Live Spending Review House of Commons

Order. Order. Mr Brendan McNeill. Calm yourself. You may be cheeky but

you are also exceptionally noisy! Statement, the Chancellor of the

Exchequer. Mr Speaker, this Spending Rdview

delivers on the commitment we made to the British people that we would

put security first. To protdct our economic security by taking the

difficult decisions to live within our means and bring down our debt,

and to protect our national security by defending our country's hnterests

abroad and keeping our citizens safe at home. Economic and national

security provide the foundations for everything we want to support.

Opportunity for all, the aspirations of families, the strong country we

want to build. Five years ago, when I presented our first Spendhng

Review, our economy was in crisis and as their Z, there was no money

left. -- said. We were borrowing ?1 in every four week spent an hour job

was to rescue Britain. Todax as we present this review, our job is to

rebuild Britain. To build otr finances, our defences, our society

so that Britain becomes the most prosperous and secure it up all the

major nations of the world `lso and we leave to the next generation a

stronger country than the one we inherited. That is what this

government was elected to do and today we set out the planned to

deliver on that commitment. We have committed to running a surplus.

Today I can confirm that thd four-year public spending plans I

set out are forecast to delhver that surplus so we don't borrow for ever

and we are ready forward but storms lie ahead. We promised to bring our

debts down. Today the forec`st I present shows that after thd longest

period of rising debt in our modern history, this year our debt will

fall and keep falling in evdry year that follows. We promised to move

Britain from being a high wdlfare low wage economy to a lower welfare

higher wage economy. Today H can tell the house that the ?12 billion

of welfare savings we committed to add the election will be delivered

in full and delivered in a way that helps families as we make the

transition to our national living wage. We promised that we would

strengthen our national defdnces, take the fight our nation 's enemies

and project our country's influence abroad. Today this Spending Review

delivers the resources to ensure that Britain, unique in the world,

will meet its twin obligations to spend 0.7% of its income on

development and 2% on the ddfence of the realm. But this Spending Review

not only ensures the economhc and national security of our cotntry, it

builds on it, it sets out a far-reaching changes to what the

state does and how it does ht, it reforms our public services so we

truly extend opportunity to all whether it is how we educatd our

children, train our workforce, rehabilitate our prisoners, provide

homes for our families, delhver care for the elderly and sick or the way

we hand back power to local communities. This is a big Spending

Review by a government that does big things, a long-term economic plan

for the future of the country. Nothing is possible without the

foundations of a strong economy Let me turn to the new forecast provided

by the independent Office for Budget Responsibility and let me thank

Robert Choate and his team for their work. Since the summer but ht new

economic acre has been publhshed which confirmed this. Since 201 can

no economy in the G-7 has grown faster than Britain. We havd grown

almost three times faster than Japan, twice as fast as France,

faster than Germany and at the same rate as the United States and that

growth has not been fuelled by an irresponsible banking boom like in

the last decade, business investment has grown more than twice as fast as

consumption, experts have grown faster than imports and the North

exports. We are determined this will exports. We are determined this will

be at economic recovery for all felt in all parts of the nation

That is already happening. Hn which every of the country are we seeing

the strongest jobs growth? Not just in the capital, the Midlands is

creating jobs three times f`ster than London and the south-e`st. In

the past year we have seen lore people in work in the Northdrn

Powerhouse than ever before. And where do we have the highest

employment rate of any part of our country? In this out West of

England. Our long-term economic plan is working. But the OBR remhnd us

today of the huge challenges we still face at home and abro`d. Our

debts are too high and our deficit remains, productivity is growing but

we still lag behind many competitors. I can tell the house

that in today's forecast, the expectations for world growth and

world trade have been revisdd down again. The weakness of the Durozone

remains a persistent problel, there are rising concerned about debt in

emerging economies, these are yet more reasons why we are detdrmined

to take the necessary steps to protect our economic security. That

brings me to the forecasts for our own GDP.

picture, our economy this ydar predicted to grow by 2.4%, growth is

then revised up from the budget forecast in the next two ye`rs to

2.4% in 2016 and 2.5% in 2007. It then start to return to its

long-term trend with growth of .4% in 2018 and 2.3% in 2019, and 2 20.

That growth is more balanced than in the past, whole economy invdstment

is set to grow faster in Brhtain than in any other major adv`nced

economy in the world this ydar, the next year and the year after that.

When I presented my first Spending Review in 2010, and set this country

on the part of living within its means, our opponents claimed that

growth would be choked off, a million jobs would be lost `nd that

inequality would rise. Everx single one of those predictions have proved

to be completely wrong. So too did the claim that Britain had to choose

between sound public financds and great public services. It is a false

choice. If you are bowled whth your reforms, you can have both. That is

why, when we have been reducing government spending, crime has

fallen, a million more children are being educated in good and

outstanding schools and public service action with our loc`l

government services has risdn. That is the exact opposite of wh`t our

critics predicted. And yet now the same people are making similar

claims about this Spending Review as we seek to move Britain out of

deficit and into surplus and they are completely wrong again. The OBR

has seen our public expenditure plans, analysed the effect on our

economy, they'll forecast is that the economy will grow robustly every

year, living standards will rise every day and more than a mhllion

extra jobs will be created over the next five years. That is because

sound public finances are not the enemy of sustained growth, they are

its precondition. Our econolic plan puts the security of working people

first so we are prepared for the inevitable storms that light ahead.

That is why our charter for budget responsibility commits us to

reducing the debt to GDP ratio in every year of this Parliament,

reaching a surplus in the ydar 2019-20 and keeping that surplus in

normal times. I can confirm that the OBR has certified that the dconomic

plan we present delivers on our commitment. That brings me to the

forecast for debt and deficht. As usual, the OBR has had access to

both published and unpublished data and has made its own assesslent of

our public finances. Since the Summer Budget, housing associations

in England have been reclassified like our independent Office for

National Statistics and thehr borrowing and debt have been brought

on to the public balance shdet and that change will be backdatdd to

2008. This is a statistical change and therefore the OBR has

recalculated its previous btdget forecast to include housing

associations so we can comp`re like with like. On that new meastre, debt

was forecast in July to be 83.6 of national income this year, now in

this statement, they forecast this year for it to be lower at 82.5 . It

falls every year down to 81.7%. . Order. Mr Lewis, get a grip of

yourself, man. Take up yoga, you will find it beneficial! Thd record

shows that the Chancellor stays for a very considerable period `fter his

statement to respond to questions and members will always find the

chair a friend if they wish to question a minister. They whll.

Those who have questions to ask will be heard. Meanwhile, the Ch`ncellor

will be heard. This is beta come I am looking forward it. -- Mr

speakable top debt was forecast in July to be 83.6% of national income

this year and now in this statement the forecast is to be lower than

82.5% and it falls every ye`r down to 81.7% next year, 79.9% in 20 7 -

18, 70 7.3% and 74.3% reachhng 1.3% in 20 -- 2025 and 21.

In every single year, the n`tional debt as a share of national income

is lower than when I presented the Budget four months ago. And this

improvement in the nation's finances did due to two things. First, the

OBR expects tax receipts to be stronger, a sign that our economy is

healthier than thought. Second, debt interest payments are expected to be

lower, reflecting the furthdr fall in the rates we paid our crdditors.

Combine the effects of bettdr tax receipts and lower debt intdrest,

and overall, the OBR calcul`te it means a ?27 billion improvelent in

our public finances over thd forecast period compared to where we

were at the budget. Mr Speaker, this improvement in the nation's finances

allows me to do the following. First, we will borrow ?8 billion

less than we forecast, making faster progress towards eliminating the

deficit and paying down the debt, fixing the roof when the sun is

shining. CHEERING

Second, we will spend ?12 bhllion more on capital investments, making

faster progress to building the infrastructure our country needs.

And third, the improved public finances allow us to reach the same

goal of a surplus while cutting less in the early years. We can smooth

the path to the same destin`tion. And that means we can help `n tax

credits. I have been asked to help in the transition as written move to

a higher wage, lower welfard, lower tax society that the countrx wants

to see, and I have had representations that these changes

to tax credits should be ph`sed in. I have listened to the concdrns I

hear and understand them, and because I have been able to

understand and announce tod`y a difference in the public finances,

the decision is to avoid thhs altogether. Tax credits are being

phased out anyway as we introduce Universal Credit, and what that

means is that the tax credit taper rate remained unchanged. Thd

disregard will be ?2500. I propose no further changes to the Universal

Credit taper or work allowances to those passed through Parlialent last

week. The minimum income floor will rise with the National living wage.

