Autumn Statement

:00:08. > :00:16.Growth is up, the deficit is down. Will there be jam today in the

:00:17. > :00:43.Autumn Statement, or just another promise of jam tomorrow?

:00:44. > :01:02.Will there be jam today in the Autumn Statement, or just

:01:03. > :01:11.Will there be jam today in the tell on economic growth. He had

:01:12. > :01:11.Will there be jam today in the over an hour he will be able to say

:01:12. > :01:16.that growth is twice what it was stronger next year and he has

:01:17. > :01:24.managed to reduce borrowing by more than was

:01:25. > :01:24.are told, without fanfare and with Labour's charge ringing in his ears

:01:25. > :01:35.that people Labour's charge ringing in his ears

:01:36. > :01:44.Chancellor left the Treasury a couple of... Is there

:01:45. > :01:44.Chancellor left the Treasury a from the BBC as the Chancellor gets

:01:45. > :01:54.Chancellor left the Treasury a into his car with the Chief

:01:55. > :01:54.Chancellor left the Treasury a across Parliament Square and into

:01:55. > :02:03.new Palace across Parliament Square and into

:02:04. > :02:13.of the speech and Labour's response the moment the

:02:14. > :02:13.of the speech and Labour's response are here until two copy with expert

:02:14. > :02:21.analysis and reaction are here until two copy with expert

:02:22. > :02:27.politicians of all stripes to find out what they

:02:28. > :02:27.politicians of all stripes to find assessing the effect it has on the

:02:28. > :02:37.political landscape. I assessing the effect it has on the

:02:38. > :02:48.and speaking to local businesses. What

:02:49. > :02:48.and speaking to local businesses. answering e-mails, tweets and texts.

:02:49. > :02:55.All answering e-mails, tweets and texts.

:02:56. > :03:06.finest public service broadcasting, of

:03:07. > :03:06.finest public service broadcasting, duration, Nick Robinson, the BBC's

:03:07. > :03:17.political duration, Nick Robinson, the BBC's

:03:18. > :03:26.tired because I have a duration, Nick Robinson, the BBC's

:03:27. > :03:48.what Ed Miliband had duration, Nick Robinson, the BBC's

:03:49. > :03:54.are battling with stagnant wages and duration, Nick Robinson, the BBC's

:03:55. > :04:03.far better than this government. -- duration, Nick Robinson, the BBC's

:04:04. > :04:11.in the Autumn Statement. Let's get a duration, Nick Robinson, the BBC's

:04:12. > :04:25.Back at the budget in March, duration, Nick Robinson, the BBC's

:04:26. > :04:25.the amount the government would be borrowing

:04:26. > :04:25.the amount the government would be to get the economy growing or reduce

:04:26. > :04:35.the deficit. As to get the economy growing or reduce

:04:36. > :04:50.her acolytes are wondering if a more Thatcherite policy might do

:04:51. > :04:50.her acolytes are wondering if a more a drubbing at the local elections

:04:51. > :04:59.her acolytes are wondering if a more May. A royal baby and

:05:00. > :04:59.her acolytes are wondering if a more in Brighton, Labour were looking for

:05:00. > :05:05.a new line of in Brighton, Labour were looking for

:05:06. > :05:16.price freeze to tackle what Labour were now calling the

:05:17. > :05:16.price freeze to tackle what Labour he would help with free school meals

:05:17. > :05:22.for younger children he would help with free school meals

:05:23. > :05:34.conference he would scrap increases in fuel duty, and

:05:35. > :05:42.2015. Talk of austerity had given way to spending and

:05:43. > :05:48.2015. Talk of austerity had given proposed a windfall tax on energy

:05:49. > :05:48.companies. proposed a windfall tax on energy

:05:49. > :05:57.taxes. With the results of that review announced

:05:58. > :05:57.taxes. With the results of that improving economy today?

:05:58. > :06:05.On the one improving economy today?

:06:06. > :06:15.better, the deficit is back to tumbling again.

:06:16. > :06:19.better, the deficit is back to you. That is exactly right.

:06:20. > :06:43.better, the deficit is back to up and say, things are

:06:44. > :07:12.better, the deficit is back to were told,

:07:13. > :07:32.better, the deficit is back to think, this is a long-term plan that

:07:33. > :07:32.better, the deficit is back to critique that we are poorer than we

:07:33. > :08:10.were There is going to be a bit of better

:08:11. > :08:16.news. A unique experience for this Chancellor. If we go back to his

:08:17. > :08:23.first budget after the election in 2010, he was forecasting that his

:08:24. > :08:31.austerity would lead to a deficit, a gap between the tax revenues and

:08:32. > :08:37.what he was spending of ?60 billion in the current financial year. It

:08:38. > :08:42.hasn't quite worked out like that. We roll forward to the budget of

:08:43. > :08:48.this year, and then he predicted, forecast, that that deficit for this

:08:49. > :08:55.year would be twice what he originally hoped. We are in the

:08:56. > :09:00.middle of a bit of an economic recovery which has been going on for

:09:01. > :09:05.six to nine months. It is a housing market led recovery and a bit more

:09:06. > :09:10.consumer spending. VAT is up, stamp duty is up. The respected IFS now

:09:11. > :09:15.thinks that the deficit might actually be a little bit lower than

:09:16. > :09:24.he expected in March, at about ?113 billion. Does that mean if he wanted

:09:25. > :09:29.to come he would have a bit more money for some giveaways. It is

:09:30. > :09:33.still an awful lot of money, not far off 7% of GDP and most economists

:09:34. > :09:37.would say it is not sustainable. He will not want to take risks in this

:09:38. > :09:45.budget, it will be steady as she goes. One of the things that will

:09:46. > :09:50.reinforce his determination not to do anything that looks like a

:09:51. > :09:55.giveaway is because his ambition to balance the books by the end of his

:09:56. > :09:59.Parliament. Maybe he is on course to do that. Let's look at what he said

:10:00. > :10:05.in March would be happening to rowing. He said that over a period

:10:06. > :10:09.of four years, it would be down to ?43 billion, which is still a lot of

:10:10. > :10:12.money to be borrowing. And the key point about that is that every year

:10:13. > :10:18.you borrow that sum of money, it adds to record levels of national

:10:19. > :10:25.debt. That is another reason why he can't afford to take big risks. So

:10:26. > :10:32.where is the national debt at the moment? It is well over ?1 trillion.

:10:33. > :10:38.Over his forecasting time horizon, he expects it to rise to over ?1.6

:10:39. > :10:45.trillion. Which is on his calculations, 85% of GDP. Very high

:10:46. > :10:50.by historical standards. Gordon Brown, a Labour Chancellor, took

:10:51. > :10:58.pride in reducing that ratio to below 40%. In labour's first-term.

:10:59. > :11:04.On the EU's measure of these things, we are going to be over 100%

:11:05. > :11:10.debt to GDP ratio. The public finances, for all the better news,

:11:11. > :11:13.still don't look all that healthy. Is it really true that it is part of

:11:14. > :11:18.the Tory calculation that we don't want to big up things too much. I

:11:19. > :11:24.saw a quote from a Tory aide, because people may think they can

:11:25. > :11:27.take a risk with Labour. There has always been a worry that the

:11:28. > :11:30.public's attitude to Tory governments is, call them in when

:11:31. > :11:35.things are bad and when the smell has gone away, you can go back to

:11:36. > :11:38.Labour. That is the Tory view of what many in the electorate think.

:11:39. > :11:43.They want to say that the problem is still there. Making progress, so

:11:44. > :11:48.cheer up, but the problem is not over, you have got to stick with

:11:49. > :11:52.them. That will be the message. George Osborne has been criticised

:11:53. > :11:56.by Labour, but by some of his own team for looking a bit smug when the

:11:57. > :12:01.economy started to grow. Saying, look at me, haven't I proved you

:12:02. > :12:06.wrong? He will be desperately tempted to say to Ed Balls, you said

:12:07. > :12:12.it was going to be a triple dip. But he needs to say, we asked a halfway

:12:13. > :12:16.through a plan. Keep us in the job. George Osborne, smug? Who would have

:12:17. > :12:21.thought it. Or Ed Balls for that matter!

:12:22. > :12:25.Throughout today's programme we will be getting reaction from people in

:12:26. > :12:31.Greater Manchester, Susannah Streeter is there for us. I am in a

:12:32. > :12:36.real temple of retail at the Trafford Centre in Greater

:12:37. > :12:41.Manchester. It is a key time for small businesses in the run-up to

:12:42. > :12:46.Christmas. Their success will depend on how confident consumers and

:12:47. > :12:49.shoppers feel. We have heard that growth has returned to the UK

:12:50. > :12:53.economy with a vengeance since March, but is that translating

:12:54. > :12:59.through to a feel-good factor for small businesses? What help do they

:13:00. > :13:05.need from the Chancellor? Liz Harris is from the Federation of small. You

:13:06. > :13:09.have been canvassing around your local area -- Federation of small

:13:10. > :13:16.businesses. What reaction are you getting? Surprisingly positive. The

:13:17. > :13:20.fact that people are spending the money is reflected in sales on the

:13:21. > :13:24.street. There are shops on the Main Street that are paying nearly as

:13:25. > :13:29.much in business rates as in rent, and it makes little difference what

:13:30. > :13:33.money they are taking in. The key is reimbursement so that exports can

:13:34. > :13:39.grow, are you seeing evidence of that -- reinvestment. I am seeing

:13:40. > :13:43.evidence that it is getting better but until we are seeing some of the

:13:44. > :13:47.things we are hoping to get, I don't think we will have the confidence to

:13:48. > :13:53.invest. But if we do get them, small businesses are in a good position.

:13:54. > :13:58.Lots more reaction bit later to the statement. Small businesses looking

:13:59. > :14:02.for help, but consumers also looking for help with those sky-high energy

:14:03. > :14:08.bills. Richard Lloyd is from the campaigning group, which. The

:14:09. > :14:12.Chancellor is going to announce something about the green levies on

:14:13. > :14:17.energy bills. What is expected and how far do you think you should go?

:14:18. > :14:24.It is looking like about ?50 a year of the average bill, that is ?1400

:14:25. > :14:27.for most people right now. It is a step in the right direction, a bit

:14:28. > :14:32.of help for people to buying a home, who commit to making it more energy

:14:33. > :14:36.efficient. But this is a small amount of money to people who are

:14:37. > :14:41.really struggling with the cost of living right now. Four in ten people

:14:42. > :14:46.tell us that they are feeling the squeeze. Fewer people than last year

:14:47. > :14:49.are gloomy about the economy and the prospects, but the big number the

:14:50. > :14:54.Chancellor has do address is that only one in six are saying they are

:14:55. > :15:00.not feeling in their pockets, in their household budgets, benefits of

:15:01. > :15:04.economic recovery. Much more from you and your view on what the

:15:05. > :15:12.Chancellor has come a bit later on in the programme. There is lots of

:15:13. > :15:16.long-term planning that has do go on and there is likely to be some talk

:15:17. > :15:20.about raising the retirement age to 68, sooner than we first thought.

:15:21. > :15:24.Paul Lewis, you thought this was going to be coming along but it will

:15:25. > :15:34.have a real effect on long-term financial planning. Yes, especially

:15:35. > :15:40.younger people. If you are in your 40s, it is going to be 68. In your

:15:41. > :15:43.30s, 69. If you are in your 20s, it could be 70 before you get your

:15:44. > :15:47.state pension. You have got to plan to make sure you are saving enough,

:15:48. > :15:51.you will have longer to save, but what job could you do at that age?

:15:52. > :15:55.Lots of people tweeting about that this morning. Perhaps we should

:15:56. > :15:59.start saving more now, but with interest rates as they are, it is

:16:00. > :16:03.not a viable option for many people. No, people are starting to

:16:04. > :16:07.spend their savings in places like this, as we have seen today, so it

:16:08. > :16:12.is going to be difficult for people to save up. We are also getting

:16:13. > :16:15.reaction to the announcement about car tax, vehicle excise duty, the

:16:16. > :16:20.piece of paper that sticks on your windscreen. That will disappear from

:16:21. > :16:22.next year, it will all be done electronically, and that is how

:16:23. > :16:26.police will check whether your car is taxed or not. You will be able to

:16:27. > :16:31.pay by direct debit, which will spread the cost out, although

:16:32. > :16:34.eventually they will have to raise it because the amount that people

:16:35. > :16:40.pay is coming down as vehicles get more efficient. You are going to be

:16:41. > :16:45.taking viewers' questions all day, how should they get in touch? They

:16:46. > :16:56.can get in touch on the website, they can tax, 61124, and they can

:16:57. > :17:00.tweet us. Thank you very much, Paul Lewis, we will hear a lot more from

:17:01. > :17:04.Paul later, and we will be gauging reaction from all the shoppers here

:17:05. > :17:09.and more local businesses to the statement. Back to you.

:17:10. > :17:17.Thanks, Susannah. You can get the latest on the statement on the BBC

:17:18. > :17:20.website, you can visit the live page on the Autumn Statement. You will

:17:21. > :17:24.find in-depth coverage, you can discover what the measures mean for

:17:25. > :17:28.you. As well as sending your comments and questions via the

:17:29. > :17:32.website, you cannot so take part in the conversation, follow the debate

:17:33. > :17:36.on Twitter, all of our correspondents and experts will be

:17:37. > :17:44.using one of the hashtags on your screen, #AS2013.

:17:45. > :17:48.It is time to find out what the City was expecting from the Chancellor

:17:49. > :17:53.today, and David Jones is at IG Index. What you want the Chancellor

:17:54. > :17:58.to say? I think Robert Peston summed it up fairly well when he said we

:17:59. > :18:01.are expecting steady as we go in the Autumn Statement. I cannot see that

:18:02. > :18:05.he will want to do anything that rocks the boat. We have all been

:18:06. > :18:09.surprised, both in the City and government, about the economic

:18:10. > :18:13.performance of the UK over the last six months. I do not think Mr

:18:14. > :18:17.Osborne can afford to be too smug, because we know how quickly things

:18:18. > :18:23.can change, so we are expecting no major surprises. It is interesting,

:18:24. > :18:27.what he may do with corporation tax, to try to encourage investment in

:18:28. > :18:32.the UK. I think that will be well received, to try to stimulate the

:18:33. > :18:36.economy a little bit further. We heard yesterday that Goldman Sachs

:18:37. > :18:40.has said it would move much of its European business and the workforce

:18:41. > :18:44.from London to Paris or Frankfurt if Britain leaves the EU. Was that a

:18:45. > :18:51.bombshell in the City? I think it was a surprise, but at the moment

:18:52. > :18:55.not many people are giving too much credence to that. We have heard over

:18:56. > :19:00.the years how banks would move away from London if the taxation system

:19:01. > :19:04.changed, for example. We have not necessarily seen an exodus there. I

:19:05. > :19:09.think people are not too worried. If more banks were saying the same

:19:10. > :19:14.things, other employers, maybe. Glass half full, glass half empty as

:19:15. > :19:21.far as you are concerned? Cautiously glass half full, but we know how

:19:22. > :19:25.quickly it can get spilt! Vice if you have just joined us, you are

:19:26. > :19:31.watching special coverage of the Autumn Statement at Westminster.

:19:32. > :19:34.I think we have got a helicopter shot coming up, there it is,

:19:35. > :19:39.beautiful, you know it is important when we have a helicopter up in the

:19:40. > :19:43.sky, something big is happening, the wonderful new skyline of London, it

:19:44. > :19:51.has been transformed over the last 20 years, all these new buildings,

:19:52. > :19:57.the She's Greater, the gherkin, that is the heart of the City that we are

:19:58. > :20:03.over. Let's go from that part of the city to Westminster, let's join

:20:04. > :20:07.Matthew Amroliwala, who is outside the House of Commons.

:20:08. > :20:11.Good morning. Labour has called it a cost of living crisis, it is a

:20:12. > :20:14.potent political message, and one that the Government has acknowledged

:20:15. > :20:19.with its efforts to bear down on energy bills, but how much are we

:20:20. > :20:22.really feeling the pinch? We asked Paul Johnson of the Institute for

:20:23. > :20:28.Fiscal Studies do investigate for us.

:20:29. > :20:32.It is easy to forget how big an economic earthquake we have lived

:20:33. > :20:35.through. National income fell by more and stayed lower for longer

:20:36. > :20:42.than in the recessions of 1980s or 1990s, and even compared with the

:20:43. > :20:45.recession of the 1930s. The result is that once you take inflation into

:20:46. > :20:47.account, it looks like household income is that once you take

:20:48. > :20:50.inflation into account, it looks like household incomes now will by

:20:51. > :20:54.about 5% less than back in Christmas 2007 before the financial crisis

:20:55. > :20:58.hit. And because incomes actually grew rather slowly in the years

:20:59. > :21:02.before the recession, we are in the unprecedented position of having no

:21:03. > :21:06.more buying power now than we did around the turn-of-the-century,

:21:07. > :21:10.nearly a decade and a half with no income growth for many people. The

:21:11. > :21:14.pain has been quite evenly spread across the income scale, though.

:21:15. > :21:21.Whether you prefer to shop at high end luxury stores like this... Or

:21:22. > :21:25.instead preferred the other end of the high street, where you can get

:21:26. > :21:30.good offers at knock-down prices. Why is that? Well, the labour market

:21:31. > :21:35.has been remarkably resilient. There are more people in jobs now than in

:21:36. > :21:39.2007, and unemployment, while high, has risen much less than in the less

:21:40. > :21:44.deep recessions of the early 1980s and early 1990s. For many of those

:21:45. > :21:47.who are dependent on benefits, the Government squeeze on welfare

:21:48. > :21:52.payments is only just beginning to bite. But most of us have taken a

:21:53. > :21:57.hit to our incomes. Back in Christmas 2007, average earnings

:21:58. > :22:02.were ?393 per week. Now they are about ?450 per week. The trouble is

:22:03. > :22:07.that, after inflation, that is worth about 8% less than back in 2007. And

:22:08. > :22:13.inflation means that the things that we buy have got more expensive since

:22:14. > :22:17.Christmas 2007 by about 20%. Within that, energy prices have risen by as

:22:18. > :22:23.much as 60%, and food prices by about 30%. Not everyone is worse

:22:24. > :22:26.off, though. Historically low interest rates have kept housing

:22:27. > :22:29.costs down for homeowners, and older people are generally done much

:22:30. > :22:34.better than younger people. But overall our incomes have gone down,

:22:35. > :22:38.and the cost of the basics have gone up. That means there is less left.

:22:39. > :22:51.Though. -- less left for Santa.

:22:52. > :22:58.Let's get political thoughts from Kwasi Kwarteng, Cathy Jamieson and

:22:59. > :23:02.Simon Hughes. Thank you for your time, Labour has set the political

:23:03. > :23:07.agenda throughout the course of the summer on energy bills, the cost of

:23:08. > :23:11.living. Is today an opportunity to wrestle it back, do you think?

:23:12. > :23:16.Absolutely, there has been a lot of media interest in the cost of living

:23:17. > :23:20.issue. Ed Miliband gave a good speech with his price, , freezing

:23:21. > :23:26.energy prices, and today is a time for the government to wrest back the

:23:27. > :23:29.agenda. The economy is growing, against what the doom mongers said,

:23:30. > :23:32.it has found a reasonable amount of growth that we have been looking

:23:33. > :23:40.for. Nick Clegg was saying the economy is growing but people do not

:23:41. > :23:43.actually feel it, so many people do act knowledge there is that

:23:44. > :23:48.disconnect there, that perhaps you are out of touch. No, I absolutely

:23:49. > :23:51.agree that people in my constituency and up and down the country are

:23:52. > :23:55.feeling more squeezed than they have done for a while, and it will take

:23:56. > :23:58.time before people realise that the economy is actually growing,

:23:59. > :24:02.contrary to what the Labour Party was saying. When will they feel it,

:24:03. > :24:06.though? I think the treasury experts are saying this summer, people will

:24:07. > :24:10.feel that the economy is on the mend, that it is picking up and that

:24:11. > :24:16.we are going to slightly more prosperous times. You talked about

:24:17. > :24:20.Ed Miliband and described it as a con, your solution, ?50 off, that

:24:21. > :24:24.leaves the energy, and with their profits and touched. The taxpayer is

:24:25. > :24:29.taking the hit, people will be rather angry at that. What is taking

:24:30. > :24:33.the hit is government spending, but why it is a con is because what

:24:34. > :24:37.happens after you have frozen prices is that they tend to go up

:24:38. > :24:42.massively. This happened in the 1960s and 70s, they had a freeze,

:24:43. > :24:48.prices went up... You have not touched profits. We have not touched

:24:49. > :24:51.profits yet. Cathy Jamieson, in terms of the general economy,

:24:52. > :24:55.unemployment is down, inflation down, growth up, George Osborne has

:24:56. > :25:00.got this right, despite, or four years, you saying this would not

:25:01. > :25:03.work. What we have added three wasted years, and I am glad there

:25:04. > :25:07.has been some acknowledgement from the Conservatives this morning that

:25:08. > :25:10.Ed Miliband was right on the cost of living, because ordinary families

:25:11. > :25:15.are feeling the pressure, and we are estimating that for an ordinary

:25:16. > :25:19.working household it is about ?1600 per year. Any improvement in the

:25:20. > :25:22.economy is to be welcomed, but this is not affecting ordinary people. It

:25:23. > :25:27.has been a recovery for the people at the top. There may be a lag in

:25:28. > :25:30.terms of the national indicators, as we were saying, but the prediction

:25:31. > :25:35.is we will have the strongest growth in the G7 in 2014. The Government

:25:36. > :25:41.could do more. We saw in that package, the energy price rise, they

:25:42. > :25:46.could do more on that. They cannot say it is a con... Free school meals

:25:47. > :25:51.at primary school, potentially a freeze on fuel duty still, is that

:25:52. > :25:55.not enough? You would welcome those things, I assume. I would want to

:25:56. > :25:59.see more done on energy prices, because that is where people are

:26:00. > :26:03.concerned. Although the Government are offering some money off, it is

:26:04. > :26:07.not as much as it could be. Are you still stuck on spending more and

:26:08. > :26:11.cutting lest you might it is not a question of spending more and

