looking at this cuts - they now have what many say would be | :28:20. | :28:25. | |
a gloomy view, not just about what's happened in the last few years be, | :28:25. | :28:28. | |
buzz what the economy is capable of. That's what makes the structural | :28:28. | :28:33. | |
hole in the budget that he's trying to fill so large. We might have | :28:33. | :28:37. | |
temporary borrowing if we had slow growth, it doesn't have to be | :28:37. | :28:40. | |
permanent, buts the Office for Budget Responsibility decided it was | :28:40. | :28:42. | |
permanent which is why we are here frankly. It's quite possible, when | :28:42. | :28:47. | |
you look at the forecasts now for 2015, even though it's only the | :28:47. | :28:51. | |
office of budget responsibility expecting us to going back to what | :28:51. | :28:58. | |
we thought would have been a normal trend growth rate in 2015, which is | :28:58. | :29:05. | |
seven or eight years after the crisis began. In the past, we have | :29:05. | :29:12. | |
had forecasts revised up. You might have to do more of course. The | :29:12. | :29:16. | |
directions of changes have gone in a negative direction, but it could be | :29:16. | :29:19. | |
better or could turn out to be better. | :29:19. | :29:23. | |
We got this picture, I think it was the Treasury released it last night, | :29:23. | :29:28. | |
Nick, I want you to tell us about this. What is the political | :29:28. | :29:33. | |
significance of this picture? half eaten burger, chips and diet | :29:33. | :29:38. | |
coke, the an austerity dinner at the Treasury. Politicians in action, | :29:38. | :29:42. | |
real guys, by the way, not out of touch is what Tweeting foe toes | :29:42. | :29:48. | |
allow you to say. Are we allowed to film or do interviews? No, but we | :29:48. | :29:51. | |
get these specially crafted, carefully produced images of what | :29:52. | :29:55. | |
spin doctors would like us to think politicians' lives are like. Having | :29:55. | :30:01. | |
been in that office under several Chancellors, there often is old | :30:01. | :30:05. | |
pizza boxes as the officials and the spim doctors and ministers sit | :30:05. | :30:15. | |
:30:15. | :30:20. | ||
around a table until very late at Chancellor, you know. What can we | :30:20. | :30:30. | |
:30:30. | :30:31. | ||
say? Do you know what kind of burger it was? You have not managed to find | :30:31. | :30:38. | |
that out? I resign on the spot!What is business going to be looking for? | :30:38. | :30:42. | |
I think business will broadly take the view that this isn't much of a | :30:42. | :30:45. | |
event for them. If he didn't deliver the cuts and therefore the outlook | :30:45. | :30:55. | |
:30:55. | :30:55. | ||
Apology for the loss of subtitles for 81 seconds | :30:55. | :31:42. | |
for the deficit was worst... interest rates low. Perhaps the | :31:43. | :31:44. | |
for the deficit was worst... going to interrupt you admit that | :31:44. | :31:54. | |
:31:54. | :32:07. | ||
Secretary said "work will begin immediately on 261 projects under | :32:07. | :32:11. | |
the priority school building programme. " Can the Prime Minister | :32:11. | :32:17. | |
tell the House how many have begun? What I can tell him is that | :32:17. | :32:19. | |
infrastructure spending under this Government has been higher than it | :32:19. | :32:23. | |
was under Labour and we have around �14 billion reserved for capital | :32:23. | :32:28. | |
spending on our schools. We have had to clear up the appalling mess left | :32:28. | :32:38. | |
:32:38. | :32:43. | ||
by the Building Schools for the Future programme. The answer is that | :32:43. | :32:49. | |
261 schools were promised. Only one has started. Now perhaps you can | :32:49. | :32:57. | |
explain why. We've had to recover from the appalling mess of the | :32:57. | :32:59. | |
Building Schools for the Future programme. That is the mess that we | :32:59. | :33:05. | |
inherited, as well as a record deficit. But it is this government, | :33:05. | :33:08. | |
as the Chancellor will announce in a minute, that are providing half a | :33:08. | :33:14. | |
million extra school places. I don't think he knew the answer to that | :33:14. | :33:22. | |
one. In October 2011, he said he wanted to bring forward, I quote, | :33:22. | :33:28. | |
every single infrastructure project that is in the pipeline. So out of | :33:28. | :33:37. | |
576 projects set out, how many have been completed? Our annual | :33:37. | :33:43. | |
infrastructure investment is �33 billion a year. That is four billion | :33:43. | :33:47. | |
more every year than ever achieved under Labour. Now let me give him | :33:47. | :33:52. | |
the figures for road schemes. We are investing more in major road schemes | :33:52. | :33:57. | |
in each of the first... Order. The answer from the Prime Minister must | :33:57. | :34:04. | |
be heard. Questions to him, from which ever side of the House, must | :34:04. | :34:14. | |
be heard. It is very clear and simple. It is called democracy. | :34:14. | :34:21. | |
You cannot build a nuclear power station overnight. By the way, they | :34:21. | :34:26. | |
had 13 years, they didn't build a single one. Let me give him the | :34:26. | :34:32. | |
figures. This government, on rail, is electrifying more than 300 miles | :34:32. | :34:36. | |
of railway routes. Perhaps he could tell us how many were electrified | :34:36. | :34:44. | |
under Labour, how many? Nine miles. That is the Labour record that this | :34:44. | :34:52. | |
government is recovering from. new hospitals under a Labour | :34:52. | :34:59. | |
government. 3700 schools rebuilt under a Labour government. 3500 new | :34:59. | :35:05. | |
children's Centre all under a Labour government. He's got no answer so | :35:05. | :35:12. | |
let me tell him the answer again. The answer is seven out of 576, and | :35:12. | :35:16. | |
five of them were started under the last Labour government. He said it | :35:16. | :35:20. | |
takes a long time to complete these projects. I thought he might say | :35:20. | :35:26. | |
that. 80% of them haven't even been started, despite the promises of two | :35:26. | :35:31. | |
years ago. More promises, no delivery. Let's see if he can answer | :35:31. | :35:35. | |
another one. Last year, the government said new buying guarantee | :35:35. | :35:41. | |
scheme would help 100,000 people buy a new home. How many has it helped | :35:41. | :35:46. | |
so far? It has helped thousands of people and been welcomed by the | :35:46. | :35:50. | |
entire industry. He talks about what was built under a Labour | :35:50. | :35:54. | |
government, we saw the results. A PFI scheme that we are still paying | :35:54. | :36:01. | |
the debt on. We saw the results at 11% of GDP budget deficit that this | :36:01. | :36:06. | |
government will cut in half. That is the proof of what we are doing. We | :36:06. | :36:12. | |
all know that the one question he has two answer is will he now admit | :36:12. | :36:18. | |
he wants to put borrowing up, will you admit it? Every time I come to | :36:18. | :36:22. | |
prime ministers questions, I ask a question and he doesn't and other | :36:22. | :36:28. | |
question, he just asks me one. The only fact this House needs to know | :36:28. | :36:33. | |
about borrowing is that contrary to the promised the Chancellor made in | :36:33. | :36:38. | |
his Autumn statement, it went up last year. That is the truth. Let me | :36:38. | :36:48. | |
:36:48. | :36:48. | ||
Apology for the loss of subtitles for 81 seconds | :36:48. | :37:50. | |
answer the question he didn't know the answer to. He have to say that | :37:50. | :38:00. | |
:38:00. | :38:00. | ||
is why half the country think he is from the Muppets. Will you admit | :38:00. | :38:10. | |
:38:10. | :38:18. | ||
borrowing would go up under Labour? Borrowing was up last year. We said | :38:18. | :38:23. | |
we are all in it together, but living standards are falling. He | :38:24. | :38:29. | |
promised to get Britain building, they haven't. All you need to know | :38:29. | :38:32. | |
about this Chancellor's Spending Review is that British people are | :38:32. | :38:42. | |
:38:42. | :38:42. | ||
paying the price for their failure. Mr Speaker, let us remember what the | :38:42. | :38:47. | |
leader of the opposition said at the time of the last Spending Review. He | :38:47. | :38:51. | |
told us unemployment would go up, it's gone down. He told us crime | :38:51. | :38:55. | |
would go up, it's gone down. He told us volunteering would go down, it's | :38:55. | :38:59. | |
gone up. He told us that poorer students wouldn't go to university, | :38:59. | :39:03. | |
the percentage as has gone up. We told us our immigration policy | :39:03. | :39:07. | |
wouldn't work, but we've cut immigration by a third. As ever, | :39:07. | :39:12. | |
wrong about the economy, wrong about everything, never trusted by the | :39:12. | :39:22. | |
:39:22. | :39:22. | ||
British people. Thank you, Mr Speaker. Today, the government | :39:22. | :39:27. | |
publishes the spending round for 2015 to 2016. Can the Prime Minister | :39:27. | :39:31. | |
confirm that it rejects the representations to borrow less by | :39:31. | :39:35. | |
borrowing more, as proposed by the party opposite? My honourable friend | :39:35. | :39:39. | |
makes a very good point. On Saturday, the leader of the Labour | :39:39. | :39:43. | |
Party told us there would be iron discipline on spending. On Sunday, | :39:43. | :39:48. | |
the Shadow Chancellor was asked five times on the television and admits | :39:48. | :39:52. | |
that, yes, borrowing would go up. They want to borrow less by | :39:52. | :39:56. | |
borrowing more. They want to spend less by spending more. They want to | :39:56. | :40:01. | |
cut welfare by spending more on welfare. No wonder it's not just | :40:01. | :40:11. | |
:40:11. | :40:20. | ||
people at Wimbledon saying new balls, please! Order. Order. Order. | :40:20. | :40:29. | |
In congratulating the honourable gentleman on his birthday, I called | :40:29. | :40:39. | |
:40:39. | :40:43. | ||
Mr David Winick. Is the Prime Minister aware how shocking it was | :40:43. | :40:46. | |
that the police apparently spent more time investigating the parents | :40:46. | :40:53. | |
and friends of Stephen Lawrence than the racist murder itself, which took | :40:53. | :40:57. | |
place in 1993? Is the Home Secretary, when she meets Mrs | :40:58. | :41:03. | |
Lawrence, is she going to apologise for what occurred, and is it really | :41:03. | :41:07. | |
right for the police to investigate itself? I think the honourable | :41:07. | :41:12. | |
gentleman makes an extremely serious point. The Lawrence family have | :41:12. | :41:16. | |
suffered appallingly. They lost their son. There was the failure to | :41:17. | :41:20. | |
investigate properly for year after year. Now they hear these | :41:20. | :41:23. | |
allegations that the police were trying to undermine them rather than | :41:23. | :41:29. | |
help them. The Home Secretary set out in the House on Monday these two | :41:29. | :41:34. | |
enquiries, independent enquiries already under way. She has met again | :41:34. | :41:39. | |
with Mark Ellison to see this morning, to make sure his enquiry | :41:39. | :41:43. | |
will cover the allegations that were made overnight about the bugging by | :41:43. | :41:48. | |
the police of a friend of Stephen Lawrence. But nothing is off the | :41:48. | :41:53. | |
table. If more needs to be done, if further investigations or enquiries | :41:53. | :41:57. | |
need to be held, they will be held. This is not an acceptable situation | :41:57. | :42:05. | |
and we must get to the bottom of it. My back to see constituency is | :42:05. | :42:09. | |
attracting a large amount of inward investment for major infrastructure | :42:09. | :42:12. | |
projects from around the world. Does the Prime Minister agree with me | :42:12. | :42:16. | |
that one of the ways in which we are restoring the UK's credibility | :42:16. | :42:20. | |
overseas is by dealing with our debts and showing how we fund public | :42:20. | :42:27. | |
spending properly? Battersea Power Station, which for all those years | :42:27. | :42:31. | |
under Labour stood there completely empty and unused, the redevelopment | :42:31. | :42:35. | |
is going to be starting this year. Because under this government we | :42:35. | :42:40. | |
take infrastructure seriously, we get investors to come into our | :42:40. | :42:43. | |
country and beget project started. Unlike the wasted years under | :42:43. | :42:51. | |
Labour. Never Battersea, what about Bassetlaw? In its last six years, | :42:51. | :42:54. | |
the Labour government delivered �225 million worth of major | :42:54. | :42:58. | |
infrastructure projects. Can the Prime Minister confirm that under | :42:58. | :43:03. | |
his three years there has been zero delivery of such projects, the row | :43:03. | :43:08. | |
starts of such projects, and when will the Prime Minister stopped | :43:08. | :43:13. | |
faffing around and get the new flyover and the new Selby Park | :43:13. | :43:17. | |
School, guaranteed by the last government, started in my | :43:18. | :43:23. | |
constituency? The last government made a lot of guarantees, they wrote | :43:23. | :43:28. | |
a lot of checks but they couldn't deliver. They left us with this | :43:28. | :43:34. | |
enormous deficit. Let me give him the figures. Our spending on capital | :43:34. | :43:38. | |
spending is higher than what Labour planned. The annual infrastructure | :43:38. | :43:42. | |
investment is �33 billion. That is �4 billion higher than they achieved | :43:42. | :43:46. | |
even in the boom years. That is what happened. They had an unaffordable | :43:46. | :43:51. | |
boom, a painful bust and it is this government that is delivering the | :43:51. | :43:59. | |
recovery. The Prime Minister knows Ipswich well. He knows it has some | :43:59. | :44:04. | |
of the poorest wards in the country. He will know that two of those wards | :44:04. | :44:08. | |
were promised schools by the previous government. They didn't | :44:08. | :44:12. | |
deliver them in 13 years. I've just been to the topping out ceremony of | :44:12. | :44:18. | |
one of them delivered by this government. When it comes to | :44:18. | :44:24. | |
promises for the least advantaged people in our community, they are | :44:24. | :44:29. | |
very good at promising. We deliver. My honourable friend is right. They | :44:29. | :44:34. | |
don't like hearing the evidence of the new schools being built by this | :44:34. | :44:40. | |
government in difficult times. Also, when we talk about the East of | :44:40. | :44:46. | |
England, of course, year after year there were calls for improvements to | :44:46. | :44:51. | |
the motorway. Never delivered, delivered by this government. | :44:51. | :44:54. | |
staging of the G8 proved that Northern Ireland is open to the | :44:54. | :44:59. | |
world for business. Now we need the business of the world to come to | :44:59. | :45:04. | |
Northern Ireland. Can the Prime Minister give us an outline of what | :45:04. | :45:08. | |
he will do in conjunction with the American administration and the | :45:08. | :45:11. | |
Northern Ireland executive to deliver a very successful inward | :45:11. | :45:15. | |
investment conference in October, to deliver thousands of much-needed | :45:15. | :45:19. | |
private-sector jobs. I'm looking forward to coming to Northern | :45:19. | :45:22. | |
Ireland for the vital investment conference. I think what we will be | :45:22. | :45:28. | |
able to demonstrate is not only the success of the G8 and the great | :45:28. | :45:32. | |
advertisement that was for Northern Ireland, but the coming together of | :45:32. | :45:36. | |
the UK Government and the Northern Irish assembly, with the plans for | :45:36. | :45:41. | |
economic development, and also for breaking down the barriers within | :45:41. | :45:45. | |
Northern Ireland between different communities. I think that shared | :45:45. | :45:48. | |
future agenda is not just important for the future of society in | :45:48. | :45:50. | |
Northern Ireland, it's also important for the future of our | :45:50. | :46:00. | |
:46:00. | :46:01. | ||
economy. . What reassurance can the Prime Minister give the women in | :46:01. | :46:03. | |
Afghanistan that the Government will continue efforts to make sure that | :46:03. | :46:07. | |
there is no return to the threats to women that they've seen in | :46:07. | :46:11. | |
Afghanistan in the past? My right honourable friend makes an | :46:11. | :46:14. | |
important point and we should continue to support the Afghan | :46:14. | :46:18. | |
constitution which gives important guarantees in this regard. I spoke | :46:18. | :46:24. | |
yesterday to President Karzai, including about this issue of the | :46:24. | :46:28. | |
Afghan constitution and how important it is. We have making a | :46:28. | :46:36. | |
major investment by supporting the forces and the programme to help | :46:36. | :46:40. | |
secure these sorts of advances in Afghanistan that we all want to see. | :46:40. | :46:43. | |
Thank you, Mr Speaker. Further to the question that the Prime Minister | :46:43. | :46:48. | |
failed to answer last week, can he confirm that he's never had a | :46:48. | :46:52. | |
conversation with Lynton Crosby about alcohol pricing or cigarettes? | :46:52. | :46:56. | |
The question is not, has he been lobbied, the question is, has he had | :46:56. | :47:01. | |
that conversation? As I said last week, I've never been lobbied by | :47:01. | :47:04. | |
Lynton Crosby about anything, but the difference between me and | :47:04. | :47:08. | |
frankly every member of the party opposite is, I can also put my hand | :47:08. | :47:12. | |
on my heart and say I've never been lobbied by Trade Union after Trade | :47:12. | :47:16. | |
Union making donation after donation, fixing Parliamentary | :47:16. | :47:19. | |
selection after Parliamentary selection. That is the real problem | :47:19. | :47:29. | |
:47:29. | :47:33. | ||
in British politics and it's time we Thank you, Mr Speaker. With Armed | :47:33. | :47:35. | |
Forces Day... THE SPEAKER: It's a very important | :47:35. | :47:39. | |
matter! Mr Berry must be heard. Mr Berry? | :47:39. | :47:44. | |
Thank you, Mr Speaker. With Armed Forces Day in mind this weekend, | :47:44. | :47:48. | |
would my right honourable friend join me in supporting a campaign | :47:48. | :47:56. | |
being brought about in Rossendale and Darwin being supported by local | :47:56. | :48:01. | |
newspapers encouraging local residents to pack boxes to those | :48:01. | :48:06. | |
serving in Afghanistan. We hope to have packed 500 by the weekend. | :48:06. | :48:08. | |
congratulate my right honourable friend and for everyone taking part | :48:08. | :48:13. | |
in this excellent initiative, I think actually these boxes - I've | :48:13. | :48:17. | |
seen them not only being packed here in Britain but also unloaded in | :48:17. | :48:20. | |
Afghanistan - I can see the huge pleasure and support Thai give to | :48:20. | :48:25. | |
our troops in Afghanistan. I also think we should continue to use the | :48:25. | :48:29. | |
money that's been raised in fines from irresponsible bankers over the | :48:29. | :48:33. | |
club lib inquiry continue to use that money to invest in the Armed | :48:33. | :48:36. | |
Forces covenant. Under this Government, we are making real | :48:36. | :48:39. | |
progress in delivering that help and support to Armed Forces and their | :48:39. | :48:43. | |
families and their communities. Thank you, Mr Speaker. In October | :48:43. | :48:48. | |
2010, the Prime Minister told the Conservative party Conference in | :48:48. | :48:51. | |
five years e' time, we'll have balanced the books. That promise is | :48:51. | :48:55. | |
going to be broken, isn't it, Prime Minister? | :48:55. | :48:59. | |
We have cut the deficit by a third, we'll cut it further by the next | :48:59. | :49:03. | |
election, but frankly, coming to this House, complaining about | :49:03. | :49:07. | |
borrowing, when you've got plans to put it up, is a pretty odd political | :49:07. | :49:13. | |
strategy. That's the question he's got to ask his frontbench - why, if | :49:13. | :49:18. | |
borrowing is a problem, is the Labour policy to put it up? Thank | :49:18. | :49:24. | |
you, Mr Speaker. In 2008, Labour buried three reports | :49:24. | :49:30. | |
warning of a fear of culture in the NHS and inspections. Now we find the | :49:30. | :49:34. | |
CQC has buried concerns over baby deaths. Will the Prime Minister | :49:34. | :49:40. | |
support a root and branch review of the sinister culture of cover-up in | :49:40. | :49:46. | |
our NHS over the last decade? First of all, can I commend my right | :49:46. | :49:50. | |
honourable friend nor campaign she's fighting for, openness and | :49:50. | :49:54. | |
transparency and clarity in our NHS. She does make an important point, | :49:54. | :49:58. | |
which is, there was a culture under the last Government of not revealing | :49:58. | :50:02. | |
problems in the NHS. The former Health Secretary is shaking his | :50:02. | :50:09. | |
head, but frankly, this is what the former Head of The CQC, Baroness | :50:09. | :50:14. | |
Young, appointed by the last Government said. I know they don't | :50:14. | :50:17. | |
want to hear it but francsly they are going to have to because it's | :50:18. | :50:22. | |
important to understand the culture that went wrong under Labour. "There | :50:22. | :50:25. | |
was huge Government pressure because the Government hated the idea that a | :50:25. | :50:29. | |
regulator would criticise it by didn't of criticising one of the | :50:29. | :50:33. | |
hospitals or one of the service ofs it was responsible for. " That's | :50:33. | :50:37. | |
what Barbara young said. She said "we were under more pressure when | :50:37. | :50:40. | |
the right honourable gentleman became a minister under the | :50:40. | :50:43. | |
politics. " There was a culture problem under Labour and the sooner | :50:43. | :50:52. | |
they admit it, the better. We now know from the latest ONS | :50:52. | :50:56. | |
figures that borrowing did rise last year and the Prime Minister will | :50:56. | :51:00. | |
recall that the Chancellor of the Exchequer of two years ago said, we | :51:00. | :51:04. | |
have asked the British people for all that is needed, there's no need | :51:04. | :51:08. | |
to ask for more. Today, why is he asking for more? | :51:08. | :51:14. | |
We have to have a Spending Review to cover the year 2016-16 which wasn't | :51:14. | :51:17. | |
covered by previous Spending Reviews. We have got the deficit | :51:17. | :51:21. | |
down by a third. It is hard, painful and difficult work, but frankly, we | :51:21. | :51:25. | |
are clearing up the mess left when he was a minister in the last | :51:25. | :51:31. | |
Government -- 2015-2016. Thank you, Mr Speaker. | :51:31. | :51:34. | |
16-18-year-olds can receive free school meals in schools, academies, | :51:34. | :51:39. | |
free schools and university keckical colleges but not in sixth form | :51:39. | :51:42. | |
colleges and in further education colleges like those in my | :51:42. | :51:45. | |
constituency. Will the Prime Minister act now to end this clear | :51:46. | :51:51. | |
injustice left by the party opposite? | :51:51. | :51:55. | |
I am happy to look at this issue. School meals are very much in the | :51:55. | :51:59. | |
news this week because it's a week when we should be promoting healthy | :51:59. | :52:04. | |
eating in schools. We have to this very carefully about how best to use | :52:04. | :52:07. | |
the education budget to get money directly to schools for all our | :52:07. | :52:17. | |
:52:17. | :52:17. | ||
children. I think the Prime Minister will | :52:18. | :52:23. | |
agree with me that the OECD figures this morning, the report, shows the | :52:23. | :52:27. | |
gravity of youth unemployment in our country, and can we please, at this | :52:27. | :52:32. | |
late stage in this Government, have a determination to stop unemployment | :52:32. | :52:36. | |
up to the age of 25 as they do in the Netherlands, why can't we | :52:36. | :52:41. | |
deliver that for young people in our country? I absolutely agree that | :52:41. | :52:45. | |
youth unemployment is a scourge. There is good news in the fact that | :52:45. | :52:48. | |
unemployment has been coming down, and youth unemployment has been | :52:48. | :52:51. | |
coming down, but where he's absolutely right is that it | :52:51. | :52:56. | |
shouldn't be the case that we have youth unemployment at 55% in Spain | :52:56. | :53:00. | |
and yet under 8% in Holland and we need to make sure here in the UK | :53:00. | :53:04. | |
that we are performing alongside Holland and Germany and the | :53:04. | :53:09. | |
countries with the lowest rates of youth unemployment. We do that by | :53:09. | :53:13. | |
having a flexible Labour market, helping businesses invest and locate | :53:13. | :53:17. | |
here. As we stand today, this untri, employment is growing faster here | :53:17. | :53:21. | |