I set a lower welfare cap at the Budget. The House should know that

helping with the transition obviously means that we will not be

within that lower welfare c`p in the first years, but the House should

also know that thanks to our welfare reforms, we meet the cat in the

later part of this Parliament. Indeed, on the figures publhshed

today, we still receive the ?12 billion per year of welfare savings

we promised. Now, that is bdcause of the permanent savings we have

already made, and further long-term reforms we announced today. The rate

of Housing Benefit in the social sector will be capped at thd

relevant local housing allowance, in other words, the same rate paid to

those in the private rented sector who received the same benefht. This

will apply to new tenancies only. We will also stop paying Housing

Benefit and pension credit payments to people who have left the country

for more than a month. The welfare should be fair to those who need it

and to those who pay for it. So improved public finances and our

continued commitment to reform means we continue to be on target for a

surplus, and the House will want to know the level of that surplus. Let

me give you the OBR forecast the deficit and borrowing. In 2010, the

deficit we inherited with estimated to be 11.1% of national income. This

year it is set to be almost one third of that, 3.9%. Next ydar it

falls to less than a quarter of what we inherited, and 1.2% in 2017/ 8,

0.2% a year after that before moving into a surplus of national hncome in

2019/20, rising to not .6% the following year. Let me turn to the

cash for in figures. With housing associations included, the OBR

predicted the time of the btdget that written would borrow ?74.1

billion this year. Instead they now forecast we will borrow less than

that at 73.5 billion, falling to 49.9 billion next year, and

continuing to fall to lower than was forecast at the Budget in every

single year after that, to 24.8 point 8,000,000,020 17/18, 4.6

billion in 201819, and in 2019/ 0, we reach a surplus. A surplts of

?10.1 billion. That is highdr than was forecast at the budget, Britain

out of the red and into the black. In 2020/21, the surplus risds to

?14.7 billion the year after that. So the deficit falls every xear the

deckchair is lower in every year than previously forecast -- the debt

share. And we reach a eager surplus, and we achieve this whilst `t the

same time helping working f`milies as we move to a lower welfare higher

wage economy, and we have the economic security of knowing our

country is any way in the world CHEERING

Mr Speaker, that brings me to our plans for public expenditurd and

taxation. I want to thank mx friend the Chief Secretary of the Treasury

and other officials who havd assisted us for long hours `nd hard

work that they have put into developing these plans. We said ?5

billion would come from the measures on tax avoidance and imbalances

Those measures were announcdd at the Budget. Together we go further today

with new penalties for the General Anti-Abuse Rule which this

Government introduced, action undisguised remuneration schemes and

Stamp Duty avoidance, and wd. Abuse of the intangible fixed assdts

regime -- we will stop abusd of the intangible fixed assets reghme. HMRC

is making efficiencies of 18% of its own budget. In the digital `ge, we

don't need taxpayers to pay for paper processing or 170 sep`rate tax

offices around the country. Instead we are reinvesting some of those

savings with an extra ?800 lillion in the fight against tax ev`sion, an

investment with a return of almost ten times in additional tax

collected. We are going to build one of the most digitally advanced tax

administrations in the world in this Parliament so that every individual

and small business will havd their own tax account by the end of the

decade in order to manage their taxes online. Capital Gains Tax will

need to be paid within 30 d`ys of completion of any disposal of

residential property. Together these form part of the vegetal Rob --

digital revolution. An extr` ?4 0 million will be received, btt the

core Cabinet Office budget will be cut by 26%. The cost of all

Whitehall administrations whll be cut by ?1.9 billion. These form part

of the ?12 billion of savings to Government departments I am

announcing today. In 2010, Government spending was 45% of

national income. This was a figure we couldn't sustain because it was

neither practical nor sensible to raise taxes high enough to pay for

that, and we ended up with ` massive structural deficit. Today the state

accounts for just under 40% of national income, and is fordcast to

reach 36.5% by the end of the Spending Review. The structtral

spending this represents is at a level of competitive modern

developed economy. It is a level that the British people are prepared

to pay their taxes for. It hs precisely because this Government

believes in decent public sdrvices and a properly funded welfare state

that we are insistent that they are sustainable and affordable. To

simply argue all the time that public spending must always go up,

never be cut, is irresponsible and lets down the people who rely on

public services most. Equally, to fund the things we want to

Government to provide in thd modern world, we have to be prepardd to

provide the resources. So I am setting the limits of the total

managed expenditure as follows. This year, public spending will be ? 56

billion. Then 773 billion ndxt year, 787 billion a year after and 80

billion before reaching 821,000,000,020 19/20, the xear we

are forecast to eliminate the surplus. Then the forecast rises

broadly in line with the growth of the economy, and will be at 857

billion in 2020/21. The figtres from the OBR show that over the next five

years, welfare spending falls as a percentage of national incole, while

departmental capital investlent is maintained and is higher at the end

of the period. That is prechsely the right switch for a company concerned

about its long-term success. People will want to know what this means in

practice. Over this Spending Review, the day-to-day spending of

Government departments is sdt to fall by an average of not .8% a year

in real terms. That compares to an average fall of 2% over the last

five years. So the savings we need are considerably smaller. This

reflects the improvement in the public finances, and the progress we

have already made. The over`ll rate of annual cuts I set out today are

less than half of those delhvered over the last five years. So Britain

is spending a lower proporthon of its money on welfare and a higher

proportion on infrastructurd, the budget is balanced with cuts half

what they were in the last Parliament, making the savings we

need, no less and no more, `nd providing the economic security to

the working people of a country with a surplus that lives within its

means. Now this does not of course mean that the decisions reqtired to

deliver the savings are easx. But nor should we lose sight of the fact

that this Spending Review commits ?4 trillion over the next five years.

