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The Spending Review

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Good morning, you are watching BBC News, the time is edging up to 1130

:00:07.:00:16.

AM. All eyes on Westminster today. We are building up to the Autumn

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Statement, the Spending Review. We will be hearing from the Chancellor,

:00:21.:00:24.

George Osborne, who left the Treasury in the last 15 minutes to

:00:25.:00:29.

make his way to Parliament. We will hear his plans and proposals. It is

:00:30.:00:34.

a Spending Review that is being widely trailed as shaping British

:00:35.:00:40.

politics for the next four or five years. To what extent will we hear

:00:41.:00:47.

about spending? To what extent will we hear about cats Mac. Now a

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special programme taking you through all the developments of the day.

:00:52.:00:56.

With Andrew Neil -- to what extent will be about cats?

:00:57.:00:59.

George Osborne wants Britain to live within its means.

:01:00.:01:01.

His critics say he's cutting public services to the bone.

:01:02.:01:06.

We'll find out what the Chancellor has in store for us all

:01:07.:01:09.

in an hour when he tells us how he's going to spend OUR money over

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Welcome to this BBC News special on the Chancellor's combined

:01:14.:01:45.

Spending Review and Autumn Statement for 2015, which will help define tax

:01:46.:01:49.

and spend in this country for the rest of the decade.

:01:50.:01:52.

Mr Osborne faces some tough choices.

:01:53.:01:56.

He wants to spend more on health, defence, security and now housing,

:01:57.:02:09.

all the while balancing the books by 2020, which means big cuts to

:02:10.:02:13.

That's not to mention the little matter of rowing back

:02:14.:02:17.

I'm here at this brand new shopping centre in Birmingham, the city

:02:18.:02:21.

at the heart of what the chancellor calls the Midlands Engine.

:02:22.:02:25.

I'll be getting reaction from businesses, local government,

:02:26.:02:27.

We'll also be in our virtual Treasury courtyard to look at where

:02:28.:02:39.

the chancellor can find the ?20 billion of savings he says he

:02:40.:02:42.

I'll be here outside Parliament getting reaction from

:02:43.:02:47.

across the political spectrum to a speech that could define

:02:48.:02:49.

Follow the story and find the best analysis on the BBC News website

:02:50.:03:02.

throughout the day. Did I mention the best analysis?

:03:03.:03:04.

Speaking of the best analysis, I'm joined

:03:05.:03:06.

for the next four hours by the BBC's political editor Laura Kuenssberg,

:03:07.:03:09.

our business editor Kamal Ahmed, and in his farewell lap before he

:03:10.:03:13.

leaves the BBC, our outgoing economics editor Robert Peston.

:03:14.:03:21.

We'll be frisking him before he leaves

:03:22.:03:25.

the studio to check he's not running off with any of the stationery.

:03:26.:03:29.

He is prone to do that, I've been told! Welcome to you all.

:03:30.:03:35.

So it's a big day for the Chancellor - and for the country.

:03:36.:03:38.

It's Mr Osborne's 3rd Spending Review since he entered

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At its core, he will set out how much is to be spent on government

:03:41.:03:47.

departments and public services over the next four financial years.

:03:48.:03:50.

Cumulatively we're talking about well over three TRILLION pounds.

:03:51.:03:58.

And if that's not enough excitement for one day, this year he's combined

:03:59.:04:01.

his Spending Review with his annual Autumn Statement, which sets out

:04:02.:04:04.

the latest official forecasts for inflation, employment, borrowing and

:04:05.:04:06.

other key indicators for the course of our economy through 2016.

:04:07.:04:09.

So a lot riding on today for the economy,

:04:10.:04:15.

our public services, our national and economic security and, of

:04:16.:04:17.

You have seen George Osborne leaving the Treasury just a few minutes ago,

:04:18.:04:30.

he made the trip safely but the Prime Minister's car had a prank

:04:31.:04:33.

today outside number ten Downing St. Yes, there it is! A bit of a bang.

:04:34.:04:43.

We don't know if the Prime Minister was inside. I am sure that

:04:44.:04:47.

government ministers will hope that is not an omen of things to come, we

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could not resist letting you see it. Statements like this are always

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political, Laura. The Chancellor is under special brush, he's promised

:04:58.:05:01.

to get us into surplus by the end of the decade and stomach every time he

:05:02.:05:04.

turns a corner someone says they want more. Today is where the

:05:05.:05:10.

rhetoric of the Tory election campaign that got them back into

:05:11.:05:15.

power smashes into reality. The big aspiration is also the difficulty.

:05:16.:05:19.

How do you make a set of hard fought decisions, hefty cuts to many

:05:20.:05:25.

departments, look as if they are a programme, a coherent programme

:05:26.:05:27.

matches the priorities of those matches the priorities of those

:05:28.:05:31.

millions of floating voters in the middle who the Tories didn't just

:05:32.:05:36.

want to get in this year but want to secure with an even bigger majority

:05:37.:05:40.

next time around. That is what it's all about. The difficulty is, along

:05:41.:05:44.

with more money for health and housing which they believe is near

:05:45.:05:46.

the top of the voters's lists, is the top of the voters's lists, is

:05:47.:05:50.

less money for the Home Office and local council, cuts to social care

:05:51.:05:54.

and to the police and the most acute demonstration of all, what will he

:05:55.:05:59.

do about tax credits. Significant cuts to tax credits for people in

:06:00.:06:05.

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

:06:06.:06:08.

detail with what he comes up with to soften that Blair will be crucial.

:06:09.:06:14.

He is only halfway through his deficit reduction strategy which he

:06:15.:06:17.

started in 2010. He should have finished it by now and he's only

:06:18.:06:22.

halfway through. Yet on health and security, tax credits, all of

:06:23.:06:26.

things, is being asked to and will have to spend more money. Indeed.

:06:27.:06:31.

The benign into protection is that this government is brave enough to

:06:32.:06:34.

decide priorities, more money for things that people care about and

:06:35.:06:38.

less money for things that they decide are less important. The less

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benign interpretation is a completely lopsided approach

:06:42.:06:47.

gradually balancing the books that makes it almost impossible to get

:06:48.:06:50.

anywhere significant. There are some in the Conservative Party who

:06:51.:06:54.

believe that the ring fencing of health and other departments was a

:06:55.:06:58.

fundamental strategic mistake. But instead of looking at the books than

:06:59.:07:02.

starting from zero, they are looking at the books in a way that makes it

:07:03.:07:07.

lopsided and therefore making the sums add up in a way that they have

:07:08.:07:11.

promised to do, makes it almost impossible. Benchmark OK. We should

:07:12.:07:17.

point out that nobody was injured in the making of that crash, if a crash

:07:18.:07:19.

occurred. of savings

:07:20.:07:21.

the Chancellor says is needed to eliminate the deficit, move

:07:22.:07:25.

into modest surplus, by 2019-20. We'll look in a moment at where

:07:26.:07:30.

he might find those savings. First, Robert, take us through

:07:31.:07:33.

the Osborne plan. Such as it is. The background is,

:07:34.:07:41.

his famous fiscal rules, which were in the last parliaments, honoured

:07:42.:07:45.

more in the breach than in the hitting. So let's look at the

:07:46.:07:52.

deficit that he forecast for this financial year just a few months ago

:07:53.:07:59.

in the July budget. He said he expected a deficit of just below 70

:08:00.:08:04.

million pounds. We know that he will miss that because the borrowing

:08:05.:08:07.

figures are of course and tax revenue isn't coming in in the way

:08:08.:08:11.

he would like -- ?70 billion. Spending is a little higher than he

:08:12.:08:17.

would like. Over the course of the parliament in the last budget he saw

:08:18.:08:20.

that deficit declining and achieving a surplus as I think you've read you

:08:21.:08:29.

mentioned, of ?10 million, in 2019, two ?20 billion. -- ?20 billion. The

:08:30.:08:36.

sort of things you have mentioned with Laura, the priority is to spend

:08:37.:08:43.

things on housing. -- spend on things like housing. Let's put it

:08:44.:08:46.

now into the context of the national debt. A whopping ?1.5 trillion in

:08:47.:08:51.

rent on a bus. In percentage terms that began the last parliament at

:08:52.:08:58.

just below 70% of GDP, or national income. It has risen progressively,

:08:59.:09:05.

painfully, since then. And is currently a little over 80% of GDP.

:09:06.:09:10.

In that last Budget the Chancellor made a big thing about how this

:09:11.:09:15.

would be the peak year for debt as a percentage of GDP. He might not

:09:16.:09:20.

achieve that. Let's see what the OBR says. We'll have to wait until April

:09:21.:09:24.

to find at the truth of that. Borrowing isn't going quite as well

:09:25.:09:29.

as he would want. That said, he will make a priority of trying to get the

:09:30.:09:35.

debt down significantly over the parliament, the last set of

:09:36.:09:40.

forecasts saw the debt falling as a share of GDP to around 72% of our

:09:41.:09:46.

national income. The background to this, what matters to him and us is

:09:47.:09:51.

what happens to the economy in the round. He started the last

:09:52.:09:57.

Parliament with very weak growth. 0.7% at its weakest in the last

:09:58.:10:02.

Parliament but then it grew progressively and accelerated

:10:03.:10:07.

progressively up to 2.9% last. That was the fastest GDP growth of the

:10:08.:10:12.

biggest developed economy. Almost back to where we were before. But

:10:13.:10:17.

growth has weakened since. We expected to be around 2.4% this

:10:18.:10:23.

year. And actually we do not expect it to accelerate much from that in

:10:24.:10:26.

the coming years. It could even weaken a little. Why? Because of

:10:27.:10:32.

what is happening on the other side of the world. You and I have talked

:10:33.:10:36.

a lot about the slowdown in China. It is the big economic event now. We

:10:37.:10:45.

can't rule out the Chinese crash. -- a Chinese crash. If that would

:10:46.:10:48.

happen everything we would hear today would become irrelevant

:10:49.:10:51.

because the shock to the global economy in those circumstances would

:10:52.:10:54.

be significant. He is making great play of making friends with China.

:10:55.:10:59.

He is assuming that the slowdown in China will be gradual and

:11:00.:11:03.

manageable. We must wait and see. We must. Thank you, Robert. Today's

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Spending Review will set limits for each Whitehall department for each

:11:10.:11:13.

of the next four financial years, 22020. The Chancellor has been

:11:14.:11:16.

locked in discussions with Cabinet colleagues for weeks to agree the

:11:17.:11:19.

figures. The meetings have taken place at the Treasury just across

:11:20.:11:23.

the road from the House of Commons. You can see it. The Chancellor

:11:24.:11:27.

claimed Sunday that negotiations have been amicable. Not a word that

:11:28.:11:33.

ministers whose departments phase massive cuts -- face massive cuts by

:11:34.:11:39.

using. We'll find out who is bruised,

:11:40.:11:44.

bloodied or unbowed today. At the heart of the Treasury is

:11:45.:11:46.

a circular courtyard - you might recognise it because it's often used

:11:47.:11:49.

as a location for filming, including the latest James Bond, which means

:11:50.:11:52.

it's now famous across the globe. Now, we couldn't get Jo Coburn

:11:53.:11:55.

inside the real courtyard, despite her being pretty famous - but here

:11:56.:11:57.

she is to tell us more about Welcome to our virtual Treasury

:11:58.:12:01.

courtyard. Now, they don't have one of these

:12:02.:12:03.

in the real courtyard, but it represents everything that

:12:04.:12:06.

the Government is due to spend this I'm going to start by highlighting

:12:07.:12:09.

a few of the most significant parts You can see the ?217 billion

:12:10.:12:17.

that goes on social security. That includes everything

:12:18.:12:29.

from Jobseeker's Allowance to And there's the ?35 billion the UK

:12:30.:12:35.

is due to spend this year George Osborne says that's a figure

:12:36.:12:39.

he's is determined to bring down. Now, the focus of today's statement

:12:40.:12:43.

is the money that goes on administering and delivering public

:12:44.:12:47.

services - departmental spending. And you can see it's just under

:12:48.:12:49.

half of the total the Government Now, we're going to delve into

:12:50.:12:57.

the budgets of a few of the most Because it's the NHS that accounts

:12:58.:13:00.

for the biggest chunk Now, the Chancellor isn't going to

:13:01.:13:10.

find any of his savings here, because he has promised to increase

:13:11.:13:14.

NHS funding in England The Government has also promised

:13:15.:13:18.

a real-terms increase That's part of its commitment to

:13:19.:13:26.

meeting the Nato target of spending The Government has also committed to

:13:27.:13:33.

spending 0.7% of GDP on overseas aid, meaning that budget

:13:34.:13:42.

is also protected. So, the Chancellor is not going to

:13:43.:13:46.

find any of his ?20 billion of savings he says he needs to make

:13:47.:13:54.

from either health, defence or aid. So,

:13:55.:13:57.

where could it come from instead? What about from the education

:13:58.:14:00.

budget, a big part of what the state Here,

:14:01.:14:04.

the Conservatives have promised a cash increase per pupil

:14:05.:14:06.

in schools. That means savings

:14:07.:14:10.

from here would be limited, although the rest of the budget doesn't have

:14:11.:14:14.

any guaranteed protection. Here is the money that goes

:14:15.:14:18.

to English local authorities. This was one of the first

:14:19.:14:23.

departments to agree to big savings The Home Office, on the other hand,

:14:24.:14:26.

took longer And the single biggest thing

:14:27.:14:32.

Theresa May's department spends money on is the grant it gives to

:14:33.:14:37.

police forces in England and Wales, although they also get some of their

:14:38.:14:42.

money from other sources, including And some of the other departments

:14:43.:14:45.

that are going to have to find big savings over

:14:46.:14:55.

the next four years are the Departments of Business,

:14:56.:14:57.

Transport and Justice. Let's go back to that big part

:14:58.:14:59.

of Government spending I mentioned Of course, that is where a lot

:15:00.:15:02.

of the focus has been in the weeks Now, again, here, there is plenty

:15:03.:15:08.

the Chancellor won't touch. The State Pension is

:15:09.:15:20.

a massive part of the Budget. But the Government has a

:15:21.:15:23.

long-standing promise not to cut it, along with various pensioner

:15:24.:15:27.

benefits. The other areas of big spending

:15:28.:15:30.

the Government has had to look to are housing benefit, disability

:15:31.:15:33.

benefits and incapacity benefits. And you can see that big sum

:15:34.:15:37.

of money, ?30 billion, that is due to be spent

:15:38.:15:46.

on personal tax credits this year - an area where the Chancellor has

:15:47.:15:49.

found that making savings can prove Let's speak to Kamal Ahmed. One

:15:50.:16:03.

business that seems to be very happy because of what was leaked overnight

:16:04.:16:08.

by the Treasury, this 400,000 affordable homes, this morning the

:16:09.:16:10.

house-building shares went through the roof? They did indeed. What is

:16:11.:16:18.

interesting is how much the Government needs the private sector

:16:19.:16:21.

to support delivery. The big strategic purpose of George Osborne

:16:22.:16:26.

is to take pressure off state provision and give it to the private

:16:27.:16:31.

sector and say, you help us provide the kind of country and economy we

:16:32.:16:35.

want. In house-building, one of the big issues, the centrepiece of David

:16:36.:16:40.

Cameron's conference speech last month, he said he wanted to help

:16:41.:16:44.

people into affordable homes, is an absolute example of that. The

:16:45.:16:48.

government have struggled with this supply problem. The issue they have

:16:49.:16:52.

had is that they have been in increasing demand. -- increasing

:16:53.:16:59.

demand. The support that we are hearing will be in the Autumn

:17:00.:17:04.

Statement which will help people buy affordable homes, again increases

:17:05.:17:07.

demand. It will put direct money into housing companies, for them to

:17:08.:17:11.

build affordable homes. The big problem though is that housing new

:17:12.:17:16.

bills are actually down slightly. That is because there is a real

:17:17.:17:22.

skills shortage in housing. They cannot find enough brickies. I went

:17:23.:17:26.

to one developer and in south-west London and it closed down on

:17:27.:17:30.

Thursday night because by then the bricklayers had got their money for

:17:31.:17:34.

the week and take on Friday off. The house-building companies are

:17:35.:17:37.

building as many houses as they feel comfortable with. Their profits are

:17:38.:17:43.

up hugely, 40%. The other big area is, how will social care change?

:17:44.:17:48.

Moving tax down to local authorities to supply support for social care,

:17:49.:17:52.

how will that have an impact? It is the private sector who provide the

:17:53.:17:57.

vast bulk of social care homes. They have been complaining about

:17:58.:18:00.

particularly the rise to the national living wage affecting their

:18:01.:18:05.

business. They have being squeezed by having to pay more, and getting

:18:06.:18:10.

less money from the local authorities? Exactly. Companies like

:18:11.:18:17.

four seasons, the biggest care home provider in the UK, has been saying

:18:18.:18:20.

that it is now no longer profitable to provide social care in places for

:18:21.:18:26.

a local authority people. That has become very difficult. Finally,

:18:27.:18:33.

Sajid Javid, the Business Secretary, one of those unprotected

:18:34.:18:37.

departments, further education, how much of an attack on his department

:18:38.:18:44.

will there be? If you have just joined us on BBC Two and the BBC

:18:45.:18:48.

News channel, you are watching our coverage of the Spending Review and

:18:49.:18:49.

the Autumn Statement. Jane Hill is Oliver Dowden and Rebecca Long

:18:50.:19:11.

Bailey join me. It is a spending review. Are we going to be looking

:19:12.:19:15.

at headlines tomorrow all about cuts? Are those the sort of

:19:16.:19:18.

headlines George Osborne is comfortable with? The headlines he

:19:19.:19:23.

will become travel with and the mission of this government, we are

:19:24.:19:27.

still in a situation where the Government is spending more than it

:19:28.:19:31.

earns. Every pound of borrowing is paid for by future generations. We

:19:32.:19:36.

are determined to get that under control. Run a surplus by the end of

:19:37.:19:41.

the Parliament, which means by the next crisis hits, we are spending

:19:42.:19:45.

less than we earn. That will be the central thrust, I hope, of the

:19:46.:19:50.

statement. There are plenty of economists, they say the Chancellor

:19:51.:19:56.

has locked himself into a corner, that giving a date is boxing himself

:19:57.:20:04.

in. It is important we have a date. By 2019 the economy hopefully will

:20:05.:20:07.

have been growing for almost ten years. The economy has been growing

:20:08.:20:12.

for ten years and we still cannot run a surplus, how will we ever be

:20:13.:20:16.

able to cope when the economy inevitably falls into another

:20:17.:20:20.

recession? We do not believe boom and bust has been abolished on that

:20:21.:20:25.

side of the house. Rebecca, there have to be cuts for the reasons

:20:26.:20:30.

Oliver explains? I agree we need to reduce our deficit but it needs to

:20:31.:20:34.

be done in the long term and in a sustainable way. The Chancellor has

:20:35.:20:38.

not offered that. He has missed its financial targets again and again.

:20:39.:20:42.

The Institute for Fiscal Studies have stated in order to meet his

:20:43.:20:46.

target this time, he will have to make unprecedented cuts. They will

:20:47.:20:52.

fall on areas of key economic growth, such as education, skills,

:20:53.:20:57.

business investment. We need to start planning our infrastructure,

:20:58.:21:01.

our manufacturing strategy. I doubt very much we will see any that

:21:02.:21:07.

today. Business editor at the same share prices are up in

:21:08.:21:13.

house-building companies. If we get lots of building, will that be the

:21:14.:21:16.

one positive that even your party agree with? I think the Chancellor

:21:17.:21:23.

is a shrewd political operator. He will offer some sweeteners to lessen

:21:24.:21:28.

the blow. In terms of house-building, the devil is always

:21:29.:21:32.

in the detail. I welcome his pledge to build 400,000 more houses. We

:21:33.:21:36.

want to see where those houses are going to be and whether there will

:21:37.:21:42.

be put in the social rented sector. A more political side to it, this is

:21:43.:21:47.

about George Osborne's personal ambitions. He has do shape things so

:21:48.:21:52.

that be the time he has his eyes on an even bigger job, the bulk of the

:21:53.:21:59.

cuts have gone? The Chancellor's ambition is in turning this country

:22:00.:22:04.

around. It is interesting what you said about investment. One of the

:22:05.:22:07.

decisions he has taken is to protect things like investment in schools,

:22:08.:22:12.

so that is maintained every year. A massive investment in housing to

:22:13.:22:15.

make sure young people get on the housing ladder. What the Chancellor

:22:16.:22:19.

wants to do is make sure that everybody gets the best start in

:22:20.:22:23.

life, whether it is investment in schools, housing for young people,

:22:24.:22:28.

or old people, to make sure they get dignity and security in retirement.

:22:29.:22:32.

That is why there is a big increase in the basic state pension. That is

:22:33.:22:36.

where his efforts are focused. Thank you very much. Much more from here

:22:37.:22:41.

when we have heard from the Chancellor.

:22:42.:22:44.

We'll hear a lot about his Northern Powerhouse and, now,

:22:45.:22:50.

At the heart of that is the city of Birmingham.

:22:51.:22:59.

Jo Coburn has left her virtual Treasury courtyard and is already

:23:00.:23:02.

Who needs HS2 when you have the magic of television?

:23:03.:23:13.

I am at Grand Central. Not New York but the shiny new shopping centre

:23:14.:23:19.

here in Birmingham. It was opened last week by the Queen. I am here to

:23:20.:23:24.

talk to people about the Autumn Statement and George Osborne's

:23:25.:23:27.

spending plans for the next five years. I'm joined by Jonathan Isaby

:23:28.:23:35.

from the Taxpayers' Alliance. Yesterday, the announcement of extra

:23:36.:23:39.

cash for the NHS will be front-loaded. Welcome news? It is

:23:40.:23:45.

welcome but it is too little, too late. The real issue for the NHS is

:23:46.:23:50.

the chronic underfunding of social care, which means elderly patients

:23:51.:23:53.

cannot be discharged quickly enough back into their homes, which means

:23:54.:23:58.

they are taking up beds. We will end up with a crisis in the A this

:23:59.:24:06.

winter. George Osborne has pledged to make cuts in this Spending Review

:24:07.:24:09.

and during this Parliament. Does he want to be known as the Chancellor

:24:10.:24:13.

of austerity? He should be want to be known as the Chancellor who

:24:14.:24:17.

balances the books of the nation. He has to make those savings. This year

:24:18.:24:22.

the Government is spending 70 billion, probably 18 billion, more

:24:23.:24:33.

than it gets in revenue. -- 80. It is utterly unacceptable. He needs to

:24:34.:24:37.

balance the books, get the nation living within its means once again

:24:38.:24:41.

to ensure our future prosperity. Let's get a little bit more about

:24:42.:24:45.

growing. Let's talk to somebody about this from the Birmingham

:24:46.:24:52.

Chamber of Commerce. We are talking about austerity versus growth. What

:24:53.:24:56.

is more important to business here? It has got to be a mix. We recognise

:24:57.:25:01.

the UK deficit is out of control. The government is spending more than

:25:02.:25:06.

the defence budget servicing the interest on that debt. It needs to

:25:07.:25:09.

be brought into line but it cannot be at the expense of business

:25:10.:25:13.

growth. That is what we will be looking for from the Autumn

:25:14.:25:18.

Statement. Help grow businesses, which helps grow jobs. And

:25:19.:25:23.

ultimately that will help get the deficit down. What would you like to

:25:24.:25:28.

see him do? We would like clarity on the apprenticeship levy, how will

:25:29.:25:32.

that work? Businesses are keen to boost the skills of young people but

:25:33.:25:36.

we do not know how the funding is going to work. Some clarity would be

:25:37.:25:40.

fantastic. We would like to see further announcement on business

:25:41.:25:43.

rates. Earlier this year the Chancellor said they would devolve

:25:44.:25:50.

business spending to councils. Thank you very much. One of the things

:25:51.:25:56.

that will be most important to people here as they start to think

:25:57.:26:01.

about Christmas shopping, that his personal finances. Their financial

:26:02.:26:07.

security. Who better to talk to than our personal finance expert? One of

:26:08.:26:12.

the main things people are worried about is tax credits. George Osborne

:26:13.:26:17.

ran into problems with those plans. If he so often sad, where Willie

:26:18.:26:22.

