Autumn Statement

Growth is up, the deficit is down. Will there be jam today in the

Autumn Statement, or just another promise of jam tomorrow?

Will there be jam today in the Autumn Statement, or just

Will there be jam today in the tell on economic growth. He had

Will there be jam today in the over an hour he will be able to say

that growth is twice what it was stronger next year and he has

managed to reduce borrowing by more than was

are told, without fanfare and with Labour's charge ringing in his ears

that people Labour's charge ringing in his ears

Chancellor left the Treasury a couple of... Is there

Chancellor left the Treasury a from the BBC as the Chancellor gets

Chancellor left the Treasury a into his car with the Chief

Chancellor left the Treasury a across Parliament Square and into

new Palace across Parliament Square and into

of the speech and Labour's response the moment the

of the speech and Labour's response are here until two copy with expert

analysis and reaction are here until two copy with expert

politicians of all stripes to find out what they

politicians of all stripes to find assessing the effect it has on the

political landscape. I assessing the effect it has on the

and speaking to local businesses. What

and speaking to local businesses. answering e-mails, tweets and texts.

All answering e-mails, tweets and texts.

finest public service broadcasting, of

finest public service broadcasting, duration, Nick Robinson, the BBC's

political duration, Nick Robinson, the BBC's

tired because I have a duration, Nick Robinson, the BBC's

what Ed Miliband had duration, Nick Robinson, the BBC's

are battling with stagnant wages and duration, Nick Robinson, the BBC's

far better than this government. -- duration, Nick Robinson, the BBC's

in the Autumn Statement. Let's get a duration, Nick Robinson, the BBC's

Back at the budget in March, duration, Nick Robinson, the BBC's

the amount the government would be borrowing

the amount the government would be to get the economy growing or reduce

the deficit. As to get the economy growing or reduce

her acolytes are wondering if a more Thatcherite policy might do

her acolytes are wondering if a more a drubbing at the local elections

her acolytes are wondering if a more May. A royal baby and

her acolytes are wondering if a more in Brighton, Labour were looking for

a new line of in Brighton, Labour were looking for

price freeze to tackle what Labour were now calling the

price freeze to tackle what Labour he would help with free school meals

for younger children he would help with free school meals

conference he would scrap increases in fuel duty, and

2015. Talk of austerity had given way to spending and

2015. Talk of austerity had given proposed a windfall tax on energy

companies. proposed a windfall tax on energy

taxes. With the results of that review announced

taxes. With the results of that improving economy today?

On the one improving economy today?

better, the deficit is back to tumbling again.

better, the deficit is back to you. That is exactly right.

better, the deficit is back to up and say, things are

better, the deficit is back to were told,

better, the deficit is back to think, this is a long-term plan that

better, the deficit is back to critique that we are poorer than we

were There is going to be a bit of better

news. A unique experience for this Chancellor. If we go back to his

first budget after the election in 2010, he was forecasting that his

austerity would lead to a deficit, a gap between the tax revenues and

what he was spending of ?60 billion in the current financial year. It

hasn't quite worked out like that. We roll forward to the budget of

this year, and then he predicted, forecast, that that deficit for this

year would be twice what he originally hoped. We are in the

middle of a bit of an economic recovery which has been going on for

six to nine months. It is a housing market led recovery and a bit more

consumer spending. VAT is up, stamp duty is up. The respected IFS now

thinks that the deficit might actually be a little bit lower than

he expected in March, at about ?113 billion. Does that mean if he wanted

to come he would have a bit more money for some giveaways. It is

still an awful lot of money, not far off 7% of GDP and most economists

would say it is not sustainable. He will not want to take risks in this

budget, it will be steady as she goes. One of the things that will

reinforce his determination not to do anything that looks like a

giveaway is because his ambition to balance the books by the end of his

Parliament. Maybe he is on course to do that. Let's look at what he said

in March would be happening to rowing. He said that over a period

of four years, it would be down to ?43 billion, which is still a lot of

money to be borrowing. And the key point about that is that every year

you borrow that sum of money, it adds to record levels of national

debt. That is another reason why he can't afford to take big risks. So

where is the national debt at the moment? It is well over ?1 trillion.

Over his forecasting time horizon, he expects it to rise to over ?1.6

trillion. Which is on his calculations, 85% of GDP. Very high

by historical standards. Gordon Brown, a Labour Chancellor, took

pride in reducing that ratio to below 40%. In labour's first-term.

On the EU's measure of these things, we are going to be over 100%

debt to GDP ratio. The public finances, for all the better news,

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

the Tory calculation that we don't want to big up things too much. I

saw a quote from a Tory aide, because people may think they can

take a risk with Labour. There has always been a worry that the

public's attitude to Tory governments is, call them in when

things are bad and when the smell has gone away, you can go back to

Labour. That is the Tory view of what many in the electorate think.

They want to say that the problem is still there. Making progress, so

cheer up, but the problem is not over, you have got to stick with

them. That will be the message. George Osborne has been criticised

by Labour, but by some of his own team for looking a bit smug when the

economy started to grow. Saying, look at me, haven't I proved you

wrong? He will be desperately tempted to say to Ed Balls, you said

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

through a plan. Keep us in the job. George Osborne, smug? Who would have

thought it. Or Ed Balls for that matter!

Throughout today's programme we will be getting reaction from people in

Greater Manchester, Susannah Streeter is there for us. I am in a

real temple of retail at the Trafford Centre in Greater

Manchester. It is a key time for small businesses in the run-up to

Christmas. Their success will depend on how confident consumers and

shoppers feel. We have heard that growth has returned to the UK

economy with a vengeance since March, but is that translating

through to a feel-good factor for small businesses? What help do they

need from the Chancellor? Liz Harris is from the Federation of small. You

have been canvassing around your local area -- Federation of small

businesses. What reaction are you getting? Surprisingly positive. The

fact that people are spending the money is reflected in sales on the

street. There are shops on the Main Street that are paying nearly as

much in business rates as in rent, and it makes little difference what

money they are taking in. The key is reimbursement so that exports can

grow, are you seeing evidence of that -- reinvestment. I am seeing

evidence that it is getting better but until we are seeing some of the

things we are hoping to get, I don't think we will have the confidence to

invest. But if we do get them, small businesses are in a good position.

Lots more reaction bit later to the statement. Small businesses looking

for help, but consumers also looking for help with those sky-high energy

bills. Richard Lloyd is from the campaigning group, which. The

Chancellor is going to announce something about the green levies on

energy bills. What is expected and how far do you think you should go?

It is looking like about ?50 a year of the average bill, that is ?1400

for most people right now. It is a step in the right direction, a bit

of help for people to buying a home, who commit to making it more energy

efficient. But this is a small amount of money to people who are

really struggling with the cost of living right now. Four in ten people

tell us that they are feeling the squeeze. Fewer people than last year

are gloomy about the economy and the prospects, but the big number the

Chancellor has do address is that only one in six are saying they are

not feeling in their pockets, in their household budgets, benefits of

economic recovery. Much more from you and your view on what the

Chancellor has come a bit later on in the programme. There is lots of

long-term planning that has do go on and there is likely to be some talk

about raising the retirement age to 68, sooner than we first thought.

Paul Lewis, you thought this was going to be coming along but it will

have a real effect on long-term financial planning. Yes, especially

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

30s, 69. If you are in your 20s, it could be 70 before you get your

state pension. You have got to plan to make sure you are saving enough,

you will have longer to save, but what job could you do at that age?

Lots of people tweeting about that this morning. Perhaps we should

start saving more now, but with interest rates as they are, it is

not a viable option for many people. No, people are starting to

spend their savings in places like this, as we have seen today, so it

is going to be difficult for people to save up. We are also getting

reaction to the announcement about car tax, vehicle excise duty, the

piece of paper that sticks on your windscreen. That will disappear from

next year, it will all be done electronically, and that is how

police will check whether your car is taxed or not. You will be able to

pay by direct debit, which will spread the cost out, although

eventually they will have to raise it because the amount that people

pay is coming down as vehicles get more efficient. You are going to be

taking viewers' questions all day, how should they get in touch? They

can get in touch on the website, they can tax, 61124, and they can

tweet us. Thank you very much, Paul Lewis, we will hear a lot more from

Paul later, and we will be gauging reaction from all the shoppers here

and more local businesses to the statement. Back to you.

Thanks, Susannah. You can get the latest on the statement on the BBC

website, you can visit the live page on the Autumn Statement. You will

find in-depth coverage, you can discover what the measures mean for

you. As well as sending your comments and questions via the

website, you cannot so take part in the conversation, follow the debate

on Twitter, all of our correspondents and experts will be

using one of the hashtags on your screen, #AS2013.

