Browse content similar to 05/12/2012. Check below for episodes and series from the same categories and more!
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The deficit is down, borrowing is down, jobs are being created, it is | :00:13. | :00:19. | |
a hard road, but we are making progress. | :00:19. | :00:22. | |
There probably wasn't much else he could say. The best the man | :00:22. | :00:26. | |
managing the nation's economy could come up with, "it's taking longer | :00:26. | :00:31. | |
than we thought, but we're on the right track". But the austerity | :00:31. | :00:33. | |
will continue, and some of the worse off people in society, in | :00:33. | :00:35. | |
particular, will find things getting worse. | :00:35. | :00:39. | |
The Chancellor laid it out in facts and figures, Plan A isn't quite | :00:39. | :00:43. | |
working. Instead, he announced Plan B, it | :00:43. | :00:46. | |
wasn't the Plan B that the opposition wants. He will be | :00:46. | :00:50. | |
cutting benefits, the better off and butter oingcy. | :00:50. | :00:57. | |
We will take -- Bureaucracy. We will take a brain scan of | :00:57. | :00:59. | |
today's Autumn Statement and see what it says. | :00:59. | :01:05. | |
We speak to the head of the office for budget responsibility on why | :01:05. | :01:12. | |
his sums went awry again. Next time the Chancellor cites any | :01:12. | :01:17. | |
of your figures, we have to have it in the back of our minds that they | :01:17. | :01:21. | |
might be wrong. We will speak to George Osborne's number two and his | :01:21. | :01:27. | |
Labour equivalent, and reconvene our panel, three pun pundits and | :01:27. | :01:37. | |
:01:37. | :01:37. | ||
103 opinions. It was National Pantomime Day today, | :01:37. | :01:42. | |
"no no it isn't" they cried in London, as pundits of various | :01:43. | :01:46. | |
credibility turned their eyes to Westminster to see the front half | :01:46. | :01:50. | |
of the coalition pantomime horse tell us what is happening to the | :01:50. | :01:53. | |
economy. He had almost nothing amuse to go say. We have six more | :01:53. | :01:57. | |
years of austerity to look forward to, he won't meet his own target | :01:57. | :02:02. | |
for cutting the public debt, and yet he claims that the plans are | :02:02. | :02:08. | |
working. "oh no they weren't", cried the opposition. Paul Mason | :02:08. | :02:16. | |
was somewhere at the back playing with his calculator. | :02:16. | :02:20. | |
Wrapped up in tinsel, lit by neon, it is hard to accept this is an | :02:20. | :02:25. | |
economy that is shrinking. But it is. And the Government's plan to | :02:25. | :02:34. | |
shrug off the debt by-election time, Plan A, has not worked. | :02:34. | :02:39. | |
Mr Speaker, it's taking time, but the British economy is healing. | :02:39. | :02:43. | |
Chancellor stood up, knowing he had missed two crucial targets, it will | :02:43. | :02:46. | |
take two years longer than originally promised to balance the | :02:46. | :02:50. | |
Government's books, and a year longer to get the total debt | :02:50. | :02:54. | |
falling. He could have said, well, we will cut harder, but he didn't. | :02:55. | :02:58. | |
Now, then there are those who say that, despite all that has happened | :02:58. | :03:04. | |
in the world this year, we should cut even more now to hit the debt | :03:04. | :03:10. | |
target. That would require �17 billion of extra cuts a year. Let | :03:10. | :03:13. | |
me explain why I have decided not to take this course. We have always | :03:13. | :03:18. | |
argued we should let the automatic stablisers work, we have not argued | :03:18. | :03:22. | |
we should chase down a cyclical or temporary ded tearation in the | :03:22. | :03:26. | |
economy. Particularly one -- temporary deterioration in the | :03:26. | :03:32. | |
economy, particularly one that is said to be largely driven by | :03:32. | :03:36. | |
problems abroad. They face a choice between targets and realisim, | :03:36. | :03:41. | |
realisim won, so that even the Christmas shoppers of 2017 will be | :03:41. | :03:45. | |
feeling them, two years longer than planned. This is what growth was | :03:45. | :03:49. | |
expected to look like two years ago, and here is the reality and the new | :03:49. | :03:53. | |
forecast, much lower. Low growth meant the Treasury would have had | :03:53. | :03:57. | |
to borrow an extra �106 billion over the next five years. But it | :03:57. | :04:03. | |
reduced it to �50 billion, mainly by pocketing the interest stored up | :04:03. | :04:06. | |
in the Bank of England due to quanative easing. Labour, who had | :04:06. | :04:11. | |
suggested things might go wrong, were happy to point out they had. | :04:11. | :04:15. | |
The Chancellor's fiscal strategy has been completely derailed, Mr | :04:15. | :04:19. | |
Speaker. The defining purpose of the Government, the cornerstone of | :04:19. | :04:23. | |
the coalition, the one test they set themselves, to balance the | :04:23. | :04:30. | |
books and get the degt falling by 2015, -- debt fall big 2015, is now | :04:30. | :04:33. | |
in tatters. Both sides at Westminster are now | :04:33. | :04:37. | |
facing a new reality, even the Chancellor's supporters think our | :04:37. | :04:41. | |
long-cherished credit rating is in question. I think that the triple-A | :04:41. | :04:44. | |
status is likely to go now. If he was going to keep that, he would | :04:44. | :04:49. | |
have had to make something of the order of �20 billion, he says �17 | :04:49. | :04:52. | |
billion, additional cuts to public spending. The only place he could | :04:53. | :04:58. | |
have got the money for that, was by cutting the health and schools' | :04:58. | :05:01. | |
budgets, since that was completely off the political agenda, in | :05:01. | :05:04. | |
reality, the most you could hope for, is he would carry on with the | :05:04. | :05:07. | |
cuts he had scheduled to other departments. The Chancellor's | :05:07. | :05:12. | |
figures have to be signed off by an independent body, called the OBR, | :05:12. | :05:15. | |
it said today his new definite reduction target is achievable. But | :05:15. | :05:20. | |
it said that last year, and the year before, and both times he | :05:20. | :05:24. | |
missed it. It is the same with growth, for three years running, | :05:24. | :05:28. | |
the OBR has overestimated how much we are going to get of the Why did | :05:28. | :05:31. | |
they get it wrong? I think, to a very large extent, there are two | :05:31. | :05:34. | |
reasons, one is the international environment is worse, and what is | :05:34. | :05:37. | |
going on in the eurozone does impact on us quite severely. The | :05:38. | :05:42. | |
second thing, they underestimated the negative impact of tightening | :05:42. | :05:46. | |
fiscal policy, of cutting the deficit too fast, which was a | :05:46. | :05:48. | |
mistake and had significant economic consequences. | :05:48. | :05:55. | |
Chancellor was able, just, to keep the deficit falling, by booking | :05:55. | :05:59. | |
�3.5 billion receipts of the sale of mobile phone license, by | :05:59. | :06:02. | |
reducing overseas aid, and a reserve earmarked for the Afghan | :06:02. | :06:08. | |
war. On growth, he has redirected �5 billion into spending on | :06:08. | :06:12. | |
infrastructure, that, plus a cancellation of 3p rise in fuel | :06:12. | :06:15. | |
duty, a cut in corporation tax, and big tax reliefs on business | :06:15. | :06:19. | |
spending, are a clear signal that growing is now more important than | :06:19. | :06:24. | |
