The Spending Review

:00:07. > :00:16.Good morning, you are watching BBC News, the time is edging up to 1130

:00:17. > :00:20.AM. All eyes on Westminster today. We are building up to the Autumn

:00:21. > :00:24.Statement, the Spending Review. We will be hearing from the Chancellor,

:00:25. > :00:29.George Osborne, who left the Treasury in the last 15 minutes to

:00:30. > :00:34.make his way to Parliament. We will hear his plans and proposals. It is

:00:35. > :00:40.a Spending Review that is being widely trailed as shaping British

:00:41. > :00:47.politics for the next four or five years. To what extent will we hear

:00:48. > :00:51.about spending? To what extent will we hear about cats Mac. Now a

:00:52. > :00:56.special programme taking you through all the developments of the day.

:00:57. > :00:59.With Andrew Neil -- to what extent will be about cats?

:01:00. > :01:01.George Osborne wants Britain to live within its means.

:01:02. > :01:06.His critics say he's cutting public services to the bone.

:01:07. > :01:09.We'll find out what the Chancellor has in store for us all

:01:10. > :01:13.in an hour when he tells us how he's going to spend OUR money over

:01:14. > :01:45.Welcome to this BBC News special on the Chancellor's combined

:01:46. > :01:49.Spending Review and Autumn Statement for 2015, which will help define tax

:01:50. > :01:52.and spend in this country for the rest of the decade.

:01:53. > :01:56.Mr Osborne faces some tough choices.

:01:57. > :02:09.He wants to spend more on health, defence, security and now housing,

:02:10. > :02:13.all the while balancing the books by 2020, which means big cuts to

:02:14. > :02:17.That's not to mention the little matter of rowing back

:02:18. > :02:21.I'm here at this brand new shopping centre in Birmingham, the city

:02:22. > :02:25.at the heart of what the chancellor calls the Midlands Engine.

:02:26. > :02:27.I'll be getting reaction from businesses, local government,

:02:28. > :02:39.We'll also be in our virtual Treasury courtyard to look at where

:02:40. > :02:42.the chancellor can find the ?20 billion of savings he says he

:02:43. > :02:47.I'll be here outside Parliament getting reaction from

:02:48. > :02:49.across the political spectrum to a speech that could define

:02:50. > :03:02.Follow the story and find the best analysis on the BBC News website

:03:03. > :03:04.throughout the day. Did I mention the best analysis?

:03:05. > :03:06.Speaking of the best analysis, I'm joined

:03:07. > :03:09.for the next four hours by the BBC's political editor Laura Kuenssberg,

:03:10. > :03:13.our business editor Kamal Ahmed, and in his farewell lap before he

:03:14. > :03:21.leaves the BBC, our outgoing economics editor Robert Peston.

:03:22. > :03:25.We'll be frisking him before he leaves

:03:26. > :03:29.the studio to check he's not running off with any of the stationery.

:03:30. > :03:35.He is prone to do that, I've been told! Welcome to you all.

:03:36. > :03:38.So it's a big day for the Chancellor - and for the country.

:03:39. > :03:40.It's Mr Osborne's 3rd Spending Review since he entered

:03:41. > :03:47.At its core, he will set out how much is to be spent on government

:03:48. > :03:50.departments and public services over the next four financial years.

:03:51. > :03:58.Cumulatively we're talking about well over three TRILLION pounds.

:03:59. > :04:01.And if that's not enough excitement for one day, this year he's combined

:04:02. > :04:04.his Spending Review with his annual Autumn Statement, which sets out

:04:05. > :04:06.the latest official forecasts for inflation, employment, borrowing and

:04:07. > :04:09.other key indicators for the course of our economy through 2016.

:04:10. > :04:15.So a lot riding on today for the economy,

:04:16. > :04:17.our public services, our national and economic security and, of

:04:18. > :04:30.You have seen George Osborne leaving the Treasury just a few minutes ago,

:04:31. > :04:33.he made the trip safely but the Prime Minister's car had a prank

:04:34. > :04:43.today outside number ten Downing St. Yes, there it is! A bit of a bang.

:04:44. > :04:47.We don't know if the Prime Minister was inside. I am sure that

:04:48. > :04:52.government ministers will hope that is not an omen of things to come, we

:04:53. > :04:57.could not resist letting you see it. Statements like this are always

:04:58. > :05:01.political, Laura. The Chancellor is under special brush, he's promised

:05:02. > :05:04.to get us into surplus by the end of the decade and stomach every time he

:05:05. > :05:10.turns a corner someone says they want more. Today is where the

:05:11. > :05:15.rhetoric of the Tory election campaign that got them back into

:05:16. > :05:19.power smashes into reality. The big aspiration is also the difficulty.

:05:20. > :05:25.How do you make a set of hard fought decisions, hefty cuts to many

:05:26. > :05:27.departments, look as if they are a programme, a coherent programme

:05:28. > :05:31.matches the priorities of those matches the priorities of those

:05:32. > :05:36.millions of floating voters in the middle who the Tories didn't just

:05:37. > :05:40.want to get in this year but want to secure with an even bigger majority

:05:41. > :05:44.next time around. That is what it's all about. The difficulty is, along

:05:45. > :05:46.with more money for health and housing which they believe is near

:05:47. > :05:50.the top of the voters's lists, is the top of the voters's lists, is

:05:51. > :05:54.less money for the Home Office and local council, cuts to social care

:05:55. > :05:59.and to the police and the most acute demonstration of all, what will he

:06:00. > :06:05.do about tax credits. Significant cuts to tax credits for people in

:06:06. > :06:08.work. He's already had to signal a humiliating U-turn on this and the

:06:09. > :06:14.detail with what he comes up with to soften that Blair will be crucial.

:06:15. > :06:17.He is only halfway through his deficit reduction strategy which he

:06:18. > :06:22.started in 2010. He should have finished it by now and he's only

:06:23. > :06:26.halfway through. Yet on health and security, tax credits, all of

:06:27. > :06:31.things, is being asked to and will have to spend more money. Indeed.

:06:32. > :06:34.The benign into protection is that this government is brave enough to

:06:35. > :06:38.decide priorities, more money for things that people care about and

:06:39. > :06:41.less money for things that they decide are less important. The less

:06:42. > :06:47.benign interpretation is a completely lopsided approach

:06:48. > :06:50.gradually balancing the books that makes it almost impossible to get

:06:51. > :06:54.anywhere significant. There are some in the Conservative Party who

:06:55. > :06:58.believe that the ring fencing of health and other departments was a

:06:59. > :07:02.fundamental strategic mistake. But instead of looking at the books than

:07:03. > :07:07.starting from zero, they are looking at the books in a way that makes it

:07:08. > :07:11.lopsided and therefore making the sums add up in a way that they have

:07:12. > :07:17.promised to do, makes it almost impossible. Benchmark OK. We should

:07:18. > :07:19.point out that nobody was injured in the making of that crash, if a crash

:07:20. > :07:21.occurred. of savings

:07:22. > :07:25.the Chancellor says is needed to eliminate the deficit, move

:07:26. > :07:30.into modest surplus, by 2019-20. We'll look in a moment at where

:07:31. > :07:33.he might find those savings. First, Robert, take us through

:07:34. > :07:41.the Osborne plan. Such as it is. The background is,

:07:42. > :07:45.his famous fiscal rules, which were in the last parliaments, honoured

:07:46. > :07:52.more in the breach than in the hitting. So let's look at the

:07:53. > :07:59.deficit that he forecast for this financial year just a few months ago

:08:00. > :08:04.in the July budget. He said he expected a deficit of just below 70

:08:05. > :08:07.million pounds. We know that he will miss that because the borrowing

:08:08. > :08:11.figures are of course and tax revenue isn't coming in in the way

:08:12. > :08:17.he would like -- ?70 billion. Spending is a little higher than he

:08:18. > :08:20.would like. Over the course of the parliament in the last budget he saw

:08:21. > :08:29.that deficit declining and achieving a surplus as I think you've read you

:08:30. > :08:36.mentioned, of ?10 million, in 2019, two ?20 billion. -- ?20 billion. The

:08:37. > :08:43.sort of things you have mentioned with Laura, the priority is to spend

:08:44. > :08:46.things on housing. -- spend on things like housing. Let's put it

:08:47. > :08:51.now into the context of the national debt. A whopping ?1.5 trillion in

:08:52. > :08:58.rent on a bus. In percentage terms that began the last parliament at

:08:59. > :09:05.just below 70% of GDP, or national income. It has risen progressively,

:09:06. > :09:10.painfully, since then. And is currently a little over 80% of GDP.

:09:11. > :09:15.In that last Budget the Chancellor made a big thing about how this

:09:16. > :09:20.would be the peak year for debt as a percentage of GDP. He might not

:09:21. > :09:24.achieve that. Let's see what the OBR says. We'll have to wait until April

:09:25. > :09:29.to find at the truth of that. Borrowing isn't going quite as well

:09:30. > :09:35.as he would want. That said, he will make a priority of trying to get the

:09:36. > :09:40.debt down significantly over the parliament, the last set of

:09:41. > :09:46.forecasts saw the debt falling as a share of GDP to around 72% of our

:09:47. > :09:51.national income. The background to this, what matters to him and us is

:09:52. > :09:57.what happens to the economy in the round. He started the last

:09:58. > :10:02.Parliament with very weak growth. 0.7% at its weakest in the last

:10:03. > :10:07.Parliament but then it grew progressively and accelerated

:10:08. > :10:12.progressively up to 2.9% last. That was the fastest GDP growth of the

:10:13. > :10:17.biggest developed economy. Almost back to where we were before. But

:10:18. > :10:23.growth has weakened since. We expected to be around 2.4% this

:10:24. > :10:26.year. And actually we do not expect it to accelerate much from that in

:10:27. > :10:32.the coming years. It could even weaken a little. Why? Because of

:10:33. > :10:36.what is happening on the other side of the world. You and I have talked

:10:37. > :10:45.a lot about the slowdown in China. It is the big economic event now. We

:10:46. > :10:48.can't rule out the Chinese crash. -- a Chinese crash. If that would

:10:49. > :10:51.happen everything we would hear today would become irrelevant

:10:52. > :10:54.because the shock to the global economy in those circumstances would

:10:55. > :10:59.be significant. He is making great play of making friends with China.

:11:00. > :11:03.He is assuming that the slowdown in China will be gradual and

:11:04. > :11:09.manageable. We must wait and see. We must. Thank you, Robert. Today's

:11:10. > :11:13.Spending Review will set limits for each Whitehall department for each

:11:14. > :11:16.of the next four financial years, 22020. The Chancellor has been

:11:17. > :11:19.locked in discussions with Cabinet colleagues for weeks to agree the

:11:20. > :11:23.figures. The meetings have taken place at the Treasury just across

:11:24. > :11:27.the road from the House of Commons. You can see it. The Chancellor

:11:28. > :11:33.claimed Sunday that negotiations have been amicable. Not a word that

:11:34. > :11:39.ministers whose departments phase massive cuts -- face massive cuts by

:11:40. > :11:44.using. We'll find out who is bruised,

:11:45. > :11:46.bloodied or unbowed today. At the heart of the Treasury is

:11:47. > :11:49.a circular courtyard - you might recognise it because it's often used

:11:50. > :11:52.as a location for filming, including the latest James Bond, which means

:11:53. > :11:55.it's now famous across the globe. Now, we couldn't get Jo Coburn

:11:56. > :11:57.inside the real courtyard, despite her being pretty famous - but here

:11:58. > :12:01.she is to tell us more about Welcome to our virtual Treasury

:12:02. > :12:03.courtyard. Now, they don't have one of these

:12:04. > :12:06.in the real courtyard, but it represents everything that

:12:07. > :12:09.the Government is due to spend this I'm going to start by highlighting

:12:10. > :12:17.a few of the most significant parts You can see the ?217 billion

:12:18. > :12:29.that goes on social security. That includes everything

:12:30. > :12:35.from Jobseeker's Allowance to And there's the ?35 billion the UK

:12:36. > :12:39.is due to spend this year George Osborne says that's a figure

:12:40. > :12:43.he's is determined to bring down. Now, the focus of today's statement

:12:44. > :12:47.is the money that goes on administering and delivering public

:12:48. > :12:49.services - departmental spending. And you can see it's just under

:12:50. > :12:57.half of the total the Government Now, we're going to delve into

:12:58. > :13:00.the budgets of a few of the most Because it's the NHS that accounts

:13:01. > :13:10.for the biggest chunk Now, the Chancellor isn't going to

:13:11. > :13:14.find any of his savings here, because he has promised to increase

:13:15. > :13:18.NHS funding in England The Government has also promised

:13:19. > :13:26.a real-terms increase That's part of its commitment to

:13:27. > :13:33.meeting the Nato target of spending The Government has also committed to

:13:34. > :13:42.spending 0.7% of GDP on overseas aid, meaning that budget

:13:43. > :13:46.is also protected. So, the Chancellor is not going to

:13:47. > :13:54.find any of his ?20 billion of savings he says he needs to make

:13:55. > :13:57.from either health, defence or aid. So,

:13:58. > :14:00.where could it come from instead? What about from the education

:14:01. > :14:04.budget, a big part of what the state Here,

:14:05. > :14:06.the Conservatives have promised a cash increase per pupil

:14:07. > :14:10.in schools. That means savings

:14:11. > :14:14.from here would be limited, although the rest of the budget doesn't have

:14:15. > :14:18.any guaranteed protection. Here is the money that goes

:14:19. > :14:23.to English local authorities. This was one of the first

:14:24. > :14:26.departments to agree to big savings The Home Office, on the other hand,

:14:27. > :14:32.took longer And the single biggest thing

:14:33. > :14:37.Theresa May's department spends money on is the grant it gives to

:14:38. > :14:42.police forces in England and Wales, although they also get some of their

:14:43. > :14:45.money from other sources, including And some of the other departments

:14:46. > :14:55.that are going to have to find big savings over

:14:56. > :14:57.the next four years are the Departments of Business,

:14:58. > :14:59.Transport and Justice. Let's go back to that big part

:15:00. > :15:02.of Government spending I mentioned Of course, that is where a lot

:15:03. > :15:08.of the focus has been in the weeks Now, again, here, there is plenty

:15:09. > :15:20.the Chancellor won't touch. The State Pension is

:15:21. > :15:23.a massive part of the Budget. But the Government has a

:15:24. > :15:27.long-standing promise not to cut it, along with various pensioner

:15:28. > :15:30.benefits. The other areas of big spending

:15:31. > :15:33.the Government has had to look to are housing benefit, disability

:15:34. > :15:37.benefits and incapacity benefits. And you can see that big sum

:15:38. > :15:46.of money, ?30 billion, that is due to be spent

:15:47. > :15:49.on personal tax credits this year - an area where the Chancellor has

:15:50. > :16:03.found that making savings can prove Let's speak to Kamal Ahmed. One

:16:04. > :16:08.business that seems to be very happy because of what was leaked overnight

:16:09. > :16:10.by the Treasury, this 400,000 affordable homes, this morning the

:16:11. > :16:18.house-building shares went through the roof? They did indeed. What is

:16:19. > :16:21.interesting is how much the Government needs the private sector

:16:22. > :16:26.to support delivery. The big strategic purpose of George Osborne

:16:27. > :16:31.is to take pressure off state provision and give it to the private

:16:32. > :16:35.sector and say, you help us provide the kind of country and economy we

:16:36. > :16:40.want. In house-building, one of the big issues, the centrepiece of David

:16:41. > :16:44.Cameron's conference speech last month, he said he wanted to help

:16:45. > :16:48.people into affordable homes, is an absolute example of that. The

:16:49. > :16:52.government have struggled with this supply problem. The issue they have

:16:53. > :16:59.had is that they have been in increasing demand. -- increasing

:17:00. > :17:04.demand. The support that we are hearing will be in the Autumn

:17:05. > :17:07.Statement which will help people buy affordable homes, again increases

:17:08. > :17:11.demand. It will put direct money into housing companies, for them to

:17:12. > :17:16.build affordable homes. The big problem though is that housing new

:17:17. > :17:22.bills are actually down slightly. That is because there is a real

:17:23. > :17:26.skills shortage in housing. They cannot find enough brickies. I went

:17:27. > :17:30.to one developer and in south-west London and it closed down on

:17:31. > :17:34.Thursday night because by then the bricklayers had got their money for

:17:35. > :17:37.the week and take on Friday off. The house-building companies are

:17:38. > :17:43.building as many houses as they feel comfortable with. Their profits are

:17:44. > :17:48.up hugely, 40%. The other big area is, how will social care change?

:17:49. > :17:52.Moving tax down to local authorities to supply support for social care,

:17:53. > :17:57.how will that have an impact? It is the private sector who provide the

:17:58. > :18:00.vast bulk of social care homes. They have been complaining about

:18:01. > :18:05.particularly the rise to the national living wage affecting their

:18:06. > :18:10.business. They have being squeezed by having to pay more, and getting

:18:11. > :18:17.less money from the local authorities? Exactly. Companies like

:18:18. > :18:20.four seasons, the biggest care home provider in the UK, has been saying

:18:21. > :18:26.that it is now no longer profitable to provide social care in places for

:18:27. > :18:33.a local authority people. That has become very difficult. Finally,

:18:34. > :18:37.Sajid Javid, the Business Secretary, one of those unprotected

:18:38. > :18:44.departments, further education, how much of an attack on his department

:18:45. > :18:48.will there be? If you have just joined us on BBC Two and the BBC

:18:49. > :18:49.News channel, you are watching our coverage of the Spending Review and

:18:50. > :19:11.the Autumn Statement. Jane Hill is Oliver Dowden and Rebecca Long

:19:12. > :19:15.Bailey join me. It is a spending review. Are we going to be looking

:19:16. > :19:18.at headlines tomorrow all about cuts? Are those the sort of

:19:19. > :19:23.headlines George Osborne is comfortable with? The headlines he

:19:24. > :19:27.will become travel with and the mission of this government, we are

:19:28. > :19:31.still in a situation where the Government is spending more than it

:19:32. > :19:36.earns. Every pound of borrowing is paid for by future generations. We

:19:37. > :19:41.are determined to get that under control. Run a surplus by the end of

:19:42. > :19:45.the Parliament, which means by the next crisis hits, we are spending

:19:46. > :19:50.less than we earn. That will be the central thrust, I hope, of the

:19:51. > :19:56.statement. There are plenty of economists, they say the Chancellor

:19:57. > :20:04.has locked himself into a corner, that giving a date is boxing himself

:20:05. > :20:07.in. It is important we have a date. By 2019 the economy hopefully will

:20:08. > :20:12.have been growing for almost ten years. The economy has been growing

:20:13. > :20:16.for ten years and we still cannot run a surplus, how will we ever be

:20:17. > :20:20.able to cope when the economy inevitably falls into another

:20:21. > :20:25.recession? We do not believe boom and bust has been abolished on that

:20:26. > :20:30.side of the house. Rebecca, there have to be cuts for the reasons

:20:31. > :20:34.Oliver explains? I agree we need to reduce our deficit but it needs to

:20:35. > :20:38.be done in the long term and in a sustainable way. The Chancellor has

:20:39. > :20:42.not offered that. He has missed its financial targets again and again.

:20:43. > :20:46.The Institute for Fiscal Studies have stated in order to meet his

:20:47. > :20:52.target this time, he will have to make unprecedented cuts. They will

:20:53. > :20:57.fall on areas of key economic growth, such as education, skills,

:20:58. > :21:01.business investment. We need to start planning our infrastructure,

:21:02. > :21:07.our manufacturing strategy. I doubt very much we will see any that

:21:08. > :21:13.today. Business editor at the same share prices are up in

:21:14. > :21:16.house-building companies. If we get lots of building, will that be the

:21:17. > :21:23.one positive that even your party agree with? I think the Chancellor

:21:24. > :21:28.is a shrewd political operator. He will offer some sweeteners to lessen

:21:29. > :21:32.the blow. In terms of house-building, the devil is always

:21:33. > :21:36.in the detail. I welcome his pledge to build 400,000 more houses. We

:21:37. > :21:42.want to see where those houses are going to be and whether there will

:21:43. > :21:47.be put in the social rented sector. A more political side to it, this is

:21:48. > :21:52.about George Osborne's personal ambitions. He has do shape things so

:21:53. > :21:59.that be the time he has his eyes on an even bigger job, the bulk of the

:22:00. > :22:04.cuts have gone? The Chancellor's ambition is in turning this country

:22:05. > :22:07.around. It is interesting what you said about investment. One of the

:22:08. > :22:12.decisions he has taken is to protect things like investment in schools,

:22:13. > :22:15.so that is maintained every year. A massive investment in housing to

:22:16. > :22:19.make sure young people get on the housing ladder. What the Chancellor

:22:20. > :22:23.wants to do is make sure that everybody gets the best start in

:22:24. > :22:28.life, whether it is investment in schools, housing for young people,

:22:29. > :22:32.or old people, to make sure they get dignity and security in retirement.

:22:33. > :22:36.That is why there is a big increase in the basic state pension. That is

:22:37. > :22:41.where his efforts are focused. Thank you very much. Much more from here

:22:42. > :22:44.when we have heard from the Chancellor.

:22:45. > :22:50.We'll hear a lot about his Northern Powerhouse and, now,

:22:51. > :22:59.At the heart of that is the city of Birmingham.

:23:00. > :23:02.Jo Coburn has left her virtual Treasury courtyard and is already

:23:03. > :23:13.Who needs HS2 when you have the magic of television?

:23:14. > :23:19.I am at Grand Central. Not New York but the shiny new shopping centre

:23:20. > :23:24.here in Birmingham. It was opened last week by the Queen. I am here to

:23:25. > :23:27.talk to people about the Autumn Statement and George Osborne's

:23:28. > :23:35.spending plans for the next five years. I'm joined by Jonathan Isaby

:23:36. > :23:39.from the Taxpayers' Alliance. Yesterday, the announcement of extra

:23:40. > :23:45.cash for the NHS will be front-loaded. Welcome news? It is

:23:46. > :23:50.welcome but it is too little, too late. The real issue for the NHS is

:23:51. > :23:53.the chronic underfunding of social care, which means elderly patients

:23:54. > :23:58.cannot be discharged quickly enough back into their homes, which means

:23:59. > :24:06.they are taking up beds. We will end up with a crisis in the A this

:24:07. > :24:09.winter. George Osborne has pledged to make cuts in this Spending Review

:24:10. > :24:13.and during this Parliament. Does he want to be known as the Chancellor

:24:14. > :24:17.of austerity? He should be want to be known as the Chancellor who

:24:18. > :24:22.balances the books of the nation. He has to make those savings. This year

:24:23. > :24:33.the Government is spending 70 billion, probably 18 billion, more

:24:34. > :24:37.than it gets in revenue. -- 80. It is utterly unacceptable. He needs to

:24:38. > :24:41.balance the books, get the nation living within its means once again

:24:42. > :24:45.to ensure our future prosperity. Let's get a little bit more about

:24:46. > :24:52.growing. Let's talk to somebody about this from the Birmingham

:24:53. > :24:56.Chamber of Commerce. We are talking about austerity versus growth. What

:24:57. > :25:01.is more important to business here? It has got to be a mix. We recognise

:25:02. > :25:06.the UK deficit is out of control. The government is spending more than

:25:07. > :25:09.the defence budget servicing the interest on that debt. It needs to

:25:10. > :25:13.be brought into line but it cannot be at the expense of business

:25:14. > :25:18.growth. That is what we will be looking for from the Autumn

:25:19. > :25:23.Statement. Help grow businesses, which helps grow jobs. And

:25:24. > :25:28.ultimately that will help get the deficit down. What would you like to

:25:29. > :25:32.see him do? We would like clarity on the apprenticeship levy, how will

:25:33. > :25:36.that work? Businesses are keen to boost the skills of young people but

:25:37. > :25:40.we do not know how the funding is going to work. Some clarity would be

:25:41. > :25:43.fantastic. We would like to see further announcement on business

:25:44. > :25:50.rates. Earlier this year the Chancellor said they would devolve

:25:51. > :25:56.business spending to councils. Thank you very much. One of the things

:25:57. > :26:01.that will be most important to people here as they start to think

:26:02. > :26:07.about Christmas shopping, that his personal finances. Their financial

:26:08. > :26:12.security. Who better to talk to than our personal finance expert? One of

:26:13. > :26:17.the main things people are worried about is tax credits. George Osborne

:26:18. > :26:22.ran into problems with those plans. If he so often sad, where Willie

:26:23. > :26:26.Geddes savings? This is the big questions. Is he going to go back to

:26:27. > :26:34.those same people and try to get the money some other way. It might

:26:35. > :26:38.affect the same people who would be affected by cuts to tax credits.