It is time to find out what the City was expecting from the Chancellor

today, and David Jones is at IG Index. What you want the Chancellor

to say? I think Robert Peston summed it up fairly well when he said we

are expecting steady as we go in the Autumn Statement. I cannot see that

he will want to do anything that rocks the boat. We have all been

surprised, both in the City and government, about the economic

performance of the UK over the last six months. I do not think Mr

Osborne can afford to be too smug, because we know how quickly things

can change, so we are expecting no major surprises. It is interesting,

what he may do with corporation tax, to try to encourage investment in

the UK. I think that will be well received, to try to stimulate the

economy a little bit further. We heard yesterday that Goldman Sachs

has said it would move much of its European business and the workforce

from London to Paris or Frankfurt if Britain leaves the EU. Was that a

bombshell in the City? I think it was a surprise, but at the moment

not many people are giving too much credence to that. We have heard over

the years how banks would move away from London if the taxation system

changed, for example. We have not necessarily seen an exodus there. I

think people are not too worried. If more banks were saying the same

things, other employers, maybe. Glass half full, glass half empty as

far as you are concerned? Cautiously glass half full, but we know how

quickly it can get spilt! Vice if you have just joined us, you are

watching special coverage of the Autumn Statement at Westminster.

I think we have got a helicopter shot coming up, there it is,

beautiful, you know it is important when we have a helicopter up in the

sky, something big is happening, the wonderful new skyline of London, it

has been transformed over the last 20 years, all these new buildings,

the She's Greater, the gherkin, that is the heart of the City that we are

over. Let's go from that part of the city to Westminster, let's join

Matthew Amroliwala, who is outside the House of Commons.

Good morning. Labour has called it a cost of living crisis, it is a

potent political message, and one that the Government has acknowledged

with its efforts to bear down on energy bills, but how much are we

really feeling the pinch? We asked Paul Johnson of the Institute for

Fiscal Studies do investigate for us.

It is easy to forget how big an economic earthquake we have lived

through. National income fell by more and stayed lower for longer

than in the recessions of 1980s or 1990s, and even compared with the

recession of the 1930s. The result is that once you take inflation into

account, it looks like household income is that once you take

inflation into account, it looks like household incomes now will by

about 5% less than back in Christmas 2007 before the financial crisis

hit. And because incomes actually grew rather slowly in the years

before the recession, we are in the unprecedented position of having no

more buying power now than we did around the turn-of-the-century,

nearly a decade and a half with no income growth for many people. The

pain has been quite evenly spread across the income scale, though.

Whether you prefer to shop at high end luxury stores like this... Or

instead preferred the other end of the high street, where you can get

good offers at knock-down prices. Why is that? Well, the labour market

has been remarkably resilient. There are more people in jobs now than in

2007, and unemployment, while high, has risen much less than in the less

deep recessions of the early 1980s and early 1990s. For many of those

who are dependent on benefits, the Government squeeze on welfare

payments is only just beginning to bite. But most of us have taken a

hit to our incomes. Back in Christmas 2007, average earnings

were ?393 per week. Now they are about ?450 per week. The trouble is

that, after inflation, that is worth about 8% less than back in 2007. And

inflation means that the things that we buy have got more expensive since

Christmas 2007 by about 20%. Within that, energy prices have risen by as

much as 60%, and food prices by about 30%. Not everyone is worse

off, though. Historically low interest rates have kept housing

costs down for homeowners, and older people are generally done much

better than younger people. But overall our incomes have gone down,

and the cost of the basics have gone up. That means there is less left.

Though. -- less left for Santa.

Let's get political thoughts from Kwasi Kwarteng, Cathy Jamieson and

Simon Hughes. Thank you for your time, Labour has set the political

agenda throughout the course of the summer on energy bills, the cost of

living. Is today an opportunity to wrestle it back, do you think?

Absolutely, there has been a lot of media interest in the cost of living

issue. Ed Miliband gave a good speech with his price, , freezing

energy prices, and today is a time for the government to wrest back the

agenda. The economy is growing, against what the doom mongers said,

it has found a reasonable amount of growth that we have been looking

for. Nick Clegg was saying the economy is growing but people do not

actually feel it, so many people do act knowledge there is that

disconnect there, that perhaps you are out of touch. No, I absolutely

agree that people in my constituency and up and down the country are

feeling more squeezed than they have done for a while, and it will take

time before people realise that the economy is actually growing,

contrary to what the Labour Party was saying. When will they feel it,

though? I think the treasury experts are saying this summer, people will

feel that the economy is on the mend, that it is picking up and that

we are going to slightly more prosperous times. You talked about

Ed Miliband and described it as a con, your solution, ?50 off, that

leaves the energy, and with their profits and touched. The taxpayer is

taking the hit, people will be rather angry at that. What is taking

the hit is government spending, but why it is a con is because what

happens after you have frozen prices is that they tend to go up

massively. This happened in the 1960s and 70s, they had a freeze,

prices went up... You have not touched profits. We have not touched

profits yet. Cathy Jamieson, in terms of the general economy,

unemployment is down, inflation down, growth up, George Osborne has

got this right, despite, or four years, you saying this would not

work. What we have added three wasted years, and I am glad there

has been some acknowledgement from the Conservatives this morning that

Ed Miliband was right on the cost of living, because ordinary families

are feeling the pressure, and we are estimating that for an ordinary

working household it is about ?1600 per year. Any improvement in the

economy is to be welcomed, but this is not affecting ordinary people. It

has been a recovery for the people at the top. There may be a lag in

terms of the national indicators, as we were saying, but the prediction

is we will have the strongest growth in the G7 in 2014. The Government

could do more. We saw in that package, the energy price rise, they

could do more on that. They cannot say it is a con... Free school meals

at primary school, potentially a freeze on fuel duty still, is that

not enough? You would welcome those things, I assume. I would want to

see more done on energy prices, because that is where people are

concerned. Although the Government are offering some money off, it is

not as much as it could be. Are you still stuck on spending more and

cutting lest you might it is not a question of spending more and

getting less. The issue is, how will this affect ordinary people? The

recovery is not helping ordinary families, it is for those at the top

at this point in time. Simon Hughes, on that point, if there is sustained

recovery, is it a fair recovery? Well, it needs to be a fair

recovery. But is it? The Government policy is that it should be, and the

key issue for us, a Liberal Democrat proposition, is that you take people

on low and middle incomes out of tax as far as possible, and we are on

target for that, the first ?10,000... People do not talk about

tax thresholds, they talk about wages, they talk about whether they

have more money... They have ?700 less to pay to the Chancellor every

year in tax. They talk about the fact that they do not have to pay

tax at all, some of them, because their income means they are below

the tax threshold, and we want to put that higher. But yes, there are

things we need to do, council tax frozen, help with childcare costs,

free school meals. All things, we are conscious, that help the budgets

of ordinary people. A final being on austerity, we have had that

announcement that we're going to get spending cuts in Whitehall, another

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

austerity going to come to an end? You told us back in 2010 that it

would be 2015, but it is looking more like 2020 now. All the external

commentators who know about these things say that our economy is going

on the right direction, we have grown in the economy, growing jobs,

people in work, growing companies... And austerity ends

when? We cannot predict that, but in the next Parliament, and before the

next Parliament, we will see that growth has come because of the

policies of the Government, difficult though they have been. Of

course, there are more cuts coming after the election as well. Thank

you very much for your time and thoughts, plenty more political

reaction from here in a little while, now it is back to you in the

studio, Andrew. Thanks, Matthew, it is just coming

up to 11:15am, you are watching a special Daily Politics programme on

the Autumn Statement. Let's get full use of the helicopter, it is

circling around the face of Big Ben, a rather nice day, autumnal, a

winter's day, and we welcome viewers from the BBC News Channel who are

joining BBC Two for this Daily Politics special coverage of the

Autumn Statement. Now, the Chancellor will get to speak in a

few minutes to deliver this Autumn Statement, we will be crossing live

as soon as he does. But first, some of the measures that we expect him

to announce. It has been one of the most leaked Autumn Statements in

living memory, and that is saying something! We know the green levies

will be cut from energy bills, he got that out because he wants the

concentration today to be on the economy, not energy bills. We know

from Nick Clegg at the Liberal Democrat conference that infants

School meals are going to be free, and we know from the Tory conference

that there is going to be a married couples tax allowance. They and we

have already been told that fuel duty is to be frozen again, likely

to be frozen for the rest of this Parliament. We know that small

businesses are going to get their rate relief extended, and we know

that he is going to cap business rates at 2%, and that national

insurance Contributions Bill those aged under 21 are going to be

scrapped. The other thing that would be scrapped as the car tax disc,

that little piece of paper on the windscreen. Sadly, the tax itself is

not going to be scrapped! The pension age rise, which will hit

Nick Clegg above all, is going to be brought forward. It was always going

to rise, but they are now going to speed up the process by which it

goes beyond 65, 268, 270. No doubt by the time of the election you will

be 93 before you are allowed to retire! There will be another ?1

billion on spending cuts in central government, no doubt to pay for the

extra spending that he's getting elsewhere. Let's find out what he is

saying, we can go straight to the House of Commons.

