:00:10. > :00:22.George Osborne has set out his spending plans for the next four
:00:23. > :00:28.years and he scrapped plans to reduce tax credits. He said he could
:00:29. > :00:40.afford to drop the plan because the public finances are in a better
:00:41. > :00:43.state than expected. The economy isn't expected to
:00:44. > :00:45.perform dramatically different to how we thought in July but we expect
:00:46. > :00:56.the public finances to be a there's about ?27 billion, giving
:00:57. > :01:01.the Chancellor some money to play with. There are things going up and
:01:02. > :01:05.down within that total, the single biggest thing is that the government
:01:06. > :01:10.is likely to have to spend less money on debt interest. The Bank of
:01:11. > :01:19.England has also announced it will reverse quantitative easing later,
:01:20. > :01:21.which helps as well. There has also been good news on tax, income tax
:01:22. > :01:24.and corporation tax receipts have been coming in well, we are a bit
:01:25. > :01:30.more optimistic on things like national insurance and we have share
:01:31. > :01:35.prices as well moving in the opposite direction, fewer
:01:36. > :01:42.transactions in the property market so less from stamp duty, so things
:01:43. > :01:45.in both directions but it is more favourable for the Chancellor. So
:01:46. > :01:50.people are saying George Osborne has just been lucky, this is not to do
:01:51. > :01:53.with skilful stewardship, he has just had good luck today. Is that
:01:54. > :01:59.fair? As I say a whole different things have contributed to
:02:00. > :02:02.this, the fact that interest rates are lower maybe tells you that
:02:03. > :02:10.people are less optimistic about the long-term outlook for the economy.
:02:11. > :02:11.The Governor of the Bank of England has in
:02:12. > :02:20.policy on quantitative easing as well. These policies do move a lot
:02:21. > :02:25.from forecast forecast, which is why we keep having to do them. In a
:02:26. > :02:30.spending review you are setting out plans which have to last for a
:02:31. > :02:39.number of years, so any Chancellor has to do that knowing that things
:02:40. > :02:47.will not turn out exactly as we expect them to. There is a price tag
:02:48. > :02:52.of about ?4 billion attached to this, so where does that come out?
:02:53. > :02:56.People watching this will be wondering, he doesn't need that,
:02:57. > :03:02.that money he wanted to say, he doesn't need that, so
:03:03. > :03:07.money coming from? The saving on the reversal of tax credits causes --
:03:08. > :03:13.costs about ?3.5 billion next year that in the next few years quite a
:03:14. > :03:16.lot less because by then people will be on the new Universal Credit which
:03:17. > :03:20.is coming in. Over the longer term the Chancellor is only giving back
:03:21. > :03:27.about 8% of the welfare savings he came up with in July, whereas next
:03:28. > :03:30.year he is giving back 80% of them. The medium-term pitcher gives a lot
:03:31. > :03:35.less room to make up than in recent years which is why his welfare cap
:03:36. > :03:40.is breached in the near term but he is back on course to achieve it
:03:41. > :03:42.later on. The cap overall is breached.
:03:43. > :03:45.Joining me now to answer your questions on today's spending review
:03:46. > :03:50.is our panel of experts - John Longworth from the British Chamber
:03:51. > :03:53.of Commerce, Louise Cooper, a personal finance writer, Geoff Tily,
:03:54. > :03:56.Chief Economist at the TUC, the federation of trade unions in
:03:57. > :04:00.England and Wales, and also Rachael Badger from Citizens Advice.
:04:01. > :04:08.It is great to have you here and hopefully we will have a stimulating
:04:09. > :04:10.discussion based on a lot of the questions and ideas that the public
:04:11. > :04:17.have been putting forward to us through the day. James Simmons has
:04:18. > :04:22.the first question and says, if tax credit cuts are to be scrapped what
:04:23. > :04:28.happens to Universal Credit, wasn't it going to replace tax credits?
:04:29. > :04:32.Rachael. The tax credits announcement today will be a relief
:04:33. > :04:36.for many millions of family who were expecting their incomes to drop in
:04:37. > :04:42.April but there is a bigger picture, the Chancellor said clearly that
:04:43. > :04:44.there will still be ?12 billion of welfare cuts, Universal Credit will
:04:45. > :04:48.still happen and there are cuts in the pipeline there, so a mixed
:04:49. > :05:00.picture and more cuts to come to tax credits. Louise, the fact is he can
:05:01. > :05:06.scrap tax credits because the universal tax would be lower than
:05:07. > :05:13.expected anyway. Universal Credit will take a few years to roll out.
