The Budget 2016 BBC News Special

Welcome to our live coverage of the Budget, the second

And it's all happening in a rather different economic climate,

not to mention the political climate, with that EU referendum

And what will it mean for spending and taxation?

A few minutes ago Mr Osborne appeared on the steps of Number 11

Downing Street, his official residence, with the traditional red

box containing a copy of his Budget speech.

His eighth since he became Chancellor in 2010.

Alongside him, his Treasury ministerial team.

And that Budget speech will be delivered at 12.30 after the usual

weekly session of Prime Minister's Questions.

making their way now to the Houses of Parliament. Mr Osborne a few

moments ago left Downing Street and headed for the Palace of

Westminster. Stay with us as we'll have

all the Budget detail and reaction. I'll be getting the thoughts

of politicians here outside Parliament as they digest

the Chancellor's announcements and assess how he deals with

the tougher economic environment. I'm in Bolton, the heart of

the so-called Northern Powerhouse, which has been promised more money

to improve its transport network. We'll be getting a range of views

from people affected And I'll be responding

to your emails, texts and tweets about what this Budget means

for you and your family's finances. We'll be making sense of the Budget

measures with expert analysis from my BBC colleagues

here in the studio. Our political editor

Laura Kuenssberg, our economics editor Kamal Ahmed,

and our business editor Simon Jack. They'll also be providing plenty

of thoughts on social media If you want to join the Twitter

conversation, use the hashtag You'll be part of the big tide of

comment hanging around speech itself.

You can also email us at [email protected].

We'll try and put some of your tweets and emails

to our experts and guests during the programme.

Keep those comments coming in and keep the questions coming in and I

will do my best to use them as the programme goes on.

So, this time last year, the coalition government

was still in power, the election was yet to come,

and it has been a rather eventful 12 months for Mr Osborne.

REPORTER: Is this an election-winning Budget,

With Britain's national debt share falling, the sun

People keep drinking beer because of the duty cut.

The simplest thing to do is not to phase these changes in,

I brought along Mao's Little Red Book.

Oh, look, it's his personal signed copy!

This is putting the power into the Northern Powerhouse.

Eventful. He's a very visible Chancellor in so many ways. What are

you expecting today? The big question for him is where has the

sunshine gone, Chancellor? In the election campaign we got used to

George Osborne making the case he had done rather a good job of fixing

the roof while the sun was shining to use the metaphor he used again

and again and again. Today, the tone is going to be completely different.

He's going to warn of gathering clouds over the world economy, and

the political question is, does he try to make the case, as his critics

will suggest, that somehow it's his fault and he has caused some of

these problems in this country? Or really point to what's happening

right around the world, how does he respond politically to the fact of

the numbers he bases his sums on in November and now look hopelessly

optimistic and rhetorically also how does he do that when he's been

telling the public something else for awhile? Lots of important things

going on, like the reaction, because, of course, today it's a

very big job to someone else on the opposition front bench. Let's look

at Jeremy Corbyn, who was leaving home a short while ago today. As is

usual on these days, he didn't say too much to the people waiting, but

he faces a big challenge today because he has got to lead the

response to this Budget speech. Some thoughts on that? This is one of the

hardest and worst gigs in Westminster, being Leader of the

Opposition is always difficult. Especially on Budget day. It is not

an impossible but almost an impossible task. Imagine doing an

exam live on television in front of the whole country that's not on your

specialist subject, you haven't had any time to prepare for and you have

got to somehow come back with something credible and hopefully for

Jeremy Corbyn, can get through to the public. It's going to be a

difficult task for him to respond in an effective detail but what we will

hear from Jeremy Corbyn I'm sure, as we heard in recent days and months

from his team, is, in their view, George Osborne's record is failure.

He has missed his own targets on sorting out the books again and

again and again. Of course, as Jeremy Corbyn will make reference to

this, George Osborne will announce more cuts on top of six years of

cuts, and that's the big difficulty for him in terms of the public. His

reputation was built on sorting out the box, persuading people he was

the safe choice to clear away the debts that is not got anything like

as far as he wanted to our road and he's going to tell people today he

has to act now so we don't pay later. That means more cuts, on top

of years of cuts and for many people watching this around the country,

it's going to be difficult to swallow. Quite a few things for us

to pick up and I'll come back in a while to talk about the

all-important context of the European referendum which could have

a bearing on the things we're talking about today.

What are you focusing on today? It's going to be a fascinating day. There

are two big issues for us to watch as George Osborne gets up to deliver

his Budget in an hour's time. One of those is around the government's

finances. The Government accounts, how much will they spend and how

much is it borrowing? Secondly, the health of the UK economy, because

there have been some headwinds over the last three months since the

Autumn Statement of last November. So let's remember some of those

rules that George Osborne set himself last year. He said he would

reduce Government borrowing and would be running a surplus by the

end of this Parliament. Let's look at some of those figures. In the

Autumn Statement in November he said borrowing would be at ?73.5 billion

this financial year. It would fall them, he suggested, down to 49.9

billion in 2016-17 and reach an overall surplus of over ?10 billion

in 2019-20. The other key target he set himself was that public sector

net debt, the amount of debt the Government is running would fall as

a percentage of national income, that is rule two. Another thing to

look for today is does he had that second rule? November 's forecast,

but more optimistic, said the figure of national debt in comparison to

income would be 83.1% last year, that would fall to 82.5%. This year.

And fall again each subsequent year until its larger healthy looking

number of 74.3% in 2019-20. A lot of economists judging today will say

you can find it difficult with his new economic headwinds to hit that

target. We need to keep a close eye on whether that downward trend is

still there. That's very important politically for him. You mentioned

the state of the economy. What is the main yardstick there? If you go

back to the spending review of last autumn, things looked better. The

Office for Budget Responsibility, economic watchdog for the

Government, said the public finances were in a better state to the tune

of ?27 billion. That was down to two things, higher tax receipts as the

economy grew more robust, and also a bit of it gain out of our national

debt repayments because interest rates are very low, the debt

repayments were low as well so the Government got a lift from those. If

we go back to the beginning of this year, global economic uncertainty

has grown and there has been slower than predicted growth. Let's look at

a few of those numbers. The Office for Budget Responsibility in

November said in 2015, growth would be 2.4% and it would be the same for

this year and would probably stay around the same area for the next

three years. But since then, those economic headwinds have been on a

downgrade. The Office for National Statistics put growth last year at

just 2.2% and the Bank of England has now cut its growth forecast for

this year, 2016, down to 2.2%. One other thing to remember, wages are

not increasing as rapidly as we thought they would last year and

that means tax receipts, income for the Government, is reduced, semi is

going to have to cut public expenditure more like Laura said. If

you want to hit his rules, you may not add them now but he will not, I

don't believe, do that. Thanks very much, we will talk later.

Plenty of speculation about the content of today's Budget,

but it's important to remember that the Chancellor has already

announced a list of things that will take effect at start

of the new financial year next month.

So let's start with the so-called giveaways.

On income tax, the tax-free personal allowance is set to rise to ?11,000

next month and the threshold for paying the higher income tax

Next month, the government's new living wage comes into force

and this will see the minimum wage rise from ?6.70 an hour to ?7.20

A new personal savings allowance of ?1,000 for basic rate taxpayers

and ?500 for higher rate taxpayers will also be introduced in April.

So much for giving away, the Chancellor is also taking money

The new apprenticeship levy will start to be collected in April

2017 and is expected to raise up to ?3 billion a year.

Stamp duty will be raised by 3% for buy-to-lets and second homes.

And while there's been much speculation about possible changes

to pension tax relief in today's Budget, the Chancellor has already

announced a reduction in the lifetime allowance

The Chancellor is squeezing public spending.

Savings will be made in the welfare budget by freezing working age

While increases in public sector pay will be capped at 1% for the rest

So plenty of changes already in the pipeline and of course the world of

business already heavily affected by some of those and the measures

announced over the past year or so. Let's talk to Simon, our business

editor. Business, what should we look out for? He's got a tricky

conundrum because it got to persuade business he is still on their side

whilst hitting them inevitably for some more cash and businesses are

feeling pretty bruised for his last few encounters with George Osborne.

We have the apprenticeship levy, the increase in the living wage come

raid on Insurance Premium Tax they are saying, enough already, give us

a break, please, we can't take much more so that's going to be their

message. I'm afraid he's not going to be able to oblige. What are you

expecting to do in that sense? Where can you go where business is

concerned? He will try to go again for business premiums, it could go

up to 12% and he would try to make sure more tax does not leak out of

the current system so for example, at the moment, you can deduct the

amount you pay in debt interest from the profits to reduce your tax

profits and we could see a change there. On the plus side, though, the

Northsea is in big trouble and this would be a no-brainer giveaway for

him because there were no profit in the North Sea at the moment so

reducing the tax by 20%, of nothing, is nothing, so it would be

everything for him to do. OK, thank you very much. We will be back for

some more analysis just before the Prime Minister's Questions at

midday. Lots of reaction of course to the Budget speech at Westminster

as we expect, but very important for us to take the temperature in other

parts of the UK. My colleague Jo is in Bolton today, the marketplace.