:26:39. > :26:41.Will he scout around the periphery? Perhaps tax relief elsewhere. I

:26:42. > :26:47.would be slightly worried about the pensions. He has said he will not do

:26:48. > :26:53.any major pension reforms until the Budget. I think there could be some

:26:54. > :26:57.measures that is stopping that. Buy now while stocks last. People are

:26:58. > :27:04.doing last-minute avoidance things. I would watch out for tinkering with

:27:05. > :27:10.the pensions tax reliefs. If you have any questions you would like to

:27:11. > :27:11.put to any of our guests, our Anni stories, you can e-mail us. -- or

:27:12. > :27:22.any stories. Start that Christmas shopping and

:27:23. > :27:31.get my present. And you can also take advantage

:27:32. > :27:34.the BBC's range of expert analysis and all the latest developments

:27:35. > :27:42.on the BBC website. It's coming up midday here

:27:43. > :27:44.at Westminster - very soon we'll go over to the House

:27:45. > :27:50.of Commons for Prime Minister's Questions and that will be followed

:27:51. > :27:59.by the Chancellor's statement. First, let's look at some

:28:00. > :28:04.of the measures that have been already announced, and others we're

:28:05. > :28:15.expecting to hear today. The biggest was the announcement

:28:16. > :28:21.earlier this week. We were told the NHS in England, equivalent spending

:28:22. > :28:28.for Scotland, Wales and Northern Ireland, will get an extra, just shy

:28:29. > :28:32.of ?4 billion. Part of loading the NHS has been asking for, to get the

:28:33. > :28:36.money and now as it rises towards an extra 8 billion by the end of this

:28:37. > :28:44.Parliament. Schools and foreign aid are protected. No cuts expected.

:28:45. > :28:50.Defence was not protected. It is now. An extra ?12 billion this week

:28:51. > :29:02.to spend on defence and equipment. That takes the total to 178 billion.

:29:03. > :29:09.2% of GDP. Tax credits. The Chancellor came out with a number of

:29:10. > :29:12.cuts in the July budget. He is having to roll back that. That will

:29:13. > :29:19.cost him money. We wait to see how he it. We expect tax Reddit cuts to

:29:20. > :29:24.be eased. The latest big thing to be rolled out is the idea that the

:29:25. > :29:28.Government will encourage, preside over, the building of 400,000

:29:29. > :29:38.affordable homes at a cost of 7 billion. There is always an alert on

:29:39. > :29:44.these. Whether governments meet these targets is a different matter.

:29:45. > :29:49.Local authority spending has been squeezed. The Chancellor will now

:29:50. > :29:54.allow local authorities to raise council tax by 2% provided the money

:29:55. > :29:59.and only if the money goes to social care because of the move from NHS

:30:00. > :30:02.hospitals and so on into care in the community. Whether that will be

:30:03. > :30:07.enough is another matter. Whether those areas that need social care

:30:08. > :30:15.most will get that much from a 2% rise in council tax because -- all

:30:16. > :30:21.things we will be keeping an ion. -- and eye on. Laura, we have a fair

:30:22. > :30:26.idea what he is going to do because they have helpfully leaked a lot of

:30:27. > :30:31.it. Chancellor, rabbit, hat. What is the rabbit?

:30:32. > :30:35.I am not sure there will be a rabbit today. There will be surprises. A

:30:36. > :30:40.couple of surprises. But there will not be, I don't think, the

:30:41. > :30:45.traditional rabbit in a hat that feels like a jolly giveaway that

:30:46. > :30:53.sends off Tory MPs jubilant to their constituencies.

:30:54. > :31:03.He has been famous for that. He has. There will be cunning wheezes. Maybe

:31:04. > :31:13.a little mice instead of a big rabbit! Gerbils? We may be

:31:14. > :31:18.surprised. He has an acute political as well as economic brain and I

:31:19. > :31:21.think this time the judgments are similar for him, we are still

:31:22. > :31:27.relatively early into the parliament and he personally has had something

:31:28. > :31:39.of a popularity dip as a result of the tax credit to buckle. -- the tax

:31:40. > :31:42.credit debacle. He will have to make tough decisions because the last

:31:43. > :31:47.thing he wants is for things to go when he's running the Tory party

:31:48. > :31:50.leadership. We can go straight to the House of Commons to the Prime

:31:51. > :31:53.Minister, and Prime Minister's Questions.

:31:54. > :32:07.Many people know from at home from Yes Prime Minister, the central role

:32:08. > :32:12.that Bernard, the principal Private Secretary, plays in the life of the

:32:13. > :32:15.per Minister. Today my Bernard my principal Private Secretary died of

:32:16. > :32:20.cancer. Chris Martin was just 42. He was one of the most loyal,

:32:21. > :32:24.hard-working dedicated public servants I have ever met. I have no

:32:25. > :32:27.idea what his politics were would he would go to the ends of the earth

:32:28. > :32:32.for his Prime Minister and for the team that he worked for. Today we

:32:33. > :32:36.are leaving the seat in the officials box where he used to sit

:32:37. > :32:40.empty as a mark of respect. We think of his wives are we, his family, the

:32:41. > :32:45.wider number ten family because it is like a family and we feel we have

:32:46. > :32:51.lost somebody between a father and a brother to all of us. Whatever

:32:52. > :32:55.happens, we will never forget him. Today Mr Speaker I have had meetings

:32:56. > :33:03.with colleagues and in addition to my duties in this House I will have

:33:04. > :33:06.further meetings today. Fiona Bruce. Can I echo the sentiments of the

:33:07. > :33:11.premise to regarding the passing of Kris ten. I am sure that all members

:33:12. > :33:13.will have heartfelt thoughts and prayers today and we will be

:33:14. > :33:21.grateful if they can be conveyed to the family. The excellent

:33:22. > :33:27.children's mental health charity in Congleton says the lack of a secure

:33:28. > :33:31.family life is the root cause of many of the troubles children have.

:33:32. > :33:35.The Prime Minister is a champion of family life, can he confirm that

:33:36. > :33:39.announcements to be made today will pass is family test by providing

:33:40. > :33:48.security for family relationships and opportunities for world rubble

:33:49. > :33:52.children? -- vulnerable children? I thank my honourable friend. She is

:33:53. > :33:57.right that families are the best welfare state we have. They bring up

:33:58. > :34:02.our children and teach us the right values and care for us when we sick.

:34:03. > :34:06.We want to help families and the Chancellor will have something to

:34:07. > :34:12.say about that later as we boost the national living wage, as we deliver

:34:13. > :34:20.tax cuts for working people. All these policies should pass the test

:34:21. > :34:25.of helping families. Jeremy Corbyn. Thank you Mr Speaker. On behalf of

:34:26. > :34:28.of the opposition may I express my condolences to the family of Kris

:34:29. > :34:32.ten on his death. The Prime Minister told me how ill he was on

:34:33. > :34:36.Remembrance Sunday. I am pleased he was able to visit him at that time.

:34:37. > :34:39.On behalf of many members who worked with Chris Martin when we were in

:34:40. > :34:43.government we appreciate very much the professional work he did in the

:34:44. > :34:47.best and highest traditions of the civil service in this country. If

:34:48. > :35:05.our condolences could be passed on, that would be helpful. This week 55

:35:06. > :35:08.Labour councils have made a commitment for their areas to be run

:35:09. > :35:10.entirely on green energy by 2050. With the Paris climate talks only

:35:11. > :35:13.days away with a premonition and join me in commending those councils

:35:14. > :35:16.and call upon all Conservative councils to do the same? I certainly

:35:17. > :35:19.commend these councils and we are helping by the tariffs that we have

:35:20. > :35:24.introduced particularly to help solar power and wind power, we will

:35:25. > :35:28.be taking part in the Paris climate talks because it is vital to get

:35:29. > :35:31.that global deal but we must make sure that we take action locally as

:35:32. > :35:36.well as globally. I would make the point that if you compare the

:35:37. > :35:39.Parliament to the previous parliament, we saw something like a

:35:40. > :35:47.tripling in the installation of renewable electricity. Jeremy

:35:48. > :35:50.Corbyn. Thank you Mr Speaker. The commitment of those Labour councils

:35:51. > :35:54.as a contrast to the per Minister Bosman performance. He used to say

:35:55. > :35:59.that his was the greenest government ever. Does he remember those days?

:36:00. > :36:04.Does he agree with the Energy Secretary that Britain is likely to

:36:05. > :36:10.miss its target of getting 50% of renewable energy from renewables by

:36:11. > :36:15.2020? Firstly I believe the last government rightly claims that

:36:16. > :36:19.record, the world's first green investment bank pioneered in Britain

:36:20. > :36:23.and a tripling of renewable energy and a meeting of all our planet

:36:24. > :36:28.change targets contributing to an EU deal that means that we go to the

:36:29. > :36:32.climate change conference in Paris with a very strong European record

:36:33. > :36:37.and the ability to say to other countries that they should stab up

:36:38. > :36:40.to the plate. Also in the last Parliament we spent record sums

:36:41. > :36:45.helping developing countries to go green. And in the next five years we

:36:46. > :36:48.will spend $9 billion on helping other countries which will be

:36:49. > :36:56.crucial in building the Paris deal next week. Jeremy Corbyn. The

:36:57. > :37:01.problem with that answer is that the gap between Britain's 2020 target

:37:02. > :37:04.and our current share of renewable energy is the biggest in the

:37:05. > :37:09.European Union. And some of his recent decisions like cutting

:37:10. > :37:12.support for solar panels on home and industrial projects, scrubbing the

:37:13. > :37:16.green deal, cutting support for wind turbines, budding any attacks on

:37:17. > :37:19.renewable energy, increasing subsidies have diesel generators, is

:37:20. > :37:23.it any wonder that the chief scientists of the United Nations's

:37:24. > :37:28.environment programme has criticised Britain for going backwards on

:37:29. > :37:34.energy? The facts paint a different picture. As I sit, a trembling of

:37:35. > :37:39.wind power in the last Parliament, it is an enormous investment -- as I

:37:40. > :37:44.said, tripling of wind power. As for solar panels, when the cost of solar

:37:45. > :37:49.panels plummets, as it has, it's right to reduce the subsidy. If we

:37:50. > :37:54.don't reduce it we ask people to pay higher energy bills. Something I

:37:55. > :37:58.remember that the Labour Party in the last Parliament made rather a

:37:59. > :38:01.lot of! If you look at the Secretary of State for climate change's speech

:38:02. > :38:04.you will see the right balance between affordable energy and making

:38:05. > :38:09.sure that we meet our green targets. That is what we are committed to.

:38:10. > :38:12.And as well as that building the first nuclear power station for

:38:13. > :38:19.decades in this country, something the Labour Party talked about a lot

:38:20. > :38:25.in government but Bolelli putting -- something that we are putting into

:38:26. > :38:28.action now we are in. In the past few weeks 1000 jobs have been lost

:38:29. > :38:32.in solar companies in Britain as they have gone bust. I have a

:38:33. > :38:38.question from some apprentice solar fitters at Bannister house, a large

:38:39. > :38:42.energy budget. Ziggy, Israel and Jay-Z that cutting feeder tariffs

:38:43. > :38:46.means you are stopping solar projects that they need to help the

:38:47. > :38:53.environment to give us jobs. They ask a prime ministers, why do you

:38:54. > :38:56.want to throw all this away? We are doubling investment in renewable

:38:57. > :39:00.energy in this Parliament. As for solar panels, in the last

:39:01. > :39:04.Parliament, over 1 million homes were fitted with solar panels, I

:39:05. > :39:08.think I'm right in saying that. It is right that we go on supporting

:39:09. > :39:12.that industry but we should do it, recognising that the cost of

:39:13. > :39:16.manufacturing solar panels has plummeted and therefore the subsidy

:39:17. > :39:21.should be necessary to Liddle what businesses agreed to deliver solar

:39:22. > :39:26.power, not what is necessary to pump up the bills of hard-working

:39:27. > :39:30.families! Not much help to those losing their jobs in the solar

:39:31. > :39:34.industry at this time. I would like to ask the prime ministers something

:39:35. > :39:38.else. Today is the International Day for the elimination of violence

:39:39. > :39:42.against women. On average two women in week are killed by a current or

:39:43. > :39:47.former partner and domestic violence accounts for up to one quarter of

:39:48. > :39:50.all violent crime. Can the Prime Minister explain why one third of

:39:51. > :39:57.those referred to women's refuges in England are now being turned away?

:39:58. > :40:00.We put more money into refuges. The Chancellor will have something to

:40:01. > :40:07.say about funding women's charities in his Autumn Statement today.

:40:08. > :40:10.Because when it comes to rape crisis centres that were protected or

:40:11. > :40:15.domestic violence centres that we helped to finance, this government

:40:16. > :40:18.has a good record on helping women and making sure that the crime of

:40:19. > :40:22.domestic violence is properly investigated by the police and

:40:23. > :40:30.prosecuted in our courts. Jeremy Corbyn. Thank you, Mr Speaker. The

:40:31. > :40:36.late Denise Marshall, was chief executive of one domestic Finance

:40:37. > :40:40.Charity, put this well when she said, if you are a woman who has

:40:41. > :40:46.experienced some form of violence, I believe you have the right to the

:40:47. > :40:51.best service and the community owes you the opportunity to recover. In

:40:52. > :40:55.2012, the Prime Minister's Govan signed the Istanbul convention in

:40:56. > :40:59.preventing and combating violence against women and domestic violence.

:41:00. > :41:03.This would make women's support services statutory and would have

:41:04. > :41:10.stopped the closure of this service. When will the Prime Minister ratify

:41:11. > :41:13.the Istanbul convention? We going one further. In the Autumn

:41:14. > :41:17.Statement, which he will hear in a minute we will be putting more money

:41:18. > :41:22.into women's charities, including those that fight domestic violence

:41:23. > :41:26.and rape, and make sure that we cut and these appalling crimes. In

:41:27. > :41:30.addition to that we have done more than any previous government to help

:41:31. > :41:34.in terms of preventing forced marriage and the horrors of female

:41:35. > :41:39.genital mutilation that to not just happen in North Africa, they happen

:41:40. > :41:42.here in this country. I don't think any government before this one has a

:41:43. > :41:49.strong record on those grounds. CHEERING

:41:50. > :41:52.Thank you, Mr Speaker. I have many constituents who come to my surgery

:41:53. > :41:58.desperate to be able to own and their own home. Many of them are on

:41:59. > :42:02.low income and they recognise that a monthly mortgage payment would be

:42:03. > :42:06.significantly lower than a monthly rental payment, sometimes 50% lower.

:42:07. > :42:10.Does my right honourable friend share the excitement of many of my

:42:11. > :42:15.constituents towards the starter homes initiative in the housing bill

:42:16. > :42:23.which will see affordable housing lowering the monthly and goings of

:42:24. > :42:25.many in this country. I do share the enthusiasm of my right honourable

:42:26. > :42:30.friend. There are lots of useful interventions we can make like the

:42:31. > :42:34.right to buy, which has put buying homes within reach of people by

:42:35. > :42:39.reducing the deposits they need. We can help people save, which we do

:42:40. > :42:42.with a help to buy Isa, so we are contributing every time people save

:42:43. > :42:45.but the biggest contribution we can make is by building more houses

:42:46. > :42:50.which were will do during this Parliament and crucially by

:42:51. > :42:54.obtaining a strong, secure, stable economy with low interest rates so

:42:55. > :43:01.that people can afford to take out a mortgage. Angus Robertson. May I

:43:02. > :43:04.begin by associating the SNP with the condolences of the Prime

:43:05. > :43:08.Minister. Having spoken to him last week I know what a personal loss it

:43:09. > :43:14.is to him and to the family and friends of Chris Martin. The fatal

:43:15. > :43:18.dangers of unintended consequences and escalation in Syria are clear

:43:19. > :43:22.for all to see these days. All serious observers agree that an air

:43:23. > :43:26.campaign alone will not lead to the ultimate defeat of Daesh on the

:43:27. > :43:29.ground, and ground forces will be needed. How many troops and from

:43:30. > :43:35.which countries does the Prime Minister have in his plan for Syria?

:43:36. > :43:38.First mate I thank the right honourable gentleman for his remarks

:43:39. > :43:44.about Chris Martin. I know that Chris Martin helped all parties in

:43:45. > :43:48.this House with inquiries. Let me deal with the issue of Syria, it is

:43:49. > :43:52.so crucial. I am not arguing for a minute that action from the alone

:43:53. > :43:57.can solve the very serious problem we have and Isil. Clearly we need a

:43:58. > :44:02.political settlement in Syria and the government there that can act

:44:03. > :44:05.comprehensively with us against Isil. The question for the House

:44:06. > :44:10.which we need to address tomorrow and in the days to come is, can we

:44:11. > :44:14.afford to wait for that political settlement before we act? No, my

:44:15. > :44:18.view is that we can't wait. We should work as hard as we can for it

:44:19. > :44:23.but we should act now for allies because it is about keeping our own

:44:24. > :44:28.people and our own country safe. You ask about ground troops. There are

:44:29. > :44:33.troops in Syria, the Free Syrian Army and the Kurdish forces, that

:44:34. > :44:39.would work with us to help eliminate Isil. Of course the full range of

:44:40. > :44:43.ground troops will only be available when there is a political settlement

:44:44. > :44:47.in Syria. But can we afford to wait for that settlement before acting to

:44:48. > :44:53.keep ourselves safe at home and my answer to that is No, we cannot

:44:54. > :44:58.afford to wait. Mr Speaker, the UK spent 13 times more bombing beer

:44:59. > :45:01.than investing in its reconstruction after the overthrow of Colonel

:45:02. > :45:06.Gaddafi's resume. Reconstructing cilia will be essential to ensure

:45:07. > :45:09.stability and allow refugees to return. How much does the Prime

:45:10. > :45:16.Minister estimate that this will cost and how much has he allocated

:45:17. > :45:19.from the UK? We have one of the largest developing budgets anywhere

:45:20. > :45:24.in the world, and the support we've given to Syrian refugees, ?1.2

:45:25. > :45:28.billion, demonstrates this. Clearly part of our plan which I will set

:45:29. > :45:32.out tomorrow in a statement in this House, will be to help to finance

:45:33. > :45:37.the reconstruction of Syria alongside the political deal that we

:45:38. > :45:41.believe is less of Syria. I would rather spend the money

:45:42. > :45:45.reconstructing cilia than supporting people kept away from their homes

:45:46. > :45:50.and their country, who want to return the -- reconstructing Syria.

:45:51. > :45:58.I know that my right honourable friend is aware of the growing cause

:45:59. > :46:02.for concern surrounding the conviction of Alexander Blackman,

:46:03. > :46:08.the former Royal Marine officer who shot an insurgent in Afghanistan in

:46:09. > :46:13.2011. If there is new evidence and if, as many feel, there has been a

:46:14. > :46:15.miscarriage of justice, would my right honourable friend agree with

:46:16. > :46:21.me that it is right this matter should be looked into again? What I

:46:22. > :46:24.would say to my honourable friend is that this is exactly what the

:46:25. > :46:30.criminal cases review commission exists to look at. There may have

:46:31. > :46:36.been a miscarriage of justice. We gave the internal report of the

:46:37. > :46:39.Naval services to Sergeant Blackman's legal advisers, so there

:46:40. > :46:46.is proper disclosure. His legal team are looking at the option of

:46:47. > :46:49.applying to the commission. Our Royal Marines have a worldwide

:46:50. > :46:54.reputation as one of the world's elite fighting forces. They made an

:46:55. > :47:01.incredible contribution to our country and we should pay tribute to

:47:02. > :47:05.them. The Government's handling of child

:47:06. > :47:09.sexual abuse enquiries has done little to instil public confidence

:47:10. > :47:21.so far. Last month the god I'd inquiry and announced it had -- they

:47:22. > :47:24.had accidentally deleted information without anybody from the inquiry

:47:25. > :47:32.reading them. These people deserve justice and for their voices to be

:47:33. > :47:38.heard. Can the Prime Minister tell the house if an independent

:47:39. > :47:42.investigation has taken place to establish the cause of the data

:47:43. > :47:46.lost? I'm sure the House will welcome the fact the inquiry is up

:47:47. > :47:49.and running and the best way to get justice to these victims is to make

:47:50. > :47:56.sure we have the full and independent inquiry we have spoken

:47:57. > :48:00.about. As for the issue she raises, that is a matter for the inquiry.

:48:01. > :48:08.What matters is that it is now up and running.

:48:09. > :48:15.3000 jobs in Newark were lost under Labour. This month we celebrate the

:48:16. > :48:24.creation of the 10,000th new job in Newark. Does the Prime Minister

:48:25. > :48:29.agree that once again Newark leads the way to a strong economy, high

:48:30. > :48:37.employment, higher wages and lower welfare? I am delighted to hear that

:48:38. > :48:41.Newark has met this landmark and it is worth remembering that these

:48:42. > :48:45.10,000 figures, they are 10,000 people, each with a job, a

:48:46. > :48:50.livelihood, a chance to support their families. I well remember

:48:51. > :48:56.visiting the constituency. I cannot promise to visit as many times in

:48:57. > :49:01.this Parliament as I did in Neil asked, but I do recognise that one

:49:02. > :49:04.business we visited last week announced the creation of more than

:49:05. > :49:10.8000 jobs. Where Newark leads I'm sure others will follow.

:49:11. > :49:18.As the Prime Minister ever heard of Alan Cartwright, Stefan Appleton or

:49:19. > :49:25.Farso Kakko? These are teenagers who were stabbed to death on the streets

:49:26. > :49:30.of Islington in the last year. Given the growing culture of drugs, gangs,

:49:31. > :49:33.of violence in my burrow and many others like it, does the Prime

:49:34. > :49:40.Minister really think that it is in the interest of my constituents for

:49:41. > :49:44.their safety and security to cut the Metropolitan Police? First of all,

:49:45. > :49:49.every life lost in the way she talks about is of course a tragedy. Many

:49:50. > :49:53.of these lives have been lost because of drugs, gangs and knife

:49:54. > :49:57.crime. Overall knife crime has come down which is welcome. There are

:49:58. > :50:02.still too many people carrying a knife and not recognising that not

:50:03. > :50:06.only is it against the law, but is is in a enormous danger to

:50:07. > :50:11.themselves and others. We will continue with our tough approach to

:50:12. > :50:16.knife crime with our work to break up gangs and to do with the problems

:50:17. > :50:20.of drugs. When it comes to policing, what we have seen in London is an

:50:21. > :50:23.increase in neighbourhood policing. The Metropolitan Police have done a

:50:24. > :50:29.good job in cutting back office costs and putting police on our

:50:30. > :50:33.streets. After many years of neglect under

:50:34. > :50:40.Labour, Cornwall is once again seeing investment in roads,

:50:41. > :50:44.railways, airports and tourism. But Cornwall is ambitious to diversify

:50:45. > :50:49.its economy and become a centre to the UK aerospace industry. Newquay

:50:50. > :50:55.airport is the forerunner to the location of the UK spaceport. Could

:50:56. > :50:59.the Prime Minister provide an update on the spaceport? And does he agree

:51:00. > :51:04.that Newquay would be the perfect place for it? I think it is very

:51:05. > :51:07.good that we have such strong voices for Cornwall in this Parliament

:51:08. > :51:12.speaking up for that county and making sure it gets the assistance

:51:13. > :51:17.and resources and help it needs. I am a strong supporter of Newquay

:51:18. > :51:22.airport, not just as a user, but it provides the opportunity for a hub

:51:23. > :51:25.of great businesses in Cornwall. We want to become the European hub for

:51:26. > :51:30.space flight, which will create jobs. There are a number of other

:51:31. > :51:38.airports in the running. I wish them all well. We are aiming to launch

:51:39. > :51:46.the selection process next year. The Government agrees much of what

:51:47. > :51:54.constitutes progress on gender equality. I have heard nothing

:51:55. > :51:58.since. I wonder if the Prime Minister agrees with me that with

:51:59. > :52:01.the fast approaching birth of my daughter, I would like to be valued

:52:02. > :52:07.as equally in her life as my husband. Will the Prime Minister

:52:08. > :52:12.take the important symbolic step to ensure that mothers are not written

:52:13. > :52:17.out of history? This is an area where the honourable

:52:18. > :52:21.lady and I agree. My understanding is that proposals for legislation

:52:22. > :52:25.have gone to the relevant committee in government. She has made a very

:52:26. > :52:31.articulated case for why that bill should be included in the next

:52:32. > :52:35.session. -- article at. Will the Prime Minister join with me

:52:36. > :52:40.in commending the French government for facing down terror, continuing

:52:41. > :52:46.with the climate summit in Paris next week? William port and the --

:52:47. > :52:51.acknowledge the important role of legislators? And does he agree that

:52:52. > :52:55.his personal presence in Paris sends a message to the world about our

:52:56. > :52:59.continuing -- commitment to a lasting climate deal to I am

:53:00. > :53:03.grateful for what my honourable friend says. I will be going to

:53:04. > :53:06.Paris for the start of this vital conference to set out what Britain

:53:07. > :53:11.and the European Union will be doing to bring about this deal. What we

:53:12. > :53:16.put on the table in terms of climate finance, nearly $9 billion over the

:53:17. > :53:24.next five years, is one of the most generous offers made by any country.