than it is in any other G7 country, including Germany. So we are doing | :53:21. | :53:27. | |
the right thing, but we need to focus more on young people. | :53:27. | :53:31. | |
I have the Prime Minister's helpful recent letter to me underlining in | :53:31. | :53:35. | |
his own hand that housing development does not trump the green | :53:35. | :53:41. | |
belt. I gave this letter to Martin Pike, the planning inspector | :53:41. | :53:45. | |
reviewing Reigate and I regret to report that he upheld the principal | :53:45. | :53:48. | |
that green fields in the green belt couldn't be identified for | :53:48. | :53:53. | |
development against the wishes of local people. Will he now direct | :53:53. | :53:57. | |
amendment of the national planning policy framework to better protect | :53:57. | :54:01. | |
green fields in the green belt from unwanted development? | :54:01. | :54:04. | |
What I say to my right honourable friend and I remember underlining | :54:04. | :54:08. | |
that part of the letser is the rules about green belt haven't changed. A | :54:08. | :54:12. | |
local authority can only change the green belt by taking something out | :54:12. | :54:15. | |
and putting something back in in consultation with local people. I | :54:15. | :54:21. | |
know he's having that discussion with his local authority. I'm | :54:21. | :54:24. | |
convinced that we can get the balance right between viement | :54:24. | :54:29. | |
protection on the one hand and the need for more housing on the other. | :54:29. | :54:33. | |
This afternoon, I shall vote enthusiastically for the high speed | :54:33. | :54:38. | |
preparation Bill. But, can the Prime Minister explain why he's instructed | :54:38. | :54:45. | |
his officials and ministers to oppose the extension of the | :54:45. | :54:48. | |
trans-European network north of London which will mean that it would | :54:48. | :54:52. | |
stay in the European Union, that High Speed Two and other transport | :54:52. | :54:55. | |
links to the north of England will not be eligible for funding? | :54:55. | :54:59. | |
Obviously we'll look at all the ways we can increase the funding | :54:59. | :55:03. | |
available for high speed rail, but, as he said, it's very important, not | :55:04. | :55:07. | |
only to achieve the high speed rail between London and Birmingham, but | :55:07. | :55:12. | |
to build the next stages as well. Thank you, Mr Speaker. The Prime | :55:12. | :55:17. | |
Minister knows how hard the structure MPs have worked to get a | :55:17. | :55:20. | |
direct train service from London to Shrewsbury. Virgin want to implement | :55:20. | :55:24. | |
that direct service in December. Unfortunately, Network Rail are | :55:24. | :55:27. | |
trying to prevent that from happening. We were the only county | :55:27. | :55:31. | |
town in England without a direct train service to London. Will he | :55:31. | :55:37. | |
ensure this blockage is resolved? I'm happy to say that the Transport | :55:37. | :55:43. | |
Secretary will meet with him to discuss this issue. In terms of the | :55:43. | :55:46. | |
answer, I gave a moment ago on high speed rail, we have to recognise | :55:46. | :55:50. | |
that there is a lot of congestion on the existing rail lines and high | :55:50. | :55:55. | |
speed rail will help free up services so we can have more direct | :55:55. | :55:59. | |
connections, particularly to important town towns like | :55:59. | :56:03. | |
Shrewsbury. The Department for Business prop | :56:03. | :56:07. | |
proses to abolish the protection for the name Sheffield that guarantees | :56:07. | :56:13. | |
to quality of our manufacturered goodslet -- proposed. The MoD | :56:13. | :56:17. | |
proposes to move the headquarters of our Territorial Army regiment out of | :56:17. | :56:20. | |
the City. What has this Government got against the businesses and | :56:20. | :56:25. | |
people of Sheffield? First of all, on the issue of the - | :56:25. | :56:31. | |
Sheffield is a fantastic city, a very important part of Brun's | :56:31. | :56:34. | |
industrial base and aisle proud of the fact that through the Regional | :56:35. | :56:37. | |
Growth Fund and other schemes, we are investing in the future of | :56:37. | :56:41. | |
Sheffield - on the issue of the reserves, we are putting more money | :56:41. | :56:45. | |
into the reserves, an extra �1. 5 billion to make sure we can get the | :56:45. | :56:50. | |
reserves up to the level of strength needed for force 2020. On the other | :56:50. | :56:57. | |
issue, I'm reliably informed that she should have some confidence. | :56:57. | :57:01. | |
Military bands are important, not only to Her Majesty's Armed Forces, | :57:01. | :57:05. | |
but also the civilian population. The last Labour Government cut the | :57:05. | :57:10. | |
number of Army bands by a quarter. In this Armed Forces week, will the | :57:10. | :57:13. | |
Prime Minister give assurances that will will be no further cuts in the | :57:13. | :57:17. | |
Army bands? The assurance I can give to my right | :57:17. | :57:20. | |
honourable friend, as the Chancellor will say in a minute, yes of course | :57:20. | :57:23. | |
we've had to make difficult fir sills in the Ministry of Defence, | :57:23. | :57:28. | |
but there 'll be no further reductions in the size of our Army, | :57:28. | :57:32. | |
Nay very or Air Force and we'll continue with an equipment programme | :57:32. | :57:36. | |
that I think is second to none in terms of the capabilities we'll be | :57:36. | :57:41. | |
giving our brave, arm ed sfs services -- armed services | :57:41. | :57:48. | |
personnel. Mr Speaker, you will recall that it | :57:48. | :57:53. | |
was over a year ago, and you will probably know the exact date, when | :57:54. | :57:57. | |
the Prime Minister announced internal inquiry to be held by the | :57:57. | :58:02. | |
lustrously named Lord Gold, into the cash for access scandal in which | :58:02. | :58:07. | |
major Conservative Party donors were richly, if not Royally entertained | :58:07. | :58:11. | |
at Downing Street and Chequers. When does the Prime Minister plan to | :58:11. | :58:14. | |
produce the results and publish the result of this inquiry? | :58:15. | :58:19. | |
I'm very happy to set out for him all of the things that Lord Gold | :58:19. | :58:24. | |
recommended and all the steps that we'll be taking. But as we do so, | :58:24. | :58:27. | |
perhaps he could impose on his frontbench on the issue of donations | :58:27. | :58:31. | |
and he can ask them when they are going to pay back the taxes that | :58:31. | :58:37. | |
they managed to dodge from their donor? Thank you, Mr Speaker. School | :58:37. | :58:42. | |
dinners are a vitally important thing ensuring children eat | :58:42. | :58:46. | |
healthily and in helping tackle childhood obesity. Would my right | :58:46. | :58:50. | |
honourable friend the Prime Minister join me in welcoming the launch of | :58:50. | :58:55. | |
national school meals week taking place in the Jubilee Room this | :58:56. | :58:59. | |
afternoon? I certainly join my right honourable friend. It's a very | :58:59. | :59:02. | |
important cause because we have several problems over the years with | :59:02. | :59:05. | |
school meals, they are not being attractive enough for young people | :59:05. | :59:08. | |
wanting to take them on, and also, having problems with obesity as | :59:08. | :59:12. | |
well. Getting this right, which is something that has been happening | :59:12. | :59:15. | |
over recent years, is extremely important. I speak as someone with | :59:15. | :59:20. | |
two children who enjoy their school meals and I want the school to go on | :59:20. | :59:24. | |
winning the battle for school meal, rather than having to do the packed | :59:24. | :59:28. | |
lunch. The revelation that the Metropolitan | :59:28. | :59:32. | |
Police may have withheld evidence from the Macpherson Inquiry, as | :59:32. | :59:36. | |
quite rightly been met with public derision, but the Prime Minister's | :59:36. | :59:41. | |
answer earlier on didn't go far enough. There's the public that are | :59:41. | :59:43. | |
not satisfied with the police investigating the police, nor will | :59:44. | :59:49. | |
an inquiry that's held in secret, no matter how eminent the QC satisfies | :59:49. | :59:53. | |
public opinion, is will he give undertakings to hold a public | :59:53. | :00:02. | |
inquiry with the power to summon people and hear evidence under oath? | :00:02. | :00:08. | |
I rule nothing out. The two enquiries under way, one is Mark | :00:08. | :00:13. | |
Anderson QC, who played a very major role in prosecuting some of those | :00:13. | :00:17. | |
responsible, who met with the Home Secretary today. We need to make | :00:18. | :00:22. | |
sure that they have all the powers and everything they need. As I said | :00:22. | :00:30. | |
clearly, if we need to go further to get to the truth, we will. As the | :00:30. | :00:34. | |
spending round is published, will the Prime Minister assure the House | :00:34. | :00:38. | |
that HMRC will be given the resources to clamp down on tax | :00:38. | :00:44. | |
avoidance, like the �700,000 avoided by the party opposite? My honourable | :00:44. | :00:49. | |
friend makes a very good point. I'm going to mention this at every Prime | :00:49. | :00:55. | |
Minister 's questions. It is a great pleasure to get this in again. They | :00:55. | :01:01. | |
owe �700,000 of tax. That could be going to schools and hospitals. It's | :01:01. | :01:04. | |
about time they realised what hypocrites they are and paid up the | :01:04. | :01:12. | |
money. With over 400,000 house building plots with planning | :01:12. | :01:16. | |
permission remaining an built on in this country, does the Prime | :01:16. | :01:20. | |
Minister agree with me that we should now put pressure on companies | :01:20. | :01:24. | |
to start building and creating jobs, rather than just the blue | :01:24. | :01:27. | |
waiting for their profits to increase? I agree with the | :01:27. | :01:32. | |
honourable weight -- honourable lady, that we need to do more to | :01:32. | :01:36. | |
encourage businesses to build on the plots they already have. That's why | :01:36. | :01:40. | |
we've -- we've taken unprecedented steps that are making available | :01:40. | :01:50. | |
:01:50. | :02:16. | ||
the beginning of the year. Would he steps that are making available | :02:16. | :02:17. | |
mortgages to young people. All The Cancer Drugs Fund has saved many | :02:17. | :02:22. | |
lives. It has made available drugs to over 30,000 people. It has been | :02:22. | :02:26. | |
expanded to include some treatments as well as drugs. I want to see this | :02:26. | :02:33. | |
as a record we build on and in no way put at risk. Last week the Prime | :02:33. | :02:36. | |
Minister said that people on these benches had forgotten about the | :02:36. | :02:40. | |
bedroom tax. I can assure him that my constituents certainly haven't. | :02:40. | :02:46. | |
In my city last week, only 20 31 bedroomed homes were available for | :02:46. | :02:56. | |
:02:56. | :02:56. | ||
let. Of those, four of them had over 200 applicants. When is the Prime | :02:56. | :03:01. | |
Minister going to admit that this is not the best way of reducing the | :03:01. | :03:07. | |
housing benefit bill? The point I'd make is we are removing the spare | :03:07. | :03:10. | |
room subsidy because it's right to be fair between people in private | :03:10. | :03:13. | |
rented accommodation and people in socially rented accommodation. But | :03:13. | :03:19. | |
this, in a way, is the perfect thing for the Spending Review we are about | :03:19. | :03:22. | |
to hear about. Labour have told us they are now going to be responsible | :03:22. | :03:25. | |
about spending, they will accept the cuts that have been made. We hear | :03:25. | :03:31. | |
week after week, backbencher after backbencher, frontbencher at | :03:31. | :03:34. | |
frontbenchers, complaining about the difficult decisions we've had to | :03:34. | :03:37. | |
take and promising to reverse them. That is why they have no credibility | :03:37. | :03:47. | |
:03:47. | :03:52. | ||
immediately be on his feet and deliver the Spending Review. George | :03:52. | :03:57. | |
Osborne. This coalition came into office with a commitment to address | :03:57. | :04:02. | |
with firmness and resolve, one of the biggest economic crises of the | :04:02. | :04:07. | |
post-war era. And the action we have taken, together with the British | :04:07. | :04:12. | |
people, has brought the deficit down by a third, helped a record number | :04:12. | :04:16. | |
of people into work and taken our economy back from the brink of | :04:16. | :04:24. | |
bankruptcy. And it allows us to say that while recovery from such a deep | :04:24. | :04:27. | |
recession can never be straightforward, Britain is moving | :04:27. | :04:33. | |
out of intensive care and from rescue to recovery. Today we | :04:33. | :04:38. | |
announce the latest action to secure the recovery. We act on the half of | :04:38. | :04:42. | |
every tax payer and every future taxpayer who once high quality | :04:42. | :04:48. | |
public services at a price our country can afford. We act on behalf | :04:48. | :04:53. | |
of everyone who knows that Britain has got to live within its means. | :04:53. | :04:59. | |
And we have applied three principles to the spending round I set out | :04:59. | :05:05. | |
today. Reform, to get more from every pound we spend. Growth, to | :05:05. | :05:09. | |
give Brittany education, enterprise and economic infrastructure it needs | :05:09. | :05:15. | |
to win the global race. -- to give Britain. And fairness, making sure | :05:15. | :05:20. | |
we are all in it together, ensuring those with the broadest shoulders | :05:20. | :05:26. | |
bare the largest burden. And making sure the unfairness of the something | :05:26. | :05:32. | |
for nothing culture in our welfare system is changed. We've always | :05:32. | :05:36. | |
understood that the greatest unfairness was loading debts onto | :05:36. | :05:39. | |
our children that our generation didn't have the courage to tackle | :05:39. | :05:46. | |
ourselves. We've always believed, against much opposition, that it is | :05:46. | :05:50. | |
possible to get better public services at lower cost. That you can | :05:50. | :05:56. | |
cut bureaucracy and boost enterprise by taking burdens off the back of | :05:56. | :06:00. | |
business. In the face of all the evidence, the opposition to these | :06:00. | :06:05. | |
ideas has collapsed into incoherence. We've always believed | :06:05. | :06:09. | |
that the deficit mattered, that we needed to take tough decisions to | :06:09. | :06:13. | |
deal with our debts. And the opposition to that has collapsed | :06:13. | :06:19. | |
into incoherence, too. I announced the next stage of our economic plan | :06:19. | :06:24. | |
to turn Britain around. Mr Speaker, let me start with the overall | :06:24. | :06:28. | |
picture on spending. In its last year in office, the previous | :06:28. | :06:35. | |
government was borrowing �1 in every �4 that it spent. It was a record | :06:35. | :06:39. | |
for a British government in peace time and a calamitous risk with our | :06:39. | :06:44. | |
economic stability. As the note we saw again this week from the | :06:44. | :06:50. | |
outgoing chief secretary put it, I'm afraid there is no money. So we | :06:50. | :06:57. | |
acted immediately. Three years ago, we set out plans to make savings and | :06:57. | :07:02. | |
to reduce our borrowing. Instead of the �157 billion the last government | :07:03. | :07:08. | |
was borrowing, this year we are set to borrow �108 billion. That is �49 | :07:08. | :07:13. | |
billion less in borrowing. That is virtually the entire education | :07:13. | :07:20. | |
budget. So we made real progress putting right what went badly wrong. | :07:20. | :07:25. | |
But while we've been acting, the challengers from abroad have grown, | :07:25. | :07:30. | |
the eurozone in crisis, rising oil prices, the damage from our own | :07:30. | :07:35. | |
banking crisis, worse than anyone feared. And the truth is, Mr | :07:35. | :07:40. | |
Speaker, we have to deal with the world as it is, not as we would wish | :07:40. | :07:45. | |
it to be. So this country has to continue to make savings will stop I | :07:45. | :07:49. | |
can report to the House that the biggest single saving we made in | :07:49. | :07:53. | |
government is the �6 billion a year left we are paying to service our | :07:53. | :07:58. | |
debts than the previous government budgeted for. There that number in | :07:58. | :08:04. | |
mind when you hear the opposition complaining about cuts. The deficit | :08:04. | :08:10. | |
has come down by a third, yet at over 7% it remains far too high, so | :08:10. | :08:14. | |
we must continue to take action. Not just because it's wrong to go on | :08:14. | :08:20. | |
adding depth to our children's soldiers, but we know because of the | :08:20. | :08:25. | |
global turbulence of the last few years that the economic risks are | :08:25. | :08:31. | |
real and the recovery has to be sustained. If we abandon our deficit | :08:31. | :08:37. | |
plan, Britain would be back in intensive care. So the figures today | :08:37. | :08:42. | |
show that until 2017 to 2018, total managed expenditure, in other | :08:42. | :08:44. | |
words, the total amount of government spending, will continue | :08:44. | :08:50. | |
to fall in real terms at the same average rate is falling today. The | :08:50. | :08:56. | |
task before us today is to spell out what that means four 2015 to 2015. | :08:56. | :09:01. | |
Total managed expenditure will be �745 billion. To put that huge sum | :09:01. | :09:05. | |
into context, consider this. If government spending had been allowed | :09:05. | :09:09. | |
to rise through this Parliament at the average rates of the last three | :09:09. | :09:14. | |
decades, that total would have been �120 billion higher. This government | :09:14. | :09:21. | |
has taken... Order, order. You must not have to shout to be heard. | :09:22. | :09:26. | |
Members know that I will always accommodate the interests of | :09:26. | :09:30. | |
backbenchers on both sides in scrutinising these matters | :09:30. | :09:34. | |
intensively. But the Chancellor and in due course the Shadow Chancellor | :09:34. | :09:42. | |
must be properly and fairly heard. This government has taken | :09:42. | :09:47. | |
unprecedented steps to achieve this expenditure control. But now we need | :09:47. | :09:53. | |
to find �11.5 billion of further savings. I want to pay a personal | :09:53. | :09:57. | |
tribute to my right honourable friend, the chief secretary, for the | :09:57. | :10:02. | |
huge effort he has put into helping deliver them. Finding savings on | :10:02. | :10:06. | |
this scale has not been easy. These are difficult decisions that will | :10:06. | :10:11. | |
affect people in our country. But there never was an easy way to bring | :10:11. | :10:16. | |
spending under control. Reform, growth and fairness are the | :10:16. | :10:20. | |
principles. Let me take teaching term and start with reform, and the | :10:20. | :10:26. | |
obligation we all have in this House to ensure we have more for every | :10:26. | :10:30. | |
pound we spend of taxpayers' money. With the help of my right honourable | :10:31. | :10:35. | |
friend the Minister for the Cabinet Office, we have been combing through | :10:35. | :10:39. | |
Whitehall -- tall, renegotiating contracts and reducing the size of | :10:39. | :10:42. | |
government. Cutting money the previous government was spending on | :10:42. | :10:46. | |
marketing and consultants, reforming government IT and negotiating hard | :10:46. | :10:52. | |
on behalf of the taxpayer has already saved almost �5 billion. In | :10:52. | :10:57. | |
this spending round we find a further �5 billion of efficiency | :10:57. | :11:01. | |
savings. That is nearly half of the total savings we need to achieve. We | :11:01. | :11:06. | |
are reforming pay in the public sector. We are holding down pay | :11:06. | :11:13. | |
awards. Public sector pay rises will be limited to an average of up to 1% | :11:13. | :11:17. | |
for 2015 to 2016. But the biggest reform we make an pay is too | :11:17. | :11:24. | |
automatic progression pay. This is the practice whereby many employees | :11:24. | :11:28. | |
not only get a pay rise every year, but also automatically move up a pay | :11:28. | :11:34. | |
grades every single year regardless of performance. Some public sector | :11:34. | :11:38. | |
employees see annual pay rises of 7%. Progression pay can I best be | :11:38. | :11:43. | |
described as antiquated. At worst, it's deeply unfair to other parts of | :11:43. | :11:47. | |
the public sector who don't get it. And to the private sector who have | :11:47. | :11:55. | |
to pay for it. So we will end automatic progression pay in the | :11:55. | :12:00. | |
civil service by 2015 to 2016. We are working to remove automatic pay | :12:00. | :12:07. | |
rises simply for time served in our schools, NHS, prisons and police. | :12:07. | :12:10. | |
The armed forces will be excluded from these reforms. Keeping pay | :12:10. | :12:13. | |
awards down and ending automatic progression pay means that for every | :12:13. | :12:17. | |
pound we have to save in central administration, we can better | :12:17. | :12:22. | |
limited job losses. I don't want to disguise from the House that there | :12:22. | :12:26. | |
will be further reductions in the number of people working in the | :12:26. | :12:29. | |
public sector. The old BR has forecast that the total number of | :12:29. | :12:36. | |
people working for the government will fall by a further 144000 x 2015 | :12:36. | :12:39. | |
to 2016. I know that for those affected this is difficult. That is | :12:39. | :12:44. | |
the consequence of the country spending far beyond its means. When | :12:44. | :12:49. | |
I presented the spending round three years ago, I said then that around | :12:49. | :12:54. | |
half a million posts in the public sector were forecast to have to go. | :12:54. | :12:59. | |
That is indeed what has happened. We are saving �2 billion ago with a | :12:59. | :13:05. | |
civil service now smaller than at any time since the war. But I also | :13:05. | :13:08. | |
said three years ago that I was confident that job creation in the | :13:08. | :13:14. | |
private sector would more than make up for the losses. That prediction | :13:14. | :13:18. | |
created more controversy than almost anything else at the time. This is | :13:18. | :13:22. | |
what the opposition said. The Shadow Chancellor called it a complete | :13:22. | :13:27. | |
fantasy. Instead, every job loss that the public sector has had has | :13:27. | :13:33. | |
been offset by three new jobs in the private sector. In the last year, | :13:33. | :13:43. | |
:13:43. | :14:06. | ||
five new jobs have been created for The Treasury will lead by example. | :14:06. | :14:13. | |
Our resource budget will be reduced by 10%. The Cabinet Office will also | :14:13. | :14:18. | |
see its resource budget reduced by 10%. But within that we will | :14:18. | :14:22. | |
continue to fund support for social action, including the National | :14:22. | :14:27. | |
citizens service, 90,000 places will be available for young adults in the | :14:27. | :14:32. | |
citizens service next, rising to 150000 x 2016. It's a fantastic | :14:32. | :14:36. | |
programme that teaches young people about their responsibilities as well | :14:36. | :14:46. | |
:14:46. | :15:00. | ||
as their rights, and we are expanding it. Local government will | :15:00. | :15:05. | |
He has agreed to a further 10% saving in his resource budget. But | :15:05. | :15:09. | |
we are committing to over �3 billion of capital investment in affordable | :15:09. | :15:14. | |
housing. We will extend the troubled families programme to reach 400,000 | :15:14. | :15:17. | |
more vulnerable families who need extra support. We are proving that | :15:18. | :15:22. | |
you can save money and create more progressive government. That is the | :15:22. | :15:32. | |
:15:32. | :15:33. | ||
right priority. Here is another priority - helping families with the | :15:33. | :15:36. | |
cost-of-living. Because we know times are tough, we have helped keep | :15:36. | :15:39. | |
mortgage rates low, increase the personal allowance, cut fuel duty | :15:39. | :15:43. | |
and we have frozen the council tax. That council tax freeze is due to | :15:43. | :15:48. | |
come to an end next April, and I don't want that to happen. So I can | :15:48. | :15:51. | |
tell you today, that because of the savings we've made, we can help | :15:51. | :15:56. | |
families with their bills, we will fund councils to freeze council tax | :15:56. | :16:04. | |
for the next two years. That's nearly �100 off the average council | :16:04. | :16:09. | |
tax bill for families, bringing the savings to �600 over this | :16:09. | :16:13. | |
Parliament. It demonstrates our commitment to all those who want to | :16:13. | :16:21. | |