It is a huge commitment of the hard earned cash of reduced taxp`yers,

and all those who dedicate their lives to public service, will want

to see the reforms. We will reform and rebuild. These reforms will

reform our objectives for this country. First, to develop ` modern

integrated health and is a system that supports people at every stage

of their lives. Second, to spread economic power and wealth through

devolution revolution and invest in long-term interest rich. Thhrd, to

extend opportunity by tacklhng the big social failures that thd Toulon

have helped people back in our country. Fourth, two restord our

national-security with resotrces. The spending is driven by these

goals. The first priority of the British people is our National

Health Service. Health spending was cut by the Labour administr`tion in

Wales, but we Conservatives have been increasing spending on the NHS

in England. And in this Spending Review, we do so again. We will work

with our health professionals to deliver the very best value for that

money. That means ?22 billion of efficiency savings across the

service, 25% cut in the Whitehall budget to the Department of Health,

modernising the way we fund students of health care. Today there is a cap

on student nurses. Over half of all applicants are turned away, and it

leaves hospital is relying on agencies and overseas staff. So we

will replace Derrick funding with loans for new students so that we

can abolish this self-defeating cap and create up to 10,000 new training

places in this Parliament. @longside these reforms, we will give the NHS

the money it needs. We made a commitment to a ?10 billion real

increase in the health servhce budget, and we fully deliver that

today with the first ?6 billion delivered upfront next year. This

fully funds the five-year forward view that the NHS itself forward as

the plan for its future. As the keep TV executive of NHS England Simon

Stephens said, the NHS has been heard and actively supported. Let me

explain what that means in cash The NHS budget will rise from ?001

billion today to ?120 billion by 2020/ 21. This is a half ?1 trillion

commitment to the NHS over this Parliament, the largest invdstment

in the health service since its creation. So we have a clear plan

for improving the NHS. We h`ve fully funded it, and in return, p`tients

Wilsey more than ?5 billion of health research in everything from

genomes to antimicrobial resistance, to a new dementia Institute and a

world-class public health f`cility in Harlow. 8000 more elective

hospital missions, 5 million more outpatient appointments, 2 lillion

more diagnostic test, new hospitals funded in Cambridge, Sandwell and

Brighton. Cancer testing within four weeks, and a brilliant NHS `re

available seven days a week. Mr Speaker, there is one part of our

NHS that has been negative the Toulon, and that is mental health. I

want to thank the all-party group, the Member for Sutton Coldfheld The

right honourable member for North Norfolk and Alistair Campbell for

their work in this vital arda. In the last Parliament, we madd a start

by laying the foundations for equality of treatment with the

first-ever waiting time standard for mental health. Today we build on

that was ?600 million of additional funding, meaning that by 2020,

significantly more people whll have access to talking therapies,

perinatal mental health services and crisis care. All possible bdcause we

made a promise to the British people to give our NHS the funding it

needs, and in this Spending Review we have delivered. Mr Speakdr, the

health service cannot functhon effectively without good social

care. The truth we need to confront is this. Many local authorities are

not going to be able to meet the growing social care needs unless

they have new sources of funding. And that's been the end comds from

the taxpayer. So in future, those local authorities who are

responsible for social care will be able to levy a new social c`re

pre-set of 2% on council tax. The money raised will have to bd spent

exclusively on adult social care, and in all authorities, if `ll

authorities make full use of it it will bring almost ?2 billion more

into the care system. It is part of a major reform in and undertaking to

implement social care better in this decade. I am increasing the better

care fund to support integr`tion with the local authority is able to

access an extra ?1.5 billion by 2019/20. The steps taken in this

review mean that by the end of the Parliament, social care spending

will have risen in real terls. A civilised and prosperous society

like ours should support its most vulnerable and elderly citizens and

that includes a decent incole in retirement. Over 5 million people

have already been auto enrolled into a pension thanks to our reforms in

the last parliament. To help businesses with the administration

of this important boost to our nation 's savings, we will `lign the

next two phases of contribution rate increases with the tax years. The

best way to afford generous pension benefit is to raise the pension age

in line with life expectancx as we are set to do in this Parli`ment and

that allows us to maintain ` triple lock

pension so never again to Britain's engine is received a derisory

increase of 75p. -- the valte. As a result of our commitment to those

who have worked hard all thdir lives and contributed to society, I can

confirm that makes did the basic state pension will rise by ?3.3 to

?119.30 per week, guest real terms in grace to the basic state pension

in 15 years -- the biggest hncrease. Taking all of our increases together

in the last five years, pensioners will be ?1125 better off per year

than they were when we came to office. We are also undertaking the

biggest change in the state pension for 40 years to make it simpler and

fairer by introducing a new single tier pension for new pensioners from

next April. I am setting thd full rate for the new state penshon at

?155 and fairer by introduchng a new single tier pension for new

pensioners from next April. I am setting the full rate for the new

state pension current means tested benefit for the lowest incole

pensioners in society and another example of progressive government in

action. Instead of cutting the savings credit, as in previous

fiscal events, it will be frozen at its current level where income is

unchanged. The first objecthve of this Spending Review is to give

unprecedented support to he`lth social care and our pensiondrs. The

second is to spread economic power and wealth across the nation. In

recent weeks, great metropolitan areas like Sheffield, Liverpool the

Tees Valley, the North East and the West Midlands have joined greater

Manchester in agreeing to create elected mayors in return for

far-reaching new powers over time is bought, skills and local economy. It

is the most determined effort to change the geographical imb`lance

that has been doubled the British economy for half a century. We are

setting aside the ?12 billion we promised for our local growth fund

and I am announcing the cre`tion of 26 new or extended enterprise zones

including 15 zones in towns and rural areas from Carlisle to Dorset

to Ipswich will stop if we really want to shift power in the country,

we have to give all local councils the tools to drive the growth of

business in their area and the rewards that come when you do so. I

can confirm that as we set out last month, we will abolish the tniform

business rate. The end of the parliament, local government will

keep all of the revenues from business rates, we will givd

councils the power to cut r`tes and make their area more attractive the

business and elected mayors will be able to raise rates provided they

are used to fund specific infrastructure problem is -, project

supported by local communitx. Because the amount we raised in

business rate is in total mtch greater than the amount we give to

local councils through the local government grant, we will phase that

out entirely over this Parlhament. We will also devolve additional

responsibilities. The temporary accommodation man of the -- manners

and the world no longer be paid through the benefit system, but

councils will receive ?10 mhllion more up front so they can provide

more help to homeless peopld alongside saving in a public health

grant, we will consult and transferring new powers and

responsible at the forefront and elements of the administrathve and

housing benefit. Local government is sitting on property worth a quarter

of ?1 trillion so we will ldt councils spend 100% of the street

from the app sets they sell to improve local services. Councils

increase their reserves by nearly ?10 billion over the last

Parliament. We will encourage them to draw on these reserves as they

undertake reforms. This amotnts to a big package of new powers btt also

new responsibilities for local councils. It is a revolution in the

way we govern this country `nd if you take into account is thd falling

grant and the rise in counchl incomes it means by the end of this

Parliament local government will be spending the same in cash tdrms as

it does today. The devolved administrations of the UK whll also

have available to them unprdcedented new powers to drive their economies.

The conclusion last week of the political talks in Northern Ireland

mean additional spending power for the executives to support the full

implementation of the Stormont house agreement. That opens the door to

the devolution of corporation tax which the parties have now confirmed

they wish to set at the ratd of 12.5%. That is a huge prize for his

knees in Northern Ireland and the onus is on the Northern Ireland

executive to play their part and deliver the sustainable budgets so

we can move forward on that. Northern Ireland Watt block grant

will be over ?11 billion by 201 -20 and funding for capital invdstment

in new infrastructure will rise by over ?600 billion over five years

ensuring that Northern Irel`nd can invest in its long-term futtre.

Wales has asked for years for a funding floor to protect public

spending that and now within months of coming to office, this

Conservative government is `nswering that call and providing that

historic funding guarantee for Wales. We will introduce thd new

funding floor and set it for this Parliament at 115%. The Welsh

Secretary and I also confirl that we will legislate so the devolttion of

income tax can take place whthout a referendum. We will also help fund a

new Cardiff City deal so thd Welsh block grant will read almost ?1

billion by 2019-20 while thd capital spending will rise by over ?900

million over five years. As Lord Smith confirmed this month, the

Scotland Bill meets the foul made by the parties... When the people of

Scotland voted to remain in the United Kingdom. It must be

underpinned by a fiscal fralework that is fair to all taxpayers and we

are now ready to reach an agreement, the ball is in the court

of the Scottish Government. Let s have a deal that is fair to

Scotland, fair to the UK and are built to last. We implement in the

city deal for Glasgow and negotiating deals with Aberdeen and

Inverness also. Of course, hf Scotland had voted for independence,

they would have had their own Spending Review this autumn and with

world oil prices falling and revenues from the North Sea forecast

by the OBR to be down 94%, we would have seen catastrophic cuts inside

this public services but th`nkfully Scotland remains a strong p`rt of a

stronger United Kingdom. CHDERING So the Scottish block grant will be

over ?30 billion in 2019-20 while Apple spending available will rise

by ?1.9 billion through to 2021 UK Government giving Scotland the

resources to invest in its long term future -- capital spending. The

funding of the Scotland, Wales and Northern Ireland offices will all be

protected in real terms. We are devolving power across the country

and also spending on the economic infrastructure that connects our

nation. That is something wd have not done enough for a gener`tion. By

making the difficult decisions to save on day-to-day costs in

departments, we can invest hn new roads, railways, science, flood

defences and energy that Brhtain needs. We started in the last

Parliament and in the last week Britain topped the league t`ble of

the best places in the world to invest in infrastructure. In this

Spending Review we go much further. The Department for Transport's

operational budget will fall by 37% but transport capital spendhng will

increase by 50% to a total of ? 1 billion, the biggest increase for a

generation and that runs thd largest road investment programme shnce the

1970s, for we are the builddrs. It means the construction of hhgh-speed

2 to link the Northern Powerhouse to the south can begin, the eldgant

edition of lines like the trans-Pennine, the Midland Lain and

the great Western can go ahdad, -- electrification. London will get an

?11 billion investment in its transport infrastructure. And having

met with my honourable friend for Folkestone and other Kent MPs, I

will relieve the pressure on roads in Kent from operation Stack with a

new investment of a quarter of 1 billion in facilities. We whll make

it a ?300 million commitment to cycling that we promised and we will

spend over ?5 million on ro`ds you can insert this Parliament `nd

thanks to the incessant lobbying from my honourable friend from

Northampton North, Britain now has a permanent pothole fund. CHEDRING

Mr Speaker... We are investhng in the transport we need and in flood

defences also pulls up effort's day-to-day budget. 15% in this

Spending Review but we are committing over ?2 billion to

protect over 300,000 homes from flooding. Our commitment to farming

and the countryside is refldcted in the protection of funding for our

national parks and forests. We will not be making that mistake `gain!

LAUGHTER I can tell the house that in

recognition of the higher costs they face, we will continue to provide

?50 off the water bills of South West water customers for thd rest of

this Parliament, a Conservative promise made to the south-wdst and a

promise kept. Investing in the long-term economic infrastrtcture of

the country is a goal of thhs review and there is no more import`nt

infrastructure than energy so we are doubling our spending on endrgy

research with a major commitment to small modular nuclear reactors and

supporting the creation of the shale gas industry by injuring th`t

communities benefit from eight Shale Wealth fund which can be worth up to

?1 billion, support for low carbon electricity and renewables will more

than double. The department and sale of ultra low emission vehicles will

continue to be supported but in the light of the slower than expected

introduction of a more rigorous EU admissions testing we will delay the

removal of the diesel suppldment from company cars until 2020. We

support efforts to tackle climate change and to show our commhtment to

the Paris talks next week, we are increasing our support for climate

finance by 50% over the next five years. The resource's resource

budget will fall by 22% ago we will reform the renewable heat incentive

to save ?700 million and we will permanently exempt our energy

intensive industries from the cost of environmental tariffs so we keep

their bills down, keep them competitive and keep them hdre. I

can announce we are introducing a cheaper domestic energy effhciency

scheme that replaces eco-, the new scheme will save an average of 30 a

year from the energy bills of 2 million households. This government

believes that going green should not cost the earth. We're cutting other

bills also, bringing forward reforms to the compensation culture around

minor motor accident injurids which will remove over ?1 billion from the

cost of providing the insur`nce and we expect the industry to p`ss on

this saving so much was the average saving of 40 to ?50 per year off

their insurance bills. This is a government that backs all otr

businesses, large and small and on this side of the house we understand

that there is no growth, no jobs without a vibrant private sdctor and

successful entrepreneurs. This Spending Review delivers wh`t

business needs. It needs colpetitive taxes, I have already announced a

reduction in corporation tax rate to 18%, our overall review of business

rate will report at the budget but I am helping 600,000 of our slallest

businesses by extending our small business rate relief scheme for

another year. Businesses also need an active and sustained indtstrial

strategy. That strategy launched in the last Parliament continuds in

this one. We commit to the same level of support for our aerospace

and automotive industries not just for the next five years but for the

next decade. Spending on our new catapult centres will incre`se. We

will protect the cash support we give to innovate UK, somethhng we

can afford to do by offering ?1 5 million of new loans to companies in

that of grants as France has successfully done for many xears.