:53:25. > :53:29.We are going to see China and America as signatories to a deal.

:53:30. > :53:33.Much more of the emissions in the world will be covered by this deal.

:53:34. > :53:37.We have to make sure it is a good deal with the review clauses and a

:53:38. > :53:41.way of tightening any deal to make sure we keep to 2 degrees. Britain

:53:42. > :53:49.is playing a leading role and has lead by example and with money.

:53:50. > :53:53.There will never be a future where we do not need steel. The government

:53:54. > :53:58.is spending minions of pounds to compensate for the loss of UK

:53:59. > :54:01.steel-making. Can I ask the Prime Minister if he will send a clear

:54:02. > :54:05.signal to date to those potential investors in the steel industry that

:54:06. > :54:11.he will do whatever it takes to back a sustainable cutting-edge UK steel

:54:12. > :54:15.industry in the future? We want to seal -- to see more still being used

:54:16. > :54:21.in the UK and across the world. I completely agree full we want to

:54:22. > :54:25.support our steel business. We are taking action on procurement. Then

:54:26. > :54:28.you look at what we have done on our Royal Navy and what we can do on

:54:29. > :54:33.Railtrack and other organisations, we should back British steel. We're

:54:34. > :54:37.going to be exempting heavy energy users like British steel from the

:54:38. > :54:42.higher electricity charges. This does go, I have to say, rather to

:54:43. > :54:46.the questions asked by the Leader of the Opposition. If we endlessly

:54:47. > :54:51.pushed up bills for everybody else, it costs even more to exempt the

:54:52. > :54:54.high energy users. That is why you need a balanced programme.

:54:55. > :54:59.Everything we can do to help British steel, including an infrastructure

:55:00. > :55:06.plan you will be hearing a bit more about in a minute, is all to the

:55:07. > :55:14.good. In 2010, unemployment in my

:55:15. > :55:19.constituency stood at 2% of the population. It now stands at 1.6%.

:55:20. > :55:24.I'm sure my honourable friend agrees that in order to help those people

:55:25. > :55:26.still employed and to boost productivity and wages, we need to

:55:27. > :55:33.offer more opportunities for skills training. Does my right honourable

:55:34. > :55:40.friend agree with that and what more can the Government offer? Our vision

:55:41. > :55:43.is that all young people aged 18 should have a real choice of being

:55:44. > :55:48.able to take on an apprenticeship, and we are planning for 3 million in

:55:49. > :55:53.this Parliament, or be able to go to one of our universities. We do not

:55:54. > :55:57.want anybody left behind. He's right that unemployment has fallen in his

:55:58. > :56:00.constituency as around the country. We will hear from the Chancellor

:56:01. > :56:06.about what has happened in the last five years. Britain has grown as

:56:07. > :56:12.fast as any other G-7 country in terms of economic performance. You

:56:13. > :56:17.can look back and see the decisions made in 2010, 2011, 2012, difficult

:56:18. > :56:21.decisions, but they laid the platform for sustained economic

:56:22. > :56:26.growth and jobs. Education in Bradford is facing a

:56:27. > :56:32.funding and schools places crisis and we remain at the bottom of the

:56:33. > :56:37.league tables. Bradford's children cannot be failed any longer. Will

:56:38. > :56:40.the Prime Minister support my call for a Bradford challenged based on

:56:41. > :56:46.the highly successful London challenge? And will he stopped the

:56:47. > :56:51.dangerous changes to the school funding formula that will drag the

:56:52. > :56:57.children of Bradford further into the land of inequality, despair and

:56:58. > :57:01.neglect? We made commitments at the last

:57:02. > :57:05.election about funding our schools and funding school places. We will

:57:06. > :57:10.be keeping all of those commitments. Not just the revenue we provide to

:57:11. > :57:14.schools, where we will not be reducing the amount per pupil, but

:57:15. > :57:19.also spending much more on new school places in this Parliament

:57:20. > :57:23.than in the Parliament that preceded my becoming Prime Minister. We are

:57:24. > :57:26.also helping with building new academy chains and free schools.

:57:27. > :57:31.They are available for his constituency as others.

:57:32. > :57:36.Does my right honourable friend agree with me that the turmoil in

:57:37. > :57:39.northern Iraq and Syria gives opportunities to resolve

:57:40. > :57:43.long-standing international disputes, not least with Russia? And

:57:44. > :57:47.does he agree with me that the attack on the Russian bomber,

:57:48. > :57:52.something that never happened in the duration of the Cold War, was

:57:53. > :57:57.disproportionate? And we make sure we do not get into a conflict with

:57:58. > :58:01.Russia over Syria? What I would say to my honourable

:58:02. > :58:03.friend is I think there are opportunities for sensible

:58:04. > :58:08.discussions with Russia about the agenda in Syria, which is about

:58:09. > :58:12.political transition, so there can be a government that represents all

:58:13. > :58:17.of the people of Syria. I had that conversation with President Putin

:58:18. > :58:22.last week. He mentions the issue about the downed Russian jet. The

:58:23. > :58:27.facts are not yet clear. We should respect Turkey's right to protect

:58:28. > :58:35.their race-based as we defend our own. -- Aerospace.

:58:36. > :58:39.The Prime Minister very often tells us that the first duty of any

:58:40. > :58:46.government is to protect the public. Will he give an undertaking to

:58:47. > :58:52.ensure that the public in this country are protected by the police

:58:53. > :58:56.and emergency services? I think this government has a good record of

:58:57. > :59:01.protecting the public. We protected counter-terrorism police thing and

:59:02. > :59:04.we had a funding situation with the police which enabled a cut in crime

:59:05. > :59:13.at 31% since I became Prime Minister.

:59:14. > :59:18.John Morton, a drink-driver, destroyed the lives of Amy Baxter

:59:19. > :59:23.and Hayley Jones. Miss Baxter is paralysed from the neck down and in

:59:24. > :59:29.hospital 16 months later. He was sentenced to just a 3 year driving

:59:30. > :59:33.banned, a fine and a 20 week tag. Weeks later he says -- successfully

:59:34. > :59:38.applied to the Magistrates' Court for his tag to be removed so he

:59:39. > :59:43.could go on holiday to a stag party. Would my right honourable friend

:59:44. > :59:47.look to issue two -- guidance to magistrates that a tag should never

:59:48. > :59:52.be removed to allow criminals to go on holiday? I think my honourable

:59:53. > :59:55.friend makes a powerful point and I will look at this carefully. Let me

:59:56. > :00:02.express my sympathy to the victim and her family for what is

:00:03. > :00:07.undoubtedly be -- undoubtably a distressing case. I did not hear all

:00:08. > :00:11.of the points made in the court. But the point he made does seem to be

:00:12. > :00:19.powerful. A punishment is a punishment, a tag is a tag.

:00:20. > :00:23.Today's Middle East is increasingly resembling the central Europe of a

:00:24. > :00:27.century ago. Minorities, be they linguistic, religious or sexual,

:00:28. > :00:34.find themselves under more pressure than ever. Ie, my constituents and

:00:35. > :00:39.the SNP, understand the threat posed to this group by Daesh. How is the

:00:40. > :00:42.Prime Minister planning to prosecute a bombing campaign that does not

:00:43. > :00:46.alter the Democratic map of the Middle East, preventing Aleppo from

:00:47. > :00:55.becoming the new Budapest? We will set out the arguments

:00:56. > :01:01.clearly tomorrow but there's a clear and present danger to the UK of

:01:02. > :01:04.Isil, based in Iraq and Syria, planning attacks against this

:01:05. > :01:09.country today. We don't live in a perfect world and we can't deliver a

:01:10. > :01:13.perfect strategy but we can deliver a clear long-term study that will

:01:14. > :01:17.work. He talks of the lessons we learned from the last century. One

:01:18. > :01:22.of the lesson I would say we should learn from them is, when your

:01:23. > :01:27.country is under threat, and UK's aggression, you cannot endlessly

:01:28. > :01:35.dream about a perfect world -- and you are facing aggression, you need

:01:36. > :01:39.to act in the world that we are in. Thank you Mr Speaker. Will my right

:01:40. > :01:46.honourable friend join me in congratulating all the staff of the

:01:47. > :01:51.birthing unit, the midwives, matron Emma Chambers local activist was

:01:52. > :01:56.scoring 100% on their friends and family survey on satisfaction and

:01:57. > :02:01.care. The commitment of the midwives is only matched by the Conservative

:02:02. > :02:05.commitment to the NHS. For two elections in a row we have promised

:02:06. > :02:12.and delivered greater investment in our NHS than Labour. Can I say to my

:02:13. > :02:16.right honourable friend she is quite right to highlight the friends and

:02:17. > :02:19.family test. It's a simple way of measuring whether our hospitals are

:02:20. > :02:24.giving great care. I think it has been a real advance in the NHS to

:02:25. > :02:27.have that. As well as good schemes to make sure you'd want your friends

:02:28. > :02:33.and family treated in hospital we need to the resources about hospital

:02:34. > :02:35.and that is what we are doing with the spending figures announced

:02:36. > :02:39.today. Crucially on childbirth, it isn't often that I quote the daily

:02:40. > :02:43.Mirror but it is worth looking at what they are raising about the

:02:44. > :02:48.importance of a seven-day NHS and making sure we have high standards

:02:49. > :02:53.across our NHS every day of the week as well as the extra money we are

:02:54. > :02:59.putting into the NHS the seven-day week NHS will mean a much stronger

:03:00. > :03:05.one. Thank you Mr Speaker. The big lottery fund supports important

:03:06. > :03:09.local projects in my constituency, including the Cake, a children's

:03:10. > :03:13.playground and some women's aid projects which play an essential

:03:14. > :03:18.role supporting the vulnerable people that this government has left

:03:19. > :03:22.behind. Will the Prime Minister join with me in congratulating these

:03:23. > :03:26.local projects on their work and reassure the House that this

:03:27. > :03:29.governor to protect the current level of national lottery funding

:03:30. > :03:35.earmarked for charities and community projects? I can certainly

:03:36. > :03:38.say we will protect the big lottery fund because it does an excellent

:03:39. > :03:43.job. I cannot resist making the point that one thing that the UK

:03:44. > :03:48.brings is a bigger national lottery. A bigger part that can support

:03:49. > :03:58.Scottish charities. Let me make this point. Following what has happened

:03:59. > :04:01.to the oil price, if there was a Scottish November Autumn Statement,

:04:02. > :04:08.it would be a statement that would be about cuts, cuts, taxes, taxes,

:04:09. > :04:22.and no relief from the National Lottery! Order! Order! Mr Brendan

:04:23. > :04:37.McNeill. Mr Angus Brendan McNeill, calm yourself. You may be a cheeky

:04:38. > :04:42.chappie but you are an exceptionally noisy one! Statement by the

:04:43. > :04:45.Chancellor of the Exchequer! Mr Speaker, this Spending Review

:04:46. > :04:51.delivers on the commitment we made to the British people that we would

:04:52. > :04:54.put security first. To protect our economic security by taking the

:04:55. > :05:01.difficult decisions to live within our means and bring down our debt.

:05:02. > :05:07.And to protect our national security by defending our country's interests

:05:08. > :05:10.abroad and keeping our citizens safe at home. Economic and national

:05:11. > :05:14.security provide the foundations for everything we want to support.

:05:15. > :05:22.Opportunity for all. The aspirations of families. The strong country we

:05:23. > :05:28.want to build. Five years ago, when I presented our first Spending

:05:29. > :05:35.Review our economy was in crisis, and as the letter said, there was no

:05:36. > :05:40.money left! We were borrowing ?1 in every ?4 that we spent and our job

:05:41. > :05:45.was to rescue Britain. Today as we present this Spending Review our job

:05:46. > :05:51.is to rebuild button. Built our finances, defences, our society so

:05:52. > :05:55.that Britain becomes the most prosperous and secure of all the

:05:56. > :05:59.major nations of the world. So we'd leave to the next generation a

:06:00. > :06:03.stronger country than the one that we inherited. And that is what this

:06:04. > :06:09.government was elected to do and today we set out a plan to deliver

:06:10. > :06:14.on that commitment. Mr Speaker, we have committed to running a surplus.

:06:15. > :06:17.Today I can confirm that the four-year public spending plans that

:06:18. > :06:21.I set out are forecast to deliver that surplus, so that we don't

:06:22. > :06:25.borrow for ever and are ready for whatever storms like ahead. We

:06:26. > :06:29.promised to bring our debts down. promised to bring our debts down.

:06:30. > :06:34.Today the forecast that I present shows that after the longest period

:06:35. > :06:39.of rising debt in our modern history, this year, our debt will

:06:40. > :06:48.fall and will keep falling in every year that follows. We promised to

:06:49. > :06:53.move Britain from being a high welfare, low-wage economy to a lower

:06:54. > :06:58.welfare, higher wage economy. Today I can tell the House that the ?12

:06:59. > :07:03.billion of welfare savings we committed to add to the election

:07:04. > :07:06.will be delivered in full, and in a way that helps families as we make

:07:07. > :07:12.the transition to our national living wage. We promised that we

:07:13. > :07:16.would strengthen our national defences, take the fight to the

:07:17. > :07:20.enemies of this nation and project the influence of our country abroad.

:07:21. > :07:24.Today this Spending Review delivers the resources to make sure that

:07:25. > :07:29.Britain, unique in the world, will meet its twin obligations to spend

:07:30. > :07:36.0.7% of its income on development and 2% on defence of the realm. In

:07:37. > :07:39.this Spending Review, we not only ensure the economic and national

:07:40. > :07:44.security of our country, we build on it. It sets out far-reaching changes

:07:45. > :07:49.to what the state does and how it does it. It reforms our public

:07:50. > :07:54.services so we truly extend opportunity to all. Whether the way

:07:55. > :07:57.we educate our children, train our workforce, rehabilitate prisoners,

:07:58. > :08:01.provide homes for our families, deliver care for the elderly and

:08:02. > :08:05.sick, all the way that we hand back power to local communities, this is

:08:06. > :08:09.a big Spending Review by a government that does big things. It

:08:10. > :08:17.is a long-term economic plan for our country's feature. Mr Speaker,

:08:18. > :08:23.nothing is possible without the foundations of a strong economy. Let

:08:24. > :08:25.me turn to the new forecast divided by the independent Office for Budget

:08:26. > :08:30.Responsibility and let me thank Robert and his team for their work.

:08:31. > :08:34.Since this budget new economic data has been published which confirms

:08:35. > :08:40.this, since 2010, no economy in the G7 has grown faster than button. We

:08:41. > :08:45.have grown must treat and is faster than Japan, twice as fast as France,

:08:46. > :08:50.faster than Germany and at the same rate as the United States. That

:08:51. > :08:53.growth has not been fuelled by an irresponsible banking boom like in

:08:54. > :08:58.the last decade. Business investment has grown more than twice as fast as

:08:59. > :09:04.consumption, exports have grown faster than imports and the North

:09:05. > :09:10.has grown faster than the south. But we are determined that this will be

:09:11. > :09:14.an economic recovery for all, felt in all parts of our nation. That is

:09:15. > :09:18.already happening. In which area of the country are we seeing the

:09:19. > :09:22.strongest jobs growth? Not just in our capital city. The Midlands is

:09:23. > :09:26.creating jobs through times faster than London and the south-east. In

:09:27. > :09:31.the past year we've seen more people in work in the Northern Power has

:09:32. > :09:34.than ever before. And where do we have the highest employment rate of

:09:35. > :09:42.any part of this country? In the south-west of England. Our long-term

:09:43. > :09:46.economic plan is working. The OBR, Mr Speaker, reminds us today of the

:09:47. > :09:52.huge challenges that we still face at home and abroad. Our debts are

:09:53. > :09:56.too high and our to visit remains. Productivity is growing yet we still

:09:57. > :10:01.like behind most of our competitors. I can say that in the forecast today

:10:02. > :10:06.expectations for world growth and world trade have been revised down

:10:07. > :10:11.again. The weakness of the Eurozone remains a persistent problem. There

:10:12. > :10:14.are rising concerns about debt in emerging economies, these are yet

:10:15. > :10:20.more reasons why we are determined to take the necessary steps to

:10:21. > :10:26.protect our economic security. And that brings me to the forecast for

:10:27. > :10:31.our own GDP. Even with the weaker double picture, our economy this

:10:32. > :10:36.year is predicted to grow by 2.4%, growth is then revised up from the

:10:37. > :10:42.budget forecast in the next two years, to 2.4% in 2016 and two

:10:43. > :10:50.years, to 2.4% in 2016 and 2.5% in starts to return to its long-term

:10:51. > :10:55.trend of growth of 2.4% in 2018 and 2.3% in 2019 and 2020. That growth

:10:56. > :11:00.is more balanced than in the past, economy investment is set to grow

:11:01. > :11:04.faster in Britain than in any other major advanced economy in the world.

:11:05. > :11:11.This year, the next year, and the after that. Mr Speaker, when I

:11:12. > :11:16.presented my first Spending Review in 2010 and said this country on the

:11:17. > :11:20.path of living within its means, our opponents claimed that growth would

:11:21. > :11:26.be joked off, when a million jobs lost, and inequality would rise.

:11:27. > :11:36.Every one of those predictions has proved to be completely wrong. And

:11:37. > :11:39.so too did the claim that Britain needed to choose between sound

:11:40. > :11:43.public finances and great public services. It's a false choice. If

:11:44. > :11:49.you are bowled with your reforms you can have both. Is why, why we have

:11:50. > :11:54.reduced government spending, crime has fallen, 1 million more children

:11:55. > :11:58.are being educated in good outstanding schools and public

:11:59. > :12:03.satisfaction with our local government services has risen. The

:12:04. > :12:07.exact opposite of what our critics predicted. And yet now the same

:12:08. > :12:11.people are making similar claims about this Spending Review as we

:12:12. > :12:18.seek to move Britain out of deficit and into surplus. And they are

:12:19. > :12:21.completely wrong again. The OBR has seen our public expenditure plans,

:12:22. > :12:24.analysed the effect on our economy. Their forecast today is that the

:12:25. > :12:28.economy will grow robustly every year, living standards will rise

:12:29. > :12:34.every gear and that more than 1 million extra jobs will be created

:12:35. > :12:37.over the next five years. That is because sound public finances are

:12:38. > :12:43.not the enemy of sustained growth, they are its precondition. Our

:12:44. > :12:47.economic plan puts the security of working people first so that we are

:12:48. > :12:52.prepared for the inevitable storms that light ahead. That is why our

:12:53. > :12:57.Charter for added responsibility commits us to reducing the debt to

:12:58. > :13:01.GDP ratio for each year of this Parliament reaching a surplus in

:13:02. > :13:06.2019-20 and keeping that surplus in normal times. I can confirm that the

:13:07. > :13:11.OBR has today acidified that the economic plan that would present

:13:12. > :13:16.delivers on our commitment. But it has certified this. That brings me

:13:17. > :13:19.to the forecast for debt and deficit. As usual the OBR has had

:13:20. > :13:26.access to published and unpublished data and made its own assessment of

:13:27. > :13:31.our public finances. Since these budget Housing Associations in have

:13:32. > :13:36.been reclassified by our independent office for National statistics, and

:13:37. > :13:40.their borrowing in to Liddle and depth of been brought on to the

:13:41. > :13:45.public balance sheet and that that will be backdated to 2008. It is

:13:46. > :13:49.listed as to change, so the OBR has recalled belated its previous budget

:13:50. > :13:55.forecast to include Housing Associations, so that we can compare

:13:56. > :14:00.like with like. On that new measure debt was forecast in July to be

:14:01. > :14:04.83.6% of national income this year. Today in this Autumn Statement have

:14:05. > :14:16.forecast this year to be lower, 82.5%. It then falls, every year,

:14:17. > :14:24.down to 81.7%... Order! Mr Lewis! Get a grip of yourself, man! Take up

:14:25. > :14:30.yoga, you will find it beneficial! The record shows that the Chancellor

:14:31. > :14:34.stays for a considerable period after his statement to respond to

:14:35. > :14:41.questions. Members will always find the chair a friend if they wish to

:14:42. > :14:47.question a minister. Yes, they will! LAUGHTER

:14:48. > :14:50.Those with questions to ask will be heard. Meanwhile, the Chancellor

:14:51. > :14:57.will be heard! Lunch Mac CHEERING

:14:58. > :15:03.Mr Speaker, I am looking forward to it! On that new measure debt was

:15:04. > :15:05.forecast in July to be 83.6% of national income this. Today in this

:15:06. > :15:12.Autumn Statement they have forecast it this year to be 82.5%. It then

:15:13. > :15:22.falls every year down to 81.7% next, done to 79.9% in 27-18 and

:15:23. > :15:29.down to 77.3% and 74 by 3% reaching 71.3% in 2020-21. In every single

:15:30. > :15:34.year, the national debt as a share of national income is lower than

:15:35. > :15:38.when I presented the budget four months ago. And this improvement in

:15:39. > :15:47.the nation's finances is due to two things. First, the OBR expects tax

:15:48. > :15:52.receipts to be stronger. A sign our economy is healthier than thought.

:15:53. > :15:56.Second, debt interest payments are expected to be lower, reflecting the

:15:57. > :16:01.further fall in the rates we pay to our creditors. Combine the effects

:16:02. > :16:06.of better tax receipts and lower debt interest and overall the OBR

:16:07. > :16:11.has copulated this means a ?27 billion improvement in our public

:16:12. > :16:16.finances -- calculated, compared to where we were at the Budget. Mr

:16:17. > :16:23.Speaker, this improvement in the nation's finances allows me to do

:16:24. > :16:32.the following. First we will borrow ?8 billion less than we forecast,

:16:33. > :16:34.making faster progress towards eliminating and lowering the doubt,

:16:35. > :16:41.fixing the roof when the sun is shining.

:16:42. > :16:48.Second, we will spend 12 billion more on capital investments, making

:16:49. > :16:54.faster progress to building the infrastructure our country needs.

:16:55. > :16:58.And third, the improved public finances allow us to reach the same

:16:59. > :17:04.goal of the surplus while cutting macro less in the early years, we

:17:05. > :17:08.can smooth the path to the same destination. We can help on tax

:17:09. > :17:14.credits. I have then asked to help in the transition as Britain moves

:17:15. > :17:20.to the higher wage, lower welfare, lower tax society. These changes to

:17:21. > :17:24.tax credits should be phased in. I have listened to the concerns. I

:17:25. > :17:29.hear and understand them. Because I have been able to announce a -- an

:17:30. > :17:33.improvement in the public finances, the simplest thing to do is not to

:17:34. > :17:41.faze these changes in body to avoid them altogether. Tax credits are

:17:42. > :17:45.being phased out any way as we introduce Universal Credit. What

:17:46. > :17:52.that means is that the tax credit tabor rate and threshold remain

:17:53. > :17:58.unchanged. The disregard will be ?2500. I propose no further changes

:17:59. > :18:06.to the Universal Credit tabor or the work allowances to those passed

:18:07. > :18:12.through Parliament last week. I set a lower welfare cap at the budget.