:26:12. > :26:15.getting less. The issue is, how will this affect ordinary people? The

:26:16. > :26:20.recovery is not helping ordinary families, it is for those at the top

:26:21. > :26:25.at this point in time. Simon Hughes, on that point, if there is sustained

:26:26. > :26:31.recovery, is it a fair recovery? Well, it needs to be a fair

:26:32. > :26:35.recovery. But is it? The Government policy is that it should be, and the

:26:36. > :26:39.key issue for us, a Liberal Democrat proposition, is that you take people

:26:40. > :26:44.on low and middle incomes out of tax as far as possible, and we are on

:26:45. > :26:49.target for that, the first ?10,000... People do not talk about

:26:50. > :26:55.tax thresholds, they talk about wages, they talk about whether they

:26:56. > :26:58.have more money... They have ?700 less to pay to the Chancellor every

:26:59. > :27:02.year in tax. They talk about the fact that they do not have to pay

:27:03. > :27:05.tax at all, some of them, because their income means they are below

:27:06. > :27:10.the tax threshold, and we want to put that higher. But yes, there are

:27:11. > :27:13.things we need to do, council tax frozen, help with childcare costs,

:27:14. > :27:19.free school meals. All things, we are conscious, that help the budgets

:27:20. > :27:23.of ordinary people. A final being on austerity, we have had that

:27:24. > :27:26.announcement that we're going to get spending cuts in Whitehall, another

:27:27. > :27:32.?1 billion on top of everything else for the next three years. When is

:27:33. > :27:36.austerity going to come to an end? You told us back in 2010 that it

:27:37. > :27:42.would be 2015, but it is looking more like 2020 now. All the external

:27:43. > :27:46.commentators who know about these things say that our economy is going

:27:47. > :27:50.on the right direction, we have grown in the economy, growing jobs,

:27:51. > :27:55.people in work, growing companies... And austerity ends

:27:56. > :27:58.when? We cannot predict that, but in the next Parliament, and before the

:27:59. > :28:01.next Parliament, we will see that growth has come because of the

:28:02. > :28:06.policies of the Government, difficult though they have been. Of

:28:07. > :28:09.course, there are more cuts coming after the election as well. Thank

:28:10. > :28:12.you very much for your time and thoughts, plenty more political

:28:13. > :28:16.reaction from here in a little while, now it is back to you in the

:28:17. > :28:21.studio, Andrew. Thanks, Matthew, it is just coming

:28:22. > :28:26.up to 11:15am, you are watching a special Daily Politics programme on

:28:27. > :28:29.the Autumn Statement. Let's get full use of the helicopter, it is

:28:30. > :28:36.circling around the face of Big Ben, a rather nice day, autumnal, a

:28:37. > :28:42.winter's day, and we welcome viewers from the BBC News Channel who are

:28:43. > :28:44.joining BBC Two for this Daily Politics special coverage of the

:28:45. > :28:47.Autumn Statement. Now, the Chancellor will get to speak in a

:28:48. > :28:52.few minutes to deliver this Autumn Statement, we will be crossing live

:28:53. > :28:56.as soon as he does. But first, some of the measures that we expect him

:28:57. > :29:00.to announce. It has been one of the most leaked Autumn Statements in

:29:01. > :29:03.living memory, and that is saying something! We know the green levies

:29:04. > :29:07.will be cut from energy bills, he got that out because he wants the

:29:08. > :29:12.concentration today to be on the economy, not energy bills. We know

:29:13. > :29:16.from Nick Clegg at the Liberal Democrat conference that infants

:29:17. > :29:20.School meals are going to be free, and we know from the Tory conference

:29:21. > :29:23.that there is going to be a married couples tax allowance. They and we

:29:24. > :29:27.have already been told that fuel duty is to be frozen again, likely

:29:28. > :29:32.to be frozen for the rest of this Parliament. We know that small

:29:33. > :29:37.businesses are going to get their rate relief extended, and we know

:29:38. > :29:42.that he is going to cap business rates at 2%, and that national

:29:43. > :29:48.insurance Contributions Bill those aged under 21 are going to be

:29:49. > :29:52.scrapped. The other thing that would be scrapped as the car tax disc,

:29:53. > :29:57.that little piece of paper on the windscreen. Sadly, the tax itself is

:29:58. > :30:00.not going to be scrapped! The pension age rise, which will hit

:30:01. > :30:06.Nick Clegg above all, is going to be brought forward. It was always going

:30:07. > :30:12.to rise, but they are now going to speed up the process by which it

:30:13. > :30:16.goes beyond 65, 268, 270. No doubt by the time of the election you will

:30:17. > :30:20.be 93 before you are allowed to retire! There will be another ?1

:30:21. > :30:24.billion on spending cuts in central government, no doubt to pay for the

:30:25. > :30:33.extra spending that he's getting elsewhere. Let's find out what he is

:30:34. > :30:41.saying, we can go straight to the House of Commons.

:30:42. > :30:53.Britain's economic plan is working. But the job... The job is not done.

:30:54. > :30:59.We need to secure the economy for the long-term. And the biggest risk

:31:00. > :31:08.to that comes from those who would abandon the plan. We seek a

:31:09. > :31:12.responsible recovery. One where we don't squander the gains we have

:31:13. > :31:17.made but go on taking the difficult decisions. One where we don't repeat

:31:18. > :31:23.the mistakes of the past, but this time spot the debt bubbles before

:31:24. > :31:26.they threaten financial stability. A responsible recovery where we don't

:31:27. > :31:30.pretend we can make this nation better off by writing checks to

:31:31. > :31:35.ourselves, and instead make the hard choices. We need a Government that

:31:36. > :31:41.lives within its means, in a country that pays its way in the world.

:31:42. > :31:47.Three and a half years ago I set out our long-term economic plan in the

:31:48. > :31:52.emergency budget. That plan restored stability in a fiscal crisis. But it

:31:53. > :31:56.was also designed to address the deep-seated problems of

:31:57. > :32:03.unsustainable spending, uncompetitive taxes and unreformed

:32:04. > :32:07.services for which there are no quick fixes. Over the last three

:32:08. > :32:11.years we have stuck to our guns, worked through the plan. We have

:32:12. > :32:17.done so in the face of a sovereign debt crisis abroad. And at home, in

:32:18. > :32:20.the face of opposition from those who got Britain into this mess in

:32:21. > :32:25.the first place, and have resisted every cut, every reform and every

:32:26. > :32:30.effort to get us out of that mess. We have held an nerve while those

:32:31. > :32:36.who predicted that there would be no growth until we turn the spending

:32:37. > :32:44.taps back on have been proved, pensively wrong. -- comprehensively

:32:45. > :32:48.wrong. Thanks to the sacrifice and the endeavour of the British people

:32:49. > :32:53.I can today report the hard evidence that shows our economic plan is

:32:54. > :33:00.working. I can also report the hard truth that the job is not yet done.

:33:01. > :33:04.Yes, the deficit is down but it is still far too high. And today we

:33:05. > :33:10.take more typical decisions. Yes, the forecast show that growth is up

:33:11. > :33:15.but the same forecasts show growth in productivity is still too low,

:33:16. > :33:20.and today we set out further economic reforms. Yes, jobs are up

:33:21. > :33:24.and unemployment is down but too many of our young people lack the

:33:25. > :33:30.skills to fill those jobs and the opportunities to acquire them. Now

:33:31. > :33:36.we take bold steps to remove the cap on aspiration. Yes, businesses are

:33:37. > :33:39.expanding at business taxes are still too high and exports are too

:33:40. > :33:47.low, and we must address that. And yes, real household disposable

:33:48. > :33:50.income is rising at the effects of the financial crash on family

:33:51. > :33:54.budgets and the cost of living are still being felt. Where we can

:33:55. > :34:01.afford to help hard-working families, we will continue to do so.

:34:02. > :34:06.Order, I apologise. Please calm yourself, man. You're bellicose

:34:07. > :34:13.barracking is detectable several miles.

:34:14. > :34:20.Thank you. The hard work of the British people is paying off and we

:34:21. > :34:23.will not squander their efforts. We will secure the economy for the

:34:24. > :34:28.long-term, and this statement sets out how. Let me turn to the report

:34:29. > :34:33.from the Office for Budget Responsibility. Again, I thank

:34:34. > :34:39.Robert Choate and his team for their rigorous and independent work. The

:34:40. > :34:42.OBR report notes that the Office for National Statistics have reassessed

:34:43. > :34:52.the depths of the great recession. A fall in GDP from peak to trough

:34:53. > :35:02.20,008, and 2009 -- between 2008, and 2009, was a staggering 7.2%.

:35:03. > :35:07.?112 billion was wiped off our economy, around ?3000 for every

:35:08. > :35:11.household in this country, and it was one of the sharpest falls in the

:35:12. > :35:18.national income of any economy in the world. It is a reminder of the

:35:19. > :35:23.economic calamity that befell Britain. The simple fact that our

:35:24. > :35:26.country remains poorer as a result of it and that a lot of work still

:35:27. > :35:31.remains to be done to put that right. The data revisions also show

:35:32. > :35:44.something else. There was no double-dip recession. Let me turn to

:35:45. > :35:50.the future. At the time of the Budget in March, the OBR forecast

:35:51. > :35:54.that growth would be 0.6%. Today they have more than double that

:35:55. > :36:01.forecast, and the estimate for growth will be 1.4%. Next year,

:36:02. > :36:07.instead of growth of 1.8%, they are now forecasting 2.4%. With faster

:36:08. > :36:18.growth now, it means they have revised the following four years.

:36:19. > :36:21.Growth over the forecast period is significantly up. It is still not as

:36:22. > :36:25.strong as we would like it to be, but this is the largest improvement

:36:26. > :36:38.to current year economic forecast that any -- than any Budget Autumn

:36:39. > :36:43.Statement for 14 years. -- Budget or Autumn Statement. I can also report

:36:44. > :36:50.that Britain is currently growing faster than any other major advanced

:36:51. > :36:56.economy. Faster than France, which is contracting. Faster than Germany,

:36:57. > :37:00.even America. And that contrast itself points to the risks that

:37:01. > :37:05.remain for the night kingdom from abroad and the weakness of many of

:37:06. > :37:13.our main trading partners -- the United Kingdom. The debt risk is a

:37:14. > :37:22.recurrence of the instability in the eurozone. The OBR still forecast

:37:23. > :37:25.that the eurozone will shrink by 0.4% this year. Their growth

:37:26. > :37:29.forecast for the US and emerging markets have also been revised down

:37:30. > :37:33.and world trade has been weaker than they expected in March. While our

:37:34. > :37:37.exports are growing, they are not growing as fast as we would like,

:37:38. > :37:42.because we are too dependent on markets in Europe and North America.

:37:43. > :37:46.The Prime Minister's visit to China is the latest depth in this

:37:47. > :37:50.Government's determined plan to increase British exports to the

:37:51. > :37:57.faster growing emerging markets, something our country should have

:37:58. > :38:04.done many years ago. Today, I am doubling to ?50 billion, the export

:38:05. > :38:06.finance capacity available to support British businesses,

:38:07. > :38:09.expanding the help available to firms in these emerging markets and

:38:10. > :38:15.ensuring that our excellent new trade Minister, Lord Livingston, has

:38:16. > :38:20.all the firepower he needs. Let me turn to the forecast for employment.

:38:21. > :38:28.Today in Britain, employment is at an all-time high. The OBR have

:38:29. > :38:32.revised their forecasts for the future up. The OBR were expecting

:38:33. > :38:39.jobs to stay flat over the, but they now expect the total number of jobs

:38:40. > :38:44.to rise by 400,000 this year. And this is being felt right across the

:38:45. > :38:48.country. Since 2010, the number of jobs in Carlisle and on the Wirral,

:38:49. > :38:53.Selby to South Tyneside, have all grown faster than in London.

:38:54. > :38:57.Meanwhile, the number of people claiming an appointment benefit has

:38:58. > :39:04.fallen by over 200,000 in the last six months. That is the largest such

:39:05. > :39:09.fall for 16 years. Unemployment is also lower than in 2010. And is

:39:10. > :39:17.forecast to fall further, from 7.6% this year, to 7% in 2015, before

:39:18. > :39:26.falling even further to 5.6% by 2018. We have the lowest proportion

:39:27. > :39:32.of workless households the 17 years. -- for 17 years. There were those

:39:33. > :39:37.who said it was a fantasy to believe that businesses could create jobs

:39:38. > :39:41.more quickly than the public sector would have to lose them. But they

:39:42. > :39:46.should have said is that it would be fantastic if it happened. So I have

:39:47. > :39:50.good news for them. Businesses have already created three jobs for

:39:51. > :39:58.everyone lost in the public sector, and the OBR report today forecasts

:39:59. > :40:03.that this will continue, with 3.1 million more jobs being created by

:40:04. > :40:09.businesses by 2019 than, in their words -- that more than offsets the

:40:10. > :40:14.reduction in the public sector headcount. Far from the mass

:40:15. > :40:18.unemployment that was predicted, we have a record number of people in

:40:19. > :40:22.work. Hundreds of thousands fewer on welfare, unemployment lower than

:40:23. > :40:28.when we came to office, and we will have to million more jobs than in

:40:29. > :40:37.2010, an economic plan that is working and a Government seeking a

:40:38. > :40:41.job rich recovery for all. Let me turn to the forecast for Government

:40:42. > :40:48.borrowing and debt. When this Government came to office, the

:40:49. > :40:53.deficit was 11% of GDP. That was the highest level in our peacetime

:40:54. > :40:57.history. ?1 in every four was being borrowed, and the former Chancellor,

:40:58. > :41:00.and one of the former prime ministers have now joined the

:41:01. > :41:07.consensus that spending was too high. The borrowing post a Houston

:41:08. > :41:12.risk to the stability and could ability of the United Kingdom --

:41:13. > :41:16.posed a huge risk. We have taken many difficult decisions to bring it

:41:17. > :41:22.down, everyone contested and opposed. I camera port today the

:41:23. > :41:26.effort is paying off. The OBR use a measure of underlying public sector

:41:27. > :41:30.net borrowing that excludes the impact of the Royal Mail pension

:41:31. > :41:35.scheme and the asset purchase facility transfers. I can tell the

:41:36. > :41:40.house, this underlying measure of the deficit, as is the case with the

:41:41. > :41:48.other deficit measure, has been revised down substantially since

:41:49. > :41:53.March. From the 11% back in 2010, the underlying deficit now falls to

:41:54. > :42:03.6.8% this year, instead of the 7.5% they were forecasting in March. It

:42:04. > :42:11.then. 5.6% next year, 4.4%, 2.7% and in 2017-18, 1.2%. By 2018,-19 on

:42:12. > :42:21.this measure, the OBR do not expect a deficit at all. Instead, they

:42:22. > :42:29.expect Britain to run a small surplus. These numbers will mean

:42:30. > :42:33.that the Government will meet its fiscal mandate to bring the

:42:34. > :42:37.structural current budget into balance and meet it one year early.

:42:38. > :42:43.Let me turn to the forecasts for cash borrowing on the same

:42:44. > :42:49.underlying basis. Mr Speaker, at this Autumn Statement last year,

:42:50. > :42:53.there were pretty -- repeated predictions that borrowing would go

:42:54. > :43:00.up but borrowing is down, and significantly more than forecast. In

:43:01. > :43:04.its last year in office, the previous Government borrowed ?158

:43:05. > :43:09.billion. This year we will borrow ?111 billion, 9 billion less than

:43:10. > :43:13.feared in March. That falls next year to 96 billion, down to

:43:14. > :43:24.79,000,000,020 15-16, we are set to borrow ?73 billion

:43:25. > :43:38.less over the period than was forecast in March. It means we are

:43:39. > :43:42.borrowing the equivalent of ?2500 less for every household in the

:43:43. > :43:46.country. On this measure, too, the OBR forecast the Government would

:43:47. > :43:53.not have to borrow anything at all but instead, we will run a small

:43:54. > :43:57.cash surplus. Of course, this will only happen if we go on working

:43:58. > :44:01.through our long-term plan, delivering the reductions in the

:44:02. > :44:07.deficit we planned this year, next year and the three years after. If

:44:08. > :44:11.we give up on the plan now, we would be saddled with a deficit that is

:44:12. > :44:17.still among the highest in Europe, and this side of the house is not

:44:18. > :44:20.prepared to take that risk. Mr Speaker, while that deficit remains,

:44:21. > :44:29.it adds to our national debt every year. The OBR expect debt this year

:44:30. > :44:33.to come in at 75.5% of GDP. ?18 billion lower than forecast in

:44:34. > :44:40.March. It's then rises to 78.3% next year. Before peaking at 80% next

:44:41. > :44:54.year. 5% lower than forecast in the budget. It falls slightly to 79.9%,

:44:55. > :45:04.then falls again to 78.4% and 75.9%. By 2017-18, debt is over ?80 billion

:45:05. > :45:09.lower than forecast in March. The supplementary target is for dads to

:45:10. > :45:14.be falling in 2015-16, and that the budget the OBR forecast it would be

:45:15. > :45:20.falling in 2017-18, but it is now forecast to fall in 2016-17, that is

:45:21. > :45:24.one year earlier. But let me enter this note of caution. The OBR is

:45:25. > :45:30.clear that this is a cyclical improvement. The forecast for the

:45:31. > :45:34.continuing fall in the structural deficit has not improved. The

:45:35. > :45:41.structural deficit is the borrowing that stays behind even when the

:45:42. > :45:45.economy improves. It has fallen from the 8.7% we inherited to 4.4% today,

:45:46. > :45:51.more than any other major advantage economy. It goes on falling, but

:45:52. > :45:56.snow faster than was previously expected, because, as we have always

:45:57. > :46:00.argued, the central task of reforming government and controlling

:46:01. > :46:04.spending does not simply dissolve when growth returns. And it supports

:46:05. > :46:09.the case we have made all along that economic growth alone was never

:46:10. > :46:14.going to be enough to repair Britain's broken public finances. An

:46:15. > :46:19.improving economy does not let us off the hook for taking the

:46:20. > :46:26.difficult decisions to make sure that the Government lives within its

:46:27. > :46:30.means. And so, Mr Speaker, the single most important economic

:46:31. > :46:35.judgment I make today is this. We will not let up in dealing with our

:46:36. > :46:42.country's debts, we will not spend the money from lower borrowing, we

:46:43. > :46:46.will not squander the hardest games of the British people, the stability

:46:47. > :46:50.and low mortgage rates, the lower deficit and falling borrowing have

:46:51. > :46:54.been hard won by this country, but let us be clear - they could easily

:46:55. > :46:59.be lost, and that is why we must work through our plan to secure the

:47:00. > :47:05.British economy for the long-term. So this Autumn Statement is fiscally

:47:06. > :47:10.neutral across the period. Indeed, today I can announce that we will

:47:11. > :47:15.take three new steps to entrench Britain's commitment to sound public

:47:16. > :47:19.finances. First, we will bring forward next year and updated

:47:20. > :47:23.charter for budget response of and as the Parliament to support it. I

:47:24. > :47:26.can say today that both parties of the coalition have agreed that we

:47:27. > :47:31.must ensure that the debt continues to fall as a percentage of GDP,

:47:32. > :47:35.including using surpluses in good years for this purpose. In other

:47:36. > :47:42.words, this time we will fix the roof when the sun is shining.

:47:43. > :47:48.We will look to see if the five-year time horizon of the fiscal mandate

:47:49. > :47:53.could be shorter, and even more binding now that the public finances

:47:54. > :47:57.are closer to balance, and we will see how fiscal credibility could be

:47:58. > :48:04.further enhanced by a stronger parliamentary commitment to the path

:48:05. > :48:09.of consolidation already agreed for 2016-17 and 2017-18. The answers

:48:10. > :48:12.will be written into an updated charter for budget responsibility

:48:13. > :48:18.which will be presented to Parliament one year from now and

:48:19. > :48:21.voted upon. The second step we take today to entrench Britain's

:48:22. > :48:27.commitment to sound public finances is this. We will cap overall welfare

:48:28. > :48:32.spending. Welfare budgets were completely out of control when we

:48:33. > :48:36.came to office, and the number of households where no-one had ever

:48:37. > :48:43.worked nearly doubled. We have taken very difficult decisions to bring

:48:44. > :48:44.benefit bills down. We have saved ?19 billion per year for the

:48:45. > :48:53.taxpayer. We need to maintain that discipline.