work hard and to get on. There's one more thing we can do to | :16:21. | :16:26. | |
help the cost-of-living in one part of the country. Those in the | :16:27. | :16:30. | |
south-west face exceptionally high water bills. Nothing was done until | :16:30. | :16:35. | |
we came to office. Now we've cut the water bills by �50 a household every | :16:35. | :16:39. | |
year until 2015. My right honourable friend, the member for Camborne and | :16:39. | :16:44. | |
Redruth and many others, have campaigned to extend that rebate | :16:44. | :16:50. | |
beyond 2015 and I'm happy to confirm today that we'll do that. Taking | :16:50. | :16:54. | |
money out of the cost of Government and putting it into the pockets of | :16:54. | :17:00. | |
families is what we mean by reform. Local government has already taken | :17:00. | :17:03. | |
difficult decisions to reduce staff numbers, share services and make | :17:03. | :17:09. | |
savings, and I want to pay tribute to mayor rim Coppull for all he's | :17:09. | :17:13. | |
done in showing how this can be achieved. We were told by the scare | :17:13. | :17:16. | |
mongerers that savings in local government could decimate local | :17:16. | :17:23. | |
services. Instead, public satisfaction with local council | :17:23. | :17:29. | |
services have gone up. That is because with our reforms, | :17:29. | :17:34. | |
communities have more control over their own destiny, that's because we | :17:34. | :17:36. | |
have devolved power and responsibility to manage budgets | :17:36. | :17:41. | |
locally. That's because we have let councils benefit from the tax | :17:41. | :17:49. | |
receipts that come when the local economy grows.let today we give more | :17:49. | :17:54. | |
freedom, including greater flexibility among assets and have | :17:54. | :17:58. | |
greater emergency services. I want to thank the honourable member for | :17:58. | :18:03. | |
Bourne moth East for services in this area which has helped us. We | :18:03. | :18:07. | |
are embarking on major reforms to the way we spend locally through the | :18:07. | :18:11. | |
single local growth fund that Lord Heseltine proposed. This will be �2 | :18:11. | :18:16. | |
billion a year, that's at least �10 billion over the next Parliament and | :18:16. | :18:21. | |
that is a sum the Local Enterprise Partnerships can bid for, details to | :18:21. | :18:27. | |
be set out tomorrow. Our philosophy is simple - trust people to make | :18:27. | :18:30. | |
their own decisions and they'll urgely make better decisions. But in | :18:30. | :18:35. | |
return for the freedoms, we have to ask local government for the kind of | :18:35. | :18:38. | |
sacrifices central Government is making. The local government and | :18:38. | :18:44. | |
resource budget will be reduced by 10% in 2015-16, but when all the | :18:44. | :18:48. | |
changes affecting local government I will set out are taken into account, | :18:48. | :18:51. | |
including local income and other central government funding, local | :18:51. | :18:55. | |
government spending reduces by around 2%. I set out today the block | :18:55. | :19:00. | |
grants to the devolved administrations. Because we have | :19:00. | :19:05. | |
prioritised health and schools in England, this feeds through the | :19:05. | :19:08. | |
Barnet formula to resource savings of around 2% in Scotland, Wales and | :19:08. | :19:12. | |
Northern Ireland. The Scottish resource budget will be | :19:12. | :19:16. | |
set at 25. 7 billion pounds and Scotland will benefit from new | :19:16. | :19:21. | |
capital borrowing powers of almost �300 million. Being part of the | :19:21. | :19:26. | |
United Kingdom means Scotland will see its capital spending power | :19:26. | :19:30. | |
increase by almost 13% in real terms in 2015-16. It's rightly for the | :19:30. | :19:35. | |
Scottish Parliament to decide how best to use that. That is devolution | :19:35. | :19:42. | |
within a united kings Dom delivering. Delivering to Scotland. | :19:42. | :19:49. | |
The Welsh budget will be �13. 6 billion and we'll shortly publish | :19:49. | :19:53. | |
our response on further devolution of taxation and borrowing. When we | :19:53. | :19:59. | |
do so, Well be able to say more about the plans to improve the M4 in | :19:59. | :20:02. | |
South Wales that my right honourable friend for the Vale of Glamorgan and | :20:02. | :20:05. | |
others have been campaigning for. The Northern Ireland resource budget | :20:05. | :20:12. | |
will be �9. 6 billion and we have agreed to provide an additional �31 | :20:12. | :20:17. | |
million in 2015 to help the Police Service of Northern Ireland tackle | :20:17. | :20:21. | |
terrorism. Those police officers do an incredibly brave job on our | :20:21. | :20:25. | |
behalf and we salute them. Separately, we'll make 10% savings | :20:25. | :20:30. | |
to the Scotland, Wales and Northern Ireland officerings. | :20:30. | :20:34. | |
Mr Speaker, we believe that the cultural heritage of our nations are | :20:34. | :20:39. | |
not just an economic asset but have an intrinsic value too. When times | :20:39. | :20:42. | |
are tough, they too must make a contribution to the savings this | :20:42. | :20:46. | |
country requires. The Department for Culture, media and sport, will make | :20:46. | :20:50. | |
savings of 7% in its resource budget, elite sports will be | :20:50. | :20:55. | |
protected while the funding of community sports, arts and museums, | :20:55. | :21:01. | |
will be reduced by just 5%. But because we recognise the value of | :21:01. | :21:05. | |
our great galleries and museums and English Heritage, we are giving them | :21:05. | :21:08. | |
much greater freedom from state control which they have long called | :21:08. | :21:13. | |
for, applying our reforming pri across across-the-board, empowering | :21:13. | :21:18. | |
those on the front line who know best what the Director of The | :21:18. | :21:22. | |
British Museum calls good news in a tough economic climate. While we are | :21:22. | :21:26. | |
at it, we'll make sure that the site of the Battle of Waterloo is | :21:26. | :21:32. | |
restored in time for the 200th anniversary, to commemorate those | :21:32. | :21:38. | |
who died there and to celebrate a great victory of coalition forces | :21:38. | :21:48. | |
:21:48. | :21:57. | ||
and very discredited former regime armed forces in the world and we | :21:57. | :22:02. | |
intend to keep it that way. The first line of national defence | :22:02. | :22:07. | |
is sound public finances and a balanced defence budget. My right | :22:07. | :22:10. | |
honourable friend, the Defence Secretary, is helping deliver both. | :22:10. | :22:14. | |
He and his predecessor, my right honourable friend for North Somerset | :22:14. | :22:20. | |
have filled the �38 billion black hole they inherited in the finances | :22:20. | :22:25. | |
of the Ministry of Defence. We continue to ensure we get maximum | :22:25. | :22:30. | |
value for money from what will remain. 2% of our GDP, one of the | :22:30. | :22:34. | |
largest defence budgets in the world. The defence resource budget | :22:34. | :22:39. | |
will be maintained in cash terms of �24 billion, the equipment budget | :22:39. | :22:44. | |
will be �14 billion and will grow by 1% in real terms thereafter. We'll | :22:44. | :22:48. | |
further reduce the civilian workforce and allowances, | :22:48. | :22:52. | |
renegotiate more of the hopeless PFI contracts signed in the last decade | :22:52. | :22:56. | |
and overhaul the way we buy equipment. My right honourable | :22:56. | :23:00. | |
friend, thement be, has rightly been clear throughout that he's not | :23:00. | :23:05. | |
prepared to see a reduction in Britain's military capabilities. | :23:05. | :23:08. | |
This spending round not only protects the capabilities, but | :23:08. | :23:13. | |
enhances them, with the latest technologies. We will not cut the | :23:13. | :23:17. | |
number of soldiers, sailors or airmen. We need them to defend our | :23:17. | :23:23. | |
country. We'll give them the best kit to do their job. The new | :23:23. | :23:27. | |
aircraft carriers, submarines, stealth fighters, destroyers and | :23:27. | :23:32. | |
state-of-the-art armoured vehicles. We also make a major commitment to | :23:32. | :23:35. | |
invest in cyber, the new frontier of defence, and a priority for this | :23:35. | :23:41. | |
government. We will look after the families | :23:41. | :23:44. | |
who've lost their loved ones and those who've been injured protecting | :23:44. | :23:50. | |
us lock after the wars are over. We previously committed to the military | :23:51. | :23:54. | |
to five years, today easy will commit to fund the Armed Forces | :23:54. | :23:57. | |
covenant permanently and we'll do this from the money we have | :23:57. | :24:02. | |
collected from the LIBOR fines, those who represented the very worst | :24:02. | :24:05. | |
values will support those who represent the very best of British | :24:06. | :24:11. | |
values. Our veterans will not be forgotten. | :24:11. | :24:16. | |
The Intelligence Services are on the frontline too. | :24:16. | :24:23. | |
Often heroically, these they protect us. We'll protect them in return | :24:23. | :24:27. | |
with a 3. 4% increase in their combined resource budget. The | :24:27. | :24:31. | |
Foreign Office is the public face of diplomacy and my right honourable | :24:31. | :24:34. | |
friend, the member for Richmond, is quite simply the best Foreign | :24:34. | :24:43. | |
Secretary we've had in a generation. He too has demonstrated how we can | :24:43. | :24:48. | |
make our taxpayers money go further, while making savings in his budget | :24:48. | :24:53. | |
he's managed to expand our network of embassies in the emerging world | :24:53. | :24:56. | |
and focus his diplomats on Brun's commercial interests. There 'll be | :24:56. | :25:01. | |
further savings in that budget of 8% in 20 #15rks but my right honourable | :25:01. | :25:04. | |
friend is still committing to strengthen our embassy network in | :25:04. | :25:10. | |
high growth markets from Shanghai to Abuja -- 2015. The Foreign Office | :25:10. | :25:15. | |
protects our values abroad. The Home Office protects our values here in | :25:15. | :25:20. | |
Britain. Police reform is a model of what we can achieve across | :25:20. | :25:27. | |
Government. Police forces are more accountable to the public with | :25:27. | :25:32. | |
modern working practices, the latest equipment and democratic oversight. | :25:32. | :25:42. | |
:25:42. | :25:43. | ||
All on a... Yes, she is the best Home Secretary! | :25:43. | :25:49. | |
And a hell of a lot better than the onings that went -- ones that went | :25:49. | :25:58. | |
before! And what was the prediction from the benches opposite? They | :25:58. | :26:02. | |
said, crime would rise. What has happened instead? Crime has fallen | :26:02. | :26:09. | |
by more than 10%. Thanks to the hard work of the police officers up and | :26:09. | :26:15. | |
down this country, crime is at its lowest for 13 years. What was the | :26:15. | :26:19. | |
prediction in we heard from the benches opposite about the borders. | :26:19. | :26:24. | |
They said the cuts would mean we were not going to be able to control | :26:24. | :26:27. | |
immigration. What has happened instead? Net immigration is down by | :26:27. | :26:34. | |
more than a third. This Home Secretary is demonstrating | :26:34. | :26:37. | |
that responsibility budgets and reform can deliver better services | :26:37. | :26:43. | |
for the public. In 2015, she will work with a resource budget of �let. | :26:44. | :26:50. | |
9 billion, a saving of 6% -- 9. 9 billion. | :26:50. | :26:56. | |
There will be savings in the department, some visa fees will go | :26:56. | :27:00. | |
up, but protecting Britain from the terrorist threat remains top | :27:00. | :27:03. | |
priority, so I can confirm the police counter-terrorism budget will | :27:03. | :27:07. | |
not be cut at all. For the police to do their job, they need a criminal | :27:07. | :27:13. | |
justice system that works a lot better. A case of common assault can | :27:13. | :27:18. | |
take 200 days to pass through the courts, involves five separate sets | :27:18. | :27:22. | |
of case papers and is generated on three different computer systems. In | :27:22. | :27:27. | |
some prisons, the cost of keeping a prisoner is �40,000 a year. In | :27:27. | :27:31. | |
others, it's one third of that. The cost of legal aid per head is double | :27:31. | :27:34. | |
the European average. My right honourable friend the Lord | :27:34. | :27:39. | |
Chancellor is reforming all of these things and by doing that, he'll make | :27:39. | :27:43. | |
savings of 10% in his departmental budget. | :27:43. | :27:47. | |
He'll do that while offering for the first time Probation Services for | :27:47. | :27:51. | |
those who've served short sentences to help end the revolving door of | :27:51. | :27:57. | |
crime and reoffending. Mr Speaker, it's an example of the | :27:57. | :28:00. | |
reform we are bringing across government and every step of the | :28:00. | :28:06. | |
way, every penny saved, every programme reformed, every | :28:06. | :28:10. | |
entitlement reduced, every difficult choice taken, has been opposed by | :28:10. | :28:13. | |
vested interests and those who got Britain into this mess in the first | :28:13. | :28:17. | |
place. We will not let up. I will not let | :28:17. | :28:21. | |
that happen. The reform will continue. | :28:21. | :28:26. | |
Now, Mr Speaker, government spending does not alone create sustainable | :28:26. | :28:30. | |
growth. Enterprise does. | :28:30. | :28:35. | |
The job of the state is to provide the schools, the science, the | :28:35. | :28:40. | |
transport links and the reliable energy that enable business to grow. | :28:40. | :28:43. | |
Britain was once the place where the future was invented from the railway | :28:43. | :28:48. | |
to the jet engine to the worldwide web. We can be that country again | :28:48. | :28:53. | |
and today we set out how to get there, a huge amount of innovation | :28:53. | :28:58. | |
and discovery still goes on. Successive governments of all | :28:58. | :29:02. | |
colours have put short-term pressures over the long-term needs | :29:02. | :29:05. | |
and refused to commit capital spending plans that match the | :29:05. | :29:09. | |
horizons of a modern economy. Today, we change that. | :29:09. | :29:15. | |
We commit now to �50 billion of capital investment in 2015 from | :29:15. | :29:19. | |
roads to railways, bridges to Broadband, science to schools, it | :29:19. | :29:25. | |
will amount to over �300 million of capital spending guaranteed to the | :29:25. | :29:31. | |
end of this decade. Today we raise our national game. This means that | :29:32. | :29:36. | |
Britain will spend on average more as a percentage of its national | :29:37. | :29:41. | |
income on capital investment in this decade, despite the fact money is | :29:41. | :29:46. | |
tight, than in the previous decade when government spending was being | :29:46. | :29:56. | |
:29:56. | :30:02. | ||
will be set out. With specific plans for more than �100 billion of | :30:02. | :30:06. | |
infrastructure projects. But this is what it means for departments. The | :30:06. | :30:10. | |
Department for Transport will make a 9% saving in its day-to-day resource | :30:10. | :30:14. | |
spending, bearing down on the running costs of Transport for | :30:14. | :30:20. | |
London and on Reagan Administration. It will rise to �9.5 billion, the | :30:20. | :30:23. | |
largest rise of any part of government. And we will repeat that | :30:23. | :30:29. | |
commitment for every year to 2020. We are already massively expanding | :30:29. | :30:33. | |
investment on major road schemes, but we will do more. So we are | :30:33. | :30:37. | |
announcing the largest programme of investment in our roads for over | :30:38. | :30:41. | |
half a century. We've already expanded our investment in the | :30:41. | :30:45. | |
railways, but we will do more. So we are committing to the largest | :30:45. | :30:51. | |
investment in our railways since the Victorian age. And with the | :30:51. | :30:53. | |
legislation before this House today, we should give the green light to | :30:53. | :30:59. | |
HS2, a huge boost to the north of England and a transformation of the | :30:59. | :31:04. | |
economic geography of this country. Here in London, we are digging | :31:04. | :31:08. | |
Crossrail, the largest urban infrastructure project in Europe. | :31:08. | :31:13. | |
But we will do more. Looking now at the case for Crossrail 2, linking | :31:13. | :31:17. | |
London from north to south. And we are going to give the mayor almost | :31:17. | :31:21. | |
�9 billion of capital spending and additional financing power to the | :31:21. | :31:26. | |
end of this decade. He's a lot better than Ken Livingstone, that's | :31:26. | :31:36. | |
:31:36. | :31:36. | ||
for sure! Mr Speaker, investing in our economic infrastructure also | :31:36. | :31:42. | |
means investing in energy. So we will provide the certainty investors | :31:42. | :31:46. | |
are crying out for in Western countries. This country is already | :31:46. | :31:50. | |
spending more on renewables than ever before. Now we will provide | :31:50. | :31:54. | |
future strike prices for low carbon. We are restarting our civil | :31:54. | :31:58. | |
nuclear programme, when other countries are unable to continue | :31:58. | :32:06. | |
theirs. Our exploitation of gas and the North Sea are second to none. | :32:06. | :32:11. | |
Now we make the tax and planning changes that will put Britain at the | :32:11. | :32:15. | |
forefront of exploiting shale gas. We will provide our country with the | :32:15. | :32:20. | |
energy of the future at a price that we can afford. And, taken together, | :32:20. | :32:24. | |
this should support over �100 billion of private sector investment | :32:24. | :32:28. | |
in energy. The Department for energy and climate will do this while | :32:28. | :32:33. | |
reducing -- dissing its budget by 8%. The Department of rural affairs | :32:33. | :32:38. | |
will see a 10% reduction. But we will set out plans for a major | :32:38. | :32:43. | |
commitment to nuclear defences for the rest of this decade. | :32:43. | :32:47. | |
Prioritising long-term capital through day-to-day cost savings are | :32:47. | :32:52. | |
exactly the tough choices that Britain should be making. It is not | :32:52. | :32:56. | |
enough to have roads and power stations and flood defences. These | :32:56. | :33:00. | |
are just the physical infrastructure you need to compete in a | :33:00. | :33:03. | |
21st-century. We need the intellectual capital, too. This | :33:03. | :33:08. | |
country needs to invent and pioneer and export around the world. That | :33:08. | :33:13. | |
means backing the Department for business that helps us to do this. | :33:13. | :33:17. | |
It means taking tough decisions about what we should support. My | :33:17. | :33:21. | |
right honourable friend has agreed to a reduction of 6% in the cost of | :33:21. | :33:24. | |
the department. That means we are making savings to student | :33:24. | :33:29. | |
maintenance, keeping grants but not increasing them, and the cost of the | :33:29. | :33:33. | |
central department will also be cut further. But this means that within | :33:33. | :33:38. | |
this reduced budget, we can put more money into apprenticeships and | :33:38. | :33:43. | |
continue with the dramatic increase in support we provided to exporters. | :33:43. | :33:47. | |
And we're not going to shift medical training and research out of this | :33:47. | :33:52. | |
department, because they are working well where they are. In this | :33:52. | :33:57. | |
department, too, we can shift from day-to-day spending to a huge 9% | :33:57. | :34:02. | |
increase in capital investment will stop this includes a huge investment | :34:02. | :34:05. | |
in science. Scientific discovery is first and foremost an expression of | :34:05. | :34:10. | |
the relentless new research to learn more about our world, but it's also | :34:10. | :34:14. | |
an enormous strength for a modern economy. From synthetic biology to | :34:14. | :34:18. | |
graph scene, written is very good at it and we are going to keep it that | :34:18. | :34:22. | |
way. I am committing today to maintain the resource budget for | :34:22. | :34:27. | |
science at �4.6 billion, to increase the capital budget for science in | :34:27. | :34:32. | |
real terms to �1.1 billion and to maintain that a real increase to the | :34:32. | :34:37. | |
end of this decade. Investment in science is an investment in our | :34:37. | :34:42. | |
future. So, yes, from the next generation of jet engines to | :34:42. | :34:45. | |
cutting-edge supercomputers, we say keep inventing, keep delivering, | :34:45. | :34:50. | |
this country will back you all the way. But when you've got | :34:50. | :34:53. | |
infrastructure and you've got science, you still need the educated | :34:53. | :34:58. | |
workforce to make it happen. And because of our ongoing reforms to | :34:58. | :35:04. | |
our universities, they are now better funded than before. People | :35:04. | :35:10. | |
will remember that the reforms to higher education were bitterly | :35:10. | :35:16. | |
contested in this House. We remember the scaremongering about fees, the | :35:16. | :35:21. | |
claims that they would destroy social mobility, put off students | :35:21. | :35:26. | |
from poorer communities applying, and what has happened since? The | :35:26. | :35:29. | |
highest proportion of students from the most deprived neighbourhoods | :35:29. | :35:39. | |
applying to university 's ever. And we should all welcome that. But | :35:39. | :35:42. | |
there's no greater long-term investment a country can make than | :35:42. | :35:46. | |
in the education and skills of children. Because of the tough | :35:46. | :35:50. | |
decisions we've taken elsewhere, we've been able to invest in | :35:50. | :35:54. | |
education and accelerate school reform. When we took office, our | :35:54. | :35:57. | |
country's education system was falling behind other parts of the | :35:57. | :36:02. | |
world. Now thanks to the brilliant programme of reform by my right | :36:02. | :36:06. | |
honourable friend the Education Secretary and the schools Minister, | :36:07. | :36:13. | |
we are once again leading the way. We've applied our reform principles | :36:13. | :36:23. | |
:36:23. | :36:23. | ||
here, to. Turning the majority of secondary schools into academies. In | :36:23. | :36:28. | |
this spending round, this momentum for reform will grow. So the | :36:28. | :36:33. | |
education Department's overall budget will increase to �53 billion, | :36:33. | :36:38. | |
and school spending will be protected in real terms, fulfilling | :36:38. | :36:41. | |
the pledge we made at this Parliament for all offers | :36:41. | :36:47. | |
Parliament. And we will transfer power and money from town halls and | :36:48. | :36:52. | |
central bureaucracy to schools, so that more of this money for | :36:52. | :36:56. | |
education is spent on education. While grants to councils and | :36:56. | :37:00. | |
spending on central agencies are reduced, the cash going to schools | :37:00. | :37:05. | |
will go up. I can announce today that school spending will be | :37:05. | :37:11. | |
allocated in a fairer way than ever before. School funding across the | :37:11. | :37:16. | |
country is not equally distributed. But distribution on a historical | :37:17. | :37:21. | |
basis does not have a logical reason. The result is that some | :37:21. | :37:25. | |
schools get much more than others in the same circumstances will stop it | :37:25. | :37:32. | |
is an affair and we are going to put it right. Many MPs from all sides of | :37:32. | :37:37. | |
this House have campaigned for it. My honourable friend for Worcester | :37:37. | :37:41. | |
has been a particular champion in this Parliament. Now the lowest | :37:41. | :37:45. | |
funded Local Authorities in this country will at last receive an | :37:45. | :37:50. | |
increase in their per-pupil funding, as we introduce a national | :37:50. | :37:54. | |
funding formula to ensure that no child in any part of our country is | :37:54. | :37:57. | |
to ensure that no child in any part of our country is disseminated | :37:57. | :38:01. | |
against. And we will consult on all the details until we get this | :38:01. | :38:05. | |
historic reform right. The pupil premium we've introduced also makes | :38:05. | :38:08. | |
sure we are fair to children from low-income backgrounds. It will be | :38:09. | :38:14. | |
protected in real terms, so every poor child will have more cash spent | :38:14. | :38:21. | |
on their future than ever before. The capital budget will be set at | :38:21. | :38:26. | |
�4.6 billion in 2015 to 2016, with over �21 billion of investment over | :38:26. | :38:30. | |
the next Parliament. We will tackle the backlog of maintenance in | :38:30. | :38:36. | |
existing schools. And we will invest in new school places. We will fund | :38:36. | :38:42. | |