Britain's economic plan is working. But the job... The job is not done.

We need to secure the economy for the long-term. And the biggest risk

to that comes from those who would abandon the plan. We seek a

responsible recovery. One where we don't squander the gains we have

made but go on taking the difficult decisions. One where we don't repeat

the mistakes of the past, but this time spot the debt bubbles before

they threaten financial stability. A responsible recovery where we don't

pretend we can make this nation better off by writing checks to

ourselves, and instead make the hard choices. We need a Government that

lives within its means, in a country that pays its way in the world.

Three and a half years ago I set out our long-term economic plan in the

emergency budget. That plan restored stability in a fiscal crisis. But it

was also designed to address the deep-seated problems of

unsustainable spending, uncompetitive taxes and unreformed

services for which there are no quick fixes. Over the last three

years we have stuck to our guns, worked through the plan. We have

done so in the face of a sovereign debt crisis abroad. And at home, in

the face of opposition from those who got Britain into this mess in

the first place, and have resisted every cut, every reform and every

effort to get us out of that mess. We have held an nerve while those

who predicted that there would be no growth until we turn the spending

taps back on have been proved, pensively wrong. -- comprehensively

wrong. Thanks to the sacrifice and the endeavour of the British people

I can today report the hard evidence that shows our economic plan is

working. I can also report the hard truth that the job is not yet done.

Yes, the deficit is down but it is still far too high. And today we

take more typical decisions. Yes, the forecast show that growth is up

but the same forecasts show growth in productivity is still too low,

and today we set out further economic reforms. Yes, jobs are up

and unemployment is down but too many of our young people lack the

skills to fill those jobs and the opportunities to acquire them. Now

we take bold steps to remove the cap on aspiration. Yes, businesses are

expanding at business taxes are still too high and exports are too

low, and we must address that. And yes, real household disposable

income is rising at the effects of the financial crash on family

budgets and the cost of living are still being felt. Where we can

afford to help hard-working families, we will continue to do so.

Order, I apologise. Please calm yourself, man. You're bellicose

barracking is detectable several miles.

Thank you. The hard work of the British people is paying off and we

will not squander their efforts. We will secure the economy for the

long-term, and this statement sets out how. Let me turn to the report

from the Office for Budget Responsibility. Again, I thank

Robert Choate and his team for their rigorous and independent work. The

OBR report notes that the Office for National Statistics have reassessed

the depths of the great recession. A fall in GDP from peak to trough

20,008, and 2009 -- between 2008, and 2009, was a staggering 7.2%.

?112 billion was wiped off our economy, around ?3000 for every

household in this country, and it was one of the sharpest falls in the

national income of any economy in the world. It is a reminder of the

economic calamity that befell Britain. The simple fact that our

country remains poorer as a result of it and that a lot of work still

remains to be done to put that right. The data revisions also show

something else. There was no double-dip recession. Let me turn to

the future. At the time of the Budget in March, the OBR forecast

that growth would be 0.6%. Today they have more than double that

forecast, and the estimate for growth will be 1.4%. Next year,

instead of growth of 1.8%, they are now forecasting 2.4%. With faster

growth now, it means they have revised the following four years.

Growth over the forecast period is significantly up. It is still not as

strong as we would like it to be, but this is the largest improvement

to current year economic forecast that any -- than any Budget Autumn

Statement for 14 years. -- Budget or Autumn Statement. I can also report

that Britain is currently growing faster than any other major advanced

economy. Faster than France, which is contracting. Faster than Germany,

even America. And that contrast itself points to the risks that

remain for the night kingdom from abroad and the weakness of many of

our main trading partners -- the United Kingdom. The debt risk is a

recurrence of the instability in the eurozone. The OBR still forecast

that the eurozone will shrink by 0.4% this year. Their growth

forecast for the US and emerging markets have also been revised down

and world trade has been weaker than they expected in March. While our

exports are growing, they are not growing as fast as we would like,

because we are too dependent on markets in Europe and North America.

The Prime Minister's visit to China is the latest depth in this

Government's determined plan to increase British exports to the

faster growing emerging markets, something our country should have

done many years ago. Today, I am doubling to ?50 billion, the export

finance capacity available to support British businesses,

expanding the help available to firms in these emerging markets and

ensuring that our excellent new trade Minister, Lord Livingston, has

all the firepower he needs. Let me turn to the forecast for employment.

Today in Britain, employment is at an all-time high. The OBR have

revised their forecasts for the future up. The OBR were expecting

jobs to stay flat over the, but they now expect the total number of jobs

to rise by 400,000 this year. And this is being felt right across the

country. Since 2010, the number of jobs in Carlisle and on the Wirral,

Selby to South Tyneside, have all grown faster than in London.

Meanwhile, the number of people claiming an appointment benefit has

fallen by over 200,000 in the last six months. That is the largest such

fall for 16 years. Unemployment is also lower than in 2010. And is

forecast to fall further, from 7.6% this year, to 7% in 2015, before

falling even further to 5.6% by 2018. We have the lowest proportion

of workless households the 17 years. -- for 17 years. There were those

who said it was a fantasy to believe that businesses could create jobs

more quickly than the public sector would have to lose them. But they

should have said is that it would be fantastic if it happened. So I have

good news for them. Businesses have already created three jobs for

everyone lost in the public sector, and the OBR report today forecasts

that this will continue, with 3.1 million more jobs being created by

businesses by 2019 than, in their words -- that more than offsets the

reduction in the public sector headcount. Far from the mass

unemployment that was predicted, we have a record number of people in

work. Hundreds of thousands fewer on welfare, unemployment lower than

when we came to office, and we will have to million more jobs than in

2010, an economic plan that is working and a Government seeking a

job rich recovery for all. Let me turn to the forecast for Government

borrowing and debt. When this Government came to office, the

deficit was 11% of GDP. That was the highest level in our peacetime

history. ?1 in every four was being borrowed, and the former Chancellor,

and one of the former prime ministers have now joined the

consensus that spending was too high. The borrowing post a Houston

risk to the stability and could ability of the United Kingdom --

posed a huge risk. We have taken many difficult decisions to bring it

down, everyone contested and opposed. I camera port today the

effort is paying off. The OBR use a measure of underlying public sector

net borrowing that excludes the impact of the Royal Mail pension

scheme and the asset purchase facility transfers. I can tell the

house, this underlying measure of the deficit, as is the case with the

other deficit measure, has been revised down substantially since

March. From the 11% back in 2010, the underlying deficit now falls to

6.8% this year, instead of the 7.5% they were forecasting in March. It

then. 5.6% next year, 4.4%, 2.7% and in 2017-18, 1.2%. By 2018,-19 on

this measure, the OBR do not expect a deficit at all. Instead, they

expect Britain to run a small surplus. These numbers will mean

that the Government will meet its fiscal mandate to bring the

structural current budget into balance and meet it one year early.