:48:54. > :48:57.The percentage of spending in the UK subject to fixed spending controls

:48:58. > :49:00.is very low by international standards at just 15%, so from next

:49:01. > :49:06.year we will introduce a new cap on total welfare spending. Now, I have

:49:07. > :49:10.had representations that the basic state pension should be included

:49:11. > :49:14.within that cap, but that would mean cutting pensions for those who have

:49:15. > :49:18.worked hard all their lives because the costs on, say, housing benefit

:49:19. > :49:22.for young people had got out of control. That is not fair, so we

:49:23. > :49:26.will not include the state pension, which is better control over a

:49:27. > :49:33.longer period. We will also exclude from the cap the most cyclical of

:49:34. > :49:36.benefits for job-seekers. All other benefits from tax credits to income

:49:37. > :49:39.support to the vast majority of housing benefit will be included in

:49:40. > :49:43.the cap. At the beginning of each Parliament, the chancellor of the

:49:44. > :49:47.day will set the cap for the coming years and as the House of Commons

:49:48. > :49:50.for its support. If the cap is breached, they will have to explain

:49:51. > :49:55.why and hold a vote in this house. The principle is clear. The

:49:56. > :49:58.Government has a responsibility to taxpayers to control their spending

:49:59. > :50:02.on welfare, and Parliament has a responsibility to the country to

:50:03. > :50:12.hold the Government to account for it. That brings me to our third

:50:13. > :50:15.step. Ultimately, the test of fiscal credibility is whether you are

:50:16. > :50:22.prepared, actually, to take the difficult decisions to keep spending

:50:23. > :50:28.under control. Tight discipline means that most of our departments

:50:29. > :50:32.are living within their budgets. This year they are expected to

:50:33. > :50:38.underspend by ?7 billion, a testament to good financial

:50:39. > :50:41.management. We can therefore be confident in reducing the

:50:42. > :50:46.contingency reserve by ?1 billion this year, and reducing departmental

:50:47. > :50:51.budgets by a similar amount in the next two years. This will save a

:50:52. > :50:54.further 3 billion in total. The protections for the NHS and schools

:50:55. > :50:59.will apply. The security and intelligence services and HMRC will

:51:00. > :51:03.be exempt. The Barnett formula means that, over the next two years, the

:51:04. > :51:07.budgets for Scotland, Northern Ireland and Wales will see a net

:51:08. > :51:11.increase, and we will not apply the savings to local government, because

:51:12. > :51:15.we expect them to freeze the council tax next year. Mr Speaker, this year

:51:16. > :51:19.Britain becomes the first G8 country to meet our promise to the poorest

:51:20. > :51:24.in the world to spend .7% of our national income on development, but

:51:25. > :51:28.we don't have to increase the budget further to do that. The

:51:29. > :51:31.effectiveness of the British government aid effort in the

:51:32. > :51:36.Philippines, matched by the generosity of the British public, is

:51:37. > :51:43.a reminder of what marks us out as a nation, and we in this country can

:51:44. > :51:47.be very proud of that. We are also immeasurably proud of the work of

:51:48. > :51:51.the armed forces as they wind down their operations in Afghanistan. The

:51:52. > :51:55.budget we spent there is also falling fast, so we can this year

:51:56. > :52:02.reduced the military special reserve by a further ?900 million, while

:52:03. > :52:06.still funding all operational costs. And to reflect our society's debt of

:52:07. > :52:12.gratitude to our service men and women and their families, I want to

:52:13. > :52:18.make a further ?100 million of money available to our early and military

:52:19. > :52:21.charities, and I want to extend that support to those who care for the

:52:22. > :52:24.work of our police, fire and ambulance services. I think the

:52:25. > :52:28.whole house would agree that the terrible events in Glasgow this

:52:29. > :52:32.weekend, and indeed the work they are doing right now to cope with the

:52:33. > :52:39.adverse weather, remind us how much we owe to them. Mr Speaker,

:52:40. > :52:43.discipline with the public finances means more than just words. It means

:52:44. > :52:48.taking difficult decisions and being prepared to stick to them. It means

:52:49. > :52:52.using surpluses in good years to keep debt falling, so we fix the

:52:53. > :52:56.roof when the sun is shining. It means capping welfare, to keep it

:52:57. > :53:01.under control, and where we do want to spend more money, finding extra

:53:02. > :53:04.ways to pay for it. One of the biggest single items of government

:53:05. > :53:08.spending is the basic state pension. I am proud to be in a

:53:09. > :53:13.government that has introduced a triple lock that ensures a fair and

:53:14. > :53:20.generous increase in the state pension every year to those who have

:53:21. > :53:25.worked hard all our lives. I can confirm the next April the state

:53:26. > :53:29.pension will rise by a further ?2.95 per week. This increase, and the

:53:30. > :53:33.other increases under this government, mean that pensioners

:53:34. > :53:38.will be over ?800 every year better off. And I can announce that we are

:53:39. > :53:43.also going to offer current pensioners an opportunity to make

:53:44. > :53:51.involuntary national insurance on to and is to boost their income in

:53:52. > :53:53.retirement. We will also make... Bash to make involuntary national

:53:54. > :53:59.insurance contributions. This will help those who have not built up

:54:00. > :54:05.much entitlement to the state pension. But we also have to

:54:06. > :54:09.guarantee that the basic state pension is affordable in the

:54:10. > :54:14.pension, even as people live longer and our society grows older. The

:54:15. > :54:19.only way to do that is to ensure that the pension age keeps track

:54:20. > :54:22.with life expectancy. The Pensions Bill currently going through

:54:23. > :54:27.Parliament puts in place reviews of the pension age every five years.

:54:28. > :54:31.Now, we set the principle that will underpin those reviews. We think a

:54:32. > :54:35.fair principle is that, as now, people should expect to spend a

:54:36. > :54:39.third of their adult life in retirement, and based on the latest

:54:40. > :54:43.life expectancy figures, applying that principle would mean an

:54:44. > :54:51.increase in the state pension age to 68 in the mid 20 30s, and 29 in the

:54:52. > :54:57.late 2040 yeah. The exact date will be set by further statutory reviews,

:54:58. > :55:00.and in line with the most up to date demographic data, published next

:55:01. > :55:05.week. This is one of those difficult decisions that governments have to

:55:06. > :55:10.take if they are serious about controlling the public finances.

:55:11. > :55:13.Future taxpayers will be saved around ?500 billion. Young people

:55:14. > :55:19.will know that our country can afford to give them a proper pension

:55:20. > :55:22.when they retire. Now, that is this generation, fulfilling its

:55:23. > :55:25.obligations for fiscal responsibility to the next

:55:26. > :55:29.generation, not saddling them with the debts and decisions that we were

:55:30. > :55:36.not prepared to deal with ourselves. Mr Speaker, having sound public

:55:37. > :55:42.finances also means making sure that we collect the taxes that are due.

:55:43. > :55:46.Most wealthy people pay their taxes and make a huge contribution to

:55:47. > :55:51.funding our public services. The latest figures show that 30% of all

:55:52. > :55:57.income tax is paid by just 1% of taxpayers. We have given incentives

:55:58. > :56:01.to enterprise, cut punitive tax rates, and this year the rich paid a

:56:02. > :56:09.greater share of the nation's income taxes than any year under the last

:56:10. > :56:13.Labour government. But alongside those paying the most tax, there are

:56:14. > :56:19.those who try to avoid paying their fair share of tax. So today we set

:56:20. > :56:22.out in detail the largest package of measures to tackle tax avoidance,

:56:23. > :56:28.tax evasion, fraud and error so far this Parliament. Together, it will

:56:29. > :56:33.raise over ?9 billion over the next five years. We are going to tackle

:56:34. > :56:37.the growth of intermediaries disguising employment as false

:56:38. > :56:41.self-employment, depriving workforces of basic employment

:56:42. > :56:47.rights like the minimum wage, in a bid to avoid employee national

:56:48. > :56:51.insurance. We will have the final period a exemption for capital gains

:56:52. > :56:55.tax private residence relief. We will end the abuse of dual

:56:56. > :57:00.contracts, offshore oil and gas contracting, derivatives linked to

:57:01. > :57:03.profits, and share buy-backs. We will ensure the tax advantages of

:57:04. > :57:08.partnerships are not abused either. We are introducing a new limited

:57:09. > :57:11.power that requires people to pay upfront for their taxes were the

:57:12. > :57:17.scheme they use has already been struck down by the courts, and we

:57:18. > :57:20.are going to strengthen the capacity to prevent error and tackle fraud in

:57:21. > :57:25.the benefit and tax credit systems and expand efforts to recover money

:57:26. > :57:29.that is owed. There is one personal tax change we made today which is

:57:30. > :57:34.not about avoidance but is about fairness. Britain is an open country

:57:35. > :57:38.that welcomes investment from all over the world, including investment

:57:39. > :57:41.in our residential property. But it is not right that those who live in

:57:42. > :57:44.this country pay capital gains tax when they sell a home that is not

:57:45. > :57:51.their primary residence, while those who do not live here do not. That is

:57:52. > :57:55.unfair, and so from April 2015 we will introduce capital gains tax on

:57:56. > :58:01.future gains made by nonresidents who sell residential property here

:58:02. > :58:10.in the UK. I can also announce, from January one next year, the rate of

:58:11. > :58:14.the bank levy will rise to 0.156%, and its base will be broadened in

:58:15. > :58:20.ways we have consulted upon. The levy will raise 2.7 billion in

:58:21. > :58:25.2014-15, and 2.9 billion each year from 2015 - 16. The country stood be

:58:26. > :58:30.hanged the banks in the crisis, and now it is right that they support

:58:31. > :58:34.the country and recovery. -- stood behind. Mr Speaker, a government

:58:35. > :58:37.that lives within its means is essential to secure the economy for

:58:38. > :58:41.the long-term, but it is not sufficient. Britain has to earn its

:58:42. > :58:45.way in the world. Our infrastructure needs to be overhauled, we have to

:58:46. > :58:50.help businesses compete, and above all our young people need the skills

:58:51. > :58:54.to succeed in the modern world. This Autumn Statement states the next big

:58:55. > :58:58.steps in all these areas. Let me start with infrastructure. We are

:58:59. > :59:01.going to be spending more on capital as a proportion of national income

:59:02. > :59:06.on average over this decade than over the whole period of the last

:59:07. > :59:09.government. And that has involved making tough choices about

:59:10. > :59:13.priorities in spending and sticking to them. But that is not the most

:59:14. > :59:17.difficult decision in this area. We have to decide whether we are

:59:18. > :59:22.serious as a country about competing in the modern world, and say to

:59:23. > :59:26.people, we need the new roads, the new railways, including the northern

:59:27. > :59:31.hub and High Speed Two. We have to say we are prepared to push the

:59:32. > :59:34.boundaries of scientific endeavour, including in controversial areas,

:59:35. > :59:36.because Britain has always been a pioneer. We should say that the

:59:37. > :59:41.country that was the first to extract oil and gas from deep under

:59:42. > :59:45.the sea should not turn its back on new sources of energy, like shale

:59:46. > :59:48.gas, because it is too difficult. And the country with the worlds

:59:49. > :59:55.first civil nuclear programme should not be a country that says, we can

:59:56. > :59:57.do this no longer. Yesterday the Chief Secretary and Lord Dighton

:59:58. > :00:00.published the update to the National Infrastructure Plan, and that

:00:01. > :00:03.includes a co-operation agreement with Hitachi on the next nuclear

:00:04. > :00:08.power station in Anglesey, it includes a deal with the insurance

:00:09. > :00:12.industry to invest at least ?25 billion in UK infrastructure, and we

:00:13. > :00:16.published the prices that support long-term investment in offshore

:00:17. > :00:24.wind and prioritise it over on the shore wind. Today, we go further,

:00:25. > :00:29.with a commitment to invest in quantum technology, a new tax

:00:30. > :00:34.allowance to encourage investment in shale gas that Harvest tax rates on

:00:35. > :00:38.early profits, and in the week in which Professor Peter ticks travels

:00:39. > :00:45.to Stockholm to connect -- collect his Nobel Prize for physics, we

:00:46. > :00:50.commit to world a new centre in Edinburgh in his name, because

:00:51. > :00:56.science is a personal priority. In housing, we have to confront this

:00:57. > :01:01.simple truth. If we want more people to own a home, we have to build more

:01:02. > :01:06.homes. And the OBR is absolutely right today. To draw attention to

:01:07. > :01:13.the weakness of housing supply in this country. The good news is the

:01:14. > :01:17.latest survey data showed residential construction growing at

:01:18. > :01:21.its fastest rate for a decade. And are planning reforms are delivering

:01:22. > :01:27.a 35% increase in approvals for new homes. But we need to do more. This

:01:28. > :01:31.week we are announcing ?1 billion of loans to unblock large housing

:01:32. > :01:35.developments on sites in Manchester, Leeds and across the country. We are

:01:36. > :01:42.going to interest the housing -- increase the housing borrowing

:01:43. > :01:47.account by ?100 million. We want to regenerate some of our most rundown

:01:48. > :01:51.urban estates. Councils will sell of the most expensive social housing so

:01:52. > :01:55.they can house many more families for the same money, and we are going

:01:56. > :02:00.to give working people in social housing a priority rights to move if

:02:01. > :02:03.they need to for a job. Right to buy applications have doubled under this

:02:04. > :02:09.government and we will expand it more. And the very same spirit of

:02:10. > :02:14.aspiration that underpins right to buy is what drives this government

:02:15. > :02:17.with help to buy. It is not enough to build more houses if families

:02:18. > :02:22.don't have the large deposits that the banks of demand it. Help to Buy

:02:23. > :02:28.is now helping thousands to own their own home and I can announce

:02:29. > :02:39.that two Challenger banks expect to join the scheme this month. We must

:02:40. > :02:43.also avoid the mistakes of the last decade. We want a responsible

:02:44. > :02:46.recovery and that is why I am the first Chancellor to give the Bank of

:02:47. > :02:54.England responsible tee and power, not only to monitor over it --

:02:55. > :03:05.overall debt bubbles but to deal with them if they threaten the

:03:06. > :03:14.economy. House prices are three point 1% lower in 2007, as forecast

:03:15. > :03:28.by the OBR. Because the authorities can act in

:03:29. > :03:32.this targeted way and because our public finances are under control,

:03:33. > :03:37.the bank can keep overall interest rates lower for longer and support

:03:38. > :03:43.the rest of the economy. Investing in the physical infrastructure of

:03:44. > :03:48.our recovery is critical to our future but it is better education

:03:49. > :03:55.and skills that hold the key to long-term national success. This

:03:56. > :04:01.week's PISA scores show how much ground this country has to make up.

:04:02. > :04:04.The Education Secretary is doing more to transform school standards

:04:05. > :04:08.and raise the aspiration of people from the poorest families then

:04:09. > :04:17.anyone who has done the job before him. Let me make it clear, his

:04:18. > :04:24.expansion of free schools and academies as the full backing of

:04:25. > :04:30.this Chancellor. We also know that children do better at school when

:04:31. > :04:35.they have a proper meal inside them. This Autumn Statement has found the

:04:36. > :04:39.financial resources to fund the expansion of free school meals to

:04:40. > :04:44.all school children in reception, year one and year two, announced by

:04:45. > :04:50.the Deputy Prime Minister and supported by me. Today, we also

:04:51. > :04:56.focus on what happens when our young people leave school and we do more

:04:57. > :05:01.to help them. We will not abandon those who leave school with few or

:05:02. > :05:05.no qualifications. At present, job centre plus does it is nothing to

:05:06. > :05:11.help 16 or 17-year-olds who are not in work or education. We will change

:05:12. > :05:17.that and fund job centres to help young adults to find

:05:18. > :05:21.apprenticeships. There is a limited chance that any young person will be

:05:22. > :05:27.able to stay of welfare without these qualifications. Anyone signing

:05:28. > :05:32.on without these basic skills will be required to undertake basic

:05:33. > :05:35.training from day one or lose their benefits. If they are still

:05:36. > :05:39.unemployed after six months, they will have to take a training ship,

:05:40. > :05:44.take work experience or do a community work placement. If they

:05:45. > :05:48.don't turn up, they will lose their benefits. A culture of work

:05:49. > :05:54.closeness becomes entrenched when young people can leave school and go

:05:55. > :05:57.straight onto the goal when -- with nothing expected in return -- work

:05:58. > :06:08.closeness. The second reform is to

:06:09. > :06:10.apprenticeships. We have doubled the number of apprenticeships and now we

:06:11. > :06:15.will transform the way they are provided by funding employers,

:06:16. > :06:20.directly through HMRC. There will now be an additional 20,000 higher

:06:21. > :06:25.apprenticeships over the next two years and I can also announced a big

:06:26. > :06:28.expansion of start-up loans, through which a new generation of

:06:29. > :06:33.entrepreneurs is being created. 50,000 more people will be helped to

:06:34. > :06:38.fulfil the aspiration to start their own business, and we are expanding

:06:39. > :06:41.the new enterprise allowance, too. Mr Speaker, this year is also the

:06:42. > :06:45.50th anniversary of the Robbins report, which challenge the nonsense

:06:46. > :06:52.that university was only suitable for a small few. In 1963, Robbins

:06:53. > :06:56.said because is of higher education should be available for all those

:06:57. > :07:00.who are qualified by ability and attainment to pursue them, and wish

:07:01. > :07:06.to do so. That was true then and I believe it should remain true today.

:07:07. > :07:11.Our reforms to student loans, difficult as they were, have put our

:07:12. > :07:13.universities on a secure footing. Some predicted that applications

:07:14. > :07:18.from students from poor backgrounds would fall. Instead, I camera port

:07:19. > :07:22.that this year we have had the highest proportion of young people

:07:23. > :07:24.from disadvantaged backgrounds applying to university, ever -- I

:07:25. > :07:37.can report. But there is still a cap on

:07:38. > :07:42.aspiration. Each year, around 60,000 young people who have worked hard at

:07:43. > :07:47.school got the results, want to go on learning and want to take out a

:07:48. > :07:50.loan, are prevented from doing so because of an arbitrator. It makes

:07:51. > :07:52.no sense when we have a lower proportion of people going to

:07:53. > :08:01.university than the United States, let alone self career. Access to

:08:02. > :08:06.higher education is a mark of success in the global race. We will

:08:07. > :08:11.provide 30,000 more student places and a year after we will abolish the

:08:12. > :08:14.cap on student numbers altogether. Extra funding will be provided to

:08:15. > :08:20.science, technology and engineering courses. The new loans will be

:08:21. > :08:25.financed by selling the old student loan book, allowing thousands more

:08:26. > :08:32.to achieve their potential. Mr Speaker, education underpins

:08:33. > :08:37.opportunity. It is business that provides those opportunities. And

:08:38. > :08:43.the best way to help business is by lowering the burden of tax. KPMG's

:08:44. > :08:48.report last week confirmed for the second year running that Britain has

:08:49. > :08:53.the most competitive business tax system in the world. Some in this

:08:54. > :09:01.house suggest that our response to this good news should be to increase

:09:02. > :09:05.corporation tax from 20%. Today we publish the first of our studies

:09:06. > :09:08.into the dynamic effects of tax changes colour that show our

:09:09. > :09:15.corporation tax cuts increase investment and raise productivity.

:09:16. > :09:18.So much so that over half of the cost to the Treasury of the tax cut

:09:19. > :09:24.will be recovered because of higher growth. Putting up corporation tax

:09:25. > :09:29.hits investment, cuts productivity, costs jobs and raises much less. We

:09:30. > :09:31.thank the honourable members for their submission but we think it

:09:32. > :09:38.would be economic madness to pursue it.

:09:39. > :09:47.Quite the reverse. Today we take further steps to make business taxes

:09:48. > :09:54.more competitive. The budget announcement that we would abolish

:09:55. > :10:00.stamp duty on shares was welcomed round the world, we also abolished

:10:01. > :10:04.stamp duty on traded funds. We are making successful film tax relief

:10:05. > :10:09.even more generous and looking to extend the principle to regional

:10:10. > :10:11.theatre. We set up major reforms to encourage employee ownership of the

:10:12. > :10:18.kind that makes them lowish such a success. -- makes John Lewis. We

:10:19. > :10:22.will introduce a new tax relief for investment in social enterprises and

:10:23. > :10:26.new social impact bonds. I want to thank Sir Ronnie Coen and I

:10:27. > :10:32.honourable friend, the charities minister, for their help in putting

:10:33. > :10:36.this innovative scheme together. Business rates imposed a heavy

:10:37. > :10:43.burden on businesses of all sizes. Today we will help ease that burden.

:10:44. > :10:48.The last government wanted to halve small business rates relief. A

:10:49. > :10:52.relief which cuts rates bills for half a million companies and means a

:10:53. > :10:56.third of a million of the smallest businesses paying no rates at all.

:10:57. > :11:03.If we followed that plan, small businesses would have faced a rate

:11:04. > :11:06.increase of up to ?3375. We have rejected that plan. We have extended

:11:07. > :11:11.that rate relief scheme year after year. It was due to expire next

:11:12. > :11:18.April. We will now extended for another whole year. -- extend it. We

:11:19. > :11:23.will relax the rules that discourage these firms from expanding and

:11:24. > :11:26.opening extra premises. That doesn't go far enough. All businesses are

:11:27. > :11:31.expecting rates to rise by 3.2% next year. Instead, I will cap the

:11:32. > :11:37.inflation increase in business rates for all premises at 2% from next

:11:38. > :11:43.April. We will also allow business to pay their rates in 12 monthly

:11:44. > :11:49.instalments. We will clear almost all of the backlog of valuation

:11:50. > :11:55.appeals by July 2015, with reform of business rates on the agenda for the

:11:56. > :11:59.2017 evaluation. There is one group of businesses that have found the

:12:00. > :12:02.recession especially hard, as it has coincided with the rising challenge

:12:03. > :12:07.from the internet that is only getting stronger. These are local

:12:08. > :12:11.retailers, the shops, the pubs, cafes that make up the high street

:12:12. > :12:15.across Britain. With small-business Saturday this weekend, I want the

:12:16. > :12:21.government to do all it can to help them. We are already changing the

:12:22. > :12:26.planning rules to help town centres compete. To get the vacant shops

:12:27. > :12:29.that blights too many town centres to open again, I am introducing a

:12:30. > :12:36.new reoccupation relief that will halve the rates for new occupants. I

:12:37. > :12:39.want to thank my honourable friends from Wolverhampton Southwest, then

:12:40. > :12:53.eaten, Hastings right, Brentford and many others for their campaign.

:12:54. > :13:02.I can announce today that for the next two years, every retail promise

:13:03. > :13:07.in England with a rateable value of up to ?50,000 will get a discount on

:13:08. > :13:12.their business rates. This will be worth ?1000 of their bills.

:13:13. > :13:22.This is what we offer. Business rates capped for the smallest firms

:13:23. > :13:27.know rates at all, and helps for the -- help for the high street. ?1000

:13:28. > :13:32.for small shops, pubs, cafes and restaurants across our country. The

:13:33. > :13:37.people in these businesses epitomise the hard-working values this

:13:38. > :13:44.government supports and we are backing British businesses all the

:13:45. > :13:49.way. And we are backing British families. Next April, the personal

:13:50. > :13:56.allowance will reach ?10,000. This government is delivering an income

:13:57. > :13:59.tax cut worth up to ?700 a year to over 25 million hard-working people.