20 new studio schools, 20 new university technical colleges, those | :38:42. | :38:46. | |
are outstanding new vocational institutions. Free schools are | :38:46. | :38:50. | |
giving parents the opportunity to aspire to a better education for | :38:50. | :38:55. | |
their children. The opposition have said they want no more of these | :38:56. | :39:02. | |
schools. We can't allow that attack an aspiration to happen. Instead, we | :39:02. | :39:06. | |
must accelerate the programme and bring more hope to children. That is | :39:06. | :39:11. | |
why I can announce that we will fund an unprecedented increase in the | :39:11. | :39:16. | |
number of free schools. We will provide for 180 great new free | :39:16. | :39:22. | |
schools. The schools budget protected, fairer funding across the | :39:22. | :39:27. | |
nation, the pupil premium extended to more students ever before and a | :39:27. | :39:31. | |
transformation in the preschool programme. We will not make our | :39:32. | :39:36. | |
children pay for the mistakes of the past. We will give them every chance | :39:36. | :39:39. | |
for the future, because that is the single best investment that Britain | :39:39. | :39:48. | |
can make. Our education... Is also consistent with the third and final | :39:48. | :39:52. | |
principle of this spending round. Fairness. It's not possible to | :39:52. | :39:55. | |
reduce a deficit of this size without asking all sections of the | :39:55. | :39:58. | |
population to play their part. But those with the broadest shoulders | :39:58. | :40:04. | |
should bear the greatest burden. And the Treasury distribution analysis | :40:04. | :40:08. | |
shows that the top fifth of the population lose the most after this | :40:08. | :40:13. | |
spending round. And the independent Institute for Fiscal Studies are | :40:13. | :40:18. | |
unequivocal that the richest 10% have paid the most. In every year of | :40:18. | :40:22. | |
this Parliament, the rich will pay a greater proportion of income tax | :40:22. | :40:26. | |
revenues than in any one of the 13 years under the last Labour | :40:26. | :40:35. | |
government. So when it comes to Her Majesty's Revenue & Customs, despite | :40:35. | :40:40. | |
the fact that this department will see a 5% reduction in its resource | :40:40. | :40:45. | |
budget, we are committed to extra resources to tackle tax evasion. The | :40:45. | :40:50. | |
result is we expect to raise over �1 billion more in tax revenues from | :40:50. | :40:56. | |
those who try and avoid to pay their fair share. Fairness also means | :40:57. | :41:02. | |
refusing to balance the budget on the backs of the world 's poorest. I | :41:02. | :41:06. | |
know that not everyone believes we should fulfil our commitment to | :41:06. | :41:11. | |
spend .7% of our national income on development. But I do, and I'm proud | :41:11. | :41:17. | |
to support a government that is in the first of our history to meet our | :41:17. | :41:22. | |
pledge and meet it not only this year but next year and vigour after. | :41:22. | :41:27. | |
Of course, oversees the parliament is about more than just this budget, | :41:27. | :41:30. | |
and we comply with internationally policed rules. But that budget is | :41:30. | :41:37. | |
the lion 's share and it will be set at �11.1 billion in 2015 to 2016. | :41:37. | :41:42. | |
Even in these tough times, the decisions we make mean we keep to | :41:42. | :41:47. | |
our commitments. And that includes our commitment to the National | :41:47. | :41:51. | |
Health Service, an institution which is the very embodiment of fairness | :41:51. | :41:57. | |
in our society. The NHS is much more than the government's priority, it | :41:57. | :42:03. | |
is the People's priority. When we came to office, the health budget | :42:03. | :42:08. | |
was �96 billion. In 2015 to 2016, it will be �110 billion. And capital | :42:08. | :42:14. | |
spending will rise to �4.7 billion. New medical treatments and an ageing | :42:14. | :42:21. | |
population means the demand for NHS services is rising. So we've not | :42:21. | :42:26. | |
spared in also demanding reform and valuable money in this service. This | :42:26. | :42:32. | |
will not insulated the health service from top choices, there are | :42:32. | :42:36. | |
already 7000 fewer managers. The NHS will continue to make efficiency | :42:36. | :42:40. | |
savings. But these savings will enable new investment in mental | :42:41. | :42:45. | |
health and the funding for new treatments for cancers, like | :42:45. | :42:50. | |
prostate and breast cancer. Let me respond directly to the breast | :42:50. | :42:54. | |
Cancer research campaign that so many have taken part in. We will | :42:54. | :42:59. | |
continue to back the charity research support fund and look into | :42:59. | :43:02. | |
making it easier for these organisations to benefit from gift | :43:02. | :43:08. | |
aid. Many older people do not just use the NHS, they also use the | :43:08. | :43:13. | |
social care system. If we are honest, they often fall between the | :43:13. | :43:17. | |
cracks of the two Systems, being pushed from pillar to post and not | :43:17. | :43:19. | |
getting the care they should. And not getting the care they should. | :43:19. | :43:25. | |
Non-others here would want that for our parents or grandparents, and in | :43:25. | :43:29. | |
a compassionate society no one should endure it. It's a failure | :43:29. | :43:35. | |
that also cost us billions of pounds and Britain can do better. In the | :43:35. | :43:39. | |
2010 Spending Review, we said that the NHS would make available around | :43:39. | :43:43. | |
�1 billion a year to support the health needs of people in social | :43:43. | :43:46. | |
care. It worked and saved hundreds of millions in the process. Last | :43:46. | :43:48. | |
year, these improvements meant almost 50,000 fewer bed days were | :43:49. | :43:53. | |
lost to the NHS. So today I can announce that I will be bringing | :43:53. | :43:58. | |
together a significant chunk of the health and social care budgets. I | :43:58. | :44:01. | |
want to make sure everyone gets a properly joined up service, where | :44:01. | :44:06. | |
they won't have to worry about services coming from the NHS or the | :44:06. | :44:09. | |
local council. Let's stop the tragedy of people being dropped in | :44:09. | :44:12. | |
A&E on a Friday night to spend the weekend in hospital because we can't | :44:12. | :44:17. | |
look after them properly and -- in social care. By 2015 to 2016, over | :44:17. | :44:21. | |
�3 billion will be spent on services that are commissioned jointly and | :44:21. | :44:25. | |
seamlessly by the local NHS and local councils working together. It | :44:25. | :44:28. | |
is a huge and historic commitment of resources to social care. It ties to | :44:29. | :44:33. | |
real reform on the ground. To help end the scandal of older people | :44:33. | :44:37. | |
trapped in hospitals because they cannot get a social care bed. This | :44:37. | :44:40. | |
will help relieve pressures on accident and emergency. It will help | :44:40. | :44:44. | |
local government deliver on its obligations. And it save will the | :44:44. | :44:48. | |
NHS at least �8 billion. Integrated health and social care. No longer a | :44:48. | :44:51. | |
vague aspiration but a concrete reality, transforming the way we | :44:51. | :44:58. | |
look after people who need care most. | :44:58. | :45:02. | |
So, Mr Speaker, these are the three principles of the spending round, | :45:02. | :45:07. | |
reform, growth and fairness. And nowhere could these principles be | :45:07. | :45:10. | |
more clearly applied than in our approach to welfare. | :45:10. | :45:14. | |
Two groups of people need to be satisfied with our welfare system, | :45:14. | :45:18. | |
those who need it who're old, vulnerable, disabled or have lost | :45:18. | :45:22. | |
their job, and who we, as a compassionate society, want to | :45:22. | :45:26. | |
support. And there's a second group. The people who pay for this welfare | :45:26. | :45:31. | |
system, who go out to work, who pay their taxes and expect it to be fair | :45:31. | :45:37. | |
on them too. So we have taken huge steps to reform welfare. Changinger | :45:37. | :45:41. | |
working age benefits with Universal credit so that work always pays, | :45:41. | :45:47. | |
removing child benefit from the better off, capping benefits so no | :45:47. | :45:57. | |
family out of work gets more than the average family gets in work. The | :45:57. | :46:00. | |
steps we have taken will save �18 billion a year and every single one | :46:00. | :46:10. | |
of them was opposed by the welfare party opposite. Now we propose to do | :46:10. | :46:13. | |
three further welfare reforms. First, as I said in the budget, we | :46:13. | :46:17. | |
are going to introduce a new welfare cap to control the overall costs of | :46:17. | :46:22. | |
the benefit bill. We have already capped the benefits | :46:22. | :46:26. | |
of individuals and now we cap the system as a whole. Under that system | :46:26. | :46:30. | |
we inherited, welfare spending was put into a daft glory called | :46:30. | :46:32. | |
annually managed expenditure, but the problem was, it wasn't managed | :46:33. | :46:40. | |
at all. The cost of welfare went up by a staggering 50% even before the | :46:40. | :46:44. | |
crash -- category. The welfare cap will stop that happening again. The | :46:44. | :46:48. | |
cap will be set each year of the budget for four years. It will apply | :46:48. | :46:52. | |
from April 2015, it will we flect forecast inflation but it will be | :46:52. | :47:00. | |
set in cash terms. In future, when a Government looks to breach the cap, | :47:00. | :47:03. | |
because it's failling to control welfare, the OBR will issue a public | :47:04. | :47:08. | |
warning and the government will be forced to take action to cut welfare | :47:08. | :47:13. | |
costs or publicly breach the cap and explain that to Parliament. | :47:13. | :47:17. | |
We'll exclude a small number of the most cyclical benefits that directly | :47:17. | :47:24. | |
rise or fall within the um employed to have the stabiliser, Housing | :47:24. | :47:27. | |
Benefit, disability benefits and pensioner benefits and Tax Credits | :47:27. | :47:36. | |
will all be included, but the state pension will not be. | :47:36. | :47:38. | |
Mr Speaker, I've heard representations that we should | :47:38. | :47:42. | |
include the basic state pension in the welfare camp. That would mean | :47:42. | :47:46. | |
that a future government could offset a rise in working age | :47:46. | :47:51. | |
benefits by cutting the pensions of older people. E.-be- penalises those | :47:51. | :47:56. | |
who've worked hard all their lives, cutting pensions to pay for working | :47:56. | :48:00. | |
age benefits is a choice this government is certainly not prepared | :48:00. | :48:06. | |
to make, it's unfair, we won't do it and we reject those represent | :48:06. | :48:12. | |
stations completely. The new welfare cap is proof that | :48:12. | :48:15. | |
Britain is serious about living within its means, controlling | :48:15. | :48:20. | |
spending, protecting the taxpayer, fundamentally fair. Today, we are | :48:20. | :48:25. | |
introducing a limit on the nation's credit card. | :48:25. | :48:30. | |
The principles enshrined in the cap apply to our second reform today. | :48:30. | :48:34. | |
We will actually ensure that we'll stop the cost of paying the Winter | :48:34. | :48:39. | |
Fuel Payments made no those who live abroad, rising in a way that no-one | :48:39. | :48:44. | |
ever intended. EU law now says that people living in the European | :48:44. | :48:48. | |
economic area can claim Winter Fuel Payments from us even if they didn't | :48:48. | :48:53. | |
get them before they left the UK. Paying out even more money to people | :48:53. | :48:57. | |
from all nationalities who may have worked in this country years ago but | :48:57. | :49:02. | |
no longer live here is not a fair use of the nation's cash. | :49:02. | :49:07. | |
So from the autumn of 2015, we'll link the Winter Fuel Payment to a | :49:07. | :49:12. | |
temperature test. People in hot countries will no longer get it. It | :49:12. | :49:19. | |
is after all a payment for winter fuel. | :49:19. | :49:25. | |
Mr Speaker, the third welfare reform I announce today is about making | :49:25. | :49:30. | |
sure we do everything to help people get into work. | :49:30. | :49:34. | |
My right honourable friend, the Work and Pensions Secretary, has changed | :49:34. | :49:39. | |
the national debate about welfare and he has comprehensively won the | :49:39. | :49:46. | |
argument. He has committed to finding a | :49:46. | :49:49. | |
further 9. 5% savings in the department's running costs. That | :49:49. | :49:54. | |
will require a difficult drive for efficiency and a hard assessment of | :49:54. | :49:58. | |
underperforming programmes. But welfare reform is about much more | :49:58. | :50:03. | |
than saving money. Vital though that is. It's about reducing dependency | :50:03. | :50:09. | |
and changing people's lives for the better. I'm determined to go further | :50:09. | :50:13. | |
to reduce worklessness with all its social consequences. Where is the | :50:13. | :50:16. | |
fairness in condemning people to a life on benefits because the system | :50:16. | :50:22. | |
won't hope them get back into work. So today, we are introducing upfront | :50:22. | :50:26. | |
work search. We are going to make sure people | :50:26. | :50:30. | |
turn up with a CV, register for online job search and start looking | :50:30. | :50:36. | |
for work and only they think -- then will they get their benefits. Thanks | :50:36. | :50:41. | |
to this government, lone parents who're out of work can get free | :50:41. | :50:47. | |
childcare for all their three and four-year-olds so it's reasonable to | :50:47. | :50:51. | |
ask they prepare to return to work. There are further changes we | :50:51. | :50:55. | |
announce today. Half of all jobseekers need more help looking | :50:55. | :51:00. | |
for work, so we'll require them to come to the Jobcentre every week, | :51:00. | :51:08. | |
rather than once a fortnight. We are going to give people more time with | :51:08. | :51:12. | |
Jobcentre advisers and proper progress reviews every three months. | :51:12. | :51:17. | |
We are going to introduce a new seven-day wait before people can | :51:17. | :51:21. | |
claim their benefits. Those first few days should be spent looking for | :51:21. | :51:26. | |
work, not looking to sign on. We are doing these things because we | :51:26. | :51:30. | |
know they help people stay off benefits and help those on benefits | :51:30. | :51:37. | |
get back into work faster. Here is a further change. From now | :51:37. | :51:42. | |
on, if claimants don't speak English, they'll have to attend | :51:42. | :51:47. | |
language courses until they do. This is a reasonable requirement in this | :51:47. | :51:51. | |
country. It will help people to find work, but if you are not prepared to | :51:51. | :51:57. | |
learn English, your benefits will be cut. | :51:57. | :52:01. | |
Taken together, this new contract with people on benefits will save | :52:01. | :52:06. | |
over �350 million a year and all that money will enable us to afford | :52:07. | :52:12. | |
extra support to help people get into work. Help to work, incentives | :52:12. | :52:16. | |
to work and an expectation that people should do everything they can | :52:16. | :52:21. | |
to find work. That's fair for people out of work and it's fair for those | :52:21. | :52:27. | |
in work who pay for them. Together, these reforms bring the total | :52:27. | :52:34. | |
additional welfare savings in 2015 up to �4 billion. Mr Speaker, step | :52:34. | :52:39. | |
by step, this reforming government is making sure that Britain lives | :52:39. | :52:44. | |
within its means. The decisions we take today are not | :52:44. | :52:48. | |
easy and these are difficult time times, but with this statement, we | :52:48. | :52:53. | |
make more progress towards an economy that prospers, a state we | :52:53. | :52:58. | |
can afford, a deficit coming down and a Britain on the rise. I commend | :52:58. | :53:07. | |
this economic plan to the country. The Chancellor finishes his spending | :53:07. | :53:10. | |
recue. He spoke for about 50 minutes. We'll now hear immediately | :53:10. | :53:13. | |
from the Shadow Chancellor, Ed Balls. | :53:13. | :53:18. | |
The Chancellor spoke for over 50 minutes. He spoke for over 50 | :53:18. | :53:23. | |
minutes, but not once did he mention the real reason for this Spending | :53:23. | :53:31. | |
Review today. His comprehensive failure on living standards rose and | :53:31. | :53:36. | |
the deficit too. Prices rising faster than wages, families worse | :53:36. | :53:42. | |
off, long-term unemployment up, welfare spending soaring, the | :53:42. | :53:47. | |
economy flatlining, the slowest recovery for over 100 years and the | :53:47. | :53:54. | |
result of this failure for all the budget boasts, borrowed last year, | :53:54. | :53:59. | |
not up but down, Mr Speaker, not balancing the books as he promised, | :53:59. | :54:05. | |
but in 2015, a deficit of �96 billion. | :54:05. | :54:11. | |
More brothering to pay for his economic failure. That is why this | :54:11. | :54:15. | |
Chancellor has been forced to come to the House today to make more cuts | :54:15. | :54:19. | |
to our Public Services. So, Mr Speaker, let me ask the | :54:19. | :54:25. | |
Chancellor, does he recall what he said to this House two years ago? He | :54:25. | :54:29. | |
said we have already asked the British people for what is needed | :54:29. | :54:36. | |
and we do not need to ask for more. We do not need to ask for more. | :54:36. | :54:40. | |
Isn't his economic failure the reason why he's back here asking for | :54:40. | :54:45. | |
more today? More cuts to the police, more cuts | :54:45. | :54:51. | |
to our defence budgets, more cuts to our local services. This out of | :54:51. | :54:55. | |
touch Chancellor has failed on living standards, growth and the | :54:55. | :54:59. | |
deficit and families and businesses are paying the price for his | :54:59. | :55:03. | |
failure. Of course, Mr Speaker, it wasn't | :55:03. | :55:09. | |
supposed to turn out like this. Let me ask the Chancellor, does he | :55:09. | :55:14. | |
remember what he told the House three years ago in its first budget | :55:14. | :55:19. | |
and Spending Review? He said the economy would grow by | :55:19. | :55:26. | |
But it's growing by just 1%. He pledged to get the banks lending, | :55:26. | :55:29. | |
but bank lending is down month on month on month. | :55:29. | :55:35. | |
He made the number one test of his economic credibility keeping the | :55:35. | :55:39. | |
triple-A credit rating, but on his watch we've been downgraded not once | :55:39. | :55:44. | |
but twice, Mr Speaker. He promised living standards would | :55:44. | :55:49. | |
rise. But they are falling year on year on year. He said we are all in | :55:49. | :55:55. | |
this together, but then he gave a huge tax cut to millionaires, Mr | :55:55. | :55:59. | |
Speaker. He promised to balance the books and that promise is in | :55:59. | :56:05. | |
tatters. Failed tests, broken promises. His friends call him | :56:05. | :56:13. | |
George, the President calls him Jeffrey, but to everyone else, he's | :56:13. | :56:23. | |
:56:23. | :56:29. | ||
just Bungle, Mr Speaker. I can see even Zippy on the | :56:29. | :56:33. | |
frontbench can't stop smiling, Mr Speaker. | :56:33. | :56:39. | |
Calm down, Zippy, calm down! And did we get an admission that his plan | :56:39. | :56:43. | |
has worked? That Britain needs to change course? | :56:43. | :56:48. | |
Did he get the plan B for growth and jobs that we and the International | :56:48. | :56:53. | |
Monetary Fund have called for? Mr Speaker, it doesn't have to be this | :56:53. | :57:00. | |
way. Instead of planning cuts in 2015, two years ahead, surely the | :57:00. | :57:04. | |
Chancellor should be taking bold action now to boost growth this year | :57:04. | :57:08. | |
and next. Investment that would get our | :57:08. | :57:13. | |
economy growing, get the tax revenues coming in, more revenues | :57:13. | :57:18. | |
which would mean our police, Armed Forces and Public Services would not | :57:18. | :57:24. | |
face such deep cuts in 2015. Let me ask the Chancellor, why didn't he | :57:24. | :57:30. | |
listen to the International Monetary Fund and bring forward �10 billion | :57:30. | :57:33. | |
in infrastructure investment this year? | :57:33. | :57:38. | |
With house building at the lowest level since the 20s, why isn't he | :57:38. | :57:42. | |
building 400,000 more affordable homes this year and next? | :57:42. | :57:47. | |
Mr Speaker, if the Chancellor continues with his failing economic | :57:47. | :57:52. | |
plan, it will be for the Next Labour Government to turn the economy | :57:52. | :57:57. | |
around, to take the tough decision to get the deficit down in a fair | :57:57. | :58:04. | |
way, Mr Speaker. I have to say, I have to say to the Chancellor, there | :58:04. | :58:09. | |
is no point boasting about infrastructure investment in five or | :58:09. | :58:13. | |
seven years' time. We need action now, Mr Speaker. | :58:13. | :58:19. | |
I have to say to him, he ought to brief the Prime Minister better for | :58:19. | :58:22. | |
Prime Minister's Questions because three years after the infrastructure | :58:22. | :58:29. | |
plan was launched, out of 576 projects announced, just seven | :58:29. | :58:35. | |
completed. Over 80% not even started, just one school, Mr | :58:35. | :58:41. | |
Speaker. The first three months of this year, infrastructure investment | :58:41. | :58:46. | |
down by 50%. On infrastructure, we need bold | :58:46. | :58:50. | |
action now, not just more empty promises for the future. | :58:50. | :58:53. | |
As for the idea this spending are eview's going to strengthen our | :58:53. | :59:01. | |
economy for the long-term, let me ask him, where is the proper British | :59:01. | :59:06. | |
investment bank? Where is the 2030 decarbonisation target which the | :59:06. | :59:10. | |
energy companies say they need to be able to invest for the future? | :59:11. | :59:15. | |
is the power to break up the banks if there's not reform which the | :59:15. | :59:18. | |
Parliamentary Commissioners call for? I have to say, whatever | :59:18. | :59:25. | |
happened to the Heseltine plans, much heralded, �49 billion single | :59:25. | :59:30. | |
pot growth fund for the regions, �2 billion, it's pathetic, Mr Speaker. | :59:30. | :59:35. | |
Isn't this the truth. Instead of action to boost growth and long-term | :59:35. | :59:40. | |
investment, all we got today is more of the same from a failing | :59:40. | :59:45. | |
Chancellor and more of the same on social security and welfare spending | :59:45. | :59:51. | |
too. We have plenty of tough talk and devisive rhetoric from the | :59:52. | :59:55. | |
Chancellor and the Prime Minister, but on their watch, the benefits | :59:55. | :00:03. | |
bill is soaring. Social security is up �21 billion compared to their | :00:03. | :00:13. | |
:00:13. | :00:25. | ||
plans. Mr Speaker, we have called Chancellor tried to set a cap in | :00:25. | :00:29. | |
2010 on social security spending. He has overspent his cap by �21 | :00:29. | :00:35. | |
billion. If he really wants to get the bills of social security down, | :00:35. | :00:41. | |
why not get young people and the unemployed back to work? With a | :00:41. | :00:45. | |
compulsory jobs guaranteed paid for by tax on bank bonuses. Why not get | :00:45. | :00:50. | |
our housing benefit bill down by tackling high rents and the shortage | :00:50. | :00:56. | |
of affordable homes? Why not stop paying the winter allowance to the | :00:56. | :01:04. | |
richest 5% of pensioners? And why not make work pay, with a mansion | :01:04. | :01:08. | |
packs dash-macro/10p tax band, instead of huge tax cuts for | :01:08. | :01:14. | |
millionaires? The Chancellor is making the wrong choices on growth | :01:14. | :01:18. | |
and social security. He is making the wrong choices on departmental | :01:18. | :01:23. | |
spending as well. Let me ask him, when thousands of front-line police | :01:23. | :01:29. | |
officers are being cut why is he spending more on police | :01:29. | :01:37. | |
commissioners than the old police authorities? Why is he spending �3 | :01:37. | :01:40. | |
billion on a reckless NHS reorganisation that the public | :01:40. | :01:46. | |
doesn't support? Why is he funding new free schools in areas with | :01:46. | :01:49. | |
enough school places, while parents in other areas can't get their | :01:49. | :01:55. | |
children into a local school? We will study his departmental spending | :01:55. | :02:02. | |
plan for 2015 to 2016. There's a lot of detail he didn't provide for the | :02:02. | :02:05. | |
House. We look forward to seeing whether he is going to confirm the | :02:05. | :02:10. | |