:18:13. > :18:16.Helping with the transition obviously means that we will not be

:18:17. > :18:21.within that lower welfare cap in the first years but the House should

:18:22. > :18:26.also note that thanks to our welfare reforms, we meet the cap in the

:18:27. > :18:30.later part of this Parliament. Indeed on the figures published

:18:31. > :18:37.today, we still achieve the ?12 billion per year welfare savings we

:18:38. > :18:41.promised. That is because of the permanent savings we have already

:18:42. > :18:45.made and further long-term reforms we announce today. The rate of

:18:46. > :18:53.housing benefit in the social sector will be capped. The same rate paid

:18:54. > :18:57.to those in the private rented sector who received the same

:18:58. > :19:00.benefit. This will apply to new tenancies only. We will also stop

:19:01. > :19:04.paying housing benefit and pension credit payments to people who have

:19:05. > :19:08.left the country for more than a month. The welfare system should be

:19:09. > :19:13.fair to those who need it and fair to those who pay for it, too.

:19:14. > :19:18.Improved public finances mean that we continue to be on target for a

:19:19. > :19:24.surplus. The House will want to know the level of that surplus. Let me

:19:25. > :19:29.give the OBR forecast for deficit and borrowing. In 2010 the deficit

:19:30. > :19:34.we inherited was estimated at 11.1% of national income. This year it is

:19:35. > :19:41.said to be almost one third of that, 3.9%. Next year it falls to less

:19:42. > :19:48.than a quarter, 2.5%. Then the deficit is down to 1.2% in 2017-18,

:19:49. > :19:54.0.2% a year after that, before moving into a surplus in 2019-20,

:19:55. > :20:01.rising to 0.6% of the following year. The cash borrowing figures.

:20:02. > :20:06.The OBR predicted at the time of the budget that Britain would borrow

:20:07. > :20:12.?74.1 billion this year. They now forecast we will borrow less than

:20:13. > :20:16.that at 73.5 billion. Borrowing falls 49.9 billion next year. It

:20:17. > :20:23.continues to fall and fall and falls to fall and fall still lower in

:20:24. > :20:31.every single year after that, to 28 -- 20 4.8 8,000,000,020 17-18, four

:20:32. > :20:37..6 billion the following year, and in 2020 we reach a surplus of ?10.1

:20:38. > :20:44.billion. That is higher than was forecast in the budget. Britain out

:20:45. > :20:50.of the red and into the black. In 2020-21 the surplus rises to 14.7

:20:51. > :20:59.billion. The deficit falls every year. We are borrowing ?8 billion

:21:00. > :21:03.less than we expected overall. And we reach a bigger surplus. We have

:21:04. > :21:09.achieved this while at the same time helping working families as we move

:21:10. > :21:12.to lower welfare, higher wage economy, and we have the economic

:21:13. > :21:19.security of knowing our country is paying its way in the world. That

:21:20. > :21:23.brings me to our plans for public expenditure and taxation. I want to

:21:24. > :21:27.thank my right honourable friend, the chief secretary, other

:21:28. > :21:30.ministerial colleagues and the brilliant officials who have

:21:31. > :21:36.assisted us for the long hours and hard work they have put into

:21:37. > :21:40.developing these plans. We said ?5 billion would come from the levels

:21:41. > :21:44.on tax avoidance, evasion and imbalances. Those measures were

:21:45. > :21:47.announced in the Budget. Together we go further today with new penalties

:21:48. > :21:52.for the General Anti-Abuse Rule which this comment introduced,

:21:53. > :21:56.action undisguised renumeration schemes and stamp duty avoidance,

:21:57. > :22:07.and we will stop abuse of the intangible fixed assets scheme. We

:22:08. > :22:12.will all show ensure... HMRC is making efficiencies of 18% in its

:22:13. > :22:18.own Budget. In the digital age we do not need taxpayers to pay for paper

:22:19. > :22:22.processing or 170 separate tax offices around the country. We are

:22:23. > :22:27.reinvesting some of those savings with an extra ?800 billion in the

:22:28. > :22:30.fight against tax evasion and investment return of almost ten

:22:31. > :22:35.times the tax collected. We're going to build one of the most digitally

:22:36. > :22:38.advanced tax administrations in the world, so that every individual and

:22:39. > :22:41.every small business will have their own digital tax account by the end

:22:42. > :22:48.of the decade in order to manage their tax online. From 2019, when

:22:49. > :22:52.these accounts are up and running, we will require Capital Gains Tax to

:22:53. > :22:56.be paid within 30 days of completion of any disposal of residential

:22:57. > :22:59.property. These form part of the digital revolution we are bringing

:23:00. > :23:04.to Whitehall with this Spending Review. The digital service will

:23:05. > :23:13.receive an additional ?450 million. The court Cabinet budget will be

:23:14. > :23:19.cut. The cost of all Whitehall administration will be cut by ?1.9

:23:20. > :23:23.billion. These form part of the ?12 billion of savings in government

:23:24. > :23:28.departments iron and -- I am announcing today. In 2010,

:23:29. > :23:32.government spending took up 45%. This figure we could not sustain

:23:33. > :23:37.because it was neither practical nor sensible to raise taxes high enough

:23:38. > :23:40.to pay for that. We ended up with a massive structural deficit. Today

:23:41. > :23:46.the state accounts for just under 40% of national income and is

:23:47. > :23:48.forecast to reach 36.5% by the end of the Spending Review. The

:23:49. > :23:54.structural spending this represents is at a level of a modern economy

:23:55. > :24:00.can sustain. It is a level B British people are prepared to pay their

:24:01. > :24:03.taxes for. It is precisely because this government believes in decent

:24:04. > :24:08.public services and a properly funded welfare state that we are

:24:09. > :24:13.insistent they are sustainable and affordable. To simply argue all the

:24:14. > :24:17.time the public spending must always increase, never be cut, is

:24:18. > :24:21.irresponsible and lets down the people who rely on public services

:24:22. > :24:25.most. Equally to fund the things we want the Government to provide in

:24:26. > :24:29.the modern world, we have to be prepared to provide the resources. I

:24:30. > :24:33.am setting the limits for total managed expenditure as follows. This

:24:34. > :24:44.year public spending will be ?756 billion. 773 billion next year, 787

:24:45. > :24:49.the year after, 801 billion before reaching 821,000,000,020 19-20. The

:24:50. > :24:53.year we are forecast to eliminate the deficit and cheaper surplus.

:24:54. > :25:01.After that, the forecast public spending rises roughly in line with

:25:02. > :25:05.the growth of the economy. The figures from the OBR show that over

:25:06. > :25:10.the next five years welfare spending falls as a percentage of national

:25:11. > :25:13.income, while departmental capital investment is maintained and is

:25:14. > :25:16.higher at the end of the period. That is precisely the right switch

:25:17. > :25:22.for a country serious about investing in its long-term economic

:25:23. > :25:26.success. People will want to know what the levels of public spending

:25:27. > :25:30.mean in practice and the scale of the cuts we are asking government

:25:31. > :25:34.departments to undertake. The day-to-day spending of government

:25:35. > :25:39.departments is set to fall by an average of 0.8% per year in real

:25:40. > :25:44.terms. That compares to an average fall of 2% in the past five years.

:25:45. > :25:47.The savings we need are considerably smaller. This reflects the

:25:48. > :25:51.improvement in the public finances and the progress we have already

:25:52. > :25:55.made. The overall rate of annual cuts I set out in today's Spending

:25:56. > :26:00.Review are less than half of those delivered over the last five years.

:26:01. > :26:04.Britain is spending a lower proportion of its money on welfare

:26:05. > :26:08.and a higher proportion on infrastructure. They Budget balanced

:26:09. > :26:16.with cuts half what they were in the last parliament, making the savings

:26:17. > :26:18.we need, no more, no less, and providing people with a country with

:26:19. > :26:25.a surplus that lives within its means. This not -- this does not

:26:26. > :26:29.mean that decisions are easy. Nor should we lose sight of the fact

:26:30. > :26:34.this Spending Review commits ?4 trillion over the next five years.

:26:35. > :26:38.It is a huge commitment of the hard earned cash of British taxpayers.

:26:39. > :26:42.And all of those who dedicate their lives to public service will want to

:26:43. > :26:45.make sure it is well spent. Our approach is not simply

:26:46. > :26:51.retrenchment. It is to reform and rebuild. These reforms will support

:26:52. > :26:55.our objectives. First, to develop a modern integrated health and social

:26:56. > :27:01.care system that supports people at every stage of their lives. Second,

:27:02. > :27:04.to spread economic power and wealth through devolution revolution and

:27:05. > :27:08.invest in long-term infrastructure. Third, to extend opportunity by

:27:09. > :27:13.attacking the big social failures that for too long have helped people

:27:14. > :27:16.back. Fourth, to reinforce our national security with the

:27:17. > :27:21.re-sources to protect us at home and protect our values abroad. The

:27:22. > :27:25.resorts is allocated are driven by these four Gaults. The first

:27:26. > :27:30.priority is the first priority of the British people, our National

:27:31. > :27:34.Health Service. Health spending was cut by the Labour administration in

:27:35. > :27:42.Wales. We Conservatives have been increasing spending on the NHS in

:27:43. > :27:47.England. And in this Spending Review we do so again. We will work with

:27:48. > :27:51.our health professionals to deliver the best value for that money. That

:27:52. > :27:57.means ?22 billion of efficiency savings across the service. It means

:27:58. > :28:01.a 25% cut in the Whitehall budget of the Department of Health. It means

:28:02. > :28:08.modernising the way we fund students of health care. There is a cap on

:28:09. > :28:11.student nurses. Over half of all applicants are turned away and it

:28:12. > :28:16.leaves hospital is relying on agencies and overseas staff. We will

:28:17. > :28:21.replace direct funding with loans for new students so we can abolish

:28:22. > :28:26.the self-defeating cap and create up to 10,000 more training places in

:28:27. > :28:29.this Parliament. Alongside these reforms we will give the NHS the

:28:30. > :28:35.money it needs. We made a commitment to a ?10 billion increase in the NHS

:28:36. > :28:41.budget and we deliver that today with the first ?6 billion delivered

:28:42. > :28:44.upfront next year. This fully funds the five-year view the NHS put

:28:45. > :28:50.forward as the plan for its future. As the Chief Executive of NHS -- NHS

:28:51. > :28:58.England said, the NHS has been heard and actively supported. Let me

:28:59. > :29:04.explain what that means in cash. The NHS budget will rise from ?101

:29:05. > :29:12.billion today to ?120 billion by 2020. This is a half of equipment to

:29:13. > :29:20.the NHS over this Parliament. -- commitment. The largest to the NHS

:29:21. > :29:26.since its creation. We have a clear plan for improving the NHS. We fully

:29:27. > :29:32.funded it. And in return patients will see more than ?5 billion in

:29:33. > :29:36.health research in everything from Gene Ormsby antimicrobial

:29:37. > :29:40.resistance, to a new dimension Institute and a new world-class

:29:41. > :29:46.public health facility in Harlow, and more. 800,000 more elected

:29:47. > :29:51.hospital admissions. 5 million more outpatient appointments. 2 million

:29:52. > :29:55.more diagnostic tests. New hospitals in Cambridge, Sandwell and

:29:56. > :30:02.Brighton. Cancer testing within four weeks and a brilliant NHS are

:30:03. > :30:07.available seven days a week. Mr Speaker, there is one part of our

:30:08. > :30:12.NHS that has been neglected for too long, mental health. I want to thank

:30:13. > :30:17.the all-party group led by my right honourable friend for Sutton

:30:18. > :30:19.Coldfield, the Right Honourable member for North Norfolk and

:30:20. > :30:23.Alastair Campbell for their work in this area. In the last Parliament we

:30:24. > :30:26.made a start by laying the foundations for the quality of

:30:27. > :30:31.treatment for waiting times for mental health. Today we are building

:30:32. > :30:35.on that. We are providing additional funding. By 2020 is significantly

:30:36. > :30:40.more people will have access to talking therapies, perinatal

:30:41. > :30:45.services and crisis care. All possible because we made a promise

:30:46. > :30:52.to the British people to give our NHS the funding it needs and in this

:30:53. > :30:55.Spending Review we have delivered. The health service cannot function

:30:56. > :30:59.effectively without good social care. The truth we need to confront

:31:00. > :31:03.is this. Many local authorities are not going to be able to meet the

:31:04. > :31:08.growing social care needs unless they have new sources of funding.

:31:09. > :31:11.That in the end comes from the taxpayer. In future those local

:31:12. > :31:17.authorities responsible for social care will be able to levy a new

:31:18. > :31:20.social care precept of up to 2% on council tax. The money raised will

:31:21. > :31:25.have to be spent exclusively on adult social care and if all

:31:26. > :31:30.authorities make full use of it, it will bring almost ?2 billion more

:31:31. > :31:35.into the care system. It is part of a major reform we are undertaking to

:31:36. > :31:39.integrate health and social care by the end of this decade. To help

:31:40. > :31:44.achieve that I am today increasing the better care fund to support that

:31:45. > :31:52.integration, with local authorities able to access a next ?1.5 million

:31:53. > :31:54.by 2019-20. The steps taken in this Spending Review mean that by the end

:31:55. > :31:55.of the parliament social care spending will have risen in real

:31:56. > :32:20.terms by the end of the Parliament. To help businesses with the

:32:21. > :32:26.administration of this important boost will -- we will align the next

:32:27. > :32:30.two phases with the tax years. The best way to afford generous pension

:32:31. > :32:36.benefits is to raise the pension age in line with life expectancy as

:32:37. > :32:40.we're set to do in this Parliament. That allows us to maintain a triple

:32:41. > :32:43.lock on the value of the state pension, so never again do

:32:44. > :32:52.Britain's pensioners receive a derisory increase of 75p. As a

:32:53. > :32:56.result of our commitment to those who have worked hard all their lives

:32:57. > :33:03.and contributed to this society I confirmed that next year the basic

:33:04. > :33:07.state pension will rise by ?3 35 to ?119 30 a week is the biggest

:33:08. > :33:13.real-time is increased the basic state pension 15 years. Taking all

:33:14. > :33:20.of our increases together over the last five years, pensioners will be

:33:21. > :33:24.?1125 better off a year than they were when we came into office. We

:33:25. > :33:28.also undertaking the biggest change in the state pension for 40 years to

:33:29. > :33:31.make it simple and fair by introducing the new single tier

:33:32. > :33:39.pension for pensioners from next April. I'm today setting the full

:33:40. > :33:44.rate the state pension at ?155, 65p. Higher than the current means tested

:33:45. > :33:46.benefit for the lowest income pensioners in this society and

:33:47. > :33:54.another example of progressive government in action. Instead of

:33:55. > :33:58.cutting these savings credit as in previous fiscal events and will be

:33:59. > :34:03.frozen at its current level where income is not changed. So the first

:34:04. > :34:07.objective of this Spending Review is to give unprecedented support to

:34:08. > :34:11.health, social care and pensioners. The second is to spread economic

:34:12. > :34:15.power and wealth across this nation. In recent weeks great metropolitan

:34:16. > :34:18.areas like Sheffield, Liverpool, the north-east and the West Midlands

:34:19. > :34:24.have joined Greater Manchester in agreeing to create elected Mayers in

:34:25. > :34:29.return for far-reaching new powers over transport skills and the local

:34:30. > :34:31.economy. It is the most determined effort to change the geographical

:34:32. > :34:39.imbalance that has bedevilled the British economy far half-century. We

:34:40. > :34:43.are today setting aside the ?12 billion we promised for the local

:34:44. > :34:47.growth fund and I'm announcing the creation of 26 new extended and

:34:48. > :34:52.enterprise zones including 15 zones in towns and rural areas from

:34:53. > :34:56.Carlisle to Dorset to Ipswich. But if we want to shift power in this

:34:57. > :35:00.country we must give all local councils the tools to drive business

:35:01. > :35:05.growth in their area, and the rewards that come when you do so. So

:35:06. > :35:10.I can confirm today that, as we set out last month, we will abolish the

:35:11. > :35:13.uniform is Ms rate, by the end of the Parliament local government will

:35:14. > :35:18.keep all the revenues from business rates, we will give councils the

:35:19. > :35:22.power to cut rates and make the area more active to businesses and

:35:23. > :35:28.elected mayors will be able to raise rates provided they fund specific

:35:29. > :35:32.infrastructure projects supported by the local business community.

:35:33. > :35:35.Because the amount we raise in business rates is greater than the

:35:36. > :35:38.amount we give to local councils through the government grant will

:35:39. > :35:43.phase out that ground over this Parliament. And we'll also devolve

:35:44. > :35:47.additional responsibilities. The temporary accommodation management

:35:48. > :35:52.fee will no longer be paid through the benefit system. Instead councils

:35:53. > :35:55.will get ?10 million a year more up front to provide more help to

:35:56. > :36:01.homeless people. Alongside savings in the public health grant we will

:36:02. > :36:05.consult on transferring new powers and responsibility for its funding

:36:06. > :36:09.and elements of the administration of housing benefit. Local government

:36:10. > :36:14.is sitting on property worth one quarter of ?1 trillion so we will

:36:15. > :36:18.let councils spend 100% of the receipts from the assets they sell

:36:19. > :36:23.to improve their local services. Councils increase their reserves by

:36:24. > :36:29.almost ?10 billion over the last Parliament. We would encourage them

:36:30. > :36:35.to draw on these reserves as they undertake reforms. Mr Speaker, this

:36:36. > :36:38.amounts to a big package of new powers but also new responsibilities

:36:39. > :36:42.for local councils. It is a revolution in the way that we govern

:36:43. > :36:47.this country and if you take into account both the falling grant and

:36:48. > :36:50.the rise in comes it means that by the end of this Parliament local

:36:51. > :36:57.government will spend the same in cash terms as does today. Mr

:36:58. > :37:01.Speaker, the devolved administrations of the UK will also

:37:02. > :37:06.have available to them unprecedented new powers to drive their economies.

:37:07. > :37:09.The conclusion last week of the political talks in Northern Ireland

:37:10. > :37:13.mean additional spending power for the executive to support the full

:37:14. > :37:17.temperament issue of the Stormont has agreement. That opens the door

:37:18. > :37:20.to the devolution of corporation tax which the parties have now confirmed

:37:21. > :37:27.they wish to set at the rate of 12.5%. If huge prize for business in

:37:28. > :37:30.Northern Ireland. The onus is now on the Northern Ireland executive to

:37:31. > :37:35.play their part and deliver sustainable budget so that we can

:37:36. > :37:41.move forward on that. The Northern Ireland's lock grant will be over

:37:42. > :37:44.?11 billion by 2019-20 and funding for new investment and

:37:45. > :37:48.infrastructure will rise by over ?600 million over five years so that

:37:49. > :37:52.Northern Ireland can invest in its long-term future. For many years

:37:53. > :37:56.Wales has asked for a funding floor to protect public spending. Within

:37:57. > :38:00.months of coming to office, this Conservative government is answering

:38:01. > :38:04.that call and providing that historic funding guarantee for

:38:05. > :38:10.Wales. I can announce that we will introduce the new funding floor and

:38:11. > :38:14.set it for this Parliament at 115%. The Welsh Secretary and I also

:38:15. > :38:18.confirm that we will legislate so that the devolution of income tax

:38:19. > :38:24.can take place without a referendum. We will also help fund a new Cardiff

:38:25. > :38:29.City deal. So the Welsh block grant will reach almost ?15 billion by

:38:30. > :38:39.2019-20, while capital spending will rise by over 500 million pounds over

:38:40. > :38:48.five years. -- capital spending will rise. Scotland voted to remain in

:38:49. > :38:51.the United Kingdom. Mr Speaker, this must be underpinned by a fiscal

:38:52. > :38:55.framework that is fair to all taxpayers and we are now ready to

:38:56. > :38:59.reach an agreement. The ball is in the Court of the Scottish

:39:00. > :39:05.Government. Let's have a deal that is fair to Scotland and to the UK,

:39:06. > :39:09.and is built to last. We are implementing the city deal for

:39:10. > :39:12.Glasgow and negotiating deals with Aberdeen and Inverness as well. If

:39:13. > :39:17.Scotland had voted for independence they would have had their own

:39:18. > :39:20.Spending Review this autumn. And with world oil prices falling and

:39:21. > :39:30.revenues from the North Sea forecast by the OBR today to be down 94%, we

:39:31. > :39:33.would have seen catastrophic cuts in Scottish public services. But

:39:34. > :39:36.thankfully, Scotland remains a strong part of a stronger United

:39:37. > :39:48.Kingdom. Pareja CHEERING

:39:49. > :39:53.So the Scottish block grant will be over ?30 million in 2019-20 while

:39:54. > :39:57.capital spending available will rise by ?1.9 billion until 2021. The UK

:39:58. > :40:03.Government giving Scotland the resources to invest in its long-term

:40:04. > :40:08.future. For the UK Government, the funding of the Scotland, Wales, and

:40:09. > :40:13.northern Ireland offices will all be protected in real terms. We are

:40:14. > :40:16.devolving power across this country and spending on the Icahn and

:40:17. > :40:21.infrastructure that connects the nation. Something Britain hasn't

:40:22. > :40:24.done enough of for a generation. Now by making the tough decisions to

:40:25. > :40:30.save on day-to-day costs in departments were involved in -- we

:40:31. > :40:34.will be investing in new roads, rails, and flood defence needed. We

:40:35. > :40:38.started in the last Parliament. Britain has just topped the league

:40:39. > :40:43.of the best places in the world to invest in infrastructure. In this

:40:44. > :40:48.Spending Review we go much further. The Department for times but's

:40:49. > :40:55.operational budget will fall by 37%. Peshmerga Department for

:40:56. > :41:01.Transport's budget. The biggest increase for a generation. That

:41:02. > :41:11.funds the largest road investment programme since the 1970s. We are

:41:12. > :41:15.the builders. It means the construction of a just two, to link

:41:16. > :41:24.the northern powerhouse to the south can begin, the electric version of

:41:25. > :41:28.lines like the great Western can go ahead, we will fund our new

:41:29. > :41:32.transport for the North to get it up and running. London will get an

:41:33. > :41:38.investment of ?11 billion in its transport infrastructure, and having

:41:39. > :41:41.met with my honourable friend for Folkestone and the Kent MPs are

:41:42. > :41:47.relieve the pressure from Operation Stack within a quarter of a million

:41:48. > :41:51.pound investment in facilities there. We will make a commitment of

:41:52. > :41:57.?300 million to cycling as promised and spent over ?5 billion on roads

:41:58. > :42:00.maintenance in this Parliament. And thanks to the incessant lobbying of

:42:01. > :42:14.my honourable friend for Northampton North, Britain now has a permanent

:42:15. > :42:21.potholes and! -- pothole fund! Nuno Espirito Santo

:42:22. > :42:25.CHEERING We are investing in what we need and

:42:26. > :42:30.in flood defences. The Defra budget will fall by 15% but we are

:42:31. > :42:34.committing more than ?2 billion to protect householders from flooding.