:14:00. > :14:03.Under the last government, council tax doubled. We are now helping

:14:04. > :14:07.councils freeze it for the whole of this Parliament. Tax free childcare

:14:08. > :14:13.is being introduced and free school meals are on their way, but there is

:14:14. > :14:18.more we are doing to help. This Autumn Statement confirms that from

:14:19. > :14:21.April 2015, we will introduce a new transferable tax allowance for

:14:22. > :14:26.married couples, available to all basic rate taxpayers. It enables

:14:27. > :14:29.people to transfer ?1000 of their personal allowance to their wife,

:14:30. > :14:34.husband or civil partner. It is just a start and I confirmed today that

:14:35. > :14:40.we will introduce a new operating mechanism that ensures the new

:14:41. > :14:41.married couples allowance is automatically increased in

:14:42. > :14:47.proportion to the personal allowance. 4 million families will

:14:48. > :14:50.benefit, many of them among the poorest working families in our

:14:51. > :14:55.country. And this measure, along with the others we take today

:14:56. > :14:58.ensures that across this Parliament, policies are progressive, showing we

:14:59. > :15:07.are all in this together with the very

:15:08. > :15:15.Mr Speaker, we are a helping energies with their family bills,

:15:16. > :15:19.not with a transparent con, pretending we can control the

:15:20. > :15:24.world's oil price, but by instead focusing on what government can

:15:25. > :15:28.control, the levies and charges that previous energy secretaries piled

:15:29. > :15:34.onto bills. This week we deliver on the promise made by the Prime

:15:35. > :15:39.Minister... The statement must be heard. Chancellor of the Exchequer.

:15:40. > :15:44.This week we deliver made by the Prime Minister to roll back on those

:15:45. > :15:49.levies, a result of ?50 off family bills, in a way that supports the

:15:50. > :15:53.lowest income families, reduces carbon, support investment in our

:15:54. > :15:59.energy infrastructure, and as the document shows, does not add 1p to

:16:00. > :16:01.the tax bills that families pay. My political philosopher sea is clear.

:16:02. > :16:07.Instead of penalising people with more taxes and radiation, give them

:16:08. > :16:11.incentives by reducing their taxes and bills. As I have often said,

:16:12. > :16:17.going green does not have to cost the earth. That brings me onto fuel

:16:18. > :16:23.duty. We inherited from the last government the hated fuel duty

:16:24. > :16:29.escalator. It would have inflicted hardship on families and small firms

:16:30. > :16:34.alike. Instead of those rises, we abolished the escalator, and we have

:16:35. > :16:37.cut and then frozen fuel duty. I have had further representations

:16:38. > :16:41.from many, many honourable friends, from the member for Blackpool

:16:42. > :16:49.North, the member for Argyll, and of course, of course the member for

:16:50. > :16:52.Harlow! He is a champion of the people he represents, and I said

:16:53. > :16:57.earlier this autumn that if we could find the money, I would like to go

:16:58. > :17:00.on freezing duty. Today I can report that because we have taken difficult

:17:01. > :17:04.decisions to control the public finances, I can deliver on that

:17:05. > :17:12.promise. Next year's fuel duty rise will be cancelled. Instead of

:17:13. > :17:16.federal taxes going up by 2p per litre, they will stay frozen. --

:17:17. > :17:22.petrol. That means compared to the previous government's plans, it will

:17:23. > :17:29.be 20p per litre less, ?11 less every time you fill up. A saving

:17:30. > :17:32.from drivers over this parliament of ?680, and double that for a small

:17:33. > :17:36.business with a band-macro. Cancelling fuel duty rises has been

:17:37. > :17:41.a major priority of the government, a ?22 billion demonstration that we

:17:42. > :17:47.are on the side of hard-working people in this country. The married

:17:48. > :17:50.couple's allowance, ?50 off energy bills, we are helping those who

:17:51. > :17:55.drive a car and helping those who get the train, to. There's next

:17:56. > :18:04.January were going to go up by 1% above inflation, and we will keep

:18:05. > :18:07.average fares flat in real terms. On this side of the house we know there

:18:08. > :18:11.is one thing more than any other that has supported family through

:18:12. > :18:15.these difficult times, and that is being in work. At the heart of our

:18:16. > :18:20.economic plan is support for the creation of more jobs. That is why

:18:21. > :18:24.we opposed the last government's plan to increase the jobs tax. That

:18:25. > :18:28.is why we reversed the most damaging part of that increase in the very

:18:29. > :18:32.first Budget after we came to office. That is also why, in the

:18:33. > :18:36.last Budget, I introduced the employment allowance that eliminates

:18:37. > :18:41.the jobs tax for half a million small businesses. And that is why we

:18:42. > :18:45.will go further still. We are going to bullish the jobs tax on young

:18:46. > :18:51.people under the age of 21. -- abolished. Employment national

:18:52. > :18:55.insurance contributions will be removed on 1.5 million jobs for

:18:56. > :19:00.young people. We are not going to leave young people behind as the

:19:01. > :19:05.economy grows. We are going to have a responsible recovery for all. The

:19:06. > :19:11.cost for a business of employing a young person on a salary of ?12,000

:19:12. > :19:17.will fall by over ?500. For someone of ?16,000, it is over ?1000 off. I

:19:18. > :19:19.want to commend my honourable friend from Braintree and Carlisle and

:19:20. > :19:27.their campaign for highlighting this issue. The change requires

:19:28. > :19:31.legislation. It will come into force in April 2015, and it will not apply

:19:32. > :19:37.beyond the upper earnings limit. Now, this country, Mr Speaker, is

:19:38. > :19:41.working through its long-term plan, bringing down the deficit and

:19:42. > :19:44.dealing with the debt, spending less on welfare and making the big

:19:45. > :19:49.decisions on infrastructure, living within our means and cutting tax on

:19:50. > :19:53.business, making work pay and letting people keep more of what

:19:54. > :19:57.they earn. Confidence in the next-generation as they make their

:19:58. > :20:01.way in education and in the workplace. This statement shows the

:20:02. > :20:06.plan is working, it is a long-term plan for a grown-up country, but the

:20:07. > :20:10.job is not done. By doing the right thing, we are heading in the right

:20:11. > :20:15.direction, Britain is moving again, let's keep going!

:20:16. > :20:20.And the Chancellor complete is Autumn Statement, he took 50 minutes

:20:21. > :20:23.to do it, we will go through it in a moment, but let's now hear the

:20:24. > :20:32.response of the Shadow Chancellor, Ed Balls.

:20:33. > :20:38.Mr Speaker... Mr Speaker! The whole country will have seen today that,

:20:39. > :21:33.for all his breathtaking complacency,

:21:34. > :21:33.for all his breathtaking this Prime Minister, under this

:21:34. > :21:41.Chancellor and this Prime Minister, under this

:21:42. > :21:41.living standards are not rising, this Prime Minister, under this

:21:42. > :22:01.Speaker. They are falling year-on-year

:22:02. > :22:10.Speaker. They are falling that, on average, working people in

:22:11. > :22:19.our country are ?1600 per year worse off than when they came into power

:22:20. > :22:25.in Twenty20 and that prices will continue to rise faster than wages

:22:26. > :22:35.this year and into next year, too? -- in 2010. As a result, people will

:22:36. > :22:41.be worse off in 2015 and they were in 2010, Mr Speaker. Isn't this the

:22:42. > :22:51.truth - after three damaging is flat lining, after the slowest recovery

:22:52. > :22:56.for over 100 years... Order! Order! However long it takes, the

:22:57. > :23:02.response... Order! Mr Morris, I don't require your assistance, calm

:23:03. > :23:09.down! Take up yoga, whatever is necessary! However long it takes,

:23:10. > :23:15.the response, like the statement, will be heard. The sooner members

:23:16. > :23:21.upon both sides of the House grasped that very simple fact, so much the

:23:22. > :23:25.better. Mr Ed Balls. Mr Speaker, there is a cost of living crisis,

:23:26. > :23:31.even if they want ad omitted in this house, Mr Speaker! And we almost

:23:32. > :23:37.white, after three damaging years of flat-lining, the slowest recovery

:23:38. > :23:43.for over 100 years, yes, from a Chancellor and Prime Minister who

:23:44. > :23:49.said we are all in this together and then gave a huge tax cut to

:23:50. > :23:53.millionaires, Mr Speaker! Don't we know the truth? Working people are

:23:54. > :24:00.not better off under the Tories, they are worse off under the Tories.

:24:01. > :24:07.And... For all their complacent boasts, after three damaging and

:24:08. > :24:13.wasted years, for most people, I have to say, in the constituencies

:24:14. > :24:18.of honourable members of all sides of this house, there is still no

:24:19. > :24:23.recovery at all, Mr Speaker. So let me ask the Chancellor about the

:24:24. > :24:29.promises he made to this house on growth and living standards three

:24:30. > :24:36.years ago. He said then, he said then, Mr Speaker, that the economy

:24:37. > :24:43.would grow by more than 8.4% by the end of this year. Even after

:24:44. > :24:50.today's welcome revisions, growth is set to be half of that, Mr Speaker.

:24:51. > :24:54.Lower growth than he forecast in 2010 this year, next year and the

:24:55. > :24:58.year after as well. Didn't the Chancellor pledged to get the banks

:24:59. > :25:06.lending? But net lending to business is now down ?100 billion compared to

:25:07. > :25:11.May 2010. Didn't he make the number one test of his economic credibility

:25:12. > :25:17.keeping the AAA credit rating? But it has been downgraded not once but

:25:18. > :25:26.twice, Mr Speaker! And as for his promise to balance the books by

:25:27. > :25:33.2015, didn't he confirm today that, in 2015, he is not balancing the

:25:34. > :25:39.books, he is borrowing ?79 billion, Mr Speaker? For all his... For all

:25:40. > :25:46.his smoke and mirrors, for all his smoke and mirrors, he is borrowing

:25:47. > :25:52.?198 billion more than he planned in 2010. More borrowing to pay for

:25:53. > :25:58.three years of economic failure, more borrowing in just three years

:25:59. > :26:07.under this Chancellor than and the last government in 13 years, Mr

:26:08. > :26:15.Speaker! -- than under. He... He used to say he would balance the

:26:16. > :26:20.books in 2015. Now he wants... Now he wants us to congratulate him for

:26:21. > :26:28.saying he will do it in 2019, Mr Speaker! With this Government, it is

:26:29. > :26:39.clearly not just the goalposts that move, Mr Speaker. Mr Speaker... Mr

:26:40. > :26:44.Speaker... On energy bills, on energy bills, after their panicked

:26:45. > :26:57.and half baked attempt to steal Labour's clothes... The...

:26:58. > :27:08.Mr Speaker... Mr Speaker... Mr Speaker, we know they are not very

:27:09. > :27:14.good at shooting other people's foxes as well as badgers, Mr

:27:15. > :27:16.Speaker, because what if the truth, for three months the leader of the

:27:17. > :27:22.opposition has been calling for an energy price freeze. And did the

:27:23. > :27:30.Chancellor announced an energy price freeze? No, he did not, Mr Speaker!

:27:31. > :27:37.Can he confirm... Can he confirm that when the energy cup and have

:27:38. > :27:44.already announced price rises of ?120 this year, his policy will

:27:45. > :27:49.still see energy price bid rise by ?70 this winter? Mr Speaker, under

:27:50. > :27:52.this Chancellor, the only freeze this winter will be for millions of

:27:53. > :27:58.families and pensioners struggling to heat their homes with rising

:27:59. > :28:05.bills! Does he really think he can get away with tinkering at the

:28:06. > :28:11.edges, moving green levies, his own party introduced them, off the bills

:28:12. > :28:17.and onto the taxpayer? And - surprise, surprise! - letting the

:28:18. > :28:21.energy companies completely off the hook, Mr Speaker! They are not

:28:22. > :28:28.paying a penny, they are not paying a penny! Doesn't he realise that for

:28:29. > :28:34.millions of hard-pressed families, pensioners and businesses across our

:28:35. > :28:39.country, nothing less than a freeze will do, Mr Speaker?! And rather

:28:40. > :28:43.than hard-pressed taxpayers, it should be the excess profits of the

:28:44. > :28:54.energy companies that pick up the tab, Mr Speaker. And... And... As

:28:55. > :29:01.for the Prime Minister... As for the Prime Minister's flagship policy for

:29:02. > :29:06.families, a tax break for marriage, why won't the Chancellor and admit

:29:07. > :29:08.the truth and tell the Prime Minister that the policy won't even

:29:09. > :29:13.help the family is the Prime Minister says it will? Because his

:29:14. > :29:22.own Treasury minister has let the cat out of the bag. I have it here

:29:23. > :29:25.in black and white, Mr Speaker. The Exchequer Secretary says just under

:29:26. > :29:31.one third of married couples will get the married couples tax

:29:32. > :29:41.allowance. Just one in six families with children will benefit. Sack

:29:42. > :29:45.him! Contrary to the Prime Minister's claim, contrary to his

:29:46. > :29:50.claim in this house a few weeks ago, a married couple were both are

:29:51. > :30:07.paying basic rate income tax will get no benefit at all, Mr Speaker!

:30:08. > :30:14.Apologise! No... Mr Speaker... Mr Speaker, no wonder his own

:30:15. > :30:20.Chancellor of the Exchequer has this week told the Daily Telegraph, he

:30:21. > :30:27.thinks the Prime Minister's policy is, and I quote, a turkey of an

:30:28. > :30:32.idea. A turkey! The Chancellor thinks the Prime Minister's policy

:30:33. > :30:43.is a turkey. Merry Christmas, Prime Minister. Merry Christmas. I have to

:30:44. > :30:48.say... Order... It is very simple, it just lengthens the proceedings,

:30:49. > :30:58.doesn't bother me, I very much enjoy chairing the proceedings. I think

:30:59. > :31:02.what members on both sides of the house will wish to consider is how

:31:03. > :31:07.the conduct is regarded by the public that we are here to

:31:08. > :31:17.represent. Mr Speaker, I think on this one, the Chancellor is right.

:31:18. > :31:25.It is a turkey of an idea. I have to say, on the cost of living crisis,

:31:26. > :31:33.an energy, on supporting families, this government just doesn't get it.

:31:34. > :31:38.And there is a reason why this Prime Minister... The Chancellor said it

:31:39. > :31:43.in his statement, there is a reason why they believe people are better

:31:44. > :31:49.off. Because the people on their Christmas card lists have seen their

:31:50. > :31:56.bonuses rise and their taxes cut. They are willing to stand up... They

:31:57. > :32:07.are willing to stand up for the interests of the energy

:32:08. > :32:10.companies... We have a prime minister and a Chancellor who will

:32:11. > :32:15.stand up for the energy companies, they will stand up for the hedge

:32:16. > :32:20.fund is, they will stand up for people earning over ?150,000 who get

:32:21. > :32:26.a tax cut but they won't stand up for millions of families in our

:32:27. > :32:32.country. People struggling with rising energy bills, falling wages,

:32:33. > :32:38.rising childcare costs. Mr Speaker, we all know and agree that rising

:32:39. > :32:50.life expectancy means we are going to have to work longer. And the

:32:51. > :32:53.Chancellor's failure on growth and the deficit means more tough

:32:54. > :32:57.decisions in the next Parliament. But when the country is crying out

:32:58. > :33:03.for the government that will work with business to promote investment

:33:04. > :33:07.and wealth creation, and build an economy that works for the many and

:33:08. > :33:12.not just the few, does this chancellery think he can get away

:33:13. > :33:19.with tinkering at the edges, -- Chancellor really think he can get

:33:20. > :33:23.away with tinkering at the edges and waiting for wealth to trickle down.

:33:24. > :33:27.Isn't this the clearest evidence yet that they do not understand the

:33:28. > :33:31.scale of the challenge that we faced to get an investment led recovery

:33:32. > :33:37.that works for all and not just a few, a strong recovery built to

:33:38. > :33:42.last. With the permission of the house, let me ask the Chancellor:

:33:43. > :33:48.With house-building under this government at its lowest level since

:33:49. > :33:55.the 1920s, doesn't he see his Help to Buy scheme to boost mortgage

:33:56. > :34:00.demand can only deliver a strong and balanced recovery if he does what we

:34:01. > :34:06.and the IMF have urged, and invest in housing supply. More affordable

:34:07. > :34:19.homes. Honourable gentleman on the opposite benches sneer at building

:34:20. > :34:24.more affordable homes. Can the Chancellor tell the house, why has

:34:25. > :34:31.infrastructure output actually fallen by 15% since 2010? No wonder

:34:32. > :34:35.the CBI is so upset. Why hasn't he used the money from the planned

:34:36. > :34:44.increase in respect of licence fees to endow a proper investment bank.

:34:45. > :34:52.On tax avoidance, why has the HMRC reported the amount of uncollected

:34:53. > :34:57.tax actually rose last year? And with almost 1 million young people

:34:58. > :35:02.unemployed, a record number who want to work full time being forced to

:35:03. > :35:07.accept part-time work. The work programme, a flop. The welfare bill

:35:08. > :35:17.rising. And as we have learned today, the universal credit, and

:35:18. > :35:23.utter shambles. HECKLING

:35:24. > :35:28.No mention of the universal credit in the statement. IDS, in deep

:35:29. > :35:49.shambles, Mr Speaker. Isn't the fact, for all the shambles

:35:50. > :35:52.and chaos and rising welfare bills, what he has announced on youth

:35:53. > :36:05.unemployment is too little, too late. Help only for the under 21s

:36:06. > :36:10.coming in the last weeks. Why won't he repeat the successful tax on bank

:36:11. > :36:17.bonuses to pay for all young people, a job they will take or lose. Why

:36:18. > :36:20.won't he remove the winter fuel allowance for the richest

:36:21. > :36:25.pensioners? Why won't he reversed his tax cut for hedge funds, protect

:36:26. > :36:29.disabled people in our country by scrapping the unfair and perverse

:36:30. > :36:36.bedroom tax this Prime Minister has introduced. I have to say, why won't

:36:37. > :36:39.he go further on the bank levy and expand free childcare for working

:36:40. > :36:47.parents and make work pay, use it to help working parents? Isn't it the

:36:48. > :36:52.truth? Can the Chancellor confirmed, even after what he has announced

:36:53. > :37:01.today on fuel duty and his increases in the personal allowance, his VAT

:37:02. > :37:04.rise, his cuts to tax credit and child benefit, meaning families with

:37:05. > :37:09.children are worse off because of his budgets, that is the truth.

:37:10. > :37:17.Giving with one hand, taking away much more with the other. Mr

:37:18. > :37:23.Speaker, energy bills still rising this winter. No real action to

:37:24. > :37:29.tackle the cost of living crisis. No proper plan to earn our way to

:37:30. > :37:38.rising living standards for all. Shirley Britta can do better than

:37:39. > :37:46.this. This complacent Chancellor sits there and think C deserves a

:37:47. > :37:51.pat on the back -- thinks he deserves. With bank bonuses rising

:37:52. > :38:00.and millionaires enjoying a big tax cut, this is a policy which is

:38:01. > :38:04.working for a few, Mr Speaker. But as this Autumn Statement shows, with

:38:05. > :38:08.this out of touch Chancellor and Prime Minister, hard-working people

:38:09. > :38:23.are worse off under the Tories. STUDIO: We are leaving the House of

:38:24. > :38:27.Commons. This is the OBR statement, and this is the Autumn Statement.

:38:28. > :38:31.Our experts are pouring through these figures to find out what the

:38:32. > :38:34.Chancellor did not tell us. There is always something hidden in these

:38:35. > :38:38.documents and we will get to the bottom of it now. If you want to

:38:39. > :38:43.continue watching the Autumn Statement debate, it is on BBC

:38:44. > :38:51.Parliament, or the Democracy live website. Let's take a look at what

:38:52. > :38:56.the Chancellor did announce over the past 50 minutes. The growth forecast

:38:57. > :39:02.committee said the OBR had increased that to 1.4% for this year, 2.4% for

:39:03. > :39:08.next year. But for some reason, it tips to 2.2% in 2015. The outer

:39:09. > :39:13.years, you can largely ignore because they don't really mean

:39:14. > :39:16.enough. The Bank of England thinks the economy will grow this year and

:39:17. > :39:20.next year more quickly than the OBR is saying. Because growth is

:39:21. > :39:25.stronger the Chancellor doesn't have to borrow so much so he has juiced

:39:26. > :39:31.borrowing forecasts. This year he has taken about 9 billion. Then it

:39:32. > :39:39.falls to 96 billion, down to 79, down to 51. By 2017-18 it goes to 23

:39:40. > :39:45.and after that, the Chancellor gave us the possibility that we might

:39:46. > :39:50.move into surplus. These out years are always revised, I wouldn't put

:39:51. > :39:54.too much faith in them. The OBR expects a small surplus by 2018-19.

:39:55. > :39:58.Debt continues to rise for the foreseeable future because we are

:39:59. > :40:06.still borrowing. National debt goes up to 80% of our national wealth by

:40:07. > :40:13.2015. Unemployment, the OBR saying will fall quite strongly, 7% in

:40:14. > :40:17.2015, 5.6% by 2018. Again it should be pointed out, independent

:40:18. > :40:19.forecasters believe unemployment will fall more quickly, which is

:40:20. > :40:23.significant not just for the unemployed, but means that interest

:40:24. > :40:35.rates may have to rise if the governor of the bank sting -- sticks

:40:36. > :40:40.to his guidance. It was confirmed the Chancellor is scrapping the

:40:41. > :40:44.planned 2p fuel duty increase. He also said that rail fares will rise

:40:45. > :40:49.only in line with inflation in January 2014. Living standards

:40:50. > :40:53.issues are ranking high with the government at the moment. It wasn't

:40:54. > :41:00.so long ago that rail fares were set to double the rate of inflation.