Let's join him now. Statemen Yes, Huw, I'm the market

place here in Bolton which is George Osborne likes to term it the

Northern powerhouse. It is under going a ?20 million refurbishment

and make-over. As you can see everybody is busy working. They

might have stopped while we are doing our broadcast here. Let's talk

to the man who has been overseeing the construction in this big market

place, Ian Spencer. The Chancellor is expected to announce new

infrastructure projects for this region. How much of a boost will

that give Bolton? It would be a fantastic boost to the region. If

you look at Bolton, has always been overshadowed by the likes of

Manchester and Liverpool, however, with the new transport links that

are coming through, from reducing travel times from over 35 minutes

out of Manchester, that's going to be reduced down to 20 minutes and

then from there to the airport, within 40 minutes. So it would be

fantastic for the region. Wla would it do for the building trade? From

our prospective it will bring more opportunities to the business,

growing it forward. So yes, you know, it is all very, very positive.

Ian, thank you very much. I will let you get back to work. Let's take you

into the Bolton sunshine, so out of the gloom of the vaults. They will

be opened actually in the next few months. There will be restaurants

and bars, tucked in under here in vaults closed since 1855 when this

was actually the biggest market place in Europe. Well, let's talk to

two ladies, Nicky Wilson-Cook who is in charge and Catherine who is a

local businesswoman. Nicky, what impact is this going to have on

Bolton? Well, the development has already started to have a positive

impact. We're hoping it is a game changer introducing lesh uand

restaurants is a key must have. We're really hopeful it will be

great. Is the northern pou per house that George Osborne talks about

tally a reality or rhetoric? No, it is a reality. We have already got

the transport interchange happening. That's a ?48 million spend, that's

been, that's funded by Greater Manchester Transport Programme,

yeah, it is good. Well, let's talk to Catherine. There are measures the

Chancellor brought in that have had an impact on small businesses like

yours and you run an accountancy furpl. What impact have they had? --

firm, what impact have they had? Changes in dividends. We know that

small business owners face paying taxes on dividends which has quite a

big impact for the tax planning as well as as in the future. What about

the minimum wage? At the same time the Government announced today the

national Living Wage. Well, obviously we all want to earn more

money, so it is not bad to increase the Living Wage, but at the same

time being forced to pay more wages and pay more in taxes regarding the

dividends, it doesn't really have a good impact on small businesses

because we are a bit afraid. All right, thank you both very much. We

will be getting reaction all day, here at the market place in Bolton

and we will also be getting reaction with ruth Alexander who is our

personal finance expert. Let's speak to her. She is up there. Amid the

speculation about what might be in the Budget, we do know what the

Chancellor already has planned to come into play in April. Pensions is

going to be a big area of change and that's something we will get a lot

of questions about on Money Box, people who are reaching State

Pension Age from 6th April, the system will change for them. They

won't get the basic state pension and the additional state pension,

there will be one new state pension which is about ?155 a month. The

highest earners are being squeezed on pensions. The maximum amount you

can save tax-free in a pension over a lifetime is going down to ?1

million and the annual amount you can save overer year if you are

earning 1 -- over a year if you are earning ?150,000 a year will be

tapered down. There is good news for savers. Basic rate taxpayers will be

able to earn ?1,000 interest tax-free on their savings and higher

tax payers will be able to earn ?500 tax-free and that's on top of the

Isa limit of ?420. We would love to keep in touch with you throughout

the Budget and hear how it is affecting you. You can e-mail us and

you can also text us or you can contact us via Twitter:

We will be here all day in the market place. Not only will we be

gauging reaction from local businesses and the TUC and local

political leaders, we will, of course, bring you analysis of the

key measures announced in the Chancellor's Budget coming up

shortly. That's it. Huw. Jo, thank you very much.

You're welcome to send in questions and comments as you go along because

we will try to deal with as many as we can.

Let's look outside our studio at Westminster. A glorious view from

our helicopter of the Palace of Westminster. There is quite a bit of

work going on, but there is a big bill attached to the projected work

if the bills are approved because there is a lot of repair work needed

on this glorious building. You have the Victoria Tower on the right

which is home to the Parliamentary archives with Bills going back

hundreds of years and Big Ben, of course, across the river there from

the London Eye. On the green in front of Parliament is Jane Hill

with guests. Let's join Jane now. Thank you very much, Huw. Welcome to

a blustery College Green. Let's take a few minutes to assess what

representatives of the two main parties here at Westminster think we

might be in for over the next couple of hours. Joining me here outside

Parliament the Shadow Chief Secretary to the Treasury and the MP

for Heartsmere. Welcome to both of you. Oliver, like it or not, this

day, this Budget, is all through the prism of what is happening on 23rd

June, isn't it? Well, 23rd June is a way off. We have got four months to

go. What this is through the prism of is sticking with the long-term

plan, that's delivering stability for the economy, we have got two

million more jobs and one million more people moved off benefits and

it is about investing for the future. I know that's what the

Chancellor's priority is today. Where is the money, for example, you

talk about investing for the future, turning schools in England into

academies, where is that money suddenly coming from? Well, actually

I think this is what the Chancellor has done right from the very

beginning. He has taken two big decision, he continued to reduce the

deficit. You spend less on debt interest. So that gives you more

money to play with and secondly, if you continue to reform welfare which

we're doing, saving ?12 billion, rather than spending money on what

Labour used to call the bills of social failure, we can actually

invest it for the long-term, that's why we are investing in education

and I'm pleased by the suggestion we will have Crossrail two and

investment in high-speed three, that is the sort of thing we need to be

doing, moving away from that spending that is wasting money on

things like debt interest to long-term investment in areas to

improve our infrastructure. Jeremy Corbyn is standing up for the

first time today. He has got a very daunting task, hasn't he? Well, I

think it will be a real test For George Osborne today about facing up

to his own failures. Oliver talks about the costs of failure, the

housing benefit bill is said to be ?350 million more than George

Osborne himself forecast last year. As a direct result of a lack of

house building, the worst record since 1920 and rent prices rising.

Today, is actually a real test about whether he is going to face up to

his own failures on the debt on deficit, on exports, which are

likely to see if he is going to meet his targets, it will take 14 years

longer. On all of those issues, people are saying are you going to

face up to the failures and are you going to put the interests of the

British economy first or your own political ambitions? That's where

today we want to see a fair Budget, we want to see the poorest not

bearing the highest cost and the highest burden and we want to see

one that genuinely invests for the future. Do you stand here confident

this lunch time that your leader will stand up, will make those

points, that he will be able to rebut whatever George Osborne

announces because this is a test for anyone, isn't it? Jeremy Corbyn is,

this is his first chance to do this? This is a test and I have every

confidence that we are going to be standing up to George Osborne today,

not just in the chamber, but we're going to be standing up to him in

the media as well because he has failed on so many levels. He has

shown that you cannot cut your way to prosperity. If people's wages are

?14, if they are worst, ?40 worse off than before the crash in 2008,

those are real questions for George Osborne to answer about why women

are worse off by.81% of cost of his cuts and why he is cutting support

for people with disabilities, 600,000 people are set to be

affected. Today is a test for George Osborne facing up to his failures.

Oliver, you mentioned investing in infrastructure and this is also a

Budget produced by a man who is thinking about trying to get into

Number Ten? Well, I had the privilege of working for the Prime

Minister for five years and I very much hope and expect that he will

continue as Prime Minister as he said until the end of the

Parliament. I think that's quite a way off and actually it is

interesting talking about failure, I remember when we came into power, we

had the biggest Budget deficit, one of the biggest budget deficits in

the western world, borrowing more than we had at any point in our

peace time history, we have reduced the deficit by a half, hopefully it

will be moving down by two-thirds, we have more jobs being created and

that's the record that the Chancellor will be focussing on. You

know that debt is a percentage of GDP has risen from 62% to 80% under

George Osborne. You know he failed to cut the deficit as he said he

would. You know he failed on manufacturing. We are now still

pre-crisis, not even at pre-crisis levels with manufacturing. You know

he failed on all those fronts. 9% of your infrastructure projects have

been delivered. There is a long way to go. Even the CBI... By having the

second strongest economy in the entire G7, that's a record which we

can be proud of. The debate is clearly going to continue. We can

continue this after the interview. Thank you very much for joining us.