Geddes savings? This is the big questions. Is he going to go back to

:26:23.:26:26.

those same people and try to get the money some other way. It might

:26:27.:26:34.

affect the same people who would be affected by cuts to tax credits.

:26:35.:26:38.

Will he scout around the periphery? Perhaps tax relief elsewhere. I

:26:39.:26:41.

would be slightly worried about the pensions. He has said he will not do

:26:42.:26:47.

any major pension reforms until the Budget. I think there could be some

:26:48.:26:53.

measures that is stopping that. Buy now while stocks last. People are

:26:54.:26:57.

doing last-minute avoidance things. I would watch out for tinkering with

:26:58.:27:04.

the pensions tax reliefs. If you have any questions you would like to

:27:05.:27:10.

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

:27:11.:27:11.

any stories. Start that Christmas shopping and

:27:12.:27:22.

get my present. And you can also take advantage

:27:23.:27:31.

the BBC's range of expert analysis and all the latest developments

:27:32.:27:34.

on the BBC website. It's coming up midday here

:27:35.:27:42.

at Westminster - very soon we'll go over to the House

:27:43.:27:44.

of Commons for Prime Minister's Questions and that will be followed

:27:45.:27:50.

by the Chancellor's statement. First, let's look at some

:27:51.:27:59.

of the measures that have been already announced, and others we're

:28:00.:28:04.

expecting to hear today. The biggest was the announcement

:28:05.:28:15.

earlier this week. We were told the NHS in England, equivalent spending

:28:16.:28:21.

for Scotland, Wales and Northern Ireland, will get an extra, just shy

:28:22.:28:28.

of ?4 billion. Part of loading the NHS has been asking for, to get the

:28:29.:28:32.

money and now as it rises towards an extra 8 billion by the end of this

:28:33.:28:36.

Parliament. Schools and foreign aid are protected. No cuts expected.

:28:37.:28:44.

Defence was not protected. It is now. An extra ?12 billion this week

:28:45.:28:50.

to spend on defence and equipment. That takes the total to 178 billion.

:28:51.:29:02.

2% of GDP. Tax credits. The Chancellor came out with a number of

:29:03.:29:09.

cuts in the July budget. He is having to roll back that. That will

:29:10.:29:12.

cost him money. We wait to see how he it. We expect tax Reddit cuts to

:29:13.:29:19.

be eased. The latest big thing to be rolled out is the idea that the

:29:20.:29:24.

Government will encourage, preside over, the building of 400,000

:29:25.:29:28.

affordable homes at a cost of 7 billion. There is always an alert on

:29:29.:29:38.

these. Whether governments meet these targets is a different matter.

:29:39.:29:44.

Local authority spending has been squeezed. The Chancellor will now

:29:45.:29:49.

allow local authorities to raise council tax by 2% provided the money

:29:50.:29:54.

and only if the money goes to social care because of the move from NHS

:29:55.:29:59.

hospitals and so on into care in the community. Whether that will be

:30:00.:30:02.

enough is another matter. Whether those areas that need social care

:30:03.:30:07.

most will get that much from a 2% rise in council tax because -- all

:30:08.:30:15.

things we will be keeping an ion. -- and eye on. Laura, we have a fair

:30:16.:30:21.

idea what he is going to do because they have helpfully leaked a lot of

:30:22.:30:26.

it. Chancellor, rabbit, hat. What is the rabbit?

:30:27.:30:31.

I am not sure there will be a rabbit today. There will be surprises. A

:30:32.:30:35.

couple of surprises. But there will not be, I don't think, the

:30:36.:30:40.

traditional rabbit in a hat that feels like a jolly giveaway that

:30:41.:30:45.

sends off Tory MPs jubilant to their constituencies.

:30:46.:30:53.

He has been famous for that. He has. There will be cunning wheezes. Maybe

:30:54.:31:03.

a little mice instead of a big rabbit! Gerbils? We may be

:31:04.:31:13.

surprised. He has an acute political as well as economic brain and I

:31:14.:31:18.

think this time the judgments are similar for him, we are still

:31:19.:31:21.

relatively early into the parliament and he personally has had something

:31:22.:31:27.

of a popularity dip as a result of the tax credit to buckle. -- the tax

:31:28.:31:39.

credit debacle. He will have to make tough decisions because the last

:31:40.:31:42.

thing he wants is for things to go when he's running the Tory party

:31:43.:31:47.

leadership. We can go straight to the House of Commons to the Prime

:31:48.:31:50.

Minister, and Prime Minister's Questions.

:31:51.:31:53.

Many people know from at home from Yes Prime Minister, the central role

:31:54.:32:07.

that Bernard, the principal Private Secretary, plays in the life of the

:32:08.:32:12.

per Minister. Today my Bernard my principal Private Secretary died of

:32:13.:32:15.

cancer. Chris Martin was just 42. He was one of the most loyal,

:32:16.:32:20.

hard-working dedicated public servants I have ever met. I have no

:32:21.:32:24.

idea what his politics were would he would go to the ends of the earth

:32:25.:32:27.

for his Prime Minister and for the team that he worked for. Today we

:32:28.:32:32.

are leaving the seat in the officials box where he used to sit

:32:33.:32:36.

empty as a mark of respect. We think of his wives are we, his family, the

:32:37.:32:40.

wider number ten family because it is like a family and we feel we have

:32:41.:32:45.

lost somebody between a father and a brother to all of us. Whatever

:32:46.:32:51.

happens, we will never forget him. Today Mr Speaker I have had meetings

:32:52.:32:55.

with colleagues and in addition to my duties in this House I will have

:32:56.:33:03.

further meetings today. Fiona Bruce. Can I echo the sentiments of the

:33:04.:33:06.

premise to regarding the passing of Kris ten. I am sure that all members

:33:07.:33:11.

will have heartfelt thoughts and prayers today and we will be

:33:12.:33:13.

grateful if they can be conveyed to the family. The excellent

:33:14.:33:21.

children's mental health charity in Congleton says the lack of a secure

:33:22.:33:27.

family life is the root cause of many of the troubles children have.

:33:28.:33:31.

The Prime Minister is a champion of family life, can he confirm that

:33:32.:33:35.

announcements to be made today will pass is family test by providing

:33:36.:33:39.

security for family relationships and opportunities for world rubble

:33:40.:33:48.

children? -- vulnerable children? I thank my honourable friend. She is

:33:49.:33:52.

right that families are the best welfare state we have. They bring up

:33:53.:33:57.

our children and teach us the right values and care for us when we sick.

:33:58.:34:02.

We want to help families and the Chancellor will have something to

:34:03.:34:06.

say about that later as we boost the national living wage, as we deliver

:34:07.:34:12.

tax cuts for working people. All these policies should pass the test

:34:13.:34:20.

of helping families. Jeremy Corbyn. Thank you Mr Speaker. On behalf of

:34:21.:34:25.

of the opposition may I express my condolences to the family of Kris

:34:26.:34:28.

ten on his death. The Prime Minister told me how ill he was on

:34:29.:34:32.

Remembrance Sunday. I am pleased he was able to visit him at that time.

:34:33.:34:36.

On behalf of many members who worked with Chris Martin when we were in

:34:37.:34:39.

government we appreciate very much the professional work he did in the

:34:40.:34:43.

best and highest traditions of the civil service in this country. If

:34:44.:34:47.

our condolences could be passed on, that would be helpful. This week 55

:34:48.:35:05.

Labour councils have made a commitment for their areas to be run

:35:06.:35:08.

entirely on green energy by 2050. With the Paris climate talks only

:35:09.:35:10.

days away with a premonition and join me in commending those councils

:35:11.:35:13.

and call upon all Conservative councils to do the same? I certainly

:35:14.:35:16.

commend these councils and we are helping by the tariffs that we have

:35:17.:35:19.

introduced particularly to help solar power and wind power, we will

:35:20.:35:24.

be taking part in the Paris climate talks because it is vital to get

:35:25.:35:28.

that global deal but we must make sure that we take action locally as

:35:29.:35:31.

well as globally. I would make the point that if you compare the

:35:32.:35:36.

Parliament to the previous parliament, we saw something like a

:35:37.:35:39.

tripling in the installation of renewable electricity. Jeremy

:35:40.:35:47.

Corbyn. Thank you Mr Speaker. The commitment of those Labour councils

:35:48.:35:50.

as a contrast to the per Minister Bosman performance. He used to say

:35:51.:35:54.

that his was the greenest government ever. Does he remember those days?

:35:55.:35:59.

Does he agree with the Energy Secretary that Britain is likely to

:36:00.:36:04.

miss its target of getting 50% of renewable energy from renewables by

:36:05.:36:10.

2020? Firstly I believe the last government rightly claims that

:36:11.:36:15.

record, the world's first green investment bank pioneered in Britain

:36:16.:36:19.

and a tripling of renewable energy and a meeting of all our planet

:36:20.:36:23.

change targets contributing to an EU deal that means that we go to the

:36:24.:36:28.

climate change conference in Paris with a very strong European record

:36:29.:36:32.

and the ability to say to other countries that they should stab up

:36:33.:36:37.

to the plate. Also in the last Parliament we spent record sums

:36:38.:36:40.

helping developing countries to go green. And in the next five years we

:36:41.:36:45.

will spend $9 billion on helping other countries which will be

:36:46.:36:48.

crucial in building the Paris deal next week. Jeremy Corbyn. The

:36:49.:36:56.

problem with that answer is that the gap between Britain's 2020 target

:36:57.:37:01.

and our current share of renewable energy is the biggest in the

:37:02.:37:04.

European Union. And some of his recent decisions like cutting

:37:05.:37:09.

support for solar panels on home and industrial projects, scrubbing the

:37:10.:37:12.

green deal, cutting support for wind turbines, budding any attacks on

:37:13.:37:16.

renewable energy, increasing subsidies have diesel generators, is

:37:17.:37:19.

it any wonder that the chief scientists of the United Nations's

:37:20.:37:23.

environment programme has criticised Britain for going backwards on

:37:24.:37:28.

energy? The facts paint a different picture. As I sit, a trembling of

:37:29.:37:34.

wind power in the last Parliament, it is an enormous investment -- as I

:37:35.:37:39.

said, tripling of wind power. As for solar panels, when the cost of solar

:37:40.:37:44.

panels plummets, as it has, it's right to reduce the subsidy. If we

:37:45.:37:49.

don't reduce it we ask people to pay higher energy bills. Something I

:37:50.:37:54.

remember that the Labour Party in the last Parliament made rather a

:37:55.:37:58.

lot of! If you look at the Secretary of State for climate change's speech

:37:59.:38:01.

you will see the right balance between affordable energy and making

:38:02.:38:04.

sure that we meet our green targets. That is what we are committed to.

:38:05.:38:09.

And as well as that building the first nuclear power station for

:38:10.:38:12.

decades in this country, something the Labour Party talked about a lot

:38:13.:38:19.

in government but Bolelli putting -- something that we are putting into

:38:20.:38:25.

action now we are in. In the past few weeks 1000 jobs have been lost

:38:26.:38:28.

in solar companies in Britain as they have gone bust. I have a

:38:29.:38:32.

question from some apprentice solar fitters at Bannister house, a large

:38:33.:38:38.

energy budget. Ziggy, Israel and Jay-Z that cutting feeder tariffs

:38:39.:38:42.

means you are stopping solar projects that they need to help the

:38:43.:38:46.

environment to give us jobs. They ask a prime ministers, why do you

:38:47.:38:53.

want to throw all this away? We are doubling investment in renewable

:38:54.:38:56.

energy in this Parliament. As for solar panels, in the last

:38:57.:39:00.

Parliament, over 1 million homes were fitted with solar panels, I

:39:01.:39:04.

think I'm right in saying that. It is right that we go on supporting

:39:05.:39:08.

that industry but we should do it, recognising that the cost of

:39:09.:39:12.

manufacturing solar panels has plummeted and therefore the subsidy

:39:13.:39:16.

should be necessary to Liddle what businesses agreed to deliver solar

:39:17.:39:21.

power, not what is necessary to pump up the bills of hard-working

:39:22.:39:26.

families! Not much help to those losing their jobs in the solar

:39:27.:39:30.

industry at this time. I would like to ask the prime ministers something

:39:31.:39:34.

else. Today is the International Day for the elimination of violence

:39:35.:39:38.

against women. On average two women in week are killed by a current or

:39:39.:39:42.

former partner and domestic violence accounts for up to one quarter of

:39:43.:39:47.

all violent crime. Can the Prime Minister explain why one third of

:39:48.:39:50.

those referred to women's refuges in England are now being turned away?

:39:51.:39:57.

We put more money into refuges. The Chancellor will have something to

:39:58.:40:00.

say about funding women's charities in his Autumn Statement today.

:40:01.:40:07.

Because when it comes to rape crisis centres that were protected or

:40:08.:40:10.

domestic violence centres that we helped to finance, this government

:40:11.:40:15.

has a good record on helping women and making sure that the crime of

:40:16.:40:18.

domestic violence is properly investigated by the police and

:40:19.:40:22.

prosecuted in our courts. Jeremy Corbyn. Thank you, Mr Speaker. The

:40:23.:40:30.

late Denise Marshall, was chief executive of one domestic Finance

:40:31.:40:36.

Charity, put this well when she said, if you are a woman who has

:40:37.:40:40.

experienced some form of violence, I believe you have the right to the

:40:41.:40:46.

best service and the community owes you the opportunity to recover. In

:40:47.:40:51.

2012, the Prime Minister's Govan signed the Istanbul convention in

:40:52.:40:55.

preventing and combating violence against women and domestic violence.

:40:56.:40:59.

This would make women's support services statutory and would have

:41:00.:41:03.

stopped the closure of this service. When will the Prime Minister ratify

:41:04.:41:10.

the Istanbul convention? We going one further. In the Autumn

:41:11.:41:13.

Statement, which he will hear in a minute we will be putting more money

:41:14.:41:17.

into women's charities, including those that fight domestic violence

:41:18.:41:22.

and rape, and make sure that we cut and these appalling crimes. In

:41:23.:41:26.

addition to that we have done more than any previous government to help

:41:27.:41:30.

in terms of preventing forced marriage and the horrors of female

:41:31.:41:34.

genital mutilation that to not just happen in North Africa, they happen

:41:35.:41:39.

here in this country. I don't think any government before this one has a

:41:40.:41:42.

strong record on those grounds. CHEERING

:41:43.:41:49.

Thank you, Mr Speaker. I have many constituents who come to my surgery

:41:50.:41:52.

desperate to be able to own and their own home. Many of them are on

:41:53.:41:58.

low income and they recognise that a monthly mortgage payment would be

:41:59.:42:02.

significantly lower than a monthly rental payment, sometimes 50% lower.

:42:03.:42:06.

Does my right honourable friend share the excitement of many of my

:42:07.:42:10.

constituents towards the starter homes initiative in the housing bill

:42:11.:42:15.

which will see affordable housing lowering the monthly and goings of

:42:16.:42:23.

many in this country. I do share the enthusiasm of my right honourable

:42:24.:42:25.

friend. There are lots of useful interventions we can make like the

:42:26.:42:30.

right to buy, which has put buying homes within reach of people by

:42:31.:42:34.

reducing the deposits they need. We can help people save, which we do

:42:35.:42:39.

with a help to buy Isa, so we are contributing every time people save

:42:40.:42:42.

but the biggest contribution we can make is by building more houses

:42:43.:42:45.

which were will do during this Parliament and crucially by

:42:46.:42:50.

obtaining a strong, secure, stable economy with low interest rates so

:42:51.:42:54.

that people can afford to take out a mortgage. Angus Robertson. May I

:42:55.:43:01.

begin by associating the SNP with the condolences of the Prime

:43:02.:43:04.

Minister. Having spoken to him last week I know what a personal loss it

:43:05.:43:08.

is to him and to the family and friends of Chris Martin. The fatal

:43:09.:43:14.

dangers of unintended consequences and escalation in Syria are clear

:43:15.:43:18.

for all to see these days. All serious observers agree that an air

:43:19.:43:22.

campaign alone will not lead to the ultimate defeat of Daesh on the

:43:23.:43:26.

ground, and ground forces will be needed. How many troops and from

:43:27.:43:29.

which countries does the Prime Minister have in his plan for Syria?

:43:30.:43:35.

First mate I thank the right honourable gentleman for his remarks

:43:36.:43:38.

about Chris Martin. I know that Chris Martin helped all parties in

:43:39.:43:44.

this House with inquiries. Let me deal with the issue of Syria, it is

:43:45.:43:48.

so crucial. I am not arguing for a minute that action from the alone

:43:49.:43:52.

can solve the very serious problem we have and Isil. Clearly we need a

:43:53.:43:57.

political settlement in Syria and the government there that can act

:43:58.:44:02.

comprehensively with us against Isil. The question for the House

:44:03.:44:05.

which we need to address tomorrow and in the days to come is, can we

:44:06.:44:10.

afford to wait for that political settlement before we act? No, my

:44:11.:44:14.

view is that we can't wait. We should work as hard as we can for it

:44:15.:44:18.

but we should act now for allies because it is about keeping our own

:44:19.:44:23.

people and our own country safe. You ask about ground troops. There are

:44:24.:44:28.

troops in Syria, the Free Syrian Army and the Kurdish forces, that

:44:29.:44:33.

would work with us to help eliminate Isil. Of course the full range of

:44:34.:44:39.

ground troops will only be available when there is a political settlement

:44:40.:44:43.

in Syria. But can we afford to wait for that settlement before acting to

:44:44.:44:47.

keep ourselves safe at home and my answer to that is No, we cannot

:44:48.:44:53.

afford to wait. Mr Speaker, the UK spent 13 times more bombing beer

:44:54.:44:58.

than investing in its reconstruction after the overthrow of Colonel

:44:59.:45:01.

Gaddafi's resume. Reconstructing cilia will be essential to ensure

:45:02.:45:06.

stability and allow refugees to return. How much does the Prime

:45:07.:45:09.

Minister estimate that this will cost and how much has he allocated

:45:10.:45:16.

from the UK? We have one of the largest developing budgets anywhere

:45:17.:45:19.

in the world, and the support we've given to Syrian refugees, ?1.2

:45:20.:45:24.

billion, demonstrates this. Clearly part of our plan which I will set

:45:25.:45:28.

out tomorrow in a statement in this House, will be to help to finance

:45:29.:45:32.

the reconstruction of Syria alongside the political deal that we

:45:33.:45:37.

believe is less of Syria. I would rather spend the money

:45:38.:45:41.

reconstructing cilia than supporting people kept away from their homes

:45:42.:45:45.

and their country, who want to return the -- reconstructing Syria.

:45:46.:45:50.

I know that my right honourable friend is aware of the growing cause

:45:51.:45:58.

for concern surrounding the conviction of Alexander Blackman,

:45:59.:46:02.

the former Royal Marine officer who shot an insurgent in Afghanistan in

:46:03.:46:08.

2011. If there is new evidence and if, as many feel, there has been a

:46:09.:46:13.

miscarriage of justice, would my right honourable friend agree with

:46:14.:46:15.

me that it is right this matter should be looked into again? What I

:46:16.:46:21.

would say to my honourable friend is that this is exactly what the

:46:22.:46:24.

criminal cases review commission exists to look at. There may have

:46:25.:46:30.

been a miscarriage of justice. We gave the internal report of the

:46:31.:46:36.

Naval services to Sergeant Blackman's legal advisers, so there

:46:37.:46:39.

is proper disclosure. His legal team are looking at the option of

:46:40.:46:46.

applying to the commission. Our Royal Marines have a worldwide

:46:47.:46:49.

reputation as one of the world's elite fighting forces. They made an

:46:50.:46:54.

incredible contribution to our country and we should pay tribute to

:46:55.:47:01.

them. The Government's handling of child

:47:02.:47:05.

sexual abuse enquiries has done little to instil public confidence

:47:06.:47:09.

so far. Last month the god I'd inquiry and announced it had -- they

:47:10.:47:21.

had accidentally deleted information without anybody from the inquiry

:47:22.:47:24.

reading them. These people deserve justice and for their voices to be

:47:25.:47:32.

heard. Can the Prime Minister tell the house if an independent

:47:33.:47:38.

investigation has taken place to establish the cause of the data

:47:39.:47:42.

lost? I'm sure the House will welcome the fact the inquiry is up

:47:43.:47:46.

and running and the best way to get justice to these victims is to make

:47:47.:47:49.

sure we have the full and independent inquiry we have spoken

:47:50.:47:56.

about. As for the issue she raises, that is a matter for the inquiry.

:47:57.:48:00.

What matters is that it is now up and running.

:48:01.:48:08.

3000 jobs in Newark were lost under Labour. This month we celebrate the

:48:09.:48:15.

creation of the 10,000th new job in Newark. Does the Prime Minister

:48:16.:48:24.

agree that once again Newark leads the way to a strong economy, high

:48:25.:48:29.

employment, higher wages and lower welfare? I am delighted to hear that

:48:30.:48:37.

Newark has met this landmark and it is worth remembering that these

:48:38.:48:41.

10,000 figures, they are 10,000 people, each with a job, a

:48:42.:48:45.

livelihood, a chance to support their families. I well remember

:48:46.:48:50.

visiting the constituency. I cannot promise to visit as many times in

:48:51.:48:56.

this Parliament as I did in Neil asked, but I do recognise that one

:48:57.:49:01.

business we visited last week announced the creation of more than

:49:02.:49:04.

8000 jobs. Where Newark leads I'm sure others will follow.

:49:05.:49:10.

As the Prime Minister ever heard of Alan Cartwright, Stefan Appleton or

:49:11.:49:18.

Farso Kakko? These are teenagers who were stabbed to death on the streets

:49:19.:49:25.

of Islington in the last year. Given the growing culture of drugs, gangs,

:49:26.:49:30.

of violence in my burrow and many others like it, does the Prime

:49:31.:49:33.

Minister really think that it is in the interest of my constituents for

:49:34.:49:40.

their safety and security to cut the Metropolitan Police? First of all,

:49:41.:49:44.

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

:49:45.:49:49.

of these lives have been lost because of drugs, gangs and knife

:49:50.:49:53.

crime. Overall knife crime has come down which is welcome. There are

:49:54.:49:57.

still too many people carrying a knife and not recognising that not

:49:58.:50:02.

only is it against the law, but is is in a enormous danger to

:50:03.:50:06.

themselves and others. We will continue with our tough approach to

:50:07.:50:11.

knife crime with our work to break up gangs and to do with the problems

:50:12.:50:16.

of drugs. When it comes to policing, what we have seen in London is an

:50:17.:50:20.

increase in neighbourhood policing. The Metropolitan Police have done a

:50:21.:50:23.

good job in cutting back office costs and putting police on our

:50:24.:50:29.

streets. After many years of neglect under

:50:30.:50:33.

Labour, Cornwall is once again seeing investment in roads,

:50:34.:50:40.

railways, airports and tourism. But Cornwall is ambitious to diversify

:50:41.:50:44.

its economy and become a centre to the UK aerospace industry. Newquay

:50:45.:50:49.

airport is the forerunner to the location of the UK spaceport. Could

:50:50.:50:55.

the Prime Minister provide an update on the spaceport? And does he agree

:50:56.:50:59.

that Newquay would be the perfect place for it? I think it is very

:51:00.:51:04.

good that we have such strong voices for Cornwall in this Parliament

:51:05.:51:07.

speaking up for that county and making sure it gets the assistance

:51:08.:51:12.

and resources and help it needs. I am a strong supporter of Newquay

:51:13.:51:17.

airport, not just as a user, but it provides the opportunity for a hub

:51:18.:51:22.

of great businesses in Cornwall. We want to become the European hub for

:51:23.:51:25.

space flight, which will create jobs. There are a number of other

:51:26.:51:30.

airports in the running. I wish them all well. We are aiming to launch

:51:31.:51:38.

the selection process next year. The Government agrees much of what

:51:39.:51:46.

constitutes progress on gender equality. I have heard nothing

:51:47.:51:54.

since. I wonder if the Prime Minister agrees with me that with

:51:55.:51:58.

the fast approaching birth of my daughter, I would like to be valued

:51:59.:52:01.

as equally in her life as my husband. Will the Prime Minister

:52:02.:52:07.

take the important symbolic step to ensure that mothers are not written

:52:08.:52:12.

out of history? This is an area where the honourable

:52:13.:52:17.

lady and I agree. My understanding is that proposals for legislation

:52:18.:52:21.

have gone to the relevant committee in government. She has made a very

:52:22.:52:25.

articulated case for why that bill should be included in the next

:52:26.:52:31.

session. -- article at. Will the Prime Minister join with me

:52:32.:52:35.

in commending the French government for facing down terror, continuing

:52:36.:52:40.

with the climate summit in Paris next week? William port and the --

:52:41.:52:46.

acknowledge the important role of legislators? And does he agree that

:52:47.:52:51.

his personal presence in Paris sends a message to the world about our

:52:52.:52:55.

continuing -- commitment to a lasting climate deal to I am

:52:56.:52:59.

grateful for what my honourable friend says. I will be going to

:53:00.:53:03.