continuation of three national museum entry. -- free national | :02:10. | :02:16. | |
museum entry. But the country needs to know the detail. Will this | :02:16. | :02:26. | |
Spending Review mean fewer police officers in 2015 to 2016, on top of | :02:26. | :02:29. | |
the 15,000 we are losing in this Parliament? Will it mean fewer | :02:29. | :02:37. | |
nurses in 2015, on top of the 4000 we've lost so far? Will it mean | :02:37. | :02:42. | |
fewer sure start children's centres on top of the 500 already closed? | :02:42. | :02:49. | |
And will he continue to impose deeper cuts on local authorities in | :02:49. | :02:56. | |
areas with the greatest need when already in this Parliament the ten | :02:56. | :03:00. | |
most deprived local authorities are losing six times the spending per | :03:00. | :03:06. | |
head of the ten least deprived areas? People want to know the | :03:06. | :03:10. | |
answers to these questions, and they should be in no doubt that the scale | :03:11. | :03:17. | |
of the extra cuts the Chancellor has announced today to our police, | :03:17. | :03:20. | |
defence and services are the direct result of his abject failure to get | :03:20. | :03:27. | |
the economy to grow. The Chancellor is failing on living standards, they | :03:27. | :03:30. | |
are falling. He has failed on both, it's flatlining. He is failing on | :03:30. | :03:35. | |
the deficit, and all we got was more of the same. No plan to turn the | :03:35. | :03:41. | |
economy around, no hope for the future and Britain's families and | :03:41. | :03:51. | |
:03:51. | :03:57. | ||
our public services are paying the now. If you want to continue | :03:57. | :04:02. | |
watching proceedings there, you can do so by switching over to BBC | :04:02. | :04:07. | |
Parliament, or by going to the democracy live website. Let's take a | :04:07. | :04:12. | |
look at the main points from the statement. It lasted for about 50 | :04:12. | :04:16. | |
minutes, longer than some had predicted. The Chancellor did | :04:16. | :04:22. | |
confirm that he needed �11.5 billion worth of spending cuts in 2015 to | :04:22. | :04:28. | |
2016 to hit its deficit target. He told us total government spending | :04:28. | :04:32. | |
would be 745 billion. That is no change from what he told us in | :04:32. | :04:38. | |
March. Here are the departmental cuts. Here is how the axe fell. The | :04:38. | :04:44. | |
Home Office took a 6% cut, business a 6% cut, work and pensions leading | :04:44. | :04:51. | |
the pack at 9.5%. Energy, 8%. Environment and justice both taking | :04:51. | :04:57. | |
a 10% cut. Culture, which is always lobbied by those in the | :04:57. | :05:01. | |
entertainment and arts business has got a 7% cut. The foreign office | :05:01. | :05:07. | |
added 8% cut. The Treasury, to coin a phrase, we are all in this | :05:07. | :05:12. | |
together, even the Treasury had to volunteer a 10% cut. The communities | :05:12. | :05:17. | |
Department took a 10% cut as well, which local government will feel the | :05:17. | :05:22. | |
impact on that. On defence, which has come out of this review rather | :05:22. | :05:27. | |
well. The defence resource budget is frozen in cash terms at �24 billion. | :05:27. | :05:29. | |
frozen in cash terms at �24 billion. That is simply a small cut in real | :05:29. | :05:32. | |
frozen in cash terms at �24 billion. That is The equipment budget of 14 | :05:32. | :05:38. | |
billion would be 14,000,000,020 16, then it would rise by 1% a year. The | :05:38. | :05:44. | |
Chancellor went out of his way to say there will be no cuts in | :05:44. | :05:47. | |
front-line personnel. But there have been in previous statements, there | :05:47. | :05:50. | |
have been substantial cuts in front-line personnel. If you are in | :05:50. | :05:55. | |
the military, no more, says the Chancellor. The education budget, | :05:55. | :05:59. | |
that is going to increase to 53 billion by 2015 to 2016. There will | :05:59. | :06:04. | |
be a new national funding formula for school spending. The Chancellor | :06:04. | :06:09. | |
said the current one wasn't fair. He wants to put some petrol into the | :06:09. | :06:14. | |
free schools movement. He will find funding for 180 new free schools in | :06:14. | :06:18. | |
2015. Here we come to the infrastructure now, which was a lot. | :06:18. | :06:22. | |
50 billion on capital investment in 2015. That sounds a lot, but he's | :06:22. | :06:29. | |
using a gross figure. Those figures tend to be down on net public-sector | :06:29. | :06:33. | |
investment. The 50 billion is a little misleading there. He says as | :06:33. | :06:38. | |
a result of increasing capital and then dashed back spending every | :06:38. | :06:42. | |
year, there effectively 300 billion guaranteed total spending throughout | :06:42. | :06:47. | |
this decade. It seems to me they are saying they will have invested 300 | :06:47. | :06:51. | |
billion over the ten years of the decade ending in 2020. Projects | :06:51. | :06:56. | |
worth �100 billion are going to be announced tomorrow. The Chancellor | :06:56. | :07:00. | |
wanting to top up his infrastructure plans to counter some of the cuts | :07:00. | :07:04. | |
he's had to make in departmental spending. NSAIDs. Let's have a look. | :07:04. | :07:10. | |
The Chancellor announced a new welfare cup from April 2015, just a | :07:10. | :07:16. | |
month before the next election. However, it excludes a number of | :07:16. | :07:21. | |
things, those benefits that changes with business, unemployment | :07:21. | :07:27. | |
benefits, jobless allowance. And a massive welfare budget area, state | :07:27. | :07:31. | |
pensions are also excluded. Winter fuel payments will be removed from | :07:31. | :07:35. | |
British expats who live in hot countries. Though I guess that will | :07:35. | :07:40. | |
partly depend on where they live in these particular hot countries. | :07:40. | :07:46. | |
There will also be a new seven-day wait before claiming benefits. Major | :07:46. | :07:50. | |
announcements on public sector pay. Public sector pay rises will be | :07:50. | :07:56. | |
capped at 1% in 2015 to 2016. That is probably not a surprise. But and | :07:56. | :08:00. | |
this was billed in the run-up, the automatic progression of pay in the | :08:00. | :08:03. | |
civil service, whereby you get a pay rise simply for staying on for | :08:04. | :08:10. | |
another year, that'll be abolished in 2015 to 2016. No more automatic | :08:10. | :08:14. | |
pay rises. The Chancellor also announced his intention to remove | :08:14. | :08:18. | |
this particular automatic progression on pay rises from the | :08:18. | :08:26. | |
NHS, schools and police. The civil service get it from 2015. On other | :08:26. | :08:31. | |
spending, the Chancellor announced funding for two further years of a | :08:31. | :08:35. | |
council tax freeze, from April 2014. There's been a breeze in play for a | :08:35. | :08:38. | |
couple of years, it's part of the idea of trying to do something about | :08:38. | :08:43. | |
the squeeze on living standards. There are a number of reports about | :08:43. | :08:47. | |
what would happen to the intelligence services. Those who | :08:47. | :08:50. | |
said the budget would be increased, they turned out to be right. It's | :08:50. | :08:56. | |
gone up by 3.4%. The health budget, which was 96 billion when the | :08:56. | :09:06. | |
:09:06. | :09:06. | ||
coalition came to power, will be 110 billion by 2015 to 2016. �14 billion | :09:06. | :09:12. | |
rise in the health budget over the lifetime of this government. Health | :09:12. | :09:22. | |
:09:22. | :09:26. | ||
2015. 2015 was a date when the current spending plans ran out. But | :09:26. | :09:30. | |
it became clear the more the Chancellor spoke, he really had his | :09:30. | :09:34. | |
eye on the key marker in 2015, the date of the general election. The | :09:34. | :09:37. | |
longer it went on, the more political it became. He announced | :09:37. | :09:42. | |
there would be a welfare cap, a cap on overall welfare spending, not | :09:42. | :09:47. | |
including the state pension, which would come in, when? On the eve of | :09:47. | :09:51. | |
that general election. Clearly designed to be something the | :09:51. | :09:53. | |
Conservatives and possibly the coalition in agreement will be able | :09:53. | :09:58. | |
to deploy just before a general election, able to say to Labour, | :09:58. | :10:02. | |
would you match it? A further squeeze on welfare for the jobless. | :10:02. | :10:06. | |
A weight of seven days in terms of the signing on time between losing | :10:06. | :10:10. | |
your job and being able to get your benefits. Also promised that if you | :10:10. | :10:14. | |
couldn't speak English, you would be forced to have English-language | :10:14. | :10:17. | |
courses or you would lose that benefit, together with the more | :10:17. | :10:21. | |
predictable promises of protection for health spending, school | :10:21. | :10:25. | |
spending, a boost for the intelligence services, a boost for | :10:25. | :10:30. | |
social care. All of those seemed to be designed to put the best possible | :10:30. | :10:33. | |
political gloss on some pretty gloomy economic news. The obvious | :10:33. | :10:39. | |
and final point to make is this. We get these very big numbers for | :10:39. | :10:42. | |
squeezes in government departments, 10% environment, justice, Cabinet | :10:42. | :10:47. | |
Office, Scotland, Wales, Northern Ireland, 8% in departments like | :10:47. | :10:51. | |
climate change the foreign office. What we haven't yet got is what does | :10:51. | :10:55. | |
that mean for jobs lost, pay squeezed, programmes cancelled? It | :10:55. | :11:03. | |
deliberate. We only get the headlines. Is it possible, is it | :11:03. | :11:08. | |
clear who are the winners and losers in this spending round? Some of the | :11:08. | :11:13. | |
winners we can see quite clearly. Defence does seem to be a bit of a | :11:13. | :11:20. | |
winner. In its resource budgets, it's only been cut by just under 2% | :11:20. | :11:25. | |
in real terms. That will mean overall, since 2010, it will be | :11:25. | :11:31. | |
looking at about 10% real cut. When you look at environment, energy, a | :11:31. | :11:35. | |
lot of local government, all of those have been cut, going into | :11:35. | :11:40. | |
this, over 20%, now looking at 30 and in some cases even 40%. | :11:40. | :11:44. | |
Transport investment is a big winner. But it's worth saying that | :11:44. | :11:48. | |
the resource budget for transport has actually been cut. Some people | :11:48. | :11:52. | |
have been reminding me that that includes road maintenance and some | :11:52. | :11:57. | |
of the things you might think of as investment. The filling in holes is | :11:57. | :12:03. | |
not in the capital budget. That is quite crucial. Communities | :12:03. | :12:09. | |
definitely looks like another big loser. Also on their investment, | :12:09. | :12:13. | |
that's been cut quite a lot. On the basis of this, relative to | :12:14. | :12:18. | |
expectations, I'd say the NHS was a bit of a loser will stop there's no | :12:18. | :12:23. | |
real cut in NHS spending. But if you look at the year-on-year growth for | :12:23. | :12:29. | |
that year, it's 0.1%, the barest amount. Most people in the NHS will | :12:29. | :12:34. | |
be not feeling very protected at all. Given that inflation in health | :12:34. | :12:40. | |
is huge. Much higher than the average level of inflation. There | :12:40. | :12:44. | |
was this puzzle that the headline cut to local councils, get the | :12:44. | :12:48. | |
speech said in effect its 2%. I've been treated by the communities | :12:48. | :12:52. | |
secretary. He is claiming that the extra money that councils will get, | :12:52. | :12:57. | |
more money to schools and more money in the spot for social care, means | :12:57. | :13:00. | |
that the effective cut the local councils is much less than 10%. I | :13:00. | :13:04. | |
can imagine a lot of councillors will dispute that, but that is the | :13:04. | :13:11. | |
claim. They can't all not be cut. is true they are putting more money | :13:11. | :13:16. | |
into the hands of local government, so it makes it harder to judge these | :13:16. | :13:19. | |
things. On the paid progression thing, that is quite significant. | :13:19. | :13:22. | |
What we've seen in the last few years is a much greater than | :13:22. | :13:27. | |
expected loss of jobs in the public sector, which has been offset by | :13:27. | :13:31. | |
growth in private sector jobs. But the pay bill and paper head in the | :13:31. | :13:35. | |
public sector has not been... It's grown much faster than they | :13:35. | :13:39. | |
expected, even despite that pay freeze. There has been a feeling | :13:39. | :13:42. | |
that these increments, these progressions that people get | :13:42. | :13:45. | |
automatically, have played quite a big part in that. The police will | :13:45. | :13:49. | |
say they haven't been employing these progressions. You would have | :13:49. | :13:54. | |
thought he would have realised that originally. What do we make of this | :13:54. | :14:01. | |
huge emphasis on infrastructure spending? We've been here before. | :14:01. | :14:07. | |
It's been rather overdone. He made this great play in his speech, | :14:07. | :14:12. | |
spending 50 billion will stop it rather implies that it is a rise. If | :14:12. | :14:17. | |
you look at the figures that they've just put out, there is no rise. He | :14:18. | :14:25. | |
was actually planning to spend �50.4 billion in 2014 to 2015. He is | :14:25. | :14:31. | |
planning to spend �50.4 billion in 2015 to 2016. It is flat. It's the | :14:31. | :14:41. | |
:14:41. | :14:41. | ||
gross figure. Actually, in that important period it is flat. �50.4 | :14:41. | :14:46. | |
billion is a rise on where it is right now. It is a rise on what | :14:46. | :14:52. | |
we've seen so far this Parliament. The fact that he has maintained it | :14:52. | :14:57. | |
will be seen by some as OK. But what he implied which was that there was | :14:57. | :15:03. | |
a great increase in that period, is simply not borne out by the | :15:03. | :15:07. | |
figures. And there are some very interesting details, in terms of | :15:07. | :15:13. | |
what's happening. For example, there is a very big drop from 4.8 billion | :15:13. | :15:19. | |
to 3.1 billion, that's a drop of 35.6% capital spending within the | :15:19. | :15:23. | |
community 's budget. Some of that is presumably things like libraries, | :15:23. | :15:32. | |
sports facilities... Real buildings that affect people 's lives. There | :15:32. | :15:36. | |
are bits of the capital budgets that people will lament because they are | :15:36. | :15:46. | |
:15:46. | :15:48. | ||
being squeezed. 57 drop in a year in media, culture | :15:48. | :15:53. | |
and sport, in a year capital budget. It's a small capital budget. | :15:53. | :15:59. | |
it's an indication of where you can cut in places. They are always very | :16:00. | :16:08. | |
articulate. All right. Where are we going next? We are going to go to | :16:08. | :16:18. | |
:16:18. | :16:20. | ||
get reaction from experts Jo Co in Bury. It's lunch time here in Bury | :16:20. | :16:25. | |
market and we are all digesting what the Chancellor has announced in his | :16:25. | :16:28. | |
Spending Review. Let's chew over some of the headline figures with | :16:28. | :16:33. | |
Robert Oxley from the Taxpayers' Alliance. Good afternoon. One of the | :16:33. | :16:36. | |
big headline figures was the �50 billion in capital investment in | :16:36. | :16:42. | |
infrastructure. That sounded like a big number to me? The worry is that | :16:42. | :16:48. | |
we have seen too often the capital investment is a white elephant, | :16:48. | :16:52. | |
�2,000 on every family's shoulders, which isn't going to deliver any of | :16:52. | :16:56. | |
the benefits the Chancellor is promising. The other part of the | :16:56. | :16:59. | |
investment could be offshore wind leading to higher energy bills to | :17:00. | :17:04. | |
families already struggling. What about the announcement of cuts to | :17:04. | :17:09. | |
Government departments? Most we were expecting, but ranging from 6-10%, | :17:09. | :17:13. | |
apart from the protected departments of health, international aid and | :17:13. | :17:18. | |
education? He took �11. 5 billion off the department and is still | :17:18. | :17:23. | |
ringfencing international aid. There is �120 billion of waste to actually | :17:23. | :17:28. | |
get out of Government waste so more could be done. We have seen the Sa | :17:28. | :17:34. | |
L'ami slicing and not the radical cuts. How would you sum it up?He's | :17:34. | :17:39. | |
done well on public sector pay, but there's still a lot more work to do | :17:39. | :17:45. | |
if he's to ease the pressure on those paying a huge amount of tax. | :17:45. | :17:50. | |
Thank you very much. Robert mentioned public sector pay. The | :17:51. | :17:54. | |
Chancellor spoke about having to have Public Services that we can | :17:54. | :17:57. | |
afford and that there could be further cuts to bureaucracy. Let's | :17:57. | :18:03. | |
talk about that with my next guest, Catt vint Nelson from unitnison. Did | :18:03. | :18:08. | |
you agree that more cuts could be made to bureaucracy in Public | :18:08. | :18:17. | |
Services in order to keep in tune with austerity -- Tevan Nelson from | :18:17. | :18:22. | |
unison? I think the reality is that there's no easy cuts to be made any | :18:22. | :18:25. | |
more in Local Government in particular. Putting aside the | :18:25. | :18:27. | |
theatrer in Parliament today, I think we have to keep some | :18:27. | :18:30. | |
proportion about what's been announced. There is a statement of | :18:30. | :18:36. | |
intent. They will take basically on the next general election. Our main | :18:36. | :18:40. | |
concern is that this sets the scene for austerity to continue beyond | :18:40. | :18:42. | |
2015 when the initial commitment of the Government was for it to end | :18:43. | :18:47. | |
that year. Labour has said we are signed up to the spending plans as | :18:47. | :18:50. | |
our starting point if we win the next election so everybody is in on | :18:50. | :18:54. | |
this? We hope Labour think again about that because it gives the | :18:54. | :18:57. | |
public no choice when the general election comes around. If both | :18:57. | :19:02. | |
parties are signed up to the cuts up to perhaps 2020, it gives little | :19:02. | :19:07. | |
real alternative to the voters and we hope Labour think again about | :19:07. | :19:11. | |
embracing the spending cuts. Public sector pay, he wants to end | :19:11. | :19:14. | |
automatic rises? It's not viable. He announced this in March in the | :19:14. | :19:20. | |
budget, we have seen no proposals since and it portrays absolute | :19:20. | :19:23. | |
ignorance about development in Public Services workers like nurses | :19:23. | :19:26. | |
and social work workers, they are linked to training and development, | :19:26. | :19:31. | |
what is the alternative if they are removed. All right, Kevan Nelson, | :19:31. | :19:36. | |
thank you very much. That's the view from unions and Taxpayers' Alliance. | :19:36. | :19:40. | |
We heard what the Chancellor had to say in a Spending Review that he | :19:40. | :19:44. | |
didn't have to do. He could have waited until next year but perhaps | :19:44. | :19:48. | |
for political reasons he did it now. Let's find out what people thought | :19:48. | :19:52. | |
about what the Chancellor had to say. Hell lop again sitting in the | :19:52. | :19:55. | |
sunshine, good sport you have got here, Paul Lewis. What have people | :19:55. | :20:01. | |
been saying? The -- hello. The reactions have been swift. Thes | :20:01. | :20:05. | |
Chancellor said if you lost your job, you would have to wait seven | :20:05. | :20:08. | |
days before you claim. At the moment, the three days, it will be | :20:08. | :20:13. | |
another four, people are saying seven days with no money in torture | :20:13. | :20:17. | |
says Barbara and another comment along similar lines, why should | :20:17. | :20:20. | |
anyone have to wait seven days. That's causing prove sill. There's | :20:20. | :20:26. | |
also the question of cutting the pay -- controversy. Cutting automatic | :20:26. | :20:30. | |
pay rises for the Civil Service, I had an e-mail saying, is this legal, | :20:30. | :20:33. | |
surely it's a contractual right and I think the Chancellor made it clear | :20:33. | :20:37. | |
he'd have to renegotiate the contracts that hundreds of thousands | :20:37. | :20:40. | |
of civil servants are on which enables them to have the regular | :20:40. | :20:44. | |
rises. The other change, scrapping Winter Fuel Payments for people | :20:44. | :20:51. | |
living abroad. Now, some people get those in the tropics, in French | :20:51. | :20:55. | |
colonies. The Chancellor's said that will save �30 million a year, and | :20:55. | :21:03. | |
from the winter of 2015, no no UK peckser which has a temperature | :21:03. | :21:06. | |
higher than the UK will be able to claim. No more detail than that, but | :21:06. | :21:12. | |
it will be a difficult one I think. -- pensioner. We may not be in the | :21:12. | :21:15. | |
tropics, but it's certainly heating up here in Bury. Back to you, | :21:15. | :21:18. | |
Andrew. We are heating up among the ex-pats | :21:18. | :21:21. | |
watching this programme too who'll no doubt be pointing out that in | :21:21. | :21:26. | |
winter, it's a lot colder in Paris than it is in Nice. Political | :21:26. | :21:32. | |
reaction to the Chancellor's speech now and we can join Matthew | :21:32. | :21:36. | |
Amroliwala. The Chancellor was on his feet for a | :21:36. | :21:42. | |
little over 45 minutes. Let's get the thoughts of my political guests. | :21:42. | :21:46. | |
Printy poo pel forthe Conservative, Lord Oakeshott for the Liberal | :21:46. | :21:56. | |
:21:56. | :21:57. | ||
Democrats. -- Pritti Patel. Do you acknowledge the cuts will cause | :21:57. | :22:02. | |
problems? I'm afraid we are looking actually at the way to say to the | :22:02. | :22:08. | |
country, we are in a state with the finances if. The Chancellor spoke | :22:08. | :22:12. | |
about growth and investment and investment in education and capital | :22:12. | :22:16. | |
spending as well, so that's thinking about the future while we manage the | :22:16. | :22:21. | |
challenges we have and reform Government, deal with the | :22:21. | :22:24. | |
inefficiencies on the wasting Government spending while looking to | :22:24. | :22:31. | |
reform welfare and bring gator fairness. I'll come to some of the | :22:31. | :22:35. | |
issue in in a moment, but do you acknowledge the pain? They'll be | :22:35. | :22:38. | |
difficult outcomes of course, that's ine tab, but it's about Government | :22:38. | :22:42. | |
making difficult choices in terms of Government spending and also future | :22:42. | :22:52. | |
:22:52. | :22:54. | ||
projections when it comes to expenditure as If you can't get | :22:54. | :22:58. | |
growth going, you will struggle... If you look at the way the economy | :22:58. | :23:02. | |
is developing, it is growing marginaling Liverpool any, but we | :23:02. | :23:06. | |
have had positive indicators, there's been over 1. 3 million | :23:06. | :23:10. | |
private sector jobs in this country which have come on since 2010, so if | :23:10. | :23:13. | |
this is the way forward, and it really is, we can't talk down the | :23:13. | :23:16. | |
economy and say cuts will automatically lead to a negative | :23:16. | :23:21. | |
situation in the country. We are seeing capical investment by the | :23:21. | :23:26. | |
government and private sector growth and that should be welcomed. Up to a | :23:26. | :23:30. | |
few weeks ago, you might well have opposed the cuts, this is now your | :23:30. | :23:32. | |
starting point for Labour if they win the election, both the Prime | :23:32. | :23:37. | |
Minister and the Chancellor taunted your party today, saying your whole | :23:37. | :23:41. | |
economic position has collapsed, it has, hasn't it? Well, the big | :23:41. | :23:45. | |
difference is, how do you get growth in the economy and where is the | :23:45. | :23:48. | |
infrastructure going to be and when's it going to start? The | :23:48. | :23:53. | |
Chancellor wants the infrastructure to be virtually all in London and he | :23:53. | :23:58. | |
reiterated that today. But it isn't starting. Ayous the country, we are | :23:58. | :24:01. | |
not seeing the major infrastructure problems that will get people back | :24:01. | :24:06. | |
to work and get the economy growing again -- across the country. This | :24:06. | :24:09. | |
economy isn't growing and the Chancellor's done nothing today to | :24:09. | :24:14. | |
make it grow. There's more money for schools, counter-terrorism, council | :24:14. | :24:18. | |
tax will be frozen for another two years, all of which I suppose you | :24:18. | :24:24. | |
would support. You support the idea of ending automatic pay rises in the | :24:24. | :24:29. | |