We will have much more from here over the course of the afternoon as

you would expect. Huw, back to you. You think it is a boring Budget,

this proves that we are in for an interesting time!

And you can also access the BBC's range of expert analysis

and all the latest Budget news on the BBC website:

Let's look at what is going on. I think they are tidying up their

session of questions on international development, but it is

a full House already because, of course, everyone has been there inn

there to book their seats for the Budget Statement. Justine Greening

finishing this session. Laura is still with me. I mentioned the

important context of the referendum coming up in June because clearly,

for lots of people, watching this today, that is really the context

around this speech. For the Government that's the context around

this speech too. There is no doubt about that and George Osborne as a

politician likes to trade in big political facts, big political

headlines and the big political fact right now is that the Government's

number one priority is making sure that they win the EU referendum or

interestingly the way a lot of them see it is not losing the referendum

which in a funny way is a different thing. That doesn't mean that the

Budget is going to be empty of anything that's ambitious or empty

of anything that makes a difference to people watching this, but what it

does mean is that we are unlikely to get many measures that are going to

give George Osborne real headaches inside his own political party. We

are still in the early days of referendum campaign, but it is

already extremely fractious inside the Conservative Party. The other

big political fact of this Parliament is they've got a very,

very small majority and they can be beaten. They have been beaten, they

were beaten the other day on George Osborne's plans to have shops in

England open for longer on Sundays. So don't expect an empty Budget,

don't expect nothing controversial, but we shouldn't expect anything

that's really going to upset the apple cart on the Conservative

benches because they are more focussed on trying to keep together

on the European Union. So on this Budget Day 2016 at

Westminster, let's take a look at the scene here on the banks of the

river Thames and the Palace of Westminster and Big Ben about to

announce that it is drawing up to midday.

Very soon, we will have Prime Minister's Questions starting. It

has been a few minutes late starting of late. But maybe the Speaker today

will be more strict. Let's go inside the chamber. Questions are still

going on and we concede the international development are still

finishing. Why don't we see whether the Speaker will call the Prime

Minister. Questions to the Prime Minister.

CHEERING Number one, Mr Speaker. Thank you,

Mr Speaker. This morning I spoke to ministerial colleagues and others

and in addition to my duties in the South ice love further meetings

later today. And employment falling by over 60% at over 5000 new

apprenticeships, Redditch is doing well. I'm holding my third jobs fair

in the next few weeks with 25 companies taking part. Would he

agree we've made a good start but we must not be complacent and continue

to get good quality jobs into our regions? I'm very much agreeable

with my honourable friend. If we look at the West Midlands and take

today's unemployment figures, we can see the claimant count has come down

since 2010 by 91,000 people and I'm sure the House would welcome an

update on the unemployment figures out today, employment at a new

record high of 31.4 million people. Compared with 2010, there are

2,370,000 more people in work than when I became Prime Minister and the

claimant count today, down 18,000 in the last month, figures I'm sure

will be welcomed right across the House. Thank you, Mr Speaker. Cut

the Prime Minister tell the House how many people will die from

respiratory disease as a result of a pollution be for this country meet

its legal obligations on air quality by 2025? I don't have those figures

to hand but what I do know is that we need to make progress on air

quality and that is why we have the new regulations on diesel engines

which is helping, the steady decarbonisation of our power sector,

which will help, and that's why we do have very strong legislation

already in terms of making sure we have clean air particularly in our

cities. If I could help the Prime Minister. The sad truth is, half a

million people will die because of this country's failure to comply

with international law on air pollution. Perhaps a good answer

another question, how much does their pollution cost our economy

every year? Of course it costs billions because people are being

injured and that is why we have the new clean air zones, we are seeing

omissions from cars coming down, and if I give him one example, if we

deliver in terms of our carbon reduction plan for electricity

generation, we are going to say something like an 85% reduction in

carbon between 1990 and 2030, giving us one of the best green record

anywhere in the world. The Royal College of physicians estimates that

their pollution costs the economy ?20 billion per year. The failure to

do their pollution is killing people. Only a few days ago, London

faced a severe smog warning. His friend, the Mayor of London has

decided over illegal breach of air quality in the capital every day

since 2012, so why can't the Prime Minister Harri up action to make is

complied with international law and help the health of the people of

this country -- hurry up. The Conservative governments in the

1950s passed the clean air act and I'm sure it'll be this Conservative

Government which take action, including the clear air zones rehab,

lower car emissions, and why are we able to do this? Not only because we

care about the environment but we have a strong economy to pay for

these improvements as we just about to hear. We all welcome the clean

air act of 1956. But things have moved on since then.