extra spending cuts. I don't think it adds up to a | :06:24. | :06:29. | |
growth strategy, I think the �5 billion in infrastructure spending | :06:29. | :06:32. | |
is a welcome recognition that the cuts in investment, which to be | :06:32. | :06:35. | |
fair, this Government largely inherited from the previous one, | :06:35. | :06:41. | |
that those cuts were a mistake, and did considerable economic damage, | :06:41. | :06:45. | |
and this reverse is welcome. But it is not large enough to have a real | :06:45. | :06:49. | |
significant impact on growth and employment in the next year or two. | :06:50. | :06:55. | |
The biggest move today came on benefits, instead of rising in line | :06:55. | :06:59. | |
with inflation, jobseeker's allowance, ESA, the benefit most | :06:59. | :07:02. | |
disabled people will get, and income support, will all rise by | :07:02. | :07:07. | |
just 1% a year. By 2015 that, and cuts to the Universal Credit, will | :07:07. | :07:12. | |
net the Treasury �3.7 billion. At the same time, the Chancellor will | :07:12. | :07:17. | |
take �600 million from the rich, by limiting tax reliefs on pensions. | :07:17. | :07:22. | |
The welfare cut is big, politically it will be huge. But for economists, | :07:22. | :07:26. | |
what matters is Britain's deteriorating position on debt, on | :07:26. | :07:31. | |
deficit, and on growth. The whole of what the Government calls Plan A | :07:31. | :07:34. | |
was designed to avoid this moment, so what's left of it? | :07:34. | :07:38. | |
The two key things this Government would like to be remembered for, I | :07:38. | :07:43. | |
think, are cutting the deficit and raising the personal allowance to | :07:43. | :07:49. | |
�10thou though although in this -- �10,000, although he wasn't able to | :07:49. | :07:52. | |
make progress in terms of cutting the deficit, he was able to make | :07:52. | :07:57. | |
progress in raising the personal allowance, in this Autumn Statement. | :07:57. | :07:59. | |
Ploughing on in political strategy is a thing to remember here. In | :07:59. | :08:02. | |
terms of the next general election, his strategy will be to say, those | :08:02. | :08:06. | |
that tell you there is an easy way out, are lying to you. There is | :08:06. | :08:14. | |
only tough and tough and tough. What the Chancellor signalled today | :08:14. | :08:18. | |
was not an end to austerity, but a limit to it. Where now, into the | :08:18. | :08:23. | |
battle -- we are now, into the battle, over where the pain will be | :08:23. | :08:26. | |
distributed. Paul is in the studio, first a | :08:26. | :08:30. | |
quick word from our political editor, Allegra Stratton. It is | :08:30. | :08:34. | |
interesting, relating to the point made towards the end of your point, | :08:34. | :08:39. | |
even my Labour sources said today was a points win for George Osborne, | :08:39. | :08:43. | |
because he had this terrible news he was supposed to announce, and he | :08:43. | :08:48. | |
managed to wriggle free, he announced it, but had enough other | :08:48. | :08:56. | |
things to announce, that the narrative tomorrow will not be what | :08:56. | :08:59. | |
it was expected to be. It leads to a question, even if you went into | :09:00. | :09:03. | |
the nebgts election with the growth strategy, and the deficit reduction, | :09:03. | :09:08. | |
supposed to be the strategy, not being as clean as they would like, | :09:08. | :09:12. | |
could they still do it and go to that election and get back in. The | :09:12. | :09:15. | |
question becomes, at what point does the public decide that they | :09:15. | :09:19. | |
don't think they have delivered on bringing down deficit and debt. So | :09:19. | :09:22. | |
at what point? There is three things being discussed, because the | :09:22. | :09:27. | |
public isn't there right now, the three things, is it the credit | :09:27. | :09:30. | |
rating, when the credit rating industries say they don't buy it | :09:30. | :09:35. | |
any more, it doesn't have to be, look at America. Is it eurozone | :09:35. | :09:39. | |
countries doing well, or Labour coming out with their massive plan | :09:39. | :09:43. | |
themselves. The economics and politics are in different places at | :09:43. | :09:48. | |
the moment. Paul? The electorate doesn't vote on fiscal policy, it | :09:48. | :09:53. | |
votes on things like tax, but fiscal policy and all these targets, | :09:53. | :09:56. | |
it is one stage removed. But, if you look at the narrative of the | :09:56. | :09:59. | |
coalition Government, not just the Conservatives, it has been very | :09:59. | :10:02. | |
much around what they have been trying to do. If it was a book, if | :10:02. | :10:06. | |
the coalition was a book, and you said what is it about, you would | :10:06. | :10:11. | |
say it is about cutting the deficit to zero. If you asked how the book | :10:11. | :10:15. | |
ended, it would be they don't cut the deficit, but they might in the | :10:15. | :10:18. | |
second book of the series. You can see the problem. Committing the | :10:18. | :10:21. | |
Liberal Democrats to all sorts of future things they might not want | :10:21. | :10:25. | |
to be committed to. The danger in politics rather than out in the | :10:25. | :10:29. | |
electorate, is it removes the spring driving the machine? There | :10:29. | :10:36. | |
is one measure we have that meshs the high politics and the feel for | :10:36. | :10:39. | |
people lives, the Ronald Regan thing, of are you better off now | :10:39. | :10:43. | |
than five years ago, tonight the Resolution Foundation, this | :10:43. | :10:46. | |
programme does a lot of work, they have crunched the numbers in the | :10:46. | :10:49. | |
OBR's report, and shows that the OBR is pushing back from these | :10:49. | :10:52. | |
numbers today, the date at which living standards begin to feel a | :10:52. | :11:02. | |
little less bad. They have pushed that back to 2014, when they were | :11:02. | :11:05. | |
2013 the electorate will feel the pound is going further, close to an | :11:05. | :11:08. | |
election. As Labour people were saying this evening, it confirms | :11:08. | :11:11. | |
the next elections about living standards. The other thing we could | :11:11. | :11:17. | |
say about the OBR, you are about to talk to the boss of it in a minute. | :11:17. | :11:20. | |
That is the Office for Budget Responsibility, the first thing is, | :11:20. | :11:25. | |
not everybody agrees with them, that the hole in the budget that we | :11:25. | :11:28. | |
discovered today is what we call cyclical. Some economists believe | :11:29. | :11:33. | |
it is structural, if it was structural, then the Tory | :11:33. | :11:37. | |
hardliners and the Treasury hardliners, who wanted the cuts of | :11:37. | :11:41. | |
�17 billion extra a year, for some considerable time, their hand would | :11:41. | :11:45. | |
have been strengthened. The other issue with the OBR, the other thing | :11:45. | :11:48. | |
we have covered on this programme forever, is about growth strategy, | :11:48. | :11:51. | |
how do you grow the UK economy. The Government believes it has a growth | :11:51. | :11:58. | |
strategy. The OBR put figures on what the effects of that are, it is | :11:58. | :12:01. | |
distinctly unimpressive. That is facts and figures, it says you have | :12:01. | :12:04. | |
the growth strategy, but you are still not really cutting it. While | :12:04. | :12:08. | |
the rest of the country was listening to George Osborne and | :12:08. | :12:12. | |
exclaiming OMG, the Chancellor just kept repeating those letters you | :12:12. | :12:16. | |