Paris for the start of this vital conference to set out what Britain

:53:04.:53:06.

and the European Union will be doing to bring about this deal. What we

:53:07.:53:11.

put on the table in terms of climate finance, nearly $9 billion over the

:53:12.:53:16.

next five years, is one of the most generous offers made by any country.

:53:17.:53:24.

We are going to see China and America as signatories to a deal.

:53:25.:53:29.

Much more of the emissions in the world will be covered by this deal.

:53:30.:53:33.

We have to make sure it is a good deal with the review clauses and a

:53:34.:53:37.

way of tightening any deal to make sure we keep to 2 degrees. Britain

:53:38.:53:41.

is playing a leading role and has lead by example and with money.

:53:42.:53:49.

There will never be a future where we do not need steel. The government

:53:50.:53:53.

is spending minions of pounds to compensate for the loss of UK

:53:54.:53:58.

steel-making. Can I ask the Prime Minister if he will send a clear

:53:59.:54:01.

signal to date to those potential investors in the steel industry that

:54:02.:54:05.

he will do whatever it takes to back a sustainable cutting-edge UK steel

:54:06.:54:11.

industry in the future? We want to seal -- to see more still being used

:54:12.:54:15.

in the UK and across the world. I completely agree full we want to

:54:16.:54:21.

support our steel business. We are taking action on procurement. Then

:54:22.:54:25.

you look at what we have done on our Royal Navy and what we can do on

:54:26.:54:28.

Railtrack and other organisations, we should back British steel. We're

:54:29.:54:33.

going to be exempting heavy energy users like British steel from the

:54:34.:54:37.

higher electricity charges. This does go, I have to say, rather to

:54:38.:54:42.

the questions asked by the Leader of the Opposition. If we endlessly

:54:43.:54:46.

pushed up bills for everybody else, it costs even more to exempt the

:54:47.:54:51.

high energy users. That is why you need a balanced programme.

:54:52.:54:54.

Everything we can do to help British steel, including an infrastructure

:54:55.:54:59.

plan you will be hearing a bit more about in a minute, is all to the

:55:00.:55:06.

good. In 2010, unemployment in my

:55:07.:55:14.

constituency stood at 2% of the population. It now stands at 1.6%.

:55:15.:55:19.

I'm sure my honourable friend agrees that in order to help those people

:55:20.:55:24.

still employed and to boost productivity and wages, we need to

:55:25.:55:26.

offer more opportunities for skills training. Does my right honourable

:55:27.:55:33.

friend agree with that and what more can the Government offer? Our vision

:55:34.:55:40.

is that all young people aged 18 should have a real choice of being

:55:41.:55:43.

able to take on an apprenticeship, and we are planning for 3 million in

:55:44.:55:48.

this Parliament, or be able to go to one of our universities. We do not

:55:49.:55:53.

want anybody left behind. He's right that unemployment has fallen in his

:55:54.:55:57.

constituency as around the country. We will hear from the Chancellor

:55:58.:56:00.

about what has happened in the last five years. Britain has grown as

:56:01.:56:06.

fast as any other G-7 country in terms of economic performance. You

:56:07.:56:12.

can look back and see the decisions made in 2010, 2011, 2012, difficult

:56:13.:56:17.

decisions, but they laid the platform for sustained economic

:56:18.:56:21.

growth and jobs. Education in Bradford is facing a

:56:22.:56:26.

funding and schools places crisis and we remain at the bottom of the

:56:27.:56:32.

league tables. Bradford's children cannot be failed any longer. Will

:56:33.:56:37.

the Prime Minister support my call for a Bradford challenged based on

:56:38.:56:40.

the highly successful London challenge? And will he stopped the

:56:41.:56:46.

dangerous changes to the school funding formula that will drag the

:56:47.:56:51.

children of Bradford further into the land of inequality, despair and

:56:52.:56:57.

neglect? We made commitments at the last

:56:58.:57:01.

election about funding our schools and funding school places. We will

:57:02.:57:05.

be keeping all of those commitments. Not just the revenue we provide to

:57:06.:57:10.

schools, where we will not be reducing the amount per pupil, but

:57:11.:57:14.

also spending much more on new school places in this Parliament

:57:15.:57:19.

than in the Parliament that preceded my becoming Prime Minister. We are

:57:20.:57:23.

also helping with building new academy chains and free schools.

:57:24.:57:26.

They are available for his constituency as others.

:57:27.:57:31.

Does my right honourable friend agree with me that the turmoil in

:57:32.:57:36.

northern Iraq and Syria gives opportunities to resolve

:57:37.:57:39.

long-standing international disputes, not least with Russia? And

:57:40.:57:43.

does he agree with me that the attack on the Russian bomber,

:57:44.:57:47.

something that never happened in the duration of the Cold War, was

:57:48.:57:52.

disproportionate? And we make sure we do not get into a conflict with

:57:53.:57:57.

Russia over Syria? What I would say to my honourable

:57:58.:58:01.

friend is I think there are opportunities for sensible

:58:02.:58:03.

discussions with Russia about the agenda in Syria, which is about

:58:04.:58:08.

political transition, so there can be a government that represents all

:58:09.:58:12.

of the people of Syria. I had that conversation with President Putin

:58:13.:58:17.

last week. He mentions the issue about the downed Russian jet. The

:58:18.:58:22.

facts are not yet clear. We should respect Turkey's right to protect

:58:23.:58:27.

their race-based as we defend our own. -- Aerospace.

:58:28.:58:35.

The Prime Minister very often tells us that the first duty of any

:58:36.:58:39.

government is to protect the public. Will he give an undertaking to

:58:40.:58:46.

ensure that the public in this country are protected by the police

:58:47.:58:52.

and emergency services? I think this government has a good record of

:58:53.:58:56.

protecting the public. We protected counter-terrorism police thing and

:58:57.:59:01.

we had a funding situation with the police which enabled a cut in crime

:59:02.:59:04.

at 31% since I became Prime Minister.

:59:05.:59:13.

John Morton, a drink-driver, destroyed the lives of Amy Baxter

:59:14.:59:18.

and Hayley Jones. Miss Baxter is paralysed from the neck down and in

:59:19.:59:23.

hospital 16 months later. He was sentenced to just a 3 year driving

:59:24.:59:29.

banned, a fine and a 20 week tag. Weeks later he says -- successfully

:59:30.:59:33.

applied to the Magistrates' Court for his tag to be removed so he

:59:34.:59:38.

could go on holiday to a stag party. Would my right honourable friend

:59:39.:59:43.

look to issue two -- guidance to magistrates that a tag should never

:59:44.:59:47.

be removed to allow criminals to go on holiday? I think my honourable

:59:48.:59:52.

friend makes a powerful point and I will look at this carefully. Let me

:59:53.:59:55.

express my sympathy to the victim and her family for what is

:59:56.:00:02.

undoubtedly be -- undoubtably a distressing case. I did not hear all

:00:03.:00:07.

of the points made in the court. But the point he made does seem to be

:00:08.:00:11.

powerful. A punishment is a punishment, a tag is a tag.

:00:12.:00:19.

Today's Middle East is increasingly resembling the central Europe of a

:00:20.:00:23.

century ago. Minorities, be they linguistic, religious or sexual,

:00:24.:00:27.

find themselves under more pressure than ever. Ie, my constituents and

:00:28.:00:34.

the SNP, understand the threat posed to this group by Daesh. How is the

:00:35.:00:39.

Prime Minister planning to prosecute a bombing campaign that does not

:00:40.:00:42.

alter the Democratic map of the Middle East, preventing Aleppo from

:00:43.:00:46.

becoming the new Budapest? We will set out the arguments

:00:47.:00:55.

clearly tomorrow but there's a clear and present danger to the UK of

:00:56.:01:01.

Isil, based in Iraq and Syria, planning attacks against this

:01:02.:01:04.

country today. We don't live in a perfect world and we can't deliver a

:01:05.:01:09.

perfect strategy but we can deliver a clear long-term study that will

:01:10.:01:13.

work. He talks of the lessons we learned from the last century. One

:01:14.:01:17.

of the lesson I would say we should learn from them is, when your

:01:18.:01:22.

country is under threat, and UK's aggression, you cannot endlessly

:01:23.:01:27.

dream about a perfect world -- and you are facing aggression, you need

:01:28.:01:35.

to act in the world that we are in. Thank you Mr Speaker. Will my right

:01:36.:01:39.

honourable friend join me in congratulating all the staff of the

:01:40.:01:46.

birthing unit, the midwives, matron Emma Chambers local activist was

:01:47.:01:51.

scoring 100% on their friends and family survey on satisfaction and

:01:52.:01:56.

care. The commitment of the midwives is only matched by the Conservative

:01:57.:02:01.

commitment to the NHS. For two elections in a row we have promised

:02:02.:02:05.

and delivered greater investment in our NHS than Labour. Can I say to my

:02:06.:02:12.

right honourable friend she is quite right to highlight the friends and

:02:13.:02:16.

family test. It's a simple way of measuring whether our hospitals are

:02:17.:02:19.

giving great care. I think it has been a real advance in the NHS to

:02:20.:02:24.

have that. As well as good schemes to make sure you'd want your friends

:02:25.:02:27.

and family treated in hospital we need to the resources about hospital

:02:28.:02:33.

and that is what we are doing with the spending figures announced

:02:34.:02:35.

today. Crucially on childbirth, it isn't often that I quote the daily

:02:36.:02:39.

Mirror but it is worth looking at what they are raising about the

:02:40.:02:43.

importance of a seven-day NHS and making sure we have high standards

:02:44.:02:48.

across our NHS every day of the week as well as the extra money we are

:02:49.:02:53.

putting into the NHS the seven-day week NHS will mean a much stronger

:02:54.:02:59.

one. Thank you Mr Speaker. The big lottery fund supports important

:03:00.:03:05.

local projects in my constituency, including the Cake, a children's

:03:06.:03:09.

playground and some women's aid projects which play an essential

:03:10.:03:13.

role supporting the vulnerable people that this government has left

:03:14.:03:18.

behind. Will the Prime Minister join with me in congratulating these

:03:19.:03:22.

local projects on their work and reassure the House that this

:03:23.:03:26.

governor to protect the current level of national lottery funding

:03:27.:03:29.

earmarked for charities and community projects? I can certainly

:03:30.:03:35.

say we will protect the big lottery fund because it does an excellent

:03:36.:03:38.

job. I cannot resist making the point that one thing that the UK

:03:39.:03:43.

brings is a bigger national lottery. A bigger part that can support

:03:44.:03:48.

Scottish charities. Let me make this point. Following what has happened

:03:49.:03:58.

to the oil price, if there was a Scottish November Autumn Statement,

:03:59.:04:01.

it would be a statement that would be about cuts, cuts, taxes, taxes,

:04:02.:04:08.

and no relief from the National Lottery! Order! Order! Mr Brendan

:04:09.:04:22.

McNeill. Mr Angus Brendan McNeill, calm yourself. You may be a cheeky

:04:23.:04:37.

chappie but you are an exceptionally noisy one! Statement by the

:04:38.:04:42.

Chancellor of the Exchequer! Mr Speaker, this Spending Review

:04:43.:04:45.

delivers on the commitment we made to the British people that we would

:04:46.:04:51.

put security first. To protect our economic security by taking the

:04:52.:04:54.

difficult decisions to live within our means and bring down our debt.

:04:55.:05:01.

And to protect our national security by defending our country's interests

:05:02.:05:07.

abroad and keeping our citizens safe at home. Economic and national

:05:08.:05:10.

security provide the foundations for everything we want to support.

:05:11.:05:14.

Opportunity for all. The aspirations of families. The strong country we

:05:15.:05:22.

want to build. Five years ago, when I presented our first Spending

:05:23.:05:28.

Review our economy was in crisis, and as the letter said, there was no

:05:29.:05:35.

money left! We were borrowing ?1 in every ?4 that we spent and our job

:05:36.:05:40.

was to rescue Britain. Today as we present this Spending Review our job

:05:41.:05:45.

is to rebuild button. Built our finances, defences, our society so

:05:46.:05:51.

that Britain becomes the most prosperous and secure of all the

:05:52.:05:55.

major nations of the world. So we'd leave to the next generation a

:05:56.:05:59.

stronger country than the one that we inherited. And that is what this

:06:00.:06:03.

government was elected to do and today we set out a plan to deliver

:06:04.:06:09.

on that commitment. Mr Speaker, we have committed to running a surplus.

:06:10.:06:14.

Today I can confirm that the four-year public spending plans that

:06:15.:06:17.

I set out are forecast to deliver that surplus, so that we don't

:06:18.:06:21.

borrow for ever and are ready for whatever storms like ahead. We

:06:22.:06:25.

promised to bring our debts down. promised to bring our debts down.

:06:26.:06:29.

Today the forecast that I present shows that after the longest period

:06:30.:06:34.

of rising debt in our modern history, this year, our debt will

:06:35.:06:39.

fall and will keep falling in every year that follows. We promised to

:06:40.:06:48.

move Britain from being a high welfare, low-wage economy to a lower

:06:49.:06:53.

welfare, higher wage economy. Today I can tell the House that the ?12

:06:54.:06:58.

billion of welfare savings we committed to add to the election

:06:59.:07:03.

will be delivered in full, and in a way that helps families as we make

:07:04.:07:06.

the transition to our national living wage. We promised that we

:07:07.:07:12.

would strengthen our national defences, take the fight to the

:07:13.:07:16.

enemies of this nation and project the influence of our country abroad.

:07:17.:07:20.

Today this Spending Review delivers the resources to make sure that

:07:21.:07:24.

Britain, unique in the world, will meet its twin obligations to spend

:07:25.:07:29.

0.7% of its income on development and 2% on defence of the realm. In

:07:30.:07:36.

this Spending Review, we not only ensure the economic and national

:07:37.:07:39.

security of our country, we build on it. It sets out far-reaching changes

:07:40.:07:44.

to what the state does and how it does it. It reforms our public

:07:45.:07:49.

services so we truly extend opportunity to all. Whether the way

:07:50.:07:54.

we educate our children, train our workforce, rehabilitate prisoners,

:07:55.:07:57.

provide homes for our families, deliver care for the elderly and

:07:58.:08:01.

sick, all the way that we hand back power to local communities, this is

:08:02.:08:05.

a big Spending Review by a government that does big things. It

:08:06.:08:09.

is a long-term economic plan for our country's feature. Mr Speaker,

:08:10.:08:17.

nothing is possible without the foundations of a strong economy. Let

:08:18.:08:23.

me turn to the new forecast divided by the independent Office for Budget

:08:24.:08:25.

Responsibility and let me thank Robert and his team for their work.

:08:26.:08:30.

Since this budget new economic data has been published which confirms

:08:31.:08:34.

this, since 2010, no economy in the G7 has grown faster than button. We

:08:35.:08:40.

have grown must treat and is faster than Japan, twice as fast as France,

:08:41.:08:45.

faster than Germany and at the same rate as the United States. That

:08:46.:08:50.

growth has not been fuelled by an irresponsible banking boom like in

:08:51.:08:53.

the last decade. Business investment has grown more than twice as fast as

:08:54.:08:58.

consumption, exports have grown faster than imports and the North

:08:59.:09:04.

has grown faster than the south. But we are determined that this will be

:09:05.:09:10.

an economic recovery for all, felt in all parts of our nation. That is

:09:11.:09:14.

already happening. In which area of the country are we seeing the

:09:15.:09:18.

strongest jobs growth? Not just in our capital city. The Midlands is

:09:19.:09:22.

creating jobs through times faster than London and the south-east. In

:09:23.:09:26.

the past year we've seen more people in work in the Northern Power has

:09:27.:09:31.

than ever before. And where do we have the highest employment rate of

:09:32.:09:34.

any part of this country? In the south-west of England. Our long-term

:09:35.:09:42.

economic plan is working. The OBR, Mr Speaker, reminds us today of the

:09:43.:09:46.

huge challenges that we still face at home and abroad. Our debts are

:09:47.:09:52.

too high and our to visit remains. Productivity is growing yet we still

:09:53.:09:56.

like behind most of our competitors. I can say that in the forecast today

:09:57.:10:01.

expectations for world growth and world trade have been revised down

:10:02.:10:06.

again. The weakness of the Eurozone remains a persistent problem. There

:10:07.:10:11.

are rising concerns about debt in emerging economies, these are yet

:10:12.:10:14.

more reasons why we are determined to take the necessary steps to

:10:15.:10:20.

protect our economic security. And that brings me to the forecast for

:10:21.:10:26.

our own GDP. Even with the weaker double picture, our economy this

:10:27.:10:31.

year is predicted to grow by 2.4%, growth is then revised up from the

:10:32.:10:36.

budget forecast in the next two years, to 2.4% in 2016 and two

:10:37.:10:42.

years, to 2.4% in 2016 and 2.5% in starts to return to its long-term

:10:43.:10:50.

trend of growth of 2.4% in 2018 and 2.3% in 2019 and 2020. That growth

:10:51.:10:55.

is more balanced than in the past, economy investment is set to grow

:10:56.:11:00.

faster in Britain than in any other major advanced economy in the world.

:11:01.:11:04.

This year, the next year, and the after that. Mr Speaker, when I

:11:05.:11:11.

presented my first Spending Review in 2010 and said this country on the

:11:12.:11:16.

path of living within its means, our opponents claimed that growth would

:11:17.:11:20.

be joked off, when a million jobs lost, and inequality would rise.

:11:21.:11:26.

Every one of those predictions has proved to be completely wrong. And

:11:27.:11:36.

so too did the claim that Britain needed to choose between sound

:11:37.:11:39.

public finances and great public services. It's a false choice. If

:11:40.:11:43.

you are bowled with your reforms you can have both. Is why, why we have

:11:44.:11:49.

reduced government spending, crime has fallen, 1 million more children

:11:50.:11:54.

are being educated in good outstanding schools and public

:11:55.:11:58.

satisfaction with our local government services has risen. The

:11:59.:12:03.

exact opposite of what our critics predicted. And yet now the same

:12:04.:12:07.

people are making similar claims about this Spending Review as we

:12:08.:12:11.

seek to move Britain out of deficit and into surplus. And they are

:12:12.:12:18.

completely wrong again. The OBR has seen our public expenditure plans,

:12:19.:12:21.

analysed the effect on our economy. Their forecast today is that the

:12:22.:12:24.

economy will grow robustly every year, living standards will rise

:12:25.:12:28.

every gear and that more than 1 million extra jobs will be created

:12:29.:12:34.

over the next five years. That is because sound public finances are

:12:35.:12:37.

not the enemy of sustained growth, they are its precondition. Our

:12:38.:12:43.

economic plan puts the security of working people first so that we are

:12:44.:12:47.

prepared for the inevitable storms that light ahead. That is why our

:12:48.:12:52.

Charter for added responsibility commits us to reducing the debt to

:12:53.:12:57.

GDP ratio for each year of this Parliament reaching a surplus in

:12:58.:13:01.

2019-20 and keeping that surplus in normal times. I can confirm that the

:13:02.:13:06.

OBR has today acidified that the economic plan that would present

:13:07.:13:11.

delivers on our commitment. But it has certified this. That brings me

:13:12.:13:16.

to the forecast for debt and deficit. As usual the OBR has had

:13:17.:13:19.

access to published and unpublished data and made its own assessment of

:13:20.:13:26.

our public finances. Since these budget Housing Associations in have

:13:27.:13:31.

been reclassified by our independent office for National statistics, and

:13:32.:13:36.

their borrowing in to Liddle and depth of been brought on to the

:13:37.:13:40.

public balance sheet and that that will be backdated to 2008. It is

:13:41.:13:45.

listed as to change, so the OBR has recalled belated its previous budget

:13:46.:13:49.

forecast to include Housing Associations, so that we can compare

:13:50.:13:55.

like with like. On that new measure debt was forecast in July to be

:13:56.:14:00.

83.6% of national income this year. Today in this Autumn Statement have

:14:01.:14:04.

forecast this year to be lower, 82.5%. It then falls, every year,

:14:05.:14:16.

down to 81.7%... Order! Mr Lewis! Get a grip of yourself, man! Take up

:14:17.:14:24.

yoga, you will find it beneficial! The record shows that the Chancellor

:14:25.:14:30.

stays for a considerable period after his statement to respond to

:14:31.:14:34.

questions. Members will always find the chair a friend if they wish to

:14:35.:14:41.

question a minister. Yes, they will! LAUGHTER

:14:42.:14:47.

Those with questions to ask will be heard. Meanwhile, the Chancellor

:14:48.:14:50.

will be heard! Lunch Mac CHEERING

:14:51.:14:57.

Mr Speaker, I am looking forward to it! On that new measure debt was

:14:58.:15:03.

forecast in July to be 83.6% of national income this. Today in this

:15:04.:15:05.

Autumn Statement they have forecast it this year to be 82.5%. It then

:15:06.:15:12.

falls every year down to 81.7% next, done to 79.9% in 27-18 and

:15:13.:15:22.

down to 77.3% and 74 by 3% reaching 71.3% in 2020-21. In every single

:15:23.:15:29.

year, the national debt as a share of national income is lower than

:15:30.:15:34.

when I presented the budget four months ago. And this improvement in

:15:35.:15:38.

the nation's finances is due to two things. First, the OBR expects tax

:15:39.:15:47.

receipts to be stronger. A sign our economy is healthier than thought.

:15:48.:15:52.

Second, debt interest payments are expected to be lower, reflecting the

:15:53.:15:56.

further fall in the rates we pay to our creditors. Combine the effects

:15:57.:16:01.

of better tax receipts and lower debt interest and overall the OBR

:16:02.:16:06.

has copulated this means a ?27 billion improvement in our public

:16:07.:16:11.

finances -- calculated, compared to where we were at the Budget. Mr

:16:12.:16:16.

Speaker, this improvement in the nation's finances allows me to do

:16:17.:16:23.

the following. First we will borrow ?8 billion less than we forecast,

:16:24.:16:32.

making faster progress towards eliminating and lowering the doubt,

:16:33.:16:34.

fixing the roof when the sun is shining.

:16:35.:16:41.

Second, we will spend 12 billion more on capital investments, making

:16:42.:16:48.

faster progress to building the infrastructure our country needs.

:16:49.:16:54.

And third, the improved public finances allow us to reach the same

:16:55.:16:58.

goal of the surplus while cutting macro less in the early years, we

:16:59.:17:04.

can smooth the path to the same destination. We can help on tax

:17:05.:17:08.

credits. I have then asked to help in the transition as Britain moves

:17:09.:17:14.

to the higher wage, lower welfare, lower tax society. These changes to

:17:15.:17:20.

tax credits should be phased in. I have listened to the concerns. I

:17:21.:17:24.

hear and understand them. Because I have been able to announce a -- an

:17:25.:17:29.

improvement in the public finances, the simplest thing to do is not to

:17:30.:17:33.

faze these changes in body to avoid them altogether. Tax credits are

:17:34.:17:41.

being phased out any way as we introduce Universal Credit. What

:17:42.:17:45.

that means is that the tax credit tabor rate and threshold remain

:17:46.:17:52.

unchanged. The disregard will be ?2500. I propose no further changes

:17:53.:17:58.

to the Universal Credit tabor or the work allowances to those passed

:17:59.:18:06.

through Parliament last week. I set a lower welfare cap at the budget.