:42:35. > :42:37.Our commitment to farming and the countryside is reflected in the

:42:38. > :42:44.funding of national parks and forests. We won't make that mistake

:42:45. > :42:50.again! I can tell the House that in recognition of the higher costs they

:42:51. > :42:57.face, Mr Speaker, we will continue to provide ?50 off the water bills

:42:58. > :43:01.of South West water customers for the rest of this Parliament. A

:43:02. > :43:08.promise made to the south-west and a promise kept. Investing in the

:43:09. > :43:12.long-term economic structure of this country is the goal of this Spending

:43:13. > :43:19.Review. -- one of the goals. There is no more important structure than

:43:20. > :43:21.energy. We are doubling our commitment to research and

:43:22. > :43:25.supporting the creation of the shale gas industry by ensuring that

:43:26. > :43:31.communities and are fed from a shale wealth fund which could be worth up

:43:32. > :43:35.to ?1 billion, -- that they benefit from a shale wealth fund. The

:43:36. > :43:39.development and sale of ultralow emission vehicles will continue to

:43:40. > :43:44.be supported but in the light of the slower than expected introduction of

:43:45. > :43:48.a more rigorous EU emissions testing we were delayed removal of the

:43:49. > :43:52.diesels supplement from company cars until 2021. We support the

:43:53. > :43:55.international efforts to tackle climate change and to show our

:43:56. > :44:00.commitment to the Paris talks next week as the Prime Minister just

:44:01. > :44:06.explained, we are increasing our support for climate finance by 50%

:44:07. > :44:14.over the next five years. DECC's day-to-day budget will fall,

:44:15. > :44:17.Alderweireld reform the renewable energy initiative and we will

:44:18. > :44:21.permanently exempt energies like chemicals from the cost of

:44:22. > :44:29.environmental tariffs so we keep them competitive and keep them here.

:44:30. > :44:30.I can announce that we are introducing a cheaper domestic

:44:31. > :44:36.energy efficiency schemes that wrap is and is Twitter replaces ego. The

:44:37. > :44:40.new scheme will save an average of ?30 a year from the energy bills of

:44:41. > :44:44.20 former the households. Because this government believes that going

:44:45. > :44:47.green should not cost the earth. And we are cutting other bills, we will

:44:48. > :44:51.bring forward reforms to the compensation culture around minor

:44:52. > :44:56.motorcycle accident injuries which were removed more than ?1 billion

:44:57. > :45:00.from the cost of motor insurance. We expect the industry to pass on the

:45:01. > :45:05.savings so motorists will see an average saving of ?40 -?50 a year

:45:06. > :45:09.from the insurance bills. Mr Speaker, this is a government that

:45:10. > :45:13.backs all our businesses, large and small. We on this side of the House

:45:14. > :45:16.and a standard that there is no growth, no jobs about a vibrant

:45:17. > :45:23.private sector and successful entrepreneurs. -- no jobs without a

:45:24. > :45:27.vibrant sector. Business needs competitive taxes. I've already

:45:28. > :45:32.announced a reduction in our corporation tax rate to 80%. Our

:45:33. > :45:37.overall review of business rates were reported in the Budget. Today I

:45:38. > :45:41.am helping 600,000 small businesses by extending our small business rate

:45:42. > :45:46.relief scheme for one more year. Businesses also need an active,

:45:47. > :45:52.sustained industrial strategy. And that strategy, launched in the last

:45:53. > :45:58.Parliament, continues on this one. We commit to the same level of

:45:59. > :46:01.support for our aerospace and automotive industries, not just for

:46:02. > :46:06.the next five years, for the next decade. Spending on our new cut

:46:07. > :46:11.above centres will increase. We will protect cash support that we give

:46:12. > :46:17.through Innovate UK, we can afford to do this by offering ?165 million

:46:18. > :46:21.of new loans to companies instead of grants, has funds has successfully

:46:22. > :46:26.done for many years. It is one of the savings that helps us reduce the

:46:27. > :46:31.business budget by 17%. In the modern world one of the best ways to

:46:32. > :46:34.back business is by backing science. That is why, in the last

:46:35. > :46:39.Parliament, I protected the resource budget for science in cash terms. In

:46:40. > :46:45.this Parliament I am protecting it in real terms. So that it rises to

:46:46. > :46:50.?4.7 billion. That's ?500 million more by the end of the decade,

:46:51. > :46:55.alongside the ?6.9 billion capital budget as well. Funding the new

:46:56. > :47:00.Royce Institute in Manchester and new agri- tech centres in

:47:01. > :47:04.Shropshire, York, Bedford and Edinburgh, we will come and ?75

:47:05. > :47:09.million to a transformation of the Cavendish laboratory is in Cambridge

:47:10. > :47:13.where our knowledge of the universe was expanded. To make the most of

:47:14. > :47:18.our investment in science I have asked one more of our Nobel Prize

:47:19. > :47:21.laureates, Paul Knows, to conduct a review of the research councils and

:47:22. > :47:22.I want to thank him for his excellent report and will implement

:47:23. > :47:35.his recommendations. Britain is brilliant at culture. One

:47:36. > :47:49.of the best things we can do is invest in culture, made as. --

:47:50. > :47:53.culture, the and is. The core administration budget will fall by

:47:54. > :47:58.20%. I am increasing the cash that will go to the arts Council, our

:47:59. > :48:03.national museums and galleries will keep free museum entry and look at a

:48:04. > :48:08.new tax credit to support their exhibitions. I will help UK sport,

:48:09. > :48:13.which has been living on diminishing reserves, with a 29% increase in

:48:14. > :48:23.their budget, so we'd go for gold in Rio and Tokyo. Mr Speaker, the Right

:48:24. > :48:29.Honourable member and former Home Secretary has personally asked me to

:48:30. > :48:33.support his city's Europe culture in Hull. His campaign has contributed

:48:34. > :48:48.to the arts while his front bench contributes to comedy. The money for

:48:49. > :48:53.a Hull... Mr Speaker, the money for Hull is all part of a package to the

:48:54. > :48:56.Northern Powerhouse which includes funding the iconic new factory in

:48:57. > :49:00.Manchester and the great exhibition in the North. In Scotland we will

:49:01. > :49:09.support the Burrell connection. In London, we will help the V and the

:49:10. > :49:14.science Museum move their exhibitions for display. We are

:49:15. > :49:17.increasing the funding for the BBC World Service so British values of

:49:18. > :49:23.freedom and free expression are heard around the world. And all this

:49:24. > :49:29.be achieved without raiding the Big Lottery Fund as some had feared. It

:49:30. > :49:35.will continue to support the work of hundreds of small charities across

:49:36. > :49:40.Britain. So too will our support for social impact bonds. There are many

:49:41. > :49:44.great charities who work to support vulnerable women. Indeed a point

:49:45. > :49:49.raised in Prime Minister's Questions. The Honourable member for

:49:50. > :49:53.Colchester has proposed a brilliant way to give them help. 300,000

:49:54. > :49:58.people have signed a petition arguing that no VAT should be

:49:59. > :50:03.charged on sanitary products. We already tried the lowest rate

:50:04. > :50:08.allowable under European law. We are committing -- committed to getting

:50:09. > :50:13.the EU to change its rules. The money raised from the tampon tax

:50:14. > :50:24.will fund women's health and charities, and supports charities.

:50:25. > :50:30.The first ?5 million, Mr Speaker... The first ?5 million will be

:50:31. > :50:35.distributed to the ease appeal, Saint lives and women's aid and

:50:36. > :50:40.haven. I invite bids from other such good causes. It is similar to how we

:50:41. > :50:46.use LIBOR funds. Today I make further awards from them. We support

:50:47. > :50:50.a host of military charities from guide dogs for military veterans to

:50:51. > :50:53.care after combat. We renovate our military museums from the Royal

:50:54. > :50:59.Marines and the DDA museums in Portsmouth to the National Army

:51:00. > :51:07.Museum and the former HQ of RAF fighter command in Bentley Priory.

:51:08. > :51:16.In the Budget I funded one of those campaign bunkers. More have emerged.

:51:17. > :51:25.We will support the fellowships awarded by funding the Winston

:51:26. > :51:28.Churchill Memorial trust. We will fund the graves of those who have

:51:29. > :51:33.died fighting for our country since the Second World War and we will

:51:34. > :51:36.contributed to a memorial to those victims of terrorism who died on the

:51:37. > :51:41.bus in Tavistock Square ten years ago. It is a reminder we always face

:51:42. > :51:46.threats to our way of life and we have never allowed them to defeat

:51:47. > :51:50.us. We deliver security so we can spread opportunity. And that is the

:51:51. > :51:55.third objective that drives this Spending Review. We showed in the

:51:56. > :51:59.last five years that sound public finances and bold public service

:52:00. > :52:02.reform can help the most disadvantaged in our society.

:52:03. > :52:11.Inequality is down, child poverty is down, the gender pay gap is at a

:52:12. > :52:17.record low. In the richest now pay more in taxes compared to the rest

:52:18. > :52:22.of the country together. The other side talks of social justice. This

:52:23. > :52:34.side delivers it. We are all in this together. In the next five years, it

:52:35. > :52:37.starts with education. That is the door to opportunity. This Spending

:52:38. > :52:41.Review commits us to a comprehensive reform of the Wade is provided from

:52:42. > :52:45.childcare to college. We start with the largest ever investment in free

:52:46. > :52:50.childcare is working families get the help they need. From 2017 we

:52:51. > :52:55.fund 30 years of free childcare for working families for three and

:52:56. > :53:02.four-year-olds. ?10,000 of childcare costs tax-free. This support will

:53:03. > :53:05.only be available to parents working more than 16 hours a week and with

:53:06. > :53:09.incomes of less than ?100,000. We will maintain the free childcare we

:53:10. > :53:15.offer to the most disadvantaged two-year-olds and support nurseries

:53:16. > :53:20.by increasing the funding to that sector by ?300 million. Taken

:53:21. > :53:24.together that is a ?6 billion childcare commitment to the working

:53:25. > :53:28.families of Britain. Next, schools. We build on our far-reaching reforms

:53:29. > :53:32.of the last parliament that have seen schools standards rise, as

:53:33. > :53:36.exams become more rigorous. We will maintain funding for free info

:53:37. > :53:42.school meals, protect rates for the pupil premium and increase the cash

:53:43. > :53:45.of the dedicated school ground. We maintain the current national base

:53:46. > :53:50.rate of funding for 16 to 19-year-old students for the whole

:53:51. > :53:54.Parliament. We're going to open 500 new free schools and university

:53:55. > :53:58.technical colleges, invest ?23 billion in school building and

:53:59. > :54:02.600,000 new school places. And to help older children make the

:54:03. > :54:05.transition to adult hood and learn not just about their rights but

:54:06. > :54:12.their responsibilities, we will expand the National citizens

:54:13. > :54:15.service. Today 80,000 students go on national citizen service. By the end

:54:16. > :54:31.of the decade we will fund 300,000 students on this. Five years ago 200

:54:32. > :54:35.schools... We will help every secondary school to become an

:54:36. > :54:41.Academy. We will let sixth form colleges become academies as well so

:54:42. > :54:44.they no longer have to pay VAT. We will make local authorities running

:54:45. > :54:47.schools a thing of the past and this will help us save around ?600

:54:48. > :54:52.million from the educational services grant. I can tell the house

:54:53. > :54:56.that as a result of this Spending Review not only is the schools

:54:57. > :55:00.budget protected in real terms what the total financial support for

:55:01. > :55:03.are extended further and higher are extended further and higher

:55:04. > :55:11.education, will increase by ?10 billion. That is a real terms

:55:12. > :55:18.increase for education, too. We are going to phase out the arbitrary and

:55:19. > :55:22.unfair school funding system, which has systematically underfunded

:55:23. > :55:26.schools. Under the current arrangements a child from a

:55:27. > :55:30.disadvantaged background in one school can receive half as much

:55:31. > :55:33.funding as a child in identical circumstances in another school. In

:55:34. > :55:39.its place we will introduce a new national funding formula. I commend

:55:40. > :55:44.the many MPs from all parties who have campaigned for many years to

:55:45. > :55:48.see this day come. It will be introduced from 2017. The Education

:55:49. > :55:53.Secretary will consult in the New Year. Education continues in further

:55:54. > :55:58.education colleges and so do our reforms. We will not cut core adult

:55:59. > :56:03.skills funding for further education colleges. We will protected in cash

:56:04. > :56:07.terms. In the Budget I announced we would replace on affordable student

:56:08. > :56:12.maintenance grants with larger student loans. That saves us more

:56:13. > :56:16.than ?2 billion a year. It means we can extend support to students who

:56:17. > :56:19.have never before had government help. Today I can announce that

:56:20. > :56:23.part-time students will be able to receive maintenance loans, helping

:56:24. > :56:31.some of our poorer students. For the first time we will provide tuition

:56:32. > :56:35.fee loans for those studying in further education, and

:56:36. > :56:37.postgraduates, too. Almost 260,000 extra students will benefit from

:56:38. > :56:44.this new support I am announcing today. Mr Speaker, the

:56:45. > :56:47.apprenticeship programme, the flagship of our commitment to

:56:48. > :56:51.skills, in the last Parliament we wore than doubled the number of

:56:52. > :56:56.apprenticeships to 2 million. By 2020 we want to see 3 million. And

:56:57. > :56:59.to make sure they are high-quality apprenticeships, we will increase

:57:00. > :57:04.the funding per place. The Business Secretary will create a new business

:57:05. > :57:07.led body to set the standards. We will be spending twice as much on

:57:08. > :57:12.apprenticeships by 2020 compared to when we came to office. To ensure

:57:13. > :57:17.large businesses share the cost of training the workforce, I announced

:57:18. > :57:22.in the Budget that we will introduce a new apprenticeship levy from April

:57:23. > :57:27.2017. Today I am setting the rate of 0.5% of the pay bill of an

:57:28. > :57:31.employer. Every employer will receive a ?15,000 allowance to

:57:32. > :57:35.offset against a levy, which means 98% of all employers and businesses

:57:36. > :57:39.who pay bills of less than ?3 million will pay no levy at all. The

:57:40. > :57:45.apprenticeship levy will raise ?3 billion a year and fund 3 million

:57:46. > :57:50.apprenticeships. Those paying will get out more than a pudding. It is a

:57:51. > :57:56.huge reform to raise the skills of the nation and address one of the

:57:57. > :58:00.enduring weaknesses. Mr Speaker, education and skills are run that

:58:01. > :58:04.smacked the foundation of opportunity. We need to help people

:58:05. > :58:08.into work. The number claiming unemployment benefits has fallen to

:58:09. > :58:15.just 2.3%. The lowest rate since 1975. We are not satisfied the job

:58:16. > :58:19.is done. We want to see full employment. Today we can from we

:58:20. > :58:23.will extend the same support and conditionality we can't expect of

:58:24. > :58:27.those on JSA 2/1 million more benefit claimants. Those signing on

:58:28. > :58:31.will to attend the job centre every week for the first three months. We

:58:32. > :58:36.will increase in real terms the help provided to people with disabilities

:58:37. > :58:41.to help them into work. This will be delivered within the 14% savings we

:58:42. > :58:43.make to the Rhys West budget of the Department for Work and Pensions,

:58:44. > :58:50.including by reducing the size of their estate. It is the way to save

:58:51. > :58:54.money while improving the front-line service we offer people and

:58:55. > :59:00.providing more support for those who are the most vulnerable and most in

:59:01. > :59:04.need of help. Mr Speaker, you cannot say you are fearlessly tackling the

:59:05. > :59:09.most difficult social problems if you turn a blind eye to what goes on

:59:10. > :59:12.in our prisons and Criminal Justice Act system. The Lord Chancellor has

:59:13. > :59:17.worked with the lord chief justice and others to put forward a typical

:59:18. > :59:24.that -- typically bold and radical plan to transform our courts so they

:59:25. > :59:28.are fit for the modern age. The money saved will be used to fund an

:59:29. > :59:32.investment in new technology that will bring further and permanent

:59:33. > :59:39.long-term savings and speed up the process of justice. Old Victorian

:59:40. > :59:43.prisons in our cities that are not suitable for rehabilitating

:59:44. > :59:47.prisoners will be sold. This will also bring long-term savings and

:59:48. > :59:50.means we can spend over ?1 billion in this parliament building nine

:59:51. > :59:54.modern new prisons. Today the transformation gets underway with

:59:55. > :59:59.the announcement that the Justice Secretary has just made. Holloway

:00:00. > :00:03.prison, the biggest women's jail in Western Europe, will close. In the

:00:04. > :00:07.future women prisoners will serve their sentences in more humane

:00:08. > :00:13.conditions, better designed to keep them away from crime. Mr Speaker, by

:00:14. > :00:18.selling these old prisons we will create more space for housing in our

:00:19. > :00:20.inner cities. For another of the great social failures of our age has

:00:21. > :00:27.been the failure to build enough houses. In the end, Spending

:00:28. > :00:30.Reviews like this come down to what your priorities are. I am clear that

:00:31. > :00:37.in this Spending Review we choose to build. Above all, we choose to build

:00:38. > :00:42.the homes people can buy. There is a growing crisis of home ownership in

:00:43. > :00:47.our country. 15 years ago around 60% of people under 35 on their own

:00:48. > :00:51.home. Next year it is set to be just half that. We made a start and

:00:52. > :00:56.tackling that in the last Parliament and with schemes like Help to Buy

:00:57. > :01:00.the number of first-time buyers rose by nearly 60%. We have not done

:01:01. > :01:05.nearly enough yet. It is time to do much more. Today we set out our bold

:01:06. > :01:09.plan to back families who aspire to buy their own home. I am doubling

:01:10. > :01:18.the housing budget. Doubling of to ?2 billion per year. And we will

:01:19. > :01:21.deliver 400,000 affordable new homes by the end of the decade and

:01:22. > :01:22.affordable means not just affordable to rent but affordable to buy as

:01:23. > :01:35.well. Biggest house-building programme by

:01:36. > :01:40.any government since the 1970s. Almost half will be starter homes

:01:41. > :01:48.sold at 20% of market value to first time buyers, and those will be

:01:49. > :01:52.banned and the help by shared ownership removing restrictions on

:01:53. > :01:57.shared ownership, who can buy them, who they can be sold on to. The

:01:58. > :02:00.second part of the plan delivers on our manifesto commitment to extend

:02:01. > :02:05.the right to buy two Housing Association tenants. From midnight

:02:06. > :02:08.tonight tenants of five Housing Associations will be able to start

:02:09. > :02:13.the process of buying their own home. Mr Speaker the third element

:02:14. > :02:17.of the plan involves accelerating housing supply, we are announcing

:02:18. > :02:22.further reforms to the planning system so it delivers more homes,

:02:23. > :02:27.more quickly. We are releasing public and suitable for 160,000

:02:28. > :02:31.homes and read designating and used commercial land. Towns. We will

:02:32. > :02:38.extend loans for small builders, regenerate rundown estates and vest

:02:39. > :02:42.over ?300 million in Ebbsfleet, the first Garden City for almost a

:02:43. > :02:47.century. Fourthly Gutmann 12 help address the housing crisis in London

:02:48. > :02:49.with a new scheme, London helped by. Londoners are the housing crisis in

:02:50. > :02:52.London with a new scheme, London help to buy. Londoners with a 5%

:02:53. > :02:56.deposit will be able to get an interest free loan worth 40% of the

:02:57. > :02:59.value of the newly built home. My honourable friend for Richmond Park

:03:00. > :03:05.has campaigned for affordable homeownership in London and today

:03:06. > :03:09.we're back him all the way. The fifth part of the housing plan,

:03:10. > :03:16.addresses the fact that more and more homes are being bought as buy

:03:17. > :03:18.to let, or second homes. Many of these are cash purchases not

:03:19. > :03:24.affected by the restrictions introduced in the Budget on mortgage

:03:25. > :03:29.relief and many are bought by those not resident in this country. People

:03:30. > :03:32.buying a home to let should not squeeze out families who can't

:03:33. > :03:37.afford a home to buy. So I'm introducing new rates of Stamp Duty

:03:38. > :03:40.that will be 3% higher on the purchase of additional properties

:03:41. > :03:45.like buy to lets and second homes. It will be introduced from next

:03:46. > :03:48.April and will consult on the details so that corporate property

:03:49. > :03:57.development is not affected. This extra Stamp Duty will raise almost

:03:58. > :03:59.?1 billion by 2021 and we will reinvest some of that money in local

:04:00. > :04:02.communities in London and places like Cornwall which are being priced

:04:03. > :04:07.out of home ownership. The funds that we raise will help in building

:04:08. > :04:11.these new homes, so this Spending Review delivers a doubling of the

:04:12. > :04:15.housing budget, 400,000 new homes and extra support for London,

:04:16. > :04:25.estates regenerated, the right to buy, payments on buy to let a second

:04:26. > :04:29.homes delivered by a Conservative government will want to help working

:04:30. > :04:37.people to buy their own homes. For we are the builders! Mr Speaker, the

:04:38. > :04:41.fourth and final objective of this Spending Review is national

:04:42. > :04:44.security. On Monday, the prime ministers set at the House the

:04:45. > :04:49.strategic defence and Security review. It commits Britain to

:04:50. > :04:52.spending 2% of our income on defence and details how these resources will

:04:53. > :04:56.be used to provide new got bad for our war fighting military, nuke

:04:57. > :05:03.abilities for special forces, new defences for our cyberspace -- new

:05:04. > :05:09.capabilities, and investments in our intelligence agencies. By 2020-21

:05:10. > :05:15.the single intelligence account will reach ?2.8 billion in the defence

:05:16. > :05:21.budget will rise from ?34 billion today ?240 billion. Britain also

:05:22. > :05:26.commits to spend on our overseas developer and we will reorder and it

:05:27. > :05:34.-- reorientate our budget so that we help the poorest and have a fragile

:05:35. > :05:39.state on the borders. It is in our national interest to do is. The

:05:40. > :05:44.overseas aid budget will increase to ?16.3 billion by 2020. Britain is

:05:45. > :05:48.unique in making these twin commitments to funding both military

:05:49. > :05:52.might and the soft power of international development. It

:05:53. > :05:57.enables us to protect ourselves, protect our influence and promote

:05:58. > :06:02.our prosperity. We do so, supported by the Foreign Secretary and our

:06:03. > :06:06.outstanding diplomatic service. To support them in their vital work I

:06:07. > :06:11.am today protecting in real terms the budget of the Foreign and

:06:12. > :06:16.Commonwealth Office. But Security starts at home. Our police are on

:06:17. > :06:21.the front line of the fight to keep us safe. In the last Parliament we

:06:22. > :06:25.make savings in police budgets. Thanks to the reforms of the Home

:06:26. > :06:28.Secretary and the hard work of police officers, crime fell and the

:06:29. > :06:34.number of neighbourhood officers increased. But reform must continue

:06:35. > :06:38.in this Parliament. We need to invest in new state-of-the-art

:06:39. > :06:42.mobile medications for our emergency services, introduce new technology

:06:43. > :06:47.on borders and increase the counterterrorism budget by 30%. We

:06:48. > :06:48.should allow elected police and crime commission is greater

:06:49. > :06:53.flexibility in those areas where they have been historically low. And

:06:54. > :06:58.further savings can be made in the police as different forces merge

:06:59. > :07:03.their back offices and share expertise. And we will provide a new

:07:04. > :07:07.fund to help with this reform. Mr Speaker, I have had rubbers and

:07:08. > :07:13.Asians from the Shadow Home Secretary that police budgets should

:07:14. > :07:17.be cut by 10%. But now is not the time for further police cuts. Now is

:07:18. > :07:22.the time to back our police and give them the tools to do the job. I am

:07:23. > :07:31.announcing that they will be no cuts in the police budget at all. --

:07:32. > :07:40.there will be no cuts at all. In real terms, protection for police

:07:41. > :07:44.funding. Mr Speaker... The police protect us and we are going to

:07:45. > :07:51.protect the police! CHEERING

:07:52. > :07:56.Mr Speaker. Five years ago, when I presented my first Spending Review,

:07:57. > :08:00.the country was on the brink of bankruptcy and our economy was in

:08:01. > :08:04.crisis. We took the difficult decisions back then, and five beers

:08:05. > :08:09.later, a report and an economy growing faster than its competitors

:08:10. > :08:14.-- five years later. And public finances set to reach is a plus of

:08:15. > :08:18.?10 billion. Today we set out the further decisions necessary to build

:08:19. > :08:22.the future of this country. Sometimes difficult, yes, but

:08:23. > :08:26.decisions that build the great public services that families rely

:08:27. > :08:30.on, build the homes people need, build stronger defences against

:08:31. > :08:33.those who threaten our way of life and build strong public finances

:08:34. > :08:42.upon which all these things depend. We were elected as a 1 nation

:08:43. > :08:45.government. Today, we deliver the Spending Review of one nation

:08:46. > :08:49.government, the guardians of economic security, the protectors of

:08:50. > :08:53.national security, the builders of our better future. This government,

:08:54. > :08:58.the mainstream representatives of the working people of Britain.