public sector? What the Government's been doing is | :24:29. | :24:34. | |
using inflationary 1970s approaches in order to try and cut the deficit. | :24:34. | :24:37. | |
It isn't working. It isn't working because there isn't the growth | :24:37. | :24:41. | |
there. The answer to the question though, do you support the notion of | :24:41. | :24:45. | |
stopping automatic pay rises for public sector workers? You can't | :24:45. | :24:49. | |
simply say one system and brutally alter it will work, as the problem | :24:49. | :24:53. | |
is, how do you keep good people in there, for example, in the police? | :24:53. | :24:57. | |
It's a simplistic slogan and I think the practicality of it is far more | :24:57. | :25:02. | |
complex than the Chancellor's making out. Labour's position now is all | :25:02. | :25:06. | |
about priorities, different priorities, same spending envelope | :25:06. | :25:09. | |
but different priorities, you are also talking about borrowing more. | :25:09. | :25:15. | |
How does that fit in coherently? I don't understand? The wrong kind of | :25:15. | :25:20. | |
cuts, the wrong things being cut, but as well, infrastructure. You | :25:20. | :25:24. | |
rebuild the economy by getting the big capital schemes going, in other | :25:24. | :25:28. | |
words building things. That is not happening and the Government failed | :25:28. | :25:34. | |
to start from the promises. How much would you borrow? Enough to get the | :25:34. | :25:38. | |
major infrastructure. But what is enough? If you were in Government, | :25:38. | :25:43. | |
what extra amount would you need to borrow? All we'd need to do this | :25:43. | :25:46. | |
year is make the commitments happen to stimulate the economy. This | :25:47. | :25:51. | |
Government, even on existing plans, has failed to get more than 7% of | :25:51. | :25:59. | |
those projects going. That's the big problem. They are not delivering. | :25:59. | :26:03. | |
terms of the basic cuts that we have had announced today, are they in the | :26:03. | :26:09. | |
right areas? Are they fair? You have had two straight questions and two | :26:09. | :26:19. | |
:26:19. | :26:19. | ||
dodgy answers from my colleagues here. I asked you... Are they in the | :26:19. | :26:23. | |
right areas? We have done our best to stop them being too painful. For | :26:23. | :26:28. | |
example, Vince Cable has fought very hard and has got the lowest cuts of | :26:28. | :26:32. | |
any unprotected department, as it's called, to protect spending for | :26:32. | :26:36. | |
growth, Education and Skills. We also managed to fight off a very | :26:36. | :26:42. | |
nasty attack by the Tories. Are they fair? It's not a dodgy answer - we | :26:42. | :26:45. | |
are doing our best to keep them fair. We'd rather they were not | :26:45. | :26:49. | |
necessary and I agree with John Mann that because economic growth's been | :26:49. | :26:52. | |
disappointing after a good start, we are in more pain than we should be. | :26:52. | :26:56. | |
The key thing is the announcements tomorrow, it's about capital | :26:56. | :27:00. | |
spending and getting house building growing. We have wasted �20 billion | :27:00. | :27:03. | |
a year on house building because Labour and Conservatives sold off | :27:04. | :27:08. | |
too many council houses. Interesting what Nick Clegg was saying yelled | :27:08. | :27:14. | |
about the help-to-buy scheme and showing his frustration saying the | :27:14. | :27:18. | |
gap between announcements and delivery. If you asking businesses | :27:18. | :27:22. | |
out there, that's their frustration as well, they hear things in this | :27:22. | :27:28. | |
building... Irishes If I decide to do something, it happens next week. | :27:28. | :27:32. | |
It's slow in Government getting house building going and the problem | :27:32. | :27:37. | |
with the so far, the things that were announced - indeed I talked to | :27:38. | :27:41. | |
you six monthings ago about it - is that they are only affecting house | :27:41. | :27:45. | |
mortgages but not building. We have had hundreds of billions of pounds | :27:45. | :27:48. | |
waiting to come in from pension funds if we can really free up | :27:48. | :27:51. | |
councils to build up Housing Associations to borrow, we can | :27:51. | :27:55. | |
really get that going. 100,000 more houses a year, half a million more | :27:55. | :27:59. | |
jobs and half a million people off benefit. There we have to leave it. | :27:59. | :28:03. | |
Thanks to all of you. Andrew, back to you. More from you later. | :28:03. | :28:08. | |
Let's pick up on the point about house building that was in Matthew's | :28:08. | :28:11. | |
discussion there, Robert. I didn't hear the Chancellor say much about | :28:11. | :28:15. | |
housing at all, yet there's always talk that what we need, as in the | :28:15. | :28:20. | |
1930s, is to get a house building boom going to help get us out of | :28:20. | :28:24. | |
slow growth into recovery? They've got a policy for trying to stimulate | :28:24. | :28:31. | |
the housing market. They have two forms of guarantees to help those | :28:31. | :28:36. | |
who haven't got deposits, and they are claiming that one of those Gar | :28:36. | :28:42. | |
tee schemes is stimulating private sector house building. | :28:42. | :28:44. | |
But there are those who argue, including the opposition, that they | :28:44. | :28:49. | |
ought to be doing more with public money to build social housing and we | :28:49. | :28:52. | |
heard nothing about that. In fact, the implication of the figures is | :28:52. | :29:00. | |
that there is no increase in that particular budget. It was quite odd | :29:00. | :29:02. | |
that you will see in Prime Minister's Question Time before that | :29:02. | :29:05. | |
that the Prime Minister looked rather on the defensive about all of | :29:05. | :29:08. | |
that, claiming that there were thousands of houses being built but | :29:08. | :29:13. | |
not able to provide any stats. The reason they can't provide them is | :29:13. | :29:16. | |
that it's because it's not a priority of theirs. The communities | :29:16. | :29:20. | |
department which, in days gone by, helped to fund house building | :29:20. | :29:25. | |
through the local authorities, that's's a budget that's been... | :29:25. | :29:28. | |
said they were one of the big losers. The capital budget had | :29:28. | :29:33. | |
already been cut by 74% in real terms and it's got more than a third | :29:33. | :29:38. | |
cut in real terms in this year for this Spending Review. Now, for the | :29:38. | :29:42. | |
2015 year, that is. What happened rightly or wrongly, George Osborne | :29:42. | :29:46. | |
looked at the system for providing affordable housing or social housing | :29:46. | :29:51. | |
in the UK when he came in and said this doesn't work and lots of | :29:51. | :29:56. | |
experts said the same. A lot of the cut in capital investment that came | :29:56. | :30:00. | |
in that year, they decided they would take out of the traditional | :30:00. | :30:04. | |
social housing programmes. One thing the crickets say is, that's all very | :30:04. | :30:08. | |
well, but the replacement for that which was being planned using the | :30:08. | :30:11. | |
private sector, trying to make all these things more efficient, have | :30:11. | :30:14. | |
more signalling, that's taken a long time to come on stream and they | :30:14. | :30:18. | |
threw up the planning system which has been influx. All these things | :30:18. | :30:21. | |
have added uncertainty to the housing industry and made it harder, | :30:21. | :30:25. | |
not easier to build homes. I think that's another reason why he's | :30:25. | :30:29. | |
defensive. Still a lot of questions about how | :30:29. | :30:33. | |
the spending cut will fall. Let's get the overall package and City | :30:33. | :30:36. | |
reaction to the review to what it means for interest rates, bond | :30:36. | :30:40. | |
prices, the size of the deficit and how much the Government will | :30:40. | :30:44. | |
continue to borrow? How is City going to react. Louise Cooper joins | :30:44. | :30:54. | |
:30:54. | :30:59. | ||
us. What do you think the reaction We've had some disappointing US | :30:59. | :31:05. | |
first-quarter GDP numbers out just half an hour ago. So at the moment, | :31:06. | :31:11. | |
markets are focusing far more on that disappointing GDP data than | :31:11. | :31:16. | |
anything in the Spending Review. can understand what is taking the | :31:16. | :31:21. | |
markets' attention, which is the rising bond yields. The beginning of | :31:21. | :31:25. | |
the end of the United States of the printing of money. It's not just the | :31:25. | :31:30. | |
beginning of the end in the states. What we've seen in the last couple | :31:30. | :31:34. | |
of months is very volatile money markets. These are short-term | :31:34. | :31:39. | |
interest rates. You've seen a big increase in both Spanish and Italian | :31:39. | :31:42. | |
three-month borrowing costs, where the Italian and Spanish governments | :31:42. | :31:46. | |
borrow for three months. Those rates have shot up. All of the other money | :31:47. | :31:51. | |
markets, you've seen the same thing there. In the UK, we're now seeing | :31:51. | :31:55. | |
money markets predict a rise in base rates in the next nine to 12 | :31:55. | :31:59. | |
months. Most people have not cottoned onto this. Big change, the | :31:59. | :32:04. | |
end of cheap money approaching. It is the beginning of the end, it's | :32:04. | :32:08. | |
not about to stop now, but that is what financial markets are telling | :32:08. | :32:12. | |
us. I don't think that's really been picked up by the media. Know, though | :32:12. | :32:16. | |
we did begin this programme by pointing out that the eve of cheap | :32:16. | :32:21. | |
money was coming to an end. But we are not the whole media, I take that | :32:21. | :32:27. | |
point, just the better part of it! still hear questions. If we don't | :32:27. | :32:32. | |
get growth? Actually, the UK, I think the risk is we get much better | :32:32. | :32:37. | |
growth. That we have a surge in growth. That is what everybody is | :32:37. | :32:42. | |
missing at the moment. That is the real risk for the UK economy, is it | :32:42. | :32:45. | |
recovers too quickly. For folks watching, a rise in interest rates | :32:45. | :32:50. | |
makes them worry about their mortgage payments. It also makes a | :32:50. | :32:53. | |
number of small businesses worry. They are servicing debt. If they | :32:53. | :32:56. | |
face bigger interest bills, some of them could be in trouble, the | :32:56. | :33:01. | |
so-called zombie companies. But the other big implications is the | :33:02. | :33:05. | |
government is still going to continue to borrow a shed load of | :33:05. | :33:10. | |
money for the foreseeable future, and its borrowing costs are now | :33:10. | :33:15. | |
going to rise. Tenure borrowing costs have already risen about one | :33:15. | :33:22. | |
percentage point. #10 year. They are still at incredibly low levels, | :33:22. | :33:27. | |
about 2.6%. But the interest bill on this incredibly low borrowing cost | :33:27. | :33:33. | |
is still �50 billion a year and rising. We cannot afford borrowing | :33:33. | :33:40. | |
costs to go up that far, all much more than here. That is the problem. | :33:40. | :33:44. | |
We have so much debt, borrowing costs are already large. If | :33:44. | :33:54. | |
:33:54. | :33:57. | ||
borrowing costs go up further, that could be really quite damaging. | :33:57. | :34:01. | |
is... Let's bring you an update of some of the key points in the | :34:01. | :34:06. | |
statement today. Here are the main measures. Departmental cuts of �11.5 | :34:06. | :34:13. | |
billion. A new welfare cap from April 2015, a month before the | :34:13. | :34:17. | |
election, but the welfare cap with a few holes in it as well a big one, | :34:18. | :34:22. | |
pensions is not included. Seven-day waiting for new benefit claims. And | :34:22. | :34:27. | |
an end to automatic pay rises in the public sector. That is on top of the | :34:27. | :34:30. | |
freezing public sector pay that we've had for some time. Some other | :34:30. | :34:38. | |
main measures in an attempt to keep down... To keep living standards | :34:38. | :34:42. | |
under control, to make sure they don't go up even more than they | :34:42. | :34:45. | |
have, funding of two further years of the council tax freeze from April | :34:45. | :34:49. | |
2014. That is almost becoming a permanent part of the British system | :34:49. | :34:56. | |
these days. The defence resource budget maintained at 24 billion. Mr | :34:56. | :35:01. | |
Hammond will be reasonably pleased. So will be Education Secretary, | :35:01. | :35:07. | |
because he is going to get funding for 180 new free schools. These are | :35:07. | :35:12. | |
some of the main measures. It was quite a long statement for a | :35:12. | :35:16. | |
Spending Review for one year. If it had been for the usual three years, | :35:16. | :35:20. | |
we'd probably have still been listening to him! We are joined by | :35:20. | :35:30. | |
:35:30. | :35:34. | ||
money and low interest rates is now coming to an end? It's far too early | :35:34. | :35:39. | |
to say that. One of the key drivers of the government's policy, the | :35:39. | :35:42. | |
tough action on public spending that we continue to take, measures to | :35:42. | :35:46. | |
deal with the deficit, is precisely to maintain the confidence and | :35:46. | :35:49. | |
credibility of this country in the financial markets, to keep our | :35:49. | :35:54. | |
borrowing costs as low as possible. But they are already rising. | :35:54. | :35:58. | |
still have some of the lowest borrowing costs of any country in | :35:58. | :36:07. | |
the world. In terms of what is going on in the financial markets are | :36:07. | :36:11. | |
driving that news from the US and so on, I will happily discuss it with | :36:11. | :36:18. | |
Louise in more detail. What we are doing is maintaining this country's | :36:18. | :36:23. | |
fiscal credibility to get away from the situation where interest rates | :36:23. | :36:28. | |
were tracking countries like Spain and Italy, when we came in, to being | :36:28. | :36:33. | |
amongst the lowest in the world. rate at which the government | :36:33. | :36:37. | |
borrowed has already risen almost a full percentage point already. Do | :36:37. | :36:41. | |
you accept, if this trend continues and almost every expert thinks it | :36:41. | :36:47. | |
will, that in future, when you come to borrow these billions, if you are | :36:47. | :36:51. | |
planning to borrow billions upon billions more, that your borrowing | :36:51. | :36:57. | |
costs will now rise and could rise quite substantially? Is the case | :36:57. | :37:07. | |
:37:07. | :37:10. | ||
that if interest rates get higher and stay higher, that that has a | :37:10. | :37:13. | |
fiscal cost to the government. The point I'm making to you is one of | :37:13. | :37:15. | |
the key objectives from the very start of this coalition government, | :37:15. | :37:17. | |
in terms of clearing up the economic mess that Labour left, is to | :37:17. | :37:19. | |
maintain this country's fiscal credibility and keep our interest | :37:19. | :37:24. | |
rates as low as they can be. But do you accept they are going to rise? | :37:24. | :37:30. | |
What I accept it was if the rise was permanent, that has a cost. I agree | :37:30. | :37:33. | |
with that statement. Let me come onto this infrastructure spending, | :37:33. | :37:39. | |
of which the Chancellor is making so much, implying there's a whole new | :37:39. | :37:45. | |
you were of infrastructure spending coming out. In the March Budget, I | :37:45. | :37:50. | |
would use the gross figure, you announced infrastructure spending of | :37:50. | :37:53. | |
50.4 billion in 2015 to 2016. The Chancellor has announced | :37:53. | :37:57. | |
infrastructure spending in the same year of 50.4 billion. No change. | :37:57. | :38:01. | |
Tomorrow I will be setting out in a separate Parliamentary statement the | :38:01. | :38:05. | |
details of our infrastructure 's plans, what we are spending the | :38:05. | :38:11. | |
money on over a longer... But you will not be changing the overall | :38:11. | :38:17. | |
total. I will not. In the March budget we added an extra �3 billion | :38:17. | :38:23. | |
to our capital spending in 2015 to 2016 and for the rest of the | :38:23. | :38:27. | |
parliament. What we are setting out today and tomorrow is how we spend | :38:27. | :38:31. | |
that extra money. The envelope for the spending round, both for current | :38:31. | :38:36. | |
and capital spending, was set at the Budget by promising to take | :38:36. | :38:39. | |
additional tough decisions on short-term current spending. We are | :38:39. | :38:46. | |
able to set aside long-term... the Spending Review today, this has | :38:46. | :38:51. | |
not added any extra money to investment, is that correct? That's | :38:51. | :38:54. | |
correct. We are allocating the budgets that we set out in the in | :38:54. | :38:58. | |
March. If you are so keen on infrastructure and investment, why | :38:58. | :39:03. | |
did you cut it so much in the first couple of years? We inherited plans | :39:03. | :39:07. | |
for very deep cuts in capital spending. Since we came into office, | :39:07. | :39:13. | |
we've added money to those plans. We added in the spending round in 2010. | :39:13. | :39:17. | |
We've added at every fiscal event since then, as we were able to find | :39:17. | :39:19. | |
ways of making more savings and current spending, we are reinvesting | :39:19. | :39:23. | |
some of that money invaluable capital spending. What we can't do | :39:23. | :39:28. | |
is say that we will borrow ever more for this. Instead, we have to make | :39:28. | :39:31. | |
difficult choices on current spending in order to afford the | :39:31. | :39:35. | |
capital investment that this country needs. In essence, what you did was | :39:35. | :39:38. | |
cut capital spending when you could have borrowed to pay for it when | :39:38. | :39:43. | |
borrowing costs work at an historic low. You are now going to increase | :39:43. | :39:46. | |
capital spending to borrow more at a time when borrowing costs are | :39:46. | :39:49. | |
returning to a higher normal level. You got it the wrong way round, | :39:49. | :39:53. | |
didn't you I don't think we did. We inherited plans for even deeper | :39:53. | :39:58. | |
cuts. You didn't have to implement them. As I was just explaining, | :39:58. | :40:01. | |
we've added money to those things. By setting up longer-term plans, we | :40:01. | :40:06. | |
can get more projects for the money we have. We have delivered the | :40:06. | :40:08. | |
Olympic project. We are changing the way that infrastructure is delivered | :40:08. | :40:11. | |
within government, to make it more effective and commercially | :40:11. | :40:17. | |
realistic, and to get more value for the capital investment of the spend. | :40:17. | :40:21. | |
You have accepted the principle that capital spending does more for both | :40:21. | :40:28. | |
short and long-term growth prospects than current spending. And that is | :40:28. | :40:32. | |
manifest in the priorities you've set out today. If you look at an | :40:32. | :40:38. | |
organisation like the IMF, they would say that one of the reasons | :40:38. | :40:42. | |
why the British economy slowed down so sharply was indeed those capital | :40:42. | :40:47. | |
spending cuts. Given that the consensus is you should be doing it, | :40:47. | :40:50. | |
including your own view, why don't you bring the capital spending | :40:50. | :41:00. | |
:41:00. | :41:00. | ||
forward? I'm waiting for the question to end! We accept that | :41:00. | :41:04. | |
capital spending is good for the economy, but not all capital | :41:04. | :41:08. | |
spending is the same. What we have done in government, we did this in | :41:09. | :41:12. | |
2010 and we've done it again, is to look at the projects around | :41:12. | :41:15. | |
government, to assess them on the basis of what has the best impact on | :41:15. | :41:20. | |
the economy and put our money on those things. In this current four | :41:20. | :41:23. | |
year period, we are spending more on transport and investment in this | :41:23. | :41:26. | |
country than our predecessors bit dashed back predecessors did. More | :41:26. | :41:33. | |
on our road network, rail networks, broadband infrastructure. Why not | :41:33. | :41:37. | |
housing? In the autumn of 2010 you announced the national | :41:37. | :41:42. | |
infrastructure plan, 550 projects. How many have been completed? | :41:42. | :41:49. | |
have been completed. I'd how many? Let me answer the question. Many of | :41:49. | :41:52. | |
those headings are programmes that contain many different projects | :41:52. | :41:55. | |
underneath them. You talk about the Highways Agency maintenance | :41:55. | :41:59. | |
programme. That is something that needs to go on for a long time | :41:59. | :42:02. | |
because it has been left over the years with a massive backlog in | :42:02. | :42:06. | |
maintenance. There are dozens of projects in that heading which have | :42:06. | :42:15. | |
been completed. White many dashed back How many have been completed? | :42:15. | :42:21. | |
The Labour Party left us with... The idea you can build a nuclear power | :42:21. | :42:27. | |
station is... That sun and Sally. You still haven't even started | :42:27. | :42:32. | |
building a nuclear power station. The infrastructure platform, meant | :42:32. | :42:38. | |
to raise 20 billion pension money. How much have you raised? It has | :42:38. | :42:42. | |
been set up by the pensions industry themselves. They've raised the | :42:42. | :42:45. | |
initial billion pounds of investment. �20 billion is over a | :42:45. | :42:52. | |
multi-year period. I think this is a real success story because, for the | :42:52. | :42:57. | |
first time, we've created a way for small, UK pension fronts to invest | :42:57. | :43:01. | |
directly in UK infrastructure. They would say to you that we've made | :43:01. | :43:07. | |
good progress. How much of that 20 billion has been invested? I don't | :43:07. | :43:14. | |
think they've made any investments yet. You announced the UK guarantee | :43:14. | :43:19. | |
scheme, which was to encourage money to come in from the private sector, | :43:19. | :43:22. | |
guaranteed by the government's balance sheet. How many projects | :43:22. | :43:28. | |
have you signed off under that? projects have been signed off. The | :43:28. | :43:32. | |
Battersea developer and and the Drax power station refurbishment. A | :43:32. | :43:36. | |
further 20 to 30 projects have been prequalified. I will have more to | :43:36. | :43:41. | |
say about that tomorrow in my statement. Turning to welfare, why | :43:41. | :43:45. | |
is it fair, particularly for your party, to say to somebody who's just | :43:45. | :43:49. | |
lost their job and maybe on very low wages and have no reliable source of | :43:49. | :43:54. | |
income, you will have to wait seven days until what you get the dole, | :43:54. | :43:58. | |
instead of three days, is that just targeting people who haven't got | :43:58. | :44:02. | |
much money? You currently have a three-day period in the system. | :44:02. | :44:06. | |
France, Sweden, Germany and other countries around the world have | :44:06. | :44:09. | |
seven-day waiting periods or even longer. We wanted to reinvest money | :44:09. | :44:15. | |
in making our job centres and our job search requirements from | :44:15. | :44:19. | |
job-seekers even more effective. The work that the DWP has done has shown | :44:19. | :44:23. | |
that there are things that we can invest money in that make it more | :44:23. | :44:27. | |
likely that people get off benefit and into work more quickly. You want | :44:27. | :44:34. | |
the job seekers to pay for an improved service. Both in our fiscal | :44:34. | :44:38. | |
consolidation, where the wealthiest pay the most towards deficit | :44:38. | :44:42. | |
reduction. Also, the wealthiest in this country are paying a greater | :44:42. | :44:46. | |
share of income tax than they ever have done before. The best thing for | :44:46. | :44:49. | |
someone who has just left their job is to find another job. We need the | :44:49. | :44:53. | |
systems to be in place to make that as intensive, and strong supportive | :44:53. | :44:58. | |
framework as possible. Meeting a similar timescale to that of other | :44:58. | :45:01. | |
countries is a perfectly reasonable way of ensuring that all that money | :45:01. | :45:04. | |
is reinvested in getting more people off benefits and into work. I | :45:04. | :45:14. | |
:45:14. | :45:14. | ||
support this. Stephanie On the distributional point and whether the | :45:14. | :45:18. | |
cuts and changes in public service spending have been evenly spread, | :45:18. | :45:23. | |
your own chart suggests that the bottom fifth of people are going to | :45:23. | :45:28. | |