have just heard, OBR, the Office for Budget Responsibility is George | :12:16. | :12:20. | |
Osborne's comfort blanket, he created it to have an outfit within | :12:20. | :12:23. | |
Government which would produce independent forecasts, on which he | :12:23. | :12:27. | |
could base political decision. The problem is, that the economic | :12:27. | :12:32. | |
forecasting so often seems a lot more like some spiritualist seance | :12:32. | :12:36. | |
than anything else. Earlier I caught up with the head of the | :12:36. | :12:38. | |
Office of Budget Responsibility, Robert Chote. Robert Chote, would | :12:38. | :12:43. | |
the Government have made a better job of running the economy if your | :12:43. | :12:47. | |
forecasts had been better? Given that the Government has to make | :12:47. | :12:50. | |
decisions about tax and spending plans, looking forward into the | :12:50. | :12:55. | |
future, you always have to base them on some sort of sense of how | :12:55. | :12:59. | |
the public finances would evolve F we had known, along with every | :12:59. | :13:02. | |
other forecaster, how long the persistence of weak productivity | :13:02. | :13:06. | |
growth, and the implications that seems to have for the long-term | :13:06. | :13:10. | |
potential health of the economy and the public finances, that task | :13:10. | :13:13. | |
would have been easier than from the start. It rather makes anybody | :13:13. | :13:17. | |
ask what is the point of you? are difficult judgments to make. | :13:17. | :13:21. | |
Which you got wrong? Which we have changed, as every other person | :13:21. | :13:26. | |
making those judgments has. admit you got them wrong? We have | :13:26. | :13:29. | |
changed our mind about the hit to the economy, and the depth of the | :13:29. | :13:32. | |
hole in the public finances that has to be filled in. Wouldn't it be | :13:32. | :13:35. | |
more accurate to say your function is to act as George Osborne's human | :13:35. | :13:39. | |
shield? No, I think the function, as with the many other fiscal | :13:39. | :13:43. | |
councils that have been set up in different countries, is to provide | :13:43. | :13:47. | |
the best professional judgment we can as to the outlook for the | :13:47. | :13:49. | |
public finances. And for politicians to make policy | :13:49. | :13:52. | |
decisions based on those. They don't have to believe our forecasts. | :13:52. | :13:58. | |
They can act in a different way, if they want to. As in other countries, | :13:58. | :14:02. | |
the finance ministers are have been perfectly -- have been perfectly | :14:02. | :14:06. | |
happy to say they don't share the view of their fiscal council and | :14:06. | :14:09. | |
act akorgdly. George Osborne might have been better to just ignore | :14:09. | :14:13. | |
you? I don't think he could have been. In what way has had helped | :14:13. | :14:17. | |
him to have duff forecasts? It has helped in the sense that you have | :14:17. | :14:20. | |
figures that are clearly explained as to where they are coming from. | :14:20. | :14:23. | |
They are wrong? Every economic forecast turns out to be wrong. We | :14:24. | :14:27. | |
look back and we explain, as clearly as we can, why things have | :14:27. | :14:31. | |
turned out differently from the way we have done. It is only by doing | :14:31. | :14:35. | |
that in a rigorous way, that you provide people with the information | :14:35. | :14:39. | |
they need to make judgments. Next time the Chancellor cites any of | :14:39. | :14:43. | |
your figures, we should all have, in the back of our minds, that they | :14:43. | :14:47. | |
are likely to be wrong? Absolutely. You should be looking at the | :14:47. | :14:51. | |
uncertainties that lie around every economic forecast. That is why we | :14:51. | :14:54. | |
demonstrate the confidence you should have in the numbers based on | :14:54. | :14:58. | |
the accuracy of past forecasts. We look at how sensitive our judgments | :14:58. | :15:01. | |
on the Government's targets are to different outcomes, what difference | :15:01. | :15:06. | |
does it make, how important is it? The economy grows more or less | :15:06. | :15:09. | |
quickly, there is more or less spare capacity, if the spare | :15:09. | :15:14. | |
capacity in the economy is used up faster or slower. All those are | :15:14. | :15:17. | |
things that any Chancellor or would-be Chancellor would need to | :15:17. | :15:21. | |
reach a decision. If they were to say they have come up with a | :15:21. | :15:24. | |
forecast, and that must be right and I will proceed on that basis, | :15:24. | :15:28. | |
that would be foolish. Would you give this country a triple-A | :15:28. | :15:31. | |
rating? That is not something we have to reach a judgment on. I | :15:31. | :15:36. | |
think the notion of a credit rating agency, in terms of thinking about, | :15:36. | :15:39. | |
are the Government's finances sustainable, a key difference is | :15:39. | :15:44. | |
that we are in a position where we have our own currency. In that | :15:44. | :15:48. | |
sense we have a greater degree of flexibility, that means that the | :15:48. | :15:53. | |
notion of the danger of insolvency, is a much different question for us. | :15:53. | :15:57. | |
You mean we just print more money? Well, the Government has been doing | :15:57. | :16:00. | |
a deal of that, or the Bank of England has been doing a deal of | :16:00. | :16:04. | |
that, to help keep demand going in the future. So I think that people | :16:04. | :16:10. | |
take a broad view on whether they think that this Government, or any | :16:10. | :16:13. | |
other Government, will deal with the difficulties in the public | :16:13. | :16:17. | |
finances over an appropriate time. A lot of people say it would be a | :16:17. | :16:20. | |
political disaster if we lost a triple-A rating from. The point of | :16:20. | :16:23. | |
view of a highly-trained economist, would it matter? Other countries | :16:23. | :16:28. | |
have seen downgradings and have been in a similar sort of position, | :16:28. | :16:31. | |
and it hasn't made an enormous difference to the reactions the | :16:31. | :16:34. | |
markets have to them. Often Credit Rating Agencies are looking at the | :16:34. | :16:39. | |
same information that everybody else does, its not clear what | :16:39. | :16:42. | |
additional information, a would-be investor in British Government debt | :16:42. | :16:46. | |
learns from that, that they couldn't have learned from looking | :16:46. | :16:51. | |
at our forecasts and others in the first place. Do you think George | :16:51. | :16:56. | |
Osborne has failed to meet his debt target by 2015? If you look at the | :16:56. | :17:02. | |
way the market have reacted to the widespread speculation that this | :17:02. | :17:09. | |
would be the case over the last few weeks. There isn't an dramatic | :17:10. | :17:14. | |
impression that it has affected the long-term credibility of the | :17:14. | :17:17. | |
Government's management of the public finances. He had a choice to | :17:17. | :17:21. | |
make about whether to do what was necessary to ensure that target | :17:21. | :17:24. | |
would stilling hit. He has chosen to let it go. Parliament has told | :17:24. | :17:28. | |
us we shouldn't take sides in that debate. As a highly-trained | :17:28. | :17:33. | |
economist you have no view on this? I have interesting views you can | :17:33. | :17:38. | |
wait to read in my memoirs. Then they might be wrong? Almost | :17:38. | :17:41. | |
certainly, yes. Although it was cloaked in the | :17:42. | :17:45. | |