:08:59. > :09:06.CHEERING STUDIO: The Chancellor sits down,

:09:07. > :09:10.you spoke for more than one hour. Tonnes of stuff to go through, which

:09:11. > :09:15.we will between now and 3:30pm. The Leader of the Opposition would

:09:16. > :09:23.respond, it's the Shadow Chancellor, John McDonnell. Mr Speaker, like me,

:09:24. > :09:26.you will have witnessed many Autumn Statement 's and statements by the

:09:27. > :09:30.Chancellor of the Exchequer. And you will know that there is such a thing

:09:31. > :09:35.as the iron law of Chancellor 's statements. That law is that the

:09:36. > :09:41.louder the cheers of the statement on the day, the greater the

:09:42. > :09:48.disappointment by the weekend when the analysis goes in! From what we

:09:49. > :09:54.have heard today, we do not need until the weekend for this statement

:09:55. > :09:57.to fall apart. Of the last five years, there has barely been a

:09:58. > :10:04.target that the Chancellor has said that he has not missed or has not

:10:05. > :10:08.ignored. Five years ago, the newly elected Chancellor and the Prime

:10:09. > :10:12.Minister came to this house and want to us that because of the Diagne

:10:13. > :10:19.situation, that our country faced, what was needed -- because of the

:10:20. > :10:25.terrible situation, what was needed was a five-year progress of

:10:26. > :10:29.austerity. Job cuts, cuts and public services, and wage freezes. We were

:10:30. > :10:33.promised specifically by this Chancellor that, by today, the

:10:34. > :10:43.deficit would be eliminated. CHEERING

:10:44. > :10:51.And debts would be under control. And falling dramatically. People put

:10:52. > :10:56.their trust in that commitment. Order! I said earlier, the Prime

:10:57. > :11:04.Minister would be heard, the Shadow Chancellor will be heard too. Order!

:11:05. > :11:09.If people think they are being clever, shouting their heads off,

:11:10. > :11:13.don't bother asking a question. Try to have the sense to realise the

:11:14. > :11:22.conflict between the two. Mr John McDonnell. The Prime Minister also

:11:23. > :11:26.issue and us, Mr Speaker, that it would be hard and sacrifices would

:11:27. > :11:33.be made, we were all in it together. Five years on, can I just say today,

:11:34. > :11:39.this Chancellor has got some front to come to this House and talk about

:11:40. > :11:48.the deficit. And to lecture us about deficit-reduction! Today is the day

:11:49. > :11:52.when the Chancellor was supposed to announce that austerity was over and

:11:53. > :11:56.the deficit was controlled. From what we've heard today, I think they

:11:57. > :12:03.will feel betrayed. The reality is this. After five years, the deficit

:12:04. > :12:10.has not been eliminated, and this year it is predicted to be over ?70

:12:11. > :12:17.billion. Instead of taking five years to eliminate the deficit, as

:12:18. > :12:22.he promised, it will take ten. And debt to GDP will not be the 69% that

:12:23. > :12:29.he promised five years ago, as he said today, it will be 82.5%. And we

:12:30. > :12:36.are potentially to bequeath to our children a debt of ?1.5 trillion.

:12:37. > :12:52.SHOUTING Their debt... The Chancellor... The

:12:53. > :12:58.Chancellor continues to miss... Both sides are still shouting. Very

:12:59. > :13:02.down-market, very low grade. Widely deprecated by the public. How it is

:13:03. > :13:09.that people think that it is legitimate to behave in that way and

:13:10. > :13:14.tried to reconnect with the electorate's disillusioned with

:13:15. > :13:17.politics is bizarre. If some people are so unintelligent that they

:13:18. > :13:21.cannot grasp the point, we did them. John McDonnell. After five

:13:22. > :13:26.years as Chancellor with that level of debt there is no one else for him

:13:27. > :13:30.to blame. There is only so long that you can blame past governments.

:13:31. > :13:36.There are no more excuses for this Chancellor after five years. We were

:13:37. > :13:40.also promised that if sacrifices had to be made to tackle the deficit,

:13:41. > :13:49.not to worry, we were all in this together. No we are not. 85% of the

:13:50. > :13:52.money saved on tax and benefits cuts in the last parliament came out of

:13:53. > :13:59.women's pockets. Disabled people were hit 18 times harder than anyone

:14:00. > :14:10.else. 4.1 children now live in absolute poverty. An increase of

:14:11. > :14:16.500,000 from 2009-2010. And the fiasco of tax credits, demonstrated

:14:17. > :14:22.once and for all that we were not in this together. At the same time as

:14:23. > :14:27.the Chancellor was planning to cut tax credits to working families, he

:14:28. > :14:33.cut inheritance taxes for some of the wealthiest families in this

:14:34. > :14:35.country. When the Chancellor and the Prime Minister were first elected to

:14:36. > :14:41.their positions they were attacked for being posh boys. I disagreed

:14:42. > :14:44.with that strongly. It was not fair. People do not choose what class they

:14:45. > :14:48.are born into the wealth they inherit. Nevertheless if you are

:14:49. > :14:54.fortunate enough to have wealth, or good incomes, the onus is upon us to

:14:55. > :14:59.take particular care when taking decisions about the lives of those

:15:00. > :15:05.last fortunate than yourselves. -- less fortunate. What shocked and

:15:06. > :15:09.angered many, not just in this House but across the country was the way

:15:10. > :15:13.there was no attempt by the Chancellor to understand the effects

:15:14. > :15:20.of the decision to cut tax credits. For many families, and would have

:15:21. > :15:25.been a choice between children being able to go on that school trip like

:15:26. > :15:32.the other children, or having a decent Christmas or a winter coat.

:15:33. > :15:38.Today the Chancellor has been forced into a U-turn on his tax credits.

:15:39. > :15:43.And I want to congratulate the members of this House on all sides

:15:44. > :15:47.who have made this happen. I want to congratulate the members of the

:15:48. > :15:56.other house as well. I am glad that he has listened to Labour, and seen

:15:57. > :16:00.sense. Accent as ever, with this Chancellor, -- we await

:16:01. > :16:03.clarification on the details. Particularly if the limit to two

:16:04. > :16:11.children remains and we are aware of the impact on Universal Credit. It

:16:12. > :16:15.appears that 14,000 families already on Universal Credit will still

:16:16. > :16:20.suffer the full cut. And all families that would nearly qualify

:16:21. > :16:25.for tax credits in 2018 will suffer the full cut under Universal Credit.

:16:26. > :16:29.So this is not a full and fair reversal as we pleaded for. And the

:16:30. > :16:34.Chancellor remains committed to ?12 billion of welfare cuts over this

:16:35. > :16:39.Parliament. And we know where they will fall, on the most vulnerable,

:16:40. > :16:48.the poorest, and those struggling to survive.

:16:49. > :16:57.Some believe the Chancellor is using the deficit and austerity to reshape

:16:58. > :17:02.the role of the British state a Machiavellian scheme. I do not. I am

:17:03. > :17:10.convinced this is sheer economic illiteracy based on incompetence and

:17:11. > :17:18.poor judgment. Poor judgment. Today, only four weeks ago, he

:17:19. > :17:22.brought to this House the Charter for fiscal responsibility. An

:17:23. > :17:25.essential part of this was our essential part of this was our

:17:26. > :17:32.adherence to his welfare cap. We supported it. Today he has broken

:17:33. > :17:37.what we said before. He said what we said before. He said

:17:38. > :17:41.himself, introducing the cap last year, breaking it would be, and I

:17:42. > :17:49.called the Chancellor, a failure of public expenditure control. On his

:17:50. > :17:53.own terms and his own language, condemned. The government is cutting

:17:54. > :18:02.today and not investing in the future. He is putting us all at

:18:03. > :18:06.future risk. Let me say this, I want to congratulate the honourable

:18:07. > :18:19.member for a league for the campaign on policing cuts, forcing a U-turn.

:18:20. > :18:24.We do not forget though... Mr Speaker, we do not forget though we

:18:25. > :18:28.face the highest level of risk from terrorist attacks in a generation.

:18:29. > :18:42.But we have already lost 17,000 police officers under this comment.

:18:43. > :18:45.We know that the first line of intelligence are the offices in the

:18:46. > :18:56.local community. We claimed today as another Labour again and victory.

:18:57. > :19:02.Let me say also, there are concerns now about the impact of the local

:19:03. > :19:09.council cuts and freezers in expenditure on other emergency

:19:10. > :19:12.services. We feel for people's safety as more firefighters jobs are

:19:13. > :19:17.cut and fire stations close as a result of this settlement. In

:19:18. > :19:21.health, the Chancellor has announced he is front-loading part of the

:19:22. > :19:26.additional ?8 billion worth of funding. In reality, this will only

:19:27. > :19:30.plug some of the gap in the huge deficits health trust in our

:19:31. > :19:37.reporting. But the Government is also relying on ?22 billion worth of

:19:38. > :19:43.unrealistic savings to be found. The extra money seems to be coming from

:19:44. > :19:48.the training of nurses, the Public health budget and other aspects of

:19:49. > :19:53.local authority support. This will be a false economy which will cause

:19:54. > :19:58.more burdens to reform the NHS. All of the signs are that we are facing

:19:59. > :20:03.a massive winter crisis in the NHS and yet again we will have two rely

:20:04. > :20:09.on our professional dedication of our staff. The Health Secretary

:20:10. > :20:14.refusing to go to a cast to settle the junior doctors dispute is no way

:20:15. > :20:23.to maintain the morale amongst our NHS professionals. One of the

:20:24. > :20:30.greatest scandals under this Chancellor has been the attack on

:20:31. > :20:36.social care. 3000 beds, 3000 beds have been lost already. And

:20:37. > :20:41.according to the Association of directors of adult services, the

:20:42. > :20:45.Care precept, the 2% announced by the Chancellor, is not nearly enough

:20:46. > :20:50.to fill the funding gap this government has created. The result

:20:51. > :20:54.is that some of the most vulnerable people in our society will be at

:20:55. > :21:01.risk. And more people will be forced to resort to their local hospital

:21:02. > :21:04.further care. -- for their care. We know much more about the scale of

:21:05. > :21:10.people suffering from mental health problems and we welcome the

:21:11. > :21:14.additional devoted to mental health. But it is no use funding through the

:21:15. > :21:21.health service from mental health service when local authority support

:21:22. > :21:24.is being cut as a result. More people will be left vulnerable. In

:21:25. > :21:29.education the Government claims school budgets will be protected.

:21:30. > :21:33.Let me say this. We fear the Government will use the new funding

:21:34. > :21:40.formula to take away from the pupils who most need it, the most deprived.

:21:41. > :21:47.And we will monitor the funding format carefully to ensure equity.

:21:48. > :21:57.In today's statement the Chancellor has announced there would be a

:21:58. > :22:00.settlement that restricts F32 Cats protection. That means sixth forms

:22:01. > :22:06.and further education colleges will be under threat of risk of closure

:22:07. > :22:10.around the country. Just at the time the economy is crying out for a

:22:11. > :22:13.skilled educated workforce, the Government is denying access to

:22:14. > :22:20.young people to the local courses they need. And with regard to

:22:21. > :22:25.childcare announced today, we note it is delayed yet again a load --

:22:26. > :22:32.and other two years. Another delay in a commitment given. The

:22:33. > :22:36.Chancellor's much vaunted increase in house building is cobbled

:22:37. > :22:40.together from reheated promises from the past. The vast majority of

:22:41. > :22:44.already been announced. The Tories should be judged by their actions,

:22:45. > :22:50.not their words. The Chancellor's first act in office was to slash

:22:51. > :22:56.housing investment by 60%. His plans today could still mean 40% less to

:22:57. > :22:59.build the homes we need compared to the investment programme he

:23:00. > :23:03.inherited from Labour. House-building now as a result

:23:04. > :23:12.remains at the lowest in peace time since the 1920s. As the member for

:23:13. > :23:15.Wakefield said this morning, if hot-air built homes, Conservative

:23:16. > :23:24.ministers would have solved our housing crisis. I worry that the

:23:25. > :23:28.vast majority of young people hoping for a new homes will be disappointed

:23:29. > :23:31.by the Chancellor's failure to deliver. His record on building

:23:32. > :23:36.anything so far does not inspire confidence at all. Over the last

:23:37. > :23:39.year the Chancellor has forced himself on to building sites all

:23:40. > :23:44.around the country to secure a photograph with a high visibility

:23:45. > :23:47.jacket. When the Chancellor did his Bob the builder 's speech at the

:23:48. > :23:54.Tory party conference, what he did not tell delegates was that he has

:23:55. > :23:59.an abysmal investment record. Only 9% of the project started under his

:24:00. > :24:03.infrastructure pipeline in two years. In 2012 the announced ?40

:24:04. > :24:10.billion guarantee scheme. Three years on, only 9% has been signed

:24:11. > :24:14.off. In 2011 he announced a ?20 billion pensions infrastructure

:24:15. > :24:17.platform. Four years on, only 1 billion of commitments has been

:24:18. > :24:24.ensured. The construction industry is shrinking and going into

:24:25. > :24:28.recession. He has also failed to invest in skills. The Royal

:24:29. > :24:31.Institute of chartered surveyors has said the biggest infrastructure

:24:32. > :24:33.programmes could grind to a halt unless the Government adopts new

:24:34. > :24:40.measures to tackle the skills and funding. And the most ironic cut of

:24:41. > :24:45.all must be the virtual closure of large sections of the Department for

:24:46. > :24:50.Business, Innovation and Skills. There are 146,000 unfilled vacancies

:24:51. > :24:55.due to lack of a skilled workforce. So naturally the Government's

:24:56. > :25:01.solution is to move to actually close the one department tasked with

:25:02. > :25:05.closing school levels. On the environment, the Government has

:25:06. > :25:10.announced today various measures. Let's be clear. Comment ministers

:25:11. > :25:15.can go to the Paris summit on climate change with the proud record

:25:16. > :25:23.of nearly killing off once flourishing solar energy sector. The

:25:24. > :25:29.international aid budget is supposedly protected but is now to

:25:30. > :25:30.be raided for defence spending. In defence, the Government has

:25:31. > :25:38.previously commissioned and aircraft carriers our last year. And at least

:25:39. > :25:43.woken up to the fact it needed aircraft as well. But the funding of

:25:44. > :25:47.the defence review is to come from ?11 billion worth of cuts with the

:25:48. > :25:52.inevitable loss of thousands of defence worker jobs. Specialist

:25:53. > :25:58.skills will be lost forever. Alongside these cuts are many more

:25:59. > :26:03.to help dig himself out of the financial hole he has got himself

:26:04. > :26:07.into. The Chancellor is selling off whatever public assets he can. This

:26:08. > :26:13.is no longer the family silver up for sale. This is the furniture, the

:26:14. > :26:20.fixtures and the fittings. And we know who is the first in line to

:26:21. > :26:23.buy. I never envisaged that when it came to nationalising I would be

:26:24. > :26:26.outdone by a Conservative Chancellor. The only difference

:26:27. > :26:29.between us is that I would like to bring services like rail back into

:26:30. > :26:32.the ownership of the British people. The Chancellor wants to sell

:26:33. > :26:41.them to the people's Republic of China. Nationalisation is OK for him

:26:42. > :26:48.as long as it is by any other state but ours. To assist comrades

:26:49. > :26:58.Osborne, I brought him along a little red book. Let me quote, Mr

:26:59. > :27:04.Speaker. Order! I want to hear about the

:27:05. > :27:19.contents of the book! I think you'll find this invaluable.

:27:20. > :27:24.You are a rather excitable one. I thought this would help him, Mr

:27:25. > :27:31.Speaker. Let us quote from mouse a junk.

:27:32. > :27:42.The wave. We must learn to do economic work from all who know how.

:27:43. > :27:48.No matter who they are, we must esteem them as teachers, respect

:27:49. > :27:51.them conscientiously but we must not pretend to know what we do not know.

:27:52. > :28:06.I thought it would come in handy for him.

:28:07. > :28:11.Mr Speaker, I am sure... I am sure, Mr Speaker... I am sure, Mr Speaker

:28:12. > :28:15.that Tory backbenchers will be under instruction to shoehorn into their

:28:16. > :28:20.speeches at every opportunity references to the mythical long-term

:28:21. > :28:25.economic plan. What we have been presented with today is not a Lamela

:28:26. > :28:30.-- an economic plan but a political fix. It is not a plan when you

:28:31. > :28:34.ridiculously commit yourself to unachievable forces and leave

:28:35. > :28:38.yourself no room to manoeuvre. It is not a plan when you sell off every

:28:39. > :28:42.long-term asset you have for short-term gain. It is not a plan

:28:43. > :28:47.when you leave important industries to go to the wall, as they have done

:28:48. > :28:50.with steel. And it is not a plan when you cut the support for those

:28:51. > :28:54.in work and leave working families to rely on food banks. And it is not

:28:55. > :29:01.a plan when you force councils up and down the line to close services

:29:02. > :29:05.people depend upon. And it is not a plan when you invest so little in

:29:06. > :29:10.schools and infrastructure and put our future at risk. Instead what we

:29:11. > :29:15.have seen today is the launch of a manifesto for the Conservative

:29:16. > :29:19.leadership election. Our long-term economic security is being

:29:20. > :29:24.sacrificed for the benefit of one man's career. I say to the

:29:25. > :29:29.honourable member from Maidenhead, I say to the honourable lady from

:29:30. > :29:33.Maidenhead, and the honourable member for Oxbridge, don't worry.

:29:34. > :29:37.The economic reality that is emerging in our economy will mean

:29:38. > :29:45.that this will be seen as the apex of the Chancellor's career. The

:29:46. > :29:53.honourable member for Oxbridge... The honourable member... The

:29:54. > :29:58.honourable member for Oxbridge, who exudes classical references in his

:29:59. > :30:02.speech, will recognise in his -- in the Chancellor, Icarus, the boy who

:30:03. > :30:07.flew too close to the sun and burnt and crashed. I fear for the

:30:08. > :30:12.Chancellor it is all downhill from here. On this side the house we will

:30:13. > :30:17.do -- do all we can to ensure he does not take this country and the

:30:18. > :30:24.economy down with him. This debate is about what sort of society we

:30:25. > :30:29.want to live in. In the end this debate is about what sort of society

:30:30. > :30:32.we want to live in. The government is systematically dismantling all of

:30:33. > :30:36.those aspects of our society that make our community worth living in

:30:37. > :30:42.and celebrating. The Chancellor is not just putting our services today,

:30:43. > :30:46.he is selling off our future. There is an alternative. And our

:30:47. > :30:51.alternatives will be that we will eliminate the deficit but we will do

:30:52. > :31:00.it fairly and effectively. We will do it by ensuring that we end the

:31:01. > :31:03.tax cuts to the rich. We tackle tax evasion and avoidance and we invest

:31:04. > :31:09.to grow. And we will grow our economy on the basis of the

:31:10. > :31:13.investments in skills and infrastructure. We will become an

:31:14. > :31:17.addition to the financial centre of Europe with the research in science

:31:18. > :31:21.and technology will become the technology centre of Europe under a

:31:22. > :31:28.government. And that means high skills, high investment, high

:31:29. > :31:32.wages. That is what we are committed to on this side. And that is what we

:31:33. > :31:40.will secure when we returned to office.

:31:41. > :31:46.So, the Shadow Chancellor, John McDonnell, finishes his response to

:31:47. > :31:52.the Chancellor's spending review and Autumn Statement. We leave the House

:31:53. > :31:55.of Commons for the debate, which continues in the tender. If you want

:31:56. > :32:02.uninterrupted coverage of that, you can get it live on BBC Parliament.

:32:03. > :32:04.Let's now take a moment to take you through the headlines from the

:32:05. > :32:11.spending review and Autumn Statement. The main headline today

:32:12. > :32:17.is clearly that tax credit cuts are to be avoided altogether. The cuts

:32:18. > :32:20.planned in July announced by the Chancellor have not been

:32:21. > :32:28.ameliorated, changed, reformed or delayed. They have been avoided

:32:29. > :32:32.altogether. They didn't survive the year, even though he only announced

:32:33. > :32:36.them in July. He also announced that education funding would now be

:32:37. > :32:39.protected in real terms, which takes it beyond the early protection he

:32:40. > :32:48.had given in the March and July budgets of this year, which

:32:49. > :32:53.concentrated on schools. The other headline is that there will be no

:32:54. > :32:57.cuts to police budgets in England and Wales, police being a devolved

:32:58. > :33:01.matter for Scotland, Wales and Northern Ireland. The Chancellor has

:33:02. > :33:08.decided he will not cut the police budget. And the NHS budget in

:33:09. > :33:15.England, with consequent rises in other parts of the UK, will rise

:33:16. > :33:23.from its current ?101 billion a year to 120 billion by the first year of

:33:24. > :33:29.the new parliament, 2021. Housing featured large in the Autumn

:33:30. > :33:33.Statement as well. The Chancellor has doubled the housing budget. His

:33:34. > :33:37.aim is to provide 400,000 new homes, as was leaked to the papers

:33:38. > :33:44.this morning. It is an extension of giving people a discount by homes,

:33:45. > :33:49.provided they are under a certain value. Not for rent, though, an

:33:50. > :33:56.emphasis on home ownership from the Chancellor. The apprenticeship levy

:33:57. > :34:01.is set at 0.5% of an employer's wage bill. It is designed for large

:34:02. > :34:05.employers, to encourage them to do their own apprenticeships, because

:34:06. > :34:12.the more people they came, the less they will have to pay this levy.

:34:13. > :34:33.Capital spending on transport is to increase by a substantial amount.

:34:34. > :34:37.Also today, the Chancellor had to give some new economic forecasts.

:34:38. > :34:54.The first is that public spending will rise to 821 billion by

:34:55. > :34:55.2019-20. But despite a substantial rise in public spending, the

:34:56. > :34:58.Chancellor is still predicting that as a percentage of our GDP, the

:34:59. > :35:04.country's national debt will start to fall. He aims to get us into a

:35:05. > :35:09.budget surplus of just over 10 billion by 2020. There had been

:35:10. > :35:14.speculation that he might not be able to meet that figure, given the

:35:15. > :35:19.demands on extra spending, but he has. He has added 100 million to

:35:20. > :35:25.show he has done better, but I would ignore the 0.1 decimal point on

:35:26. > :35:34.forecasts. They are almost five years out. Growth forecasts are

:35:35. > :35:37.biased up, but only by a smidgen. Essentially, the OBR thinks this

:35:38. > :35:42.economy is going to grow at about 2.5% for the rest of the decade. So,

:35:43. > :39:28.what does all this mean for borrowing?

:39:29. > :39:34.So this is a massive Autumn Statement and spending review, a

:39:35. > :39:38.huge amount of detail. The paperwork is only now coming into the studio.

:39:39. > :39:43.We are getting some of it online. There is a lot to pour over. The

:39:44. > :39:47.devil will be in the detail. And as is always the case, there are things

:39:48. > :39:50.the Chancellor put into the paperwork, but did not tell us in

:39:51. > :39:54.his announcement. He would not be the first Chancellor to do that. We

:39:55. > :39:58.are joined now in the studio by a man who has been described variously

:39:59. > :40:05.as the real Chancellor, the most important man in government you have

:40:06. > :40:10.never heard of, and even one half of George Osborne's brain, which could

:40:11. > :40:15.mean it is but a small half. Rupert Harrison used to be George

:40:16. > :40:22.Osborne's chief of staff. He now works for the massive fund managers

:40:23. > :40:26.Blackrock. And he joins us for what I believe is your first television

:40:27. > :40:31.appearance. Come out from behind the curtain. First, let's get reaction

:40:32. > :40:36.to the speech from our BBC editors. Laura, what is your take on this?

:40:37. > :40:42.George Osborne clearly wants us to see this as, after 2010-2015, which

:40:43. > :40:47.he described as the rescue mission for the economy, is now being on the

:40:48. > :40:53.rebuilding of the economy. He said that by 2020, the state will make up

:40:54. > :40:57.35% of national income compared to nearly 50% when he first took office

:40:58. > :41:01.as Chancellor. That is a significant reshaping of the balance of the

:41:02. > :41:06.economy in the country. Fascinatingly, the huge cheers from

:41:07. > :41:11.the Conservative benches do not hide the fact that there were big climb

:41:12. > :41:17.downs. They were not about his political ideology, but reality.