lose 3. 9% of their net income as a result of all this changes since | :45:28. | :45:33. | |
120, 4% for the top fifth. Do you accept the top fifth are paying as | :45:33. | :45:39. | |
much of a share of the net income as the bottom, a difference of 0. 1%? | :45:39. | :45:43. | |
They'll pay more as a share of a much larger income. People might | :45:43. | :45:47. | |
think they are paying a lot more and they are paying a tiny amount which | :45:47. | :45:51. | |
they can more easily afford? If I may answer the question. They'll pay | :45:51. | :45:55. | |
more in cash terms, they are paying more as a share of the income and | :45:55. | :45:57. | |
benefits in kind that they receive from Public Services. Of course, | :45:57. | :46:03. | |
many of the savings that are described in the tables are | :46:03. | :46:07. | |
efficiently savings in the delivery of Public Services so the public | :46:07. | :46:09. | |
service outcomes many people are receiving and Public Services are | :46:09. | :46:12. | |
consumed much more by people on lower incomes and rightly so, the | :46:13. | :46:16. | |
quality of the services is being maintained because we are reforming | :46:16. | :46:20. | |
them and making them more efficient. Some efficiency savings still show | :46:20. | :46:25. | |
up. You talk about the cash terms. When you look at the effect of the | :46:25. | :46:28. | |
changes in Tax Credits and benefits, it's interesting to meal that | :46:28. | :46:32. | |
actually it's not just as a share of income, but in cash terms, the | :46:32. | :46:37. | |
bottom fifth are losing out more from the changes to benefits in Tax | :46:37. | :46:41. | |
Credits. That makes it sound like the changes have been very skewed | :46:41. | :46:45. | |
towards the bottom? We publish a fiscal events table showing the | :46:45. | :46:49. | |
impact of changes to Tax Credits, welfare changes and taxation. Of | :46:49. | :46:53. | |
course, the wealthiest in the land by and large don't consume benefits | :46:53. | :46:59. | |
expenditure. We have taken away child Ben from it from that group. | :46:59. | :47:02. | |
There are other reforms we could make in that area, instead we have | :47:02. | :47:08. | |
put up taxes. The wealthiest 10% are paying the greatest by far. We are | :47:08. | :47:11. | |
running out of time usmt what is the point of a welfare cap which is full | :47:11. | :47:17. | |
of holes? The The idea is to bring more expenditure within a framework | :47:17. | :47:24. | |
of control. Excludeing pensions? When we started, there was Correct? | :47:24. | :47:32. | |
Let me explain. Annual managed expenditure. There was a controlled | :47:32. | :47:40. | |
framework for pensions. The best way to control costs was in the state | :47:40. | :47:44. | |
pension system. We put in place a control work for environmental | :47:44. | :47:50. | |
levies, spending under an annually managed eexpenditure. Today we are | :47:50. | :47:54. | |
announcing a welfare cap which will control the costs of other parts of | :47:54. | :48:00. | |
the benefits system. Doesn't include jobseeker's allowance? And also the | :48:00. | :48:05. | |
benefits passport. How much of the welfare budget does the cap cover? | :48:05. | :48:10. | |
About �100 billion of the �200 billion. So it's not a cap, it's | :48:10. | :48:14. | |
like a baseball cap and somebody's taken half of it out? We have | :48:14. | :48:18. | |
already put in a different framework in the Pensions Bill and in the | :48:18. | :48:21. | |
legislation I put through on public service pensions, there is a cost | :48:21. | :48:31. | |
:48:31. | :48:31. | ||
cap. Politically important decision for you, that cap is due to come in | :48:32. | :48:35. | |
just before a general election. Do you think that 'll be a coalition | :48:35. | :48:38. | |
agreed cap or is it possible that a Conservative Chancellor wants a | :48:38. | :48:43. | |
lower cap than you do and you choose at that stage not to support it? | :48:43. | :48:49. | |
Well, I put the cap in place for the first time for April 15 in the | :48:49. | :48:52. | |
previous years' budget. That's something we'll need to agree as a | :48:52. | :48:56. | |
coalition. We all agree that having a control mechanism which forces the | :48:57. | :49:01. | |
Chancellor to account to Parliament, either for decisions taken to bring | :49:01. | :49:08. | |
welfare down or to explain why that action hasn't been taken, is a | :49:08. | :49:13. | |
sensible reform to ensure spending isn't just able to rise without | :49:13. | :49:18. | |
accountability year on year. Very quickly, almost everybody says that | :49:18. | :49:24. | |
the big problem facing rich Western countries, including the UK is the | :49:24. | :49:28. | |
rise in age related expenditure whether it's pensions or health. | :49:28. | :49:32. | |
These are two areas which you are to an extent ringfencing and | :49:32. | :49:35. | |
protecting. Aren't you taking a very is short-term political view and | :49:36. | :49:40. | |
again putting the British economy at risk? No-one who's looked at the | :49:40. | :49:44. | |
decisions we have made on the state pension age in the last few years | :49:45. | :49:48. | |
and overtime increasing it has said we are not taking tough decisions in | :49:48. | :49:51. | |
that year. The biggest single reform in the spending round statement | :49:51. | :49:55. | |
today was about the integration of health and social care. That's about | :49:55. | :49:58. | |
ensuring that as our population ages and people have more care needs, | :49:59. | :50:02. | |
that our services are better eight able to immediate the needs in an | :50:02. | :50:07. | |
effective way, rather than causing more people to become a burden on | :50:07. | :50:13. | |
the NHS when they could be burdens on the homes. If it's easier to get | :50:13. | :50:18. | |
efficiency savings, why don't you just cut now? Ewe are making savings | :50:18. | :50:23. | |
now. Well well ahead of the programme we set out in the 2010... | :50:23. | :50:28. | |
Why do you need to do �11. 5 billion in 2015? It's appropriate and right | :50:28. | :50:36. | |
to carry on doing this in a measured way. We are taking the country from | :50:36. | :50:39. | |
repair to renewal in a steady way and we'll continue to do that. | :50:39. | :50:45. | |
Thank you for coming over from the Commons. We have been to the North | :50:45. | :50:50. | |
to Jo in Bury and let eats head south now to the beautiful town of | :50:50. | :50:54. | |
Winchester. Robert Hall is there. Andrew, in a county which has saved | :50:54. | :50:59. | |
�130 million over the last couple of years, 10% cuts will make more | :50:59. | :51:03. | |
difficult decisions very, very likely. Cuts to transport, perhaps | :51:03. | :51:07. | |
to community facilities, to the cash available to those who need it most. | :51:07. | :51:11. | |
Let's talk about that with Martin able radio rams who campaigns for | :51:11. | :51:16. | |
rural transport and the Deputy Leader of Hampshire Council. Are we | :51:16. | :51:21. | |
talking about a transport system in crisis, not just here but in the UK? | :51:21. | :51:24. | |
We think we are and we are still going through the finer points but | :51:24. | :51:27. | |
we have found that a 10% cut to local authority budgets is going to | :51:27. | :51:31. | |
mean further cuts to buses and we'd say to the Chancellor that enough is | :51:31. | :51:36. | |
enough, there's been a lot of cuts and people are suffering as a | :51:36. | :51:41. | |
result, especially in rural areas. Young people are finding it really | :51:41. | :51:45. | |
difficult to access job, education, training, older people rely on buses | :51:45. | :51:50. | |
as a lifeline to independence and well-being. Unemployed people need | :51:50. | :51:54. | |
buses to access job opportunities and get to job interviews. We have | :51:54. | :52:01. | |
now heard that the signing on benefit has been cut to seven days, | :52:01. | :52:05. | |
so people are going to have to sign on after seven days, which will add | :52:05. | :52:10. | |
more pressures to bus services and we'll say enough is enough. | :52:10. | :52:13. | |
balancing act between community facilities like the library and | :52:13. | :52:17. | |
those people who need your help most, it's another difficult few | :52:17. | :52:23. | |
months ahead isn't it? Yes, it is. When we took over bus subsidies from | :52:23. | :52:26. | |
the district councils, we put more money into those for the very | :52:26. | :52:29. | |
reasons that have already been said. We were conscious of the needs of | :52:29. | :52:33. | |
the young and the needs of elderly. But you are absolutely right. It's | :52:33. | :52:37. | |
not going to be an easy few years ahead, but we are planning for it | :52:37. | :52:42. | |
because we started early in looking at the previous series of cuts. And | :52:42. | :52:46. | |
what our golden rule is, is the last thing we want to pot is the | :52:46. | :52:50. | |
frontline. We want to find other ways of ensuring we maintain our | :52:50. | :52:53. | |
frontline services by forming partnerships with the Health | :52:53. | :52:57. | |
Service, with the police for common facilities and with other public | :52:57. | :53:01. | |
departments. At the same time, we want to increase the amount of | :53:01. | :53:05. | |
income that the county earns from the services it provides outside the | :53:05. | :53:12. | |
county. A good example of that, on July 1st, we formally take over | :53:12. | :53:15. | |
education on the Isle of Wight and we believe that will be a benefit to | :53:15. | :53:18. | |
the Isle of Wight and to Hampshire. Martin, very briefly because we have | :53:18. | :53:22. | |
to stop in a minute, but it's going to be about partnerships isn't it, | :53:22. | :53:28. | |
groups like you just keeping on? is about working together. We are | :53:28. | :53:31. | |
also quite concerned about the big announcements on infrastructure | :53:31. | :53:37. | |
spending that the Chancellor announced a huge road building | :53:37. | :53:40. | |
programme, for example, and that money could be better spent on | :53:40. | :53:45. | |
filling in potholes, improving roads, for bus users, cyclists and | :53:45. | :53:49. | |
the public as a whole. We have got to stop. A very business programme. | :53:49. | :53:52. | |
Thank you both very much indeed. From the lovely city of Winchester, | :53:53. | :53:57. | |
Andrew, back to you. Thank you very much. The sun is | :53:57. | :54:03. | |
shining there. Let's get some more political reaction from Matthew. | :54:03. | :54:11. | |
I'm joined by Stuart from the SNP and a member of the Plaid Cymru. | :54:11. | :54:15. | |
What did you think about what you heard? Awful. This Chancellor | :54:15. | :54:19. | |
doesn't learn from history or his own mistakes. He's trying to cut his | :54:19. | :54:24. | |
way to growth and it will fail this time like last time. I agree. The | :54:24. | :54:28. | |
IMF are telling him, you must spend far more on infrastructure and do it | :54:28. | :54:33. | |
quickly and he's ignoring them. It's a bad situation to be in. Labour | :54:33. | :54:37. | |
said they'll use it as a starting point in 2015 if they were to win. | :54:37. | :54:41. | |
Is that a position that you accept from your parties? No, it's not. It | :54:41. | :54:45. | |
appears now that all the London-based parties are austerity | :54:45. | :54:50. | |
parties. The only choice it seems to me in Wales is ourselves and our | :54:50. | :54:53. | |
friends in Scotland. We can think creatively of saving money without | :54:53. | :54:56. | |
sacking people. Seems to be the way to do it is to hit the public sector | :54:56. | :55:00. | |
as hard as you can with the least respect you can muster if you think | :55:00. | :55:04. | |
you are going to come out of it. It's not going to work. What is the | :55:04. | :55:10. | |
magic formula? �100 billion savings, do away with Trident, �25 billion in | :55:10. | :55:16. | |
the first year, transaction tax will bring in �20 billion per annum and | :55:16. | :55:21. | |
do away with the obvious tax avoidance loopholes that exist, a | :55:21. | :55:25. | |
further �25 to �32 billion without sacking a single person. Stewart, in | :55:25. | :55:29. | |
terms of the priorities we have heard, has the Chancellor in these | :55:29. | :55:32. | |
difficult times made the right choices do you think in where he's | :55:32. | :55:38. | |
decided to come? He's made difficult choices. The things he's ringfenced | :55:39. | :55:44. | |
and these are political choices. We have to understand that there are | :55:44. | :55:47. | |
more revenue cuts across all departments, including in skoonled | :55:47. | :55:52. | |
Wales. The capital expenditure which has been talked about certain isly | :55:52. | :55:57. | |
in Scotland isn't real capital expenditure, it's loans and funny | :55:57. | :56:00. | |
money financial transactions at a time when we need direct capital | :56:00. | :56:03. | |
investment to kick start the economy. He is not delivering what | :56:03. | :56:06. | |
he needed to deliver. A final point to you both. We were hearing about | :56:06. | :56:10. | |
the welfare cap that will come in just before the election. He was | :56:10. | :56:14. | |
talking about stopping the automatic pay rises for the public sector | :56:14. | :56:20. | |
perhaps. What do you think of those ideas? I think what they tell us is | :56:20. | :56:25. | |
the welfare cap, this Government have a ratio of 4-1 in terms of cuts | :56:25. | :56:29. | |
to tax rises. He's balancing the books on the back of the poor and | :56:29. | :56:33. | |
nothing he's said today will change that. I think it's pushing the | :56:33. | :56:39. | |
envelope. Labour have signed up to all of this. Labour are in favour of | :56:39. | :56:42. | |
great austerity. This is pushing the envelope to see whether they can | :56:42. | :56:45. | |
Labour to rise to this particular bait. | :56:45. | :56:50. | |
Thank you very much gentlemen. More from here later. Back to you, | :56:50. | :56:54. | |
Andrew. We can now talk to our Northern Ireland Business Editor, | :56:54. | :56:58. | |
Jimmy Fitzpatrick in Belfast. Not quite as exciting as a G8 meeting in | :56:58. | :57:02. | |
Northern Ireland, but what are you making of it? Yeah, I mean I suppose | :57:02. | :57:07. | |
the anticipation was great for G8 and in terms of this, a certain | :57:07. | :57:10. | |
amount of nervousness, but because health and education are such big | :57:10. | :57:13. | |
parts of the Northern Ireland budget, it was never going to be a | :57:13. | :57:18. | |
huge impact. In fact, Northern Ireland has emerged relatively | :57:18. | :57:23. | |
unscathed, cuts of about 2% in 2015-16, still �9. 6 billion going | :57:24. | :57:27. | |
to Northern Ireland departments to spend. We are a public sector | :57:27. | :57:31. | |
dominated economy, so what is going to be the issue to look at? I think | :57:31. | :57:38. | |
it's going to be the ending of automatic progression pay. That will | :57:38. | :57:42. | |
mean tens of thousand us of civil servants could see an end to the | :57:43. | :57:46. | |
automatic increases which they've enjoyed even during austerity and a | :57:46. | :57:52. | |
period when pay freezes have been in place, in terms of the numbers, we | :57:52. | :57:56. | |
are talking about 28% of workers paid directly out of the public | :57:56. | :58:02. | |
purse. Anything up to 20,000 -- 200,000 people affected. Extra money | :58:02. | :58:07. | |
for the police because of national security issues and extra money for | :58:07. | :58:11. | |
the Northern Ireland Executive. Northern Ireland emerged relatively | :58:11. | :58:18. | |
unscathed. Pf Thank you very much. We are going to | :58:18. | :58:24. | |
talk about the pay progression issue in a moment, starting with the civil | :58:24. | :58:33. | |
servants. Before that, back to Jo Co in Bury with Paul Lewis. | :58:33. | :58:37. | |
It's a glorious day here. Paul Lewis is enjoying his cappuccino. Now, we | :58:37. | :58:44. | |
have heard the Chancellor saying what he said. In terms of cutting | :58:44. | :58:47. | |
though, what did the viewers say? They are disappointed that he | :58:47. | :58:50. | |
committed himself to the high speed rail and to overseas aid. Many | :58:50. | :58:56. | |
people still want those to be cut. On public sector pay, Mick has | :58:56. | :59:00. | |
e-mailed to say he works toer a local authority, he was dismissed | :59:00. | :59:04. | |
and re-employed on lower pay already and Karen came to me at this table, | :59:04. | :59:09. | |
she works for the NHS, her job's been outsource and she says she's | :59:09. | :59:13. | |
had a 47% pay cut already. Right. So people already | :59:13. | :59:17. | |
experiencing some of the things the Chancellor's been talking about. | :59:17. | :59:22. | |
What about changes to lone parents? I found out that what is going to | :59:22. | :59:26. | |
happen with them, already they have to apply for a job, they have to | :59:26. | :59:29. | |
become jobseekers as soon as their youngest child is five and now, when | :59:29. | :59:33. | |
the youngest child is three, they are going to have to start preparing | :59:33. | :59:38. | |
for work. That may mean learning English in some cases which he said | :59:38. | :59:47. | |
everyone will have to do to get the allowance. | :59:47. | :59:52. | |
Gingerbread said the DWP is saving �420 million on efficiency savings, | :59:52. | :59:57. | |
how can they implement these new things. Winter Fuel Payment, to be | :59:57. | :00:01. | |
taken away from people in warmer countries - Glynis is in Spain and | :00:01. | :00:05. | |
says she already has to wear her dressing gown in the winter because | :00:05. | :00:08. | |
it's cold. Must be in the mountains! How will she manage without it? | :00:08. | :00:12. | |
She's not happy. One of the other announcements which we'd already | :00:12. | :00:16. | |
heard and certainly talked about was a welfare cap that would be | :00:16. | :00:20. | |
announced ever are I Yahoo!er in the budget from 2015. Let's get reaction | :00:20. | :00:27. | |
on that from Karen Dyson from the Sainsbury in Manchester. What will | :00:27. | :00:32. | |
be the impact on your clients -- Citizens Advice Barrow? We are not | :00:32. | :00:36. | |
entirely sure how it will be put into practice, but if it means no | :00:36. | :00:41. | |
those who claim benefits are no going to have the same rights as | :00:41. | :00:44. | |
those who claim earlier in the year, that's a source of concern for us. | :00:44. | :00:48. | |
What about local authorities? We were talking to a councillor, they | :00:48. | :00:58. | |
:00:58. | :01:05. | ||
said they have had big cuts already, further, again, we have serious | :01:05. | :01:10. | |
concerns there won't be the infrastructure there to support the | :01:10. | :01:14. | |
welfare reform successfully. Thank you. You can grab a coffee. One of | :01:14. | :01:19. | |
the other announcements that the Chancellor claimed has been a | :01:19. | :01:23. | |
success is that for every public sector job lost it has been offset | :01:23. | :01:26. | |
by three new private sector jobs. Let's talk about that with John | :01:26. | :01:31. | |
Holden, from a Manchester think tank. Has that been the case in the | :01:31. | :01:34. | |
Northwest? Greater Manchester has certainly played its part in | :01:34. | :01:39. | |
achieving strong private sector jobs growth. The priority is ensuring | :01:39. | :01:42. | |
that growth continues. That's why we were pleased today to see the | :01:42. | :01:46. | |
announcements about an additional investment in infrastructure, | :01:46. | :01:50. | |
particularly the announcement around HS2 and making that happen, because | :01:50. | :02:00. | |
:02:00. | :02:10. | ||
that is crucial to the increase in the government's capital spend on | :02:10. | :02:12. | |
science. There were some disappointments in the announcement | :02:12. | :02:14. | |
around the local growth fund. From the report by Michael Heseltine, we | :02:14. | :02:17. | |
thought that might be as big a �70 billion but it's only going to be �2 | :02:17. | :02:20. | |
billion. But for replaced by Greater Manchester, that could be a lot | :02:20. | :02:22. | |
extra a year that could contribute to local growth and jobs. Nice to | :02:22. | :02:26. | |
see the sun shining there. It's time now to say goodbye to viewers in | :02:26. | :02:34. | |
Scotland. Let's bring you up to date with some of the key points in the | :02:34. | :02:42. | |
statement. As widely expected, the Chancellor is cutting �8.5 billion | :02:42. | :02:48. | |
from departmental budgets in the 2015 to 2016 budget. Among the | :02:48. | :02:54. | |
casualties of that, though not one casualties of that, though not one | :02:54. | :02:56. | |
of the big ones, defence resource budget is frozen at 24 billion, | :02:56. | :03:01. | |
which means a small cut in real terms. The health budget will rise | :03:01. | :03:06. | |
to 110 billion, but it's not rising by very much in real terms. And the | :03:06. | :03:10. | |
education budget, mainly on the schools side, will rise 53 billion. | :03:10. | :03:19. | |
There will be a new welfare cap from April 2015. Though, as we were | :03:19. | :03:24. | |
discussing, there are a few holes in that cap, there's a big one called | :03:24. | :03:29. | |
pensions. He told us it will only cover about 50% of the welfare | :03:29. | :03:33. | |
budget. State pension is excluded. Seven-day waiting for unemployment | :03:33. | :03:40. | |
benefits. Remarkably, that's meant to save about �230 million. And the | :03:40. | :03:44. | |
winter fuel payments will be removed from expats in hot countries. I | :03:44. | :03:51. | |
guess if you are an expat in Ireland, you will be all right. On a | :03:51. | :03:55. | |
public sector pay front, that pay cap has been at 1% for quite a | :03:55. | :04:00. | |
while. It's days capped at 1% rises. This is a big announcement | :04:00. | :04:03. | |
that the Chancellor made, the automatic progression pay in the | :04:03. | :04:08. | |
civil service will be abolished. No more rises just full length of | :04:08. | :04:12. | |
service or because you've completed another year. That will now go. The | :04:13. | :04:17. | |
Chancellor indicated that he wants to remove these automatic pay rises | :04:17. | :04:27. | |
:04:27. | :04:30. | ||
in the NHS, schools and police. But director of the Institute for Fiscal | :04:30. | :04:37. | |
Studies. What have you found out that we haven't yet had a chance to | :04:37. | :04:43. | |
find out ourselves? Not a lot. There wasn't a lot we found out that we | :04:43. | :04:49. | |
didn't know several hours ago. It has been confirmed that this year, | :04:49. | :04:53. | |
despite anything else, a huge reduction in a whole series of areas | :04:53. | :04:56. | |
of public service spending, on top of what have been a range of big | :04:56. | :05:00. | |
reductions. Some of the things you've been talking about were very | :05:00. | :05:05. | |
well trailed, the pay changes pretty much the same as what he said at the | :05:05. | :05:09. | |
Budget. The changes, the introduction of the welfare cap, he | :05:09. | :05:13. | |
said there was going to be one of those. We've got a bit more detail | :05:13. | :05:18. | |
now but not a great deal more. I think we will hear more in the | :05:18. | :05:22. | |
Autumn statement and we might even get a number about next March. Nine | :05:22. | :05:26. | |
months to work out how they are going to do that. There must be | :05:26. | :05:31. | |
something hidden in the small print. I'm sure there is but I haven't | :05:31. | :05:34. | |
found it. He did make something of a new national funding formula for | :05:34. | :05:41. | |
schools. We found that a little hard to understand what it meant. Except | :05:41. | :05:45. | |
it was thought the current formula was unfair. It's a potentially big | :05:45. | :05:49. | |
change which will have a significant effect on individual schools up and | :05:49. | :05:54. | |
down the country. The idea will be to have a single formula which will | :05:54. | :05:59. | |
translate central government money into the money each school gets. | :05:59. | :06:04. | |
It's based on a sort of a formula, sort of history, what local | :06:04. | :06:08. | |
authorities do differently between themselves. So it is the case, as | :06:08. | :06:13. | |
the Chancellor said, that similar schools can end up with very | :06:13. | :06:16. | |
different amounts of money. But inevitably, when you make a | :06:16. | :06:20. | |
perfectly rational reform like this, there will be winners and losers. | :06:20. | :06:25. | |
That will be politically difficult, if, technically, it's the right | :06:25. | :06:31. | |
thing to do. George Osborne praise a Tory backbencher who he said had | :06:31. | :06:37. | |
campaigned for this. Yes.Looking at the speeches he has given in the | :06:37. | :06:42. | |
past on this, he claimed that schools in Worcestershire, he says | :06:42. | :06:48. | |