language of the managing the economy, you wouldn't expect a man | :17:45. | :17:49. | |
in charge of the election strategy to misan opportunity d miss an | :17:49. | :17:53. | |
opportunity to score political points, or dig a few holes and | :17:53. | :17:57. | |
plant pointy sticks in them. It hasn't escaped George Osborne's | :17:58. | :18:01. | |
notice that the next election will be fought in the midst of austerity. | :18:01. | :18:11. | |
This is what our political editor, Allegra Stratton, making of it. | :18:11. | :18:21. | |
:18:21. | :18:33. | ||
As we are about to leave autumn, the Chancellor, today, drove | :18:33. | :18:36. | |
through the last of the autumn leaves, to deliver the season's | :18:36. | :18:40. | |
grand economic statement. George Osborne was apparently on the verge | :18:40. | :18:44. | |
of admitting his economic strategy as good as a plate of autumnal | :18:45. | :18:48. | |
toast. Far from bringing down borrowing, he was expected to | :18:48. | :18:52. | |
announce it was up. This is from a man determined not to sanction more | :18:52. | :18:55. | |
borrowing, also known as Plan B. When the Chancellor did get to his | :18:55. | :18:59. | |
feet, he delivered Plan B, it wasn't the sort of Plan B that the | :18:59. | :19:07. | |
opposition has been falling for. We show our determination to do | :19:07. | :19:11. | |
this fairly, with further savings from bureaucracy, from the benefits | :19:11. | :19:20. | |
bill, and from the better off. Lots of Bs in parliament, not the | :19:20. | :19:23. | |
ones Labour thinks the economy needs. The Autumn Statement in 2012 | :19:23. | :19:29. | |
was to be an enjoyable moment for the opposition, an "I told you so" | :19:29. | :19:35. | |
moment, when the Chancellor returned to his words, "we are all | :19:35. | :19:39. | |
in this together", the opposition past. This statement can be seen as | :19:39. | :19:42. | |
an atonement statement by the Chancellor, an admission that he | :19:42. | :19:47. | |
knows the budget of six months ago unravelled spectacularly, and this | :19:47. | :19:50. | |
time round more discipline needed. No trips to Washington, or | :19:50. | :19:53. | |
briefings to the press, and more coalition unity than we have seen | :19:53. | :19:58. | |
in 12 months. The result is he managed to wriggling out of one | :19:58. | :20:00. | |
economic target that had been central to his Government, and in | :20:00. | :20:04. | |
the process, lay a few booby traps for the opposition. In the last two | :20:04. | :20:09. | |
years, the deficit has fall bin a quarter. Today's figures -- fallen | :20:09. | :20:15. | |
by a quarter. Today's figures show with or without the APF coupons, | :20:15. | :20:19. | |
the deficit is forecast to fall this year again, cash borrowing is | :20:19. | :20:24. | |
forecast to fall too. Osborne was only able to say the | :20:24. | :20:29. | |
deficit would fall this year, because of �3.5 billion raised from | :20:29. | :20:33. | |
the sale of 4G mobile phone licenses, it is a sale not yet | :20:33. | :20:36. | |
taken place. One cabinet minister said they had done so because Ed | :20:36. | :20:39. | |
Balls had also used the money to stimulate the economy, and they | :20:39. | :20:45. | |
would do so too. For backbenchers, delighted this evening at the | :20:45. | :20:47. | |
return of George Osborne the tactition, the booby traps are | :20:47. | :20:52. | |
these. Firstly, we now know that the Government will do another | :20:52. | :20:55. | |
Comprehensive Spending Review. This means as of next summer we will | :20:55. | :21:01. | |
know what it will spend and cut in the years 2015/16, it means we go | :21:01. | :21:04. | |
into the next election with the Government saying what they will | :21:04. | :21:08. | |
cut, and Labour will have to come out with more details too. The | :21:08. | :21:13. | |
second booby trap is this, in April next year there will be a vote on | :21:13. | :21:20. | |
the uprating of benefits by only 1%, which way does Labour go, again. | :21:20. | :21:24. | |
The Spending Review a difficult call for the Chancellor, he has to | :21:24. | :21:27. | |
set spending targets because the election will be a month into the | :21:27. | :21:31. | |
financial year. He will have to go into the next election, saying we | :21:31. | :21:34. | |
will cut again spending on transport and education, and | :21:34. | :21:40. | |
justice and all those sorts of things. Who was this budget for? My | :21:40. | :21:43. | |
sources within Government diagnosed the group of strivers, as those | :21:43. | :21:48. | |
earning between �19,000 and �30,000 a year. Help for them today | :21:48. | :21:52. | |
included a shelving, forever, not just till April, of the planned 3p | :21:52. | :21:55. | |
rise in fuel duty, and also a surprise, another increase in the | :21:56. | :22:00. | |
personal tax allowance. For others, not so far up the income spectrum, | :22:00. | :22:04. | |
not such good news. 400,000 extra people were today brought into the | :22:04. | :22:09. | |
higher rate of tax. If you have a number of kids, you are actually in | :22:09. | :22:13. | |
the upper middle bit of income distrib bough, and not feeling | :22:13. | :22:18. | |
particularly happy -- distribution, and not feeling particularly happy | :22:18. | :22:22. | |
about your might. It is a difficult decision today to raise more money, | :22:22. | :22:26. | |
and the Chancellor was up front, which is welcome. The opposition | :22:26. | :22:29. | |
went for the jugular on capping benefits much The majority of | :22:29. | :22:34. | |
people who lose from his cuts to tax credits, are people in work. | :22:34. | :22:40. | |
Millions of families, striving hard to do the right thing, Mr Speaker. | :22:40. | :22:44. | |
What do the Prime Minister's allies say to that? An important point is | :22:44. | :22:47. | |
it wasn't a freeze. If you look at where he has rated it, it is the | :22:48. | :22:51. | |
same place public sector pay will be, in the same place as average | :22:51. | :22:54. | |
earnings growth in the private sector. It is very much about | :22:54. | :22:59. | |
parity. That is a very important point. Anything that looked unduly | :22:59. | :23:03. | |
punitive would have caused those concerns, think he has the right | :23:03. | :23:05. | |
balance. It was the Autumn Statement and | :23:05. | :23:09. | |
measures announced today to take you through more than four seasons, | :23:09. | :23:13. | |
next summer and spring bring the next Spending Review, more cut, but | :23:13. | :23:18. | |
which ones. With us now is Rachel Reeves, the | :23:18. | :23:21. | |
Shadow Chief Secretary to the Treasury, and Danny Alexander, her | :23:21. | :23:24. | |
Government counterpart. Are we supposed to take today's | :23:24. | :23:30. | |
announcement as evidence you are running the economy well? Yes, I | :23:30. | :23:33. | |
think we are running the economy well. The statement today reflected | :23:33. | :23:38. | |
the world we are in, not the world we hope to be in, two years ago. | :23:38. | :23:42. | |
The OBR and Robert Chote said, we have seen worse parts in the | :23:42. | :23:45. | |
eurozone and other parts of the world economy, that slowed growth | :23:45. | :23:48. | |
down. Our response to that is, rather than making more cuts now, | :23:48. | :23:53. | |
that we could have done, if we were going to chase the debt target, | :23:53. | :23:56. | |
instead we took more time to deal with the financial problems. | :23:56. | :23:59. | |