LAUGHTER The Government is now being

threatened with being taken to court for its failure to comply with

international law on air pollution. He is proposing to spend tens, if

not hundreds of thousands of pounds, public money, defending the

indefensible. Why not instead invest that money in cleaner air and better

air quality for everyone in this country? We are investing money in

cleaner in our country. For instance, we are phasing out the use

of coal-fired power stations, far in advance of what other European

countries are doing, blazing a trail in terms of more renewable energy,

the clean nuclear energy we are going to be investing in, all of

these things will make a difference but let me say again, you can only

do this if you have a strong economy, able to pay for these

things. If the Government and the Prime Minister are so keen on

renewable and clean energy, could you explain why, on Monday, the

House approved new regulations to allow communities a veto on clean

energy projects like Shaw went, and I have a question from Angela from

Lancaster who asks the Prime Minister this. If I was you, I would

listen. Will the Prime Minister offer the same rights of veto to her

community and community like air of a veto on fracking? We have a proper

planning system for deciding these things. If he wants to know what is

happening in terms of renewable energy, 99% of the solar panels in

this country were installed since I became Prime Minister. That is the

record we have. The UK now has the second-largest ultralow emission

vehicle market anywhere in the European Union. We've seen one of

the strongest growth in renewable energies, but isn't it remarkable,

five questions in, and know well, to the fall in unemployment, no mention

on the 31 million people now in work, no mention of the fact we have

more women, young people, in work, more people bringing home a salary,

a wage, and paying less taxes. Not a word from the party I thought was

meant to be the party of labour. The party of working people, getting

people into work is on this side of the House. Mr Speaker, the questions

to the Prime Minister RVs. -- are these. He boasted he led the

greatest Government ever. No Husky was safe from his cuddles. So could

he explain why the energy and climate change select committee has

produced a damning report when it comes to green energy, saying major

investors policies as risky as a result of cuts and changes. Why is

this Government so failing the renewable energy sector, clean air,

investors, consumers and those who work in that industry? I think, if

any proper look at the figures will find, this Government has a

remarkable record in green energy. Let me take the climate action

network, they said Britain is the second best country in the world for

tackling climate change after Denmark. That is our record. Since

2010, we produced greenhouse gases by 14%, over delivering against

carbon budgets, securing the first truly global legally binding

agreement to tackle climate change and have annual support for

renewables, more than doubling to over ?10 billion by 2020, on

renewable and it has become on track to deliver our target of at least

30% of renewable sources by 2020 and almost all of that would not have

happened under a Labour Government. That's our record and we are proud

of it. Question two, Mr Speaker. There are some positive things going

on in the West Midlands economy and today's figures show employment in

the region are up by 140,000 since 2010 and more than 108,000

businesses work raged in the region between 2010-14. Thanks to our

long-term economic plan for the Midlands engine, we've invested in

public services in the West Midlands, helping to build a strong

NHS, reform the education system and give the police the resources they

need. Unemployment is down again in my beautiful Lichfield. And

yesterday, was an absolute first for the West Midlands, when the whole

region cooperated to present 33 investment schemes at an

international investment creating a further 178,000 jobs. So what more

can the Prime Minister do to support the Midlands engine? Apart from

insuring, of course, we never get a Labour Government. I'm glad he chose

to be here rather than in the South of France. Is right about these 33

schemes. Last week we had a deal signed between Chinese investors and

an automotive company creating 1000 jobs in Coventry. The Business

Secretary was in Staffordshire as Nestle opened a new coffee factory

ringing 400 jobs and of course now that historic deal with the West

Midlands which will see significant new powers devolved to the combined

authority and Mayor, changing the way the country is run, devolving

power, building the strength of our great cities and Birmingham is the

second city of our country. There is widespread reporting that the UK

Government is about to commit to send ground troops to Libya to train

Government forces there. Is this true and why has Parliament not been

informed about it? Of course, if we had any plans to send conventional

forces for training in Libya, it would come to this House and we

discuss it. What we want to see the beer is the formation of a unity

Government, there progress with the Prime Minister who can lead to a

Government of National Accord, and we want to hear from him what

assistance and help we think should be given in Libya and countries like

Britain, like France, America, Italy, will definitely try and help

that new Government because, right now, Libya is a people smuggling

route, which is bad for Europe and for us, and also you the growth of

Brexit, which is bad for us but we if we had plans for troop

deployment, we were discovered in the House. The UK spent 13 times

more bombing Libya than securing the peace after the overflow of the

hated Gaddafi regime. The critics of UK policy, even include President

Obama of the USA, so we'll Prime Minister Erdogan a to bring the

issue of any potential Libyan deployment, or any British forces to

Parliament, for approval, before giving the green light for that to

happen? Will he give back commitment, yes or no? I'm happy to

give back but as we always do. I'm very clear that it was right to take

action to prevent that slaughter by Colonel Gaddafi would have carried

out against his people in Benghazi. I believe that was right. Of course,

Libya is in a state which is very concerning right now and everyone

has to take their responsibilities for that. What I would say is, after

the conflict, the British Government supported the training of Libyan

troops, we brought the Libyan Prime Minister to the G8 in Northern

Ireland, we went to the UN and passed resolutions to help that

Government but so far we have not been able to bring about that

Government of national accord, back and bring a semblance of stability

and peace to that country but is it in our interest in bad Government do

that? Yes, it is, and we should work with others to try to deliver that.

Byron Davies. My constituency was once the first time ever by the

Conservatives, and it could be transformed along with the rest of

the region by the Swansea Bay tidal lagoon. Having signed a 1.2 billion

deal yesterday for Cardiff, cut the PM gave an insurance they will do

anything to ensure the tidal lagoon project fits the UK energy strategy

and that he further recognise the economic potential this would bring

to the Swansea Bay region? I thank my honourable friend. I do remember

visiting his constituency just after his victory last year. I seem to

remember we went to a brewery for a mild celebration. The tidal lagoon

does have potential, we launched an independent review of a tidal lagoon

power to better understand the technology and we will look

carefully at the findings of that review and work closely with the

developers to make a decision on Swansea. Wrexham and North Wales is

a strong manufacturing and exporting region. But its growth is

constrained by lack of access to airports in north-west England. The

office for rail regulation is currently considering applications

for rail paths from North Wales. Will he support a cross-party

campaign for fairness for North Wales and for access to airports in

north-west England? The former Secretary of State for Wales, the

Honourable member for Clywd West, came to see me recently about this

because I think there is a very strong argument for how we can

better connect North Wales with the north-west of England and make sure

we build on economic strength of both, so I will look carefully at

what he says and my right honourable friend says about the potential for

increasing rail capacity. James Davis. Lastly, High Court judge

ruled in favour of the CPO of the great two star listed former North

Wales Hospital in Denbigh, years of neglect by the offshore company

owner resulted in the building being brought to the point of collapse.

Thanks to the ground-breaking work carried out by Denbighshire County

Council and the Princes regeneration trust, their future should now be

safeguarded. But what can the Prime Minister do to prevent buildings

such as these which are deemed national assets from falling into

hands of those who are not fit and proper guardians and particularly

those outside the control of our judicial system?

My honourable friend makes an important point and I am aware of

this case. It is great news that these buildings which I know how

important they are will be safeguarded. They were bought by a

company and left abandoned and as he says, that's no way to treat a grade

II listed building of the that's why we have the powers in place for

compulsory purchase orders and I think in this case, Denbighshire

Council were right to use them. Councils should have the confidence

that they have the measures and when appropriate, they should be prepared

to use them. Two weeks ago, in front of the

Education Select Committee, the head of Ofsted said that 16 to 19

education should be done in a school-based environment and not in

a FE institution. He went on to say some pupils head off towards the FE

institution, do badly and they get lost and drop out. Does the Prime

Minister agree with him? I think we need a range of settings

for A-levels and for post 16 study. I would say this, there are a lot of

secondary schools in our country who would like to have a sixth form and

I think there are great benefits for particularly the 11-year-olds going

to secondary school who can look to the top of the school and see what

girls and boys are achieving 16, 17, 18, what A-level choices they're

making, what futures they are thinking of and for many people it

is inspiring to go to a school with a sixth form, let's encourage both

and let's have the choice and that's why the academy misation of schools

is very important. In apprenticeship Week, I'm sure the Prime Minister

will join my thanks to the employers who created 6500 apprenticeships in

Gloucester since 2010, in Gloucester Citizen for its support and all the

apprentices themselves including my first apprentice, now Gloucester's

youngest ever city councillor. Looking forward, would my Right

Honourable friend do all he can to hasten the introduction of associate

nurses? Well, the south-west has delivered over 280,000

apprenticeships start since 2010, so it is pulling its weight and well

done to his constituents for doing that. I think he is also right about

the introduction of associate nurses, we are working with health

education England to take this as another route into nursing.

Mr Speaker, according to the statistics provided by the House

library, there are 280,000 problem gamblers in the United Kingdom. Can

the Prime Minister indicate when the Government will take forward the

2010 report prepared for the Department of Culture, media and

sport and does the Prime Minister agree that the money from dormant

betting accounts should be used to support those whose lives have been

destroyed by gambling? We will study the report carefully. We took some

action in the last Parliament to deal with problem gambling in terms

of the planning system and in terms of the way particularly fixed odds

betting terminals worked and I'm happy to keep examining this issue

and to act on the evidence and I will be discussing with the

Secretary of State for Culture, media and sport.

The systematic killing of Christians and other minority groups by the

so-called Islamic State across the Middle East has reached

unprecedented proportions. So the action being taken by Her Majesty's

Government is just. But what more will my Right Honourable friend do

working with the international community to halt this genocide

being committed against Christians by what I call the satanic State? My

honourable friend is right to draw atonings what Daesh is doing in

terms of persecuting Christians and not least others of other faiths and

Muslims who they take disagreement with. What we must do is keep to the

plan. We can see that we have shrunk the amount of territory Daesh have

in Iraq by 40%, we are seeing also some progress in Syria as well, but

this is going to take time and we must show the patience and the

persistence to make sure we rid the world of this evil death cult. The

Prime Minister's energy policy is a complete shambles. It is wholly

dependant on the troubled and expensive nuclear plant at Hinkley.

There is barely a Plan A let alone a Plan B. Is the Prime Minister

seeking to build the world's most expensive power station or the

world's biggest white elephant? We are planning on continuing with the

successful energy policy which is seeing cheaper energy and lower

carbon at the same time. The strength of the Hinkley deal is

there is no payment unless this power station goes ahead and is

built efficiently by EDF and I think that will be good for our energy

supplies because if you want to have energy at low-cost and low-carbon,

you need to have strong nuclear energy at the heart of your system.

Thank you, Mr Speaker. Research UK situated in my constituency is the

world's first charity to acle anti-my robial resistance. Would the

Prime Minister agree to meet with me to see how we can fund their vital

research so that this time, it is not the Americans that save the

world, but the British? I am happy to meet with my honourable friend.

He is right to raise this issue, because of the resistance to

antibiotics and antibiotics aren't working, we do face a genuine

medical emergency around the world. That is why Britain must put this

issue squarely on the agenda of the G20, why it was a large part of our

discussions with the Chinese when they made the State visit last year

and why we are investing ?50 million in an innovation fund working with

the Chinese Government to take this forward and I hope the organisation

in his constituency can benefit from solicitor of the research.

Mr Speaker, the Prime Minister will know his Home Secretary is once

again trying to deport Afghan interpreters seeking sanctuary in

the United Kingdom. These brave people risked their lives, serving

our armed forces, yet they now face being sent back for mercy of the

Taliban and to join hundreds of thousands of people rotting in

refugee camps. Is this how Britain should we pay those who put their

lives on the line for us? Will he do the right thing and do whatever

possible to ensure they are offered safe haven here? Well, what we did

in the last Government in which his party played a role was that we

agreed a set of conditions for Afghan interpreters to be able to

come to the UK and be given sanctuary, but we provided for a

scheme so those who wanted to stay and help rebuild their country were

able to do so and I would defend that scheme even if his party

changed its mind. Thank you, Mr Speaker. My

constituent Deborah Read and her sister watched her mother waste away

in hospital after a fall. Last week my Right Honourable friend the

Health Secretary host add global summit on patient safety and

announced the creation of the new healthcare safety investigation

branch. What more can the Government do to ensure patient safety is at

the heart of the NHS and prevent such instances occurring in the

future? I think my honourable friend is

right to raise cases like this and obviously they are horrendous when

they take place and they should be properly investigated. We need to

learn the lessons from them. We have made some progress, the proportion

of patients being harmed in the NHS has dropped by over a third in the

last two years and MRSA, blood stream infections have fallen by

over half in the last five years. The Health Secretary is right to

hold this conference and to examine what other industries and practises

have done in order to have a 100%, you know, zero accident safety

culture. We have seen this in other walks of life and it is time we

aplayed it to the NHS. Thank you, Mr Speaker. Just eight

days ago, Oliver Tetlo popped to the shops and he was brutally shot dead.