some of them are in areas which are among some of the 5% most deprived | :06:48. | :06:54. | |
in the country, are getting per pupil, more than �700 less than | :06:54. | :06:57. | |
neighbouring schools in Birmingham. That doesn't sound right, but that | :06:57. | :07:02. | |
means some school in Birmingham is now going to face a cut in order | :07:02. | :07:07. | |
that a school in neighbouring Worcestershire can get theirs. | :07:07. | :07:13. | |
are not talking about a change in the total amount of money going to | :07:13. | :07:18. | |
schools, that continues to be ring-fenced. But it is the case that | :07:18. | :07:23. | |
because partly of the vagaries of history and partly because different | :07:23. | :07:26. | |
authorities allocated differently according to the characteristics of | :07:26. | :07:32. | |
their schools, similar schools get really very different amounts. | :07:32. | :07:36. | |
are the expert on all things fiscal. We've also been talking about the | :07:36. | :07:41. | |
rise in the government's borrowing costs. This may have been imported | :07:41. | :07:45. | |
from a bit of Bond mayhem in the States. The fact is that bond yields | :07:45. | :07:49. | |
have risen, which means it costs more for government to borrow. How | :07:49. | :07:52. | |
much could that throw the government's projections of course, | :07:52. | :07:57. | |
how much more might it has to end up cutting if these interest rates | :07:57. | :08:02. | |
continue to rise? If they were to rise significantly, this makes a big | :08:02. | :08:05. | |
difference. The level of outstanding debt continues to rise and rise | :08:05. | :08:13. | |
fast. It's heading for �1.5 trillion. For all the talk of the | :08:13. | :08:16. | |
deficit falling, the total amount of debt on which we are paying interest | :08:16. | :08:18. | |
continues to rise pretty fast. The level of interest that we are | :08:18. | :08:21. | |
currently paying is one of the big reasons why what the Chancellor | :08:21. | :08:26. | |
referred to as annually managed expenditure continues to rise. It is | :08:26. | :08:30. | |
not significantly created by welfare spending on the biggest change is | :08:30. | :08:35. | |
the increase in debt interest. Plus the public services. The rise in | :08:35. | :08:42. | |
interest rates would affect existing debt, that's already been gone away | :08:42. | :08:46. | |
in the greedy yield. It's when the government has to issue new debt. | :08:46. | :08:53. | |
It's not just completely new debt. You don't need to be an accountant | :08:54. | :09:03. | |
to work out that 4% of 1.5 trillion is a lot more than 2%. It's about | :09:03. | :09:09. | |
double, I reckon! It's a lot of money, that's the point. Even a | :09:09. | :09:13. | |
smallish rise in interest rates can result in a big increase in the | :09:13. | :09:20. | |
deficit. In terms of rolling over existing borrowing, it's about 150 | :09:20. | :09:26. | |
billion a year. If you are borrowing at 4% on 150 billion rather than 2%, | :09:26. | :09:32. | |
that's a lot of money. The pay progression was one of the big | :09:32. | :09:36. | |
announcements. My understanding is that when the implemented the freeze | :09:36. | :09:42. | |
and then the 1% rise, they couldn't work out why it was that public | :09:42. | :09:46. | |
sector pay continue to rise, it was supposed to be frozen. Then it | :09:46. | :09:52. | |
dawned on them that there were so many categories where there was an | :09:52. | :09:56. | |
automatic pay rise every year, in addition to that which had been | :09:56. | :10:02. | |
agreed by collective-bargaining. So he's now, I assume, brought that in | :10:02. | :10:07. | |
to stop it. That's quite a of what's been going on. Despite the public | :10:07. | :10:12. | |
sector freeze and now the 1% increase is, actually, the public | :10:12. | :10:16. | |
sector pay bill, earnings of the public sector, have still been going | :10:16. | :10:20. | |
up a bit faster than in the private sector. That mostly reflects that | :10:20. | :10:25. | |
they in the private sector has been doing very badly. There is still | :10:25. | :10:29. | |
quite a lot of progression building to the public sector. And we are | :10:29. | :10:32. | |
still getting to the end of the transition period from some of the | :10:32. | :10:35. | |
big reforms from the last government. As I understand, the | :10:35. | :10:38. | |
changes announced today re-announced, because he said | :10:38. | :10:41. | |
something very similar in the Budget. He will be looking to | :10:41. | :10:43. | |
increasingly move every central Whitehall department to a situation | :10:43. | :10:47. | |
where there is no progression pay. There are already some where that is | :10:47. | :10:51. | |
the case. Then he will take on other bits of the public sector. He didn't | :10:51. | :10:57. | |
put a time limit on sorting that out. Is it still the case that | :10:57. | :11:04. | |
despite these extra cuts of 11.5 billion for 2015 to 2016, the | :11:05. | :11:11. | |
current 2016 to 2017 and 2018, to get the deficit reduction plan | :11:11. | :11:15. | |
continuing as currently rejected, whoever is in power has got to find | :11:15. | :11:20. | |
another 23 billion? That the numbers in the Budget Redbook. That is what | :11:21. | :11:25. | |
the Chancellor set out as a way of getting to something adjusted. It | :11:25. | :11:31. | |
will still be a very big deficit, even after those big cuts. That is | :11:31. | :11:37. | |
what he has set out. That means this level of cuts again in the coming | :11:37. | :11:41. | |
years, unless whoever is the next Chancellor said, well, there's got | :11:41. | :11:48. | |
to be more taxes or we borrow some more. A lot of people have raised | :11:48. | :11:51. | |
the possibility that you could have higher taxes to pay for this instead | :11:51. | :11:55. | |
of more spending cuts. But there is another possibility, which is the | :11:55. | :11:58. | |
Office for Budget Responsibility decides, as it did in 2011, that the | :11:58. | :12:02. | |
economy is going to look very different in the next few years and | :12:02. | :12:06. | |
that structural hole is smaller than they think. On historical record, | :12:06. | :12:09. | |
that is perfectly possible. In either direction, the numbers could | :12:09. | :12:15. | |
change a lot. Reason we've had some of the big changes over the last | :12:15. | :12:19. | |
couple of years has been because the economy has done worse than expected | :12:19. | :12:23. | |
and the obi are has changed its mind quite significantly about what will | :12:23. | :12:30. | |
happen in the future. Even these bad figures are based on the assumption | :12:30. | :12:35. | |
that the economy bounces back big time in the next few years. On the | :12:35. | :12:39. | |
welfare cup, how meaningful do you think it will be, given that it | :12:39. | :12:43. | |
looks like it will only cover about half of welfare spending? Cole the | :12:43. | :12:48. | |
basic state pension is a very large chunk of welfare spending. If you | :12:48. | :12:54. | |
get rid of that, it's a very large chunk of everything that isn't basic | :12:54. | :12:58. | |
and additional pensions. The meaningfulness of it will come out | :12:58. | :13:01. | |
whether it makes a difference to how the government actually goes about | :13:01. | :13:11. | |
:13:11. | :13:11. | ||
that spending. Do you think this is sensible? It's quite a technocratic | :13:11. | :13:17. | |
change. It's something that the Treasury and the DWP could do now if | :13:17. | :13:22. | |
they wanted to. They could say, it looks as though spending on housing | :13:22. | :13:25. | |
fell as if they wanted to. They could say, it looks as though | :13:25. | :13:27. | |
spending on housing fell at a fit or disability allowance is rising, we | :13:27. | :13:32. | |
will take it under control. They are providing themselves with an | :13:32. | :13:39. | |
external impetus to do. I know we've got to let you go and we've got to | :13:39. | :13:43. | |
move on, forget whether it's a structural deficit or just the | :13:43. | :13:47. | |
normal bog-standard deficit. We are adding to the deficit, the national | :13:47. | :13:51. | |
debt every year for the foreseeable future. When now do we start paying | :13:51. | :13:56. | |
back this national debt of around 1.5 trillion? It starts falling as a | :13:57. | :14:01. | |
proportion of national income not until about 2017, two years after | :14:01. | :14:07. | |
the Chancellor wanted it to. One of the fiscal rules was the debt starts | :14:07. | :14:13. | |
falling as a proportion of national income in 2015. It will be at least | :14:13. | :14:17. | |
2017 and possibly later until that happens. Let's go back to Matthew on | :14:17. | :14:27. | |
:14:27. | :14:27. | ||
College Green. With me is Kevin Maguire, from the | :14:27. | :14:34. | |
mirror, and Anne McElvoy, from the Economist. What will you be writing? | :14:34. | :14:38. | |
It's clearly a failure by George Osborne. He wasn't supposed to be | :14:38. | :14:42. | |
still in austerity. He's borrowed billions extra over the period. | :14:42. | :14:46. | |
These cuts, once you look behind those headline figures, there were | :14:46. | :14:49. | |
some pretty mean moves. Look what he's doing with the unemployed. You | :14:49. | :14:53. | |
lose your job and you will not be able to claim jobseeker's allowance | :14:53. | :14:57. | |
for a week, no matter how long you've paid national insurance | :14:57. | :15:01. | |
Contributions Bill �72. Every time your contract of two months or so | :15:02. | :15:07. | |
finishes, you will not be able to claim an employment. I do not see | :15:07. | :15:10. | |
where the fairness is in that policy. I think he has found himself | :15:10. | :15:13. | |
in a difficult position. He can't defend Plan A, we are not out of the | :15:13. | :15:20. | |
austerity that we would be out of. But on his side he does have quite a | :15:20. | :15:24. | |
lot of interesting indicators. The eurozone looks like it's in a worse | :15:24. | :15:28. | |
state than we are. All right, you can pick around who has given to or | :15:28. | :15:33. | |
who has been taken away from in this review, but you can't get away from | :15:33. | :15:37. | |
the big picture which will determine the argument in the next election. | :15:37. | :15:40. | |
And that is, are we gradually getting better or worse compared to | :15:40. | :15:49. | |
other countries? In terms of the choices he's made, is he right? | :15:49. | :15:53. | |
have a different view to Kevan on that, but there was still money to | :15:53. | :15:56. | |
be taken out of the department. It's interesting, despite a lot of fuss, | :15:56. | :16:02. | |
you didn't hear a massive cry of resistance. David Cameron at Prime | :16:02. | :16:05. | |
Minister's Questions taunted Ed Miliband, he said on the deficit, on | :16:05. | :16:07. | |
immigration and welfare, he was on the wrong side of the argument, the | :16:07. | :16:12. | |
wrong side of public opinion. We have seen a shift there from Labour. | :16:12. | :16:16. | |
They are signed up to this now? are always on the wrong side in was | :16:17. | :16:21. | |
fare. We saw with Tax Credits where Labour voted against them, I think | :16:21. | :16:28. | |
they won the argument with the public. But they signed up to the | :16:28. | :16:33. | |
cuts? Quite right that Ed Miliband has blurred some red lines that | :16:33. | :16:37. | |
should be thicker and clearer between him and the Chancellor and | :16:37. | :16:41. | |
David Cameron. Clearly, Cameron was setting a lot of traps for Labour on | :16:41. | :16:46. | |
things like would you restore that weeks' unemployment pay that will be | :16:46. | :16:51. | |
taken from people who'll lose their job, what about public service | :16:51. | :16:57. | |
wages, public servants do real jobs, a three-year freeze, your pay is | :16:57. | :17:07. | |
:17:07. | :17:08. | ||
going up less than inflation. need to have this? It was there to | :17:08. | :17:12. | |
signal a behavioural change. There is another view that you need the | :17:12. | :17:15. | |
behavioural nudges built into policy that you could possibly get to get | :17:15. | :17:20. | |
people to go to work and stay at work. The childrening you have just | :17:20. | :17:25. | |
described is not very good for people and it's not very good in | :17:25. | :17:31. | |
terms of... Decisions do you think were put off until after the next | :17:31. | :17:35. | |
election. We were just hearing from the IFS and the projected cuts to | :17:35. | :17:39. | |
come. Duping the big and bold decisions, they've just not been | :17:39. | :17:42. | |
honest. Two things about that, on welfare, | :17:42. | :17:48. | |
we have moved along. -- do you think the big and bold decisions. The | :17:48. | :17:51. | |
Labour Party's moved towards the idea of a cut and that is a really | :17:51. | :17:54. | |
big change. We have made progress on that in this Parliament. After the | :17:55. | :18:00. | |
next election, it depend on the public finances. What you call the | :18:00. | :18:04. | |
bold, it will hurt them most. He's postponed those until after the next | :18:04. | :18:08. | |
election. The only way to get out of this mess is economic growth and | :18:08. | :18:11. | |
that's the one thing George Osborne hasn't got because he's strangled it | :18:11. | :18:14. | |
at birth. Thank you very much for those early | :18:14. | :18:18. | |
thoughts and pointers. Andrew, back to you. | :18:19. | :18:24. | |
More political reaction now from Tim Acre of the UK Independence Party. | :18:24. | :18:31. | |
What do you make of it all -- Tim Aker? Interesting that your viewers | :18:31. | :18:37. | |
are again spending �32 billion on high High Speed Two and 11. 5 | :18:37. | :18:47. | |
:18:47. | :18:48. | ||
billion on foreign aid. We are building HS2 in Britain, that's not | :18:48. | :18:53. | |
abroad? The foreign aid's obviously going abroad, but the High Speed | :18:53. | :18:57. | |
Two, a trainline from London to Birmingham, look, it's a budget | :18:57. | :19:01. | |
that's very political and it's going to come in, conveniently enough, | :19:01. | :19:05. | |
during the next election campaign. The national debt is growing. | :19:05. | :19:09. | |
many high speed rail lines did the UKIP call for at the last general | :19:09. | :19:14. | |
election? Upgrading existing lines. It calls for two high speed rail | :19:14. | :19:18. | |
lines? No, we looked at this and the manifesto called for high speed | :19:18. | :19:24. | |
rail. Upgrading existing lines. The problem with High Speed Two is it's | :19:24. | :19:27. | |
completely uneconomical and the people don't want it. That was shown | :19:27. | :19:31. | |
in the county council elections where the route that high speed goes | :19:31. | :19:35. | |
through, it could do very well. to like the idea of compulsory | :19:35. | :19:38. | |
English language lessons? I don't like the idea of the taxpayer having | :19:38. | :19:43. | |
to pay for it. If you want to come and live and work here, it would be | :19:43. | :19:46. | |
nice if you spoke English beforehand. Indeed. Thank you very | :19:46. | :19:50. | |
much. That's the UKIP reaction. We are joined by the Shadow Chancellor, | :19:50. | :19:55. | |
Ed Balls, who you saw performing in the House. He's now arrived here. | :19:55. | :20:02. | |
You may change the composition of the �11. 5 billion of the cuts for | :20:02. | :20:06. | |
15-16, but I do take it you will accept that as the envelope for | :20:07. | :20:16. | |
:20:17. | :20:21. | ||
spending in 15-16? I have to say, the disappointing thing is, he | :20:21. | :20:25. | |
didn't do anything to get growth moving and tax revenues coming in | :20:25. | :20:29. | |
this year and next year, no increase in capital spending, no house | :20:29. | :20:34. | |
building. In 15-16, they are cutting in real terms cam tap spending. My | :20:34. | :20:38. | |
argument today was, if there was actual growth to get the economy | :20:38. | :20:45. | |
moving, then we'd be able to do less deep cuts for police and defence in | :20:45. | :20:49. | |
2016 -- capital spending. If George Osborne carries on with a failing | :20:49. | :20:58. | |
plan, we'd have to do that. It felt like failing deck chairs. Not the | :20:58. | :21:01. | |
Titanic though, the analogy usually used? I switched it half way | :21:01. | :21:07. | |
through, did you notice? The Titanic was fine when it left Belfast! Do | :21:07. | :21:12. | |
you oppose any cuts announced today? The problem when you read the | :21:12. | :21:17. | |
documentation is that there's not a huge amount of detail in there. I | :21:17. | :21:22. | |
asked the Chancellor questions about policing and nursing. Sure. Do you | :21:22. | :21:28. | |
oppose any of the cuts announced for 2015-16? It will me an exampleI'm | :21:28. | :21:34. | |
asking you. That's how it works? terms of detail... I'm happy to... | :21:34. | :21:39. | |
In terms of the overall numbers of 15-16, I think the cuts are deeper | :21:39. | :21:42. | |
than they need to be, but they are failing on the economy and the | :21:42. | :21:46. | |
deficit's going to be �96 billion. I don't want to see the scale of cuts | :21:46. | :21:50. | |
but this is what we are going to have to deal with and work from. | :21:50. | :21:54. | |
Within the totals, it's such a thin document, we have almost no detail | :21:54. | :22:03. | |
but the individual cuts. Is it still your plan? The | :22:03. | :22:07. | |
Government's capital spending hasn't changed from the announcement in the | :22:07. | :22:15. | |
Budget, the just about �50 billion in 2015-16, gross, net, a lot less | :22:15. | :22:21. | |
than that after depreciation. Would bit your sgention to borrow more to | :22:21. | :22:27. | |
have more infrastructure investment in 2015-16? I'm not going to make | :22:27. | :22:31. | |
that decision and that commitment at this stage two years ahead. What we | :22:31. | :22:38. | |
said is for 2015-16, if we come into Government, we'll work from and | :22:38. | :22:43. | |
inherit the current spending plans. On capital spending, they should be | :22:43. | :22:48. | |
spending �10 billion more this year and next to boost house building and | :22:48. | :22:55. | |
capital. We are worried that it's a 1. 7% real terms cut, 35% cut in | :22:55. | :22:58. | |
Local Government budget, so therefore there is a case if the | :22:58. | :23:01. | |
economy is still weak, and we need to build more homes to get the | :23:01. | :23:05. | |
Housing Benefit bill down, there else a case for doing more. I said | :23:05. | :23:09. | |
that on Sunday. You are not making a commitment on that yet? No.All | :23:09. | :23:13. | |
right. The Government's excluded the basic state pension from the welfare | :23:13. | :23:18. | |
cap. Would you? It's quite confusing what they've done over the last few | :23:18. | :23:21. | |
weeks on this, because two weeks ago when I came on your programme, they | :23:21. | :23:26. | |
were going to exclude all pension spending from the cap. You've incan | :23:26. | :23:29. | |
colluded that in the cap when I interviewed you? Yes.So you would | :23:29. | :23:35. | |
include it this en? I said we'd look at all social security and welfare | :23:35. | :23:40. | |
spending because we should try to control all of it. If the Government | :23:40. | :23:43. | |
despies to have a small welfare cap, but not the basic pension, that | :23:43. | :23:47. | |
would be fine by us because we've said we'll stick with the triple | :23:47. | :23:52. | |
lock alongside George Osborne anyway. If you are talking a 20, 30, | :23:52. | :23:55. | |
40-year view of social security spending which I thought we were | :23:55. | :23:58. | |
debating because it makes sense to plan these things long-term, of | :23:58. | :24:03. | |
course you can't then, from a long-term view and cap, you can't | :24:03. | :24:07. | |
then exclude pension spending which is actually about today's working | :24:07. | :24:10. | |
age population. The Chancellor said exactly the same thing as me on | :24:10. | :24:14. | |
Sunday, so a long-term plan, of course you have to look at all | :24:14. | :24:17. | |
long-term spending, a short-term cap within the next Parliament, if the | :24:17. | :24:20. | |
Chancellor can excuse the basic state pension because he's intending | :24:20. | :24:26. | |
to have to triple lock, fine by us. I see. All right. Still not clear | :24:26. | :24:30. | |
where you are including pensions in the cap or not? I explained if there | :24:30. | :24:33. | |
is a short-term cap, which I think is what he's saying and he's | :24:33. | :24:37. | |
sticking with the triple lock, we'll stick to that on the basic pension, | :24:37. | :24:44. | |
so whether pensions are in or out is irinvestigate rant. | :24:44. | :24:49. | |
-- irrelevant. I understand. | :24:49. | :24:53. | |
When you look at what's happened to the cost of borrowing, just in the | :24:53. | :24:58. | |
past month or so, and you look at events in the United States and in | :24:58. | :25:03. | |
China, do you accept that if you get to power, when it comes to extra | :25:04. | :25:08. | |
borrowing, it's going to cost you to lot more to borrow than it has in | :25:08. | :25:12. | |
the last couple of years and the rising cost of borrowing will | :25:12. | :25:17. | |
inhibit your ability to promise to borrow more? It depends on the what | :25:17. | :25:20. | |
the long-term bond yield rises are telling you. If this is about the | :25:20. | :25:26. | |
economies returning to normality, to growth with low in inflation but | :25:26. | :25:31. | |
with more nor that will interest rates... That inhibits your ability | :25:31. | :25:37. | |
to... Well it will increase the cost, clearly. However, what's gone | :25:37. | :25:42. | |
on in financial markets is equity markets that are falling, worries | :25:42. | :25:46. | |
from Turkey to Indonesia, Brazil, the China slowdown alongside the | :25:46. | :25:50. | |
withdrawal of QE, the danger is in China and maybe more widely, we may | :25:50. | :25:57. | |
see actually the credit crunch continuing and that may be there's | :25:57. | :26:01. | |
some nervousness about investors about where economies are going. | :26:01. | :26:07. | |
That may make it more important to have growth. The Chancellor's being | :26:07. | :26:10. | |
very complacent in the British economy. This has been billed as a | :26:10. | :26:17. | |
big event. As the IFS has pointed out, if the Government is to hit it | :26:17. | :26:22. | |
own target of reducing debt as a share of GDP by 2018, so not getting | :26:22. | :26:28. | |
the debt down to 2018, we are going to have to have many more years of | :26:28. | :26:35. | |
these sorts of cuts. Do you agree that 2018 is an appropriate year to | :26:35. | :26:45. | |
:26:45. | :26:46. | ||
start getting debt down? I'm fearful about coming back, with | :26:46. | :26:49. | |
Spending Review, Spending Review, that the debt is higher than we | :26:49. | :26:54. | |
thought and we'll go back to more cuts which goes back to my point, | :26:54. | :27:00. | |
don't shift the deck chairs, get the growth moving. We have only got two | :27:00. | :27:05. | |
minutes. Quick question, Nick, and then Stephanie? Chancellor said he'd | :27:05. | :27:08. | |
get rid of pay progression in the Public Services with Labour, | :27:08. | :27:11. | |
Chancellor says people should work seven days before they get the dole, | :27:11. | :27:16. | |
or the GSA, would Labour back it? need to look at the detail | :27:16. | :27:21. | |
obviously. On the welfare, English language for incoming migrants | :27:21. | :27:25. | |
definitely. I think for the seven day, we have it three days at the | :27:25. | :27:30. | |
moment, seven days, is it going to be a blank check? If it saves money | :27:30. | :27:35. | |
and works, fine, in terms of paid progression, we have to look at | :27:35. | :27:40. | |
this. Is it going to save money? I don't know the answer, but we'll | :27:40. | :27:46. | |
study it. Anything you like in the review? Any caught your fancy? | :27:46. | :27:53. | |
honest, I found it incredibly depressing. The economy's flatlined, | :27:53. | :27:56. | |
the deficit's high and the Chancellor has a chance to come and | :27:56. | :28:00. | |
say I'll get the economy moving and he wanted to talk capital and did | :28:00. | :28:04. | |
nothing for the next three years, zero. What a missed opportunity. I | :28:04. | :28:10. | |
find it very, very gloomy. I fear for what is going to be the future | :28:10. | :28:13. | |
of Public Services and the state of our country for our children. | :28:13. | :28:17. | |
that raising of the spirits note, we'll leave it there. Ed Balls, | :28:17. | :28:20. | |
thank you very much. That's all for viewers on BBC Two. There's | :28:20. | :28:24. | |
continued coverage of today's Spending Review over on the BBC News | :28:24. | :28:28. | |
Channel. I'll be back with Jo Co with the Daily Politics at 11 | :28:28. | :28:31. |