:41:01. > :41:04.Something well trailed, a ?50 average saving on energy fuel bills

:41:05. > :41:09.by changing the way green levies are levied. The Chancellor also

:41:10. > :41:15.announced that was to be a rise in the state pension that will go up in

:41:16. > :41:26.April. But the pension age will rise when you retire. He would not give

:41:27. > :41:30.an exact date. And then he announced that a cap on the total amount of

:41:31. > :41:37.money spent on welfare would be introduced next year. That is

:41:38. > :41:40.clearly, I suggest, designed to embarrass Labour ought to get a

:41:41. > :41:44.response. The Chancellor also said it would not include pensions, state

:41:45. > :41:51.pensions would not be in the welfare cap. It goes up and down depending

:41:52. > :41:54.on the level of employment. Another idea that was well trailed in

:41:55. > :41:58.advance was that for non-UK residents who buy homes in this

:41:59. > :42:02.country when they come to sell, no doubt having made a substantial gain

:42:03. > :42:08.if it is in central London, they will pay capital gains tax. Just as

:42:09. > :42:12.British citizens pay capital gains tax on their second homes. He

:42:13. > :42:17.announced there will be ?3 billion of departmental savings at central

:42:18. > :42:21.government level, not a huge amount but maybe a bit painful on top of

:42:22. > :42:28.cuts that have fallen on departments. And an idea that was

:42:29. > :42:31.trailed at the Tory Party conference, the married couples tax

:42:32. > :42:36.allowance will be introduced in 2015, probably just in time for the

:42:37. > :42:39.election. On the business front, the Chancellor announced in this rate

:42:40. > :42:44.increases would be capped at 2% from next April. They would be a ?1000

:42:45. > :42:49.discount for small retail businesses for the next two years, in an

:42:50. > :42:53.attempt to get some life back into the high street. And that employer

:42:54. > :42:59.national insurance contributions would be removed from under 20 ones

:43:00. > :43:04.in an attempt to get the 1 million youth jobless back to work. It was

:43:05. > :43:11.confirmed there would be free school meals for the first three years in

:43:12. > :43:16.England. It also announced there would be an extra 30,000 student

:43:17. > :43:20.places at British universities, and that the cap on student numbers

:43:21. > :43:24.which currently exists would be abolished from 2015 and it would be

:43:25. > :43:27.up to the universities to determine how many students they are going to

:43:28. > :43:35.take. Infrastructure, widely announced yesterday. He wants to get

:43:36. > :43:40.more housing going. There is to be a new tax allowance for investment in

:43:41. > :43:46.shale gas. Many in the Shell gas industry say the planning is the rub

:43:47. > :43:50.them. -- is the problem. And he confirmed there will be a new

:43:51. > :43:55.nuclear power station planned for Anglesey, probably on broadly the

:43:56. > :43:59.same terms of guaranteed price and help with the borrowing to pay for

:44:00. > :44:06.it that EDF recently got for the new one planned in Hinckley. There we

:44:07. > :44:13.go, not a lot in it! Give me your reaction, Nick. There is a lot in it

:44:14. > :44:16.but there is a lot we already knew about because they were announced at

:44:17. > :44:21.conferences or work well briefed. In terms of the measures, there is a

:44:22. > :44:25.mixture of what the government regards as populists, we knew we

:44:26. > :44:30.would get the free school meals but it is an important step. Robert

:44:31. > :44:34.spotted, there don't seem to be any numbers for paying for that in the

:44:35. > :44:39.years after an election. The Tory and Lib Democrat teams can I have

:44:40. > :44:50.treated them to ask what is going on. -- I have tweeted. Ed Balls and

:44:51. > :44:53.Labour said they would reverse one of the cuts to corporation tax in

:44:54. > :44:58.order to give more money to small business. It is quite a lot of money

:44:59. > :45:02.spent by a government initiative, ?1000 off retail Princess was an

:45:03. > :45:07.important measure to get isn't is to employ the young -- retail

:45:08. > :45:11.businesses. Overall, the government spend a bit of money, about ?2

:45:12. > :45:16.billion, but what it is saying is, we have made progress. The

:45:17. > :45:22.structural, underlying deficit, has not come down fast because of

:45:23. > :45:26.growth. So steady as she goes, carry on with the plan, don't change it.

:45:27. > :45:31.Which is why you have repeated uses of the word plan, repeated uses of

:45:32. > :45:35.the word long-term, repeated uses of the phrase, difficult decisions.

:45:36. > :45:42.Chancellor is saying, bank on the fact we have a lot more to do.

:45:43. > :45:45.Robert, the Chancellor was able to announce better growth rates for

:45:46. > :45:49.this year and next year, and therefore lower deficit forecasts

:45:50. > :45:53.for this year and next you. But is the OBR being cautious? Could it be

:45:54. > :45:57.better than the figures they have come up with? Certainly, it is very

:45:58. > :46:01.striking that the Bank of England, for example, has forecast rather

:46:02. > :46:07.stronger growth over the coming 18 months than the OBR. And for me,

:46:08. > :46:12.actually, it is the fiscal forecast and the economic forecasts which are

:46:13. > :46:14.interesting today, because as Nick pointed out, almost all the measures

:46:15. > :46:21.that he announced and broadly we knew about, there are a number of

:46:22. > :46:26.striking things here. One thing that the OBR says is that it believes

:46:27. > :46:30.that the strength of economic recovery that we are seeing at the

:46:31. > :46:35.moment is coming from an anticipated, by it, anticipated

:46:36. > :46:39.revival in private consumption, most of which comes from lower saving,

:46:40. > :46:45.people not rebuilding their overstretched financial positions.

:46:46. > :46:49.There is not high income for people driving this recovery, so what does

:46:50. > :46:52.that mean? It means it worries that, actually, as we go through the

:46:53. > :46:56.coming months, growth will slow down, until we begin to see

:46:57. > :47:02.businesses investing, until we begin to see productivity going up. Now,

:47:03. > :47:07.that is a long-term challenge, because businesses have not been

:47:08. > :47:12.investing. I was slightly surprised, actually, that the Chancellor did

:47:13. > :47:16.not do anything in his statement to encourage a bit more business

:47:17. > :47:20.investment, to put the recovery on what economists would describe as a

:47:21. > :47:25.more sustainable long-term footing. But there is one other really

:47:26. > :47:32.striking thing in the OBR analysis, which... Well, it was a slightly

:47:33. > :47:37.jaw-dropping thing for me! It says this, right? It talks about the

:47:38. > :47:43.profile of public sector borrowing, going out to 2018 - 2019, when the

:47:44. > :47:47.OBR is saying, by 2018-19, there will be a very small surplus, right?

:47:48. > :47:51.Something we have not seen for years and years and years, but this is the

:47:52. > :47:55.interesting thing. It says around 80% of the reduction is accounted

:47:56. > :47:59.for by lower public spending, austerity to you and me, right? This

:48:00. > :48:04.will take Government consumption of goods and services, a proxy for

:48:05. > :48:07.day-to-day spending on public services and administration, to its

:48:08. > :48:16.smallest share of national income since at least 1948. In other words,

:48:17. > :48:21.as a country, public spending, the portion of GDP that we devote to

:48:22. > :48:25.public spending, we will back at 1948 levels if they had these

:48:26. > :48:32.targets. Now, that is a remarkable change. That is not a cyclical

:48:33. > :48:36.thing, that is a change in what we expect government to do, of a

:48:37. > :48:42.radical form, much bigger than under Margaret Thatcher. The Tories have

:48:43. > :48:46.long dream Dyfed. It is Jeff is only in limited government approach, that

:48:47. > :48:52.is what we are going for. -- Jeff Sony. I was just raising this issue

:48:53. > :48:57.we spotted the glitch in school meals, someone has pointed out, who

:48:58. > :49:03.has read the document, the OBR have said in here that they note that the

:49:04. > :49:06.Treasury have not come up with the money to pay for school meals after

:49:07. > :49:13.the general election. So it will come out of education. They have not

:49:14. > :49:17.come up with the money for some of the tax cuts after the election. Why

:49:18. > :49:20.does it matter? If you assume that the coalition goes on after the

:49:21. > :49:26.election, they would have to cancel those policies or make cuts

:49:27. > :49:31.elsewhere in order to pay for them, and the OBR, the Office for Budget

:49:32. > :49:34.Responsibility, point that out. On the Labour side, Ed Balls, clearly

:49:35. > :49:42.the Tories were determined to give him a bad time, he has to be

:49:43. > :49:45.shouting to be heard, not an edifying time for Parliament. But

:49:46. > :49:50.the attack remains on living standards, cost of living, which is

:49:51. > :49:54.why I suggest the Chancellor is talking about trade fairs and all

:49:55. > :49:59.the rest of it. Where does it leave Labour, if the economy does grow

:50:00. > :50:03.even more strongly next year than the OBR is forecasting, and the Bank

:50:04. > :50:07.of England is more accurate? By that time, surely living standards will

:50:08. > :50:11.be rising. I note the OBR forecast as a point some time next you when

:50:12. > :50:15.average earnings are rising more quickly than prices. He is still

:50:16. > :50:24.banking, Ed Balls, in fact he said that living standards will be lower

:50:25. > :50:28.in 2015 in 2010. It is impossible for living standards to be higher at

:50:29. > :50:31.the typical level, I do not think that is the issue. I think it is

:50:32. > :50:39.whether the blood feeling better off. It is the sense of direction.

:50:40. > :50:42.As a sound bite, Ronald Reagan used this, do you feel better off than

:50:43. > :50:46.you did five years ago? He is confident he will be able to say

:50:47. > :50:53.that, so even if there is a dispute about the numbers, where Labour will

:50:54. > :50:57.do is post about a bombshell, ?1600 does not take into account tax cuts,

:50:58. > :51:03.does not take into account a whole series of things. So the figures are

:51:04. > :51:07.not wrong, but there is a debate about what you should include in

:51:08. > :51:11.those factors. But the calculation that Labour are making is that most

:51:12. > :51:14.people will feel worse off than they did, and certainly most people who

:51:15. > :51:18.are not rich will feel worse off than they did, and therefore a

:51:19. > :51:21.recovery will be meaningless to them in terms of individual personal

:51:22. > :51:26.circumstances, household circumstances. Let's just say, you

:51:27. > :51:31.have alluded to it, but the screaming at Ed Balls is not just

:51:32. > :51:35.childish, as some people think, not just because they dislike him, and

:51:36. > :51:40.the Tories do. It is a tactic. He messed up a previous speech, this

:51:41. > :51:44.was not his finest hour, but it was a deliberate tactic to make him

:51:45. > :51:49.shout, make him look red-faced. It was, at the Americans would say, to

:51:50. > :51:55.discombobulated, and he was a little discombobulated. The Tory election

:51:56. > :52:00.strategists were looking for a return to growth this year, clearly

:52:01. > :52:04.stronger by this autumn, then continued strong growth next year,

:52:05. > :52:09.and even stronger growth in 2015, so they go to the election saying

:52:10. > :52:13.Britain is back, do not lead Labour ruin it. These figures do not quite

:52:14. > :52:17.bear that out, growth next year is not that strong, and it falls back

:52:18. > :52:24.in 2015 on these forecasts. The problem is that this growth is based

:52:25. > :52:31.on a consumer recovery that, frankly, if it continued at these

:52:32. > :52:35.levels, would be dangerous, because British households do still have

:52:36. > :52:40.enormous levels of debt. Down a bit as a share of disposable income, but

:52:41. > :52:45.in absolute money terms still over ?1.5 trillion, an all-time record,

:52:46. > :52:50.and it is not fairly distributed. 5 million households at least are up

:52:51. > :52:55.to their eyeballs in debt. If we saw, essentially, that indebtedness

:52:56. > :52:58.rising, that would be highly worrying. But I have to say there is

:52:59. > :53:02.one thing again in here which will give some comfort to those Tory

:53:03. > :53:11.strategists, and it is that the OBR is saying that, at the end of the

:53:12. > :53:15.forecasting horizon, 2018-19, there is significantly... There is a

:53:16. > :53:20.significant margin for the Government in terms of hitting its

:53:21. > :53:24.debt targets. What does that mean? It means that, if he wants to, and I

:53:25. > :53:30.would put a fair bet that he will want to, if the Chancellor once, in

:53:31. > :53:33.early 2015 in the Budget to promise tax cuts, he can do that, because

:53:34. > :53:39.these forecasts allow him to do that. It would be astonishing if he

:53:40. > :53:43.didn't. Who would even think of a Budget promising tax cuts before an

:53:44. > :53:48.election?! It never happens! You asked whether things could be too

:53:49. > :53:51.good, and a phrase used in the Treasury was Goldilocks, not too

:53:52. > :53:56.hot, not too cold. George Osborne wants to say, we have made progress,

:53:57. > :54:02.it has not been a waste of time, but it is not over yet, I have to carry

:54:03. > :54:05.on cooking the porridge. This is the dilemma for them, isn't it? The

:54:06. > :54:08.things that the Tories cannot make their mind up about is whether they

:54:09. > :54:11.want people to be feeling good or frightened, because if they are

:54:12. > :54:16.frightened, they might take the view they will not vote for them in the

:54:17. > :54:21.circumstances. It is a tactical dilemma. We have plenty of time, we

:54:22. > :54:24.are going to be on air until two o'clock as we analyse this

:54:25. > :54:28.substantial Autumn Statement. Interesting to see that the

:54:29. > :54:32.Chancellor has finally discovered that when he cuts corporation tax,

:54:33. > :54:36.he gets money in, that has been a while coming, interesting that the

:54:37. > :54:41.Treasury is now doing that with his dynamic models. Jo. Going from the

:54:42. > :54:46.Goldilocks analogy to political reaction now, to that speech, we can

:54:47. > :54:49.join Matthew Amroliwala, who is on College Green outside House of

:54:50. > :54:54.Commons. Thank you very much, Lescott a snapshot reaction to what

:54:55. > :54:59.we have heard from Ken Clarke, John McFall, Lord McFaul. -- let's get.

:55:00. > :55:04.Your headline thought in terms of what you have heard? I thought it

:55:05. > :55:09.was a masterful performance, a Chancellor who is on top of the

:55:10. > :55:13.worst financial crisis in modern times, things are improving, he has

:55:14. > :55:19.got common sense, he is calm, the main help these giving is to

:55:20. > :55:23.businesses and young people, all the things that matter. We have a long

:55:24. > :55:30.way to go. Ed Balls has got a lot of chutzpah, but quite a ridiculous

:55:31. > :55:36.position to criticise him. It was a 99% politics, 1% economics show,

:55:37. > :55:40.with 100% theatre, and your own Nick Robinson tweeted that the Tories

:55:41. > :55:44.were shouting and bawling and barracking Ed Balls to make him look

:55:45. > :55:49.as if he was unfit for government. It was all theatre today, not much

:55:50. > :55:53.economics in it. In terms of the big picture, we had George Osborne say

:55:54. > :55:58.that we are going to have grow faster than Germany, faster than

:55:59. > :56:02.America. In those sorts of basics, he is on the right course now, isn't

:56:03. > :56:09.it you might up the economy fell off a cliff, the financial crisis, GDP,

:56:10. > :56:23.the OBR figures indicated it fell 72%. -- 7.2%. We have actually got a

:56:24. > :56:26.debt fuelled economy, and the Governor of the Bank of England only

:56:27. > :56:32.this month said that three quarters of the growth will be by

:56:33. > :56:37.consumption, by housing and by consumers. So that is not a good

:56:38. > :56:41.picture, taking it in the long term. Ken Clarke, one of your

:56:42. > :56:45.colleagues was on the programme earlier, acknowledging that Labour

:56:46. > :56:50.has shifted the whole political debate onto the cost of living. That

:56:51. > :56:54.is a real problem, isn't it? The national indicators are one thing,

:56:55. > :57:00.but real lives are quite different. I do not think they have. There is a

:57:01. > :57:03.cost of living problem, of course, but too exploited by making

:57:04. > :57:06.absolutely absurd suggestions that the government can arbitrarily frees

:57:07. > :57:11.energy bills, whatever happens to the cost of energy, was ridiculous.

:57:12. > :57:16.It has gone beyond just energy, it is how people feel in terms of wages

:57:17. > :57:19.and everything else. Underlying it all, of course, nobody knows

:57:20. > :57:26.anything about macroeconomics and expects to see a sudden surge in

:57:27. > :57:30.living standards. He would not have expected as to bounce back in the

:57:31. > :57:34.first three years. Was Ed Balls wrong to say that people in 2015

:57:35. > :57:39.will be worse off than when you came to power in 2010? We do not know for

:57:40. > :57:42.certain, but because of the mess we took over, the country has been

:57:43. > :57:49.rendered poorer. The economy crashed by 7%, the currency devalued by 25%,

:57:50. > :57:54.forcing petrol prices up and everything else. There is no doubt

:57:55. > :57:57.it is a slow recovery. George Osborne acknowledged that, and he

:57:58. > :58:02.continued to show the way forward, tackling debt, deficit, tackling the

:58:03. > :58:06.structural problems, getting back to normality. It is nonsense to try to

:58:07. > :58:10.divert people to say it is we will cut your gas bill arbitrarily, which

:58:11. > :58:15.is not changing things. John McFall, in terms of efforts to help, we saw

:58:16. > :58:19.the announcement on energy, a freeze in fuel duty, a cap on business

:58:20. > :58:24.rates, free school meals at primary school, what would you do

:58:25. > :58:29.differently at this stage? We have just got a billboard broadcasting

:58:30. > :58:37.that he was ?1600 was off under David Cameron. So you do not support

:58:38. > :58:41.those things? What David Cameron has done... To adapt Margaret

:58:42. > :58:44.Thatcher's phrase, you may be for you turning, but David Cameron is

:58:45. > :58:49.first in the queue. If it is payday loans, I will do it, plain packaging

:58:50. > :58:54.of cigarettes, energy bills, I will do it. They are not leaving, they

:58:55. > :58:57.are following, that is the problem, Ken. We heard another announcement,

:58:58. > :59:04.another National Infrastructure Plan, and in the Budget programme,

:59:05. > :59:09.Andrew Neil gave Danny Alexander a torrid time asking about delivery

:59:10. > :59:12.on, I think, the third National Infrastructure Plan. Why is it such

:59:13. > :59:18.a problem for government to deliver these things you say you will do? We

:59:19. > :59:23.have an infrastructure system, a legal system, a culture of constant

:59:24. > :59:28.debate and objection. We would not have had the industrial revolution

:59:29. > :59:31.if we had had this system in the early 19th century. The Government

:59:32. > :59:34.has targeted major infrastructure programmes, we are getting them

:59:35. > :59:38.under way, and we are going to be spending more on infrastructure in

:59:39. > :59:42.this decade than we did in Labour's decade, and we are progressing. We

:59:43. > :59:46.have to change the planning system, we have to take more thing through

:59:47. > :59:49.Parliament, rather than years of endless public inquiries, and we

:59:50. > :59:52.have got to make all the proper checks on where we go more

:59:53. > :59:59.sensible. Brunel would never have got started with out the reforms we

:00:00. > :00:03.are bringing in now. On pensions, that announcement bringing forward

:00:04. > :00:07.that we heard about, how can I put this delicately, perhaps both of you

:00:08. > :00:11.are champions of working later in dual careers, but we were talking to

:00:12. > :00:16.the TUC earlier, and they are saying, what has changed in terms of

:00:17. > :00:22.data on life expectancy to bring forward this proposal? Is it purely

:00:23. > :00:25.about politics and money? This was responsible government in the

:00:26. > :00:28.national interest. When my generation were working to pay the

:00:29. > :00:32.pensioners of our day, most of them only to their pension for three or

:00:33. > :00:36.four years. We greatly outnumbered the pensioners we were paying for.

:00:37. > :00:40.Our children, our grandchildren, they cannot pay people a state

:00:41. > :00:47.pension for 30 years when the pensioners will outnumber the

:00:48. > :00:52.working people. It is common sense. We have seen it with infrastructure,

:00:53. > :00:56.Ken was pathetic at trying to explain infrastructure. We need a

:00:57. > :01:01.serious examination on pensions to see if there is an intergenerational

:01:02. > :01:05.bias. Yes, we have got problems because of an ageing population. We

:01:06. > :01:14.need to have analysis, we just can't have sound bites. That was a 99%

:01:15. > :01:23.politics presentation. When you left office... Infrastructure... We can't

:01:24. > :01:27.have excuses after three years. We have got to leave it there, you can

:01:28. > :01:32.continue to argue the point. We have to go back to the studio.

:01:33. > :01:37.They will probably still be arguing when we go back to them. We are

:01:38. > :01:41.joined by the Chief Secretary to the Treasury, Danny Alexander, welcome

:01:42. > :01:45.to this Daily Politics special. You have got a recovery but it is a

:01:46. > :01:48.recovery without export growth and with business investment in

:01:49. > :01:53.decline. That therefore means it is unsustainable. I don't agree the

:01:54. > :01:58.recovery is unsustainable. You are certainly right to say that this

:01:59. > :02:03.country, as George Osborne said, has to do a lot more to grow our

:02:04. > :02:08.exports, especially when our major export remains depressed, the

:02:09. > :02:12.eurozone. The forecast there is for continued very slow economic

:02:13. > :02:19.activity, which is why we are working hard to expand trade in

:02:20. > :02:23.places like China. On business investment, if you look at the OBR

:02:24. > :02:27.forecast, you are right that it has been much slower than anticipated

:02:28. > :02:30.but they also forecast growing business investment. It is one of

:02:31. > :02:33.the things I have been talking about. The only way you can get

:02:34. > :02:40.sustainable improvements on living standards is with a strong economy

:02:41. > :02:43.matched by rising productivity. Business investment is one of the

:02:44. > :02:47.missing ingredients which is why we are putting so much pressure on

:02:48. > :02:53.businesses to invest. What will encourage businesses to invest? The

:02:54. > :02:56.measures on business rates are there to support small businesses. A lot

:02:57. > :03:00.of the investment will need to come from the small business sector. The

:03:01. > :03:05.Treasury coppers have about ?750 billion in them. -- coffers. What

:03:06. > :03:13.did the Chancellor do that would unlock that money? On business

:03:14. > :03:18.investment, there is about ?500 billion sitting on the corporate

:03:19. > :03:26.balance sheets, it has risen ?125 billion. Why won't they invest? We

:03:27. > :03:30.are starting to see signs of that investment. Six Britain's largest

:03:31. > :03:34.insurance companies pledged to divide billion pounds of investment

:03:35. > :03:38.in UK infrastructure, it is a welcome vote of confidence in the UK

:03:39. > :03:42.economy. One of the tests over the next 12 months will be, do we start

:03:43. > :03:47.to see businesses investing some of that cash. We are starting to see

:03:48. > :03:50.more investment because of better growth, we are seeing the UK

:03:51. > :03:54.performed better than other countries around the world. A lot of

:03:55. > :03:58.our conversations with business are about the need for businesses to

:03:59. > :04:03.invest, making sure we have a tax regime that helps to make this a

:04:04. > :04:08.good place to invest. You mention the insurance fund, six of them have

:04:09. > :04:12.agreed to invest 25 billion. How will that be any different from the

:04:13. > :04:17.pension funds that you told us had agreed to invest 20 billion? So far

:04:18. > :04:24.they have committed one billion and not 1p has been spent. I would say

:04:25. > :04:29.there has been good progress made on the pension fund issue. How much has

:04:30. > :04:33.been spent? It takes pension funds a long time to put in place these

:04:34. > :04:38.arrangements, they are investing billions of pounds this year and

:04:39. > :04:43.more India is to come. They haven't -- more in the years to come. They

:04:44. > :04:48.haven't spent a penny yet. It is for the pension funds to make decisions

:04:49. > :04:53.for themselves but for the first time, those funds have created a

:04:54. > :04:56.vehicle which enables them to invest in British infrastructure. For the

:04:57. > :05:02.insurance companies, the difference is the successful negotiations we

:05:03. > :05:07.had in Brussels... I have heard you talk about them before, by getting a

:05:08. > :05:10.successful outcome we have unlock the opportunity for those insurance

:05:11. > :05:14.Company is to invest. Hearing some of them talk about it yesterday, it

:05:15. > :05:22.is clear they want to get on with it because they see it as a crucial

:05:23. > :05:29.part of being able to fulfil their duties to their members. Why will

:05:30. > :05:34.they be quicker than pension funds? Pension funds had to create a new

:05:35. > :05:38.vehicle. In the UK, by and large, they are too small to invest in

:05:39. > :05:43.infrastructure by themselves. Why didn't you go to the insurance

:05:44. > :05:46.companies first? Because the regulations, which were uncertain

:05:47. > :05:49.and we were trying to win the negotiations in Brussels, were

:05:50. > :05:52.holding them back. The original proposals would have stopped them

:05:53. > :05:56.investing. Having won the argument we are unlocking ?25 billion of

:05:57. > :06:04.investment. It is not one to be criticised. Isn't the poster boy for

:06:05. > :06:08.you approach to infrastructure the a 14? You came into power come you

:06:09. > :06:15.cancelled the plan to upgrade the A14. You then decided to revive it

:06:16. > :06:19.but as a toll road, you then announced you're going to do what

:06:20. > :06:24.you got back in 2010, you are going to build the A14 of the government

:06:25. > :06:28.purse without tolls and it is going to cost 200 million more than if you

:06:29. > :06:33.started in 2010. After all this, not a single shovel has hit the ground.