Let me turn to the forecasts for cash borrowing on the same

underlying basis. Mr Speaker, at this Autumn Statement last year,

there were pretty -- repeated predictions that borrowing would go

up but borrowing is down, and significantly more than forecast. In

its last year in office, the previous Government borrowed ?158

billion. This year we will borrow ?111 billion, 9 billion less than

feared in March. That falls next year to 96 billion, down to

79,000,000,020 15-16, we are set to borrow ?73 billion

less over the period than was forecast in March. It means we are

borrowing the equivalent of ?2500 less for every household in the

country. On this measure, too, the OBR forecast the Government would

not have to borrow anything at all but instead, we will run a small

cash surplus. Of course, this will only happen if we go on working

through our long-term plan, delivering the reductions in the

deficit we planned this year, next year and the three years after. If

we give up on the plan now, we would be saddled with a deficit that is

still among the highest in Europe, and this side of the house is not

prepared to take that risk. Mr Speaker, while that deficit remains,

it adds to our national debt every year. The OBR expect debt this year

to come in at 75.5% of GDP. ?18 billion lower than forecast in

March. It's then rises to 78.3% next year. Before peaking at 80% next

year. 5% lower than forecast in the budget. It falls slightly to 79.9%,

then falls again to 78.4% and 75.9%. By 2017-18, debt is over ?80 billion

lower than forecast in March. The supplementary target is for dads to

be falling in 2015-16, and that the budget the OBR forecast it would be

falling in 2017-18, but it is now forecast to fall in 2016-17, that is

one year earlier. But let me enter this note of caution. The OBR is

clear that this is a cyclical improvement. The forecast for the

continuing fall in the structural deficit has not improved. The

structural deficit is the borrowing that stays behind even when the

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

more than any other major advantage economy. It goes on falling, but

snow faster than was previously expected, because, as we have always

argued, the central task of reforming government and controlling

spending does not simply dissolve when growth returns. And it supports

the case we have made all along that economic growth alone was never

going to be enough to repair Britain's broken public finances. An

improving economy does not let us off the hook for taking the

difficult decisions to make sure that the Government lives within its

means. And so, Mr Speaker, the single most important economic

judgment I make today is this. We will not let up in dealing with our

country's debts, we will not spend the money from lower borrowing, we

will not squander the hardest games of the British people, the stability

and low mortgage rates, the lower deficit and falling borrowing have

been hard won by this country, but let us be clear - they could easily

be lost, and that is why we must work through our plan to secure the

British economy for the long-term. So this Autumn Statement is fiscally

neutral across the period. Indeed, today I can announce that we will

take three new steps to entrench Britain's commitment to sound public

finances. First, we will bring forward next year and updated

charter for budget response of and as the Parliament to support it. I

can say today that both parties of the coalition have agreed that we

must ensure that the debt continues to fall as a percentage of GDP,

including using surpluses in good years for this purpose. In other

words, this time we will fix the roof when the sun is shining.

We will look to see if the five-year time horizon of the fiscal mandate

could be shorter, and even more binding now that the public finances

are closer to balance, and we will see how fiscal credibility could be

further enhanced by a stronger parliamentary commitment to the path

of consolidation already agreed for 2016-17 and 2017-18. The answers

will be written into an updated charter for budget responsibility

which will be presented to Parliament one year from now and

voted upon. The second step we take today to entrench Britain's

commitment to sound public finances is this. We will cap overall welfare

spending. Welfare budgets were completely out of control when we

came to office, and the number of households where no-one had ever

worked nearly doubled. We have taken very difficult decisions to bring

benefit bills down. We have saved ?19 billion per year for the

taxpayer. We need to maintain that discipline.

The percentage of spending in the UK subject to fixed spending controls

is very low by international standards at just 15%, so from next

year we will introduce a new cap on total welfare spending. Now, I have

had representations that the basic state pension should be included

within that cap, but that would mean cutting pensions for those who have

worked hard all their lives because the costs on, say, housing benefit

for young people had got out of control. That is not fair, so we

will not include the state pension, which is better control over a

longer period. We will also exclude from the cap the most cyclical of

benefits for job-seekers. All other benefits from tax credits to income

support to the vast majority of housing benefit will be included in

the cap. At the beginning of each Parliament, the chancellor of the

day will set the cap for the coming years and as the House of Commons

for its support. If the cap is breached, they will have to explain

why and hold a vote in this house. The principle is clear. The

Government has a responsibility to taxpayers to control their spending

on welfare, and Parliament has a responsibility to the country to

hold the Government to account for it. That brings me to our third

step. Ultimately, the test of fiscal credibility is whether you are

prepared, actually, to take the difficult decisions to keep spending

under control. Tight discipline means that most of our departments

are living within their budgets. This year they are expected to

underspend by ?7 billion, a testament to good financial

management. We can therefore be confident in reducing the

contingency reserve by ?1 billion this year, and reducing departmental

budgets by a similar amount in the next two years. This will save a

further 3 billion in total. The protections for the NHS and schools

will apply. The security and intelligence services and HMRC will

be exempt. The Barnett formula means that, over the next two years, the

budgets for Scotland, Northern Ireland and Wales will see a net

increase, and we will not apply the savings to local government, because

we expect them to freeze the council tax next year. Mr Speaker, this year

Britain becomes the first G8 country to meet our promise to the poorest

in the world to spend .7% of our national income on development, but

we don't have to increase the budget further to do that. The

effectiveness of the British government aid effort in the

Philippines, matched by the generosity of the British public, is

a reminder of what marks us out as a nation, and we in this country can

be very proud of that. We are also immeasurably proud of the work of

the armed forces as they wind down their operations in Afghanistan. The

budget we spent there is also falling fast, so we can this year

reduced the military special reserve by a further ?900 million, while

still funding all operational costs. And to reflect our society's debt of

gratitude to our service men and women and their families, I want to

make a further ?100 million of money available to our early and military

charities, and I want to extend that support to those who care for the

work of our police, fire and ambulance services. I think the

whole house would agree that the terrible events in Glasgow this

weekend, and indeed the work they are doing right now to cope with the

adverse weather, remind us how much we owe to them. Mr Speaker,

discipline with the public finances means more than just words. It means

taking difficult decisions and being prepared to stick to them. It means

using surpluses in good years to keep debt falling, so we fix the

roof when the sun is shining. It means capping welfare, to keep it

under control, and where we do want to spend more money, finding extra

ways to pay for it. One of the biggest single items of government

spending is the basic state pension. I am proud to be in a

government that has introduced a triple lock that ensures a fair and

generous increase in the state pension every year to those who have

worked hard all our lives. I can confirm the next April the state

pension will rise by a further ?2.95 per week. This increase, and the

other increases under this government, mean that pensioners

will be over ?800 every year better off. And I can announce that we are

also going to offer current pensioners an opportunity to make

involuntary national insurance on to and is to boost their income in

retirement. We will also make... Bash to make involuntary national

insurance contributions. This will help those who have not built up

much entitlement to the state pension. But we also have to

guarantee that the basic state pension is affordable in the

pension, even as people live longer and our society grows older. The

only way to do that is to ensure that the pension age keeps track

with life expectancy. The Pensions Bill currently going through

Parliament puts in place reviews of the pension age every five years.

Now, we set the principle that will underpin those reviews. We think a

fair principle is that, as now, people should expect to spend a

third of their adult life in retirement, and based on the latest

life expectancy figures, applying that principle would mean an

increase in the state pension age to 68 in the mid 20 30s, and 29 in the

late 2040 yeah. The exact date will be set by further statutory reviews,

and in line with the most up to date demographic data, published next

week. This is one of those difficult decisions that governments have to

take if they are serious about controlling the public finances.

Future taxpayers will be saved around ?500 billion. Young people

will know that our country can afford to give them a proper pension

when they retire. Now, that is this generation, fulfilling its

obligations for fiscal responsibility to the next

generation, not saddling them with the debts and decisions that we were

not prepared to deal with ourselves. Mr Speaker, having sound public

finances also means making sure that we collect the taxes that are due.