:18:07.:18:12.

Helping with the transition obviously means that we will not be

:18:13.:18:16.

within that lower welfare cap in the first years but the House should

:18:17.:18:21.

also note that thanks to our welfare reforms, we meet the cap in the

:18:22.:18:26.

later part of this Parliament. Indeed on the figures published

:18:27.:18:30.

today, we still achieve the ?12 billion per year welfare savings we

:18:31.:18:37.

promised. That is because of the permanent savings we have already

:18:38.:18:41.

made and further long-term reforms we announce today. The rate of

:18:42.:18:45.

housing benefit in the social sector will be capped. The same rate paid

:18:46.:18:53.

to those in the private rented sector who received the same

:18:54.:18:57.

benefit. This will apply to new tenancies only. We will also stop

:18:58.:19:00.

paying housing benefit and pension credit payments to people who have

:19:01.:19:04.

left the country for more than a month. The welfare system should be

:19:05.:19:08.

fair to those who need it and fair to those who pay for it, too.

:19:09.:19:13.

Improved public finances mean that we continue to be on target for a

:19:14.:19:18.

surplus. The House will want to know the level of that surplus. Let me

:19:19.:19:24.

give the OBR forecast for deficit and borrowing. In 2010 the deficit

:19:25.:19:29.

we inherited was estimated at 11.1% of national income. This year it is

:19:30.:19:34.

said to be almost one third of that, 3.9%. Next year it falls to less

:19:35.:19:41.

than a quarter, 2.5%. Then the deficit is down to 1.2% in 2017-18,

:19:42.:19:48.

0.2% a year after that, before moving into a surplus in 2019-20,

:19:49.:19:54.

rising to 0.6% of the following year. The cash borrowing figures.

:19:55.:20:01.

The OBR predicted at the time of the budget that Britain would borrow

:20:02.:20:06.

?74.1 billion this year. They now forecast we will borrow less than

:20:07.:20:12.

that at 73.5 billion. Borrowing falls 49.9 billion next year. It

:20:13.:20:16.

continues to fall and fall and falls to fall and fall still lower in

:20:17.:20:23.

every single year after that, to 28 -- 20 4.8 8,000,000,020 17-18, four

:20:24.:20:31.

.6 billion the following year, and in 2020 we reach a surplus of ?10.1

:20:32.:20:37.

billion. That is higher than was forecast in the budget. Britain out

:20:38.:20:44.

of the red and into the black. In 2020-21 the surplus rises to 14.7

:20:45.:20:50.

billion. The deficit falls every year. We are borrowing ?8 billion

:20:51.:20:59.

less than we expected overall. And we reach a bigger surplus. We have

:21:00.:21:03.

achieved this while at the same time helping working families as we move

:21:04.:21:09.

to lower welfare, higher wage economy, and we have the economic

:21:10.:21:12.

security of knowing our country is paying its way in the world. That

:21:13.:21:19.

brings me to our plans for public expenditure and taxation. I want to

:21:20.:21:23.

thank my right honourable friend, the chief secretary, other

:21:24.:21:27.

ministerial colleagues and the brilliant officials who have

:21:28.:21:30.

assisted us for the long hours and hard work they have put into

:21:31.:21:36.

developing these plans. We said ?5 billion would come from the levels

:21:37.:21:40.

on tax avoidance, evasion and imbalances. Those measures were

:21:41.:21:44.

announced in the Budget. Together we go further today with new penalties

:21:45.:21:47.

for the General Anti-Abuse Rule which this comment introduced,

:21:48.:21:52.

action undisguised renumeration schemes and stamp duty avoidance,

:21:53.:21:56.

and we will stop abuse of the intangible fixed assets scheme. We

:21:57.:22:07.

will all show ensure... HMRC is making efficiencies of 18% in its

:22:08.:22:12.

own Budget. In the digital age we do not need taxpayers to pay for paper

:22:13.:22:18.

processing or 170 separate tax offices around the country. We are

:22:19.:22:22.

reinvesting some of those savings with an extra ?800 billion in the

:22:23.:22:27.

fight against tax evasion and investment return of almost ten

:22:28.:22:30.

times the tax collected. We're going to build one of the most digitally

:22:31.:22:35.

advanced tax administrations in the world, so that every individual and

:22:36.:22:38.

every small business will have their own digital tax account by the end

:22:39.:22:41.

of the decade in order to manage their tax online. From 2019, when

:22:42.:22:48.

these accounts are up and running, we will require Capital Gains Tax to

:22:49.:22:52.

be paid within 30 days of completion of any disposal of residential

:22:53.:22:56.

property. These form part of the digital revolution we are bringing

:22:57.:22:59.

to Whitehall with this Spending Review. The digital service will

:23:00.:23:04.

receive an additional ?450 million. The court Cabinet budget will be

:23:05.:23:13.

cut. The cost of all Whitehall administration will be cut by ?1.9

:23:14.:23:19.

billion. These form part of the ?12 billion of savings in government

:23:20.:23:23.

departments iron and -- I am announcing today. In 2010,

:23:24.:23:28.

government spending took up 45%. This figure we could not sustain

:23:29.:23:32.

because it was neither practical nor sensible to raise taxes high enough

:23:33.:23:37.

to pay for that. We ended up with a massive structural deficit. Today

:23:38.:23:40.

the state accounts for just under 40% of national income and is

:23:41.:23:46.

forecast to reach 36.5% by the end of the Spending Review. The

:23:47.:23:48.

structural spending this represents is at a level of a modern economy

:23:49.:23:54.

can sustain. It is a level B British people are prepared to pay their

:23:55.:24:00.

taxes for. It is precisely because this government believes in decent

:24:01.:24:03.

public services and a properly funded welfare state that we are

:24:04.:24:08.

insistent they are sustainable and affordable. To simply argue all the

:24:09.:24:13.

time the public spending must always increase, never be cut, is

:24:14.:24:17.

irresponsible and lets down the people who rely on public services

:24:18.:24:21.

most. Equally to fund the things we want the Government to provide in

:24:22.:24:25.

the modern world, we have to be prepared to provide the resources. I

:24:26.:24:29.

am setting the limits for total managed expenditure as follows. This

:24:30.:24:33.

year public spending will be ?756 billion. 773 billion next year, 787

:24:34.:24:44.

the year after, 801 billion before reaching 821,000,000,020 19-20. The

:24:45.:24:49.

year we are forecast to eliminate the deficit and cheaper surplus.

:24:50.:24:53.

After that, the forecast public spending rises roughly in line with

:24:54.:25:01.

the growth of the economy. The figures from the OBR show that over

:25:02.:25:05.

the next five years welfare spending falls as a percentage of national

:25:06.:25:10.

income, while departmental capital investment is maintained and is

:25:11.:25:13.

higher at the end of the period. That is precisely the right switch

:25:14.:25:16.

for a country serious about investing in its long-term economic

:25:17.:25:22.

success. People will want to know what the levels of public spending

:25:23.:25:26.

mean in practice and the scale of the cuts we are asking government

:25:27.:25:30.

departments to undertake. The day-to-day spending of government

:25:31.:25:34.

departments is set to fall by an average of 0.8% per year in real

:25:35.:25:39.

terms. That compares to an average fall of 2% in the past five years.

:25:40.:25:44.

The savings we need are considerably smaller. This reflects the

:25:45.:25:47.

improvement in the public finances and the progress we have already

:25:48.:25:51.

made. The overall rate of annual cuts I set out in today's Spending

:25:52.:25:55.

Review are less than half of those delivered over the last five years.

:25:56.:26:00.

Britain is spending a lower proportion of its money on welfare

:26:01.:26:04.

and a higher proportion on infrastructure. They Budget balanced

:26:05.:26:08.

with cuts half what they were in the last parliament, making the savings

:26:09.:26:16.

we need, no more, no less, and providing people with a country with

:26:17.:26:18.

a surplus that lives within its means. This not -- this does not

:26:19.:26:25.

mean that decisions are easy. Nor should we lose sight of the fact

:26:26.:26:29.

this Spending Review commits ?4 trillion over the next five years.

:26:30.:26:34.

It is a huge commitment of the hard earned cash of British taxpayers.

:26:35.:26:38.

And all of those who dedicate their lives to public service will want to

:26:39.:26:42.

make sure it is well spent. Our approach is not simply

:26:43.:26:45.

retrenchment. It is to reform and rebuild. These reforms will support

:26:46.:26:51.

our objectives. First, to develop a modern integrated health and social

:26:52.:26:55.

care system that supports people at every stage of their lives. Second,

:26:56.:27:01.

to spread economic power and wealth through devolution revolution and

:27:02.:27:04.

invest in long-term infrastructure. Third, to extend opportunity by

:27:05.:27:08.

attacking the big social failures that for too long have helped people

:27:09.:27:13.

back. Fourth, to reinforce our national security with the

:27:14.:27:16.

re-sources to protect us at home and protect our values abroad. The

:27:17.:27:21.

resorts is allocated are driven by these four Gaults. The first

:27:22.:27:25.

priority is the first priority of the British people, our National

:27:26.:27:30.

Health Service. Health spending was cut by the Labour administration in

:27:31.:27:34.

Wales. We Conservatives have been increasing spending on the NHS in

:27:35.:27:42.

England. And in this Spending Review we do so again. We will work with

:27:43.:27:47.

our health professionals to deliver the best value for that money. That

:27:48.:27:51.

means ?22 billion of efficiency savings across the service. It means

:27:52.:27:57.

a 25% cut in the Whitehall budget of the Department of Health. It means

:27:58.:28:01.

modernising the way we fund students of health care. There is a cap on

:28:02.:28:08.

student nurses. Over half of all applicants are turned away and it

:28:09.:28:11.

leaves hospital is relying on agencies and overseas staff. We will

:28:12.:28:16.

replace direct funding with loans for new students so we can abolish

:28:17.:28:21.

the self-defeating cap and create up to 10,000 more training places in

:28:22.:28:26.

this Parliament. Alongside these reforms we will give the NHS the

:28:27.:28:29.

money it needs. We made a commitment to a ?10 billion increase in the NHS

:28:30.:28:35.

budget and we deliver that today with the first ?6 billion delivered

:28:36.:28:41.

upfront next year. This fully funds the five-year view the NHS put

:28:42.:28:44.

forward as the plan for its future. As the Chief Executive of NHS -- NHS

:28:45.:28:50.

England said, the NHS has been heard and actively supported. Let me

:28:51.:28:58.

explain what that means in cash. The NHS budget will rise from ?101

:28:59.:29:04.

billion today to ?120 billion by 2020. This is a half of equipment to

:29:05.:29:12.

the NHS over this Parliament. -- commitment. The largest to the NHS

:29:13.:29:20.

since its creation. We have a clear plan for improving the NHS. We fully

:29:21.:29:26.

funded it. And in return patients will see more than ?5 billion in

:29:27.:29:32.

health research in everything from Gene Ormsby antimicrobial

:29:33.:29:36.

resistance, to a new dimension Institute and a new world-class

:29:37.:29:40.

public health facility in Harlow, and more. 800,000 more elected

:29:41.:29:46.

hospital admissions. 5 million more outpatient appointments. 2 million

:29:47.:29:51.

more diagnostic tests. New hospitals in Cambridge, Sandwell and

:29:52.:29:55.

Brighton. Cancer testing within four weeks and a brilliant NHS are

:29:56.:30:02.

available seven days a week. Mr Speaker, there is one part of our

:30:03.:30:07.

NHS that has been neglected for too long, mental health. I want to thank

:30:08.:30:12.

the all-party group led by my right honourable friend for Sutton

:30:13.:30:17.

Coldfield, the Right Honourable member for North Norfolk and

:30:18.:30:19.

Alastair Campbell for their work in this area. In the last Parliament we

:30:20.:30:23.

made a start by laying the foundations for the quality of

:30:24.:30:26.

treatment for waiting times for mental health. Today we are building

:30:27.:30:31.

on that. We are providing additional funding. By 2020 is significantly

:30:32.:30:35.

more people will have access to talking therapies, perinatal

:30:36.:30:40.

services and crisis care. All possible because we made a promise

:30:41.:30:45.

to the British people to give our NHS the funding it needs and in this

:30:46.:30:52.

Spending Review we have delivered. The health service cannot function

:30:53.:30:55.

effectively without good social care. The truth we need to confront

:30:56.:30:59.

is this. Many local authorities are not going to be able to meet the

:31:00.:31:03.

growing social care needs unless they have new sources of funding.

:31:04.:31:08.

That in the end comes from the taxpayer. In future those local

:31:09.:31:11.

authorities responsible for social care will be able to levy a new

:31:12.:31:17.

social care precept of up to 2% on council tax. The money raised will

:31:18.:31:20.

have to be spent exclusively on adult social care and if all

:31:21.:31:25.

authorities make full use of it, it will bring almost ?2 billion more

:31:26.:31:30.

into the care system. It is part of a major reform we are undertaking to

:31:31.:31:35.

integrate health and social care by the end of this decade. To help

:31:36.:31:39.

achieve that I am today increasing the better care fund to support that

:31:40.:31:44.

integration, with local authorities able to access a next ?1.5 million

:31:45.:31:52.

by 2019-20. The steps taken in this Spending Review mean that by the end

:31:53.:31:54.

of the parliament social care spending will have risen in real

:31:55.:31:55.

terms by the end of the Parliament. To help businesses with the

:31:56.:32:20.

administration of this important boost will -- we will align the next

:32:21.:32:26.

two phases with the tax years. The best way to afford generous pension

:32:27.:32:30.

benefits is to raise the pension age in line with life expectancy as

:32:31.:32:36.

we're set to do in this Parliament. That allows us to maintain a triple

:32:37.:32:40.

lock on the value of the state pension, so never again do

:32:41.:32:43.

Britain's pensioners receive a derisory increase of 75p. As a

:32:44.:32:52.

result of our commitment to those who have worked hard all their lives

:32:53.:32:56.

and contributed to this society I confirmed that next year the basic

:32:57.:33:03.

state pension will rise by ?3 35 to ?119 30 a week is the biggest

:33:04.:33:07.

real-time is increased the basic state pension 15 years. Taking all

:33:08.:33:13.

of our increases together over the last five years, pensioners will be

:33:14.:33:20.

?1125 better off a year than they were when we came into office. We

:33:21.:33:24.

also undertaking the biggest change in the state pension for 40 years to

:33:25.:33:28.

make it simple and fair by introducing the new single tier

:33:29.:33:31.

pension for pensioners from next April. I'm today setting the full

:33:32.:33:39.

rate the state pension at ?155, 65p. Higher than the current means tested

:33:40.:33:44.

benefit for the lowest income pensioners in this society and

:33:45.:33:46.

another example of progressive government in action. Instead of

:33:47.:33:54.

cutting these savings credit as in previous fiscal events and will be

:33:55.:33:58.

frozen at its current level where income is not changed. So the first

:33:59.:34:03.

objective of this Spending Review is to give unprecedented support to

:34:04.:34:07.

health, social care and pensioners. The second is to spread economic

:34:08.:34:11.

power and wealth across this nation. In recent weeks great metropolitan

:34:12.:34:15.

areas like Sheffield, Liverpool, the north-east and the West Midlands

:34:16.:34:18.

have joined Greater Manchester in agreeing to create elected Mayers in

:34:19.:34:24.

return for far-reaching new powers over transport skills and the local

:34:25.:34:29.

economy. It is the most determined effort to change the geographical

:34:30.:34:31.

imbalance that has bedevilled the British economy far half-century. We

:34:32.:34:39.

are today setting aside the ?12 billion we promised for the local

:34:40.:34:43.

growth fund and I'm announcing the creation of 26 new extended and

:34:44.:34:47.

enterprise zones including 15 zones in towns and rural areas from

:34:48.:34:52.

Carlisle to Dorset to Ipswich. But if we want to shift power in this

:34:53.:34:56.

country we must give all local councils the tools to drive business

:34:57.:35:00.

growth in their area, and the rewards that come when you do so. So

:35:01.:35:05.

I can confirm today that, as we set out last month, we will abolish the

:35:06.:35:10.

uniform is Ms rate, by the end of the Parliament local government will

:35:11.:35:13.

keep all the revenues from business rates, we will give councils the

:35:14.:35:18.

power to cut rates and make the area more active to businesses and

:35:19.:35:22.

elected mayors will be able to raise rates provided they fund specific

:35:23.:35:28.

infrastructure projects supported by the local business community.

:35:29.:35:32.

Because the amount we raise in business rates is greater than the

:35:33.:35:35.

amount we give to local councils through the government grant will

:35:36.:35:38.

phase out that ground over this Parliament. And we'll also devolve

:35:39.:35:43.

additional responsibilities. The temporary accommodation management

:35:44.:35:47.

fee will no longer be paid through the benefit system. Instead councils

:35:48.:35:52.

will get ?10 million a year more up front to provide more help to

:35:53.:35:55.

homeless people. Alongside savings in the public health grant we will

:35:56.:36:01.

consult on transferring new powers and responsibility for its funding

:36:02.:36:05.

and elements of the administration of housing benefit. Local government

:36:06.:36:09.

is sitting on property worth one quarter of ?1 trillion so we will

:36:10.:36:14.

let councils spend 100% of the receipts from the assets they sell

:36:15.:36:18.

to improve their local services. Councils increase their reserves by

:36:19.:36:23.

almost ?10 billion over the last Parliament. We would encourage them

:36:24.:36:29.

to draw on these reserves as they undertake reforms. Mr Speaker, this

:36:30.:36:35.

amounts to a big package of new powers but also new responsibilities

:36:36.:36:38.

for local councils. It is a revolution in the way that we govern

:36:39.:36:42.

this country and if you take into account both the falling grant and

:36:43.:36:47.

the rise in comes it means that by the end of this Parliament local

:36:48.:36:50.

government will spend the same in cash terms as does today. Mr

:36:51.:36:57.

Speaker, the devolved administrations of the UK will also

:36:58.:37:01.

have available to them unprecedented new powers to drive their economies.

:37:02.:37:06.

The conclusion last week of the political talks in Northern Ireland

:37:07.:37:09.

mean additional spending power for the executive to support the full

:37:10.:37:13.

temperament issue of the Stormont has agreement. That opens the door

:37:14.:37:17.

to the devolution of corporation tax which the parties have now confirmed

:37:18.:37:20.

they wish to set at the rate of 12.5%. If huge prize for business in

:37:21.:37:27.

Northern Ireland. The onus is now on the Northern Ireland executive to

:37:28.:37:30.

play their part and deliver sustainable budget so that we can

:37:31.:37:35.

move forward on that. The Northern Ireland's lock grant will be over

:37:36.:37:41.

?11 billion by 2019-20 and funding for new investment and

:37:42.:37:44.

infrastructure will rise by over ?600 million over five years so that

:37:45.:37:48.

Northern Ireland can invest in its long-term future. For many years

:37:49.:37:52.

Wales has asked for a funding floor to protect public spending. Within

:37:53.:37:56.

months of coming to office, this Conservative government is answering

:37:57.:38:00.

that call and providing that historic funding guarantee for

:38:01.:38:04.

Wales. I can announce that we will introduce the new funding floor and

:38:05.:38:10.

set it for this Parliament at 115%. The Welsh Secretary and I also

:38:11.:38:14.

confirm that we will legislate so that the devolution of income tax

:38:15.:38:18.

can take place without a referendum. We will also help fund a new Cardiff

:38:19.:38:24.

City deal. So the Welsh block grant will reach almost ?15 billion by

:38:25.:38:29.

2019-20, while capital spending will rise by over 500 million pounds over

:38:30.:38:39.

five years. -- capital spending will rise. Scotland voted to remain in

:38:40.:38:48.

the United Kingdom. Mr Speaker, this must be underpinned by a fiscal

:38:49.:38:51.

framework that is fair to all taxpayers and we are now ready to

:38:52.:38:55.

reach an agreement. The ball is in the Court of the Scottish

:38:56.:38:59.

Government. Let's have a deal that is fair to Scotland and to the UK,

:39:00.:39:05.

and is built to last. We are implementing the city deal for

:39:06.:39:09.

Glasgow and negotiating deals with Aberdeen and Inverness as well. If

:39:10.:39:12.

Scotland had voted for independence they would have had their own

:39:13.:39:17.

Spending Review this autumn. And with world oil prices falling and

:39:18.:39:20.

revenues from the North Sea forecast by the OBR today to be down 94%, we

:39:21.:39:30.

would have seen catastrophic cuts in Scottish public services. But

:39:31.:39:33.

thankfully, Scotland remains a strong part of a stronger United

:39:34.:39:36.

Kingdom. Pareja CHEERING

:39:37.:39:48.

So the Scottish block grant will be over ?30 million in 2019-20 while

:39:49.:39:53.

capital spending available will rise by ?1.9 billion until 2021. The UK

:39:54.:39:57.

Government giving Scotland the resources to invest in its long-term

:39:58.:40:03.

future. For the UK Government, the funding of the Scotland, Wales, and

:40:04.:40:08.

northern Ireland offices will all be protected in real terms. We are

:40:09.:40:13.

devolving power across this country and spending on the Icahn and

:40:14.:40:16.

infrastructure that connects the nation. Something Britain hasn't

:40:17.:40:21.

done enough of for a generation. Now by making the tough decisions to

:40:22.:40:24.

save on day-to-day costs in departments were involved in -- we

:40:25.:40:30.

will be investing in new roads, rails, and flood defence needed. We

:40:31.:40:34.

started in the last Parliament. Britain has just topped the league

:40:35.:40:38.

of the best places in the world to invest in infrastructure. In this

:40:39.:40:43.

Spending Review we go much further. The Department for times but's

:40:44.:40:48.

operational budget will fall by 37%. Peshmerga Department for

:40:49.:40:55.

Transport's budget. The biggest increase for a generation. That

:40:56.:41:01.

funds the largest road investment programme since the 1970s. We are

:41:02.:41:11.

the builders. It means the construction of a just two, to link

:41:12.:41:15.

the northern powerhouse to the south can begin, the electric version of

:41:16.:41:24.

lines like the great Western can go ahead, we will fund our new

:41:25.:41:28.

transport for the North to get it up and running. London will get an

:41:29.:41:32.

investment of ?11 billion in its transport infrastructure, and having

:41:33.:41:38.

met with my honourable friend for Folkestone and the Kent MPs are

:41:39.:41:41.

relieve the pressure from Operation Stack within a quarter of a million

:41:42.:41:47.

pound investment in facilities there. We will make a commitment of

:41:48.:41:51.

?300 million to cycling as promised and spent over ?5 billion on roads

:41:52.:41:57.

maintenance in this Parliament. And thanks to the incessant lobbying of

:41:58.:42:00.

my honourable friend for Northampton North, Britain now has a permanent

:42:01.:42:14.

potholes and! -- pothole fund! Nuno Espirito Santo

:42:15.:42:21.

CHEERING We are investing in what we need and

:42:22.:42:25.

in flood defences. The Defra budget will fall by 15% but we are

:42:26.:42:30.

committing more than ?2 billion to protect householders from flooding.

:42:31.:42:34.

Our commitment to farming and the countryside is reflected in the

:42:35.:42:37.

funding of national parks and forests. We won't make that mistake

:42:38.:42:44.

again! I can tell the House that in recognition of the higher costs they

:42:45.:42:50.

face, Mr Speaker, we will continue to provide ?50 off the water bills

:42:51.:42:57.

of South West water customers for the rest of this Parliament. A

:42:58.:43:01.

promise made to the south-west and a promise kept. Investing in the

:43:02.:43:08.

long-term economic structure of this country is the goal of this Spending

:43:09.:43:12.

Review. -- one of the goals. There is no more important structure than

:43:13.:43:19.

energy. We are doubling our commitment to research and

:43:20.:43:21.

supporting the creation of the shale gas industry by ensuring that

:43:22.:43:25.

communities and are fed from a shale wealth fund which could be worth up

:43:26.:43:31.

to ?1 billion, -- that they benefit from a shale wealth fund. The

:43:32.:43:35.

development and sale of ultralow emission vehicles will continue to

:43:36.:43:39.

be supported but in the light of the slower than expected introduction of

:43:40.:43:44.

a more rigorous EU emissions testing we were delayed removal of the

:43:45.:43:48.

diesels supplement from company cars until 2021. We support the

:43:49.:43:52.

international efforts to tackle climate change and to show our

:43:53.:43:55.

commitment to the Paris talks next week as the Prime Minister just

:43:56.:44:00.

explained, we are increasing our support for climate finance by 50%

:44:01.:44:06.

over the next five years. DECC's day-to-day budget will fall,

:44:07.:44:14.