:05:14. > :05:16.There are two other things going on, the national living wage is
:05:17. > :05:20.increasing and he is increasing the personal allowance, the amount you
:05:21. > :05:27.can earn before you go into income tax, and he wants that to go up by
:05:28. > :05:31.?12,500 by the end of Parliament. The idea of the Chancellor is that
:05:32. > :05:35.you get paid more and you keep more of your earnings. That is the
:05:36. > :05:40.theory, although what we saw with tax credits is about an increase in
:05:41. > :05:46.wage and an increase in personal allowance didn't make up for the tax
:05:47. > :05:49.credits being scrapped. Hence we had the House of Lords refusing to put
:05:50. > :05:55.it into law and the big political climb down we saw today, but that is
:05:56. > :06:02.the idea, this is a temporary relief. The welfare cuts are still
:06:03. > :06:06.to come. The message from him is that we are moving people off
:06:07. > :06:14.benefit into work, that is not changing is his message. Geoff Tily,
:06:15. > :06:18.a lot of people you represent at the TUC will be concerned that the
:06:19. > :06:23.Universal Credit is going to mean they get less money than they are
:06:24. > :06:32.now. Absolutely. On one level we have to welcome this big climb-down
:06:33. > :06:35.from the Chancellor, everything everybody says about Universal
:06:36. > :06:40.Credit is right but this is the underlying theme of the Autumn
:06:41. > :06:44.Statement, the reality is quite different from the rhetoric. The OBR
:06:45. > :06:50.are still stressing that we looking at the biggest cuts over this ten
:06:51. > :06:57.period in recorded history for the past century. You compare it to all
:06:58. > :07:02.of the leading G7 economies and it is the biggest. Let's move on and
:07:03. > :07:05.this is from Jill, what is happening to the British steel industry and
:07:06. > :07:11.the thousands of workers out of a job? John. The Chancellor has
:07:12. > :07:17.announced, I understand, some measures to help steal. One of the
:07:18. > :07:21.issues is that energy costs are so high in the UK because there is such
:07:22. > :07:25.an input into what is basically green taxes and the UK has run ahead
:07:26. > :07:34.of the European Union in relation to the carbon tax, so one of the things
:07:35. > :07:38.is -- it is impinging on it is the green policies of the government and
:07:39. > :07:43.they really need to compensate for that or revise the policies. Because
:07:44. > :07:47.all we will end up with if we go down that route is exporting jobs
:07:48. > :07:51.because these industries will move abroad and we will export the
:07:52. > :07:55.pollution as well, because the chances are they will not be as
:07:56. > :07:59.constrained in other countries in relation to emissions. You are
:08:00. > :08:05.talking about business in general there, the effective green policies.
:08:06. > :08:11.Very briefly, what did he say about the steel industry? He picked up on
:08:12. > :08:16.the fact that the steel industry was having problems and he mentioned
:08:17. > :08:20.compensatory factor involved in compensatory factor involved in
:08:21. > :08:25.trying to balance that. There is an issue about bumping as well. Other
:08:26. > :08:31.countries of course with a high cost economy, like the Netherlands, and
:08:32. > :08:38.high-level productivity, but nevertheless dumping is an issue.
:08:39. > :08:41.This is the big test because you talk today about industrial
:08:42. > :08:47.strategies and at the moment we have this critical issue going on in the
:08:48. > :08:51.country. It touches on everything we have talked about, the steel
:08:52. > :08:57.industry contributes ?2 billion to the UK balance of trade, represents
:08:58. > :09:03.tens of thousands of jobs, generates ?90,000 value added for every
:09:04. > :09:06.employee in the steel industry but one in six jobs in the industry is
:09:07. > :09:10.at risk and identity we have heard much about what we are going to do
:09:11. > :09:15.about it. It is not the same in other countries, America, France,
:09:16. > :09:21.Germany, they look after their steel industry, and we know the government
:09:22. > :09:26.has things they could do. They could provide some relief for the
:09:27. > :09:35.exorbitant rates that the steel industry forces, we could use
:09:36. > :09:39.British Steel in projects like HS2. This is from Peter Kox, how is
:09:40. > :09:44.replacing grants for nurses' education with loans going to
:09:45. > :09:47.increase the number of nurses? Effectively because the government
:09:48. > :09:52.is not paying them in advance any more. The government was paying in
:09:53. > :09:57.advance and now it is replaced by individual personal debt. I have an
:09:58. > :10:03.issue with this because I can see effectively between need a
:10:04. > :10:09.world-class education system that needs to be funded, and part of that
:10:10. > :10:14.funding is now coming from individuals, a lot of that funding,
:10:15. > :10:21.for individuals who hopefully will earn more because of that education.