Most wealthy people pay their taxes and make a huge contribution to

funding our public services. The latest figures show that 30% of all

income tax is paid by just 1% of taxpayers. We have given incentives

to enterprise, cut punitive tax rates, and this year the rich paid a

greater share of the nation's income taxes than any year under the last

Labour government. But alongside those paying the most tax, there are

those who try to avoid paying their fair share of tax. So today we set

out in detail the largest package of measures to tackle tax avoidance,

tax evasion, fraud and error so far this Parliament. Together, it will

raise over ?9 billion over the next five years. We are going to tackle

the growth of intermediaries disguising employment as false

self-employment, depriving workforces of basic employment

rights like the minimum wage, in a bid to avoid employee national

insurance. We will have the final period a exemption for capital gains

tax private residence relief. We will end the abuse of dual

contracts, offshore oil and gas contracting, derivatives linked to

profits, and share buy-backs. We will ensure the tax advantages of

partnerships are not abused either. We are introducing a new limited

power that requires people to pay upfront for their taxes were the

scheme they use has already been struck down by the courts, and we

are going to strengthen the capacity to prevent error and tackle fraud in

the benefit and tax credit systems and expand efforts to recover money

that is owed. There is one personal tax change we made today which is

not about avoidance but is about fairness. Britain is an open country

that welcomes investment from all over the world, including investment

in our residential property. But it is not right that those who live in

this country pay capital gains tax when they sell a home that is not

their primary residence, while those who do not live here do not. That is

unfair, and so from April 2015 we will introduce capital gains tax on

future gains made by nonresidents who sell residential property here

in the UK. I can also announce, from January one next year, the rate of

the bank levy will rise to 0.156%, and its base will be broadened in

ways we have consulted upon. The levy will raise 2.7 billion in

2014-15, and 2.9 billion each year from 2015 - 16. The country stood be

hanged the banks in the crisis, and now it is right that they support

the country and recovery. -- stood behind. Mr Speaker, a government

that lives within its means is essential to secure the economy for

the long-term, but it is not sufficient. Britain has to earn its

way in the world. Our infrastructure needs to be overhauled, we have to

help businesses compete, and above all our young people need the skills

to succeed in the modern world. This Autumn Statement states the next big

steps in all these areas. Let me start with infrastructure. We are

going to be spending more on capital as a proportion of national income

on average over this decade than over the whole period of the last

government. And that has involved making tough choices about

priorities in spending and sticking to them. But that is not the most

difficult decision in this area. We have to decide whether we are

serious as a country about competing in the modern world, and say to

people, we need the new roads, the new railways, including the northern

hub and High Speed Two. We have to say we are prepared to push the

boundaries of scientific endeavour, including in controversial areas,

because Britain has always been a pioneer. We should say that the

country that was the first to extract oil and gas from deep under

the sea should not turn its back on new sources of energy, like shale

gas, because it is too difficult. And the country with the worlds

first civil nuclear programme should not be a country that says, we can

do this no longer. Yesterday the Chief Secretary and Lord Dighton

published the update to the National Infrastructure Plan, and that

includes a co-operation agreement with Hitachi on the next nuclear

power station in Anglesey, it includes a deal with the insurance

industry to invest at least ?25 billion in UK infrastructure, and we

published the prices that support long-term investment in offshore

wind and prioritise it over on the shore wind. Today, we go further,

with a commitment to invest in quantum technology, a new tax

allowance to encourage investment in shale gas that Harvest tax rates on

early profits, and in the week in which Professor Peter ticks travels

to Stockholm to connect -- collect his Nobel Prize for physics, we

commit to world a new centre in Edinburgh in his name, because

science is a personal priority. In housing, we have to confront this

simple truth. If we want more people to own a home, we have to build more

homes. And the OBR is absolutely right today. To draw attention to

the weakness of housing supply in this country. The good news is the

latest survey data showed residential construction growing at

its fastest rate for a decade. And are planning reforms are delivering

a 35% increase in approvals for new homes. But we need to do more. This

week we are announcing ?1 billion of loans to unblock large housing

developments on sites in Manchester, Leeds and across the country. We are

going to interest the housing -- increase the housing borrowing

account by ?100 million. We want to regenerate some of our most rundown

urban estates. Councils will sell of the most expensive social housing so

they can house many more families for the same money, and we are going

to give working people in social housing a priority rights to move if

they need to for a job. Right to buy applications have doubled under this

government and we will expand it more. And the very same spirit of

aspiration that underpins right to buy is what drives this government

with help to buy. It is not enough to build more houses if families

don't have the large deposits that the banks of demand it. Help to Buy

is now helping thousands to own their own home and I can announce

that two Challenger banks expect to join the scheme this month. We must

also avoid the mistakes of the last decade. We want a responsible

recovery and that is why I am the first Chancellor to give the Bank of

England responsible tee and power, not only to monitor over it --

overall debt bubbles but to deal with them if they threaten the

economy. House prices are three point 1% lower in 2007, as forecast

by the OBR. Because the authorities can act in

this targeted way and because our public finances are under control,

the bank can keep overall interest rates lower for longer and support

the rest of the economy. Investing in the physical infrastructure of

our recovery is critical to our future but it is better education

and skills that hold the key to long-term national success. This

week's PISA scores show how much ground this country has to make up.

The Education Secretary is doing more to transform school standards

and raise the aspiration of people from the poorest families then

anyone who has done the job before him. Let me make it clear, his

expansion of free schools and academies as the full backing of

this Chancellor. We also know that children do better at school when

they have a proper meal inside them. This Autumn Statement has found the

financial resources to fund the expansion of free school meals to

all school children in reception, year one and year two, announced by

the Deputy Prime Minister and supported by me. Today, we also

focus on what happens when our young people leave school and we do more

to help them. We will not abandon those who leave school with few or

no qualifications. At present, job centre plus does it is nothing to

help 16 or 17-year-olds who are not in work or education. We will change

that and fund job centres to help young adults to find

apprenticeships. There is a limited chance that any young person will be

able to stay of welfare without these qualifications. Anyone signing

on without these basic skills will be required to undertake basic

training from day one or lose their benefits. If they are still

unemployed after six months, they will have to take a training ship,

take work experience or do a community work placement. If they

don't turn up, they will lose their benefits. A culture of work

closeness becomes entrenched when young people can leave school and go

straight onto the goal when -- with nothing expected in return -- work

closeness. The second reform is to

apprenticeships. We have doubled the number of apprenticeships and now we

will transform the way they are provided by funding employers,

directly through HMRC. There will now be an additional 20,000 higher

apprenticeships over the next two years and I can also announced a big

expansion of start-up loans, through which a new generation of

entrepreneurs is being created. 50,000 more people will be helped to

fulfil the aspiration to start their own business, and we are expanding

the new enterprise allowance, too. Mr Speaker, this year is also the

50th anniversary of the Robbins report, which challenge the nonsense

that university was only suitable for a small few. In 1963, Robbins

said because is of higher education should be available for all those

who are qualified by ability and attainment to pursue them, and wish

to do so. That was true then and I believe it should remain true today.

Our reforms to student loans, difficult as they were, have put our

universities on a secure footing. Some predicted that applications

from students from poor backgrounds would fall. Instead, I camera port

that this year we have had the highest proportion of young people

from disadvantaged backgrounds applying to university, ever -- I

can report. But there is still a cap on

aspiration. Each year, around 60,000 young people who have worked hard at

school got the results, want to go on learning and want to take out a

loan, are prevented from doing so because of an arbitrator. It makes

no sense when we have a lower proportion of people going to

university than the United States, let alone self career. Access to

higher education is a mark of success in the global race. We will

provide 30,000 more student places and a year after we will abolish the

cap on student numbers altogether. Extra funding will be provided to

science, technology and engineering courses. The new loans will be

financed by selling the old student loan book, allowing thousands more

to achieve their potential. Mr Speaker, education underpins

opportunity. It is business that provides those opportunities. And

the best way to help business is by lowering the burden of tax. KPMG's

report last week confirmed for the second year running that Britain has

the most competitive business tax system in the world. Some in this

house suggest that our response to this good news should be to increase

corporation tax from 20%. Today we publish the first of our studies

into the dynamic effects of tax changes colour that show our

corporation tax cuts increase investment and raise productivity.

So much so that over half of the cost to the Treasury of the tax cut

will be recovered because of higher growth. Putting up corporation tax

hits investment, cuts productivity, costs jobs and raises much less. We

thank the honourable members for their submission but we think it

would be economic madness to pursue it.

Quite the reverse. Today we take further steps to make business taxes

more competitive. The budget announcement that we would abolish

stamp duty on shares was welcomed round the world, we also abolished

stamp duty on traded funds. We are making successful film tax relief

even more generous and looking to extend the principle to regional

theatre. We set up major reforms to encourage employee ownership of the

kind that makes them lowish such a success. -- makes John Lewis. We

will introduce a new tax relief for investment in social enterprises and

new social impact bonds. I want to thank Sir Ronnie Coen and I

honourable friend, the charities minister, for their help in putting

this innovative scheme together. Business rates imposed a heavy

burden on businesses of all sizes. Today we will help ease that burden.

The last government wanted to halve small business rates relief. A

relief which cuts rates bills for half a million companies and means a

third of a million of the smallest businesses paying no rates at all.

If we followed that plan, small businesses would have faced a rate

increase of up to ?3375. We have rejected that plan. We have extended

that rate relief scheme year after year. It was due to expire next

April. We will now extended for another whole year. -- extend it. We

will relax the rules that discourage these firms from expanding and

opening extra premises. That doesn't go far enough. All businesses are

expecting rates to rise by 3.2% next year. Instead, I will cap the

inflation increase in business rates for all premises at 2% from next

April. We will also allow business to pay their rates in 12 monthly

instalments. We will clear almost all of the backlog of valuation

appeals by July 2015, with reform of business rates on the agenda for the

2017 evaluation. There is one group of businesses that have found the

recession especially hard, as it has coincided with the rising challenge

from the internet that is only getting stronger. These are local

retailers, the shops, the pubs, cafes that make up the high street

across Britain. With small-business Saturday this weekend, I want the

government to do all it can to help them. We are already changing the

planning rules to help town centres compete. To get the vacant shops

that blights too many town centres to open again, I am introducing a

new reoccupation relief that will halve the rates for new occupants. I

want to thank my honourable friends from Wolverhampton Southwest, then

eaten, Hastings right, Brentford and many others for their campaign.

I can announce today that for the next two years, every retail promise

in England with a rateable value of up to ?50,000 will get a discount on

their business rates. This will be worth ?1000 of their bills.

This is what we offer. Business rates capped for the smallest firms

know rates at all, and helps for the -- help for the high street. ?1000

for small shops, pubs, cafes and restaurants across our country. The

people in these businesses epitomise the hard-working values this

government supports and we are backing British businesses all the

way. And we are backing British families. Next April, the personal

allowance will reach ?10,000. This government is delivering an income

tax cut worth up to ?700 a year to over 25 million hard-working people.