The community are shocked and saddened by this murder of an

innocent young man. They have asked for more community local policing

and more youth engagement. Will the Prime Minister meet with me and some

community champions to discuss how we can make our streets safer?

The honourable lady raises a very important point and what we have

seen in London, is actually a reduction in gun crime. It is a

tragic case she refers to and our hearts go out to the family of the

person that she talks about. But we have seen a reduction. We have seen

more active policing in our communities, better intelligence

policing in terms of dealing with gun crimes and we must keep that up

and I will certainly arrange whatever meeting I think is best to

ensure the voices she mentioned are listened to.

Thank you, Mr Speaker. As my Right Honourable friend will be aware,

highways England are consulting on a new lower Thames crossing with their

preferred option being option C which will divert 14% of traffic

away from the existing the Dartford Crossing. Before spending billions

on the new crossing, we should sort out the problem at the existing

crossing? Not only helping a greater number of motorists, but to improve

illegal levels of poor air quality, and restore resilience to the M25

motorway network and will he meet with me to discuss these matters

further? We need to tackle congestion and air

quality and actually stationary traffic is more polluting than

moving traffic so sorting out the problems at the existing the

Dartford Crossing is important, but we have got to look at the options

for a new crossing. Two locations are on the table as a result of

early detailed work and these are the best available ogsesment

highways England looked in detail at both locations in terms of their

look forward to seeing what they look forward to seeing what they

recommend and when they do, I hope we can make progress. We need the

traffic to be flowing smoothly. On reflection, was it wise of the

chancellor to bank on the theory of a ?27 billion windfall when it has

only vanished in the space of the last three months?

We will be hearing a lot from the Chancellor in a minute or two, but

what would I would say we have got an economy which is fundamentally

strong, facing a very difficult set of world circumstances, but here in

Britain, when you look at it, unemployment at 5%, inflation at

virtually 0%, the unemployment figures today showing unemployment

falling again and wages growing at 2%. That is a better record than

most other countries in the developed world can boast and a lot

is down to the very clear plan set out by my Right Honourable friend

and followed these last six years. Last week was English tourism week

and I was delighted to welcome an international deggation to the Eden

Project to promote Cornwall as a destination for international

tourists, visitor numbers are up in Cornwall, but there is still more we

can do to attract overseas visitors out of London and into our country.

Can I ask the Prime Minister what more the Government can do to

promote the tourist and to get more overseas visitors to come to

Cornwall? There is, as far as I'm concerned, nothing finer than

getting out of London and getting down to Cornwall and no better place

than the beach when the sun is setting and the waves are big! And

my phone is working! He is right, and the Daily Mail photographer has

gone home too. That is helps! But what we need to do get people who

come to our country, to spend sometime outside London and that is

what some of the new schemes we have announced like for instance, the ?40

million Discover England fund are all about and I would urge the

authorities in Cornwall to make the most of it.

Mr Speaker, in 2014, we exported ?12.8 billion worth of food

products. With 73% of that total going to other European States. No

wonder that 71% of Food and Drink Federation members want us to avoid

Brexit. Does the Prime Minister think that our prospects of

improving further the export profile of food manufacturing will be

strengthened by staying in the European Union?

Well, I think the view from food manufacturers and indeed, from

farmers and from the wider business community.81% of whom yesterday said

they wanted to stay in a reform Europe I think is very clear and the

arguments on food are clearment our farmers produce some of the cleanest

and best food anywhere in the world and they know they have access to a

market of 500 million consumers without tariffs, without quotas and

without any problems and we shouldn't put that at risk. And when

we look at some of the alternatives to being a part of the single

market, for instance, a Canadian-style free trade deal we

can see there are restrictions for instance quotas on beef and I don't

want to see that applying to British farmers who have got so much to be

proud of. Does my Right Honourable friend

agree that having an inspirational mentor can provide young people with

the opportunities they would never have benefited from before? Can he

tell me how the ?14 million that the Government will be putting into a

new national mentoring scheme will be able to benefit some of the most

disadvantaged children in our society?

I agree with my Right Honourable friend. One of the most important

things that our schools can look to do in the future is to encourage,

mentors from business, from the public sector, from charities, into

their schools to give that extra one on one help that young people so

benefit from. I was at an academy in Southwark yesterday to see how well

that is going, where every child studying GCSEs who wants a mentor,

can get them and I think it makes a huge difference to those children's

life chances. The ?14 million we're putting in should allow an extra

25,000 of the most disadvantaged people in our country have a mentor

and I would urge all schools to look at this. I think there are so many

people in business, in the public sector, in charities, would love to

take part in this and help young people achieve their potential.

The Prime Minister likes to suggest he's a champion of localism but

today his Government is seeking to guide local communities with a crass

forced academies policy that stamps out local consultation and dissent.

Can he explain to the vast majority of parents and residents in Brighton

and Hove Albion recently rejected academy status for two local

schools, why it is that their views count for nothing in the future? I

would argue that academy schools are to devolution because you end up

with the parents, the governors, the head teacher having full control of

the school, able to make decisions about the future about school and at

that does not convince her, I would say look at the results. That you

look at primary sponsored academies you can see they have got better

records and are improving faster, if you look at the converter academy

schools, 88% rated good outstanding, to devolution on making sure every

headteacher is in charge of their school providing the great education

we want for our children. My constituents Jackie Woodcock has got

terminal breast cancer, she has shown outstanding courage in her

fight against the disease but unfortunately she did not get the

support or compassion of her employer who wanted to dismiss it

through capability procedures. Now her former partner is trying to get

the House they own repossessed, leaving her homeless, whilst dying.

With the Prime Minister Erdogan with me that we require better protection

for working people who are diagnosed with a terminal illness and will you

join with me and Jackie in supporting the changes as outlined

in the TUC's dying to work campaign? I think the point is my honourable

friend makes is right, and I will look carefully at the case she

raises full from the truth is, in all of these things, as well as

having clear rules, we also need organisations, employers, housing

associations, landlords, indeed trade unions, to act with genuine

compassion, and to think of the human being at the other end of the

telephone. Order. Prime Minister's Questions comes to an end and as a

traditional on Budget Day, the senior Deputy Speaker takes the

chair, the chairman of ways and Means, the old Parliamentary

committee which traditionally scrutinised financial measures and

they're getting ready now and for the Budget statement by the

Chancellor, George Osborne. Let's join proceedings. Order, before I

call the Chancellor of the Exchequer, I remind Honourable

members copies of the Budget resolutions will be available to

them in the office at the end of the Chancellor's speech. It also remind

Honourable members not it is not the norm to intervene on the Chancellor

of the Exchequer or the Leader of the Opposition. I now call the right

Honourable George Osborne, Chancellor of the Exchequer.

Mr Deputy Speaker, today I report on an economy set to grow faster than

any other major advanced economy in the world. I report on a labour

market delivering the highest employment in our history. And I

report on a deficit down by two thirds, falling each year, and I can

confirm today on course for a Budget surplus. The British economy is

stronger because we confronted our country's problems and took the

difficult decisions. The British economy is growing because we didn't

seek short-term fixes, but pursued a long-term economic plan. The British

economy is resilient because whatever the challenge, however

strong the headwinds, we have held to the course we set out. I must

tell the House that we face such a challenge now. Financial markets are

turbulent, productivity growth across the West is too low, and the

outlook for the global economy is weak, it makes for a dangerous

cocktail of risks, but one that Britain is well prepared to handle

if we act now so we don't pay later. Mr Deputy Speaker, Britain has

learnt to its cost what happens when you base your economic policy on the

assumption you have abolished boom and bust. Britain is not immune to

slowdowns and shocks and nor is the nation powerless, we have a choice.

We can choose to add to the risk and uncertainty or choose to be a force

of stability, in this Budget we choose to put stability first.

Britain can choose, as others are, short-term fixes and more stimulus

or lead the world with long-term solutions, for long-term problems.