It is one of the savings th`t helps us to reduce the budget and find the

savings we need. That is whx I protected the resource budgdt for

science in cash terms. In this budget I am protecting it in real

terms, so it rises to ?4.7 billion. That is ?500 million more bx the end

of the decade along with a ?6.9 billion capital budget as wdll. We

funding the new Royce Institute in magister, the agri-tech centres in

Shropshire, York and Edinburgh, and we will commit ?75 million to the

famous Cavendish laboratorids in Cambridge where Crick and Rttherford

expanded our knowledge of the universe. I have asked another of

our Nobel laureate is to conduct a review, and I want to thank you for

the excellent report he has just published. Britain is brillhant at

culture, too, and we need to invest in our extraordinary arts, luseums,

heritage, media and sport. ?1 million a year in grants adds a

trillion pounds to our economy, not a bad return, so deep cuts hn the

small budget of the Departmdnt for Culture, Media and Sport ard a false

economy. I am increasing thd cash that will go to the Arts Cotncil,

our national museums and galleries. We will keep free museum entry and

look at a new tax credit to support their exhibitions, and I will help

UK sport, which has been living on diminishing reserves, with ` 29

increase in their budget so that we can go for gold in Rio and Tokyo. Mr

Speaker, The right honourable member and former Home Secretary h`s asked

us to support his city, and I'm happy to do so with a grant. His

front bench contributes to, the LAUGHTER

-- to comedy. The money far Hull is all part of a package from Northern

Powerhouse which includes ftnding the iconic new factory in M`nchester

and the great exhibition of the North. In Scotland we will support

the world famous Burrell collection, while here in London, we will help

the British Museum, the scidnce Museum and the V to help their

collections out of storage `nd on display. We are increasing the

funding to the BBC's World Service so British values of freedol and

free expression are heard around the world. And all of this can be

achieved without raiding, as the Prime Minister said, the big lottery

fund, as some had feared. It will continue to support the work of

hundreds of small charities across Britain, and so too will allow 20

million a year new support for social impact on. There are many

great charities that work to support vulnerable women, a point that was

raised in Prime Minister's questions, and my honourabld under

the new member for Colchestdr has proposed a brilliant way to give the

more help. 300,000 people h`ve signed a petition arguing that no

VAT should be charged on sanitary products. We already charge the

lowest rate, and we are comlitted to get the EU to change its rules.

Until that happens, I'm going to use the money raised from the t`mpon tax

to fund women's health charhties. CHEERING

The first ?5 million... CHEERING

The first ?5 million will bd distributed to the eve appe`l and

the Haven, and a invite bids from other such good causes. It hs

similar to the way we use LHBOR finds, and today I make further

awards. We renovate our milhtary museums from the Royal for. In the

budget I funded one of thesd campaign bunkers, but more have

emerged since then. And the suggestion of my right honotrable

friend the Mid Sussex, we whll support the fellowships awarded in

the name of his grandfather by funding the Winston Churchill

Memorial trust. We will fund the brilliant Commonwealth War Graves

Commission to attend to over 60 0 graves for those who died fhghting

for our country since the Sdcond World War, and will contribtte to a

memorial to those victims of terrorism who died on the bts in

Tavistock Square ten years `go. It is a reminder that we have `lways

faced threats to our way of life, and we have never allowed them to

defeat us. Mr Speaker, we ddliver securities that we spread

opportunity. That is the thhrd objective that drives the Spending

Review. We showed in the last five years that sound public fin`nces and

bold public service reform can help the most disadvantaged in otr

society. That's why inequalhty is Dan, child poverty is down, the

gender pay gap is at a record low, and the richest now pay mord in

taxes than the rest of the country put together. The other sidd talks

of social justice, this sidd delivers it because we are `ll in

this together. And Mr Speakdr, in the next five years, we will be even

bolder in our social reform. It starts with education, becatse that

is the daughter opportunity in our society. This Spending Revidw

commits us to a comprehensive reform of the weight is provided from

childcare to college. We st`rt with the largest ever investment in free

childcare so working familids get the help they need. From 2007 we

will fund 30 hours of free childcare for working families, we will

support ?10,000 of childcard costs tax-free to make this affordable

will now only be available to parents working more than 16 hours a

week and with incomes of less than ?100,000. We will maintain the free

childcare which offer to thd most disadvantaged two-year-olds, and to

sport nurseries delivering lore free places, we were increase thd funding

to that sector by ?300 millhon. That is a ?6 billion childcare commitment

to the working families of Britain. Next, schools. We build on our

far-reaching reforms of the last Parliament that have seen school

standards rise even as exams become more rigorous. We will maintain

funding for free infant school meals, protect rates for thd pupil

premium and increase the cash in the dedicated school grant. We will

maintain the current nation`l base rate of funding for our 16-09

-year-old students for the whole Parliament. We will open 500 new

free schools and university technical colleges, invested ?2

billion in school building `nd 600,000 new school places, `nd to

help all of our children make the transition to adult heard and learn

not just about their rights but their responsibilities, too, we will

expand the National citizens service. Today, 80,000 studdnts go

on National citizens servicd, and by the end of the decade, we whll fund

places for 300,000 on this life changing programme pioneered by my

right on a wall friend the Prime Minister. Five years ago, 200

schools were academies. Tod`y, 000 schools. Our goal is to complete the

school revolution and help dvery secondary school become an `cademy,

and I can announce that we will let sixth form colleges become `cademies

so that they no longer have to pay VAT. We will make local authorities

running schools a thing of the past, and this will help us save `round

?600 million from the education and services grant. Mr Speaker, I can

tell the House that as a result of this pending review, not only is

terms, but the total financhal supporter education, includhng

childcare and our extended further and higher educational loans, will

increase by ?10 billion. Th`t is a real terms increase in educ`tion,

too. Something else I can tdll the House. We are going to phasd out the

arbitrary and unfair school funding system...

CHEERING Under the current arrangements, a

child from a disadvantaged background in one school can receive

half as much funding as a child in identical circumstances in `nother

school. In its place, we were introduced a new national ftnding

formula, and I commend to the many MPs from all parties who have

campaigned for them any years to see this day come. It will be started to

be introduced from 2017, and the Education Secretary will consult in

the New Year. Education continues in our further education colleges and

universities, and so do our reforms. We will not cut core adult skills

funding for every colleges. We will protected in cash terms. I `nnounce

that we would replace an sttdent maintenance grants with larger

student loans. That saves us over ?2 billion year in the Spending Review,

into means we can extend support to students who have never before had

government help. Today I can announce that part-time students

will be able to receive maintenance loans, helping some of our poorest

students. We will also for the first time provide tuition fee lo`ns for

those studying higher skills in Effie Gray and extend loans to all

postgraduate students. -- in further education. An extra 200,000 students

will benefit from this extr` support I'm announcing today. The

apprenticeship programme, in the last Parliament we more than double

the number of Britons to 2 lillion. By 2020 we want to see 3 million

apprentices, and to make sure they are high quality apprenticeships, we

will increase the funding pdr place, and the Business Secretary will

create a new business led body to set the standards. As a restlt, we

will be spending twice as mtch on apprenticeships by 2020 compared to

when we came to office. To dnsure large businesses share the cost of

trained workforces, I announced in the budget that we will introduce a

new apprenticeship levy, and today I set the rate at 0.5%. Every imply

will receive a 15,000 pounddr last offset against the levy, whhch means

that 98% of all employers and businesses with bills of lesson ?3

million will pay no levy at all This will fund 3 million

apprenticeships. With those paying it able to get out more than they

put in, it is a huge reform to raise the skills of the nation and address

one of the enduring weaknesses of the British economy.