Fundamentally, to get this country back on the right road, we have to | :23:59. | :24:06. | |
clear up the mess of Labour. misread it? You missed your target? | :24:06. | :24:11. | |
We have missed our debt target, we are on target to meet the | :24:11. | :24:15. | |
structural deficit. Of course, look it is taking longer and it is | :24:15. | :24:17. | |
harder to deal with the economic problems than we expected. Mainly | :24:18. | :24:22. | |
because, as the O bfpl R themselves say, because of the problems in the | :24:22. | :24:26. | |
world economy. That is not our problem, but we are responding to | :24:26. | :24:32. | |
taking further decisions, and as Paul Mason said investing more in | :24:32. | :24:35. | |
infrastructure, cutting taxes for business and putting more money | :24:35. | :24:39. | |
into the pockets of working people. Is cutting the deficit still the | :24:39. | :24:42. | |
number one priority? It is essential. That is not my question, | :24:42. | :24:47. | |
is it the number one priority? have always said cutting the | :24:47. | :24:50. | |
deficit is essential to achieve economic growth and restore | :24:50. | :24:54. | |
prosperity. I notice you don't say it is the number one priority, | :24:54. | :24:58. | |
which used to be your line? Without it, none of those things are | :24:58. | :25:02. | |
possible, it is still absolutely essential. Not the number one | :25:02. | :25:04. | |
priority, George Osborne made a great song and dance about this, | :25:04. | :25:07. | |
you will recall? It is our first priority as a Government, to get | :25:07. | :25:11. | |
the public finances in order. To deal with the deficit. Do you just | :25:11. | :25:18. | |
remind us how much you are borrowing it this year? We will be | :25:18. | :25:24. | |
borrowing �108 billion. �108 billion. That is down �50 billion | :25:24. | :25:27. | |
since we came in. We cut the deficit in the first two years in | :25:27. | :25:31. | |
Government by a quarter. Against these head winds in the world | :25:31. | :25:34. | |
economy. We set out plans to deal with the deficit going further into | :25:34. | :25:38. | |
the next parliament t will take longer, because the economic | :25:38. | :25:43. | |
situation is worse than we expected. At least Robert Chote admits his | :25:43. | :25:49. | |
forecasts are almost invariably up the spot! -- spout! Don't you have | :25:49. | :25:53. | |
a similar degree of humility about the pledges you made? We are | :25:53. | :25:56. | |
setting out our plans based on the best economic forecast we can get. | :25:56. | :26:00. | |
We set up an independent Office for Budget Responsibility, precisely | :26:00. | :26:04. | |
because we didn't want forecasts to be interfered with by politicians, | :26:04. | :26:08. | |
as they were in the past. We make our judgments off the back of those | :26:08. | :26:13. | |
things. Of course, Robert Chote has been very honest, and I, and George | :26:13. | :26:17. | |
Osborne, that things have not turned out as we expected. Robert | :26:17. | :26:20. | |
Chote published a detailed report earlier in the year, giving all the | :26:20. | :26:24. | |
reasons why he thought his forekas were not accurate, that are | :26:24. | :26:29. | |
principally to do with, the problems in the eurozone, and the | :26:29. | :26:34. | |
pricinging and the way it is weighing on small and medium term | :26:34. | :26:37. | |
business. We didn't cause the mess, but we are doing our best to clear | :26:37. | :26:41. | |
it up. Let's look at borrowing figures, for example, there is a | :26:41. | :26:49. | |
figure in there of �3.5 billion, income, from the sale of 4G | :26:49. | :26:56. | |
telephone licenses. Have I missed something, have they been told? | :26:56. | :26:59. | |
It is speculative money, it is money that doesn't exist? It is | :26:59. | :27:03. | |
money that will come in this year. The Office of Budget Responsibility, | :27:03. | :27:08. | |
looking at the evidence presented to them by the office doing that, | :27:08. | :27:12. | |
decided to count them in the figures. Just as they do every year. | :27:12. | :27:17. | |
This is like Billy Bunter's postal order? Not at all, if you look | :27:17. | :27:24. | |
every year in departmental spending, departments are spending money on | :27:24. | :27:29. | |
various things, income from assets sales and property sales. All those | :27:29. | :27:34. | |
things have to be forecast in the normal way. I trust the judgment of | :27:34. | :27:37. | |
the Office of Budget Responsibility. In coming to the conclusion that it | :27:37. | :27:40. | |
was right to count that money this year, I'm sorry you don't. | :27:40. | :27:47. | |
always, I was unaware of this, every year's economic figures | :27:47. | :27:52. | |
include money that has not been realised and may not be realised? | :27:52. | :27:56. | |
forecast, by definition, is a forecast of events that haven't | :27:56. | :27:59. | |
taken place yet. That is why Robert Chote was pointing to the | :27:59. | :28:03. | |
uncertainty of his forecast reasonably in his interview earlier. | :28:03. | :28:08. | |
We can't rely on their forecasts or your promises? We have set out | :28:08. | :28:11. | |
clearly what we are doing to departmental spending every year. | :28:11. | :28:14. | |
One of the things clear from the OBR today, we have stuck to our | :28:14. | :28:18. | |
plans from departmental spending, we are slightly ahead of those | :28:18. | :28:21. | |
plans. We have reduced public spending by more than expected, | :28:21. | :28:24. | |
that is one of the reasons the deficit is falling this year. | :28:25. | :28:29. | |
Rachel Reeves, one of the things that is being done in order to | :28:29. | :28:34. | |
reduce Government spending s to kapt uprating of benefits at -- cap | :28:34. | :28:40. | |
the uprating of benefits at 1%? need to say what benefits the | :28:40. | :28:44. | |
Government are uprate anything that way. I'm sure he can tell you? | :28:44. | :28:48. | |
are published in the Autumn Statement published today. | :28:48. | :28:54. | |
example, Child Tax Credit, child benefit, maternity pay. The | :28:54. | :29:00. | |
Resolution Foundation say 60% of those benefits will be falling on | :29:00. | :29:04. | |
people in work in modest income. We have real issue with the changes. | :29:04. | :29:09. | |
We haven't seen the bill yet, so it is difficult to say. How we will be | :29:09. | :29:14. | |
voting on it. But people who are most hit are those on modest income. | :29:14. | :29:18. | |
The details are in the statement? The bill hasn't been written or | :29:18. | :29:24. | |
published. It will be, there will be a limit of 1% to the uprating of | :29:24. | :29:28. | |
benefits. Will you vote in favour of it? The bill hasn't been written | :29:28. | :29:33. | |
yet, you haven't seen it and neither do I. We know what it will | :29:33. | :29:40. | |
say? We know the impact on child poverty. Until that information is | :29:40. | :29:43. | |
published, when the strerb publishes the bill, I'm not going | :29:43. | :29:47. | |
to commit to vote for a bill we haven't seen yet. But I am clear. | :29:47. | :29:54. | |
Do you support the principle of it? I don't support the principle of | :29:54. | :29:58. | |
giving a tax cut for millionaire's next year, and on the same day | :29:58. | :30:02. | |
cutting support for some of the most vulnerable in society. | :30:02. | :30:05. | |
don't support it? I don't support those people with the least paying | :30:05. | :30:10. | |
for deficit reduction, at the same time giving a tax give Ye to the | :30:10. | :30:16. | |