In this Budget, we choose the long term, we choose to put the

next-generation first. We choose, as Conservatives should always choose,

sound public finances to deliver security. Lower taxes on his knees

and enterprise, to create jobs, reform, improve schools, investment

to build homes and infrastructure because we know that's the only way

to deliver real opportunity and social mobility. And, as

Conservatives, the best way we can help working people is to help them

to save and let them keep more of the money they earn. Now that is the

path we followed over the past five years and it's given us one of the

strongest economies in the world. And that is the path we will follow

in the years ahead, in this Budget we will redouble our efforts to make

Britain fit for the future. Mr Deputy Speaker, let me turn to the

economic forecasts. I want to thank Robert choke and the Office for

Budget Responsibility to make sure they have available to them the best

statistics in the world, I'm accepting all of the recommendations

of Sir Charlie Bean's excellent rapport and I want to take this

moment to thank another great public servant, Sir Nicholas Macpherson,

who has served as Permanent Secretary to the Treasury for ten

years under three very different Chancellor's and, throughout Commies

always demonstrated the great British civil service values of

integrity and impartiality. He is here today to watch the last of 34

Budget he's worked on and on behalf of the House and the dedicated

Treasury I thank him for his service. The OBR tell us today in

every year the forecast our economy grows and so too does our

productivity. But they have revised down growth in the world economy and

in world trade full in their words, the outlook is materially weaker.

They point to the turbulence in financial markets, slower growth in

emerging economies like China, and a weak growth across the developed

world. Around the globe, they note that monetary policy, instead of

normalising this year as expected, has been loosened, we've seen the

bank of Japan join Sweden, Denmark, Switzerland and the European Central

Bank with unprecedented negative interest rates, the OBR also note

this reflects concerns across the West about low productivity growth.

The secretary-general of the OECD said last month productivity growth

has been decelerating in a vast majority of countries and, as a

result, the most significant change, the OBR has made since the November

forecast, it is their decision to revise down potential UK

productivity growth. The had thought that what they described as the drag

from the financial crisis on our productivity would have eased by

now, but the latest status shows it does not. The OBR acknowledged today

that this revision is in their own words a highly uncertain judgment

call but I back than 100%. We saw under the last Labour Government

what happened when Chancellor revised upward trend growth rate,

spent money the country did not have, and left it to the next

generation to pick up the bill. I am not going to let that happen on my

watch. Now these days, thanks to the fact we have established independent

forecasts, our country is confronted with the truth as economic

challenges emerge and can act on them before it's too late. We fix

our plans to fit the figures, we don't fix the figures to fit the

plans. The IMF have warned us this month that the global economy is at

a delicate juncture and faces a growing risk of economic derailment.

Eight years ago, Britain was the worst prepared of any other major

economies for the crisis we then faced. Today, Britain is amongst the

best prepared for whatever challenges may lie ahead. And that

is what our long-term economic plan has all been about. When I became

Chancellor, we borrowed ?1 in every four we spent. Next day, it'll be ?1

in every 14 that we spend. Our banks have doubled their capital ratios,

we have doubled our foreign exchange reserves, and we have a clear

consistent and accountable monetary policy framework around the world.

The hard work of fixing our economy is paying off. In 2014, we were the

fastest major growing advanced economy in the world. In 2015, we

were ahead of everyone that America. So let me give the OBR's latest

forecast for economic growth in the face of the new assessment

productivity and a slowing global economy. Last year, GDP grew by

2.2%. The OBR now forecast it will grow by 2% this year and then 2.2%

again in 2017 and then 2.1% in each of the three years after that. The

House will want to know how this compares to other countries. I can

confirm that in these turbulent times, the latest international

forecast expects Britain to grow faster this year than any other

major advanced economy in the world. Mr Deputy Speaker, the OBR are

explicit today that their forecasts are predicated on Britain remaining

in the European Union. Over the next... Over the next few months

this country is going to debate the merits of leaving all remaining in

the European Union. I have many colleagues who I respect greatly on

both sides of the argument. The OBR correctly state out of the political

debate and they do not assess the long-term costs and benefits of EU

membership but they do say this and I quote them directly, "A voter to

leave in the forthcoming referendum could usher in an extended period of

uncertainty regarding the precise terms of the UK's future

relationship with the EU." They go on to say, "This club have negative

implications for activity by business and consumer confidence and

might result in greater volatility in financial and other asset

markets." They cite a number of external reports, the OBR say this,

"There appears to be a greater consensus that a vote to leave would

result in a period potentially disruptive uncertainty while the

precise details of the UK's new relationship with the EU were

negotiated." The House knows my view, Britain will be stronger,

safer and better off in the side a reformed European Union. I believe

it should not put at risk all the hard work the British people have

done to make our economy strong again. Mr Deputy Speaker... Order.

Let's be honest, we all want to hear what the Chancellor has got to say.

Some people may agree and some people may disagree, but I want to

hear him. The electorate want to hear him. This country wants to hear

him. Chancellor. Let me turn to the OBR forecast for the labour market.

Since the Autumn Statement four months ago, we've created over 150

more jobs than the OBR expected -- 150,000 jobs extra families with the

security of work, 150,000 reasons to support a la long-term economic

plan. This morning, unemployment fell again. It reached the highest

level ever and the data confirmed we have the lowest proportion of people

claiming out of work benefits since November 1974. The OBR are

forecasting 1 million more jobs over this Parliament, and we remember

what our political opponents said in the last parliament. They claimed 1

million jobs would be lost. Instead, 2 million were created. And when the

jobs started coming, we were told they would be low skilled. But

today, we know almost 90% of new jobs are instilled occupations that

in skilled occupations. Jobs we were told were going to part-time but

three quarters are full-time, Weaver told jobs would all be in London but

the unemployment rate is falling fastest in the north-east, youth

unemployment is falling fast in the West Midlands can't employment is

going fastest in the north-west. In today's forecast real wages continue

to grow and inflation in each and every

Mr Deputy Speaker, the OBR forecasts lower inflation, 0.7% this year and

1.6% next year. I am today confirming in a letter to the

governor of the Bank of England that the remit for the Monetary Policy

Committee remains the se meet trick CPI inflation target of 2%. I'm also

publishing the new remit for the financial policy committee, the body

we created to keep an eye on emerging long-term risks in our

financial system, I'm asking them to be particularly vigilant in the face

of current market turbulence because in this Budget, we act now, so we

don't pay later. Mr Deputy Speaker, that brings me to

our approach to public spending and the OBR forecasts for our public

finances. In every year since 2010, I have been told by the opposition

that now is not the right time to cut Government spending. When the

economy is growing, I'm told, we can afford to spend more. When the

economy isn't growing I'm told we can't afford not to. Today I'm

publishing new analysis that shows that if we hadn't taken the action

we did in 2010 and listened to our opponents, then borrowing would have

been ?930 billion more by the end of the decade than it is now forecast

today. If we had taken their advice,

Britain would not have been one of the best economies for the current

global uncertainties, we would have been one of the worst prepared. Now,

the very same people are saying to us, we should spend more again.