Alderweireld reform the renewable energy initiative and we will

:44:15.:44:17.

permanently exempt energies like chemicals from the cost of

:44:18.:44:21.

environmental tariffs so we keep them competitive and keep them here.

:44:22.:44:29.

I can announce that we are introducing a cheaper domestic

:44:30.:44:30.

energy efficiency schemes that wrap is and is Twitter replaces ego. The

:44:31.:44:36.

new scheme will save an average of ?30 a year from the energy bills of

:44:37.:44:40.

20 former the households. Because this government believes that going

:44:41.:44:44.

green should not cost the earth. And we are cutting other bills, we will

:44:45.:44:47.

bring forward reforms to the compensation culture around minor

:44:48.:44:51.

motorcycle accident injuries which were removed more than ?1 billion

:44:52.:44:56.

from the cost of motor insurance. We expect the industry to pass on the

:44:57.:45:00.

savings so motorists will see an average saving of ?40 -?50 a year

:45:01.:45:05.

from the insurance bills. Mr Speaker, this is a government that

:45:06.:45:09.

backs all our businesses, large and small. We on this side of the House

:45:10.:45:13.

and a standard that there is no growth, no jobs about a vibrant

:45:14.:45:16.

private sector and successful entrepreneurs. -- no jobs without a

:45:17.:45:23.

vibrant sector. Business needs competitive taxes. I've already

:45:24.:45:27.

announced a reduction in our corporation tax rate to 80%. Our

:45:28.:45:32.

overall review of business rates were reported in the Budget. Today I

:45:33.:45:37.

am helping 600,000 small businesses by extending our small business rate

:45:38.:45:41.

relief scheme for one more year. Businesses also need an active,

:45:42.:45:46.

sustained industrial strategy. And that strategy, launched in the last

:45:47.:45:52.

Parliament, continues on this one. We commit to the same level of

:45:53.:45:58.

support for our aerospace and automotive industries, not just for

:45:59.:46:01.

the next five years, for the next decade. Spending on our new cut

:46:02.:46:06.

above centres will increase. We will protect cash support that we give

:46:07.:46:11.

through Innovate UK, we can afford to do this by offering ?165 million

:46:12.:46:17.

of new loans to companies instead of grants, has funds has successfully

:46:18.:46:21.

done for many years. It is one of the savings that helps us reduce the

:46:22.:46:26.

business budget by 17%. In the modern world one of the best ways to

:46:27.:46:31.

back business is by backing science. That is why, in the last

:46:32.:46:34.

Parliament, I protected the resource budget for science in cash terms. In

:46:35.:46:39.

this Parliament I am protecting it in real terms. So that it rises to

:46:40.:46:45.

?4.7 billion. That's ?500 million more by the end of the decade,

:46:46.:46:50.

alongside the ?6.9 billion capital budget as well. Funding the new

:46:51.:46:55.

Royce Institute in Manchester and new agri- tech centres in

:46:56.:47:00.

Shropshire, York, Bedford and Edinburgh, we will come and ?75

:47:01.:47:04.

million to a transformation of the Cavendish laboratory is in Cambridge

:47:05.:47:09.

where our knowledge of the universe was expanded. To make the most of

:47:10.:47:13.

our investment in science I have asked one more of our Nobel Prize

:47:14.:47:18.

laureates, Paul Knows, to conduct a review of the research councils and

:47:19.:47:21.

I want to thank him for his excellent report and will implement

:47:22.:47:22.

his recommendations. Britain is brilliant at culture. One

:47:23.:47:35.

of the best things we can do is invest in culture, made as. --

:47:36.:47:49.

culture, the and is. The core administration budget will fall by

:47:50.:47:53.

20%. I am increasing the cash that will go to the arts Council, our

:47:54.:47:58.

national museums and galleries will keep free museum entry and look at a

:47:59.:48:03.

new tax credit to support their exhibitions. I will help UK sport,

:48:04.:48:08.

which has been living on diminishing reserves, with a 29% increase in

:48:09.:48:13.

their budget, so we'd go for gold in Rio and Tokyo. Mr Speaker, the Right

:48:14.:48:23.

Honourable member and former Home Secretary has personally asked me to

:48:24.:48:29.

support his city's Europe culture in Hull. His campaign has contributed

:48:30.:48:33.

to the arts while his front bench contributes to comedy. The money for

:48:34.:48:48.

a Hull... Mr Speaker, the money for Hull is all part of a package to the

:48:49.:48:53.

Northern Powerhouse which includes funding the iconic new factory in

:48:54.:48:56.

Manchester and the great exhibition in the North. In Scotland we will

:48:57.:49:00.

support the Burrell connection. In London, we will help the V and the

:49:01.:49:09.

science Museum move their exhibitions for display. We are

:49:10.:49:14.

increasing the funding for the BBC World Service so British values of

:49:15.:49:17.

freedom and free expression are heard around the world. And all this

:49:18.:49:23.

be achieved without raiding the Big Lottery Fund as some had feared. It

:49:24.:49:29.

will continue to support the work of hundreds of small charities across

:49:30.:49:35.

Britain. So too will our support for social impact bonds. There are many

:49:36.:49:40.

great charities who work to support vulnerable women. Indeed a point

:49:41.:49:44.

raised in Prime Minister's Questions. The Honourable member for

:49:45.:49:49.

Colchester has proposed a brilliant way to give them help. 300,000

:49:50.:49:53.

people have signed a petition arguing that no VAT should be

:49:54.:49:58.

charged on sanitary products. We already tried the lowest rate

:49:59.:50:03.

allowable under European law. We are committing -- committed to getting

:50:04.:50:08.

the EU to change its rules. The money raised from the tampon tax

:50:09.:50:13.

will fund women's health and charities, and supports charities.

:50:14.:50:24.

The first ?5 million, Mr Speaker... The first ?5 million will be

:50:25.:50:30.

distributed to the ease appeal, Saint lives and women's aid and

:50:31.:50:35.

haven. I invite bids from other such good causes. It is similar to how we

:50:36.:50:40.

use LIBOR funds. Today I make further awards from them. We support

:50:41.:50:46.

a host of military charities from guide dogs for military veterans to

:50:47.:50:50.

care after combat. We renovate our military museums from the Royal

:50:51.:50:53.

Marines and the DDA museums in Portsmouth to the National Army

:50:54.:50:59.

Museum and the former HQ of RAF fighter command in Bentley Priory.

:51:00.:51:07.

In the Budget I funded one of those campaign bunkers. More have emerged.

:51:08.:51:16.

We will support the fellowships awarded by funding the Winston

:51:17.:51:25.

Churchill Memorial trust. We will fund the graves of those who have

:51:26.:51:28.

died fighting for our country since the Second World War and we will

:51:29.:51:33.

contributed to a memorial to those victims of terrorism who died on the

:51:34.:51:36.

bus in Tavistock Square ten years ago. It is a reminder we always face

:51:37.:51:41.

threats to our way of life and we have never allowed them to defeat

:51:42.:51:46.

us. We deliver security so we can spread opportunity. And that is the

:51:47.:51:50.

third objective that drives this Spending Review. We showed in the

:51:51.:51:55.

last five years that sound public finances and bold public service

:51:56.:51:59.

reform can help the most disadvantaged in our society.

:52:00.:52:02.

Inequality is down, child poverty is down, the gender pay gap is at a

:52:03.:52:11.

record low. In the richest now pay more in taxes compared to the rest

:52:12.:52:17.

of the country together. The other side talks of social justice. This

:52:18.:52:22.

side delivers it. We are all in this together. In the next five years, it

:52:23.:52:34.

starts with education. That is the door to opportunity. This Spending

:52:35.:52:37.

Review commits us to a comprehensive reform of the Wade is provided from

:52:38.:52:41.

childcare to college. We start with the largest ever investment in free

:52:42.:52:45.

childcare is working families get the help they need. From 2017 we

:52:46.:52:50.

fund 30 years of free childcare for working families for three and

:52:51.:52:55.

four-year-olds. ?10,000 of childcare costs tax-free. This support will

:52:56.:53:02.

only be available to parents working more than 16 hours a week and with

:53:03.:53:05.

incomes of less than ?100,000. We will maintain the free childcare we

:53:06.:53:09.

offer to the most disadvantaged two-year-olds and support nurseries

:53:10.:53:15.

by increasing the funding to that sector by ?300 million. Taken

:53:16.:53:20.

together that is a ?6 billion childcare commitment to the working

:53:21.:53:24.

families of Britain. Next, schools. We build on our far-reaching reforms

:53:25.:53:28.

of the last parliament that have seen schools standards rise, as

:53:29.:53:32.

exams become more rigorous. We will maintain funding for free info

:53:33.:53:36.

school meals, protect rates for the pupil premium and increase the cash

:53:37.:53:42.

of the dedicated school ground. We maintain the current national base

:53:43.:53:45.

rate of funding for 16 to 19-year-old students for the whole

:53:46.:53:50.

Parliament. We're going to open 500 new free schools and university

:53:51.:53:54.

technical colleges, invest ?23 billion in school building and

:53:55.:53:58.

600,000 new school places. And to help older children make the

:53:59.:54:02.

transition to adult hood and learn not just about their rights but

:54:03.:54:05.

their responsibilities, we will expand the National citizens

:54:06.:54:12.

service. Today 80,000 students go on national citizen service. By the end

:54:13.:54:15.

of the decade we will fund 300,000 students on this. Five years ago 200

:54:16.:54:31.

schools... We will help every secondary school to become an

:54:32.:54:35.

Academy. We will let sixth form colleges become academies as well so

:54:36.:54:41.

they no longer have to pay VAT. We will make local authorities running

:54:42.:54:44.

schools a thing of the past and this will help us save around ?600

:54:45.:54:47.

million from the educational services grant. I can tell the house

:54:48.:54:52.

that as a result of this Spending Review not only is the schools

:54:53.:54:56.

budget protected in real terms what the total financial support for

:54:57.:55:00.

are extended further and higher are extended further and higher

:55:01.:55:03.

education, will increase by ?10 billion. That is a real terms

:55:04.:55:11.

increase for education, too. We are going to phase out the arbitrary and

:55:12.:55:18.

unfair school funding system, which has systematically underfunded

:55:19.:55:22.

schools. Under the current arrangements a child from a

:55:23.:55:26.

disadvantaged background in one school can receive half as much

:55:27.:55:30.

funding as a child in identical circumstances in another school. In

:55:31.:55:33.

its place we will introduce a new national funding formula. I commend

:55:34.:55:39.

the many MPs from all parties who have campaigned for many years to

:55:40.:55:44.

see this day come. It will be introduced from 2017. The Education

:55:45.:55:48.

Secretary will consult in the New Year. Education continues in further

:55:49.:55:53.

education colleges and so do our reforms. We will not cut core adult

:55:54.:55:58.

skills funding for further education colleges. We will protected in cash

:55:59.:56:03.

terms. In the Budget I announced we would replace on affordable student

:56:04.:56:07.

maintenance grants with larger student loans. That saves us more

:56:08.:56:12.

than ?2 billion a year. It means we can extend support to students who

:56:13.:56:16.

have never before had government help. Today I can announce that

:56:17.:56:19.

part-time students will be able to receive maintenance loans, helping

:56:20.:56:23.

some of our poorer students. For the first time we will provide tuition

:56:24.:56:31.

fee loans for those studying in further education, and

:56:32.:56:35.

postgraduates, too. Almost 260,000 extra students will benefit from

:56:36.:56:37.

this new support I am announcing today. Mr Speaker, the

:56:38.:56:44.

apprenticeship programme, the flagship of our commitment to

:56:45.:56:47.

skills, in the last Parliament we wore than doubled the number of

:56:48.:56:51.

apprenticeships to 2 million. By 2020 we want to see 3 million. And

:56:52.:56:56.

to make sure they are high-quality apprenticeships, we will increase

:56:57.:56:59.

the funding per place. The Business Secretary will create a new business

:57:00.:57:04.

led body to set the standards. We will be spending twice as much on

:57:05.:57:07.

apprenticeships by 2020 compared to when we came to office. To ensure

:57:08.:57:12.

large businesses share the cost of training the workforce, I announced

:57:13.:57:17.

in the Budget that we will introduce a new apprenticeship levy from April

:57:18.:57:22.

2017. Today I am setting the rate of 0.5% of the pay bill of an

:57:23.:57:27.

employer. Every employer will receive a ?15,000 allowance to

:57:28.:57:31.

offset against a levy, which means 98% of all employers and businesses

:57:32.:57:35.

who pay bills of less than ?3 million will pay no levy at all. The

:57:36.:57:39.

apprenticeship levy will raise ?3 billion a year and fund 3 million

:57:40.:57:45.

apprenticeships. Those paying will get out more than a pudding. It is a

:57:46.:57:50.

huge reform to raise the skills of the nation and address one of the

:57:51.:57:56.

enduring weaknesses. Mr Speaker, education and skills are run that

:57:57.:58:00.

smacked the foundation of opportunity. We need to help people

:58:01.:58:04.

into work. The number claiming unemployment benefits has fallen to

:58:05.:58:08.

just 2.3%. The lowest rate since 1975. We are not satisfied the job

:58:09.:58:15.

is done. We want to see full employment. Today we can from we

:58:16.:58:19.

will extend the same support and conditionality we can't expect of

:58:20.:58:23.

those on JSA 2/1 million more benefit claimants. Those signing on

:58:24.:58:27.

will to attend the job centre every week for the first three months. We

:58:28.:58:31.

will increase in real terms the help provided to people with disabilities

:58:32.:58:36.

to help them into work. This will be delivered within the 14% savings we

:58:37.:58:41.

make to the Rhys West budget of the Department for Work and Pensions,

:58:42.:58:43.

including by reducing the size of their estate. It is the way to save

:58:44.:58:50.

money while improving the front-line service we offer people and

:58:51.:58:54.

providing more support for those who are the most vulnerable and most in

:58:55.:59:00.

need of help. Mr Speaker, you cannot say you are fearlessly tackling the

:59:01.:59:04.

most difficult social problems if you turn a blind eye to what goes on

:59:05.:59:09.

in our prisons and Criminal Justice Act system. The Lord Chancellor has

:59:10.:59:12.

worked with the lord chief justice and others to put forward a typical

:59:13.:59:17.

that -- typically bold and radical plan to transform our courts so they

:59:18.:59:24.

are fit for the modern age. The money saved will be used to fund an

:59:25.:59:28.

investment in new technology that will bring further and permanent

:59:29.:59:32.

long-term savings and speed up the process of justice. Old Victorian

:59:33.:59:39.

prisons in our cities that are not suitable for rehabilitating

:59:40.:59:43.

prisoners will be sold. This will also bring long-term savings and

:59:44.:59:47.

means we can spend over ?1 billion in this parliament building nine

:59:48.:59:50.

modern new prisons. Today the transformation gets underway with

:59:51.:59:54.

the announcement that the Justice Secretary has just made. Holloway

:59:55.:59:59.

prison, the biggest women's jail in Western Europe, will close. In the

:00:00.:00:03.

future women prisoners will serve their sentences in more humane

:00:04.:00:07.

conditions, better designed to keep them away from crime. Mr Speaker, by

:00:08.:00:13.

selling these old prisons we will create more space for housing in our

:00:14.:00:18.

inner cities. For another of the great social failures of our age has

:00:19.:00:20.

been the failure to build enough houses. In the end, Spending

:00:21.:00:27.

Reviews like this come down to what your priorities are. I am clear that

:00:28.:00:30.

in this Spending Review we choose to build. Above all, we choose to build

:00:31.:00:37.

the homes people can buy. There is a growing crisis of home ownership in

:00:38.:00:42.

our country. 15 years ago around 60% of people under 35 on their own

:00:43.:00:47.

home. Next year it is set to be just half that. We made a start and

:00:48.:00:51.

tackling that in the last Parliament and with schemes like Help to Buy

:00:52.:00:56.

the number of first-time buyers rose by nearly 60%. We have not done

:00:57.:01:00.

nearly enough yet. It is time to do much more. Today we set out our bold

:01:01.:01:05.

plan to back families who aspire to buy their own home. I am doubling

:01:06.:01:09.

the housing budget. Doubling of to ?2 billion per year. And we will

:01:10.:01:18.

deliver 400,000 affordable new homes by the end of the decade and

:01:19.:01:21.

affordable means not just affordable to rent but affordable to buy as

:01:22.:01:22.

well. Biggest house-building programme by

:01:23.:01:35.

any government since the 1970s. Almost half will be starter homes

:01:36.:01:40.

sold at 20% of market value to first time buyers, and those will be

:01:41.:01:48.

banned and the help by shared ownership removing restrictions on

:01:49.:01:52.

shared ownership, who can buy them, who they can be sold on to. The

:01:53.:01:57.

second part of the plan delivers on our manifesto commitment to extend

:01:58.:02:00.

the right to buy two Housing Association tenants. From midnight

:02:01.:02:05.

tonight tenants of five Housing Associations will be able to start

:02:06.:02:08.

the process of buying their own home. Mr Speaker the third element

:02:09.:02:13.

of the plan involves accelerating housing supply, we are announcing

:02:14.:02:17.

further reforms to the planning system so it delivers more homes,

:02:18.:02:22.

more quickly. We are releasing public and suitable for 160,000

:02:23.:02:27.

homes and read designating and used commercial land. Towns. We will

:02:28.:02:31.

extend loans for small builders, regenerate rundown estates and vest

:02:32.:02:38.

over ?300 million in Ebbsfleet, the first Garden City for almost a

:02:39.:02:42.

century. Fourthly Gutmann 12 help address the housing crisis in London

:02:43.:02:47.

with a new scheme, London helped by. Londoners are the housing crisis in

:02:48.:02:49.

London with a new scheme, London help to buy. Londoners with a 5%

:02:50.:02:52.

deposit will be able to get an interest free loan worth 40% of the

:02:53.:02:56.

value of the newly built home. My honourable friend for Richmond Park

:02:57.:02:59.

has campaigned for affordable homeownership in London and today

:03:00.:03:05.

we're back him all the way. The fifth part of the housing plan,

:03:06.:03:09.

addresses the fact that more and more homes are being bought as buy

:03:10.:03:16.

to let, or second homes. Many of these are cash purchases not

:03:17.:03:18.

affected by the restrictions introduced in the Budget on mortgage

:03:19.:03:24.

relief and many are bought by those not resident in this country. People

:03:25.:03:29.

buying a home to let should not squeeze out families who can't

:03:30.:03:32.

afford a home to buy. So I'm introducing new rates of Stamp Duty

:03:33.:03:37.

that will be 3% higher on the purchase of additional properties

:03:38.:03:40.

like buy to lets and second homes. It will be introduced from next

:03:41.:03:45.

April and will consult on the details so that corporate property

:03:46.:03:48.

development is not affected. This extra Stamp Duty will raise almost

:03:49.:03:57.

?1 billion by 2021 and we will reinvest some of that money in local

:03:58.:03:59.

communities in London and places like Cornwall which are being priced

:04:00.:04:02.

out of home ownership. The funds that we raise will help in building

:04:03.:04:07.

these new homes, so this Spending Review delivers a doubling of the

:04:08.:04:11.

housing budget, 400,000 new homes and extra support for London,

:04:12.:04:15.

estates regenerated, the right to buy, payments on buy to let a second

:04:16.:04:25.

homes delivered by a Conservative government will want to help working

:04:26.:04:29.

people to buy their own homes. For we are the builders! Mr Speaker, the

:04:30.:04:37.

fourth and final objective of this Spending Review is national

:04:38.:04:41.

security. On Monday, the prime ministers set at the House the

:04:42.:04:44.

strategic defence and Security review. It commits Britain to

:04:45.:04:49.

spending 2% of our income on defence and details how these resources will

:04:50.:04:52.

be used to provide new got bad for our war fighting military, nuke

:04:53.:04:56.

abilities for special forces, new defences for our cyberspace -- new

:04:57.:05:03.

capabilities, and investments in our intelligence agencies. By 2020-21

:05:04.:05:09.

the single intelligence account will reach ?2.8 billion in the defence

:05:10.:05:15.

budget will rise from ?34 billion today ?240 billion. Britain also

:05:16.:05:21.

commits to spend on our overseas developer and we will reorder and it

:05:22.:05:26.

-- reorientate our budget so that we help the poorest and have a fragile

:05:27.:05:34.

state on the borders. It is in our national interest to do is. The

:05:35.:05:39.

overseas aid budget will increase to ?16.3 billion by 2020. Britain is

:05:40.:05:44.

unique in making these twin commitments to funding both military

:05:45.:05:48.

might and the soft power of international development. It

:05:49.:05:52.

enables us to protect ourselves, protect our influence and promote

:05:53.:05:57.

our prosperity. We do so, supported by the Foreign Secretary and our

:05:58.:06:02.

outstanding diplomatic service. To support them in their vital work I

:06:03.:06:06.

am today protecting in real terms the budget of the Foreign and

:06:07.:06:11.

Commonwealth Office. But Security starts at home. Our police are on

:06:12.:06:16.

the front line of the fight to keep us safe. In the last Parliament we

:06:17.:06:21.

make savings in police budgets. Thanks to the reforms of the Home

:06:22.:06:25.

Secretary and the hard work of police officers, crime fell and the

:06:26.:06:28.

number of neighbourhood officers increased. But reform must continue

:06:29.:06:34.

in this Parliament. We need to invest in new state-of-the-art

:06:35.:06:38.

mobile medications for our emergency services, introduce new technology

:06:39.:06:42.

on borders and increase the counterterrorism budget by 30%. We

:06:43.:06:47.

should allow elected police and crime commission is greater

:06:48.:06:48.

flexibility in those areas where they have been historically low. And

:06:49.:06:53.

further savings can be made in the police as different forces merge

:06:54.:06:58.

their back offices and share expertise. And we will provide a new

:06:59.:07:03.

fund to help with this reform. Mr Speaker, I have had rubbers and

:07:04.:07:07.

Asians from the Shadow Home Secretary that police budgets should

:07:08.:07:13.

be cut by 10%. But now is not the time for further police cuts. Now is

:07:14.:07:17.

the time to back our police and give them the tools to do the job. I am

:07:18.:07:22.

announcing that they will be no cuts in the police budget at all. --

:07:23.:07:31.

there will be no cuts at all. In real terms, protection for police

:07:32.:07:40.

funding. Mr Speaker... The police protect us and we are going to

:07:41.:07:44.

protect the police! CHEERING

:07:45.:07:51.

Mr Speaker. Five years ago, when I presented my first Spending Review,

:07:52.:07:56.

the country was on the brink of bankruptcy and our economy was in

:07:57.:08:00.

crisis. We took the difficult decisions back then, and five beers

:08:01.:08:04.

later, a report and an economy growing faster than its competitors

:08:05.:08:09.

-- five years later. And public finances set to reach is a plus of

:08:10.:08:14.

?10 billion. Today we set out the further decisions necessary to build

:08:15.:08:18.

the future of this country. Sometimes difficult, yes, but

:08:19.:08:22.

decisions that build the great public services that families rely

:08:23.:08:26.

on, build the homes people need, build stronger defences against

:08:27.:08:30.

those who threaten our way of life and build strong public finances

:08:31.:08:33.

upon which all these things depend. We were elected as a 1 nation

:08:34.:08:42.

government. Today, we deliver the Spending Review of one nation

:08:43.:08:45.

government, the guardians of economic security, the protectors of

:08:46.:08:49.

national security, the builders of our better future. This government,

:08:50.:08:53.

the mainstream representatives of the working people of Britain.

:08:54.:08:58.