:41:18. > :41:21.Firstly, on tax credits. Not tinkering or tweaking, but dropping

:41:22. > :41:24.those cuts altogether, although there will still be cuts to

:41:25. > :41:30.universal credit and its report is on. That is a big victory for the

:41:31. > :41:36.House of Lords, the Labour Party and some Tory backbenchers including

:41:37. > :41:41.Boris Johnson. The second big climb down was not cutting the police

:41:42. > :41:45.budget at all. Many people believe in the last few days, after what

:41:46. > :41:50.happened in Paris, it was just not politically possible to go ahead

:41:51. > :41:57.with the kind of cuts that had been expected. Interestingly, two big

:41:58. > :42:01.changes. Labour will claim them as victories, but of course,

:42:02. > :42:05.conveniently for George Osborne, that kills off two of Labour's

:42:06. > :42:09.strongest attacks on the government at a time when they have not been

:42:10. > :42:12.effective at coming up with ways to put him under pressure. I will come

:42:13. > :42:18.to Robert Peston in a minute, because some of this arithmetic

:42:19. > :42:27.needs delving into. Kamal, what do you think? We are seeing a huge

:42:28. > :42:33.movement of costs in three significant ways. Firstly, there is

:42:34. > :42:36.the social care issue. A new tax-raising power will begin to

:42:37. > :42:40.local authorities to pay for social care. Private care providers who are

:42:41. > :42:44.complaining about the cost of social care will say that the ?2 billion

:42:45. > :42:48.raised from that will not go far enough and there will still be a ?1

:42:49. > :42:51.billion shortfall, so he has moved costs from central government and

:42:52. > :42:57.local government. And then the apprenticeship levy, ?3 billion to

:42:58. > :43:02.be raised from the largest private businesses for funding 3 million

:43:03. > :43:05.apprentices by 2020, he says will start again, putting the duty on the

:43:06. > :43:11.private sector to deliver on things like skills, so vital to our

:43:12. > :43:19.economy. And of course, on housing. Direct funding support for housing,

:43:20. > :43:22.businesses and building companies to build houses themselves. Again, he

:43:23. > :43:29.is saying, private sector, it is up to you to solve the supply-side

:43:30. > :43:32.problem in housing. There are lots of questions over whether the

:43:33. > :43:40.housing industry can deliver or even wants to deliver. Or has the skills

:43:41. > :43:43.to deliver. This will be a monotonous repetition over the next

:43:44. > :43:49.announcing big numbers on things announcing big numbers on things

:43:50. > :43:52.like capital investment, transport, they are only announcements, not

:43:53. > :43:56.delivery. The government has found it difficult to deliver the big

:43:57. > :44:02.schemes that the Chancellor says we need to make sure our economy is

:44:03. > :44:08.thriving in the future. The big picture is that there is a big move

:44:09. > :44:11.from responsibility on the state to responsibility on local authorities,

:44:12. > :44:19.devolved powers and the private sector. Robert, here is a Chancellor

:44:20. > :44:23.who has says he has to balance the budget. He is not increasing any

:44:24. > :44:27.data taxes, although there are tax rise is built into this. He is

:44:28. > :44:33.spreading money around all over the press, yet he still says he will

:44:34. > :44:36.reach the surplus. Is there something going on here that we

:44:37. > :44:41.don't know about? It seems suspicious. Well, he has been bailed

:44:42. > :44:46.out by the Office for Budget Responsibility, the forecasting

:44:47. > :44:54.agency he created, forecasting significantly higher tax revenues

:44:55. > :44:57.than it was expecting in July and a significant reduction in interest

:44:58. > :45:04.payments on the government's big debt. That is not to do with new

:45:05. > :45:09.taxes imposed today, that is just the OBR being more optimistic. It

:45:10. > :45:15.says the reason it is more optimistic is because it has new

:45:16. > :45:18.data on the rate at which taxes are now being paid, which has allowed it

:45:19. > :45:26.to make what it thinks is a rational judgment. Let's be clear, these

:45:27. > :45:32.judgments. They are not accurate scientific forecasts is. The OBR

:45:33. > :45:39.might get it wrong. But George Osborne is banking on that windfall.

:45:40. > :45:41.You can see that in the most important women in the Office for

:45:42. > :45:46.Budget Responsibility's enormous book that it publishes when it is

:45:47. > :45:50.the most direct effect of the government's policy decisions has

:45:51. > :46:00.been to push borrowing higher between 2016-17 and 20 219-20. That

:46:01. > :46:08.means the things he has done today, reversing example, the cuts in tax

:46:09. > :46:14.credits, freezing the budget for the police, and limiting cuts in

:46:15. > :46:17.individual departments, the cuts are significantly less than the

:46:18. > :46:25.speculation was and that he outlined. He was talking about 20

:46:26. > :46:31.billion only a few weeks ago. So the direct effect of all of that is to

:46:32. > :46:39.push borrowing higher. But borrowing actually comes down because the OBR

:46:40. > :46:47.thinks the economy's ability to generate tax is better than it was.

:46:48. > :46:55.There is this big shift that he has made. I read it in a blog. You read

:46:56. > :46:58.your own blog? Occasionally. There is a shift in terms of shifting

:46:59. > :47:01.costs, doing a lot of the stuff we expect the state to do from the

:47:02. > :47:07.state, to the private sector. All right. Let me come to Rupert

:47:08. > :47:14.Harrison. How is it credible to suddenly produce a ?27 billion

:47:15. > :47:17.underlying improvement in the nation's finances between July and

:47:18. > :47:19.November? I think it's an interesting pattern. If we think

:47:20. > :47:24.about George Osborne's period of being Chancellor in a sense the

:47:25. > :47:28.first few years were a period where we saw downgrades to the growth

:47:29. > :47:31.forecasts, the eurozone crisis. The second half of the last parliament

:47:32. > :47:35.was when the economy looked to be picking up but tax receipts were

:47:36. > :47:39.perhaps not picking up at the same rate. It looked possible we are now

:47:40. > :47:43.into a third phase where finally the tax receipts are starting to come

:47:44. > :47:48.through and the OBR are moving from what was a cautious view on that,

:47:49. > :47:53.perhaps because the economy's growing they're more confident about

:47:54. > :47:58.earnings. He is assuming ?47 billion, not he, but the OBR, there

:47:59. > :48:02.will be ?47 billion in extra tax without putting tax up because of

:48:03. > :48:07.tax buoyancy. Where is the evidence for that? If you look at the October

:48:08. > :48:13.borrowing figures the October borrowing figures were the worst

:48:14. > :48:18.since October 2009 and that was partly because tax receipts

:48:19. > :48:22.underperformed in every major category, VAT, corporation tax,

:48:23. > :48:27.income tax, national insurance. How is it suddenly produce an extra ?37

:48:28. > :48:32.billion? Two points. We are always don't -- ?47 billion. Don't place

:48:33. > :48:35.too much on one month of data. The whole of the financial year it's

:48:36. > :48:40.still bad. The OBR will have seen those figures but won't have had a

:48:41. > :48:42.chance to radically change their forecasts because of them and

:48:43. > :48:47.probably nor should they because it's one month of figures. The big

:48:48. > :48:50.picture, you should always evaluate big events by the hand the

:48:51. > :48:54.Chancellor is dealt and how he choose to play it. He was dealt by a

:48:55. > :48:59.growing economy and more tax receipts a better hand than he

:49:00. > :49:03.expected but interestingly, he choose to play that hand by

:49:04. > :49:07.essentially taking risks off the table. Instead of new tax cuts or

:49:08. > :49:12.giveaways he is essentially taking the tax credit issue off the table

:49:13. > :49:16.completely, taken police cuts off the table. That's a sign of, first

:49:17. > :49:21.of all, we are early in a parliament and that's a phase where any money

:49:22. > :49:25.you have got you are about reducing risks and also I think a reflection

:49:26. > :49:29.of we have a Government that doesn't have a small majority in the House

:49:30. > :49:36.of Commons. He is taking risks. He is spending the ?47 billion in tax

:49:37. > :49:41.buoyancy the OBR is predicting. He is assuming the - he is also the OBR

:49:42. > :49:46.is assuming that the extra dwroet is going to produce more tax receipts

:49:47. > :49:51.too. The increase in the OBR forecasts are 0. 1 of a percentage.

:49:52. > :49:57.You were in the Treasury. The OBR has no idea whether the economy is

:49:58. > :50:01.going to grow by 2. 4% or 2. 5% by 2018. But the Chancellor's banked

:50:02. > :50:06.it. Several points to that. First of all, they're not his numbers. That's

:50:07. > :50:09.very important. I said the OBR. These are independent numbers he

:50:10. > :50:13.gets given. The OBR has been at the cautious end of the spectrum. Their

:50:14. > :50:16.forecast is still relatively cautious compared to other

:50:17. > :50:22.independent forecasters like the Bank of England. Not for 18-19. If

:50:23. > :50:28.you look at independent forecasts most people don't... City consensus

:50:29. > :50:31.is 2. 5. For the next few years they're at the cautious end and have

:50:32. > :50:34.been for tax receipts. More importantly the main criticism from

:50:35. > :50:37.the Chancellor's opponents has always been you are cutting too

:50:38. > :50:44.much, there is no need to run a surplus. The main accusation

:50:45. > :50:48.normally levied against him is he is too cautious. He is still on these

:50:49. > :50:54.independent numbers delivering a ?10 billion surplus. It's hard to argue

:50:55. > :51:01.he is taking risks on that front. One question and then I will bring

:51:02. > :51:06.in my colleagues. Why did he make such a complete Horlicks of tax

:51:07. > :51:08.credits? We must not lose sight of the fact he is still making ?12

:51:09. > :51:13.billion of save initial Government departments. Why did he get the tax

:51:14. > :51:18.credits wrong? I will answer the question. Why did he brand the party

:51:19. > :51:22.to be... Next thing he does is smash the working poor? It's difficult to

:51:23. > :51:27.save money. You have to see this in the context of a consolidation over

:51:28. > :51:29.?100 billion. It hasn't been done in this country in living memory. You

:51:30. > :51:34.are not going to get everything right. In the last parliament

:51:35. > :51:37.probably sort of lost in the mists of political history now, but we did

:51:38. > :51:40.things, for example, we proposed that after a year of being on

:51:41. > :51:44.jobseeker's allowance it would get cut by 10%. That didn't go down

:51:45. > :51:48.well. We dropped it. We made proposals that we would take child

:51:49. > :51:53.benefit away from higher rate taxpayers, that didn't go down well,

:51:54. > :51:59.we changed the threshold from about 42,000 up to between 50 and 60,000.

:52:00. > :52:02.When you are making ?100 billion plus savings you are not going to

:52:03. > :52:07.get everything right. When you have a problem fix it properly so you

:52:08. > :52:12.don't have to come back to it. He has listened to Denis Healy's, when

:52:13. > :52:16.you are in one hole, stop digging. Why did it take the Chancellor so

:52:17. > :52:20.long to realise the size of this problem? Let's not forget for weeks

:52:21. > :52:25.and weeks the Treasury was digging themselves further in. They were

:52:26. > :52:28.determined that there would be no mitigation. When he finally realised

:52:29. > :52:33.or perhaps it was pointed out to him perhaps by Number 10, just how bad

:52:34. > :52:36.this might have been around the time before the Lords' defeat, in the end

:52:37. > :52:40.he saw he would have to change course. Someone described to me that

:52:41. > :52:47.moment as being the moment when he really decided that he wanted to be

:52:48. > :52:51.Prime Minister, rather than a successful Chancellor. That's a

:52:52. > :52:56.little unfair. The policy is the policy until the policy changes. You

:52:57. > :52:59.can't go hinting in the meantime you might be changing. After today what

:53:00. > :53:04.people are going to remember is he ditched the tax credit cuts. They're

:53:05. > :53:08.not going to remember that he spent months with people speculating. We

:53:09. > :53:12.will! You will, Andrew. Many of his colleagues will. I suspect you are

:53:13. > :53:19.not representative of most people, most voters. You may say that. Watch

:53:20. > :53:27.this programme and tonight and papers tomorrow, they'll get, OK, he

:53:28. > :53:34.listened, he Devoned them. There are sort of slightly intuitive issues

:53:35. > :53:40.raised by the OBR. One, for example, is you have got growth remaining

:53:41. > :53:45.pretty robust. In a global economy actually which is a lot weaker than

:53:46. > :53:50.we thought it would be a few months ago. You are also increasing the

:53:51. > :53:57.costs that are being imposed on the private sector and yet expecting the

:53:58. > :54:01.private sector to increase its investment, not to lay people off. I

:54:02. > :54:06.think just intuitively one wonders actually whether this is going to

:54:07. > :54:10.work out quite as the OBR and the Chancellor assumes? You have to put

:54:11. > :54:16.what are relatively small tweaks today in the context of the big

:54:17. > :54:18.picture, he is still cutting public spending down towards 36%, that's at

:54:19. > :54:23.the near the historical lows in recent history. All right. A quick

:54:24. > :54:28.question from you. I wondered, Rupert, has the housing supply issue

:54:29. > :54:32.which has been a big problem since 2010, how much has that been an

:54:33. > :54:36.issue around the house building companies simply not having the

:54:37. > :54:41.energy or the desire to deliver on housing? If you speak to the chief

:54:42. > :54:46.executives in the house building sector their profits are already up

:54:47. > :54:49.40%. They feel themselves full stretched, they have a massive

:54:50. > :54:52.skills shortage and don't seem to be convinced although they'll make

:54:53. > :54:55.noises today about the announcements made, how much of a problem was it

:54:56. > :54:59.for you and how can it be solved? It's a very good question. It's one

:55:00. > :55:02.of the biggest economic issues that we face as a country. The house

:55:03. > :55:05.building rates are beginning to pick up. There were two big factors and

:55:06. > :55:10.one is the one you are talking about. One big factor was planning.

:55:11. > :55:15.That is now at least a bit better and planning is easier to get. There

:55:16. > :55:19.was an issue that if we go back to the boom years when more houses were

:55:20. > :55:22.building built, about half were built by the big guys, people you

:55:23. > :55:25.are talking about, but there was another sector in the market, the

:55:26. > :55:29.small builder who perhaps would build three or four houses, sell

:55:30. > :55:33.them, move on and build another one. A lot of those guys got wiped out or

:55:34. > :55:36.they're still in debt and banks won't lend to them. There is a

:55:37. > :55:41.supply issue but it's starting to mend. Skills shortage is a huge

:55:42. > :55:44.issue. It's been an issue since I have been in short trousers! We will

:55:45. > :55:51.move on. Fancy getting into politics after this? I am not in politics any

:55:52. > :55:56.more. I know that. Fancy getting into it? I am happy... Like a

:55:57. > :55:59.politician you have learned how not to answer the question, try it! I am

:56:00. > :56:08.enjoying what I am doing. Thank you for being with us, Rupert Harrison.

:56:09. > :56:16.Let's go to Birmingham and Jo. Yes, Andrew, so much to chew over.

:56:17. > :56:20.And the improved state of the public finances has given George Osborne

:56:21. > :56:26.more room, hence he announced he was not going to go ahead with planned

:56:27. > :56:32.cuts on things like tax credits. With that in mind, my guest here,

:56:33. > :56:36.the Conservative leader of Solihull council is here, he has heralded the

:56:37. > :56:40.northern powerhouse, now the Midlands engine, is it as good as it

:56:41. > :56:44.sounds? It's a good deal for Midlands and devolution basically.

:56:45. > :56:48.The new money unlocks ?8 billion worth of new investment for skills,

:56:49. > :56:51.transport connectivity, he has also devolving the skills budget which is

:56:52. > :56:54.important to us to train people up to take those jobs. There are other

:56:55. > :56:59.funds available for the future, as well. It's a pretty good deal at

:57:00. > :57:06.this stage. It will transfer into real growth here in this region? ?36

:57:07. > :57:10.million a year will unlock ?1 billion worth of funding which we

:57:11. > :57:14.can use to create the ?8 billion fund across the West Midlands and

:57:15. > :57:18.that's what we intend to do. The big headline of course and the thing

:57:19. > :57:22.that he faced most opposition to was this cut to tax credits. He said

:57:23. > :57:28.they're not going to go ahead. Labour have already said it's not a

:57:29. > :57:33.full and fair reversal of those planned cuts. Laura is, is that how

:57:34. > :57:36.you see it too? Many working families would have struggled to

:57:37. > :57:41.cope with a cut to tax credits. It's welcome news this is to be avoided

:57:42. > :57:44.and siem sure many families will be relieved to history that. However,

:57:45. > :57:48.people will face a change in their finances as they move on to

:57:49. > :57:53.universal credits. So it's really important that people prepare and

:57:54. > :57:57.plan their finances now so that they can adapt to changes in the future.

:57:58. > :58:00.We already see lots of people struggling with debt or managing

:58:01. > :58:04.bills or balancing working child care. If you do have any worries

:58:05. > :58:07.about your finances or questions, come and talk to Citizens Advice,

:58:08. > :58:10.get advice and we will help you think it through. Is your first

:58:11. > :58:14.impression that those families who are not going to face those cuts

:58:15. > :58:17.coming Barff Christmas, coming into place -- coming before Christmas,

:58:18. > :58:20.coming into place next year will have more time for transition in the

:58:21. > :58:24.hope they'll get higher wages? Absolutely. It's important that

:58:25. > :58:29.people are able to have that time to plan and prepare and come and talk

:58:30. > :58:32.to us to help do that. One of the other big announcements was this

:58:33. > :58:39.increase that councils will be allowed to put on council tax ks up

:58:40. > :58:43.to 2% as long as it's for social care, what will that mean Father a

:58:44. > :58:48.lot of customers? Council tax debt is already one of the biggest issues

:58:49. > :58:51.we help people with at Citizens Advice, it's for people to have

:58:52. > :58:55.support and advice to really help them plan and manage those changes.

:58:56. > :58:58.Thank you very much. Of course for shoppers here just

:58:59. > :59:02.weeks before Christmas they'll be thinking about the money in their

:59:03. > :59:06.pocket and how it's going to affect their personal finances. One of the

:59:07. > :59:13.big announcements was also about the state pension. With us is our

:59:14. > :59:19.personal finances expert. Tell us about peoples' pensions, it's going

:59:20. > :59:23.to go up? It is, we knew this, there wasn't really a lot we didn't know.

:59:24. > :59:28.We already had worked out how much the state pension was going to be

:59:29. > :59:30.because of the triple lock. We knew as soon as the inflation and

:59:31. > :59:38.earnings figures came out how much it was going to be. It's going up by

:59:39. > :59:44.?3. 35 to ?119. 30. That's what they call the old state pension, that's

:59:45. > :59:49.the one that's before the April 2016 changes. The key thing that was new

:59:50. > :59:56.that we do know because it was announced for the first time today

:59:57. > :00:03.is that this new state pension, the so-called flat rate, which isn't at

:00:04. > :00:08.all, but that's going to be 1 a 55. 65. George Osborne always said this

:00:09. > :00:14.will be above the level of pension credit under the old system. It's 5p

:00:15. > :00:19.so he has kept his promise, but not by a great deal. We will have to

:00:20. > :00:25.leave it there. Keep economies and e-mails coming to us and we will try

:00:26. > :00:29.and get some next time. -- questions and e-mails. Thank you. As they were

:00:30. > :00:33.saying there the state pension is going up to over ?119, if you were

:00:34. > :00:41.worried about losing your tax credits as a result of the July

:00:42. > :00:47.budget, that will now not happen. You will not see a dmination at

:00:48. > :00:51.least until welfare credit comes in. If you were worried that the

:00:52. > :00:54.Government at a time of heightened security threat was going to cut

:00:55. > :00:59.police numbers, then the Chancellor said he is not going to do so.

:01:00. > :01:03.Some of the issues that affect everybody in the country, rather

:01:04. > :01:06.than just a great number crunching. But the number crunching is

:01:07. > :01:12.important. That tells us whether or not the Chancellor's projections are

:01:13. > :01:16.credible. The man who gets to mark the Chancellor's homework is Paul

:01:17. > :01:23.Johnson, director of the Institute for Fiscal Studies. I am sure he has

:01:24. > :01:26.his red pen. We are puzzled here as to how the Chancellor still

:01:27. > :01:29.determined to get a surplus by the end of this parliament has so much

:01:30. > :01:35.money to do so many things. Is it credible? .

:01:36. > :01:43.Well, he got lucky in that there are more tax revenues expected to come

:01:44. > :01:49.in and he will be spending a bit less on debt interest. He has also

:01:50. > :01:53.increased taxes reasonably significantly. There is a 3 billion

:01:54. > :01:58.cost on is Mr pay for the new apprenticeship. Wasn't that in the

:01:59. > :02:03.Labour manifesto? I don't know. I think it might have been. It wasn't

:02:04. > :02:08.in the figures in July. And there have been increases in council tax

:02:09. > :02:15.and some other increases. So he has done thee things, taken advantage of

:02:16. > :02:18.increased revenues, he has increased tax a bit and he has used that money

:02:19. > :02:25.to damp down the cuts in spending. to damp down the cuts in spending.

:02:26. > :02:29.And because the cuts in spending were on a relatively limited part of

:02:30. > :02:36.government, the effect of that bit of extra money is to significantly

:02:37. > :02:43.reduce the overall level of cuts. But everyone is assuming the economy

:02:44. > :02:50.will grow by roughly 2.5% a year till the end of the decade. We knew

:02:51. > :02:53.that interest rates were staying low for another while yet and that that

:02:54. > :02:58.would affect the debt interest, the service on the national debt that he

:02:59. > :03:01.had to pay. We know that if an economy is growing, there is a

:03:02. > :03:06.certain buoyancy in tax revenues at some stage. So if we knew all that,

:03:07. > :03:13.why does all this come as a surprise? Therein lies the risk. The

:03:14. > :03:16.changes in the OBR's forecasts are small. They are if you billion

:03:17. > :03:22.pounds, but you are five years out in terms of tax revenues and the

:03:23. > :03:29.economy. Those are small changes, and the Chancellor has used most of

:03:30. > :03:32.and reduce the spending cuts he and reduce the spending cuts he

:03:33. > :03:37.would otherwise have done. The risk for him is that if that turns just a

:03:38. > :03:42.bit, as it may well do, he will have to do more in terms of tax increases

:03:43. > :03:46.or go back to those departments and cut them further. In the last

:03:47. > :03:50.Parliament, when things looked worst, he did not increase spending

:03:51. > :03:54.cuts to meet his target. This time, when things are looking better, he

:03:55. > :04:00.is not using that to have a bigger surplus to have tax cuts, he is

:04:01. > :04:06.using it to protect public services. This is the Chancellor's third

:04:07. > :04:14."Budget" this year. It is a form of Budget called the Autumn

:04:15. > :04:17.Statement/spending review. If there is a 27 billion difference in the

:04:18. > :04:25.underlying improvement in revenues between July this year and

:04:26. > :04:28.mid-November, when these figures were put together, he should have a

:04:29. > :04:35.Budget every three months if the figures are so wrong! Please, don't

:04:36. > :04:42.wish for that! 27 million is one of these silly numbers. But it allows

:04:43. > :04:48.him to get the surplus. It only comes out to 4 billion or 5 billion

:04:49. > :04:52.in the end, plus he has 6 billion in tax increases in the end. The reason

:04:53. > :04:59.it makes such a big difference is that he is only playing with a small

:05:00. > :05:04.bit of public spending. The whole of welfare is separate. Why didn't you

:05:05. > :05:11.see this coming? You are the expert. We don't do anything unless

:05:12. > :05:15.you tell us. We have always said there is a lot of risk around this

:05:16. > :05:21.because of the Guerin between a relatively small amount spending and

:05:22. > :05:25.small changes in taxing and borrowing. If you look at these

:05:26. > :05:31.numbers, there are still some big cuts. There's a 15% cut for justice,

:05:32. > :05:35.there are still cuts for local governments and big cuts in

:05:36. > :05:38.day-to-day spending for transport. There is 12 billion of cuts for

:05:39. > :05:44.those unprotected departments, which is still a substantial cut. It is

:05:45. > :05:48.not as big as it would have been in the July Budget numbers, because the

:05:49. > :05:53.Chancellor has decided to use the extra money he has not to cut taxes

:05:54. > :06:01.or increase the surplus, but to protect public services. To that

:06:02. > :06:06.extent, given that the political strategy was to move the

:06:07. > :06:10.Conservatives on to the centre ground in the July Budget as they

:06:11. > :06:13.saw Labour moving to the left, there were a lot of things in the July

:06:14. > :06:22.Budget that had been in the Labour manifesto, this is a continuation of

:06:23. > :06:25.that? It is certainly using the money not to do what you might think

:06:26. > :06:32.of as conservative things like cutting taxes and increasing

:06:33. > :06:35.spending. He has used it to increase spending. It is important to be

:06:36. > :06:40.clear that he has changed nothing in the long-running. In the long one,

:06:41. > :06:45.the cuts to universal credit that were announced in the July Budget,

:06:46. > :06:53.which are on a similar scale to the cuts to tax credits, will come in.