Mr Speaker, education and skills are the foundation of opportunity in our

country. Next we need to help the poor into work. The number claiming

and implement benefit has f`llen to just 2.3%, the lowest rate since

1975. But we are not satisfhed that the job is done. We want to see full

employment. So today we confirm we will extend the same support and

conditionality we currently expect of those on Jaer say to over 1

million more benefit claimants. -- to JSA. We will increase in real

terms the help we provide to people with disabilities to help gdt them

into work. This will all be delivered within the 14% savings

made to the resource budget of the Department for Work and Pensions,

included by reducing the size of the estate and collating job centres

with local authority buildings. It is the way to save money whhle

improving the front-line service we offer people, and providing more

support for those who are the most vulnerable and most in need of our

help. Mr Speaker, you can't say you are fearlessly tackling the most

difficult social problems if you turn a blind eye to what gods on in

our prisons and Criminal Justice Act the. My right honourable frhend the

lawsuit Chancellor has workdd with the Chief Justice and others to

transform our courts so thex are fit for the modern age. Underusdd courts

will be closed, and I can announce today the money saved will be used

to fund a ?700 million investment in new technology that will brhng

further and permanent long-term savings and speed up the process of

justice. Old Victorian prisons in our cities that are not suitable for

rehabilitating prisoners will be sold. This will also bring long term

savings and means we can spdnd over ?1 billion in this Parliament will

then nine modern, new prisons. Today the transformation gets unddr way

with the announcement that the Justice Secretary has just lade I

can tell the House that Holloway prison, the biggest women's jail in

Western Europe, will close. In the future, women prisoners will serve

their sentences in more hum`ne conditions better designed to keep

them away from crime. By selling these old prisons, we will create

more space of a housing in our inner cities, for another of the great

social failures of our age has been the failure to build enough houses.

And in the end, spending reviews like this come down to choices about

what your priorities are. I am clear in this Spending Review, we choose

to build. Above all, we choose to build homes that people can buy

because there is a growing crisis of home ownership in our country. 5

years ago, around 60% of people under 35 owned their own hole. Next

year it is set to be just h`lf that. We made a start on tackling this in

the last Parliament, and with schemes like help to buy, the number

of first-time buyers rose bx nearly 60%. But we haven't done ne`rly

enough, so it is time to do much more. Today we set out our bold plan

to back families who aspire to buy their own home. First, I am doubling

the housing budget. Doubling it to ?2 billion a year.

We will deliver with governlent help for hundred thousand afford`ble new

homes by the end of the dec`de and affordable means not just affordable

to rent but affordable to bty as well -- 400,000. That is thd biggest

house-building programme by every -- any government since the 1970s,

almost half of them will be starter homes sold at 20% of market value to

young first-time buyers, 134,00 will be our brand-new help `bout

shared ownership which will remove many of the restrictions on shared

ownership, who can buy and who can build and who they can be sold to.

The second part of the plan delivers on our manifesto commitment to

extend the right to buy a housing association tenants. This starts

with a new pilot and from mhdnight tonight, tenants in five Hotsing

Association will be able to start the process of buying their own

home. The third element involves accelerating housing supply, we are

announcing further reforms to our planning system so it delivdrs more

homes more quickly. We are releasing public land suitable for a 000, 00

homes and redesignate the unused commercial land. Homes. We will

extend loans for small builders regenerate rundown estate and

deliver in absolute the first garden city in most centuries. The

government will help address the housing crisis in our capit`l city

with a new scheme London helped by. Londoners with a 5% deposit will be

able to get an free loan -- when interest-free loan. My honotrable

friend bought Richmond Park has been campaigning on this and tod`y we

back him all the way. -- from Richmond Park. The fifth part of our

housing plan addresses the fact that more and more homes are being bought

as buy to let or second homds. Many of them are catch purchases that are

not affected by the reductions are introduced in the budget on -- more

do mortgage interest relief. People buying a home to let should not be

squeezed at families who cannot afford a home to bite so I `m

introducing new rate of Stalp Duty that will be 3% higher on the

purchase of additional propdrties like buy to let and second homes. It

will be introduced from next April and we will consult on the details

so corporate property development is not affected. This extra St`mp Duty

rate is almost ?1 billion bx 20 1 and will reinvest some of that money

in local communities in London and places like Cornwall which `re being

priced out of home ownership. The funds we raise will help buhld these

new homes so this Spending Review delivers a doubling of the housing

budget, 400,000 -- 400,000 new homes with extra support for London,

estate regenerated, right to buy rolled out, paid for by a t`x on why

to let and second home delivered by a Conservative government committed

to helping working people who want to buy their own home, for we are

the builders. The fourth and final objecthve of

this Spending Review is nathonal security. On Monday the prile

ministers set out to the hotse the strategic defence and securhty were

duped. It commits us to spending 2% of our income on defence and how

these resources will be used to provide new equipment for otr war

fighting military, new capabilities for our special forces, new defences

for our cyberspace and new investment in our remarkabld

intelligence agencies. By 2020 21 comedy single intelligence `ccount

will rise from two x 1 billhon to reach 2.8 billion and the btdget

will rise from ?34 billion to ? 0 billion. Britain will also commit to

spend 0.7% of national incole on overseas to element and we will

reorientate that budget so we need our moral obligation to the world's

poorest and help those in the fragile and failing states on the

borders of Europe. It is overwhelmingly in our national

interest that we do so. Our total overseas aid budget will increase to

?16.3 billion by 2020. Brit`in is unique in the world in making these

twin commitment to funding the hard power of military might and the soft

power of international developer and and it enables us to protect

ourselves, project our infltence and promote our prosperity. We do so

ably supported by my right honourable friend the Foreign

Secretary and our outstanding diplomatic service. To support them

in our -- thereby thought work I am protecting in real terms thd budget

of the Foreign and Commonwe`lth Office. Security starts at home Our

police are on the front lind of the fight to keep us safe. In the last

Parliament we make savings hn police budgets but thanks to the rdforms of

my right honourable friend the Home Secretary and hard work of police

officers, crime fell and thd number of neighbourhood officers increased

for that reform must continte. We need to invest in new

state-of-the-art mobile communications for our immediate --

emergency services, introduce new technology on our borders and

increased the counterterrorhsm budget by 30%. We should allow

addicted Police and Crime Commissioners great that Fldx

ability in keeping local prdcepts. And further savings can be lade in

the police as different forces merge their back offices and shard

expertise. We will provide ` new fund to help with this reform. I

have had representations from the Shadow Home Secretary that police

budgets should be cut by 10$. Now is not the time for further police

cuts. Now is the time to back our police and give them the tools to do

the job. I am today announchng there will be no cuts in the police budget

at all... CHEERING There will be real terms protection

for police funding. Mr Speaker. . CHEERING

The police protect us and wd are going to protect the police

CHEERING Five years ago, when I presdnted my

first Spending Review, the country was on the brink of bankruptcy and

our economy was in crisis. We took the difficult decisions back then

and five years later I report on an economy growing faster than its

competitors, and public fin`nces set to reach a surplus of ?10 bhllion.

Today we have set out the ftrther decisions necessary to build this

country's future, sometimes difficult, yes, but decisions that

build the great public servhces families rely on, the infrastructure

and homes people need, stronger defences against those who threaten

our way of life and willed the strong public finances upon which

all these things depend. We were all these things depend. We were

elected as a 1 nation government, today we deliver the Spending Review

of a 1 nation government. The garden -- guardians of economic security,

the protectors of national security, the builders of our better future,

this government, the mainstream representatives of the workhng

people of Great Britain. CHDERING Thank you, Mr Speaker. Like me, you

will have witnessed many Autumn Statement 's and statements by the

Chancellor of the Exchequer. And you know that there is such a thing as

the iron law of Chancellor's statements and that is that the

louder the cheers for the statement on the day, the greater the

disappointment by the weekend when the analysis goes in. From what we

have heard today, we don't need until the weekend for this statement

to fall apart. Over the last five years there has barely been a target

the Chancellor as set he has not missed or ignored. Five years ago,

the newly elected Chancellor and the Prime Minister came to this house

and warned us that because of the dire economic situation our country

faced, what was needed was five year programme of austerity meastres job

cuts, wage freezes and cuts in public services. But we werd

promised specifically by thhs Chancellor that by today, the

deficit would be eliminated. And debt would be under control. And

falling dramatically. Peopld put their trust in that commitmdnt.

Order. I said earlier that the Prime Minister would be hurt, the Shadow

Chancellor will be heard too. If people think they are being clever

shouting their heads off, don't bother trying to ask a question try

to at least have the sense to realise the complex between the two.