:06:34. > :06:38.There have been a lot of things to sort out on the A14. A lot of

:06:39. > :06:42.planning and negotiation with the ports and developers who want to

:06:43. > :06:45.build housing along that route. We have also worked with the highways

:06:46. > :06:51.agency to speed up their processes so it will not take as long to build

:06:52. > :06:54.as if we built it under the procedures in 2010 that we

:06:55. > :06:57.inherited. If I am to be criticised to listening to the responses to

:06:58. > :07:03.because will take on and deciding not to go ahead, I disagree. You

:07:04. > :07:05.said it was simply unaffordable under any reasonable future funding

:07:06. > :07:10.scenario, and now you are building it. Because we have taken tough

:07:11. > :07:15.decisions on current spending, we have held it down. In June I was

:07:16. > :07:18.able to set out a ?100 billion plan to invest in roads and railways and

:07:19. > :07:24.in the structure that matters. We are able to afford precisely that.

:07:25. > :07:32.When will the good people of Felixstowe be able to drive on the

:07:33. > :07:39.road? The road will -- the work will start in 2016. Things like nuclear

:07:40. > :07:42.power stations and offshore wind turbines and massive road

:07:43. > :07:50.investments, they can't be suddenly delivered overnight. We have

:07:51. > :08:03.completed 30 Six Rd projects, 350 flood defences, 150 railway stations

:08:04. > :08:08.-- 36 road projects. ?46 billion has been invested per year on average on

:08:09. > :08:14.infrastructure compared to an average of 41 billion under the last

:08:15. > :08:22.government. The ABI says that by 2019, real spending on goods and

:08:23. > :08:27.services will be back to levels we have not seen since 1948. What do

:08:28. > :08:33.you think the colleagues in your party, the Liberal Democrats, will

:08:34. > :08:36.think about that? I am not sure I know precisely what figure you are

:08:37. > :08:45.referring to. It is repeated several times. Two things. Total government

:08:46. > :08:51.spending in 2018-19 will be at the same level in 2009. It is a lot to

:08:52. > :08:56.do with welfare going up, slow growth of the economy. You have

:08:57. > :09:02.asked me long winded questions and I am trying to give you short answer.

:09:03. > :09:05.There will be choices about the further steps in deficit reduction,

:09:06. > :09:11.do we do it through departmental spending, further reductions in

:09:12. > :09:16.costs, raising more taxes on wealthy people? What we are committed to and

:09:17. > :09:19.what the Conservatives are committed to is the path of deficit reduction.

:09:20. > :09:26.The precise com position of what the government does in 2016-17 and

:09:27. > :09:29.2018-19 will be a matter to be set out in the manifestoes of both

:09:30. > :09:34.parties. We did not hear word from Labour about the economy or their

:09:35. > :09:43.commitment to the continuing, what is underpinning this economy which

:09:44. > :09:47.is a firm plan... There was a talk of a charter for budget

:09:48. > :09:51.responsibility. It sounded like a trap, pre-election, from the Labour

:09:52. > :09:55.Party and Ed Balls, that you hope he will fall into. What is it that you

:09:56. > :10:03.and the Tories are prepared to agree on in that charter? There already is

:10:04. > :10:07.a charter for budget responsible to comment as part of the founding

:10:08. > :10:11.legislation of the OBR, it needs to be updated every so often. Our

:10:12. > :10:16.fiscal mandate is a rolling one over a five-year period. Should we

:10:17. > :10:20.shorten that period? That might be something we can do to bind the

:10:21. > :10:24.country into dealing with its financial problems on a responsible

:10:25. > :10:29.timescale. Other measures we could take to firm up the commitment to

:10:30. > :10:32.the path of deficit reduction... It will not be about this tax measure

:10:33. > :10:36.or that spending measure, it will be about trying to make sure that as a

:10:37. > :10:37.country, we have a firm Parliamentary commitment to that

:10:38. > :10:49.timetable. It is not quite a law because the

:10:50. > :10:54.current budget responsibility act or Eddie has a charter in it. It will

:10:55. > :10:58.be updating the charter to reflect current conditions -- already has a

:10:59. > :11:03.charter in it. How worried are you that the growth that we are seeing

:11:04. > :11:07.now is based primarily on increased consumer spending, more personal

:11:08. > :11:10.private debt and a housing bubble? I don't accept that is a fair

:11:11. > :11:14.characterisation of the growth we are seeing now. One of the things I

:11:15. > :11:18.am concerned about, and have been talking about a lot over the last

:11:19. > :11:20.few months, is the need for business investment to kick in and start

:11:21. > :11:24.responding to better economic conditions. That is one of the keys

:11:25. > :11:28.to ensuring we get better productivity. I am pleased that we

:11:29. > :11:32.are seeing a recovery not just in consumer spending but in the

:11:33. > :11:35.construction sector, manufacturing sector. The last two quarters of

:11:36. > :11:39.growth, strong wrist in the developed world. We are fairly even

:11:40. > :11:44.in the composition as between the major sectors of the economy. There

:11:45. > :11:50.is some balance but we need to make sure it continues. Business

:11:51. > :11:53.investment is the key. The accept that a recovery largely based on

:11:54. > :12:00.consumer spending, as it is at the moment, the one thing almost back to

:12:01. > :12:03.2008 levels, do you accept it is unsustainable when median pay levels

:12:04. > :12:07.have fallen to what they were like in 2003. I think what you are

:12:08. > :12:11.referring to is the fact that the service sector is a large proportion

:12:12. > :12:15.of our economy, it has been the case for a while. We therefore need to

:12:16. > :12:19.see strong recovery in services if we are to see a strong economic

:12:20. > :12:22.recovery in this country. There are a number of things we have been

:12:23. > :12:28.doing to make sure we have more disposable income in our pockets.

:12:29. > :12:36.Cutting income tax. Next April we will reach the Liberal Democrats

:12:37. > :12:40.promise of ?10,000 allowance, putting several hundred pounds back

:12:41. > :12:45.in people's pockets. Making it several p a litre less develop your

:12:46. > :12:48.tank of fuel than it would have done under Labour. All of which by

:12:49. > :12:59.helping people with disposable income. By the start of 2015, will

:13:00. > :13:02.people be better off than in 2010? There is some good analysis in the

:13:03. > :13:08.Autumn Statement document about this. You are right to say, and this

:13:09. > :13:11.is a consequence of the depth of the economic crisis, that pay levels

:13:12. > :13:15.have been suppressed. It is also true that household disposable

:13:16. > :13:19.income, that reflects the tax measures I have been describing, has

:13:20. > :13:27.been rising come albeit very slowly. It fell in 2011. It did. My view is

:13:28. > :13:30.that we need to keep working and taking difficult decisions elsewhere

:13:31. > :13:33.so that we can afford to do things like further increases in the

:13:34. > :13:40.personal allowance. One thing this government will not do is as the

:13:41. > :13:48.economy recovers, start frittering away the gains on short-term

:13:49. > :13:54.measures. I would like an answer to my question. I thought I had answer

:13:55. > :13:59.it. It was simple and you did not answer it. Will people be better off

:14:00. > :14:05.by the start of 2015 in 2010? It will depend on individual

:14:06. > :14:11.circumstances. On average! There are 1.4 million people in work compared

:14:12. > :14:19.to... I know that. Those people are better off. There is a ?40 billion

:14:20. > :14:25.commitment by this government. I didn't think I was going to get an

:14:26. > :14:32.answer. I thought it was an answer. Just not a good one. Not a good

:14:33. > :14:38.question, I would say. You better get an answer, it will be asked a

:14:39. > :14:42.lot! The office of budget responsibility have actually made a

:14:43. > :14:46.specific note that you haven't put in your books, any money for free

:14:47. > :14:52.school meals after the election, the removal of the cap on student

:14:53. > :14:56.numbers after the election, any money for some of the tax cuts after

:14:57. > :14:59.the election. Aren't you making commitments that people would assume

:15:00. > :15:07.our long term, but not coming up with the cash? They are scored in

:15:08. > :15:09.the first year of the next Parliament, and beyond that we have

:15:10. > :15:12.made an assumption about the total amount of spending, but because

:15:13. > :15:17.there are no public expenditure totals for those years, the costs

:15:18. > :15:20.sit within that. Equally, they also note that there are savings to be

:15:21. > :15:25.made in the spending round, which we scored this time. The policy we

:15:26. > :15:29.announced then on keeping social rent increases lower, that saves

:15:30. > :15:32.money on welfare bills, that was not scored, so the pressure on those

:15:33. > :15:35.future years is much less than people might assume, but those costs

:15:36. > :15:41.have to be found from within the overall envelope. Make it one the

:15:42. > :15:52.Chief Secretary will think is a good question! That is blatantly

:15:53. > :15:56.impossible! I am so sorry! What the OBR says is the single most

:15:57. > :16:00.important judgment is that productivity, output per worker in

:16:01. > :16:04.this country is going to Wright. Without that, this recovery will not

:16:05. > :16:12.be sustainable and these fiscal numbers will be blown up. I agree

:16:13. > :16:16.with that judgment, by the way. It is striking that many people will

:16:17. > :16:20.say there was nothing announced by the Chancellor today that is going

:16:21. > :16:24.to do anything to help productivity. Where are the measures to help with

:16:25. > :16:28.investment? The two biggest differences in productivity are

:16:29. > :16:32.infrastructure and skills. We have a massive expansion in

:16:33. > :16:39.apprenticeships, extra measures to help 16 and 17-year-olds, and that

:16:40. > :16:45.will help productivity. Not over the next two or three years. The big

:16:46. > :16:49.investment in infrastructure, that raises productivity. All of those

:16:50. > :16:55.things help productivity, as will Andrew's point. Was that a good

:16:56. > :16:59.question? That was a great question! He is going to be the nest economics

:17:00. > :17:06.editor. Is he really? Congratulations. I will be watching

:17:07. > :17:12.the show from the South of France! Take that! Danny Alexander, Chief

:17:13. > :17:18.Secretary to the Treasury, thank you very much for being on this Daily

:17:19. > :17:26.Politics special. Shall I give out the gold stars now? Just to the new

:17:27. > :17:30.economics editor! We can get some more political reaction now if we

:17:31. > :17:34.let Danny Alexander go and talk to Stewart Hosie of the SNP and Elfyn

:17:35. > :17:39.Llwyd of life Camry, both in Central Lobby, and they no doubt heard some

:17:40. > :17:45.of what Danny Alexander said. -- Clyde Camry. Let's ask you, Stewart

:17:46. > :17:48.Hosie, the economy is growing faster than any developed economy, the

:17:49. > :17:54.deficit is coming down, Britain could be building a surplus, what is

:17:55. > :17:59.not to like? If that were remotely true, it would be fantastic. The

:18:00. > :18:06.problem is that GDP growth forecast means that the economy is 2.5% lower

:18:07. > :18:09.than before the crash. The modest improvement in employment is to be

:18:10. > :18:14.welcomed but it is almost unchanged since this Government came to

:18:15. > :18:17.power, still 1 million people unemployed compared to pre-crash.

:18:18. > :18:22.George Osborne said the borrowing figures have fallen to 111 billion,

:18:23. > :18:26.still 15 billion more than he promised in his first Budget only

:18:27. > :18:32.three years ago. He has failed on every single one of the targets he

:18:33. > :18:35.has given himself. Despite what Stewart Hosie says, Elfyn Llwyd,

:18:36. > :18:39.growth is back and it is actually going to be stronger than initially

:18:40. > :18:43.forecast. One of the things that the Chancellor announced as a trade-off

:18:44. > :18:47.was a rise in the state pension age, before you can get your state

:18:48. > :18:53.pension, is that justifiable? We don't think so, because we thought

:18:54. > :18:57.the 68-69 level was bad enough, but the announcement now of 70 years of

:18:58. > :19:01.age is utterly unfair. I will tell you why, because in some

:19:02. > :19:04.underprivileged areas of the UK, and I name for example the South Wales

:19:05. > :19:09.valleys, might expectancy is as low as 75, though Izzie saying you will

:19:10. > :19:16.give an old-age pension of five years' pension before he or she

:19:17. > :19:18.passes away? It is not on. You are sticking to your public spending

:19:19. > :19:23.commitments in that independence referendum, you will commit to that

:19:24. > :19:29.level of public spending in years to come due back I am not quite sure

:19:30. > :19:32.what you mean by that stopped the Scottish Government has laid out

:19:33. > :19:37.certain things we would like to see done, but the economic situation we

:19:38. > :19:43.inherit when we become independent is the economic situation we

:19:44. > :19:47.inherit. Decisions will need to be taken by subsequent Scottish

:19:48. > :19:51.Government. Are you making promises you cannot keep already? Absolutely

:19:52. > :19:56.not, we have laid out very clearly things like removing the bedroom

:19:57. > :19:59.tax, which is completely iniquitous, so the pledges which have been made

:20:00. > :20:04.have been made, but we need to look in detail at the economic situation

:20:05. > :20:07.we inherit in 2016. What about business rates? The Chancellor has

:20:08. > :20:14.got a cap on the increase in business rates at 2%, what will you

:20:15. > :20:18.do? I think that is welcome, a very sensible move forward, and can I say

:20:19. > :20:22.as well there are two good things in this, the national insurance holiday

:20:23. > :20:28.to bring youngsters into work, that is not at all a bad idea. And also

:20:29. > :20:32.increased tax avoidance measures, all these things for the good, I do

:20:33. > :20:36.think that is right. But overall the problem we have is there is

:20:37. > :20:41.considerable growth where we are now, but in other parts of the UK is

:20:42. > :20:46.cannot be seen anywhere. What about business rates? What about your

:20:47. > :20:48.government in Scotland? Interest-rate are completely

:20:49. > :20:55.devolved, and some of the measures he announced today for sees Scottish

:20:56. > :21:01.businesses paying less business rates. -- is this rates are

:21:02. > :21:04.completely devolved. I am sure the Scottish Government will look at

:21:05. > :21:08.what there may be from this measure, and they will then determine whether

:21:09. > :21:11.action on business rates is the best way to stimulator economic growth,

:21:12. > :21:15.or whether the money can be used in a different way, but that is a

:21:16. > :21:19.decision for the Scottish Government. But you will get less

:21:20. > :21:24.money from the Barnett formula as a result. The Government announced a

:21:25. > :21:27.modest increase because of the Barnett formula, I have not seen the

:21:28. > :21:30.numbers, so we need to work out precisely what that means, taking

:21:31. > :21:33.into consideration that even if there is a modest increase in

:21:34. > :21:37.revenues bending, it will barely dent the massive cuts we have had in

:21:38. > :21:45.revenue and capital over the last three years. -- revenue spending.

:21:46. > :21:49.My little gremlins have just pointed out to me that, hidden in the

:21:50. > :21:53.figures, there is an extra 11 billion due to be sent to what is

:21:54. > :21:59.called EU institutions over the next five years, an extra 11 billion,

:22:00. > :22:03.just wait until Peter Bone finds out! Look, it has just gone one

:22:04. > :22:08.o'clock, seven minutes past, to be exact, you are watching live

:22:09. > :22:11.coverage and analysis of the Chancellor's Autumn Statement here

:22:12. > :22:14.on the Daily Politics special. Let's take a look if you are breaking for

:22:15. > :22:20.lunch and have a Sammut and copy by your side, let's take a look at what

:22:21. > :22:23.was announced by the Chancellor. -- a sandwich. The Office for Budget

:22:24. > :22:28.Responsibility's forecasts are here, saying that growth will be stronger

:22:29. > :22:35.than it thought, 1.4% this year, pretty much a consensus. 2.4% on

:22:36. > :22:41.2014, it has had to up that as well, but then dipping to 2.2% in 2015, a

:22:42. > :22:45.bit of a surprise, and that will merit some investigation why it goes

:22:46. > :22:49.down and not towards 3%. Borrowing, as a result of this growth, the

:22:50. > :22:56.Government gets more tax revenue, fewer people are unemployed, it

:22:57. > :23:01.helps, borrowing comes down below what was forecast in March, down to

:23:02. > :23:07.111 billion for this fiscal year. The next fiscal year starting in

:23:08. > :23:14.April 2014, down to 96 billion, then down to 79 billion in the election

:23:15. > :23:17.year, 2015. Even by 2015, it is a lot, and originally the Chancellor

:23:18. > :23:23.had hoped there would be no deficit by 2015. It is still 79 billion. As

:23:24. > :23:28.a result of this fall in the deficit, though, the OBR are saying

:23:29. > :23:32.that there could be a small surplus by 2018-19. That is interesting, I

:23:33. > :23:40.would counsel caution here, because nobody really has an idea what the

:23:41. > :23:43.deficit will be by then. These estimates have always been wrong,

:23:44. > :23:45.but it is interesting when they are within shouting distance. The

:23:46. > :23:50.national debt continue to rise because we are still racking up the

:23:51. > :23:56.deficit for the next few years, and it is expected now to beat a little

:23:57. > :24:00.lower than earlier, 80% of GDP by 2015-16. As Robert pointed out

:24:01. > :24:03.earlier, that is the British Treasury definition. If you take the

:24:04. > :24:06.Maastricht definition for the European Union under the treaty

:24:07. > :24:11.which allows you to compare our deficit with deficit in other major

:24:12. > :24:17.European economies, it is actually around 100%, rather than 80%, a lot

:24:18. > :24:24.more. Unemployment is to fall to 7% in 2015, 5.6% in 2018, and that has

:24:25. > :24:28.always been a key political figure, but all the more so now because the

:24:29. > :24:31.Governor of the Bank of England has says that when unemployment gets

:24:32. > :24:37.down to 7%, he will look at raising interest rates. At least that is a

:24:38. > :24:41.possible trigger to do that. While the Chancellor was delivering his

:24:42. > :24:46.statement, we discovered that the bank has decided to keep interest

:24:47. > :24:51.rates at 0.5%, the historic low, and to keep quantitative easing, the

:24:52. > :24:58.printing of money electronically, at ?375 billion. No surprises there .

:24:59. > :25:02.Those are the headlines at the Chancellor announced, back to

:25:03. > :25:05.Susannah Streeter, who is at the Trafford Centre in Greater

:25:06. > :25:09.Manchester. Susannah. Hello, yes, we heard from the

:25:10. > :25:14.Chancellor that the economic plan is working, but is that really being

:25:15. > :25:18.felt here in the north-west of England? I am at the Trafford

:25:19. > :25:22.Centre, which is a real temple of retail, and this is a very important

:25:23. > :25:25.time of the year for businesses in the run-up to Christmas. Of course,

:25:26. > :25:30.all the signs are good, growth has returned to the economy with a

:25:31. > :25:34.vengeance since March, unemployment is steadily falling, but with

:25:35. > :25:42.productivity low and wages stagnant, is it all good news? Let's have a

:25:43. > :25:47.chat with Kevin from Unison, what is your main concern? The Chancellor

:25:48. > :25:50.made no mention whatsoever of pay. Britain needs a pay rise. Real

:25:51. > :25:58.earnings in Britain are at 2003 levels, ?53 billion has been removed

:25:59. > :26:02.from the national pay packet, and we need an increase in earnings in this

:26:03. > :26:05.country if we are to have growth. The Government says it has to be

:26:06. > :26:09.responsible and live within its means. That will ring hollow with

:26:10. > :26:12.people here in the north-west to have struggled to live within

:26:13. > :26:15.limited means. Tens of thousands of people are using food banks in this

:26:16. > :26:20.region, and what we need is to ensure that as as the economy grows,

:26:21. > :26:24.workers who sustained so much pain during this period have their share

:26:25. > :26:28.of economic growth. Thank you very much, a lot of people are hoping to

:26:29. > :26:32.get onto the housing market, they were looking for some kind of

:26:33. > :26:38.announcements to help them as well, and the national Stacey Asian of

:26:39. > :26:43.estate agents -- the national Association of estate agents is

:26:44. > :26:47.here. We were hoping for something on stamp duty, we will continue to

:26:48. > :26:54.campaign for a reduction or form on stamp duty, because it inhibits

:26:55. > :27:06.movements of houses. -- reduction or reform. Putting ?1 billion behind

:27:07. > :27:11.the scheme should see some movement on affordable homes. What will the

:27:12. > :27:16.impact the capital gains on those nonresidents who sell second homes?