rich in society worth �-- tax givaway to the rich in society | :30:16. | :30:19. | |
worth billions. You will have to vote against it? We haven't seen | :30:19. | :30:25. | |
the Bill yet, we don't know what decision provisions the Government | :30:25. | :30:30. | |
will be making for poorer people. We will wait and see the bill, that | :30:30. | :30:34. | |
is responsible. The Government say we will vote before Christmas, I | :30:34. | :30:37. | |
hope the bill will be published in the next few days. | :30:37. | :30:42. | |
Do you support performance-related- pay for teachers? What the | :30:42. | :30:46. | |
Chancellor said today that Michael Gove, the Education Secretary, will | :30:46. | :30:50. | |
bring forward market-facing pay. My understanding is regional and local | :30:50. | :30:52. | |
pay. I have spoken to a lot of teachers in my constituency in | :30:53. | :30:57. | |
Leeds, and around the country, who are saying, actually, it is already | :30:57. | :31:03. | |
quite difficult to recruit teachers the toughest areas of country. This | :31:03. | :31:09. | |
is likely to make it harder to do that. You won't support that? | :31:09. | :31:14. | |
didn't support a regional pay bargaining, we are in favour of a | :31:14. | :31:18. | |
national pay bargaining structure, where flexibility, where needed to | :31:18. | :31:21. | |
recruit in hot spots. Moving to local and regional pay, which the | :31:21. | :31:24. | |
Government have rejected in the National Health Service, they have | :31:24. | :31:29. | |
said today, but wanting to reduce it in education, that won't get the | :31:29. | :31:34. | |
best results for kids around the country. There will be a Spending | :31:34. | :31:37. | |
Review, Danny Alexander's colleague has told us today, there will be a | :31:37. | :31:42. | |
Spending Review, will it be next summer. Will you be doing a similar | :31:42. | :31:45. | |
thing? We are not in Government. You can decide how you would run | :31:45. | :31:49. | |
the economy, having got us partly into this mess? We can't do a | :31:49. | :31:52. | |
Spending Review if we are not in Government. We are, at the moment, | :31:52. | :31:56. | |
doing reviews into value for money and efficiency in public services, | :31:56. | :32:01. | |
we have said when we come to power, we will look at a zero-based | :32:01. | :32:05. | |
Spending Review, looking at everyone rather than a salami slice | :32:05. | :32:09. | |
like the Government is doing. It is not something that is | :32:09. | :32:12. | |
possible without the support of the Civil Service to do it. When it | :32:12. | :32:17. | |
gets closer to the election. better watch out, it might be the | :32:17. | :32:20. | |
Office of Budget Responsibility helping you out? Closer to the | :32:20. | :32:23. | |
election we will publish our manifesto commitment, two-and-a- | :32:23. | :32:26. | |
half years ahead of a general election it is not possible to do | :32:27. | :32:29. | |
that. I want to explore the benefits question, most of the | :32:29. | :32:33. | |
people who receive the benefits in question are actually in work, | :32:33. | :32:37. | |
aren't they? Yes, people in work will be net better off next year | :32:37. | :32:41. | |
and the year after as a result of the decisions we have announced. | :32:41. | :32:44. | |
Were you comfortable with George Osborne talking about some people | :32:44. | :32:48. | |
going to work, and other people, next door, perhaps, keeping the | :32:48. | :32:52. | |
curtains drawn and staying in bed, were you comfortable with that | :32:52. | :32:56. | |
language? That is not the language I use, most people I know are | :32:56. | :32:59. | |
working very hard to get themselves back into work. This is a difficult | :32:59. | :33:04. | |
decision to make to deal with the public finances. People in work, on | :33:04. | :33:08. | |
tax credits, for example, will be net better off, because as a whole | :33:08. | :33:12. | |
we have also got the biggest increase in the income tax personal | :33:12. | :33:15. | |
allowances in this country. People in work will benefit from that, as | :33:15. | :33:20. | |
a result of all the decisions we have made as Government, | :33:20. | :33:24. | |
people...That Is not what the documents published today. People | :33:24. | :33:29. | |
will be �50 better off a month. documents shown today show the | :33:29. | :33:32. | |
average family will be worse off to the tune of �700 because of the | :33:32. | :33:37. | |
decisions. That is on top of the VAT increase, that hit the average | :33:37. | :33:44. | |
family by �450. And the tax changes this year will lead to well over a | :33:44. | :33:48. | |
thousand pounds. I dispute what you are saying. The tax credit changes | :33:48. | :33:51. | |
on that day means it will be worse off in real terms. Those numbers | :33:51. | :33:56. | |
don't stack up. I want decisions today about uprating benefits today, | :33:56. | :34:00. | |
it was a difficult decision, we set out the benefits in the Autumn | :34:00. | :34:03. | |
Statement. She won't answer that now. | :34:03. | :34:06. | |
We are reducing taxes for working people. A lot of the newspapers are | :34:06. | :34:10. | |
referring to this tomorrow morning, it is the fact you have brought | :34:10. | :34:14. | |
another 400,000 people into the upper tax bracket. Are you pleased | :34:14. | :34:17. | |
about that? I didn't come into politics to do any of these things, | :34:17. | :34:21. | |
but we have to do them. The crucial things to make sure is as we deal | :34:21. | :34:26. | |
with the problems in the public finance, we do so fairly. That | :34:26. | :34:32. | |
means everyone has to make a contribution. Are those on the top | :34:32. | :34:39. | |
rate of tax, �3 billion into the hands of the richest people, 8,000 | :34:39. | :34:47. | |
millionaires and �100,000 worse -- better off next year. Those with | :34:47. | :34:51. | |
the broader shoulders should bear the brunt of it. They are the | :34:51. | :34:56. | |
numbers that you set up from the OBR, �3 billion tax cut next year. | :34:56. | :34:59. | |
I won't take lectures from the Labour Party of millionaires. A | :34:59. | :35:03. | |
party in 13 years in Government, had had millionaire equity fund | :35:03. | :35:07. | |
managers paying a lower rate of tax on their gains than those cleaning | :35:07. | :35:12. | |
the office. It was an utterly disgraceful position under the | :35:12. | :35:17. | |
previous Government. The tuition fees, you are asking million airs | :35:17. | :35:20. | |
to contribute even less to deficit reduction. You voted in favour of | :35:20. | :35:23. | |
those things, you are just like the Conservative Party, you vote with | :35:24. | :35:29. | |
them every single day? It was a contrick, nobody paid it. | :35:29. | :35:32. | |
Office of Budget Responsibility said �3 billion brought in. The | :35:32. | :35:35. | |
people saying the price are those on modest and middle incomes. | :35:36. | :35:39. | |
You have no credibility on that point whatsoever. Credibility, I'm | :35:39. | :35:44. | |
not taking lessons from the Liberal Democrats on that. All is | :35:44. | :35:47. | |
tremenduously exciting, with the talk of cyclical borrowing and | :35:47. | :35:50. | |
fiscal mandate, and it comes down in the end to something simple for | :35:50. | :35:55. | |
most people, what does it mean for me. Will I feel itch richer or | :35:55. | :35:59. | |
poorer, -- richer or poorer, will my family or town be worse off. Joe | :36:00. | :36:05. | |