CHEERING STUDIO: The Chancellor sits down,

:08:59.:09:06.

you spoke for more than one hour. Tonnes of stuff to go through, which

:09:07.:09:10.

we will between now and 3:30pm. The Leader of the Opposition would

:09:11.:09:15.

respond, it's the Shadow Chancellor, John McDonnell. Mr Speaker, like me,

:09:16.:09:23.

you will have witnessed many Autumn Statement 's and statements by the

:09:24.:09:26.

Chancellor of the Exchequer. And you will know that there is such a thing

:09:27.:09:30.

as the iron law of Chancellor 's statements. That law is that the

:09:31.:09:35.

louder the cheers of the statement on the day, the greater the

:09:36.:09:41.

disappointment by the weekend when the analysis goes in! From what we

:09:42.:09:48.

have heard today, we do not need until the weekend for this statement

:09:49.:09:54.

to fall apart. Of the last five years, there has barely been a

:09:55.:09:57.

target that the Chancellor has said that he has not missed or has not

:09:58.:10:04.

ignored. Five years ago, the newly elected Chancellor and the Prime

:10:05.:10:08.

Minister came to this house and want to us that because of the Diagne

:10:09.:10:12.

situation, that our country faced, what was needed -- because of the

:10:13.:10:19.

terrible situation, what was needed was a five-year progress of

:10:20.:10:25.

austerity. Job cuts, cuts and public services, and wage freezes. We were

:10:26.:10:29.

promised specifically by this Chancellor that, by today, the

:10:30.:10:33.

deficit would be eliminated. CHEERING

:10:34.:10:43.

And debts would be under control. And falling dramatically. People put

:10:44.:10:51.

their trust in that commitment. Order! I said earlier, the Prime

:10:52.:10:56.

Minister would be heard, the Shadow Chancellor will be heard too. Order!

:10:57.:11:04.

If people think they are being clever, shouting their heads off,

:11:05.:11:09.

don't bother asking a question. Try to have the sense to realise the

:11:10.:11:13.

conflict between the two. Mr John McDonnell. The Prime Minister also

:11:14.:11:22.

issue and us, Mr Speaker, that it would be hard and sacrifices would

:11:23.:11:26.

be made, we were all in it together. Five years on, can I just say today,

:11:27.:11:33.

this Chancellor has got some front to come to this House and talk about

:11:34.:11:39.

the deficit. And to lecture us about deficit-reduction! Today is the day

:11:40.:11:48.

when the Chancellor was supposed to announce that austerity was over and

:11:49.:11:52.

the deficit was controlled. From what we've heard today, I think they

:11:53.:11:56.

will feel betrayed. The reality is this. After five years, the deficit

:11:57.:12:03.

has not been eliminated, and this year it is predicted to be over ?70

:12:04.:12:10.

billion. Instead of taking five years to eliminate the deficit, as

:12:11.:12:17.

he promised, it will take ten. And debt to GDP will not be the 69% that

:12:18.:12:22.

he promised five years ago, as he said today, it will be 82.5%. And we

:12:23.:12:29.

are potentially to bequeath to our children a debt of ?1.5 trillion.

:12:30.:12:36.

SHOUTING Their debt... The Chancellor... The

:12:37.:12:52.

Chancellor continues to miss... Both sides are still shouting. Very

:12:53.:12:58.

down-market, very low grade. Widely deprecated by the public. How it is

:12:59.:13:02.

that people think that it is legitimate to behave in that way and

:13:03.:13:09.

tried to reconnect with the electorate's disillusioned with

:13:10.:13:14.

politics is bizarre. If some people are so unintelligent that they

:13:15.:13:17.

cannot grasp the point, we did them. John McDonnell. After five

:13:18.:13:21.

years as Chancellor with that level of debt there is no one else for him

:13:22.:13:26.

to blame. There is only so long that you can blame past governments.

:13:27.:13:30.

There are no more excuses for this Chancellor after five years. We were

:13:31.:13:36.

also promised that if sacrifices had to be made to tackle the deficit,

:13:37.:13:40.

not to worry, we were all in this together. No we are not. 85% of the

:13:41.:13:49.

money saved on tax and benefits cuts in the last parliament came out of

:13:50.:13:52.

women's pockets. Disabled people were hit 18 times harder than anyone

:13:53.:13:59.

else. 4.1 children now live in absolute poverty. An increase of

:14:00.:14:10.

500,000 from 2009-2010. And the fiasco of tax credits, demonstrated

:14:11.:14:16.

once and for all that we were not in this together. At the same time as

:14:17.:14:22.

the Chancellor was planning to cut tax credits to working families, he

:14:23.:14:27.

cut inheritance taxes for some of the wealthiest families in this

:14:28.:14:33.

country. When the Chancellor and the Prime Minister were first elected to

:14:34.:14:35.

their positions they were attacked for being posh boys. I disagreed

:14:36.:14:41.

with that strongly. It was not fair. People do not choose what class they

:14:42.:14:44.

are born into the wealth they inherit. Nevertheless if you are

:14:45.:14:48.

fortunate enough to have wealth, or good incomes, the onus is upon us to

:14:49.:14:54.

take particular care when taking decisions about the lives of those

:14:55.:14:59.

last fortunate than yourselves. -- less fortunate. What shocked and

:15:00.:15:05.

angered many, not just in this House but across the country was the way

:15:06.:15:09.

there was no attempt by the Chancellor to understand the effects

:15:10.:15:13.

of the decision to cut tax credits. For many families, and would have

:15:14.:15:20.

been a choice between children being able to go on that school trip like

:15:21.:15:25.

the other children, or having a decent Christmas or a winter coat.

:15:26.:15:32.

Today the Chancellor has been forced into a U-turn on his tax credits.

:15:33.:15:38.

And I want to congratulate the members of this House on all sides

:15:39.:15:43.

who have made this happen. I want to congratulate the members of the

:15:44.:15:47.

other house as well. I am glad that he has listened to Labour, and seen

:15:48.:15:56.

sense. Accent as ever, with this Chancellor, -- we await

:15:57.:16:00.

clarification on the details. Particularly if the limit to two

:16:01.:16:03.

children remains and we are aware of the impact on Universal Credit. It

:16:04.:16:11.

appears that 14,000 families already on Universal Credit will still

:16:12.:16:15.

suffer the full cut. And all families that would nearly qualify

:16:16.:16:20.

for tax credits in 2018 will suffer the full cut under Universal Credit.

:16:21.:16:25.

So this is not a full and fair reversal as we pleaded for. And the

:16:26.:16:29.

Chancellor remains committed to ?12 billion of welfare cuts over this

:16:30.:16:34.

Parliament. And we know where they will fall, on the most vulnerable,

:16:35.:16:39.

the poorest, and those struggling to survive.

:16:40.:16:48.

Some believe the Chancellor is using the deficit and austerity to reshape

:16:49.:16:57.

the role of the British state a Machiavellian scheme. I do not. I am

:16:58.:17:02.

convinced this is sheer economic illiteracy based on incompetence and

:17:03.:17:10.

poor judgment. Poor judgment. Today, only four weeks ago, he

:17:11.:17:18.

brought to this House the Charter for fiscal responsibility. An

:17:19.:17:22.

essential part of this was our essential part of this was our

:17:23.:17:25.

adherence to his welfare cap. We supported it. Today he has broken

:17:26.:17:32.

what we said before. He said what we said before. He said

:17:33.:17:37.

himself, introducing the cap last year, breaking it would be, and I

:17:38.:17:41.

called the Chancellor, a failure of public expenditure control. On his

:17:42.:17:49.

own terms and his own language, condemned. The government is cutting

:17:50.:17:53.

today and not investing in the future. He is putting us all at

:17:54.:18:02.

future risk. Let me say this, I want to congratulate the honourable

:18:03.:18:06.

member for a league for the campaign on policing cuts, forcing a U-turn.

:18:07.:18:19.

We do not forget though... Mr Speaker, we do not forget though we

:18:20.:18:24.

face the highest level of risk from terrorist attacks in a generation.

:18:25.:18:28.

But we have already lost 17,000 police officers under this comment.

:18:29.:18:42.

We know that the first line of intelligence are the offices in the

:18:43.:18:45.

local community. We claimed today as another Labour again and victory.

:18:46.:18:56.

Let me say also, there are concerns now about the impact of the local

:18:57.:19:02.

council cuts and freezers in expenditure on other emergency

:19:03.:19:09.

services. We feel for people's safety as more firefighters jobs are

:19:10.:19:12.

cut and fire stations close as a result of this settlement. In

:19:13.:19:17.

health, the Chancellor has announced he is front-loading part of the

:19:18.:19:21.

additional ?8 billion worth of funding. In reality, this will only

:19:22.:19:26.

plug some of the gap in the huge deficits health trust in our

:19:27.:19:30.

reporting. But the Government is also relying on ?22 billion worth of

:19:31.:19:37.

unrealistic savings to be found. The extra money seems to be coming from

:19:38.:19:43.

the training of nurses, the Public health budget and other aspects of

:19:44.:19:48.

local authority support. This will be a false economy which will cause

:19:49.:19:53.

more burdens to reform the NHS. All of the signs are that we are facing

:19:54.:19:58.

a massive winter crisis in the NHS and yet again we will have two rely

:19:59.:20:03.

on our professional dedication of our staff. The Health Secretary

:20:04.:20:09.

refusing to go to a cast to settle the junior doctors dispute is no way

:20:10.:20:14.

to maintain the morale amongst our NHS professionals. One of the

:20:15.:20:23.

greatest scandals under this Chancellor has been the attack on

:20:24.:20:30.

social care. 3000 beds, 3000 beds have been lost already. And

:20:31.:20:36.

according to the Association of directors of adult services, the

:20:37.:20:41.

Care precept, the 2% announced by the Chancellor, is not nearly enough

:20:42.:20:45.

to fill the funding gap this government has created. The result

:20:46.:20:50.

is that some of the most vulnerable people in our society will be at

:20:51.:20:54.

risk. And more people will be forced to resort to their local hospital

:20:55.:21:01.

further care. -- for their care. We know much more about the scale of

:21:02.:21:04.

people suffering from mental health problems and we welcome the

:21:05.:21:10.

additional devoted to mental health. But it is no use funding through the

:21:11.:21:14.

health service from mental health service when local authority support

:21:15.:21:21.

is being cut as a result. More people will be left vulnerable. In

:21:22.:21:24.

education the Government claims school budgets will be protected.

:21:25.:21:29.

Let me say this. We fear the Government will use the new funding

:21:30.:21:33.

formula to take away from the pupils who most need it, the most deprived.

:21:34.:21:40.

And we will monitor the funding format carefully to ensure equity.

:21:41.:21:47.

In today's statement the Chancellor has announced there would be a

:21:48.:21:57.

settlement that restricts F32 Cats protection. That means sixth forms

:21:58.:22:00.

and further education colleges will be under threat of risk of closure

:22:01.:22:06.

around the country. Just at the time the economy is crying out for a

:22:07.:22:10.

skilled educated workforce, the Government is denying access to

:22:11.:22:13.

young people to the local courses they need. And with regard to

:22:14.:22:20.

childcare announced today, we note it is delayed yet again a load --

:22:21.:22:25.

and other two years. Another delay in a commitment given. The

:22:26.:22:32.

Chancellor's much vaunted increase in house building is cobbled

:22:33.:22:36.

together from reheated promises from the past. The vast majority of

:22:37.:22:40.

already been announced. The Tories should be judged by their actions,

:22:41.:22:44.

not their words. The Chancellor's first act in office was to slash

:22:45.:22:50.

housing investment by 60%. His plans today could still mean 40% less to

:22:51.:22:56.

build the homes we need compared to the investment programme he

:22:57.:22:59.

inherited from Labour. House-building now as a result

:23:00.:23:03.

remains at the lowest in peace time since the 1920s. As the member for

:23:04.:23:12.

Wakefield said this morning, if hot-air built homes, Conservative

:23:13.:23:15.

ministers would have solved our housing crisis. I worry that the

:23:16.:23:24.

vast majority of young people hoping for a new homes will be disappointed

:23:25.:23:28.

by the Chancellor's failure to deliver. His record on building

:23:29.:23:31.

anything so far does not inspire confidence at all. Over the last

:23:32.:23:36.

year the Chancellor has forced himself on to building sites all

:23:37.:23:39.

around the country to secure a photograph with a high visibility

:23:40.:23:44.

jacket. When the Chancellor did his Bob the builder 's speech at the

:23:45.:23:47.

Tory party conference, what he did not tell delegates was that he has

:23:48.:23:54.

an abysmal investment record. Only 9% of the project started under his

:23:55.:23:59.

infrastructure pipeline in two years. In 2012 the announced ?40

:24:00.:24:03.

billion guarantee scheme. Three years on, only 9% has been signed

:24:04.:24:10.

off. In 2011 he announced a ?20 billion pensions infrastructure

:24:11.:24:14.

platform. Four years on, only 1 billion of commitments has been

:24:15.:24:17.

ensured. The construction industry is shrinking and going into

:24:18.:24:24.

recession. He has also failed to invest in skills. The Royal

:24:25.:24:28.

Institute of chartered surveyors has said the biggest infrastructure

:24:29.:24:31.

programmes could grind to a halt unless the Government adopts new

:24:32.:24:33.

measures to tackle the skills and funding. And the most ironic cut of

:24:34.:24:40.

all must be the virtual closure of large sections of the Department for

:24:41.:24:45.

Business, Innovation and Skills. There are 146,000 unfilled vacancies

:24:46.:24:50.

due to lack of a skilled workforce. So naturally the Government's

:24:51.:24:55.

solution is to move to actually close the one department tasked with

:24:56.:25:01.

closing school levels. On the environment, the Government has

:25:02.:25:05.

announced today various measures. Let's be clear. Comment ministers

:25:06.:25:10.

can go to the Paris summit on climate change with the proud record

:25:11.:25:15.

of nearly killing off once flourishing solar energy sector. The

:25:16.:25:23.

international aid budget is supposedly protected but is now to

:25:24.:25:29.

be raided for defence spending. In defence, the Government has

:25:30.:25:30.

previously commissioned and aircraft carriers our last year. And at least

:25:31.:25:38.

woken up to the fact it needed aircraft as well. But the funding of

:25:39.:25:43.

the defence review is to come from ?11 billion worth of cuts with the

:25:44.:25:47.

inevitable loss of thousands of defence worker jobs. Specialist

:25:48.:25:52.

skills will be lost forever. Alongside these cuts are many more

:25:53.:25:58.

to help dig himself out of the financial hole he has got himself

:25:59.:26:03.

into. The Chancellor is selling off whatever public assets he can. This

:26:04.:26:07.

is no longer the family silver up for sale. This is the furniture, the

:26:08.:26:13.

fixtures and the fittings. And we know who is the first in line to

:26:14.:26:20.

buy. I never envisaged that when it came to nationalising I would be

:26:21.:26:23.

outdone by a Conservative Chancellor. The only difference

:26:24.:26:26.

between us is that I would like to bring services like rail back into

:26:27.:26:29.

the ownership of the British people. The Chancellor wants to sell

:26:30.:26:32.

them to the people's Republic of China. Nationalisation is OK for him

:26:33.:26:41.

as long as it is by any other state but ours. To assist comrades

:26:42.:26:48.

Osborne, I brought him along a little red book. Let me quote, Mr

:26:49.:26:58.

Speaker. Order! I want to hear about the

:26:59.:27:04.

contents of the book! I think you'll find this invaluable.

:27:05.:27:19.

You are a rather excitable one. I thought this would help him, Mr

:27:20.:27:24.

Speaker. Let us quote from mouse a junk.

:27:25.:27:31.

The wave. We must learn to do economic work from all who know how.

:27:32.:27:42.

No matter who they are, we must esteem them as teachers, respect

:27:43.:27:48.

them conscientiously but we must not pretend to know what we do not know.

:27:49.:27:51.

I thought it would come in handy for him.

:27:52.:28:06.

Mr Speaker, I am sure... I am sure, Mr Speaker... I am sure, Mr Speaker

:28:07.:28:11.

that Tory backbenchers will be under instruction to shoehorn into their

:28:12.:28:15.

speeches at every opportunity references to the mythical long-term

:28:16.:28:20.

economic plan. What we have been presented with today is not a Lamela

:28:21.:28:25.

-- an economic plan but a political fix. It is not a plan when you

:28:26.:28:30.

ridiculously commit yourself to unachievable forces and leave

:28:31.:28:34.

yourself no room to manoeuvre. It is not a plan when you sell off every

:28:35.:28:38.

long-term asset you have for short-term gain. It is not a plan

:28:39.:28:42.

when you leave important industries to go to the wall, as they have done

:28:43.:28:47.

with steel. And it is not a plan when you cut the support for those

:28:48.:28:50.

in work and leave working families to rely on food banks. And it is not

:28:51.:28:54.

a plan when you force councils up and down the line to close services

:28:55.:29:01.

people depend upon. And it is not a plan when you invest so little in

:29:02.:29:05.

schools and infrastructure and put our future at risk. Instead what we

:29:06.:29:10.

have seen today is the launch of a manifesto for the Conservative

:29:11.:29:15.

leadership election. Our long-term economic security is being

:29:16.:29:19.

sacrificed for the benefit of one man's career. I say to the

:29:20.:29:24.

honourable member from Maidenhead, I say to the honourable lady from

:29:25.:29:29.

Maidenhead, and the honourable member for Oxbridge, don't worry.

:29:30.:29:33.

The economic reality that is emerging in our economy will mean

:29:34.:29:37.

that this will be seen as the apex of the Chancellor's career. The

:29:38.:29:45.

honourable member for Oxbridge... The honourable member... The

:29:46.:29:53.

honourable member for Oxbridge, who exudes classical references in his

:29:54.:29:58.

speech, will recognise in his -- in the Chancellor, Icarus, the boy who

:29:59.:30:02.

flew too close to the sun and burnt and crashed. I fear for the

:30:03.:30:07.

Chancellor it is all downhill from here. On this side the house we will

:30:08.:30:12.

do -- do all we can to ensure he does not take this country and the

:30:13.:30:17.

economy down with him. This debate is about what sort of society we

:30:18.:30:24.

want to live in. In the end this debate is about what sort of society

:30:25.:30:29.

we want to live in. The government is systematically dismantling all of

:30:30.:30:32.

those aspects of our society that make our community worth living in

:30:33.:30:36.

and celebrating. The Chancellor is not just putting our services today,

:30:37.:30:42.

he is selling off our future. There is an alternative. And our

:30:43.:30:46.

alternatives will be that we will eliminate the deficit but we will do

:30:47.:30:51.

it fairly and effectively. We will do it by ensuring that we end the

:30:52.:31:00.

tax cuts to the rich. We tackle tax evasion and avoidance and we invest

:31:01.:31:03.

to grow. And we will grow our economy on the basis of the

:31:04.:31:09.

investments in skills and infrastructure. We will become an

:31:10.:31:13.

addition to the financial centre of Europe with the research in science

:31:14.:31:17.

and technology will become the technology centre of Europe under a

:31:18.:31:21.

government. And that means high skills, high investment, high

:31:22.:31:28.

wages. That is what we are committed to on this side. And that is what we

:31:29.:31:32.

will secure when we returned to office.

:31:33.:31:40.

So, the Shadow Chancellor, John McDonnell, finishes his response to

:31:41.:31:46.

the Chancellor's spending review and Autumn Statement. We leave the House

:31:47.:31:52.

of Commons for the debate, which continues in the tender. If you want

:31:53.:31:55.

uninterrupted coverage of that, you can get it live on BBC Parliament.

:31:56.:32:02.

Let's now take a moment to take you through the headlines from the

:32:03.:32:04.

spending review and Autumn Statement. The main headline today

:32:05.:32:11.

is clearly that tax credit cuts are to be avoided altogether. The cuts

:32:12.:32:17.

planned in July announced by the Chancellor have not been

:32:18.:32:20.

ameliorated, changed, reformed or delayed. They have been avoided

:32:21.:32:28.

altogether. They didn't survive the year, even though he only announced

:32:29.:32:32.

them in July. He also announced that education funding would now be

:32:33.:32:36.

protected in real terms, which takes it beyond the early protection he

:32:37.:32:39.

had given in the March and July budgets of this year, which

:32:40.:32:48.

concentrated on schools. The other headline is that there will be no

:32:49.:32:53.

cuts to police budgets in England and Wales, police being a devolved

:32:54.:32:57.

matter for Scotland, Wales and Northern Ireland. The Chancellor has

:32:58.:33:01.

decided he will not cut the police budget. And the NHS budget in

:33:02.:33:08.

England, with consequent rises in other parts of the UK, will rise

:33:09.:33:15.

from its current ?101 billion a year to 120 billion by the first year of

:33:16.:33:23.

the new parliament, 2021. Housing featured large in the Autumn

:33:24.:33:29.

Statement as well. The Chancellor has doubled the housing budget. His

:33:30.:33:33.

aim is to provide 400,000 new homes, as was leaked to the papers

:33:34.:33:37.

this morning. It is an extension of giving people a discount by homes,

:33:38.:33:44.

provided they are under a certain value. Not for rent, though, an

:33:45.:33:49.

emphasis on home ownership from the Chancellor. The apprenticeship levy

:33:50.:33:56.

is set at 0.5% of an employer's wage bill. It is designed for large

:33:57.:34:01.

employers, to encourage them to do their own apprenticeships, because

:34:02.:34:05.

the more people they came, the less they will have to pay this levy.

:34:06.:34:12.

Capital spending on transport is to increase by a substantial amount.

:34:13.:34:33.

Also today, the Chancellor had to give some new economic forecasts.

:34:34.:34:37.

The first is that public spending will rise to 821 billion by

:34:38.:34:54.

2019-20. But despite a substantial rise in public spending, the

:34:55.:34:55.

Chancellor is still predicting that as a percentage of our GDP, the

:34:56.:34:58.

country's national debt will start to fall. He aims to get us into a

:34:59.:35:04.

budget surplus of just over 10 billion by 2020. There had been

:35:05.:35:09.

speculation that he might not be able to meet that figure, given the

:35:10.:35:14.

demands on extra spending, but he has. He has added 100 million to

:35:15.:35:19.

show he has done better, but I would ignore the 0.1 decimal point on

:35:20.:35:25.

forecasts. They are almost five years out. Growth forecasts are

:35:26.:35:34.

biased up, but only by a smidgen. Essentially, the OBR thinks this

:35:35.:35:37.

economy is going to grow at about 2.5% for the rest of the decade. So,

:35:38.:35:42.

what does all this mean for borrowing?

:35:43.:39:28.

So this is a massive Autumn Statement and spending review, a

:39:29.:39:34.

huge amount of detail. The paperwork is only now coming into the studio.

:39:35.:39:38.

We are getting some of it online. There is a lot to pour over. The

:39:39.:39:43.

devil will be in the detail. And as is always the case, there are things

:39:44.:39:47.

the Chancellor put into the paperwork, but did not tell us in

:39:48.:39:50.

his announcement. He would not be the first Chancellor to do that. We

:39:51.:39:54.

are joined now in the studio by a man who has been described variously

:39:55.:39:58.

as the real Chancellor, the most important man in government you have

:39:59.:40:05.

never heard of, and even one half of George Osborne's brain, which could

:40:06.:40:10.

mean it is but a small half. Rupert Harrison used to be George

:40:11.:40:15.

Osborne's chief of staff. He now works for the massive fund managers

:40:16.:40:22.

Blackrock. And he joins us for what I believe is your first television

:40:23.:40:26.

appearance. Come out from behind the curtain. First, let's get reaction

:40:27.:40:31.

to the speech from our BBC editors. Laura, what is your take on this?

:40:32.:40:36.

George Osborne clearly wants us to see this as, after 2010-2015, which

:40:37.:40:42.

he described as the rescue mission for the economy, is now being on the

:40:43.:40:47.

rebuilding of the economy. He said that by 2020, the state will make up

:40:48.:40:53.

35% of national income compared to nearly 50% when he first took office

:40:54.:40:57.

as Chancellor. That is a significant reshaping of the balance of the

:40:58.:41:01.

economy in the country. Fascinatingly, the huge cheers from

:41:02.:41:06.

the Conservative benches do not hide the fact that there were big climb

:41:07.:41:11.

downs. They were not about his political ideology, but reality.

:41:12.:41:17.