:10:22. > :10:26.If you compare the UK to the States, you are seeing almost unheard-of
:10:27. > :10:30.levels of personal indebtedness leading to personal bankruptcy and a
:10:31. > :10:35.lot of that has come from student debt in America. That is the point
:10:36. > :10:38.of the question, if you are a nurse and you are going to lose these
:10:39. > :10:43.grants, why would you want to take out a loan to push for a job you
:10:44. > :10:47.might not be able to get? I think you will be able to get it a go is
:10:48. > :10:52.one of the problems we have had is the cost of agency nurses and having
:10:53. > :10:56.to import nurses from around the world because we have not been
:10:57. > :10:59.training enough. We absolutely need to train more nurses and for the
:11:00. > :11:07.government this is a cheaper way of doing it, letting the nurses fund it
:11:08. > :11:12.themselves. George Osborne is talking about ?6 billion for the NHS
:11:13. > :11:18.upfront. Rachael, this question is from Jill, where is George
:11:19. > :11:23.Osborne's new money for the NHS coming from? We have to go to the
:11:24. > :11:27.OBR on this because it is a range of issues in the wider economy but it
:11:28. > :11:33.is clear that as we have said there are still dig cuts in different
:11:34. > :11:37.departments. As ever it is a balancing act for the Treasury. One
:11:38. > :11:44.thing is low interest rates for longer. That is what has given him
:11:45. > :11:48.three to four Ilium pounds a year. A lot of city experts are coming into
:11:49. > :11:49.this project who thought his position on spending would be worse,
:11:50. > :11:59.not yet. -- independent forecasters thought
:12:00. > :12:06.after the bad deficit numbers last Friday he had less, not more.
:12:07. > :12:10.Interest rates have been low for six years, he could have borrowed this
:12:11. > :12:12.money and invested, as a lot of people suggested. Suddenly he has
:12:13. > :12:19.decided to do it now. He has been quite fortunate in relation to the
:12:20. > :12:19.OBR figures, they have given him some
:12:20. > :12:28.everyone, but interest rates you are right are at an all-time low and we
:12:29. > :12:56.have been Interest rates are starting to rise
:12:57. > :13:04.globally, given that global debt is to half times global GDP, so Britain
:13:05. > :13:05.needs to be in a strong position to weather that. -- interest rates
:13:06. > :13:12.might start to rise. has actually not been very
:13:13. > :13:18.successful in getting the deficit down. I don't
:13:19. > :13:20.but he is looking at a deficit of 70 billion for this year when
:13:21. > :13:26.previously his plan was for the deficit to be gone over the -- and
:13:27. > :13:33.over the last parliament he has borrowed billions of pounds more
:13:34. > :13:38.than he said he would. In a way your correspondent was right, he has been
:13:39. > :13:43.very lucky. These are small changes, basically he has freed up about ?10
:13:44. > :13:49.billion a year, half of that coming from the Bank of England statement
:13:50. > :13:52.about what it is going to do with its monetary. The other half is an
:13:53. > :14:00.increase in taxes which have come through in stamp duty and the
:14:01. > :14:05.apprenticeship levy. The big backdrop is this huge increase in
:14:06. > :14:09.borrowing compared to what he expected. Some very small changes
:14:10. > :14:15.this year really but it has enabled... They say it is better to
:14:16. > :14:21.be lucky than clever and we do need lucky chancellors. What he did in
:14:22. > :14:25.the last parliament, which we always applauded and I highlighted, he
:14:26. > :14:29.played a fantastic game of persuading the world markets that he
:14:30. > :14:40.was a hard chancellor bearing down on the economy and he didn't end up
:14:41. > :14:42.cutting spending that much. Next question, John says widely
:14:43. > :14:54.pensioners get benefits that they don't need? -- why do pensioners. If
:14:55. > :14:57.you look at all of the lines on welfare spending, they are
:14:58. > :15:06.effectively the same number if you go from 2016 through to 2021,
:15:07. > :15:11.essentially you get real cuts. The one line that shows huge growth is
:15:12. > :15:18.pensions. I have forgotten the exact number because it goes from ?85
:15:19. > :15:27.billion up to 105 Ilium pounds. A massive increase in pensions. Way
:15:28. > :15:30.above the rate of inflation. Essentially what they did is
:15:31. > :15:37.promised pensioners this triple lock, generous pension payments in
:15:38. > :15:42.future, and I think is fiscally unjustifiable given the cuts
:15:43. > :15:47.elsewhere, and pensions are a big part of our social bill. All of the