-- conflict. The Prime Minister also assured us that sacrifices had to be

made and we were all in it together. Five years on, can I just s`y, that

the Chancellor has some front to come to this house and talk to us

about deficit? The lecture ts about deficit reduction. Today is the day

when the Chancellor was supposed to announce austerity was over, the

deficit was done. From what we have heard, I think they will fedl

absolutely betrayed because the reality is this: After five years,

the deficit has not been elhminated and this year is predicted to be

over ?70 billion. Instead of taking five years to eliminate the deficit

as he promised, it will takd ten. And debt to GDP will not be the 69%

he promised five years ago, as he said today, it will be 82.5$. We are

now potentially to bequeath our children a debt of 1.5 trillion

Their debt. Their debt. The Chancellor... The Chancellor

continues... Members on both sides are still shouting their he`ds off,

it is very down market, it hs very low-grade and widely deprec`ted by

the public. How it is that people think it is legitimate to bdhave in

that way and tried to reconnect with the electorate disillusioned with

politics is just bizarre and if some people are so unintelligent that

they cannot grasp the point, I pity them. After five years as

Chancellor, with that level of debt, there is nobody else for hil to

blame. There is only so long you can blame past governments. There is no

more excuses for this Chancdllor after five-year is. We were also

promised that if sacrifices had to be made to tackle the deficht, not

to worry, we were all in thhs together. No, we are not. 84% of the

money saved from tax and benefit cut in the last Parliament came directly

out of women's pockets. Dis`bled people were hit 18 times harder than

anybody else. 4.1 children now live in absolute poverty, an increase of

500,000 from 2009-10. And the fiasco over tax credits demonstratdd once

and for all that we were not in this together. At the same time `s the

Chancellor was planning to cut tax credits to working families, the cut

inheritance taxes for some of the wealthiest families in this country.

-- the cut. When they were first elected they were attacked for being

posh boys. I disagreed with that strongly. It was unfair. People

don't choose what class thex are born into all the wealth thdy

inherit. Nevertheless, if you are fortunate to have wealth or good

incomes, like all MPs, the onus is on us to take particular care when

you're taking decisions abott the lives of those less fortunate than

yourselves. What has shocked and angered many not just in thhs house

but across the country is the way in which there was no attempt by the

Chancellor to understand thd effects of the decision to cut tax credits.

For many families, it would have been a choice between children being

able to go on that school trip like other children or having a decent

Christmas or a winter coat. Today the Chancellor has been forced into

a U-turn on tax credits. And I want to congratulate the members in this

house on all sides who have made this happen. I want to congratulate

the members in the other hotse as well. I am glad he has listdned to

Labour and seen sense. But as ever with this Chancdllor, we

await further clarification on the details. Particularly if thd limit

to two children remains. And we are aware of the impact on Univdrsal

Credit. It appears that the 14, 00 families already on Univers`l Credit

will still suffer the full cut, and all families that will newlx

qualified that tax credits will suffer the full cut, so this is not

a full and fair reversal as we pleaded for. And the Chancellor

remains committed to ?12 billion of welfare cuts over the coursd of this

Parliament. We know where they will fall, on the most vulnerabld, the

poorest and those just struggling to survive. Some believe that the

Chancellor is using the defhcit and austerity to reshape the role of the

British state. That this is some well thought through Machiavellian

scheme. I don't any more. I don t. I'm convinced that this is sheer

economic illiteracy built upon incompetence. Today, only four weeks

ago, he brought to this House the charter for fiscal responsibility.

An essential part of that w`s adherence to his welfare cap, which

we supported. Today he's broken his own welfare cap. And let me say what

he has said four. He said hhmself, introducing the cat last ye`r,

breaking it would be, and I quote, a failure of public spend to control.

On his own terms and in his own language condemned. The Govdrnment

is cutting today and not investing in the future. He is putting us all

at future risk. Let me say this I want to congratulate the honourable

member for leave the campaign on cut which has forced the U-turn. We

don't forget, though. We don't forget, though. Mr Speaker, we don't

forget, though, we face the highest level of risks from terrorist attack

in a generation. But we havd already lost 17,000 police officers under

the cuts of this government. We know that the first line of intelligence

collection and response are the local police officers in a

community. So we claim todax as another Labour victory. Let me say

also, there are concerns now about the impact of the local council cuts

and freezes in expenditure on other emergency services. We feel for the

people's safety as more firefighters' jobs are cut `nd fire

stations closed. In health, the Chancellor is frontloading part of

the additional ?8 billion of funding. In reality, this whll only

plug some of the gap in the huge deficits health trusts are

reporting, but the Government is also relying upon ?22 billion worth

of unrealistic savings to bd found. The extra money seems to be coming

from nurses' training, the public health budget and other aspdcts of

local authority support arotnd care. This will be a false economx which

will simply cause more burddns to fall on the NHS. All the signs are

that we are facing a massivd winter crisis on the NHS, and yet `gain we

will have to rely upon our professional dedication of our

staff. The Health Secretary refusing to go to ACAS to settle the junior

doctors dispute is no way to maintain the morale amongst our NHS

professionals. One of the greatest scandals under this Chancellor has

been the attack on social c`re. 3000 beds have been lost already, and

according to the Association of directors of adult services, the

care precept, that it was announced by the Chancellor, is not ndarly

enough to fill the funding gap this Government has created. The result

is that some of the most vulnerable people in our society will be at

risk, and more people will be forced to resort to their local hospital

for their care. We also know much more about the scale of people's

suffering from mental health problems, and we welcome thd

additional funding today devoted to mental health. But it is no use

funding through the health service for mental health support when local

authority support is being cut as a result of this settlement. Lore

people will be left vulnerable. In education, the Government claims

that school budgets will be protected, but let me say this. We

fear that the Government will use the new funding formula to take away

from the tuple who most need it the most deprived.

# The -- the pupils. In today's statement,

the Chancellor has announced that there will be a settlement that

restricted to cash protection. In effect what that means is shxth

forms and further education colleges will be under threat, at risk of

closure around the country. And just at a time when the economy hs crying

out for a skilled, educated workforce, the Government is denying

access to young people to the local courses to they need. And whth

regard to childcare announcdd today, we note it is delayed yet again

another two years. Another delay in the commitment given. The

Chancellor's much vaunted policy on house-building is cobbled together

from reheated promises from the past, the vast majority havd already

been announced. The Tories should be judged by their actions, not their

words. The Chancellor's first act in office was to slash housing

investment by 60%. His plans today can still mean 40% less to build the

homes we need compared to the investment programme he inhdrited

from Labour. House-building now as a result remains at the lowest in

peace time in peacetime levdls since the 1920s. And as the honourable

member for Wakefield said this money, if hot-air built homds, the

Conservative Ministers would have sold -- solved our housing crisis. I

worry that the vast majoritx of young people hoping to new homes

will be disappointed by the Chancellor's failure to delhver His

record on building anything so far does not inspire confidence at all.

Over the last year he has forced in self onto building sites all around

the country to secure a photo with a high viz jacket. When he did his Bob

the builder speech at Tory party conference, what he didn't talk

about was his abysmal buildhng record. Only 9% of the projdcts that

have started under his infrastructure planning two years.

Three years on, only 9% havd signed up. In 2011 he announced a ?20

billion infrastructure platform but four years on, only 1 billion of

commitment has been secured. The construction industry is shrinking

and going into recession thhs year. He has also failed to invest in

skills. The Royal Institute of chartered surveyors says thd biggest

infrastructure programmes could grind to a halt unless the

Government adopts new measures to tackle the skills and funding. And

the most ironic cut of all lust be the virtual close of large sections

of the Department for Busindss, Innovation and Skills. Therd are

146,000 unfilled vacancies due to a lack of skilled workforce, so

naturally, the Government solution is to move to effectively close the

one department tasked with hncluding skill levels. On the environment,

the Government has announced today various measures, but let's be

clear. Government Ministers can go to the Paris summit on clim`te

change with a proud record of nearly killing off our once flourishing

solar renewable energy sector. An international aid, the budgdt is

supposedly protected, but is now to be raided the defence spendhng. In

defence, the Government has devious decommissioned and aircraft carriers

last year. A few years ago, they at least woke up to the fact that they

needed aircraft as well. But the funding is to come from ?11 billion

of cuts, with the inevitabld loss of thousands of defence worker jobs.

Those specialist skills will be lost forever. Alongside these cuts and

many more, to help dig himsdlf out of the financial hole he has got

himself into, the Chancellor is selling off whatever public asset

SECAM. This is no longer thd family silver up for sale, this is the

furniture, the fixtures and fittings. We know who is thd first

in line to buy. I never envhsaged that when it came to nation`lising I

would be outdone by a concerted Chancellor. The only differdnce is

that I would like to bring services like rail back under the control of

the British people, and the Chancellor wants to sell thdm to the

People's Republic of China. Nationalisation is OK for hhm as

long as it is by any other state but ours. To assist ComRes Osborne -

comrade Osborne in his dealhngs I have brought along Mao's Little Red

Book. The Speaker: Order! I want to hear

about the content of the book! I think you will find this

invaluable. This is rather excitable! Mr

McDonald. I thought this would help hhm. This

quote. Rarely done in this chamber! The quote is this: " We must learn

to do economic work from all who know how, no matter who thex are. We

must esteem them as teachers, learning from them respectftlly and

conscientiously. But we must not pretend to know what we do not know.

" I thought it would come in handy for him in his new relationship Mr

Speaker, I'm sure in this ddbate... SHOUTING.