Under the last government, council tax doubled. We are now helping

councils freeze it for the whole of this Parliament. Tax free childcare

is being introduced and free school meals are on their way, but there is

more we are doing to help. This Autumn Statement confirms that from

April 2015, we will introduce a new transferable tax allowance for

married couples, available to all basic rate taxpayers. It enables

people to transfer ?1000 of their personal allowance to their wife,

husband or civil partner. It is just a start and I confirmed today that

we will introduce a new operating mechanism that ensures the new

married couples allowance is automatically increased in

proportion to the personal allowance. 4 million families will

benefit, many of them among the poorest working families in our

country. And this measure, along with the others we take today

ensures that across this Parliament, policies are progressive, showing we

are all in this together with the very

Mr Speaker, we are a helping energies with their family bills,

not with a transparent con, pretending we can control the

world's oil price, but by instead focusing on what government can

control, the levies and charges that previous energy secretaries piled

onto bills. This week we deliver on the promise made by the Prime

Minister... The statement must be heard. Chancellor of the Exchequer.

This week we deliver made by the Prime Minister to roll back on those

levies, a result of ?50 off family bills, in a way that supports the

lowest income families, reduces carbon, support investment in our

energy infrastructure, and as the document shows, does not add 1p to

the tax bills that families pay. My political philosopher sea is clear.

Instead of penalising people with more taxes and radiation, give them

incentives by reducing their taxes and bills. As I have often said,

going green does not have to cost the earth. That brings me onto fuel

duty. We inherited from the last government the hated fuel duty

escalator. It would have inflicted hardship on families and small firms

alike. Instead of those rises, we abolished the escalator, and we have

cut and then frozen fuel duty. I have had further representations

from many, many honourable friends, from the member for Blackpool

North, the member for Argyll, and of course, of course the member for

Harlow! He is a champion of the people he represents, and I said

earlier this autumn that if we could find the money, I would like to go

on freezing duty. Today I can report that because we have taken difficult

decisions to control the public finances, I can deliver on that

promise. Next year's fuel duty rise will be cancelled. Instead of

federal taxes going up by 2p per litre, they will stay frozen. --

petrol. That means compared to the previous government's plans, it will

be 20p per litre less, ?11 less every time you fill up. A saving

from drivers over this parliament of ?680, and double that for a small

business with a band-macro. Cancelling fuel duty rises has been

a major priority of the government, a ?22 billion demonstration that we

are on the side of hard-working people in this country. The married

couple's allowance, ?50 off energy bills, we are helping those who

drive a car and helping those who get the train, to. There's next

January were going to go up by 1% above inflation, and we will keep

average fares flat in real terms. On this side of the house we know there

is one thing more than any other that has supported family through

these difficult times, and that is being in work. At the heart of our

economic plan is support for the creation of more jobs. That is why

we opposed the last government's plan to increase the jobs tax. That

is why we reversed the most damaging part of that increase in the very

first Budget after we came to office. That is also why, in the

last Budget, I introduced the employment allowance that eliminates

the jobs tax for half a million small businesses. And that is why we

will go further still. We are going to bullish the jobs tax on young

people under the age of 21. -- abolished. Employment national

insurance contributions will be removed on 1.5 million jobs for

young people. We are not going to leave young people behind as the

economy grows. We are going to have a responsible recovery for all. The

cost for a business of employing a young person on a salary of ?12,000

will fall by over ?500. For someone of ?16,000, it is over ?1000 off. I

want to commend my honourable friend from Braintree and Carlisle and

their campaign for highlighting this issue. The change requires

legislation. It will come into force in April 2015, and it will not apply

beyond the upper earnings limit. Now, this country, Mr Speaker, is

working through its long-term plan, bringing down the deficit and

dealing with the debt, spending less on welfare and making the big

decisions on infrastructure, living within our means and cutting tax on

business, making work pay and letting people keep more of what

they earn. Confidence in the next-generation as they make their

way in education and in the workplace. This statement shows the

plan is working, it is a long-term plan for a grown-up country, but the

job is not done. By doing the right thing, we are heading in the right

direction, Britain is moving again, let's keep going!

And the Chancellor complete is Autumn Statement, he took 50 minutes

to do it, we will go through it in a moment, but let's now hear the

response of the Shadow Chancellor, Ed Balls.

Mr Speaker... Mr Speaker! The whole country will have seen today that,

for all his breathtaking complacency,

for all his breathtaking this Prime Minister, under this

Chancellor and this Prime Minister, under this

living standards are not rising, this Prime Minister, under this

Speaker. They are falling year-on-year

Speaker. They are falling that, on average, working people in

our country are ?1600 per year worse off than when they came into power

in Twenty20 and that prices will continue to rise faster than wages

this year and into next year, too? -- in 2010. As a result, people will

be worse off in 2015 and they were in 2010, Mr Speaker. Isn't this the

truth - after three damaging is flat lining, after the slowest recovery

for over 100 years... Order! Order! However long it takes, the

response... Order! Mr Morris, I don't require your assistance, calm

down! Take up yoga, whatever is necessary! However long it takes,

the response, like the statement, will be heard. The sooner members

upon both sides of the House grasped that very simple fact, so much the

better. Mr Ed Balls. Mr Speaker, there is a cost of living crisis,

even if they want ad omitted in this house, Mr Speaker! And we almost

white, after three damaging years of flat-lining, the slowest recovery

for over 100 years, yes, from a Chancellor and Prime Minister who

said we are all in this together and then gave a huge tax cut to

millionaires, Mr Speaker! Don't we know the truth? Working people are

not better off under the Tories, they are worse off under the Tories.

And... For all their complacent boasts, after three damaging and

wasted years, for most people, I have to say, in the constituencies

of honourable members of all sides of this house, there is still no

recovery at all, Mr Speaker. So let me ask the Chancellor about the

promises he made to this house on growth and living standards three

years ago. He said then, he said then, Mr Speaker, that the economy

would grow by more than 8.4% by the end of this year. Even after

today's welcome revisions, growth is set to be half of that, Mr Speaker.

Lower growth than he forecast in 2010 this year, next year and the

year after as well. Didn't the Chancellor pledged to get the banks

lending? But net lending to business is now down ?100 billion compared to

May 2010. Didn't he make the number one test of his economic credibility

keeping the AAA credit rating? But it has been downgraded not once but

twice, Mr Speaker! And as for his promise to balance the books by

2015, didn't he confirm today that, in 2015, he is not balancing the

books, he is borrowing ?79 billion, Mr Speaker? For all his... For all

his smoke and mirrors, for all his smoke and mirrors, he is borrowing

?198 billion more than he planned in 2010. More borrowing to pay for

three years of economic failure, more borrowing in just three years

under this Chancellor than and the last government in 13 years, Mr

Speaker! -- than under. He... He used to say he would balance the

books in 2015. Now he wants... Now he wants us to congratulate him for

saying he will do it in 2019, Mr Speaker! With this Government, it is

clearly not just the goalposts that move, Mr Speaker. Mr Speaker... Mr

Speaker... On energy bills, on energy bills, after their panicked

and half baked attempt to steal Labour's clothes... The...

Mr Speaker... Mr Speaker... Mr Speaker, we know they are not very

good at shooting other people's foxes as well as badgers, Mr

Speaker, because what if the truth, for three months the leader of the

opposition has been calling for an energy price freeze. And did the

Chancellor announced an energy price freeze? No, he did not, Mr Speaker!

Can he confirm... Can he confirm that when the energy cup and have

already announced price rises of ?120 this year, his policy will

still see energy price bid rise by ?70 this winter? Mr Speaker, under

this Chancellor, the only freeze this winter will be for millions of

families and pensioners struggling to heat their homes with rising

bills! Does he really think he can get away with tinkering at the

edges, moving green levies, his own party introduced them, off the bills

and onto the taxpayer? And - surprise, surprise! - letting the

energy companies completely off the hook, Mr Speaker! They are not

paying a penny, they are not paying a penny! Doesn't he realise that for

millions of hard-pressed families, pensioners and businesses across our

country, nothing less than a freeze will do, Mr Speaker?! And rather

than hard-pressed taxpayers, it should be the excess profits of the

energy companies that pick up the tab, Mr Speaker. And... And... As

for the Prime Minister... As for the Prime Minister's flagship policy for

families, a tax break for marriage, why won't the Chancellor and admit

the truth and tell the Prime Minister that the policy won't even

help the family is the Prime Minister says it will? Because his

own Treasury minister has let the cat out of the bag. I have it here

in black and white, Mr Speaker. The Exchequer Secretary says just under

one third of married couples will get the married couples tax

allowance. Just one in six families with children will benefit. Sack

him! Contrary to the Prime Minister's claim, contrary to his

claim in this house a few weeks ago, a married couple were both are

paying basic rate income tax will get no benefit at all, Mr Speaker!