I reject that dangerous advice. The security of families and businesses

depends on Britain living within its means. Last autumn's Spending Review

delivers a reduction in Government consumption that is judged by the

OBR to be the most sustained under taken in the last 100 years of

British history barring the periods of demobilisation after the first

and Second World Wars, my spending plans in the last Parliament reduce

the share of income from the 45% we inherited to 40% today. My spending

plans in this Parliament will see it fall to 36.9% by the end of this

decade. In other words, the country will be spending no more than the

country raises in taxes. We are achieving this while at the same

time increasing resources for our NHS and schools, building new

infrastructure, and increasing our security at home and abroad. The OBR

now tells us that the world has become more uncertain so we have two

option. We can ignore the latest information and spend more than the

one can afford, that's precisely the mistake that was made a decade ago,

or we can live in the world as it is and cut our cloth accordingly. I say

we act now, so we don't pay later. I'm asking the Chief Secretary and

the Paymaster General to undertake a further drive for efficiency and

value for money. The aim is to save a further ?3.5 billion in the year

2019 ssh 20 and less than 0.5% of Government spending in four years

time, that is more than achievable while maintaining the protebss we

have set out. At the same time we will continue to deliver sensible

reforms to keep Britain living within its means. On welfare, last

week, the Secretary of State for Work and pensions set out changes

that will ensure that within the rising disability budget support is

better targeted at those who need it most. Let me confirm, that this

means the disability budget will rise by more than ?1 billion, we

will be spending more in real terms supporting disabled people than at

any point under the last Labour Government. On international aid, I

am proud to be part of the Government that was the first to

honour Britain's commitment to spend 0.7% of Britain's income on

development. We won't spend more than that, the budget will be

readjusted saving ?650 million in 2019/20. We will keep public sector

pensions sustainable. We reformed them in the last Parliament which

will save over ?400 billion in the long-term. To ensure those pensions

remain sustainable, we've carried out the regular revaluation of the

discount rate and the public sector employer contributions will rise as

a result. This will not affect anyone's pension and will be

affordable within spending plans that are benefiting from the fiscal

windfall of lower inflation. Each of these decisions are a demonstration

of our determinedation that the British economy will stay on course

and we will not burden our children and grandchildren. This is a Budget

for the next generation. Mr Deputy Speaker, let me give the OBR's

forecasts for the debt and the deficit. The combination of our

action to reduce borrowing this year along with the revisions to our

nominal GDP driven by lower inflation produced this por

docksical result, the national debt is lower than it was forecast to be

in the autumn. But so too is the nominal size of our economy. We

measure the fiscal target against debt to GDP. So while debt as a

percentage of GDP is above target and set to be higher in 2015/16 than

the year before compared to the forecast, the actual level of our

national debt is in cash, ?9 billion lower. In the future, debt falls to

82.6% next year then.81.3% in 2017/18 and then 79.9% the year

after and in 2019/20, it falls again to 77.2% and down again the year

after to 74.7%. Let me turn to the forecasts for the deficit. When I

became chancellor, the deficit we inherited was forecast to reach

11.1% of national income. The highest level in the peace time

history of Britain. Thanks our sustained action, the

deficit is forecast to fall next year to just over a quarter of that

at 2.9%. In 2017/18, it falls to 1.9%. Then it falls again to 1% in

2018/19. In cash terms, in 2010, British borrowing was a totally

unsustainable ?150 billion a year. This year we are expected to borrow

less than half of that at ?72.2 billion. Indeed, our borrowing this

year is lower than the OBR forecast in the amount. Borrowing continues

to fall, but not by as much as before to ?55.5 billion next year,

?38.8 billion the year after that and ?21.4 billion in 2018/19. Now, I

know there has been concern that the challenging economic times mean we

would lose our surplus the following year and that would have been the

case if we had not taken further action today to control spending and

make savings. But because we have acted decisively, in 2019/20,

Britain is set to have a surplus of ?10.4 billion.

That surplus is set to rise to ?11 billion the year after, that's 0.5%

of GDP in both years. We said we would take the action necessary to

give Britain's families economic security. We said our country would

not repeat the mistakes of the past and instead live within our means.

Today, we maintain that commitment to long-term stability, in

challenging times, decisive action to achieve a ?10 billion surplus, we

act now so we don't pay later, we put the next generation first.

Mr Deputy Speaker, in every Budget I've given, action against tax

avoidance and evasion has contributed to the repair of our

public finances and this Budget is no different. In the red book, we

set out in detail the action we will take to shutdown, disguised renone

ration schemes, to ensure the UK tax will be paid on UK property

development. We changed the treatment of free plays for remote

gaming providers, we limit capital tax treatments and cap exempt gains

in the employee shareholder status, public sector organisations will

have a new duty to ensure those working for them pay the correct tax

rather than giving a tax advantage to those who choose to contract

their work through personal service companies. Loans to participators

will be taxed at 32.5%, to prevent tax avoidance and we will tighten

rules around the use of termination payments. Termination payments over

?30,000 are already subject to income tax from 2018 they will

attract employer national insurance. Taken together, the further steps in

this Budget to stop tax evasion and prevent tax avoidance and tackle

imbalances in the system will raise ?12 billion for our country over

this Parliament. The party opposite talked about social justice, but

left enormous loopholes in our tax system for the very richest to

exploit. While the independent statistics confirm that under this

Prime Minister, child poverty is down. Pensioner poverty is down.

Inequality is down. And the gender pay gap has never been smaller.

The distributional analysis published today shows that the

proportion of welfare and public services going to the poorest has

been protected and I can report that the latest figures confirm the

richest 1% paid 28% of all income tax revenue, a higher proportion

than in any single year of the last Labour Government.

Proof that we are all in this together.

So... THE DEPUTY SPEAKER: It is strange

that we can't hear your own Chancellor of the Exchequer. I want

to hear, I'm sure you must do as well. The Chancellor of the

Exchequer. So Mr Deputy Speaker, I can report

solid steady growth, more jobs, lower inflation, and an economy on

course for a surplus, and all done in a fair way, a Britain prepared

for whatever the world throws at us because we've stuck to our long-term

economic plan. Mr Deputy Speaker, credible fiscal policy and affected

monetary policy has only ever been part of our plan, a crucial

ingredient has always been the lasting structural reforms needed to

make our economy fit for the future and with new risks on the horizon

and with all western countries looking for ways to increase living

standards, now is not the time to go easy on our structural reforms. It

is time to redouble our efforts. My Budget's last year delivered key

improvements to productivity, by the apprenticeship levy, lower

corporation tax and the national Living Wage. My Budget this year

sets out these further bold steps we need to take. One, fundamental

reform of the business tax system, loopholes closed, reliefs reduced,

but so too rates, a huge boost for small business and enterprise. Two,

a radical devolution of power so more of the responsibility and the

rewards of economic growth are in the hands of local communities.

Three, major new commitments to the national infrastructure projects of

the future. Four, confronting the obstacles that stand in the way of

important improvements to education and our children's future. And five,

backing people who work hard and save. In short, this Budget puts the

next generation first and I take each step in turn. Mr Deputy

Speaker, in the last Parliament, I cut corporation tax dramatically,

but I also introduced the diverted profits tax to catch those trying to

shift profits overseas. As a result, Britain went from one of the least

competitive business tax regimes to one of the most competitive and we

raised much more money for our public services. Today the financial

second and I are publishing a road map to make Britain's business tax

system fit for the future. It will deliver a low tax regime that will

attract the multinational businesses we want to see in Britain, but

ensure they pay taxes here too. Soing that never happened under a

Labour Government. And it will level the playing field which has been

tilted against small firms. The approach we take is guided by the

best practise set out by the OECD, work which Britain called for and

Britain paid and Britain will be among the very first to implement.

First, some multinationals over borrow in the UK. So from April next

year, we will restrict interest deductibility for the largest

companies at 30% of UK earnings while making sure firms whose

activities justify higher borrowing are protected with a group ratio

rule. Next, we are setting new hybrid mismatch rules which allow

some multinationals to avoid paying tax anywhere or to deduct the same

expenses in more than one country. Some firms shift money to tax havens

and lastly, we are going to modernise the way we treat losses.

We're going to allow firms to use losses more flexibly in a way that

will help over # 0,000 British companies -- 70,000 British

companies, but with the new flexibilities in place we will do

what other countries do and retrict the maximum amount of profits that

can be off set using past losses to 50%. This will only apply to the

less than 1% of firms making profits over ?5 million and the existing

rules for historic losses in the banking sector will be tightened to

25%. We will maintain our plans to align tax payment dates for the

largest companies more closely when profits are earned, but we will give

firms longer to adjust the changes which will come into effect in April

2019. year. All of these reforms to

corporation tax will reflect better the reality of the global economy.

And together, they will raise ?9 billion in extra revenue for the

Exchequer. That's our policy is not to raise taxes on business. Our

policy is to lower taxes on business. So everything we collect

from the largest firms who are trying to pay no tax will be used to

help millions of firms who pay their fair share of tax. I can confirm

today we are going to reduce the rate of corporation tax even

further. That's the rate of Britain's profit-making companies,

large and small, have to pay and all the evidence shows is one of the

most distorted and unproductive taxes mirrors. Corporation tax was

20% at the start of a last Parliament and we reduced it so it

is 20% at the start of this one. Last summer I cut it to 18% in the

coming years and today I'm going further. By April 2020, 17%. Britain

is blazing a trail and let the rest of the world catch up. Cut in

corporation tax is only part of our plan for the future. I also want to

address the great unfairness that many small businessmen and women

feel when they compete against companies on the Internet. EBay and

Amazon have provided an incredible platform for many new small British

start-ups to reach large numbers of customers but there's been a big

rise in overseas suppliers storing goods in Britain and selling them

online without paying VAT. It unfairly undercut British businesses

on the Internet and on the high Street and today I can announce we

are taking action to stop it. That's the first thing we will do to help

small firms. Second, we will help the micro-entrepreneurs who sells

services online, rent out their homes through the Internet, taxes

should help these people so I'm helping to introduce two new

tax-free allowances worth ?1000 a year and for trading and property

income, no forms to fill in, no tax to pay, but tax break for the

digital age and at least half a million people will benefit. On top

of these measures comes the biggest tax cut for business in this Budget.