Lynam got the return off-peak ticket to Nottingham today, where | :36:05. | :36:14. | |
he went to a flower factory. The moon still hoovers on the icey | :36:14. | :36:20. | |
morning, days start early at the flower delivery business. Christmas | :36:20. | :36:26. | |
is one of the busiest times of year. When the Government talked about | :36:26. | :36:32. | |
strivers, had this family in mind. It started out under an umbrella 60 | :36:32. | :36:36. | |
years ago. We are predominant in the on-line business. What does the | :36:36. | :36:40. | |
young managing director want now from the Autumn Statement? We want | :36:40. | :36:43. | |
pounds in people's pockets. Tax breaks and opportunities for real | :36:43. | :36:50. | |
people on the streets. So that they have got confidence to spend. | :36:50. | :36:57. | |
My expectations are less in that regard. | :36:57. | :37:01. | |
So, as the Chancellor began his speech, four employees, with four | :37:01. | :37:06. | |
very different incomes, were watching carefully. What do you | :37:06. | :37:10. | |
make of the corporation tax cut to 21%, that will affect you guys? | :37:11. | :37:15. | |
is a few more pounds which we are able to keep, and invest into | :37:15. | :37:23. | |
perhaps a new factory. Some equipment. The tax allowance to | :37:23. | :37:28. | |
�250,000? That is useful, in our case, the really big stuff is | :37:28. | :37:33. | |
things like a fridge. A cold centre, that costs a lot of money. That | :37:33. | :37:39. | |
would be very useful. Chris started off in the call centre, and without | :37:39. | :37:43. | |
any formal training, he's marketing manager. There is a lot of talk and | :37:43. | :37:47. | |
not a great deal of policies. I don't think he has a lot of room to | :37:47. | :37:56. | |
manoeuvre. The corporation tax cuts are good. He has done as much as he | :37:56. | :38:00. | |
can in terms of people's personal allowances. He increased the ISA | :38:00. | :38:04. | |
amount, to give people a little bit more. I don't think there is a lot | :38:04. | :38:11. | |
there, to be honest. There was limited sympathy for those facing | :38:11. | :38:15. | |
benefit cuts? I think it is a self- motivation to want to come in and | :38:15. | :38:21. | |
do better every day. I'm not sure they are doing enough to encourage | :38:21. | :38:25. | |
enough people to do that. Again, the been fits are so high for a lot | :38:25. | :38:31. | |
of people, that there isn't really the encouragement to get up and go | :38:31. | :38:36. | |
out and try to improve their own skill set. To try to improve their | :38:36. | :38:41. | |
lives. Especially when you are being paid not to. When you are | :38:41. | :38:47. | |
being paid not to have a job. are the people sitting at home. | :38:47. | :38:55. | |
Yeah. 18-year-old hanjoinds Bunches as an apprentice d Hannah, joined | :38:56. | :39:03. | |
Bunches as an a-- Hannah, joined Bunches as an apprenticeship, she | :39:03. | :39:08. | |
thinks things aren't so bad. Some people don't want the work, it is | :39:08. | :39:12. | |
hard for people to get a job. If you are lucky enough like I did, | :39:12. | :39:17. | |
applied to it must be over 60, then surely one of them has to at least | :39:17. | :39:22. | |
give you a chance of an interview. Sharon has been with the company | :39:22. | :39:27. | |
since 197, her daughter is also employed here, she hasn't had a | :39:27. | :39:33. | |
holiday in three years. Used to go out and buy clothes or go on | :39:33. | :39:43. | |
:39:43. | :39:44. | ||
holiday, it is just work and pay bills. | :39:44. | :39:47. | |
This colliery closed in 1987, scaring the town in many place. | :39:47. | :39:52. | |
Clarence worked there for 37 years, on this icey day he was hand- | :39:52. | :39:56. | |
delivering Christmas cards. We do worry, the future of the younger | :39:56. | :40:00. | |
generation. How come? Because they don't work. They are getting worse, | :40:00. | :40:06. | |
there is no work for the young ones. At the end of the working day, at | :40:06. | :40:10. | |
Bunches, three generations, all with very different stakes in the | :40:10. | :40:13. | |
economy, gather to discuss the future. | :40:13. | :40:19. | |
I think of some of our staff and what they earn on the factory floor. | :40:19. | :40:23. | |
We pay them a good wage for the job they do. However, it is on the | :40:23. | :40:29. | |
lower end. I think, you know, about all the working age benefits we | :40:29. | :40:32. | |
have spoke been today, and they were going to increase by a per | :40:32. | :40:37. | |
cent, but actually a per cent is less than inflation, so in real | :40:37. | :40:42. | |
terms of money, they are probably going to have less to spend. | :40:42. | :40:47. | |
Benefits were cut in real terms today, George Osborne, doubtless | :40:47. | :40:51. | |
hopes, that will entice many off the dole and into the work force. | :40:51. | :40:56. | |
Time now to summon the ghosts of Christmas past, present and future, | :40:56. | :40:58. | |
Danny Finkelstein used to work for Conservative Central Office and | :40:58. | :41:03. | |
writes for the Times now, Sally worked for Tony Blair and Downing | :41:03. | :41:08. | |
Street, and Mark Pack editor of Lib Dem Voice, and prolific blogger and | :41:08. | :41:13. | |
general commentator, I was going to say "nuisance"! Let's talk about | :41:13. | :41:20. | |
the papers as well. Interesting a Government that | :41:20. | :41:24. | |
misses its self-impose target, is getting reasonably good -- self- | :41:24. | :41:29. | |
imposed target, is getting reasonably good press some? Yes, | :41:29. | :41:34. | |
the -- tomorrow? But how incomes change is how people will really | :41:34. | :41:38. | |
react. Partly because Ed Balls didn't do as well as he could have | :41:38. | :41:42. | |
done, George Osborne was confident, the politics were good, it is a | :41:42. | :41:45. | |
reasonable press in tomorrow's papers. Still, the decisions they | :41:45. | :41:50. | |
have made are very hard for people. That is very hard incidentally | :41:50. | :41:54. | |
politically, it is also hard to see. It means people on quite low | :41:54. | :41:59. | |
incomes will be squeezed. That is very difficult. A hard road to 2018 | :41:59. | :42:03. | |
does catch it? You couldn't listen to those figures without thinking | :42:03. | :42:07. | |
that. What we wanted to do was capture that in the headline. | :42:07. | :42:15. | |
has, I mean, Daniely has already mentioned Ed Balls's performance -- | :42:15. | :42:19. | |
Danny has already mentioned Ed Balls's performance today, and | :42:19. | :42:23. | |
there is talk from Labour supporters of missing an open goal? | :42:23. | :42:27. | |
I was surprised by his performance, it was pretty much an open goal. | :42:27. | :42:32. | |
Although George Osborne performed well, the message was pretty bleak. | :42:32. | :42:35. | |
I thought particularly bad, although he had political headlines | :42:35. | :42:39. | |
that were rather effective, if you look at the two groups I would be | :42:39. | :42:42. | |
worried about if I was a Tory backbencher, I would be worried | :42:42. | :42:48. | |
about the people in the 40% tax band, prime target voters for them. | :42:48. | :42:51. | |
I would also be worried about labelling everyone as scroungers | :42:51. | :42:56. | |
when a lot of them are at work. This will unfold in the days and | :42:56. | :43:02. | |
weeks to come. But they have had a pretty decent first 24 hours is my | :43:02. | :43:07. | |