:06:54. > :07:02.Politically, he has got through that. It is just a matter of time.

:07:03. > :07:06.So the kind of cuts that were envisaged in the July tax credit

:07:07. > :07:12.statement do it eventually come round in a different way by the time

:07:13. > :07:16.universal credit comes in? People on tax credits should realise that.

:07:17. > :07:20.Nobody will face the cash losses they would have faced with the tax

:07:21. > :07:24.credits because, even as you go on to universal credit, you are

:07:25. > :07:31.protected relative to what you were on tax credits. But every new

:07:32. > :07:35.claimant will get the new amount. So George Osborne is achieving what he

:07:36. > :07:42.wanted. But he has postponed it. Robert? It is worth pointing out

:07:43. > :07:51.that if you look at all of the managed spending, it is now flat in

:07:52. > :07:56.real terms, adjusted for inflation, throughout the Parliament. In other

:07:57. > :08:01.words, this is not a government that is any longer cutting. This is the

:08:02. > :08:09.moment when one can say that austerity, in the extreme form, is

:08:10. > :08:12.over. Within that, because there are number of departments that get

:08:13. > :08:21.useful increases, defence is up 2.3%, a reasonable increase, health

:08:22. > :08:28.is up 3.3%. Because of these protective departments, they're big

:08:29. > :08:32.cuts elsewhere. One should not underestimate that this will be

:08:33. > :08:38.painful for those who depend on the services provided by those

:08:39. > :08:40.departments. But this is not the kind of Armageddon that people were

:08:41. > :08:50.talking about before the general election. It is a big political

:08:51. > :08:56.shift. Laura, can we say he has decided not to cut taxes in the old

:08:57. > :09:00.Tory weight but to increase public spending, not to cut the police and

:09:01. > :09:04.rent back on tax credit, is it a continuation of the Chancellor's

:09:05. > :09:09.strategy to put his tanks on the centre ground? No question about it.

:09:10. > :09:12.Particularly after his speech at the conference, that was an attempt to

:09:13. > :09:18.roll his tanks onto Labour's lawn, and we have seen it again today.

:09:19. > :09:23.Here, he could have chosen to pay down the debt quicker. He could have

:09:24. > :09:26.chosen to pull back further. We are four years from a general election

:09:27. > :09:35.with a Labour opposition that have not found a groove yet. That may

:09:36. > :09:45.well be part of the story today. We have got so much to pack in. Paul

:09:46. > :09:51.Press conference tomorrow? Of Press conference tomorrow? Of

:09:52. > :09:54.course. Excellent. Now, in the run up to today's statement, we heard

:09:55. > :09:58.some dire warnings about the impact of spending cuts on front line

:09:59. > :10:02.policing, but as we have been saying, a surprise announcement is

:10:03. > :10:06.that the Chancellor did not do as much as people said he was planning.

:10:07. > :10:10.He decided there would be no further cuts to police budgets in England

:10:11. > :10:13.and Wales. There has been a meeting of chief constables and elected

:10:14. > :10:16.police and crime commission is taking place at Manchester Townhall

:10:17. > :10:23.today. It is being covered by our home affairs correspondent, who is

:10:24. > :10:33.there now. What has been the reaction? As you say, this was a

:10:34. > :10:38.dramatic, unexpected announcement. We were all expecting cuts of up to

:10:39. > :10:42.25% for police in England and Wales. Perhaps the Chancellor would pull a

:10:43. > :10:45.rabbit out of his hat to soften the blow. Instead, he said no cuts at

:10:46. > :10:53.all for policing until 2020. Joining me to gauge the reaction is Kevin

:10:54. > :10:58.Hurley, the Police and Crime Commissioner for Surrey. You were

:10:59. > :11:02.watching the announcement. What was the response? It was almost like

:11:03. > :11:06.euphoria if your football team had scored a goal. The Police and Crime

:11:07. > :11:11.Commissioner 's and chief constables are delighted. Of course, we should

:11:12. > :11:15.remember that we are already in the process of implementing cuts. So all

:11:16. > :11:21.is not well in the world and we will seek further reductions in policing,

:11:22. > :11:26.but this is good news. Fair play to the Chancellor. He has listened, and

:11:27. > :11:31.we are happy. Can you explain why you have to make further cuts?

:11:32. > :11:36.Shouldn't it stop now? No, because the budgets are allocated further

:11:37. > :11:42.upstream. So we have plans for the next three years where we will

:11:43. > :11:46.gradually reduce staff. Some forces will be cut significantly. In

:11:47. > :11:50.Surrey, it will not be so bad. But the good news is that the Chancellor

:11:51. > :11:55.will also allow us to take some extra money on the council tax

:11:56. > :11:59.side, which means some forces such as mine in the wealthier south can

:12:00. > :12:05.be almost completely cosseted from this. It will not be so good in the

:12:06. > :12:08.north. Dr Steve Davis from the Institute of Economic Affairs, what

:12:09. > :12:14.do you think has brought about this shift in George Osborne's thinking?

:12:15. > :12:17.I think he has got better than expected figures for the annual

:12:18. > :12:22.growth rate, so he now thinks that economic growth and higher tax

:12:23. > :12:28.receipts will save him the political pain of making such large cuts. To

:12:29. > :12:32.add to what Kevin said, it is worth bearing in mind that there was a 31%

:12:33. > :12:37.real increase in police spending between 2001 and 2010. The cuts we

:12:38. > :12:43.have had so far have taken us back to where we were in 2003. I don't

:12:44. > :12:49.remember there being a complete collapse of policing at that time.

:12:50. > :12:53.Had the anticipated cuts taken place, they would have taken us back

:12:54. > :12:57.to 2001. So our police now going to be binning or the plans they had to

:12:58. > :13:02.make cuts of up to 25%, and should they do that? Well, they will be in

:13:03. > :13:06.a lot of the plans they had, although some things are already in

:13:07. > :13:09.train that they will put through. But I think they should take this as

:13:10. > :13:18.an opportunity to think about how they might reorganise the way they

:13:19. > :13:21.work. Do we need 43 police forces, for example? Why do we have each

:13:22. > :13:26.police force buying its own equipment? It makes more sense to do

:13:27. > :13:31.that nationally. And that question remains. Should always be thinking

:13:32. > :13:35.about that. Private sector businesses typically look to reduce

:13:36. > :13:39.their costs by 4% every year. There is no reason why the public sector

:13:40. > :13:44.should not also look to spend money more effectively. A final word from

:13:45. > :13:52.Kevin. There was news about extra funding for firearms capability.

:13:53. > :13:56.That is really good news. And I agree that 43 police forces is a

:13:57. > :13:59.silly business model. I would like the Police and Crime Commissioner to

:14:00. > :14:04.be made redundant. Let's reduce the number of forces. Perhaps George

:14:05. > :14:08.Osborne and Theresa May are listening. If they are, I am sure

:14:09. > :14:18.they will take note for the next announcement of government plans.

:14:19. > :14:20.That is the view from Manchester. That is the first voluntary

:14:21. > :14:25.redundancy offer we have had today. Let's go to Jane Hill on College

:14:26. > :14:30.Green. Yes, let's get reaction to everything we have heard from the

:14:31. > :14:36.Liberal Democrats and from Ukip, Baroness Kramer is with me and

:14:37. > :14:41.Douglas Carswell, Ukip MP. I want to talk about tax credits and the

:14:42. > :14:45.police. We were just listening to that, and you made some strident

:14:46. > :14:50.points about what is going on here. On the face of it, positive that

:14:51. > :14:54.there no cuts to police. It is interesting. George Osborne has said

:14:55. > :14:57.no cuts to the police budget, but in the small print, we will see a

:14:58. > :15:02.massive increase in the police precept. So the government in

:15:03. > :15:05.Whitehall will not get blamed for that, but local police and crime

:15:06. > :15:09.commissioners will get it in the neck. George has been clever in

:15:10. > :15:15.shifting responsibility for finance for the police. That is politics. It

:15:16. > :15:21.is good politics. I am not sure it is great for the country. We need a

:15:22. > :15:24.Chancellor who understands that we need new priorities. This is the

:15:25. > :15:30.first year where the Home Office budget will be less than the

:15:31. > :15:33.overseas aid budget. This is going to be really tough for more deprived

:15:34. > :15:38.communities. Council taxpayers will suddenly find there is a charge

:15:39. > :15:42.turning up to pay for the police and to pay for all people with the

:15:43. > :15:45.social care budget, and it will fall hardest on the most deprived

:15:46. > :15:51.communities that have the least ability to raise council tax. At the

:15:52. > :15:56.same time, they will get less money on their business rates. Kensington

:15:57. > :16:01.and Chelsea can go home laughing, but if you are a deprived community,

:16:02. > :16:07.did you get whacked today? There is more and more pressure being put on

:16:08. > :16:10.local councils. And I worry about the bus network, because we just

:16:11. > :16:14.heard that the central Department for Transport will have its

:16:15. > :16:20.operational budget slashed. Does that mean that paying for buses

:16:21. > :16:22.outside of the big cities will now fall on councils as well? There are

:16:23. > :16:32.a lot of issues. If I could sum it up, this is a

:16:33. > :16:38.Blairite budget. The Labour Party has lurked so far to the extreme

:16:39. > :16:42.left, their shadow Chancellor was even quoting Chairman Mao, that's

:16:43. > :16:45.allowed George Osborne to create a space for a Blairite budget. It

:16:46. > :16:52.sounds better than it turns out to be. There is a lot in the small

:16:53. > :16:57.print that we will find unpalatable. Do you understand how he has done

:16:58. > :17:01.it, still talking about welfare cuts and auto U-turn on tax credits which

:17:02. > :17:06.I assume makes you happy? We still have ?12 billion in welfare cuts so

:17:07. > :17:09.it's coming. There has been magic with what's going to come in in

:17:10. > :17:14.terms of tax receipts and br owing to offset some changes he has made.

:17:15. > :17:19.We still have ?12 billion cuts in welfare. I am delighted that he

:17:20. > :17:23.stopped the cuts for tax credits on working families. And one of the

:17:24. > :17:28.ironies is had George Osborne been in the House of Lords he would have

:17:29. > :17:30.voted for the Democrat motion to absolutely kill those cuts in tax

:17:31. > :17:37.credits stone dead. He wouldn't have voted with either the Labour Party

:17:38. > :17:43.or the Conservatives. Interesting. Thank you both very much for your

:17:44. > :17:48.reactions. Andrew, back to you. Thank you. The sun looks like it's

:17:49. > :17:54.come out there. We are always kept in the dark here! We are grateful

:17:55. > :17:58.for that picture. A moment ago we went through a number of issue that

:17:59. > :18:05.had come up in this budget. Let's just go through them again.

:18:06. > :18:09.Here are the main measures announced in this Autumn Statement/Spending

:18:10. > :18:12.Review. Tax credits announced in the July post-election budget. The

:18:13. > :18:17.changes planning, cuts planning have been cancelled in their entirety.

:18:18. > :18:22.But there will still be universal credit coming in which will embody

:18:23. > :18:26.some of what the tax credit cuts had involved. We will talk about that in

:18:27. > :18:32.a minute. There will be no cuts to the police

:18:33. > :18:35.budget in England and Wales. There was thought the Chancellor was

:18:36. > :18:39.under pressure to reduce the cuts he was planning, the result is that

:18:40. > :18:43.there are no cuts at all. I think the word Paris comes into

:18:44. > :18:51.mind when you look at that. NHS budget in England will rise from

:18:52. > :18:54.?101 billion today to ?120 billion by 2020-21 and rises for the health

:18:55. > :19:02.budgets in Scotland, Wales and Northern Ireland.

:19:03. > :19:06.And, as local authorities are squeezed and one of the main roles

:19:07. > :19:10.in the community is to provide social care, as that money gets

:19:11. > :19:16.squeezed, there they will be allowed to increase council tax by 2% to pay

:19:17. > :19:22.for social care. And only social care. What else?

:19:23. > :19:27.We have got a ?10 billion increase for education and child care, that's

:19:28. > :19:33.through the life of the parliament, over five-year period. An

:19:34. > :19:37.apprenticeship levy eight at 0. 5% of employer's wage bill. This is

:19:38. > :19:40.mainly designed for major employers to encourage them to do more to give

:19:41. > :19:45.people apprenticeships and skills and if they do that, they get some

:19:46. > :19:50.of that levy back. It's actually not a new idea. It was introduced by the

:19:51. > :19:54.Wilson Government in a version of it in the 1960s. There it is around

:19:55. > :20:01.again. And 400,000 new homes, the big story

:20:02. > :20:04.leaked overnight to the papers and broadcasters.

:20:05. > :20:08.The Government getting into the property development business.

:20:09. > :20:12.It seems to have a pot of money of about ?7 billion able to do that.

:20:13. > :20:17.Capital spending on transport to increase, as well.

:20:18. > :20:22.That's by the end of the decade. Capital spending to rise by 50% even

:20:23. > :20:25.as the adminive bill for the transport department is cut as the

:20:26. > :20:29.Government tries to find ways to save money.

:20:30. > :20:32.We spoke a while ago to the former advisor to George Osborne, giving

:20:33. > :20:36.him his first interview on television. We are joined now by

:20:37. > :20:40.another former adviser to the Chancellor, he had a lot of them,

:20:41. > :20:43.Matt Hancock, it's definitely not his first interview and probably not

:20:44. > :20:48.his last either. You can be the judge of that. Depends what happens!

:20:49. > :20:52.He is a Minister from the Cabinet Office. Can we now enter the

:20:53. > :20:56.department of honesty. And admit that if it hadn't been for the

:20:57. > :21:00.attacks in Paris we would not be seeing a freeze in any further cuts

:21:01. > :21:04.to the police budget? Well, this Spending Review has been in the

:21:05. > :21:10.planning for several months. You know, I don't know exactly when that

:21:11. > :21:14.decision was taken. Crucially, the whole purpose of the Spending Review

:21:15. > :21:19.is centred around national security and economic security. That goes

:21:20. > :21:21.back to the manifesto, we set out the manifesto, it was about national

:21:22. > :21:25.and economic security and national security of course includes all the

:21:26. > :21:29.defense items that were outlined this week. But it's also about

:21:30. > :21:34.safety closer to home. Before Paris the Home Secretary was digging in

:21:35. > :21:38.her kitten heels and trying to avoid any further cuts to police budgets.

:21:39. > :21:41.The Treasury was pushing them to come up with more as part of the

:21:42. > :21:47.departmental round of cuts the Treasury needed. Now there are to be

:21:48. > :21:51.no cuts. What happened in between, it's Paris. It would seem crazy most

:21:52. > :21:54.people would think for a Conservative Government or any

:21:55. > :21:58.Government to proceed with cuts to the police budget beyond what you

:21:59. > :22:02.have already introduced. That's the truth of the situation, isn't it? I

:22:03. > :22:10.don't know exactly when that decision was taken. Crucially, the

:22:11. > :22:16.question is what do you do over a four-year Spending Review and how do

:22:17. > :22:19.you spend the four trillion worth of taxpayers' money and as national

:22:20. > :22:23.security and economic security are the bedrock of what we feel that we

:22:24. > :22:28.were elected on, independenting it's perfectly reasonable to make sure

:22:29. > :22:33.the police are protected. At a time when this country faces the greatest

:22:34. > :22:36.terrorist threat in its history, terrorist threat, not the greatest

:22:37. > :22:41.threat ever, the Nazis obviously beat that one, the terrorist threat,

:22:42. > :22:46.bigger than the 30-year war from the IRA. In what way does it make sense

:22:47. > :22:50.for the overseas aid budget now to be bigger than the Home Office

:22:51. > :22:55.budget? Hold on, look at what we are going to be doing with the aid

:22:56. > :22:58.budget. Of course you have to be working around the world and our

:22:59. > :23:04.moral obligation to the world's poor, we signed up for that. We are

:23:05. > :23:10.also redirecting the aid budget to support failed states on Europe's

:23:11. > :23:14.borders. No, that may work down the road. I hope it does. But if you

:23:15. > :23:19.have been following the news in Paris and Belgium you will be aware

:23:20. > :23:24.that a lot of the bad guys are already here. The overseas aid is

:23:25. > :23:27.for future years. They're here or heading this way now. Yet you are

:23:28. > :23:32.spending more on overseas aid than you are on the Home Office. Does

:23:33. > :23:37.that really make sense? The whole package makes sense because we are

:23:38. > :23:44.protecting the police budget. We are increasing the counterterrorism

:23:45. > :23:48.element of the budget by 30%. We are increasing more conventional defense

:23:49. > :23:53.with the defense review we saw. I am talking about the terrorist. We are

:23:54. > :23:57.making sure when we spend aid money we are spending it at source trying

:23:58. > :24:02.to stop the terrorists threat at source. Let me give you an example.

:24:03. > :24:08.No, but the point, these people... That may stop them coming. That may

:24:09. > :24:12.stop them coming in five years, a couple of ?200million will do in

:24:13. > :24:17.Somalia or Syria is another matter. I am talking about the ones already

:24:18. > :24:22.on their way or already here. We need to tackle both. You are right

:24:23. > :24:25.on that level. We have to support police domesticicly, we have to

:24:26. > :24:29.support counterterrorism and officers and the agencies, but we

:24:30. > :24:35.also have got to do everything we can to stop failed states and to

:24:36. > :24:40.make sure that in those refugee camps people don't come here with

:24:41. > :24:44.the risk attached, especially if foreign fighters come, of then

:24:45. > :24:48.bringing terrorism with them. I think that an overall package that

:24:49. > :24:51.includes protection at home and trying to support failed states on

:24:52. > :24:56.Europe's borders makes sense. You have to look at the whole thing as a

:24:57. > :24:59.package, all about national security and economic security. What kind of

:25:00. > :25:04.Government comes up with a major change to tax credits in July and

:25:05. > :25:10.abandon it is in November? Well, we got an improved set of forecasts.

:25:11. > :25:15.These forecasts said there was ?27 billion extra. And that allow us us

:25:16. > :25:19.to bring the debt down faster than we were planning to in the July

:25:20. > :25:21.budget. And also to spend more on capital infrastructure, which is

:25:22. > :25:26.important, I think you probably agree. Were you wrong to introduce

:25:27. > :25:31.these tax credits in the first place? I thought they were sensible

:25:32. > :25:35.measures. Why are you not proceeding with them? We lost in the House of

:25:36. > :25:41.Lords. You could have gone back. The difference between then and now is

:25:42. > :25:44.that in the new forecasts the OBR said they expect ?27 billion extra

:25:45. > :25:48.and I think it's a perfectly reasonable use of some of that money

:25:49. > :25:55.to mitigate the impact of this change. The key point is this, on

:25:56. > :25:59.benefits we were elected on a mandate to find ?12 billion worth of

:26:00. > :26:03.benefits savings. We discussed that loads at the time. You never told us

:26:04. > :26:06.what they would be. We didn't specifically say which ones it would

:26:07. > :26:11.be. We are going to meet the ?12 billion but we are going to do it in

:26:12. > :26:13.a different way to how we set out at the previous budget but we have the

:26:14. > :26:18.money. Can we stay in the department of honesty and just be clearer,

:26:19. > :26:21.although the tax credit cuts are not going to hit people now, when

:26:22. > :26:25.universal credit comes in elements of what you were planning to do in

:26:26. > :26:30.the tax credits will be introduced? You will limit the child element in

:26:31. > :26:35.tax credits to two children from April 17 who are abolishing the

:26:36. > :26:40.family element in tax credits worth ?540 a year. This is simply some

:26:41. > :26:43.pain for the poorest families postponed, not eliminated? That's

:26:44. > :26:47.not quite right. We are still making the ?12 billion of savings that we

:26:48. > :26:50.said in the manifesto that we would make and we are still meeting the

:26:51. > :26:57.?10 billion of surplus by the end of the parliament that we set out in

:26:58. > :27:02.July. But the difference is that when people move on to universal

:27:03. > :27:05.credit, unless their circumstances change, they're protected and so

:27:06. > :27:12.they don't lose cash in cash terms. That means that you can make this

:27:13. > :27:17.transition in a far more sensible way and make sure that we get the

:27:18. > :27:21.savings to the benefits savings by the end of the parliament that are

:27:22. > :27:26.just as big as we planned. Crucially, it is delivering on what

:27:27. > :27:36.we promised in the manifesto. We are up against the time limit, we have

:27:37. > :27:39.to deal with other parts of the great... It's interesting when you

:27:40. > :27:43.start going through the detail. There is some analysis of what the

:27:44. > :27:49.Chancellor's statement really means. This is a big tax-raising Autumn

:27:50. > :27:54.Statement. Tax-raising on businesses, you have the apprentice

:27:55. > :28:00.levy we spoke about, the stamp duty increase we have spoken about. Also

:28:01. > :28:03.a lot of transference of grants for research and development support

:28:04. > :28:07.being changed into loans. Business corporation tax too. What we are

:28:08. > :28:10.going to get out of this, when you go through the detail, I am looking

:28:11. > :28:15.at the business department, the Government will reduce the teening

:28:16. > :28:18.grant by ?120 million, they're -- teaching grant. Changing grants to

:28:19. > :28:22.loans. There is a lot of cuts in here which are small scale. There

:28:23. > :28:25.will be overwhelmed by the announcements on the tax credits and

:28:26. > :28:30.announcements on security, but in here is actually a lot of

:28:31. > :28:34.tax-raising powers which actually means that this is not a giveaway

:28:35. > :28:37.Autumn Statement in the slightest, but actually it's raising large

:28:38. > :28:42.amounts of money as well as all the issues made. What other bits are

:28:43. > :28:44.hidden in the small print? Well, loads and loads of changes because

:28:45. > :28:48.we are reforming the way that the state works. You have hidden loads

:28:49. > :28:52.and loads of changes in the small print? No, the Chancellor set out in

:28:53. > :28:57.the big things in the statement and then we publish the book and the

:28:58. > :29:00.crucial... For instance on the business changes just mentioned, the

:29:01. > :29:04.Chancellor said in his speech that there is a 17% saving in the

:29:05. > :29:08.business department. Of course there is. So there do have to be savings,

:29:09. > :29:12.they're about half as big in the last parliament but absolutely there

:29:13. > :29:17.is savings. Robert, a quick point. You spent most of the last

:29:18. > :29:20.parliament attacking Labour for being too optimistic in forecasting

:29:21. > :29:24.rises in tax revenues when this was in power and spending on the back of

:29:25. > :29:30.that. Some would say there is a shift, some perhaps would describe

:29:31. > :29:35.it as a hypocrisy that here we have a Chancellor who always said he is

:29:36. > :29:44.Conservative - huge forecast increases in tax revenues that may

:29:45. > :29:48.turn out to be illusaro. Figures were not included in the Office for

:29:49. > :29:52.Budget Responsibility. The OBR did have details. This is the

:29:53. > :29:56.independent office for budget responsibility. I used to be an

:29:57. > :29:59.economic forecaster. I am glad politicians no longer do that. It's

:30:00. > :30:06.done independently by experts. Very well. We will look at it with a fine

:30:07. > :30:09.toothcomb. Thank you, Matt Hancock. We are on air on BBC Two until 3.

:30:10. > :30:10.30pm.