Business rates are the fixed costs that way down on many small

enterprises and at present small business rate relief is only

permanent available to firms at a value of less than ?6,000 and in the

past I'd been able to double it for one year only but today I'm more

than doubling its and more than doubling its permanently. The new

threshold for small business rate relief will raise from ?6,000 to a

maximum threshold of ?15,000 and I'm also going to raise the threshold

for the high rates from ?18,000 to ?51,000. Let me explain what this

means. From April next year, 600,000 small businesses will pay no

business rates at all. That's an annual saving for them of up to

nearly ?6,000 for ever. A further quarter of a million businesses will

see their rates cut. In total, half of all British properties will see

their business rates fall or be abolished altogether. And to support

all ratepayers, including larger stores who face tough competition,

and employs lemony people, we will simplify the administration business

rates and from 2020, switch the rating from the higher RPI to a

lower CPI, a permanent long-term savings for all businesses in

Britain, a typical corner shop in Barnstable will pay no business

rates, a typical hairdresser in Leeds will pay no business rates, a

typical newsagent in Nuneaton will pay no business rates. This is a

Budget which gets rid of loopholes for multinationals, and gets rid of

tax for small businesses, a ?7 billion tax cut for the nation of

shopkeepers, which says to the world we are open for business, this is a

Conservative Government which is on your side. Mr Deputy Speaker just

over a year ago I reformed residential stamp duty. We moved

from a distorted slab system to a much simpler slice system and 98% of

home-buyers are now paying the same or less and revenues from the

expensive properties of rhythm. The IMF welcomed the changes and

suggests we do the same to commercial property so that's what

we're going to do and that helps our small firms. At the moment the small

firm can pay just ?1 more for a property and face a tax bill three

times as large. That makes no sense. From now on, commercial stamp duty

will have a zero rate band on purchases up to ?150,000, a 2% rate

on the next ?100,000 and 5% top rate above ?250,000 and there will also

be a 2% rate for those high-value leases with a net present value

above minimum pounds. This new regime comes into effect from

midnight tonight. -- ?5 million. These reforms raise ?500 million a

year. While 9% will pay more, over 90% will see their tax bills cut or

stay the same. For example, if you buy a pub in the Midlands worth

?270,000, you would today pay ?8,000 stamp duty. From tomorrow, you will

pay just ?3000 stamp duty. It's a big tax cut for small firms, all in

a Budget which backs small business. Businesses also want a simpler tax

system. I've asked Angela at the office for tax and have occasion to

look at what we can do to make the system work better for small firms

and I'm funding a dramatic improvement in the service HMRC

offers them. Many retailers have complained bitterly to me about the

complexity of the Carbon reduction commitment. It's not a commitment

but tax, so I can tell the House were not going to reform it but I

decided to abolish it altogether. And to make good the lost revenue,

the Climate Change Levy will rise from 2019, the most energy intensive

industries like steel remain completely protected and I'm

extending the climate change agreement would help many others.

The energy secretary and I are announcing ?730 million a further

auctions to back renewable technology and inviting bids to

develop the next generation of small multi-reactors. We also going to

help one of the most valued industries in the UK, which has been

severely affected by global events. The oil and gas sector employs

hundreds of thousands of people in Scotland and around our country. In

my Budget year ago I made major reductions to their taxes but the

oil price has continued to fall so we need to act now for long-term. I

am today cutting in half the supplementary charge on oil and gas

from 20% down to 10% and I'm effectively abolishing petroleum

revenue tax, too. Backing these are Scottish jobs.

Order. Mr Ellis. Just relax. More to come. The Chancellor of the

Exchequer. Both of these major tax cuts will be backdated so they are

effective from the 1st of January this year. We'll give the industry

our full support. We are only able to provide this kind of support to

our oil and gas industry because of the broad shoulders of the... None

of this support would have been remotely affordable if, in just

eight days' time, Scotland had broken away from the rest of the UK

as the Nationalists wanted. Their own audit of Scotland's public

finances confirms they would have struggled from the start is with a

fiscal crisis under the burden of the highest Budget deficit in the

Western world. Thankfully the Scottish people decided we are

better together in one United Kingdom.

Mr Deputy Speaker, believing in the UK is not the same in believing

every decision should be taken in Westminster and Whitehall, that's

the next step in this Budget plan to make Britain fit for the future. As

Conservatives, we know if you want local communities to take

responsibility for local growth, I have to be able to reap the rewards.

This Government is delivering the most radical devolution of power in

modern British history. We are devolving power to our nations, the

Scottish Secretary and I have agreed the new fiscal framework with a

Scottish Government and also opening negotiations on a city deal with

Edinburgh, we back the new V Museum in Dundee, and in response to

the powerful case made to me by Ruth Davidson, we are providing new

community facilities for people and the Royal navy personnel in fast

lane paid for by us. In Wales, we are committed to devolving new

powers to the Assembly and yesterday the Welsh Secretary and the chief

secretary signed a new billion pound deal for the Cardiff region, opening

discussion on a city deal for Swansea and growth deal for North

Wales Summit Bannock connected the Northern Powerhouse, I've listened

to the case made by the Welsh Conservative colleagues and I can

announce today that from 2019, we will half the price of the Severn

Crossing. My right honourable friend, the Northern Ireland

Secretary and I are working towards a devolution of corporation tax. I'm

also extending enhanced capital allowances to the enterprise zone in

Coleraine and we will use over ?4 million from libel funds to help

establish the first air Ambulance Service in Northern Ireland. In this

Budget we make major further advances in the devolution power

within England, too. It is less than two years ago I called for the

creation of strongly elected Mayors to build a Northern Powerhouse and

since then, they have been agreed for Manchester, Liverpool, Tees

Valley, Newcastle and Sheffield. Over half the population of the

Northern Powerhouse will be able to elect a Mayor accountable to them

next year and will have an elected Mayor for the West Midlands, too.

These new arrangements involve and grow stronger and I can tell the

House that my right honourable friend the Justice Secretary and I

are transferring new powers over the criminal justice systems to Greater

Manchester, the kind of progressive social policy that this Government

is proud to pioneer. I can also announce to the House today that for

the first time, we have reached agreement to establish new elected

Mayors inning as counties in southern cities, too, and I want to

thank the Communities Secretary and my Treasury colleague Jim O'Neill

for their human efforts and we've agreed a powerful East Anglia

combined authority heading up by an elected Mayor and ?1 billion of new

investment and a new West of England may all authority and they will also

see almost ?1 billion invested locally and the authorities of

greater Lincolnshire will have new powers, new funding and a new Mayor.

North, south, east, west, the Devolution Revolution is taking

hold. When I became Chancellor, 80% of local Government funding came in

largely ring fenced grants from Government, the illusion of local

democracy but by the end of this Parliament, 100% of local Government

resources will come from local Government, raised locally, spent

locally, invested locally, at the great capital city wants to lead the

way. The Mayor of London passionately argued for the

devolution of business rates and I can confirm today that the Greater

London authority will move towards full attention of its business rates

from next April, three years earlier. Michael Heseltine has

accepted our invitation to lead a Thames Estuary growth commission and

will report to me with his ideas next year. In every international

survey of our country, our failure for a generation to build new

housing and transport has been identified as a major problem. In

this Government, we are the builders and so today, we are setting out...

We will speed up our planning system, zone housing developers and

prepare the country for the arrival of five G technology. The Business

Secretary will bring forward our innovation proposals and, because we

make savings in day-to-day spending, we can accelerate capital investment

and increase it as a share of GDP. All these things are country focused

on its long-term future should be doing. Alan new stamp duty rates on

additional properties will come into effect next month. I have listened

to colleagues and the rates will apply to larger investors, too. We

will use receipts to support community Housing trusts including

?20 million to help young families onto the housing ladder in the

south-west England, a brilliant idea and it is proof that when the

south-west vote with their voice, it's a head loudly in Westminster.

But it is heard loudly. And because under this Government we are not

prepared to let people be left behind, I'm also announcing a major

new package of support worth over 150 will in pounds, to support those

who are homeless and produce rough sleeping. -- ?150 million. I

established a new national in first article is on to advise us all on

the big long-term decisions we need to boost our productivity and I'm

sure everyone in the House will want to thank Andrew Adonis and his

fellow commissioners for getting off to such a strong start. They've

already produced three impressive reports and recommend much stronger

links across northern England so we are giving the green light to High

Speed three between Manchester and Leeds, providing new money to create

a 4-lane lane M 62 and we will develop the case for a new tunnel

road from Manchester Sheffield. High honourable friends have told us

not to ne glate their areas. I said we would build the Northern

powerhouse, we put in the roads and we are making the Northern

powerhouse a reality and rebuilding our country. I'm also accepting the

infrastructure commission's recommendations on energy and on

London Transport. The Government that is delivering Crossrail one

will now commission Crossrail 2. I know this commitment to Crossrail 2

will be warmly welcomed by the Leader of the Opposition, the Right