Firstly, on tax credits. Not tinkering or tweaking, but dropping

:41:18.:41:21.

those cuts altogether, although there will still be cuts to

:41:22.:41:24.

universal credit and its report is on. That is a big victory for the

:41:25.:41:30.

House of Lords, the Labour Party and some Tory backbenchers including

:41:31.:41:36.

Boris Johnson. The second big climb down was not cutting the police

:41:37.:41:41.

budget at all. Many people believe in the last few days, after what

:41:42.:41:45.

happened in Paris, it was just not politically possible to go ahead

:41:46.:41:50.

with the kind of cuts that had been expected. Interestingly, two big

:41:51.:41:57.

changes. Labour will claim them as victories, but of course,

:41:58.:42:01.

conveniently for George Osborne, that kills off two of Labour's

:42:02.:42:05.

strongest attacks on the government at a time when they have not been

:42:06.:42:09.

effective at coming up with ways to put him under pressure. I will come

:42:10.:42:12.

to Robert Peston in a minute, because some of this arithmetic

:42:13.:42:18.

needs delving into. Kamal, what do you think? We are seeing a huge

:42:19.:42:27.

movement of costs in three significant ways. Firstly, there is

:42:28.:42:33.

the social care issue. A new tax-raising power will begin to

:42:34.:42:36.

local authorities to pay for social care. Private care providers who are

:42:37.:42:40.

complaining about the cost of social care will say that the ?2 billion

:42:41.:42:44.

raised from that will not go far enough and there will still be a ?1

:42:45.:42:48.

billion shortfall, so he has moved costs from central government and

:42:49.:42:51.

local government. And then the apprenticeship levy, ?3 billion to

:42:52.:42:57.

be raised from the largest private businesses for funding 3 million

:42:58.:43:02.

apprentices by 2020, he says will start again, putting the duty on the

:43:03.:43:05.

private sector to deliver on things like skills, so vital to our

:43:06.:43:11.

economy. And of course, on housing. Direct funding support for housing,

:43:12.:43:19.

businesses and building companies to build houses themselves. Again, he

:43:20.:43:22.

is saying, private sector, it is up to you to solve the supply-side

:43:23.:43:29.

problem in housing. There are lots of questions over whether the

:43:30.:43:32.

housing industry can deliver or even wants to deliver. Or has the skills

:43:33.:43:40.

to deliver. This will be a monotonous repetition over the next

:43:41.:43:43.

announcing big numbers on things announcing big numbers on things

:43:44.:43:49.

like capital investment, transport, they are only announcements, not

:43:50.:43:52.

delivery. The government has found it difficult to deliver the big

:43:53.:43:56.

schemes that the Chancellor says we need to make sure our economy is

:43:57.:44:02.

thriving in the future. The big picture is that there is a big move

:44:03.:44:08.

from responsibility on the state to responsibility on local authorities,

:44:09.:44:11.

devolved powers and the private sector. Robert, here is a Chancellor

:44:12.:44:19.

who has says he has to balance the budget. He is not increasing any

:44:20.:44:23.

data taxes, although there are tax rise is built into this. He is

:44:24.:44:27.

spreading money around all over the press, yet he still says he will

:44:28.:44:33.

reach the surplus. Is there something going on here that we

:44:34.:44:36.

don't know about? It seems suspicious. Well, he has been bailed

:44:37.:44:41.

out by the Office for Budget Responsibility, the forecasting

:44:42.:44:46.

agency he created, forecasting significantly higher tax revenues

:44:47.:44:54.

than it was expecting in July and a significant reduction in interest

:44:55.:44:57.

payments on the government's big debt. That is not to do with new

:44:58.:45:04.

taxes imposed today, that is just the OBR being more optimistic. It

:45:05.:45:09.

says the reason it is more optimistic is because it has new

:45:10.:45:15.

data on the rate at which taxes are now being paid, which has allowed it

:45:16.:45:18.

to make what it thinks is a rational judgment. Let's be clear, these

:45:19.:45:26.

judgments. They are not accurate scientific forecasts is. The OBR

:45:27.:45:32.

might get it wrong. But George Osborne is banking on that windfall.

:45:33.:45:39.

You can see that in the most important women in the Office for

:45:40.:45:41.

Budget Responsibility's enormous book that it publishes when it is

:45:42.:45:46.

the most direct effect of the government's policy decisions has

:45:47.:45:50.

been to push borrowing higher between 2016-17 and 20 219-20. That

:45:51.:46:00.

means the things he has done today, reversing example, the cuts in tax

:46:01.:46:08.

credits, freezing the budget for the police, and limiting cuts in

:46:09.:46:14.

individual departments, the cuts are significantly less than the

:46:15.:46:17.

speculation was and that he outlined. He was talking about 20

:46:18.:46:25.

billion only a few weeks ago. So the direct effect of all of that is to

:46:26.:46:31.

push borrowing higher. But borrowing actually comes down because the OBR

:46:32.:46:39.

thinks the economy's ability to generate tax is better than it was.

:46:40.:46:47.

There is this big shift that he has made. I read it in a blog. You read

:46:48.:46:55.

your own blog? Occasionally. There is a shift in terms of shifting

:46:56.:46:58.

costs, doing a lot of the stuff we expect the state to do from the

:46:59.:47:01.

state, to the private sector. All right. Let me come to Rupert

:47:02.:47:07.

Harrison. How is it credible to suddenly produce a ?27 billion

:47:08.:47:14.

underlying improvement in the nation's finances between July and

:47:15.:47:17.

November? I think it's an interesting pattern. If we think

:47:18.:47:19.

about George Osborne's period of being Chancellor in a sense the

:47:20.:47:24.

first few years were a period where we saw downgrades to the growth

:47:25.:47:28.

forecasts, the eurozone crisis. The second half of the last parliament

:47:29.:47:31.

was when the economy looked to be picking up but tax receipts were

:47:32.:47:35.

perhaps not picking up at the same rate. It looked possible we are now

:47:36.:47:39.

into a third phase where finally the tax receipts are starting to come

:47:40.:47:43.

through and the OBR are moving from what was a cautious view on that,

:47:44.:47:48.

perhaps because the economy's growing they're more confident about

:47:49.:47:53.

earnings. He is assuming ?47 billion, not he, but the OBR, there

:47:54.:47:58.

will be ?47 billion in extra tax without putting tax up because of

:47:59.:48:02.

tax buoyancy. Where is the evidence for that? If you look at the October

:48:03.:48:07.

borrowing figures the October borrowing figures were the worst

:48:08.:48:13.

since October 2009 and that was partly because tax receipts

:48:14.:48:18.

underperformed in every major category, VAT, corporation tax,

:48:19.:48:22.

income tax, national insurance. How is it suddenly produce an extra ?37

:48:23.:48:27.

billion? Two points. We are always don't -- ?47 billion. Don't place

:48:28.:48:32.

too much on one month of data. The whole of the financial year it's

:48:33.:48:35.

still bad. The OBR will have seen those figures but won't have had a

:48:36.:48:40.

chance to radically change their forecasts because of them and

:48:41.:48:42.

probably nor should they because it's one month of figures. The big

:48:43.:48:47.

picture, you should always evaluate big events by the hand the

:48:48.:48:50.

Chancellor is dealt and how he choose to play it. He was dealt by a

:48:51.:48:54.

growing economy and more tax receipts a better hand than he

:48:55.:48:59.

expected but interestingly, he choose to play that hand by

:49:00.:49:03.

essentially taking risks off the table. Instead of new tax cuts or

:49:04.:49:07.

giveaways he is essentially taking the tax credit issue off the table

:49:08.:49:12.

completely, taken police cuts off the table. That's a sign of, first

:49:13.:49:16.

of all, we are early in a parliament and that's a phase where any money

:49:17.:49:21.

you have got you are about reducing risks and also I think a reflection

:49:22.:49:25.

of we have a Government that doesn't have a small majority in the House

:49:26.:49:29.

of Commons. He is taking risks. He is spending the ?47 billion in tax

:49:30.:49:36.

buoyancy the OBR is predicting. He is assuming the - he is also the OBR

:49:37.:49:41.

is assuming that the extra dwroet is going to produce more tax receipts

:49:42.:49:46.

too. The increase in the OBR forecasts are 0. 1 of a percentage.

:49:47.:49:51.

You were in the Treasury. The OBR has no idea whether the economy is

:49:52.:49:57.

going to grow by 2. 4% or 2. 5% by 2018. But the Chancellor's banked

:49:58.:50:01.

it. Several points to that. First of all, they're not his numbers. That's

:50:02.:50:06.

very important. I said the OBR. These are independent numbers he

:50:07.:50:09.

gets given. The OBR has been at the cautious end of the spectrum. Their

:50:10.:50:13.

forecast is still relatively cautious compared to other

:50:14.:50:16.

independent forecasters like the Bank of England. Not for 18-19. If

:50:17.:50:22.

you look at independent forecasts most people don't... City consensus

:50:23.:50:28.

is 2. 5. For the next few years they're at the cautious end and have

:50:29.:50:31.

been for tax receipts. More importantly the main criticism from

:50:32.:50:34.

the Chancellor's opponents has always been you are cutting too

:50:35.:50:37.

much, there is no need to run a surplus. The main accusation

:50:38.:50:44.

normally levied against him is he is too cautious. He is still on these

:50:45.:50:48.

independent numbers delivering a ?10 billion surplus. It's hard to argue

:50:49.:50:54.

he is taking risks on that front. One question and then I will bring

:50:55.:51:01.

in my colleagues. Why did he make such a complete Horlicks of tax

:51:02.:51:06.

credits? We must not lose sight of the fact he is still making ?12

:51:07.:51:08.

billion of save initial Government departments. Why did he get the tax

:51:09.:51:13.

credits wrong? I will answer the question. Why did he brand the party

:51:14.:51:18.

to be... Next thing he does is smash the working poor? It's difficult to

:51:19.:51:22.

save money. You have to see this in the context of a consolidation over

:51:23.:51:27.

?100 billion. It hasn't been done in this country in living memory. You

:51:28.:51:29.

are not going to get everything right. In the last parliament

:51:30.:51:34.

probably sort of lost in the mists of political history now, but we did

:51:35.:51:37.

things, for example, we proposed that after a year of being on

:51:38.:51:40.

jobseeker's allowance it would get cut by 10%. That didn't go down

:51:41.:51:44.

well. We dropped it. We made proposals that we would take child

:51:45.:51:48.

benefit away from higher rate taxpayers, that didn't go down well,

:51:49.:51:53.

we changed the threshold from about 42,000 up to between 50 and 60,000.

:51:54.:51:59.

When you are making ?100 billion plus savings you are not going to

:52:00.:52:02.

get everything right. When you have a problem fix it properly so you

:52:03.:52:07.

don't have to come back to it. He has listened to Denis Healy's, when

:52:08.:52:12.

you are in one hole, stop digging. Why did it take the Chancellor so

:52:13.:52:16.

long to realise the size of this problem? Let's not forget for weeks

:52:17.:52:20.

and weeks the Treasury was digging themselves further in. They were

:52:21.:52:25.

determined that there would be no mitigation. When he finally realised

:52:26.:52:28.

or perhaps it was pointed out to him perhaps by Number 10, just how bad

:52:29.:52:33.

this might have been around the time before the Lords' defeat, in the end

:52:34.:52:36.

he saw he would have to change course. Someone described to me that

:52:37.:52:40.

moment as being the moment when he really decided that he wanted to be

:52:41.:52:47.

Prime Minister, rather than a successful Chancellor. That's a

:52:48.:52:51.

little unfair. The policy is the policy until the policy changes. You

:52:52.:52:56.

can't go hinting in the meantime you might be changing. After today what

:52:57.:52:59.

people are going to remember is he ditched the tax credit cuts. They're

:53:00.:53:04.

not going to remember that he spent months with people speculating. We

:53:05.:53:08.

will! You will, Andrew. Many of his colleagues will. I suspect you are

:53:09.:53:12.

not representative of most people, most voters. You may say that. Watch

:53:13.:53:19.

this programme and tonight and papers tomorrow, they'll get, OK, he

:53:20.:53:27.

listened, he Devoned them. There are sort of slightly intuitive issues

:53:28.:53:34.

raised by the OBR. One, for example, is you have got growth remaining

:53:35.:53:40.

pretty robust. In a global economy actually which is a lot weaker than

:53:41.:53:45.

we thought it would be a few months ago. You are also increasing the

:53:46.:53:50.

costs that are being imposed on the private sector and yet expecting the

:53:51.:53:57.

private sector to increase its investment, not to lay people off. I

:53:58.:54:01.

think just intuitively one wonders actually whether this is going to

:54:02.:54:06.

work out quite as the OBR and the Chancellor assumes? You have to put

:54:07.:54:10.

what are relatively small tweaks today in the context of the big

:54:11.:54:16.

picture, he is still cutting public spending down towards 36%, that's at

:54:17.:54:18.

the near the historical lows in recent history. All right. A quick

:54:19.:54:23.

question from you. I wondered, Rupert, has the housing supply issue

:54:24.:54:28.

which has been a big problem since 2010, how much has that been an

:54:29.:54:32.

issue around the house building companies simply not having the

:54:33.:54:36.

energy or the desire to deliver on housing? If you speak to the chief

:54:37.:54:41.

executives in the house building sector their profits are already up

:54:42.:54:46.

40%. They feel themselves full stretched, they have a massive

:54:47.:54:49.

skills shortage and don't seem to be convinced although they'll make

:54:50.:54:52.

noises today about the announcements made, how much of a problem was it

:54:53.:54:55.

for you and how can it be solved? It's a very good question. It's one

:54:56.:54:59.

of the biggest economic issues that we face as a country. The house

:55:00.:55:02.

building rates are beginning to pick up. There were two big factors and

:55:03.:55:05.

one is the one you are talking about. One big factor was planning.

:55:06.:55:10.

That is now at least a bit better and planning is easier to get. There

:55:11.:55:15.

was an issue that if we go back to the boom years when more houses were

:55:16.:55:19.

building built, about half were built by the big guys, people you

:55:20.:55:22.

are talking about, but there was another sector in the market, the

:55:23.:55:25.

small builder who perhaps would build three or four houses, sell

:55:26.:55:29.

them, move on and build another one. A lot of those guys got wiped out or

:55:30.:55:33.

they're still in debt and banks won't lend to them. There is a

:55:34.:55:36.

supply issue but it's starting to mend. Skills shortage is a huge

:55:37.:55:41.

issue. It's been an issue since I have been in short trousers! We will

:55:42.:55:44.

move on. Fancy getting into politics after this? I am not in politics any

:55:45.:55:51.

more. I know that. Fancy getting into it? I am happy... Like a

:55:52.:55:56.

politician you have learned how not to answer the question, try it! I am

:55:57.:55:59.

enjoying what I am doing. Thank you for being with us, Rupert Harrison.

:56:00.:56:08.

Let's go to Birmingham and Jo. Yes, Andrew, so much to chew over.

:56:09.:56:16.

And the improved state of the public finances has given George Osborne

:56:17.:56:20.

more room, hence he announced he was not going to go ahead with planned

:56:21.:56:26.

cuts on things like tax credits. With that in mind, my guest here,

:56:27.:56:32.

the Conservative leader of Solihull council is here, he has heralded the

:56:33.:56:36.

northern powerhouse, now the Midlands engine, is it as good as it

:56:37.:56:40.

sounds? It's a good deal for Midlands and devolution basically.

:56:41.:56:44.

The new money unlocks ?8 billion worth of new investment for skills,

:56:45.:56:48.

transport connectivity, he has also devolving the skills budget which is

:56:49.:56:51.

important to us to train people up to take those jobs. There are other

:56:52.:56:54.

funds available for the future, as well. It's a pretty good deal at

:56:55.:56:59.

this stage. It will transfer into real growth here in this region? ?36

:57:00.:57:06.

million a year will unlock ?1 billion worth of funding which we

:57:07.:57:10.

can use to create the ?8 billion fund across the West Midlands and

:57:11.:57:14.

that's what we intend to do. The big headline of course and the thing

:57:15.:57:18.

that he faced most opposition to was this cut to tax credits. He said

:57:19.:57:22.

they're not going to go ahead. Labour have already said it's not a

:57:23.:57:28.

full and fair reversal of those planned cuts. Laura is, is that how

:57:29.:57:33.

you see it too? Many working families would have struggled to

:57:34.:57:36.

cope with a cut to tax credits. It's welcome news this is to be avoided

:57:37.:57:41.

and siem sure many families will be relieved to history that. However,

:57:42.:57:44.

people will face a change in their finances as they move on to

:57:45.:57:48.

universal credits. So it's really important that people prepare and

:57:49.:57:53.

plan their finances now so that they can adapt to changes in the future.

:57:54.:57:57.

We already see lots of people struggling with debt or managing

:57:58.:58:00.

bills or balancing working child care. If you do have any worries

:58:01.:58:04.

about your finances or questions, come and talk to Citizens Advice,

:58:05.:58:07.

get advice and we will help you think it through. Is your first

:58:08.:58:10.

impression that those families who are not going to face those cuts

:58:11.:58:14.

coming Barff Christmas, coming into place -- coming before Christmas,

:58:15.:58:17.

coming into place next year will have more time for transition in the

:58:18.:58:20.

hope they'll get higher wages? Absolutely. It's important that

:58:21.:58:24.

people are able to have that time to plan and prepare and come and talk

:58:25.:58:29.

to us to help do that. One of the other big announcements was this

:58:30.:58:32.

increase that councils will be allowed to put on council tax ks up

:58:33.:58:39.

to 2% as long as it's for social care, what will that mean Father a

:58:40.:58:43.

lot of customers? Council tax debt is already one of the biggest issues

:58:44.:58:48.

we help people with at Citizens Advice, it's for people to have

:58:49.:58:51.

support and advice to really help them plan and manage those changes.

:58:52.:58:55.

Thank you very much. Of course for shoppers here just

:58:56.:58:58.

weeks before Christmas they'll be thinking about the money in their

:58:59.:59:02.

pocket and how it's going to affect their personal finances. One of the

:59:03.:59:06.

big announcements was also about the state pension. With us is our

:59:07.:59:13.

personal finances expert. Tell us about peoples' pensions, it's going

:59:14.:59:19.

to go up? It is, we knew this, there wasn't really a lot we didn't know.

:59:20.:59:23.

We already had worked out how much the state pension was going to be

:59:24.:59:28.

because of the triple lock. We knew as soon as the inflation and

:59:29.:59:30.

earnings figures came out how much it was going to be. It's going up by

:59:31.:59:38.

?3. 35 to ?119. 30. That's what they call the old state pension, that's

:59:39.:59:44.

the one that's before the April 2016 changes. The key thing that was new

:59:45.:59:49.

that we do know because it was announced for the first time today

:59:50.:59:56.

is that this new state pension, the so-called flat rate, which isn't at

:59:57.:00:03.

all, but that's going to be 1 a 55. 65. George Osborne always said this

:00:04.:00:08.

will be above the level of pension credit under the old system. It's 5p

:00:09.:00:14.

so he has kept his promise, but not by a great deal. We will have to

:00:15.:00:19.

leave it there. Keep economies and e-mails coming to us and we will try

:00:20.:00:25.

and get some next time. -- questions and e-mails. Thank you. As they were

:00:26.:00:29.

saying there the state pension is going up to over ?119, if you were

:00:30.:00:33.

worried about losing your tax credits as a result of the July

:00:34.:00:41.

budget, that will now not happen. You will not see a dmination at

:00:42.:00:47.

least until welfare credit comes in. If you were worried that the

:00:48.:00:51.

Government at a time of heightened security threat was going to cut

:00:52.:00:54.

police numbers, then the Chancellor said he is not going to do so.

:00:55.:00:59.

Some of the issues that affect everybody in the country, rather

:01:00.:01:03.

than just a great number crunching. But the number crunching is

:01:04.:01:06.

important. That tells us whether or not the Chancellor's projections are

:01:07.:01:12.

credible. The man who gets to mark the Chancellor's homework is Paul

:01:13.:01:16.

Johnson, director of the Institute for Fiscal Studies. I am sure he has

:01:17.:01:23.

his red pen. We are puzzled here as to how the Chancellor still

:01:24.:01:26.

determined to get a surplus by the end of this parliament has so much

:01:27.:01:29.

money to do so many things. Is it credible? .

:01:30.:01:35.

Well, he got lucky in that there are more tax revenues expected to come

:01:36.:01:43.

in and he will be spending a bit less on debt interest. He has also

:01:44.:01:49.

increased taxes reasonably significantly. There is a 3 billion

:01:50.:01:53.

cost on is Mr pay for the new apprenticeship. Wasn't that in the

:01:54.:01:58.

Labour manifesto? I don't know. I think it might have been. It wasn't

:01:59.:02:03.

in the figures in July. And there have been increases in council tax

:02:04.:02:08.

and some other increases. So he has done thee things, taken advantage of

:02:09.:02:15.

increased revenues, he has increased tax a bit and he has used that money

:02:16.:02:18.

to damp down the cuts in spending. to damp down the cuts in spending.

:02:19.:02:25.

And because the cuts in spending were on a relatively limited part of

:02:26.:02:29.

government, the effect of that bit of extra money is to significantly

:02:30.:02:36.

reduce the overall level of cuts. But everyone is assuming the economy

:02:37.:02:43.

will grow by roughly 2.5% a year till the end of the decade. We knew

:02:44.:02:50.

that interest rates were staying low for another while yet and that that

:02:51.:02:53.

would affect the debt interest, the service on the national debt that he

:02:54.:02:58.

had to pay. We know that if an economy is growing, there is a

:02:59.:03:01.

certain buoyancy in tax revenues at some stage. So if we knew all that,

:03:02.:03:06.

why does all this come as a surprise? Therein lies the risk. The

:03:07.:03:13.

changes in the OBR's forecasts are small. They are if you billion

:03:14.:03:16.

pounds, but you are five years out in terms of tax revenues and the

:03:17.:03:22.

economy. Those are small changes, and the Chancellor has used most of

:03:23.:03:29.

and reduce the spending cuts he and reduce the spending cuts he

:03:30.:03:32.

would otherwise have done. The risk for him is that if that turns just a

:03:33.:03:37.

bit, as it may well do, he will have to do more in terms of tax increases

:03:38.:03:42.

or go back to those departments and cut them further. In the last

:03:43.:03:46.

Parliament, when things looked worst, he did not increase spending

:03:47.:03:50.

cuts to meet his target. This time, when things are looking better, he

:03:51.:03:54.

is not using that to have a bigger surplus to have tax cuts, he is

:03:55.:04:00.

using it to protect public services. This is the Chancellor's third

:04:01.:04:06.

"Budget" this year. It is a form of Budget called the Autumn

:04:07.:04:14.

Statement/spending review. If there is a 27 billion difference in the

:04:15.:04:17.

underlying improvement in revenues between July this year and

:04:18.:04:25.

mid-November, when these figures were put together, he should have a

:04:26.:04:28.

Budget every three months if the figures are so wrong! Please, don't

:04:29.:04:35.

wish for that! 27 million is one of these silly numbers. But it allows

:04:36.:04:42.

him to get the surplus. It only comes out to 4 billion or 5 billion

:04:43.:04:48.

in the end, plus he has 6 billion in tax increases in the end. The reason

:04:49.:04:52.

it makes such a big difference is that he is only playing with a small

:04:53.:04:59.

bit of public spending. The whole of welfare is separate. Why didn't you

:05:00.:05:04.

see this coming? You are the expert. We don't do anything unless

:05:05.:05:11.

you tell us. We have always said there is a lot of risk around this

:05:12.:05:15.

because of the Guerin between a relatively small amount spending and

:05:16.:05:21.

small changes in taxing and borrowing. If you look at these

:05:22.:05:25.

numbers, there are still some big cuts. There's a 15% cut for justice,

:05:26.:05:31.

there are still cuts for local governments and big cuts in

:05:32.:05:35.

day-to-day spending for transport. There is 12 billion of cuts for

:05:36.:05:38.

those unprotected departments, which is still a substantial cut. It is

:05:39.:05:44.

not as big as it would have been in the July Budget numbers, because the

:05:45.:05:48.

Chancellor has decided to use the extra money he has not to cut taxes

:05:49.:05:53.

or increase the surplus, but to protect public services. To that

:05:54.:06:01.

extent, given that the political strategy was to move the

:06:02.:06:06.