:27:17. > :27:19.I think the impact will be minimal, because those who are buying second

:27:20. > :27:24.homes are buying them for the long-term, not the short-term. And

:27:25. > :27:28.you think it is just going to affect the south-east. I think the

:27:29. > :27:32.predominantly, yes, but certainly when the Chancellor was talking

:27:33. > :27:37.about house price inflation, even in 2018, 3% below the high, that shows

:27:38. > :27:41.they recognise there is not a bubble nationally. Mark Heywood, many

:27:42. > :27:45.thanks. Throughout the programme we have been asking for your comments,

:27:46. > :27:50.opinions and questions about what the Chancellor had to say. Paul

:27:51. > :27:54.Lewis from the BBC's Moneybox has been taking those questions, what

:27:55. > :27:58.are people saying to you? People are very concerned about the rising

:27:59. > :28:02.state pension age. Adrian says, by the time I retire, it could be 71.

:28:03. > :28:10.If you are a teenager, that might be the case. If you are in your 50s, it

:28:11. > :28:14.will be 67. If you are in your 20s, it will be 70. People have been

:28:15. > :28:17.making the point that people do not magically remain fit just because

:28:18. > :28:22.the Government raises the pension age. I have asked weeks from people

:28:23. > :28:26.in their 60s who cannot work or get a pension, people are very worried

:28:27. > :28:31.about that. Comments about the marriage tax allowance. Strangely,

:28:32. > :28:37.Karen tweeted to say, I presume that is her husband, I will not be

:28:38. > :28:40.claiming the married tax break it is insulting and discriminatory. It

:28:41. > :28:45.could be ?200 the year when one partner does not pay tax, but she is

:28:46. > :28:50.going to turn it down. There will be lots more comments coming through,

:28:51. > :29:00.how do people get in touch? On the BBC website, you can text, 61124,

:29:01. > :29:04.and you can tweet me. Lovely, Paul Lewis, thank you very much. Yet at

:29:05. > :29:08.the Trafford Centre, we have not seen any empty shops, but up and

:29:09. > :29:11.down the country there are plenty, and the Chancellor's plans for

:29:12. > :29:15.business rate relief and discounts will be debated very strongly

:29:16. > :29:18.amongst those small businesses. We will be getting reaction from them a

:29:19. > :29:27.little bit later, finding out whether they think it will help them

:29:28. > :29:32.to revitalise town centres. Let's see how Mr Osborne's statement has

:29:33. > :29:39.gone down in the city. Give us your first reaction. It is a not rocking

:29:40. > :29:44.the boat statement as everyone was hoping for, a good indication of how

:29:45. > :29:48.sentiment is is what the pound does on the foreign exchange market. We

:29:49. > :29:54.saw very little movement in that. I think people are glad that we are

:29:55. > :29:57.sticking to the plan as it is now. And maybe the forecasts were the

:29:58. > :30:01.more surprising part of the statement today. In terms of some of

:30:02. > :30:05.the measures, will there be people in the city who will be nervous

:30:06. > :30:09.about the measures on tax avoidance, capital gains tax imposed on

:30:10. > :30:16.nonresidents who sell residential property in the UK from next year?

:30:17. > :30:19.It has been a talking point. If we look at the London market as a

:30:20. > :30:24.bubble, we are seeing incredible growth still at the high-end of the

:30:25. > :30:29.London housing market. Many people are thinking, is it going to mark a

:30:30. > :30:32.top? We have seen plenty of foreign money buying London property as a

:30:33. > :30:37.safe haven and maybe that will start to struggle. In terms of worries

:30:38. > :30:45.about boom and bust, Abe returned to those sorts of economics -- a

:30:46. > :30:48.return? It is always a worry. We can't describe what we have been in

:30:49. > :30:54.as a boom, there is still concern about the housing markets. They are

:30:55. > :30:56.seeing this as a steady pair of hands to hopefully continue the

:30:57. > :31:01.growth that we have seen over the prior six months. There are some to

:31:02. > :31:04.the right of the Tory Party who would have said, you are saving

:31:05. > :31:09.money because borrowing is down, why not use that money for tax cuts, why

:31:10. > :31:15.not stimulate the economy in that way? I think most people like to see

:31:16. > :31:20.a tax cut. Maybe he has one eye on the election and he is thinking,

:31:21. > :31:25.maybe I will do this nearer the election. Maybe it is something for

:31:26. > :31:30.the Budget prior to the election. I think maybe that is why we're not

:31:31. > :31:35.seeing the tax cuts there. Thank you.

:31:36. > :31:41.It looks like the capital gains tax on foreign owners is going to raise

:31:42. > :31:46.all of ?15 million in 2015. Which I think gets you about a one-bedroom

:31:47. > :31:52.flat in Knightsbridge. A couple of basements in Kensington. Alan? --

:31:53. > :32:13.what about bull? -- the pound is now trading above ?1

:32:14. > :32:19.63. We had this cut in the valuation but it can't be helpful that it is

:32:20. > :32:23.at that level. It is not good news for exporters. Broadly what happened

:32:24. > :32:28.which is a bit of a pain, many people say that when sterling fell,

:32:29. > :32:33.rather than aggressively seeking out new markets and seeking advantage of

:32:34. > :32:36.the competitiveness that was on offer, lots of company simply pushed

:32:37. > :32:44.up their margins and banked bigger profits. It is not a bad thing

:32:45. > :32:50.except that they then sat on those profits, rather than investing them.

:32:51. > :32:54.Plainly, as you go into what we hope is a sustainable economic upturn,

:32:55. > :32:57.you would want them to start investing them. If their profits are

:32:58. > :33:05.being squeezed by the strength of the pound, you probably won't, so it

:33:06. > :33:14.is not Holywell come. -- holy welcome -- it is not wholly welcome.

:33:15. > :33:23.To get a reaction to the changes to the pension age, we can join Dave

:33:24. > :33:28.Harvey at a business in Swindon. They are flat out making cardboard

:33:29. > :33:34.boxes. Haven't seen any red boxes come off yet. The growth of 1.4%

:33:35. > :33:39.means places like this are much busier. Because as Britain's

:33:40. > :33:46.manufacturing industry gets busier, they make more staff. Have a look

:33:47. > :33:51.through here, it is rammed to the rafters with cardboard boxes for all

:33:52. > :33:57.kinds of industry. As you say, for the staff, it is another five years

:33:58. > :34:02.making boxes. Lisa and Matt are here for up looking forward to working

:34:03. > :34:05.until you are 70? No, it is not a thought I want to think about, the

:34:06. > :34:11.thought of working for the next 45 years does not please me. Where do

:34:12. > :34:15.they draw the line? Next time there is a speech, why not another year or

:34:16. > :34:20.two years? Then you are paying into a pension and you don't know when

:34:21. > :34:26.you're going to withdraw the funds. Was it a surprise? I don't think

:34:27. > :34:33.so. Most people would have expected it. I agree with Lisa but I can't

:34:34. > :34:38.say I am surprised. Let's speak to Stella from mainline recruitment.

:34:39. > :34:46.You are seeing more people getting work now. Definitely, we are seeing

:34:47. > :34:48.more jobs, a variety of sectors are busier, temporary and permanent

:34:49. > :34:53.positions, much busier than it has been. We are all talking about in 30

:34:54. > :35:00.years but people are already working until they are 70. Lots of people

:35:01. > :35:03.are not retiring early and are still working at 70 plus. It means that

:35:04. > :35:08.younger people can't get through the door and there are not so many job

:35:09. > :35:15.vacancies. The other knock-on effect of this, companies like this, the

:35:16. > :35:20.guy who runs the place was saying, how do you manage people out when

:35:21. > :35:24.that they can't do a factory job and they can't hear so well. It is

:35:25. > :35:27.difficult, it is not just about age but capability and a lot of

:35:28. > :35:31.companies have to move people around if they are not able to work in the

:35:32. > :35:39.warehouse. It becomes another burden for the businesses sometimes. Thank

:35:40. > :35:43.you for those reflections. No one is exactly celebrating working until

:35:44. > :35:47.they are 70 but this place is seeing that growth we heard about, although

:35:48. > :35:52.no one is really opening the champagne yet. You shouldn't drink

:35:53. > :35:56.champagne at work anyway! We are joined by Paul Johnson, the director

:35:57. > :36:02.of the Institute for Fiscal Studies. Give me your headline thoughts, what

:36:03. > :36:06.have we missed? What is the slight of hand in the book rest

:36:07. > :36:18.the overall story is as we have seen. The OBR said the underlying

:36:19. > :36:22.deficit is exactly where it was, just that we will get to where we

:36:23. > :36:29.want to a bit faster in terms of the actual... What he has called the

:36:30. > :36:32.structural deficit. Exactly. A couple of things are rather

:36:33. > :36:39.interesting. One is that we don't see the additional spending

:36:40. > :36:42.commitments scored after 2015-16. We have seen that before. It is one of

:36:43. > :36:46.these rather difficult things about the way the Treasury scores its

:36:47. > :36:51.numbers and thinks about public spending. It lives in this kind of

:36:52. > :36:56.world in which it acts as if it believes that nothing it says now is

:36:57. > :37:01.committing itself in the long run. That is how spending reviews have

:37:02. > :37:06.always worked. We saw this in the budget in terms of the funding for

:37:07. > :37:09.social care and child care. We saw it in terms of the changes to

:37:10. > :37:14.funding for national insurance contributions. It means even bigger

:37:15. > :37:18.pressures on public spending going forward than you will see in these

:37:19. > :37:24.numbers. The surplus may be a fiction? It means there is more to

:37:25. > :37:33.be done with in the extremely tight spending cuts. The cuts remain at

:37:34. > :37:39.the same level, you need to fit more staff within the same envelope. What

:37:40. > :37:46.is your take on the claim of Ed Balls that on average, we are ?1600

:37:47. > :37:49.worse off? Household incomes are significantly lower in real terms

:37:50. > :37:54.than before the recession. It is hardly surprising. We have had the

:37:55. > :38:00.biggest recession in 100 years, national income went down by 7%, it

:38:01. > :38:09.is still below where it was. That is part of what is going on. In a

:38:10. > :38:13.sense, the plus side of this is despite the fact that national

:38:14. > :38:17.income is below where it was in 2008, employment levels are much

:38:18. > :38:23.higher. There are not so many people out of work as you would expect.

:38:24. > :38:29.Everyone in work really has felt a significant and historically big

:38:30. > :38:33.squeeze on their incomes. You were about to tell me there was a slight

:38:34. > :38:40.of hand with the student loan book. What is going on there? It is not

:38:41. > :38:44.necessarily slight of hand but it is the way these kinds of figures work.

:38:45. > :38:48.The Chancellor said he is going to sell off the student loan book. It

:38:49. > :38:53.is worth money in the sense that students will be paying back their

:38:54. > :38:57.loans in the future. In the real sense, that is a neutral thing for

:38:58. > :39:01.the government. It sells off something which would get it some

:39:02. > :39:04.money in the future. But he is saying, I am going to take that

:39:05. > :39:11.money and use it to pay for more students to come in. He is going to

:39:12. > :39:16.use that money to pay for extra students. But by selling the loan

:39:17. > :39:19.book, he has not made the public sector any better off, but he has

:39:20. > :39:29.increased the amount he has to spend on the surplus. Have real household

:39:30. > :39:32.disposable income is gone up? The Chancellor uses that phrase

:39:33. > :39:36.deliberately. Real household disposable income is rising. As I

:39:37. > :39:40.understand it, it is an aggregate figure, putting everybody in the

:39:41. > :39:44.country together and saying that because more people are in jobs,

:39:45. > :39:47.overall incomes are up. How do you make sense of the difference between

:39:48. > :39:54.that claim and acclaim from Labour that households are on average ?1600

:39:55. > :39:59.worse off. Can they both be true? Probably not, the chief secretary is

:40:00. > :40:02.using a number produced by the Office for National Statistics which

:40:03. > :40:09.has a lot of things in it, including some money which is not in the

:40:10. > :40:14.household sector. It uses different deflators, it is not using CPI but

:40:15. > :40:17.other measures and it is put together in a way that probably only

:40:18. > :40:22.a few people in the ONS actually understand. The other statistics

:40:23. > :40:26.that one sees, which are less conferencing and less up-to-date,

:40:27. > :40:31.but we do understand, our first that we know for sure that household

:40:32. > :40:35.incomes on average were falling up to about 18 months ago, there is no

:40:36. > :40:38.reason to believe they have increased much since then. And we

:40:39. > :40:43.know that average earnings have been falling. There are different sets of

:40:44. > :40:51.statistic that people are flinging at each other. The 1600 figure is

:40:52. > :40:55.telling in the difference between the rise in wages and the higher

:40:56. > :40:59.rise in prices. When you do that, real wages have been falling against

:41:00. > :41:03.prices. The government would argue that the measures should be wider

:41:04. > :41:07.and take into account the tax cuts, the council tax freeze and so on.

:41:08. > :41:12.What can we use as journalists, as a measure to hold the politicians to

:41:13. > :41:15.account? You have different things affecting different people. Wages

:41:16. > :41:19.have increased much less quickly than inflation. That is not

:41:20. > :41:26.surprising. We have had a great recession, the biggest recession in

:41:27. > :41:31.100 years. It would be astonishing if household income had not fallen.

:41:32. > :41:35.Earnings have fallen by a bit more for people in work because there are

:41:36. > :41:47.more people in work. More of us are in work producing less stuff. You

:41:48. > :41:51.have said the typical disposable income of a British person is at

:41:52. > :41:57.2003 levels, when do you think it is going to be back at where it was at

:41:58. > :42:03.the start of this Parliament? It doesn't that like it will be back

:42:04. > :42:07.there by 2015. -- doesn't look like. It depends significantly on

:42:08. > :42:12.what happens to earnings. I haven't looked at the most recent earnings

:42:13. > :42:16.figures but if you eat use last year's OBR, expectations about what

:42:17. > :42:20.is happening to earnings and we plug in what is happening to taxes and

:42:21. > :42:28.social security, it looks like in 2015 people will be no better off

:42:29. > :42:33.than in 2001. There is a slight dip in the growth forecast, is that

:42:34. > :42:36.significant or is it just one of those statistical things that you

:42:37. > :42:41.have to live with, it goes down and back up again? It is telling us a

:42:42. > :42:46.bit about why the OBR is saying that growth is higher this year than

:42:47. > :42:50.next. It is essentially cyclical, we get the growth now and as a result

:42:51. > :42:55.we get less growth later on. Overall they are not saying any more growth

:42:56. > :43:07.in the economy in steady state over the long run. We are getting it now

:43:08. > :43:12.rather than later. Since the OBR has been consistently wrong, why should

:43:13. > :43:18.we take any notice? Every forecast ever has been consistently wrong!

:43:19. > :43:26.That is the nature of forecasting. You take the growth for this year,

:43:27. > :43:32.they have gone back to where they were in the Autumn Statement in

:43:33. > :43:36.2012, which is when they were forecasting this. This is the

:43:37. > :43:40.serious point of my question. Just as the economy was beginning to turn

:43:41. > :43:48.in March of this year, around budget time, the OBR cut its forecast from

:43:49. > :43:58.1.4, to 0.6. And now back again in December of this year, it is back to

:43:59. > :44:06.1.4. Why take it seriously? You have to look at these things. I talked to

:44:07. > :44:10.a lot of people who do economic forecasting and about May or June,

:44:11. > :44:15.people suddenly got cheerful. In March, the OBR were very good

:44:16. > :44:22.company. They didn't see the recovery. Isn't that right? They

:44:23. > :44:27.didn't. There is something a bit odd about short-term forecasting.

:44:28. > :44:33.Because as you point out, it is not just the OBR, although it has been

:44:34. > :44:39.very visible. You never get it right. The worry about it is that it

:44:40. > :44:42.is off the back of these wrong fluctuating forecasts that

:44:43. > :44:50.government makes some quite important decisions. About tax and

:44:51. > :44:54.spend. It isn't something that one regards as completely trivial, but

:44:55. > :44:57.it is a problem. They have not change the structural place that the

:44:58. > :45:04.economy is in and that is what determines the choices. The thing

:45:05. > :45:08.that really will affect the political debate, if you get rid of

:45:09. > :45:13.all this chat about forecasts and so on, essentially they have said the

:45:14. > :45:16.problem is just as it was before. It does not matter that we are growing

:45:17. > :45:23.faster, the deficit problem is exactly what it was before. Is that

:45:24. > :45:27.right? The deficit problem is, in long-term structural terms, is the

:45:28. > :45:31.same as it was nine months ago, much bigger than it was three years ago.

:45:32. > :45:34.No great change, and that is why the Chancellor has been careful to say

:45:35. > :45:40.that the bits of money he is giving away, he is also taking back. Wobbly

:45:41. > :45:44.politically helpful, because George Osborne has got the thing he wanted,

:45:45. > :45:48.growth is more than expected, his plan is working, but the whole is

:45:49. > :45:53.just as big as it was, so the problem is just as big, therefore

:45:54. > :45:56.the job must be carried on. That prediction that many people will

:45:57. > :46:01.struggle to understand the detail of the structural deficit, that is

:46:02. > :46:04.politically quite helpful for him. The question I was dragged to ask,

:46:05. > :46:10.do you agree with the OBR that this recovery is purely cyclical and that

:46:11. > :46:15.therefore the underlying problem of public finances is as bad as it ever

:46:16. > :46:28.was? Well, we do not get into this mugs game! Can I say, I think there

:46:29. > :46:33.is a vacancy in the market?! Is boss used to run the IFS! He knows that,

:46:34. > :46:38.and I certainly knew it! Tell him I was asking for him. You might be

:46:39. > :46:44.frightened by that prospect. Let's find out how the statement is being

:46:45. > :46:48.written up, two of Fleet Street's finest with Matthew.

:46:49. > :46:51.I am joined on College Green by Elizabeth Rigby from the Financial

:46:52. > :46:55.Times and Kevin Maguire from the Mirror, thank you for your time,

:46:56. > :46:59.what will you be writing? What we will be writing is that this was the

:47:00. > :47:05.victory speech of George Osborne, if you like. Growth figures, biggest

:47:06. > :47:09.growth since the millennium, calling a surplus toward the end of the

:47:10. > :47:12.decade, and so this was the moment where his plan was proved right, his

:47:13. > :47:18.Conservative backbenchers, their tails were up, and I think it was a

:47:19. > :47:23.very positive story for him, more uncomfortable for Labour. Kevin. It

:47:24. > :47:29.was a bit like Paul Potts, ignoring the last three and a half years,

:47:30. > :47:34.downgrading forecasts. There is a big battle at home between

:47:35. > :47:37.Conservative and Labour, a lot of people will be watching and thinking

:47:38. > :47:41.we are talking about this great economy that seems to be booming,

:47:42. > :47:48.but I am not feeling it. On the cost of living, Elizabeth, George Osborne

:47:49. > :47:50.spooked Gordon Brown when he was back in opposition on inheritance

:47:51. > :47:56.tax, spooked him enough not to call a general election. Did Ed Miliband

:47:57. > :48:01.do the same for this government on cost of living? On fuel prices and

:48:02. > :48:05.just broadly, I think they have, and the point about today, what George

:48:06. > :48:11.Osborne is trying to do, saying, here is the economics, giving

:48:12. > :48:16.something back for the next budget. Do you think people sitting on a

:48:17. > :48:21.sober think about microeconomics? I think that's the thing is that you

:48:22. > :48:25.want to hit with tax cuts when it has most potency for boaters, and I

:48:26. > :48:29.would suggest that next year, before the election or just six months

:48:30. > :48:35.before is when he does that. -- voters. Isn't the problem for

:48:36. > :48:38.Labour, on the biggest use, welfare, immigration, they have got it wrong

:48:39. > :48:44.and are being forced to change policy? On the bedroom tax, they

:48:45. > :48:49.have not. On the economy, it depends how you look at it and which bits

:48:50. > :48:52.you look at, because people do feel that their standard of living is

:48:53. > :48:56.falling, because it is. There has only been one month when wages have

:48:57. > :49:00.gone up more than prices, that was when bankers held over their bonuses

:49:01. > :49:03.to cash in on the tax cuts which George Osborne provided. It is a

:49:04. > :49:08.battle for the hearts and minds, the wallets and purses of Britain, but

:49:09. > :49:13.Labour was talking the language of ordinary people, and it is the

:49:14. > :49:17.Conservatives who sounds like 1930s Stalinist officials talking about

:49:18. > :49:21.pig iron production in the Ukraine! There is strong growth, the fastest

:49:22. > :49:25.in the G7 predicted for next year, is the problem, though,

:49:26. > :49:29.sustainability? A lot of that growth potentially around housing, around

:49:30. > :49:35.consumer spending is out of savings. Beyond the headline speech

:49:36. > :49:37.and the headline figures today, in the OBR statement which was the

:49:38. > :49:41.independent statement on the government figures, there is a sign

:49:42. > :49:46.that there is a housing bubble emerging. There has been concerns

:49:47. > :49:50.over the right to buy scheme, the Help To Buy scheme, sorry, and if

:49:51. > :49:55.you look at it, it looks from the OBR forecast that house prices could

:49:56. > :49:59.start hitting the peaks we saw in 2007. Just a final thought from both

:50:00. > :50:02.of you, this argument we have heard played out in the Commons is the

:50:03. > :50:08.ideal and we will see over the next 18 months leading into the general

:50:09. > :50:11.election. Isn't the problem we will have the election and the winner is

:50:12. > :50:15.posterity? There will be much more of this coming. Labour would have

:50:16. > :50:17.had an austere period, although bizarrely George Osborne is doing

:50:18. > :50:22.what Alistair Darling said in terms of the deficit. He was go to clear

:50:23. > :50:26.it all this parliament, now it is going to be 2019. Andrew Neil at

:50:27. > :50:29.Danny Alexander, the Chief Secretary to the Treasury, early on the

:50:30. > :50:34.programme, will people be better off in 2015 and 2010? Danny Alexander

:50:35. > :50:38.could not say yes. That is a problem for the coalition. They may have