Apologise! No... Mr Speaker... Mr Speaker, no wonder his own

Chancellor of the Exchequer has this week told the Daily Telegraph, he

thinks the Prime Minister's policy is, and I quote, a turkey of an

idea. A turkey! The Chancellor thinks the Prime Minister's policy

is a turkey. Merry Christmas, Prime Minister. Merry Christmas. I have to

say... Order... It is very simple, it just lengthens the proceedings,

doesn't bother me, I very much enjoy chairing the proceedings. I think

what members on both sides of the house will wish to consider is how

the conduct is regarded by the public that we are here to

represent. Mr Speaker, I think on this one, the Chancellor is right.

It is a turkey of an idea. I have to say, on the cost of living crisis,

an energy, on supporting families, this government just doesn't get it.

And there is a reason why this Prime Minister... The Chancellor said it

in his statement, there is a reason why they believe people are better

off. Because the people on their Christmas card lists have seen their

bonuses rise and their taxes cut. They are willing to stand up... They

are willing to stand up for the interests of the energy

companies... We have a prime minister and a Chancellor who will

stand up for the energy companies, they will stand up for the hedge

fund is, they will stand up for people earning over ?150,000 who get

a tax cut but they won't stand up for millions of families in our

country. People struggling with rising energy bills, falling wages,

rising childcare costs. Mr Speaker, we all know and agree that rising

life expectancy means we are going to have to work longer. And the

Chancellor's failure on growth and the deficit means more tough

decisions in the next Parliament. But when the country is crying out

for the government that will work with business to promote investment

and wealth creation, and build an economy that works for the many and

not just the few, does this chancellery think he can get away

with tinkering at the edges, -- Chancellor really think he can get

away with tinkering at the edges and waiting for wealth to trickle down.

Isn't this the clearest evidence yet that they do not understand the

scale of the challenge that we faced to get an investment led recovery

that works for all and not just a few, a strong recovery built to

last. With the permission of the house, let me ask the Chancellor:

With house-building under this government at its lowest level since

the 1920s, doesn't he see his Help to Buy scheme to boost mortgage

demand can only deliver a strong and balanced recovery if he does what we

and the IMF have urged, and invest in housing supply. More affordable

homes. Honourable gentleman on the opposite benches sneer at building

more affordable homes. Can the Chancellor tell the house, why has

infrastructure output actually fallen by 15% since 2010? No wonder

the CBI is so upset. Why hasn't he used the money from the planned

increase in respect of licence fees to endow a proper investment bank.

On tax avoidance, why has the HMRC reported the amount of uncollected

tax actually rose last year? And with almost 1 million young people

unemployed, a record number who want to work full time being forced to

accept part-time work. The work programme, a flop. The welfare bill

rising. And as we have learned today, the universal credit, and

utter shambles. HECKLING

No mention of the universal credit in the statement. IDS, in deep

shambles, Mr Speaker. Isn't the fact, for all the shambles

and chaos and rising welfare bills, what he has announced on youth

unemployment is too little, too late. Help only for the under 21s

coming in the last weeks. Why won't he repeat the successful tax on bank

bonuses to pay for all young people, a job they will take or lose. Why

won't he remove the winter fuel allowance for the richest

pensioners? Why won't he reversed his tax cut for hedge funds, protect

disabled people in our country by scrapping the unfair and perverse

bedroom tax this Prime Minister has introduced. I have to say, why won't

he go further on the bank levy and expand free childcare for working

parents and make work pay, use it to help working parents? Isn't it the

truth? Can the Chancellor confirmed, even after what he has announced

today on fuel duty and his increases in the personal allowance, his VAT

rise, his cuts to tax credit and child benefit, meaning families with

children are worse off because of his budgets, that is the truth.

Giving with one hand, taking away much more with the other. Mr

Speaker, energy bills still rising this winter. No real action to

tackle the cost of living crisis. No proper plan to earn our way to

rising living standards for all. Shirley Britta can do better than

this. This complacent Chancellor sits there and think C deserves a

pat on the back -- thinks he deserves. With bank bonuses rising

and millionaires enjoying a big tax cut, this is a policy which is

working for a few, Mr Speaker. But as this Autumn Statement shows, with

this out of touch Chancellor and Prime Minister, hard-working people

are worse off under the Tories. STUDIO: We are leaving the House of

Commons. This is the OBR statement, and this is the Autumn Statement.

Our experts are pouring through these figures to find out what the

Chancellor did not tell us. There is always something hidden in these

documents and we will get to the bottom of it now. If you want to

continue watching the Autumn Statement debate, it is on BBC

Parliament, or the Democracy live website. Let's take a look at what

the Chancellor did announce over the past 50 minutes. The growth forecast

committee said the OBR had increased that to 1.4% for this year, 2.4% for

next year. But for some reason, it tips to 2.2% in 2015. The outer

years, you can largely ignore because they don't really mean

enough. The Bank of England thinks the economy will grow this year and

next year more quickly than the OBR is saying. Because growth is

stronger the Chancellor doesn't have to borrow so much so he has juiced

borrowing forecasts. This year he has taken about 9 billion. Then it

falls to 96 billion, down to 79, down to 51. By 2017-18 it goes to 23

and after that, the Chancellor gave us the possibility that we might

move into surplus. These out years are always revised, I wouldn't put

too much faith in them. The OBR expects a small surplus by 2018-19.

Debt continues to rise for the foreseeable future because we are

still borrowing. National debt goes up to 80% of our national wealth by

2015. Unemployment, the OBR saying will fall quite strongly, 7% in

2015, 5.6% by 2018. Again it should be pointed out, independent

forecasters believe unemployment will fall more quickly, which is

significant not just for the unemployed, but means that interest

rates may have to rise if the governor of the bank sting -- sticks

to his guidance. It was confirmed the Chancellor is scrapping the

planned 2p fuel duty increase. He also said that rail fares will rise

only in line with inflation in January 2014. Living standards

issues are ranking high with the government at the moment. It wasn't

so long ago that rail fares were set to double the rate of inflation.

Something well trailed, a ?50 average saving on energy fuel bills

by changing the way green levies are levied. The Chancellor also

announced that was to be a rise in the state pension that will go up in

April. But the pension age will rise when you retire. He would not give

an exact date. And then he announced that a cap on the total amount of

money spent on welfare would be introduced next year. That is

clearly, I suggest, designed to embarrass Labour ought to get a

response. The Chancellor also said it would not include pensions, state

pensions would not be in the welfare cap. It goes up and down depending

on the level of employment. Another idea that was well trailed in

advance was that for non-UK residents who buy homes in this

country when they come to sell, no doubt having made a substantial gain

if it is in central London, they will pay capital gains tax. Just as

British citizens pay capital gains tax on their second homes. He

announced there will be ?3 billion of departmental savings at central

government level, not a huge amount but maybe a bit painful on top of

cuts that have fallen on departments. And an idea that was

trailed at the Tory Party conference, the married couples tax

allowance will be introduced in 2015, probably just in time for the

election. On the business front, the Chancellor announced in this rate

increases would be capped at 2% from next April. They would be a ?1000

discount for small retail businesses for the next two years, in an

attempt to get some life back into the high street. And that employer

national insurance contributions would be removed from under 20 ones

in an attempt to get the 1 million youth jobless back to work. It was

confirmed there would be free school meals for the first three years in

England. It also announced there would be an extra 30,000 student

places at British universities, and that the cap on student numbers

which currently exists would be abolished from 2015 and it would be

up to the universities to determine how many students they are going to

take. Infrastructure, widely announced yesterday. He wants to get

more housing going. There is to be a new tax allowance for investment in

shale gas. Many in the Shell gas industry say the planning is the rub

them. -- is the problem. And he confirmed there will be a new

nuclear power station planned for Anglesey, probably on broadly the

same terms of guaranteed price and help with the borrowing to pay for

it that EDF recently got for the new one planned in Hinckley. There we

go, not a lot in it! Give me your reaction, Nick. There is a lot in it

but there is a lot we already knew about because they were announced at

conferences or work well briefed. In terms of the measures, there is a

mixture of what the government regards as populists, we knew we

would get the free school meals but it is an important step. Robert

spotted, there don't seem to be any numbers for paying for that in the

years after an election. The Tory and Lib Democrat teams can I have

treated them to ask what is going on. -- I have tweeted. Ed Balls and

Labour said they would reverse one of the cuts to corporation tax in

order to give more money to small business. It is quite a lot of money

spent by a government initiative, ?1000 off retail Princess was an

important measure to get isn't is to employ the young -- retail

businesses. Overall, the government spend a bit of money, about ?2

billion, but what it is saying is, we have made progress. The

structural, underlying deficit, has not come down fast because of

growth. So steady as she goes, carry on with the plan, don't change it.