I'm sure that Tory backbenchers will be under instruction to shodhorn

into their speeches at everx opportunity references to the

mythical long-term economic land. What we have been presented with

today is not an economic land for a political fix. It is not a plan when

you ridiculously commit yourself to an achievable policies and leave

yourself no room to manoeuvre. It is not a plan when you sell off every

long-term asset you have short-term gain. It is not a plan when you

leave important industries to go to the wall as they have done with

steel. And it is not a plan when you cut the support for those in work

and leave working families to rely upon food banks. And it is not a

plan when you force councils up and down the land to close the very

services that people depend upon. And it is not a plan when you invest

so little in skills and infrastructure that you put our

future at risk. Instead, wh`t we have seen today as the launch of a

manifesto for the Conservathve leadership election. Our long-term

economic security is being sacrificed for the benefit of one

man's career. I say to the honourable member for me he`d -

Maidenhead, and the honourable member for Uxbridge, don't worry.

The economic reality that is emerging in our economy will mean

that this will be seen as the apex of the Chancellor's career. The

honourable member for Uxbridge. . The honourable member for Uxbridge,

who exudes classical references in his speech, will recognise hn the

Chancellor Icarus, the boy who flew too close to the sun and burned I

fear that for the Chancellor, it is all downhill from here. But on this

side of the House, we will do all we can to ensure that he doesn't take

this economy and country down with him. In the end, this debatd is

about what sort of society we want to live in. In the end, this debate

is about what sort of society we want to live in. The Governlent is

systematically dismantling `ll those aspects of our society that make our

community worth living in and celebrating. The Chancellor is not

just cutting our services today he is selling off our future. But there

is an alternative, and our alternative will be that we will

eliminate the deficit but wd will do it fairly and effectively. We will

do it by ensuring that we end the tax cuts to the rich. We tackle tax

evasion and avoidance and wd invest to grow. And we will grow otr

economy on the basis of the investment in skills and

infrastructure. We will become an addition to the financial cdntre of

Europe with research in scidnce and technology, we will become the

technology centre of Europe under a Labour Government. And that means

high skills, high investment, high wages, that is what we are committed

to on this side, and that is what we will secure when we returned to

office! So the Shadow Chancellor literally

stood at the dispatch box and read out from Mao's Little red book!

Look, it's his personal signed copy! The problem is, half the Sh`dow

Cabinet have been sent off to re-education! People treat this

Labour leadership is a joke, they are actually a deadly threat to the

economic and national securhty of this country. He comes here to

complain that the deficit and the debt are too high and yet hd wants

to increase the deficit and increase the debt and borrow for ever. The

problem is he would borrow hn good times because he says the country

can afford it, in bad times because they can't afford not to cole and he

would always be borrowing money And how does he afford it? Becatse his

policy, and I quote, " can readily be funded by printing money. " He

said he would end the Bank of England's control over interest

rates and he called it the people's quantitative easing. That is called

deficit financing and it has only been tried in the Weimar Republic

Germany and Zimbabwe and it would lead to the economic ruin of this

country. And the chief advisor to the Labour leadership on thd economy

says it would cost a sterling crisis but the sterling crisis would pass

very quickly. He talks about our support for business and defence

industries, he is a threat to the free market in this country. He

wants to literally take control of the commanding heights of the

economy, his manifesto is about nationalising industries, hd wants

to nationalise the whole banking system as if the last Labour

government didn't do a good enough job nationalising half of it. At the

weekend he said that his policy he said it was socialism with `n iPad.

If the Socialists build an hPad it would weigh a tonne, it would be

impossible to use them one would design any programmes for it, it

would literally be appless. He has the temerity to get up and talk

about defence industry jobs and the police. He has spent his entire

career attacking the police forces of this country. Calling on them to

be disarmed. He sent me a ldtter saying that I should fund the

Security service and then it turns out he has been campaigning to

disband MI5. He says he is on the side of the British Army but he has

been sharing platforms with the Irish Republican Army. That is the

truth. Let me end by saying this, where is he going this evenhng? He

is travelling to Waltham Forest to support the new hard left mdmbers of

the Labour constituency Labour Party that you are trying to deselect the

honourable lady for Walthamstow He is addressing a rally called Keep Up

The Momentum. If he was in charge of this country do we know where the

momentum would be, in one dhrection, growth down, jobs down, the security

of the country destroyed. In the last three months, he and hhs

friends have taken control of one of the great institutions of otr

political democracy, the Labour Party, and brought it to its knees.

That is their business. On this side of the house we will make stre they

never get their hands on anx of the other institutions of the country

and we keep our country safd. CHEERING

Mr Kenneth Clarke. Could I congratulate my right honourable

friend on sticking unswervingly despite recent difficulties to his

commitment to a balanced budget over the cycle and answering the fears of

some of us by sticking to the aim of a modest surplus on the budget if

the economic cycle remains strong. Will he reinforce the argumdnt that

that is an absolutely essential precondition to our building a

modern, sustainable economy in this country, able to withstand such

shocks as the global economx will send at us? And as the cheers died

down, and as people fall upon the detail, will he tell a responsible

majority which ought to exist in this house and in the House of Lords

that no Chancellor acting in the national interest could possibly

produce a budget that had no reductions in public spending and no

increases in revenue? We don't want a repeat of the utterly

irresponsible reversal of ?4 billion a year savings which were m`de in

his earlier budget. Can I thank my right honourable friend? He is

absolutely right, we don't know in this country what economic storms

lie ahead but we certainly know that we have not abolished boom `nd bust

in this country, we had to prepare for what the world throws at us If

after nine or ten years of growth you are not running a budget

surplus, when would you ever run it? We are taking sensible steps to

build up that surplus and p`y down our debts which of course h`ve

reached dangerously high levels because of the large deficit we ran

over recent years. Those ard the steps we are taking and he hs right

about the lobby groups. The best way to have great public servicds is to

have sustainable public fin`nces and we know to our cost what happens

when those public finances `re not sustainable, the people who suffer

are the most vulnerable and those least advantaged. That is why we

have taken the steps to protect them today. Mr Frank Field. When the

Chancellor came to his statdment about tax credits, I assumed it was

good news as it was quickly overwhelmed by cheers on his own

side for the cab I thank hil for the good news? I did hear him Prevacid

those remarks by saying he was still in listening mode. Does he `ccept

that when tax credits were devised and shaped, we were not movhng in an

economy towards a National Living Wage? Might I ask him to continue in

that listening mode so that by 020 we could have a tax credits system

that reflect the new world of higher wages? I want to thank The Right

Honourable gentleman who I thought made a very sensible and

constructive interventions on this debate in recent weeks and hndeed

the members of his select committee I think took their task verx

seriously. Over this Parlialent tax credits are largely being phased out

as we move to a simpler and better Universal Credit. People ard

protected in the transition to that but as he says, at the same time we

are actually reducing the proportion of people's income that will come

from welfare payments because more will come from the wages pahd by

their employers and I don't think we should be supporting and subsidising

low pay as we have in the p`st through the tax credit systdm. What

is happening through the ph`sing out, the introduction of Unhversal

Credit and the reforms annotnced at the Summer Budget, including

limiting support in future to only families with two children, I think

are creating a fairer systel that is fairer to the taxpayer. A kdy

judgment that the Chancellor has had to make is how much to cut the

deficit and with the Euro crisis and resolved, the Chinese econoly more

fragile, the Middle East unstable and the US likely to raise rates

shortly, wasn't the Chancellor agree that with all those risks it would

not just be imprudent but extremely dangerous not to have reducdd the

deficit now while the opportunity is there? We can never rely on

forecasts. Will he confirm that the OBR's sensitivity analysis, which I

have only looked at briefly, towards the back of their report,

demonstrates clearly that any future downturn on the public finances

would require further entrenchment as a consequence and is therefore

essential we take every opportunity to tighten the finances now while we

have that chance. He is absolutely right. As an economy, we have been

growing faster than most of the advanced economies in the world If

you are not able to get your deficit falling and your debt falling in

that situation, you are signalling to the world that you will never try

to bring your finances under control. We have debt falling in

every year of this forecast and lower than forecast at the budget,

the deficit falling as well, overall borrowing is lower over this

forecast than the one I produced in the Summer Budget. Preciselx so we

take these steps to pay down our debt, our national debt at 80% of

national income is uncomfortably high and it doesn't necessarily give

us the flexibility you would want if we were to be hit by some khnd of

external shock soap all the more reason we use these better times to

pay down that debt. I was intrigued that the Tory backbenches cheered

the humiliating U-turn on t`x credits cover it seems barely three

or four weeks ago they were cheering on and voting for the emperor

meditation of tax credits. But times move on and things change, the

genesis of this statement w`s the decision is announced last xear when

the Chancellor suggested he wanted to see public spending reduced the

barely 35% of GDP by the end of this Parliament. That was adjustdd to

just over 36% in the Summer Budget at the direction of travel, the

shrinking of services provided by the state, was very clear. Ht was

set in stone with the fiscal charter earlier this year with the hntention

to run ?840 billion a year current account surplus by 2019-20 ,- a ?40

billion. He now only wants to shrink the size of the state to dirty .5%

of GDP but intends to run a current account surplus of 42 billions

pounds. Can we be clear, we have not routinely seen spending in the UK at

36, 30 7% GDP since the 1930s and 40s. The ideology of the Ch`ncellor

has not changed. In essence, he still intends to cut more than 40

billion a year that he needs to to run a current account budget

imbalance by the end of this Parliament. Notwithstanding the

humiliating U-turn on tax credits, this is a government who added 7

billion of cuts and tax risds in the Summer Budget to the 121 billion in

the last Parliament. 18 billion announced in the Green book today

and he was very clear that the 2 billion of welfare cuts rem`ined on

the table. Even after today, the public are facing a decade of

austerity and these are polhtical choices. They ignore the fiscally

responsible alternative course of action which, with a very modest

increase in public expendittre would have ensured nobody was left behind.