:50:39. > :50:42.doubts about Labour copper but if they are not better off after five

:50:43. > :50:46.years of George Osborne, easy going to get another five? The only thing

:50:47. > :50:51.I would say about that is that the problem that Labour have not faced

:50:52. > :50:55.is that they are not trusted on the economy. George Osborne is gambling

:50:56. > :51:00.on posterity now, a hand-out towards the election, and that could be very

:51:01. > :51:05.potent. Bribes. Isn't that what every government does? That is why

:51:06. > :51:09.we are in a mess! Thank you very much for your time, back to the

:51:10. > :51:14.studio. Just a little titbit we are picking

:51:15. > :51:17.up here, the OBR, the Office for Budget Responsibility, has increased

:51:18. > :51:22.its forecast for house price rises, with the extra demand, expecting

:51:23. > :51:29.house price inflation to be above 5% in 2014, and 7% in 2015. Relative to

:51:30. > :51:35.the March forecast, they say they have revised the levels of house

:51:36. > :51:38.prices up 10% by 2017-18. Interesting. It is interesting,

:51:39. > :51:44.although 5% might be an underestimate. We will see, it is

:51:45. > :51:51.one of the bees and is why the Bank of England recently cut back the

:51:52. > :51:55.supply of cheap funding to banks. -- it is one of the reasons. Nick

:51:56. > :52:00.Robinson has just popped out to do another part of the BBC, Radio 4. He

:52:01. > :52:03.will be joining us again, we are broadcasting to you until two

:52:04. > :52:09.o'clock in the Daily Politics special. It is now 24 minutes before

:52:10. > :52:12.two o'clock, let's bring you up with the key points if you have just

:52:13. > :52:17.coming over lunch to switch on the TV, this was in the statement. The

:52:18. > :52:23.planned fuel duty rise is now scrapped, petrol prices will not be

:52:24. > :52:27.rising because of that. Still is strong against the dollar, so I

:52:28. > :52:31.suspect oil prices will not be a major inflationary pressure. While

:52:32. > :52:38.yet. Rail fares will rise only in line with inflation. -- for a while

:52:39. > :52:42.yet. That is the Chancellor trying to keep an eye on living standards,

:52:43. > :52:50.but the state pension age, the time when you can retire, will rise to 68

:52:51. > :52:55.in the midst 2030s and 69 in the late 2040s. Now, the married couples

:52:56. > :52:59.tax allowance, we were expecting that, that will be introduced in

:53:00. > :53:06.April 2015, just one month before the next election. There will be,

:53:07. > :53:10.for two years, a ?1000 business rates discount for small retailers,

:53:11. > :53:16.an attempt to try to blow some life back into the high streets up and

:53:17. > :53:22.down the country. And the employer national insurance contributions

:53:23. > :53:26.will be scrapped for under 21s, and attempt to do something about the

:53:27. > :53:33.970,000 young people who are unemployed. That is a big problem

:53:34. > :53:36.for them. We can talk now to the Northern Ireland economics and

:53:37. > :53:40.business editor, John Campbell, who is in Belfast, welcome to the

:53:41. > :53:43.programme. The Chancellor has said the recovery has started, because of

:53:44. > :53:47.those improved growth figures, Labour says there is a cost of

:53:48. > :53:51.living crisis, how are people feeling in Northern Ireland? The

:53:52. > :53:55.recession in Northern Ireland has been much deeper and longer lasting

:53:56. > :53:58.than in the rest of the UK, really because we have this enormous

:53:59. > :54:02.housing bubble and it burst, and that really blew a hole in the

:54:03. > :54:05.finances of companies, households and the whole economy here in

:54:06. > :54:09.Northern Ireland, really. The economy here is recovering, it is

:54:10. > :54:13.happening much slower than in the rest of the UK. Any growth in the

:54:14. > :54:17.rest of the UK is good news, because it is the biggest market for

:54:18. > :54:21.companies in Northern Ireland. What about the cost of living crisis that

:54:22. > :54:26.Labour claims Sony families are feeling at the moment? Was there

:54:27. > :54:30.anything in the Autumn Statement to try to meet those challenges,

:54:31. > :54:34.anything to cheer about in Northern Ireland? I suppose the complicating

:54:35. > :54:38.factor is that when the Chancellor announces any of the policies to do

:54:39. > :54:42.with spending, the micro-measures, they do not automatically applied to

:54:43. > :54:46.the devolved regions. The devolved regions will get some money, but it

:54:47. > :54:50.is up to the devolved administrations on how to spend

:54:51. > :54:56.that. Northern Ireland will get an extra 136 million over the next two

:54:57. > :54:58.years, and the Northern Ireland Of us has helpfully suggested to the

:54:59. > :55:02.local administration that they might want to spend that on fuel bills,

:55:03. > :55:07.but it will be down to the local finance minister and his colleagues.

:55:08. > :55:11.Thank you very much. Now, let's go back to Susannah

:55:12. > :55:16.Streeter at the Trafford Centre in Greater Manchester. Susanna!

:55:17. > :55:20.Yes, well, the Chancellor has said there are record numbers of people

:55:21. > :55:24.in work, and of course that is what retailers here at the Trafford

:55:25. > :55:28.Centre really want to hear. They want more people to earn more money

:55:29. > :55:33.so they can have more money in their pocket and spend more at the shops,

:55:34. > :55:38.but even so, there is still a real squeeze on household incomes. The

:55:39. > :55:42.standard of living, the cost of living has gone up, in particular

:55:43. > :55:46.those very high fuel bills that we have heard so much about lately.

:55:47. > :55:50.Richard Lloyd has been listening to the Autumn Statement with me, from

:55:51. > :55:54.Which?, you have been campaigning against high fuel bills, and we have

:55:55. > :55:59.had confirmation that there will be this ?50 reduction. Would you have

:56:00. > :56:03.liked to have seen more? We would have liked to CD Chancellor doing

:56:04. > :56:14.much more to get the cost of policy off bills, but also committing to a

:56:15. > :56:17.bigger shake-up of the energy market. It is the wholesale costs

:56:18. > :56:19.that are pining on the agony for millions of households. There was

:56:20. > :56:22.nothing much to give comfort to people struggling with bills. It is

:56:23. > :56:26.welcome help on some of the cost of Government policy, but not enough.

:56:27. > :56:29.But an announcement on rail fares. The main message was it will be

:56:30. > :56:34.growth in the economy, that will help with living standards, and some

:56:35. > :56:38.giveaways, help on rail fares and help on the fuel duty. But in the

:56:39. > :56:41.end, if what he is relying on is growth in the economy, in a place

:56:42. > :56:45.like this, people out and about shopping, are people in the economy

:56:46. > :56:49.spending on sustainable levels of borrowing? Are they getting into

:56:50. > :56:54.debt to spend? The answer is yes, too many people are into tight a

:56:55. > :56:59.squeeze, so the job is not done, as the Chancellor said, to raise living

:57:00. > :57:04.standards. Richard Lloyd, many thanks. Still real concerns about

:57:05. > :57:07.consumers' ability to afford the extra spending that the economy

:57:08. > :57:12.requires. What about local businesses? Peter Smith is the

:57:13. > :57:17.Labour leader on Wigan Council, you think measures introduced for small

:57:18. > :57:20.businesses, such as the business rates discount and cap, will be

:57:21. > :57:25.enough to support businesses in your area? It is not enough, the

:57:26. > :57:29.Government had an opportunity to revalue business rate and turned it

:57:30. > :57:33.down, so the retail sector has been badly hit, and you see that in town

:57:34. > :57:36.centres in the north-west. This is typically a budget for London and

:57:37. > :57:44.the south-east, not really doing enough for us. We look forward to

:57:45. > :57:47.HS2 coming from London, but we have not got that. So the economy is

:57:48. > :57:52.doing better, but mainly again in London and the south-east, job

:57:53. > :57:57.vacancies here are very low compared with the number of people looking

:57:58. > :58:01.for work. A continued commitment to austerities as well, the Government

:58:02. > :58:05.living within its means. Local government has taken 40% of its

:58:06. > :58:08.budget, I do not know if he expects us to take more. Many local

:58:09. > :58:12.authorities will be looking to go to the wall. At the end of the day, it

:58:13. > :58:16.is services that are cut back. We will not be able to do as much for

:58:17. > :58:20.local communities, and it is in places like the North that people

:58:21. > :58:24.needed more than in London. Thank you very much for talking to me.

:58:25. > :58:27.Throughout the programme we have been asking for your opinion and

:58:28. > :58:32.comment about what the Chancellor has said, and Paul Lewis from the

:58:33. > :58:38.BBC's Money Box has been taking your questions, a lot of talk about

:58:39. > :58:42.pensions. A lot of talk about pensions and other issues, Cat and

:58:43. > :58:47.Olivia both to eat, if we have to work until we asked 70, do we need

:58:48. > :58:51.to put more into private pension so we can retire earlier? And Peter,

:58:52. > :58:55.his wife is caught by what he calls a triple whammy, she will have to

:58:56. > :59:00.retire before the new pension starts in 26, are they changing that? No,

:59:01. > :59:04.some good news for women in that position, they will be able to buy

:59:05. > :59:08.an extra pension, the new provision, full details next week, but I

:59:09. > :59:12.understand they will be able to boost their pension by up to ?25 per

:59:13. > :59:20.week by paying more contributions now. Briefly, concerns about savings

:59:21. > :59:24.as well. Grumpy Old Man, nothing for savers, and that is true. The

:59:25. > :59:30.tax-free ISA limits are going up, but only with inflation. One ray of

:59:31. > :59:35.hope, though, if the Chancellor is right and unemployment falls to 7%

:59:36. > :59:38.by 2015-16, that is the trigger for the Bank of England to look at

:59:39. > :59:43.raising rates, and that will help savers. Thank you very much, that

:59:44. > :59:47.would help savers, but it would be another squeeze on household

:59:48. > :59:50.incomes, and that is really concerning people here, just how

:59:51. > :00:00.people are able to afford the rising cost of living, back to you. The

:00:01. > :00:04.Chancellor said that the British economy is now the fastest-growing

:00:05. > :00:08.economy among the G7. That was probably true when the Chancellor

:00:09. > :00:13.said it, it is no longer true as 15 minutes ago. The United States has

:00:14. > :00:18.redone its growth estimates for the third quarter and the American

:00:19. > :00:27.economy grew in the third quarter at an annual rate of 3.6%. The first

:00:28. > :00:32.test -- estimate was 2.8, it has actually gone to 3.6%. That is fast

:00:33. > :00:39.growth by any standards and faster than the growth rate of the British

:00:40. > :00:46.economy. There we go, you say something and events prove you

:00:47. > :00:50.wrong. George Osborne will be pleased that came after he sat down

:00:51. > :00:55.from his Autumn Statement! Lets get some open to call reaction. We are

:00:56. > :01:01.joined by the UK Independence Party's Stephen Wolf. We had growth

:01:02. > :01:05.in the economy, we seem to have avoided the double and triple dip

:01:06. > :01:09.recession. And until Andrew mentioned those figures from the US,

:01:10. > :01:13.the economies were going faster than any developed economy in the world.

:01:14. > :01:17.It is to be welcomed, the Chancellor was right with his austerity

:01:18. > :01:22.measures. We have to be careful about what he means by the austerity

:01:23. > :01:27.measures. He is spending 198 billion more than he said he would do and he

:01:28. > :01:31.is four years behind in his deficit reduction plans. I believe this is a

:01:32. > :01:40.Chancellor who has got the wrong parities. -- priorities. He is

:01:41. > :01:46.spending ?48 billion on HS2. We have seen an energy crisis and it could

:01:47. > :01:49.mean 24,000 people possibly dying because they can't afford their

:01:50. > :01:57.bills. They are the priorities of UKIP but not the Chancellor's. Where

:01:58. > :02:04.would you make cuts to balance the books? We would make drastic cuts to

:02:05. > :02:14.the foreign aid budget. We shouldn't be spending zero 7p on foreign aid.

:02:15. > :02:25.-- ?0.7 billion on foreign aid. We should either use the money to

:02:26. > :02:31.reduce the deficit from HS2 or spend money on creating jobs. Would UKIP

:02:32. > :02:37.state pensions be included in the cap or not? We think the Chancellor

:02:38. > :02:41.has attacked pensions consistently over the last few years, he is

:02:42. > :02:45.making people work for longer and work harder. He is not really

:02:46. > :02:47.improving pensions for those in the private sector. He should be looking

:02:48. > :02:53.at ways of listening the market so that more people can invest in

:02:54. > :02:59.private pensions -- loosening the market. We have 4.7 trillion of

:03:00. > :03:08.unintended but in pensions in this country. -- underfunded debt in

:03:09. > :03:14.pensions. -- unfunded debt. I think it is dangerous for the children of

:03:15. > :03:19.the future if the debt more than doubles. Would you include state

:03:20. > :03:26.pensions in a cap on welfare spending? We're not looking at those

:03:27. > :03:29.people who are teachers and nurses, earning low pensions. You have got

:03:30. > :03:35.to look at the civil servants who are earning 200000 and more, ie more

:03:36. > :03:43.than the Prime Minister and Obama, who gets massive pensions. Attack

:03:44. > :03:44.them, then deal with private sector pensions to enable us to get more

:03:45. > :03:53.into that sector. We are joined by the Shadow Chief

:03:54. > :03:59.Secretary to the Treasury, Steven Leslie. What would Labour's position

:04:00. > :04:05.B and would Labour support a cap on welfare spending Aspar posed by the

:04:06. > :04:10.government? We have got to go through the specific details. When

:04:11. > :04:14.you are in opposition you get about an hour to look through these

:04:15. > :04:20.things. Of course we have got to have controls on the welfare budget.

:04:21. > :04:26.This was certainly something we were going to look at. Ed Balls told me

:04:27. > :04:29.on the Sunday politics that unlike the Chancellor, Labour would include

:04:30. > :04:39.state pensions in the welfare cap. Is that still Labour policy? We know

:04:40. > :04:43.there are structural welfare issues that have to be controlled and it is

:04:44. > :04:49.important we take action on those. One of the things we have said we

:04:50. > :04:54.will do is to match the government's spending totals for

:04:55. > :05:00.2015-16. If we vary from that, we will say exactly how we will fund

:05:01. > :05:04.that. That's very interesting but let me ask the question again

:05:05. > :05:09.because it is quite simple. If you are in principle favour of a welfare

:05:10. > :05:16.cap, would it include pensions or not? The Chancellor is saying it

:05:17. > :05:19.would not. We think it is important that we look at the definitions of

:05:20. > :05:26.what is and what is not structural welfare. Would it include pensions

:05:27. > :05:28.or not? He said he wouldn't include pensions, I am asking you if you

:05:29. > :05:37.would. I will look at what he is proposing.

:05:38. > :05:45.We have had about 15 minutes. We will make our assessment. -- 50

:05:46. > :05:48.minutes. How can Ed Balls tell me that it would include the pension in

:05:49. > :05:53.his cap, and now you can't me whether it would or wouldn't? The

:05:54. > :05:57.Chancellor's commitment to the triple lock was not as much of a

:05:58. > :06:00.commitment as he said it would be. He has said it is only going to

:06:01. > :06:04.commit until the general election. We want to see what his proposals

:06:05. > :06:09.are beyond that. A lot of people listening to this programme and the

:06:10. > :06:13.Chancellor's announcements will be concerned about what the effect will

:06:14. > :06:19.be for them and their incomes. We can see the top line issues, the one

:06:20. > :06:23.issue that has come clearly through the Chancellor's statements, is that

:06:24. > :06:27.earnings are falling and prices are rising and we have a cost of living

:06:28. > :06:31.crisis that the Chancellor still has not addressed in the statement. Let

:06:32. > :06:36.me move on since you are not going to answer my question. You are

:06:37. > :06:41.committed to matching government current spending in 2015-16. If we

:06:42. > :06:47.vary from it, we will say how we fund the difference. Do you intend

:06:48. > :06:50.to have more capital spending? At present we think there is an

:06:51. > :06:53.important need to bring forward infrastructure spending. We will

:06:54. > :06:57.make a judgement in our manifesto when we know the state of the

:06:58. > :07:01.economy by 2015. We don't think it would be responsible to make the

:07:02. > :07:05.judgement on capital infrastructure spending. It might be that we want

:07:06. > :07:09.to spend more on capital. It is why we have made the distinct between

:07:10. > :07:13.capital and current spending. Right now we have seen infrastructure down

:07:14. > :07:17.15% since the general election and it is one of the reasons why we have

:07:18. > :07:24.had so little growth over the last three years and why the deficit is

:07:25. > :07:28.so much higher than he said. He said the deficit would be abolished by

:07:29. > :07:33.2015 and we are still going to have ?79 billion by the time of the

:07:34. > :07:38.election. I know what he said, I am trying to find out what you think.

:07:39. > :07:45.On the government's plans to lock in deficit reduction in 2016 - 17 and

:07:46. > :07:50.17-18, will you vote for that, too? They have only done a spending

:07:51. > :07:56.review for 2015-16. They have not set out fiscal plans up to 2018. If

:07:57. > :08:01.they do that we will be able to make an assessment. How can we know? It

:08:02. > :08:09.is a simple principle. Regardless of what the government does, will you

:08:10. > :08:15.vote... To continue reducing the deficit in 16-17, 17-18 Norway you

:08:16. > :08:21.borrow more? -- or will you borrow more? Of course we want to reduce

:08:22. > :08:24.the deficit and we believe it is possible to get to a surplus. If you

:08:25. > :08:27.don't have the growth, you're not going to be able to reduce the

:08:28. > :08:32.borrowing. More over this is a Chancellor who promised we would get

:08:33. > :08:38.rid of the deficit. Because he has not done that, that is why the

:08:39. > :08:46.balance will not happen until 2019. Do you want a surplus? Of course. If

:08:47. > :08:50.the choice under the next Labour government, as you continue to bring

:08:51. > :08:53.the deficit down and you have the opportunity to move into surplus,

:08:54. > :08:59.you would choose that rather than spending more or taxing less? We

:09:00. > :09:03.have got to make sure that we earn our way as a country to higher

:09:04. > :09:10.living standards. What is the answer to my mum question? -- my question?

:09:11. > :09:15.The Chancellor would like to make out that he knows how to cut his way

:09:16. > :09:19.to abolishing the deficit. If the Chancellor was here, I would ask

:09:20. > :09:24.him. You cannot do these things in isolation. If a future Labour

:09:25. > :09:28.government has a choice between running a surplus spending more on

:09:29. > :09:34.schools, welfare, cutting taxes, you would to run a surplus? We believe

:09:35. > :09:39.we would be more effective at eradicating the deficit than George

:09:40. > :09:43.Osborne has proven to be. It is relative to his performance against

:09:44. > :09:48.our belief that a stronger, more sustainable level of growth would

:09:49. > :09:53.help to improve the public finances. We are now talking about a period of

:09:54. > :09:58.time coming years from now, where George Osborne hasn't even done a

:09:59. > :10:04.spending review for beyond 2016. He is asking us, what we would do on

:10:05. > :10:12.his spending plans and 17-18. You are not going to answer it. I have

:10:13. > :10:15.been answering it. On your ?1600 that we are worse off on average,

:10:16. > :10:26.does that include any tax changes? No. It doesn't. The figures we have

:10:27. > :10:34.seen show that the typical working person has lost ?1600 per year. The

:10:35. > :10:41.pound in their pocket... Does it include the raising of the tax

:10:42. > :10:44.threshold? When you then look at the tax benefit and changes, the

:10:45. > :10:50.Institute for Fiscal Studies say that it is beyond even that ?1600.

:10:51. > :10:56.But does your calculation includes the raising of the tax threshold? As

:10:57. > :11:04.far as I and Stan, the 1600 figure relates to earnings against prices.

:11:05. > :11:10.-- as far as I understand. Let me give you another revelation on page

:11:11. > :11:16.85. What they have done is they have revised up prices, expectations on

:11:17. > :11:20.price rises are going higher next year and the beyond. And earnings

:11:21. > :11:26.are anticipated to be falling back even further than they were saying.

:11:27. > :11:29.All right. This is a really important point. Big up in terms of

:11:30. > :11:34.living standards and the cost of living is getting worse as a result

:11:35. > :11:38.of George Osborne... I hope you will come back onto the Sunday politics

:11:39. > :11:46.when I go onto that in more detail. There is a question about whether

:11:47. > :11:49.any government can alter the gap. Even under an energy freeze,

:11:50. > :11:55.households would be worse off than five years ago. The reason is that

:11:56. > :11:58.we have had a great big recession, that is what happens will stop you

:11:59. > :12:03.either lose your job or you get paid less for doing the same job. Nothing

:12:04. > :12:08.you are arguing for seems to change that fundamental economics. The

:12:09. > :12:12.Chancellor would like to say nothing can be done about this. He was

:12:13. > :12:16.forced to mention living standards on 12 occasions, when previous

:12:17. > :12:19.budgets he has not mentioned it at all. We are glad that at least we

:12:20. > :12:25.have dragged him on to this agenda. The idea that nothing can be done is

:12:26. > :12:29.his view. Our view is that you can take action on the cost of childcare

:12:30. > :12:34.for example. You should be looking at how much the bank levy raises and

:12:35. > :12:38.using some of that money to increase the number of free childcare hours.

:12:39. > :12:42.I think there is action you could take on the living wage, helping the

:12:43. > :12:46.lowest paid in particular. We have set out in Centre 's and ways of

:12:47. > :12:59.helping companies do that. Specific actions that can be taken -- set out

:13:00. > :13:04.in scented. -- incentives. There is an argument but it would not change

:13:05. > :13:09.the core economic. You can't affect the wages that people's are paid.

:13:10. > :13:14.You would not change the fundamental economics. This is where I would

:13:15. > :13:19.disagree, you have to have some hope and believe that government policy

:13:20. > :13:22.can actually do things that are for the many and not just the wealthiest

:13:23. > :13:28.few in society, which is the Chancellor's priority. For the many,

:13:29. > :13:35.not the few, I have not heard that before! I will be back on BBC One at

:13:36. > :13:47.11:40pm with List! Week, when we will have James Blunt, I wonder what

:13:48. > :13:49.he will sing -- I am back with This next Mac week.