Which is why you have repeated uses of the word plan, repeated uses of

the word long-term, repeated uses of the phrase, difficult decisions.

Chancellor is saying, bank on the fact we have a lot more to do.

Robert, the Chancellor was able to announce better growth rates for

this year and next year, and therefore lower deficit forecasts

for this year and next you. But is the OBR being cautious? Could it be

better than the figures they have come up with? Certainly, it is very

striking that the Bank of England, for example, has forecast rather

stronger growth over the coming 18 months than the OBR. And for me,

actually, it is the fiscal forecast and the economic forecasts which are

interesting today, because as Nick pointed out, almost all the measures

that he announced and broadly we knew about, there are a number of

striking things here. One thing that the OBR says is that it believes

that the strength of economic recovery that we are seeing at the

moment is coming from an anticipated, by it, anticipated

revival in private consumption, most of which comes from lower saving,

people not rebuilding their overstretched financial positions.

There is not high income for people driving this recovery, so what does

that mean? It means it worries that, actually, as we go through the

coming months, growth will slow down, until we begin to see

businesses investing, until we begin to see productivity going up. Now,

that is a long-term challenge, because businesses have not been

investing. I was slightly surprised, actually, that the Chancellor did

not do anything in his statement to encourage a bit more business

investment, to put the recovery on what economists would describe as a

more sustainable long-term footing. But there is one other really

striking thing in the OBR analysis, which... Well, it was a slightly

jaw-dropping thing for me! It says this, right? It talks about the

profile of public sector borrowing, going out to 2018 - 2019, when the

OBR is saying, by 2018-19, there will be a very small surplus, right?

Something we have not seen for years and years and years, but this is the

interesting thing. It says around 80% of the reduction is accounted

for by lower public spending, austerity to you and me, right? This

will take Government consumption of goods and services, a proxy for

day-to-day spending on public services and administration, to its

smallest share of national income since at least 1948. In other words,

as a country, public spending, the portion of GDP that we devote to

public spending, we will back at 1948 levels if they had these

targets. Now, that is a remarkable change. That is not a cyclical

thing, that is a change in what we expect government to do, of a

radical form, much bigger than under Margaret Thatcher. The Tories have

long dream Dyfed. It is Jeff is only in limited government approach, that

is what we are going for. -- Jeff Sony. I was just raising this issue

we spotted the glitch in school meals, someone has pointed out, who

has read the document, the OBR have said in here that they note that the

Treasury have not come up with the money to pay for school meals after

the general election. So it will come out of education. They have not

come up with the money for some of the tax cuts after the election. Why

does it matter? If you assume that the coalition goes on after the

election, they would have to cancel those policies or make cuts

elsewhere in order to pay for them, and the OBR, the Office for Budget

Responsibility, point that out. On the Labour side, Ed Balls, clearly

the Tories were determined to give him a bad time, he has to be

shouting to be heard, not an edifying time for Parliament. But

the attack remains on living standards, cost of living, which is

why I suggest the Chancellor is talking about trade fairs and all

the rest of it. Where does it leave Labour, if the economy does grow

even more strongly next year than the OBR is forecasting, and the Bank

of England is more accurate? By that time, surely living standards will

be rising. I note the OBR forecast as a point some time next you when

average earnings are rising more quickly than prices. He is still

banking, Ed Balls, in fact he said that living standards will be lower

in 2015 in 2010. It is impossible for living standards to be higher at

the typical level, I do not think that is the issue. I think it is

whether the blood feeling better off. It is the sense of direction.

As a sound bite, Ronald Reagan used this, do you feel better off than

you did five years ago? He is confident he will be able to say

that, so even if there is a dispute about the numbers, where Labour will

do is post about a bombshell, ?1600 does not take into account tax cuts,

does not take into account a whole series of things. So the figures are

not wrong, but there is a debate about what you should include in

those factors. But the calculation that Labour are making is that most

people will feel worse off than they did, and certainly most people who

are not rich will feel worse off than they did, and therefore a

recovery will be meaningless to them in terms of individual personal

circumstances, household circumstances. Let's just say, you

have alluded to it, but the screaming at Ed Balls is not just

childish, as some people think, not just because they dislike him, and

the Tories do. It is a tactic. He messed up a previous speech, this

was not his finest hour, but it was a deliberate tactic to make him

shout, make him look red-faced. It was, at the Americans would say, to

discombobulated, and he was a little discombobulated. The Tory election

strategists were looking for a return to growth this year, clearly

stronger by this autumn, then continued strong growth next year,

and even stronger growth in 2015, so they go to the election saying

Britain is back, do not lead Labour ruin it. These figures do not quite

bear that out, growth next year is not that strong, and it falls back

in 2015 on these forecasts. The problem is that this growth is based

on a consumer recovery that, frankly, if it continued at these

levels, would be dangerous, because British households do still have

enormous levels of debt. Down a bit as a share of disposable income, but

in absolute money terms still over ?1.5 trillion, an all-time record,

and it is not fairly distributed. 5 million households at least are up

to their eyeballs in debt. If we saw, essentially, that indebtedness

rising, that would be highly worrying. But I have to say there is

one thing again in here which will give some comfort to those Tory

strategists, and it is that the OBR is saying that, at the end of the

forecasting horizon, 2018-19, there is significantly... There is a

significant margin for the Government in terms of hitting its

debt targets. What does that mean? It means that, if he wants to, and I

would put a fair bet that he will want to, if the Chancellor once, in

early 2015 in the Budget to promise tax cuts, he can do that, because

these forecasts allow him to do that. It would be astonishing if he

didn't. Who would even think of a Budget promising tax cuts before an

election?! It never happens! You asked whether things could be too

good, and a phrase used in the Treasury was Goldilocks, not too

hot, not too cold. George Osborne wants to say, we have made progress,

it has not been a waste of time, but it is not over yet, I have to carry

on cooking the porridge. This is the dilemma for them, isn't it? The

things that the Tories cannot make their mind up about is whether they

want people to be feeling good or frightened, because if they are

frightened, they might take the view they will not vote for them in the

circumstances. It is a tactical dilemma. We have plenty of time, we

are going to be on air until two o'clock as we analyse this

substantial Autumn Statement. Interesting to see that the

Chancellor has finally discovered that when he cuts corporation tax,

he gets money in, that has been a while coming, interesting that the

Treasury is now doing that with his dynamic models. Jo. Going from the

Goldilocks analogy to political reaction now, to that speech, we can

join Matthew Amroliwala, who is on College Green outside House of

Commons. Thank you very much, Lescott a snapshot reaction to what

we have heard from Ken Clarke, John McFall, Lord McFaul. -- let's get.

Your headline thought in terms of what you have heard? I thought it

was a masterful performance, a Chancellor who is on top of the

worst financial crisis in modern times, things are improving, he has

got common sense, he is calm, the main help these giving is to

businesses and young people, all the things that matter. We have a long

way to go. Ed Balls has got a lot of chutzpah, but quite a ridiculous

position to criticise him. It was a 99% politics, 1% economics show,

with 100% theatre, and your own Nick Robinson tweeted that the Tories

were shouting and bawling and barracking Ed Balls to make him look

as if he was unfit for government. It was all theatre today, not much

economics in it. In terms of the big picture, we had George Osborne say

that we are going to have grow faster than Germany, faster than

America. In those sorts of basics, he is on the right course now, isn't

it you might up the economy fell off a cliff, the financial crisis, GDP,

the OBR figures indicated it fell 72%. -- 7.2%. We have actually got a

debt fuelled economy, and the Governor of the Bank of England only

this month said that three quarters of the growth will be by

consumption, by housing and by consumers. So that is not a good

picture, taking it in the long term. Ken Clarke, one of your

colleagues was on the programme earlier, acknowledging that Labour

has shifted the whole political debate onto the cost of living. That

is a real problem, isn't it? The national indicators are one thing,

but real lives are quite different. I do not think they have. There is a

cost of living problem, of course, but too exploited by making

absolutely absurd suggestions that the government can arbitrarily frees

energy bills, whatever happens to the cost of energy, was ridiculous.

It has gone beyond just energy, it is how people feel in terms of wages

and everything else. Underlying it all, of course, nobody knows

anything about macroeconomics and expects to see a sudden surge in

living standards. He would not have expected as to bounce back in the

first three years. Was Ed Balls wrong to say that people in 2015

will be worse off than when you came to power in 2010? We do not know for

certain, but because of the mess we took over, the country has been

rendered poorer. The economy crashed by 7%, the currency devalued by 25%,

forcing petrol prices up and everything else. There is no doubt

it is a slow recovery. George Osborne acknowledged that, and he