:15:48. > :15:52.other welfare has been cut so dramatically and pensions is up
:15:53. > :16:03.really quite fast. The cynical thing is to say that that is because
:16:04. > :16:07.pensioners vote. Yes. I think -- I think politicians would say that is
:16:08. > :16:12.why it is. We are talking about the universe Al-Ahly of all pensioners
:16:13. > :16:22.are regardless of wealth, getting a certain level of benefit. -- the
:16:23. > :16:26.universal quality of all pensioners. It is clear that there are some real
:16:27. > :16:30.choices being made, in Citizens Advice we see two and a half million
:16:31. > :16:36.people every year who are not feeling the financial security the
:16:37. > :16:41.Chancellor is talking about today, and we see a real different with --
:16:42. > :16:45.difference with pensioners. Do you have a lot of pensioners going
:16:46. > :16:53.through your doors? Yes, questions about pension credit and people
:16:54. > :17:10.asking about the pensionwise service. Some small announcements
:17:11. > :17:14.today... It is not all pensioners -- some pensioners are having a
:17:15. > :17:18.difficult time. Matt says why isn't some of the money for house building
:17:19. > :17:24.going towards social housing? 5 million are on the waiting lists. An
:17:25. > :17:32.excellent question. Obviously building some houses is better than
:17:33. > :17:37.not building some houses. 400,000 over the rest of parliament. It
:17:38. > :17:43.sounds like a lot but back in the day we built 300,000 a year or
:17:44. > :17:46.ambition and of course, as your ambition and of course, as your
:17:47. > :17:53.question says, these are houses for the private sector. I think the
:17:54. > :17:57.worry is that the motivation here is more about the housing market,
:17:58. > :18:04.looking after the builders of houses, the finances of houses,
:18:05. > :18:09.rather than the people who need houses. -- financiers of houses.
:18:10. > :18:13.There is that rhetoric that everybody should have a right to
:18:14. > :18:19.their own home, it goes back to the policy of selling off houses, the
:18:20. > :18:24.Conservatives just don't like social housing, is that it? There is some
:18:25. > :18:29.politics in there I'm sure. It is hugely important that we have more
:18:30. > :18:32.housing stock and people can move, it is important for businesses
:18:33. > :18:37.otherwise they can't get the skilled people they need in parts of the
:18:38. > :18:41.country with shortages. It is hugely important for the economy that we
:18:42. > :18:45.get construction going but there are tensions in the economy because the
:18:46. > :18:50.planning regime restricts the Department of Housing, people don't
:18:51. > :18:54.want the new developments, so there is a tension between the need for
:18:55. > :18:59.housing and the desire not to have housing on the green belt for
:19:00. > :19:02.example. The Tories have changed planning laws and today Osborne said
:19:03. > :19:09.we will ease up the planning laws but in the past but have tried and
:19:10. > :19:15.failed. The whole question has been dogged by not putting spades in the
:19:16. > :19:17.ground, getting on with developing infrastructure including housing, it
:19:18. > :19:23.has been a real problem for this government. We want to see actual
:19:24. > :19:27.action next. There is a real question about housing that works
:19:28. > :19:33.for everyone, welcome commitment for new homes but for private renters we
:19:34. > :19:37.see huge problems with that sector, the private renting sector not
:19:38. > :19:41.really fit for purpose, nothing there in the announcements today and
:19:42. > :19:50.cuts for housing benefit for those in the social sector. He has
:19:51. > :19:56.restricted that sector in elation to tax measures. The increase in buy to
:19:57. > :20:02.let, that could well lead to private landlords having to put up their
:20:03. > :20:07.prices. Or exit the market, which would make things even worse. I
:20:08. > :20:13.think his calculation was that there would be more houses for sale. We
:20:14. > :20:19.will have to see whether that works. But there is also a need for social
:20:20. > :20:24.rented property. You made the point about the green belt and planning
:20:25. > :20:28.and NIMBYs and it is very easy to blame these things but
:20:29. > :20:33.fundamentally, for the past five years, there has been a lack of
:20:34. > :20:37.ambition about investment plans. We agree about the necessity for
:20:38. > :20:42.investment, that now is the ideal opportunity to invest. Interest
:20:43. > :20:46.rates have than the lowest for 5000 years or something so it would we
:20:47. > :20:53.crazy not to borrow to do these things. We will have to move on.