Conservatives on to the centre ground in the July Budget as they

:06:07.:06:10.

saw Labour moving to the left, there were a lot of things in the July

:06:11.:06:13.

Budget that had been in the Labour manifesto, this is a continuation of

:06:14.:06:22.

that? It is certainly using the money not to do what you might think

:06:23.:06:25.

of as conservative things like cutting taxes and increasing

:06:26.:06:32.

spending. He has used it to increase spending. It is important to be

:06:33.:06:35.

clear that he has changed nothing in the long-running. In the long one,

:06:36.:06:40.

the cuts to universal credit that were announced in the July Budget,

:06:41.:06:45.

which are on a similar scale to the cuts to tax credits, will come in.

:06:46.:06:53.

Politically, he has got through that. It is just a matter of time.

:06:54.:07:02.

So the kind of cuts that were envisaged in the July tax credit

:07:03.:07:06.

statement do it eventually come round in a different way by the time

:07:07.:07:12.

universal credit comes in? People on tax credits should realise that.

:07:13.:07:16.

Nobody will face the cash losses they would have faced with the tax

:07:17.:07:20.

credits because, even as you go on to universal credit, you are

:07:21.:07:24.

protected relative to what you were on tax credits. But every new

:07:25.:07:31.

claimant will get the new amount. So George Osborne is achieving what he

:07:32.:07:35.

wanted. But he has postponed it. Robert? It is worth pointing out

:07:36.:07:42.

that if you look at all of the managed spending, it is now flat in

:07:43.:07:51.

real terms, adjusted for inflation, throughout the Parliament. In other

:07:52.:07:56.

words, this is not a government that is any longer cutting. This is the

:07:57.:08:01.

moment when one can say that austerity, in the extreme form, is

:08:02.:08:09.

over. Within that, because there are number of departments that get

:08:10.:08:12.

useful increases, defence is up 2.3%, a reasonable increase, health

:08:13.:08:21.

is up 3.3%. Because of these protective departments, they're big

:08:22.:08:28.

cuts elsewhere. One should not underestimate that this will be

:08:29.:08:32.

painful for those who depend on the services provided by those

:08:33.:08:38.

departments. But this is not the kind of Armageddon that people were

:08:39.:08:40.

talking about before the general election. It is a big political

:08:41.:08:50.

shift. Laura, can we say he has decided not to cut taxes in the old

:08:51.:08:56.

Tory weight but to increase public spending, not to cut the police and

:08:57.:09:00.

rent back on tax credit, is it a continuation of the Chancellor's

:09:01.:09:04.

strategy to put his tanks on the centre ground? No question about it.

:09:05.:09:09.

Particularly after his speech at the conference, that was an attempt to

:09:10.:09:12.

roll his tanks onto Labour's lawn, and we have seen it again today.

:09:13.:09:18.

Here, he could have chosen to pay down the debt quicker. He could have

:09:19.:09:23.

chosen to pull back further. We are four years from a general election

:09:24.:09:26.

with a Labour opposition that have not found a groove yet. That may

:09:27.:09:35.

well be part of the story today. We have got so much to pack in. Paul

:09:36.:09:45.

Press conference tomorrow? Of Press conference tomorrow? Of

:09:46.:09:51.

course. Excellent. Now, in the run up to today's statement, we heard

:09:52.:09:54.

some dire warnings about the impact of spending cuts on front line

:09:55.:09:58.

policing, but as we have been saying, a surprise announcement is

:09:59.:10:02.

that the Chancellor did not do as much as people said he was planning.

:10:03.:10:06.

He decided there would be no further cuts to police budgets in England

:10:07.:10:10.

and Wales. There has been a meeting of chief constables and elected

:10:11.:10:13.

police and crime commission is taking place at Manchester Townhall

:10:14.:10:16.

today. It is being covered by our home affairs correspondent, who is

:10:17.:10:23.

there now. What has been the reaction? As you say, this was a

:10:24.:10:33.

dramatic, unexpected announcement. We were all expecting cuts of up to

:10:34.:10:38.

25% for police in England and Wales. Perhaps the Chancellor would pull a

:10:39.:10:42.

rabbit out of his hat to soften the blow. Instead, he said no cuts at

:10:43.:10:45.

all for policing until 2020. Joining me to gauge the reaction is Kevin

:10:46.:10:53.

Hurley, the Police and Crime Commissioner for Surrey. You were

:10:54.:10:58.

watching the announcement. What was the response? It was almost like

:10:59.:11:02.

euphoria if your football team had scored a goal. The Police and Crime

:11:03.:11:06.

Commissioner 's and chief constables are delighted. Of course, we should

:11:07.:11:11.

remember that we are already in the process of implementing cuts. So all

:11:12.:11:15.

is not well in the world and we will seek further reductions in policing,

:11:16.:11:21.

but this is good news. Fair play to the Chancellor. He has listened, and

:11:22.:11:26.

we are happy. Can you explain why you have to make further cuts?

:11:27.:11:31.

Shouldn't it stop now? No, because the budgets are allocated further

:11:32.:11:36.

upstream. So we have plans for the next three years where we will

:11:37.:11:42.

gradually reduce staff. Some forces will be cut significantly. In

:11:43.:11:46.

Surrey, it will not be so bad. But the good news is that the Chancellor

:11:47.:11:50.

will also allow us to take some extra money on the council tax

:11:51.:11:55.

side, which means some forces such as mine in the wealthier south can

:11:56.:11:59.

be almost completely cosseted from this. It will not be so good in the

:12:00.:12:05.

north. Dr Steve Davis from the Institute of Economic Affairs, what

:12:06.:12:08.

do you think has brought about this shift in George Osborne's thinking?

:12:09.:12:14.

I think he has got better than expected figures for the annual

:12:15.:12:17.

growth rate, so he now thinks that economic growth and higher tax

:12:18.:12:22.

receipts will save him the political pain of making such large cuts. To

:12:23.:12:28.

add to what Kevin said, it is worth bearing in mind that there was a 31%

:12:29.:12:32.

real increase in police spending between 2001 and 2010. The cuts we

:12:33.:12:37.

have had so far have taken us back to where we were in 2003. I don't

:12:38.:12:43.

remember there being a complete collapse of policing at that time.

:12:44.:12:49.

Had the anticipated cuts taken place, they would have taken us back

:12:50.:12:53.

to 2001. So our police now going to be binning or the plans they had to

:12:54.:12:57.

make cuts of up to 25%, and should they do that? Well, they will be in

:12:58.:13:02.

a lot of the plans they had, although some things are already in

:13:03.:13:06.

train that they will put through. But I think they should take this as

:13:07.:13:09.

an opportunity to think about how they might reorganise the way they

:13:10.:13:18.

work. Do we need 43 police forces, for example? Why do we have each

:13:19.:13:21.

police force buying its own equipment? It makes more sense to do

:13:22.:13:26.

that nationally. And that question remains. Should always be thinking

:13:27.:13:31.

about that. Private sector businesses typically look to reduce

:13:32.:13:35.

their costs by 4% every year. There is no reason why the public sector

:13:36.:13:39.

should not also look to spend money more effectively. A final word from

:13:40.:13:44.

Kevin. There was news about extra funding for firearms capability.

:13:45.:13:52.

That is really good news. And I agree that 43 police forces is a

:13:53.:13:56.

silly business model. I would like the Police and Crime Commissioner to

:13:57.:13:59.

be made redundant. Let's reduce the number of forces. Perhaps George

:14:00.:14:04.

Osborne and Theresa May are listening. If they are, I am sure

:14:05.:14:08.

they will take note for the next announcement of government plans.

:14:09.:14:18.

That is the view from Manchester. That is the first voluntary

:14:19.:14:20.

redundancy offer we have had today. Let's go to Jane Hill on College

:14:21.:14:25.

Green. Yes, let's get reaction to everything we have heard from the

:14:26.:14:30.

Liberal Democrats and from Ukip, Baroness Kramer is with me and

:14:31.:14:36.

Douglas Carswell, Ukip MP. I want to talk about tax credits and the

:14:37.:14:41.

police. We were just listening to that, and you made some strident

:14:42.:14:45.

points about what is going on here. On the face of it, positive that

:14:46.:14:50.

there no cuts to police. It is interesting. George Osborne has said

:14:51.:14:54.

no cuts to the police budget, but in the small print, we will see a

:14:55.:14:57.

massive increase in the police precept. So the government in

:14:58.:15:02.

Whitehall will not get blamed for that, but local police and crime

:15:03.:15:05.

commissioners will get it in the neck. George has been clever in

:15:06.:15:09.

shifting responsibility for finance for the police. That is politics. It

:15:10.:15:15.

is good politics. I am not sure it is great for the country. We need a

:15:16.:15:21.

Chancellor who understands that we need new priorities. This is the

:15:22.:15:24.

first year where the Home Office budget will be less than the

:15:25.:15:30.

overseas aid budget. This is going to be really tough for more deprived

:15:31.:15:33.

communities. Council taxpayers will suddenly find there is a charge

:15:34.:15:38.

turning up to pay for the police and to pay for all people with the

:15:39.:15:42.

social care budget, and it will fall hardest on the most deprived

:15:43.:15:45.

communities that have the least ability to raise council tax. At the

:15:46.:15:51.

same time, they will get less money on their business rates. Kensington

:15:52.:15:56.

and Chelsea can go home laughing, but if you are a deprived community,

:15:57.:16:01.

did you get whacked today? There is more and more pressure being put on

:16:02.:16:07.

local councils. And I worry about the bus network, because we just

:16:08.:16:10.

heard that the central Department for Transport will have its

:16:11.:16:14.

operational budget slashed. Does that mean that paying for buses

:16:15.:16:20.

outside of the big cities will now fall on councils as well? There are

:16:21.:16:22.

a lot of issues. If I could sum it up, this is a

:16:23.:16:32.

Blairite budget. The Labour Party has lurked so far to the extreme

:16:33.:16:38.

left, their shadow Chancellor was even quoting Chairman Mao, that's

:16:39.:16:42.

allowed George Osborne to create a space for a Blairite budget. It

:16:43.:16:45.

sounds better than it turns out to be. There is a lot in the small

:16:46.:16:52.

print that we will find unpalatable. Do you understand how he has done

:16:53.:16:57.

it, still talking about welfare cuts and auto U-turn on tax credits which

:16:58.:17:01.

I assume makes you happy? We still have ?12 billion in welfare cuts so

:17:02.:17:06.

it's coming. There has been magic with what's going to come in in

:17:07.:17:09.

terms of tax receipts and br owing to offset some changes he has made.

:17:10.:17:14.

We still have ?12 billion cuts in welfare. I am delighted that he

:17:15.:17:19.

stopped the cuts for tax credits on working families. And one of the

:17:20.:17:23.

ironies is had George Osborne been in the House of Lords he would have

:17:24.:17:28.

voted for the Democrat motion to absolutely kill those cuts in tax

:17:29.:17:30.

credits stone dead. He wouldn't have voted with either the Labour Party

:17:31.:17:37.

or the Conservatives. Interesting. Thank you both very much for your

:17:38.:17:43.

reactions. Andrew, back to you. Thank you. The sun looks like it's

:17:44.:17:48.

come out there. We are always kept in the dark here! We are grateful

:17:49.:17:54.

for that picture. A moment ago we went through a number of issue that

:17:55.:17:58.

had come up in this budget. Let's just go through them again.

:17:59.:18:05.

Here are the main measures announced in this Autumn Statement/Spending

:18:06.:18:09.

Review. Tax credits announced in the July post-election budget. The

:18:10.:18:12.

changes planning, cuts planning have been cancelled in their entirety.

:18:13.:18:17.

But there will still be universal credit coming in which will embody

:18:18.:18:22.

some of what the tax credit cuts had involved. We will talk about that in

:18:23.:18:26.

a minute. There will be no cuts to the police

:18:27.:18:32.

budget in England and Wales. There was thought the Chancellor was

:18:33.:18:35.

under pressure to reduce the cuts he was planning, the result is that

:18:36.:18:39.

there are no cuts at all. I think the word Paris comes into

:18:40.:18:43.

mind when you look at that. NHS budget in England will rise from

:18:44.:18:51.

?101 billion today to ?120 billion by 2020-21 and rises for the health

:18:52.:18:54.

budgets in Scotland, Wales and Northern Ireland.

:18:55.:19:02.

And, as local authorities are squeezed and one of the main roles

:19:03.:19:06.

in the community is to provide social care, as that money gets

:19:07.:19:10.

squeezed, there they will be allowed to increase council tax by 2% to pay

:19:11.:19:16.

for social care. And only social care. What else?

:19:17.:19:22.

We have got a ?10 billion increase for education and child care, that's

:19:23.:19:27.

through the life of the parliament, over five-year period. An

:19:28.:19:33.

apprenticeship levy eight at 0. 5% of employer's wage bill. This is

:19:34.:19:37.

mainly designed for major employers to encourage them to do more to give

:19:38.:19:40.

people apprenticeships and skills and if they do that, they get some

:19:41.:19:45.

of that levy back. It's actually not a new idea. It was introduced by the

:19:46.:19:50.

Wilson Government in a version of it in the 1960s. There it is around

:19:51.:19:54.

again. And 400,000 new homes, the big story

:19:55.:20:01.

leaked overnight to the papers and broadcasters.

:20:02.:20:04.

The Government getting into the property development business.

:20:05.:20:08.

It seems to have a pot of money of about ?7 billion able to do that.

:20:09.:20:12.

Capital spending on transport to increase, as well.

:20:13.:20:17.

That's by the end of the decade. Capital spending to rise by 50% even

:20:18.:20:22.

as the adminive bill for the transport department is cut as the

:20:23.:20:25.

Government tries to find ways to save money.

:20:26.:20:29.

We spoke a while ago to the former advisor to George Osborne, giving

:20:30.:20:32.

him his first interview on television. We are joined now by

:20:33.:20:36.

another former adviser to the Chancellor, he had a lot of them,

:20:37.:20:40.

Matt Hancock, it's definitely not his first interview and probably not

:20:41.:20:43.

his last either. You can be the judge of that. Depends what happens!

:20:44.:20:48.

He is a Minister from the Cabinet Office. Can we now enter the

:20:49.:20:52.

department of honesty. And admit that if it hadn't been for the

:20:53.:20:56.

attacks in Paris we would not be seeing a freeze in any further cuts

:20:57.:21:00.

to the police budget? Well, this Spending Review has been in the

:21:01.:21:04.

planning for several months. You know, I don't know exactly when that

:21:05.:21:10.

decision was taken. Crucially, the whole purpose of the Spending Review

:21:11.:21:14.

is centred around national security and economic security. That goes

:21:15.:21:19.

back to the manifesto, we set out the manifesto, it was about national

:21:20.:21:21.

and economic security and national security of course includes all the

:21:22.:21:25.

defense items that were outlined this week. But it's also about

:21:26.:21:29.

safety closer to home. Before Paris the Home Secretary was digging in

:21:30.:21:34.

her kitten heels and trying to avoid any further cuts to police budgets.

:21:35.:21:38.

The Treasury was pushing them to come up with more as part of the

:21:39.:21:41.

departmental round of cuts the Treasury needed. Now there are to be

:21:42.:21:47.

no cuts. What happened in between, it's Paris. It would seem crazy most

:21:48.:21:51.

people would think for a Conservative Government or any

:21:52.:21:54.

Government to proceed with cuts to the police budget beyond what you

:21:55.:21:58.

have already introduced. That's the truth of the situation, isn't it? I

:21:59.:22:02.

don't know exactly when that decision was taken. Crucially, the

:22:03.:22:10.

question is what do you do over a four-year Spending Review and how do

:22:11.:22:16.

you spend the four trillion worth of taxpayers' money and as national

:22:17.:22:19.

security and economic security are the bedrock of what we feel that we

:22:20.:22:23.

were elected on, independenting it's perfectly reasonable to make sure

:22:24.:22:28.

the police are protected. At a time when this country faces the greatest

:22:29.:22:33.

terrorist threat in its history, terrorist threat, not the greatest

:22:34.:22:36.

threat ever, the Nazis obviously beat that one, the terrorist threat,

:22:37.:22:41.

bigger than the 30-year war from the IRA. In what way does it make sense

:22:42.:22:46.

for the overseas aid budget now to be bigger than the Home Office

:22:47.:22:50.

budget? Hold on, look at what we are going to be doing with the aid

:22:51.:22:55.

budget. Of course you have to be working around the world and our

:22:56.:22:58.

moral obligation to the world's poor, we signed up for that. We are

:22:59.:23:04.

also redirecting the aid budget to support failed states on Europe's

:23:05.:23:10.

borders. No, that may work down the road. I hope it does. But if you

:23:11.:23:14.

have been following the news in Paris and Belgium you will be aware

:23:15.:23:19.

that a lot of the bad guys are already here. The overseas aid is

:23:20.:23:24.

for future years. They're here or heading this way now. Yet you are

:23:25.:23:27.

spending more on overseas aid than you are on the Home Office. Does

:23:28.:23:32.

that really make sense? The whole package makes sense because we are

:23:33.:23:37.

protecting the police budget. We are increasing the counterterrorism

:23:38.:23:44.

element of the budget by 30%. We are increasing more conventional defense

:23:45.:23:48.

with the defense review we saw. I am talking about the terrorist. We are

:23:49.:23:53.

making sure when we spend aid money we are spending it at source trying

:23:54.:23:57.

to stop the terrorists threat at source. Let me give you an example.

:23:58.:24:02.

No, but the point, these people... That may stop them coming. That may

:24:03.:24:08.

stop them coming in five years, a couple of ?200million will do in

:24:09.:24:12.

Somalia or Syria is another matter. I am talking about the ones already

:24:13.:24:17.

on their way or already here. We need to tackle both. You are right

:24:18.:24:22.

on that level. We have to support police domesticicly, we have to

:24:23.:24:25.

support counterterrorism and officers and the agencies, but we

:24:26.:24:29.

also have got to do everything we can to stop failed states and to

:24:30.:24:35.

make sure that in those refugee camps people don't come here with

:24:36.:24:40.

the risk attached, especially if foreign fighters come, of then

:24:41.:24:44.

bringing terrorism with them. I think that an overall package that

:24:45.:24:48.

includes protection at home and trying to support failed states on

:24:49.:24:51.

Europe's borders makes sense. You have to look at the whole thing as a

:24:52.:24:56.

package, all about national security and economic security. What kind of

:24:57.:24:59.

Government comes up with a major change to tax credits in July and

:25:00.:25:04.

abandon it is in November? Well, we got an improved set of forecasts.

:25:05.:25:10.

These forecasts said there was ?27 billion extra. And that allow us us

:25:11.:25:15.

to bring the debt down faster than we were planning to in the July

:25:16.:25:19.

budget. And also to spend more on capital infrastructure, which is

:25:20.:25:21.

important, I think you probably agree. Were you wrong to introduce

:25:22.:25:26.

these tax credits in the first place? I thought they were sensible

:25:27.:25:31.

measures. Why are you not proceeding with them? We lost in the House of

:25:32.:25:35.

Lords. You could have gone back. The difference between then and now is

:25:36.:25:41.

that in the new forecasts the OBR said they expect ?27 billion extra

:25:42.:25:44.

and I think it's a perfectly reasonable use of some of that money

:25:45.:25:48.

to mitigate the impact of this change. The key point is this, on

:25:49.:25:55.

benefits we were elected on a mandate to find ?12 billion worth of

:25:56.:25:59.

benefits savings. We discussed that loads at the time. You never told us

:26:00.:26:03.

what they would be. We didn't specifically say which ones it would

:26:04.:26:06.

be. We are going to meet the ?12 billion but we are going to do it in

:26:07.:26:11.

a different way to how we set out at the previous budget but we have the

:26:12.:26:13.

money. Can we stay in the department of honesty and just be clearer,

:26:14.:26:18.

although the tax credit cuts are not going to hit people now, when

:26:19.:26:21.

universal credit comes in elements of what you were planning to do in

:26:22.:26:25.

the tax credits will be introduced? You will limit the child element in

:26:26.:26:30.

tax credits to two children from April 17 who are abolishing the

:26:31.:26:35.

family element in tax credits worth ?540 a year. This is simply some

:26:36.:26:40.

pain for the poorest families postponed, not eliminated? That's

:26:41.:26:43.

not quite right. We are still making the ?12 billion of savings that we

:26:44.:26:47.

said in the manifesto that we would make and we are still meeting the

:26:48.:26:50.

?10 billion of surplus by the end of the parliament that we set out in

:26:51.:26:57.

July. But the difference is that when people move on to universal

:26:58.:27:02.

credit, unless their circumstances change, they're protected and so

:27:03.:27:05.

they don't lose cash in cash terms. That means that you can make this

:27:06.:27:12.

transition in a far more sensible way and make sure that we get the

:27:13.:27:17.

savings to the benefits savings by the end of the parliament that are

:27:18.:27:21.

just as big as we planned. Crucially, it is delivering on what

:27:22.:27:26.

we promised in the manifesto. We are up against the time limit, we have

:27:27.:27:36.

to deal with other parts of the great... It's interesting when you

:27:37.:27:39.

start going through the detail. There is some analysis of what the

:27:40.:27:43.

Chancellor's statement really means. This is a big tax-raising Autumn

:27:44.:27:49.

Statement. Tax-raising on businesses, you have the apprentice

:27:50.:27:54.

levy we spoke about, the stamp duty increase we have spoken about. Also

:27:55.:28:00.

a lot of transference of grants for research and development support

:28:01.:28:03.

being changed into loans. Business corporation tax too. What we are

:28:04.:28:07.

going to get out of this, when you go through the detail, I am looking

:28:08.:28:10.

at the business department, the Government will reduce the teening

:28:11.:28:15.

grant by ?120 million, they're -- teaching grant. Changing grants to

:28:16.:28:18.

loans. There is a lot of cuts in here which are small scale. There

:28:19.:28:22.

will be overwhelmed by the announcements on the tax credits and

:28:23.:28:25.

announcements on security, but in here is actually a lot of

:28:26.:28:30.

tax-raising powers which actually means that this is not a giveaway

:28:31.:28:34.

Autumn Statement in the slightest, but actually it's raising large

:28:35.:28:37.

amounts of money as well as all the issues made. What other bits are

:28:38.:28:42.

hidden in the small print? Well, loads and loads of changes because

:28:43.:28:44.

we are reforming the way that the state works. You have hidden loads

:28:45.:28:48.

and loads of changes in the small print? No, the Chancellor set out in

:28:49.:28:52.

the big things in the statement and then we publish the book and the

:28:53.:28:57.

crucial... For instance on the business changes just mentioned, the

:28:58.:29:00.

Chancellor said in his speech that there is a 17% saving in the

:29:01.:29:04.

business department. Of course there is. So there do have to be savings,

:29:05.:29:08.

they're about half as big in the last parliament but absolutely there

:29:09.:29:12.

is savings. Robert, a quick point. You spent most of the last

:29:13.:29:17.

parliament attacking Labour for being too optimistic in forecasting

:29:18.:29:20.

rises in tax revenues when this was in power and spending on the back of

:29:21.:29:24.

that. Some would say there is a shift, some perhaps would describe

:29:25.:29:30.

it as a hypocrisy that here we have a Chancellor who always said he is

:29:31.:29:35.

Conservative - huge forecast increases in tax revenues that may

:29:36.:29:44.

turn out to be illusaro. Figures were not included in the Office for

:29:45.:29:48.

Budget Responsibility. The OBR did have details. This is the

:29:49.:29:52.

independent office for budget responsibility. I used to be an

:29:53.:29:56.

economic forecaster. I am glad politicians no longer do that. It's

:29:57.:29:59.

done independently by experts. Very well. We will look at it with a fine

:30:00.:30:06.

toothcomb. Thank you, Matt Hancock. We are on air on BBC Two until 3.

:30:07.:30:09.

30pm.

:30:10.:30:10.

Andrew Neil presents live coverage of George Osborne's Spending Review and Autumn Statement. With Laura Kuenssberg, Robert Peston, Kamal Ahmed and Jo Coburn in Birmingham. Includes live Prime Minister's Questions.


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