guess. When you look at the Lib Dem contribution, you saw Danny | :43:07. | :43:10. | |
Alexander a moment or so ago, you saw that moment in George Osborne's | :43:10. | :43:14. | |
speech when Nick Clegg is sitting behind him, and virtually rolling | :43:14. | :43:18. | |
his eyes. Because George Osborne's dismissed the mansion tax. And | :43:18. | :43:21. | |
generally, acting in a pretty disloyal sort of fashion. What do | :43:21. | :43:26. | |
you think the Lib Dems got out of this today? I think that was astute | :43:26. | :43:29. | |
of Nick Clegg, those facial expressions can be a very effective | :43:29. | :43:34. | |
way of conveying disagreement. It is no secret that Liberal Democrats | :43:34. | :43:37. | |
and Tories disagree fundamentally on taxing wealth and taxing | :43:37. | :43:43. | |
property. Clegg played a smart move by playingp the difference, but in | :43:43. | :43:48. | |
a way that didn't -- playing up the difference, but didn't overshadow | :43:48. | :43:51. | |
the news. That is the mistake the parties made for the budget in the | :43:51. | :43:55. | |
spring, there was bits of good news, but so much was leaked in advance, | :43:55. | :43:59. | |
all the news on the day was bad news. This time they got it right, | :43:59. | :44:04. | |
there was good news, limited, but extra good news about cuts in | :44:04. | :44:08. | |
income tax, the OBR figures better than expected. But those figures | :44:08. | :44:13. | |
should be taken with a pinch of salt, there was good a genuine | :44:13. | :44:19. | |
surprises. On the OBR, they forecast like all other economists | :44:19. | :44:22. | |
forecast. Their analysis of the situation, and the figures | :44:22. | :44:26. | |
underneath it in terms of the budget, those are very important | :44:26. | :44:29. | |
for George Osborne, they basically allow him to argue it is not his | :44:29. | :44:32. | |
fiscal policy that created the situation. The credibility of the | :44:32. | :44:37. | |
OBR, on the forecasts, has taken a dent, everyone's forecasts were | :44:37. | :44:41. | |
wrong. But the credibility underneath the budget, on the OBR, | :44:41. | :44:45. | |
is critical, actually. People in the country want to know if George | :44:45. | :44:49. | |
Osborne can put it right. In the end it is a pretty esoteric | :44:49. | :44:54. | |
argument, about OBR figures or somebody else. The question is, can | :44:54. | :44:58. | |
this man put this right on track. We know something key about the | :44:58. | :45:02. | |
ground the next election will be fought? We certainly do, it is a | :45:02. | :45:05. | |
different place than we all expected a few years ago. | :45:05. | :45:09. | |
advantage of winning in the House of Commons, was the biggest danger | :45:09. | :45:13. | |
today for George Osborne was to be seen not to make any progress. The | :45:13. | :45:17. | |
figures could lend themselves to that analysis, very heavily. The | :45:17. | :45:20. | |
fact that Ed Balls failed to make the point, gave George Osborne an | :45:20. | :45:24. | |
advantage. In the long run people doesn't watch the events or know | :45:24. | :45:27. | |
what is happening in the House of Commons. They will feel it in their | :45:27. | :45:32. | |
pockets, that is a problem for the Government. What about the | :45:32. | :45:35. | |
suggestion that shortly before the election there will be a tickling | :45:35. | :45:38. | |
of the economy so people will feel better? No, they have to get the | :45:38. | :45:43. | |
last year right, and make sure they don't impose unexpected increases | :45:43. | :45:50. | |
in tax or reductions in business. It will be an interesting sort of | :45:50. | :45:53. | |
environment to fight an election. The challenge for Labour is | :45:53. | :45:59. | |
difficult? The challenge for Labour, is, I think that Labour are OK at | :46:00. | :46:03. | |
the moment. Not bringing home a comprehensive spending plan at the | :46:03. | :46:07. | |
moment, it would beed madness to bring it forward at this stage. We | :46:07. | :46:11. | |
got it so wrong in a previous life doing that. Labour is exactly right, | :46:11. | :46:15. | |
we can't go into the election in that position. That's the challenge | :46:15. | :46:21. | |
in the next 18 months. The benefits thing, this question of 1% and how | :46:21. | :46:27. | |
they jump on that, will put them in an awkward spot politically. What | :46:27. | :46:31. | |
George Osborne did today will unravel, I think, for in a sense, | :46:31. | :46:36. | |
his labelling all the benefit of not being at work and not seeking | :46:36. | :46:43. | |
work, it was perfectly clear that was not supported as a headline by | :46:43. | :46:46. | |
the liberals, and it is not a reality. That is why I thought he | :46:46. | :46:51. | |
was being smart saying there will be a vote in parliament. People | :46:51. | :46:54. | |
like Rachel Reeves can't side step it. That will be hard for Liberal | :46:54. | :46:57. | |
Democrats, and peers, people like Ed Balls have a lot to work out | :46:57. | :47:03. | |
about how Labour will handle that. If I was the Lib Dem chief in the | :47:03. | :47:10. | |
House of Lords, I will be thinking it asteriky vote. | :47:10. | :47:14. | |
You said we knew how the election would go and the politics, the Lib | :47:15. | :47:19. | |
Dems are clearly going to propose a mansion tax, Vince Cable seems to | :47:19. | :47:24. | |
have won that battle. It looks like Labour will as well, they have a | :47:24. | :47:28. | |
position off the baseline, in which they have money, and the Tories | :47:29. | :47:31. | |
will show how they will match it. We learned something else about the | :47:31. | :47:35. | |
general election, there will be a lot of arguing about the mansion | :47:35. | :47:40. | |
tax. And good for you, you think? suspect what we will see the | :47:40. | :47:42. | |
Liberal Democrats saying at the general election, is mansion tax | :47:42. | :47:50. | |
and using that revenue to cut knack tax further, so if you are earning | :47:50. | :47:53. | |
anal minimum wage, in full-time job, you don't have to pay tax at all. | :47:53. | :47:58. | |
That is a good headline position, it will be hard for the Tories to | :47:58. | :48:08. | |
say instead of that money for that it goes somewhere else. It will be | :48:08. | :48:11. | |
hard for Tories to say you need to pay counter tax. Why not liberal | :48:11. | :48:16. | |
and Conservative. We will reconvene afterChristmas. That is it for now, | :48:16. | :48:26. | |
:48:26. | :48:27. | ||
the great jazz pianist and composer, Dave Brubeck, has died. His Let's | :48:27. | :48:37. | |
:48:37. | :48:44. | ||
Take Five was the first number one Take Five was the first number one | :48:44. | :48:54. | |
:48:54. | :49:02. | ||
Hello, after a very cold, frosty and icey night, it is Scotland that | :49:02. | :49:06. | |
will bear the brunt of further snow through the Thursday morning rush | :49:06. | :49:10. | |
hour. Met Office amber warnings in force. Be prepared for the | :49:10. | :49:15. | |
likelihood of travel disruption. All of that wet weather, rain sleet | :49:15. | :49:20. | |
and he snow moves into northern England. Tricky conditions in the | :49:20. | :49:28. | |
Pennine. -- Pennines. Not much rain until afterdark in the south west. | :49:28. | :49:34. | |
More rain into south-west and South Wales, unwanted rain for those | :49:34. | :49:40. | |
suffering flooding t will turn wet late afternoon and into the evening | :49:40. | :49:44. | |
especially. In Northern Ireland a wet start, eatsing off southwards, | :49:44. | :49:49. |