:20:54. > :20:59.Ernie says if we are hard up why isn't the government collecting all
:21:00. > :21:06.of the tax it is owed? An entire accounting industry developed
:21:07. > :21:10.burning a fortune helping companies avoid paying tax and there is a
:21:11. > :21:17.strong lady. Jeremy Corbyn says a hell of a lot could be done. Jeremy
:21:18. > :21:22.Corbyn has ?120 billion to be found down the side of the sofa, I think
:21:23. > :21:27.that is somewhat optimistic. Osborne is trying but they have been trying
:21:28. > :21:32.for sometime. This is a global issue, not really something that can
:21:33. > :21:36.be sold, and the evidence is that governments around the world are
:21:37. > :21:43.more willing to -- to incorporate than five or ten years ago. The OECD
:21:44. > :21:50.is looking at this and already we have seen tax havens being cracked
:21:51. > :21:56.down on. It is happening but there is an entire accounting industry
:21:57. > :22:03.developed around avoiding tax and that will take quite some time to
:22:04. > :22:07.change. It is up to us as individuals, shareholders, citizens,
:22:08. > :22:13.it is said to companies, it is your job to contribute to this nation
:22:14. > :22:16.that you are based in. Social pressure can have quite a lot of
:22:17. > :22:22.effect, naming and shaming companies, Facebook, whatever, and
:22:23. > :22:28.almost even a consumer boycott. That will help, plus the changes to rules
:22:29. > :22:35.that will be slow. John, there are some of your members who would take
:22:36. > :22:39.advantage of the way the tax laws are set up in this country, let's
:22:40. > :22:43.put it that way, and they are making clear that if it is possible for
:22:44. > :22:48.them to have a certain tax arrangement which means they pay
:22:49. > :22:53.less then that is absolutely fine. Do you think the rules need to be
:22:54. > :22:57.tightened up? You hit the nail on the head, it is about the rules. If
:22:58. > :23:07.companies are operating within the law it
:23:08. > :23:11.law, get on and do it. Of course it is a global issue, we have to beat
:23:12. > :23:16.competitive in a global market, which is why we seeing constant
:23:17. > :23:21.rises in consumption taxes and being there taxes like business rates,
:23:22. > :23:26.because they are the ones you can actually get and there is no
:23:27. > :23:29.escaping them. Things like corporation tax are much more
:23:30. > :23:35.difficult to get your hands on. There is much more Eichmann to get
:23:36. > :23:38.rid of corporation tax completely. In the Treasury's announcement
:23:39. > :23:44.today, look at the lines, income taxes are going up by 50%, national
:23:45. > :23:54.insurance up by 50%, corporation tax pretty much flat over the next
:23:55. > :23:58.spending review. 18% corporation tax rate is very low. I disagree, it is
:23:59. > :24:04.not lack in white, it is great, and there is dark and light grey, and
:24:05. > :24:11.companies should be much further to wards the light grey. It is not that
:24:12. > :24:16.simple and they should have a social responsibility to pay an appropriate
:24:17. > :24:27.18%. Abolish corporation tax, a polish it. Where will that 50
:24:28. > :24:32.billion come from? The final question, how can we be assured that
:24:33. > :24:37.young workers will be able to get on the property ladder? Rachael, nobody
:24:38. > :24:44.can guarantee that, can they? Know, and I don't think we have heard much
:24:45. > :24:49.today that makes that easy. 200,000 starter homes. But a lot of people
:24:50. > :24:55.who are struggling to make any kind of deposit, they are in households
:24:56. > :24:58.that are not saving anything, so there are challenges here. A lot of
:24:59. > :25:05.young people are struggling much trying to make things add up,
:25:06. > :25:15.particularly with childcare costs costs on top of bills and rent. For
:25:16. > :25:25.a lot of your members this is a huge problem, Jeff. It is a fundamental
:25:26. > :25:28.issue and it takes us back to the Autumn Statement, there are some
:25:29. > :25:32.fundamental problems with the economy, that it is not delivering
:25:33. > :25:36.for large sections of the publication. The one thing we have
:25:37. > :25:44.not discussed today are cuts to local government spending. The
:25:45. > :25:48.government has signalled its intention to scrap the grants for
:25:49. > :25:53.local authorities. The head of the LGA says even if councils stopped
:25:54. > :25:58.filling potholes, closed all children's centres, libraries,
:25:59. > :26:04.leisure centres, etc, they would still have a financial black hole.
:26:05. > :26:09.There are some very difficult things in this spending review. It has been
:26:10. > :26:12.great having you all in looking at some of the issues coming out of the
:26:13. > :26:18.Chancellor's words today. Many, many thanks to you.
:26:19. > :26:19.Much more on the spending review coming up but now time for the
:26:20. > :26:24.weather news.