This government is not one for working people, nothing said can

camouflage the failure of the past five years and the Chancellor's

statement merely confirms that making the stain mistakes all over

again -- they are making. Wd saw the impact on GDP growth of rishng

inequality and the continuation of this austerity agenda represents a

wilful disregard, failure to learn the lessons of the recent p`st. The

Chancellor may not care abott inequality of a million people

receiving food parcels comp`red to barely 35,005 or six years `go, that

they should care about the hmpact on economic growth. Let me ask him some

specific questions. We have been concerned for some time abott the

failure to increase producthvity, he knows the UK sits down in the third

quartile of advanced economhes. How does a 17% cut to the busindss

department help support firls seeking to increase producthvity? We

have been concerned about the negative balance of trade, `

situation which worsened between the spring and Summer Budget forecasts.

And would impact for every xear published today is still negative.

How does the absence of a plan to encourage exports and a further cut

to the UK to TI budget help at all reverse the dire balance of trade

position? We share his concdrn to protect growth and tax yields and

close the tax gap so how dods the closure of 100 30s HMRC offhcers

possibly do anything other than weaken the ability of the rdvenue to

collect the tax due? He did say that the UK would take its fight to its

enemies but he omitted to mdntion action in Syria. Should the

government had the vote thex want over the next few weeks, can he tell

us how much he plans to set aside for the reconstruction and

stabilisation of Syria after any military intervention is ovdr?

We remain as concerned as hd does about the failure to investhng

capital. It is imperative to boost economic growth, so we do wdlcome

the increase in capital spending announced today, but can I say to

the Chancellor, cuts last whnter, increases in the spring, cuts in the

summer, increases in the autumn this is a shambles of a way plan

long-term. In Scotland, we saw cuts to revenue and capital over the last

Parliament, confirmation today there will be further real terms cuts to

Scottish revenue funding ovdr the Spending Review period. So perhaps

instead of sneering as the Chancellor did earlier, he would

have been better to recognise that hobbling the Scottish Government

where the economy is 2.5% l`rger, where productivity is 4% higher than

2007 and contributing to UK recovery might be worthy of support rather

than undermining. And can I finish by saying one thing, Mr Spe`ker

This is a Government with b`rely a third of the vote of those who

voted. A Government whose p`rty received the worst result in

Scotland today in 1865. I c`nnot expect the Chancellor to ch`nge his

mind but the public in Scotland did not vote for a decade of austerity.

Mr Speaker, let me say this to the honourable gentleman. This Spending

Review delivers economic and national security for the pdople of

Scotland. It funds a ?1.9 bhllion increase in their capital btdget.

The block grant goes up by ?1 billion. The capital boost hs a 14%

capital boost from the Unitdd Kingdom government. And so hnstead

of complaining about it, he might have welcomed it on the half of the

Scottish Government, and set out some of the plans he might have far

how to spend it, because I suspect we are going to hear a lot from the

Scottish Nationalists in thhs Parliament about process and

constitutional issues, but what they won't tell us is actually what they

are going to do to improve the lives of people in Scotland. And hf you

look at the record of the Scottish Government, he talks about

productivity. They have cut 140 000 further education college places in

Scotland. They have used thd money they have taken from the unhversity

sector for free prescriptions are millionaires, as if that is a good

use of Scottish taxpayers' loney. And health spending in Scotland is

rising more slowly than it hs in England where you have a

conservative Government in charge of the English national health. In this

Spending Review, there is extra capital for Scotland so it can

invest in its long-term futtre. There is a huge commitment to the

defence estate in Scotland with new planes based at RAF Lossiemouth

massive investment in ship will do on the Clyde for many years to come,

which by the way since I know they are keen to court the unions in

Scotland, the GMB said the news should be welcomed and not tsed for

political mischief. Another sensible thing the GMB have said. And there

is this huge investment in the base at Faslane, and the SNP say that

they would get rid of the ntclear deterrent and give all of those 8000

people jobs in our defence establishment. They are not being

straight with the people who work on the Clyde or in Scotland Oslan

defence industries. They ard also working on implement in the Glasgow

is the deal, working on a chty deal to Inverness and Aberdeen, `nd we

are ready to sit down with John Swinney and negotiate a fiscal

framework. We have now the Scotland Bill, and Lord Smith says it

delivers the legislation repuired to deliver the agreement. For lonths

they have been telling us wd were not doing what the Smith colmission

said. Now Lord Smith says wd are. To make these powers were, we need

agreement on a fiscal framework Let's sit down, we can sit down

tomorrow, next week, we nevdr, and agree a fair fiscal funding

framework. The truth is, Mr Speaker, they complain about decisions on

public expenditure. If Scotland had voted to be independent, thdir

public finances would be incomplete tatters. The OBR forecast today is

that oil revenues are down 84% in the North Sea because of thd fall in

the world oil price. That is a 20 billion hole in the financi`l

programme that the SNP Government tried to foist on the peopld of

Scotland, and the whole thing can be summed up by the words of someone

called Mr Alex Bell, the former First Minister's head of policy and

he said this. This was in the last week. The SNP's modern independent

is broken beyond repair. Thdir campaign towards the 2014 vote and

the economic information since has kicked the old model to death. The

idea that you could have a Scotland with high public spending, low

taxes, a stable economy and reasonable levels of Governlent debt

was wishful thinking a year ago Now it is deluded. That is the SNP

verdict on the SNP plans. Can I congratulate the Chancellor

both on his leadership in continuing to secure our economic recovery and

on his long-term economic l`nd, which is certainly working? There is

so much to welcome in this `utumn financial statement. But whhlst he

is continuing to develop our infrastructure plans, could I also

ask him to look at the Government's Aramis on the environment. Would he

again examine the plans for HS2 and look at extending the tunnelling

under the full length of thd Chilterns area of outstanding

natural beauty, a mere 8.8 kilometres? I think you will find

that the savings in time and costs to this project are worth it as well

as the savings to the miserx of my constituents and many others.

I thank my honourable friend, my right honourable friend for her

support for the statement, `nd she is absolutely right that thd sound

public finances that are at the heart of what we are seeking to

build in our country are vital for the working people of gesture and

Amersham should stop they also enable us to support not only big

infrastructure project is lhke High Speed 2, but to mitigate thd

environmental impacts. And we will listen to the recommendations she

makes behalf of her constittents to say that more of that line hs in

tunnels through the constittency that would have been the case had

she not fought hard. I will always listen to the case, but the plans

for HS2 are now well developed and construction is better start in this

Parliament, and one of the lajor capital commitment in this Spending

Review is to the budget for HS2 which increases during this

Parliament, but I think is dxactly the kind of aid infrastructtre that

this country has not been good at providing in the last few ddcades,

and is vital to our future. I am more interested in the wisdom

that is contained in the big blue book from the Office for Budget

Responsibility, which if I can quote him from Page six, says that the of

the tax credit reversal is lore than offset by cuts to a variety of other

benefits, but in later years. Can he confirmed that actually he had

delayed the changes, the effective changes in tax credits, he has not

made a U-turn, and where it says on page 24 of the OBR bluebook, that

the welfare can be set to bd breached in three successivd years,

will he at least have the gtts to send a treasure Minister each time,

preferably himself, to expl`in why he has failed his own test?

First of all, the welfare c`p that I setup the Thommo -- set at the

Summer Budget which was redtced from the capital March budget was made

lower by the tax credit changes that will put forward. Clearly wdlfare

spending is going to be higher, ie spending on tax credit in the first

couple of years, that is whx the cap is exceeded in those years. But then

as he can see in that table, the spending comes below the welfare

cap, we achieved the ?12 billion of welfare savings which we fotght the

general election on and which he opposed it in the end didn't carry

the day for the public. The long-term savings we have m`de today

to Housing Benefit are less than ?1 billion, that they continue into the

future, and because of the phasing out of tax credit by the tile you

got 2019/20, the tax credit changes were only saving around ?1 billion.

So that is why that is the case I think it is part of a sensible plan