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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


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


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


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


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


a Spending Review that is being widely trailed as shaping British


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


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


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


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


George Osborne wants Britain to live within its means.


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


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


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


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


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


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


Mr Osborne faces some tough choices.


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


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


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


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


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


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


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


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


I'll be here outside Parliament getting reaction from


across the political spectrum to a speech that could define


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


throughout the day. Did I mention the best analysis?


Speaking of the best analysis, I'm joined


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


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


leaves the BBC, our outgoing economics editor Robert Peston.


We'll be frisking him before he leaves


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


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


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


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


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


departments and public services over the next four financial years.


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


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


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


the latest official forecasts for inflation, employment, borrowing and


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


So a lot riding on today for the economy,


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


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


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


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


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


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


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


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


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


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


rhetoric of the Tory election campaign that got them back into


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


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


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


matches the priorities of those matches the priorities of those


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


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


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


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


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


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


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


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


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


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


He is only halfway through his deficit reduction strategy which he


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


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


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


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


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


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


benign interpretation is a completely lopsided approach


gradually balancing the books that makes it almost impossible to get


anywhere significant. There are some in the Conservative Party who


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


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


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


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


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


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


occurred. of savings


the Chancellor says is needed to eliminate the deficit, move


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


debt down significantly over the parliament, the last set of


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


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


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


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


Parliament but then it grew progressively and accelerated


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


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


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


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


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


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


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


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


happen everything we would hear today would become irrelevant


because the shock to the global economy in those circumstances would


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


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


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


Spending Review will set limits for each Whitehall department for each


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


locked in discussions with Cabinet colleagues for weeks to agree the


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


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


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


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


using. We'll find out who is bruised,


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


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


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


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


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


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


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


in the real courtyard, but it represents everything that


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


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


that goes on social security. That includes everything


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


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


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


is the money that goes on administering and delivering public


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


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


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


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


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


NHS funding in England The Government has also promised


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


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


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


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


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


from either health, defence or aid. So,


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


budget, a big part of what the state Here,


the Conservatives have promised a cash increase per pupil


in schools. That means savings


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


any guaranteed protection. Here is the money that goes


to English local authorities. This was one of the first


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


took longer And the single biggest thing


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


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


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


that are going to have to find big savings over


the next four years are the Departments of Business,


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


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


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


the Chancellor won't touch. The State Pension is


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


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


benefits. The other areas of big spending


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


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


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


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


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


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


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


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


interesting is how much the Government needs the private sector


to support delivery. The big strategic purpose of George Osborne


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


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


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


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


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


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


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


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


Statement which will help people buy affordable homes, again increases


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


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


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


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


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


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


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


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


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


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


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


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


particularly the rise to the national living wage affecting their


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


less money from the local authorities? Exactly. Companies like


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


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


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


Sajid Javid, the Business Secretary, one of those unprotected


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


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


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


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


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


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


headlines George Osborne is comfortable with? The headlines he


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


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


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


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


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


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


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


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


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


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


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


able to cope when the economy inevitably falls into another


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


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


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


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


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


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


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


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


business investment. We need to start planning our infrastructure,


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


when we have heard from the Chancellor.


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


At the heart of that is the city of Birmingham.


Jo Coburn has left her virtual Treasury courtyard and is already


Who needs HS2 when you have the magic of television?


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


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


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


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


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


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


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


the chronic underfunding of social care, which means elderly patients


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


fantastic. We would like to see further announcement on business


rates. Earlier this year the Chancellor said they would devolve


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


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


about Christmas shopping, that his personal finances. Their financial


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


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


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


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


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


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


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


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


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


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


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


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


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


any stories. Start that Christmas shopping and


get my present. And you can also take advantage


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


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


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


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


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


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


expecting to hear today. The biggest was the announcement


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


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


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


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


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


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


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


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


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


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


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


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


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


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


Local authority spending has been squeezed. The Chancellor will now


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


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


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


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


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


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


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


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


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


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


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


sends off Tory MPs jubilant to their constituencies.


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


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


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


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


relatively early into the parliament and he personally has had something


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


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


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


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


Minister, and Prime Minister's Questions.


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


will have heartfelt thoughts and prayers today and we will be


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


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


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


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


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


security for family relationships and opportunities for world rubble


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


Parliament to the previous parliament, we saw something like a


tripling in the installation of renewable electricity. Jeremy


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


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


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


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


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


2020? Firstly I believe the last government rightly claims that


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


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


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


climate change conference in Paris with a very strong European record


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


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


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


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


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


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


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


European Union. And some of his recent decisions like cutting


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


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


renewable energy, increasing subsidies have diesel generators, is


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


environment programme has criticised Britain for going backwards on


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


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


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


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


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


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


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


you will see the right balance between affordable energy and making


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


manufacturing solar panels has plummeted and therefore the subsidy


should be necessary to Liddle what businesses agreed to deliver solar


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


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


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


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


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


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


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


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


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


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


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


domestic violence centres that we helped to finance, this government


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


domestic violence is properly investigated by the police and


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


late Denise Marshall, was chief executive of one domestic Finance


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


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


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


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


preventing and combating violence against women and domestic violence.


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


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


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


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


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


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


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


in terms of preventing forced marriage and the horrors of female


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


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


strong record on those grounds. CHEERING


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


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


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


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


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


constituents towards the starter homes initiative in the housing bill


which will see affordable housing lowering the monthly and goings of


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


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


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


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


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


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


which were will do during this Parliament and crucially by


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


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


begin by associating the SNP with the condolences of the Prime


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


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


dangers of unintended consequences and escalation in Syria are clear


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


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


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


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


First mate I thank the right honourable gentleman for his remarks


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


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


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


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


political settlement in Syria and the government there that can act


comprehensively with us against Isil. The question for the House


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


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


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


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


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


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


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


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


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


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


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


than investing in its reconstruction after the overthrow of Colonel


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


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


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


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


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


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


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


the reconstruction of Syria alongside the political deal that we


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


reconstructing cilia than supporting people kept away from their homes


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


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


for concern surrounding the conviction of Alexander Blackman,


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


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


miscarriage of justice, would my right honourable friend agree with


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


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


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


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


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


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


applying to the commission. Our Royal Marines have a worldwide


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


incredible contribution to our country and we should pay tribute to


them. The Government's handling of child


sexual abuse enquiries has done little to instil public confidence


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


had accidentally deleted information without anybody from the inquiry


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


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


investigation has taken place to establish the cause of the data


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


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


sure we have the full and independent inquiry we have spoken


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


What matters is that it is now up and running.


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


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


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


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


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


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


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


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


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


business we visited last week announced the creation of more than


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


increase in neighbourhood policing. The Metropolitan Police have done a


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


streets. After many years of neglect under


Labour, Cornwall is once again seeing investment in roads,


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


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


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


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


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


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


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


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


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


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


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


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


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


constitutes progress on gender equality. I have heard nothing


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


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


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


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


out of history? This is an area where the honourable


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


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


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


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


in commending the French government for facing down terror, continuing


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


good. In 2010, unemployment in my


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


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


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


offer more opportunities for skills training. Does my right honourable


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


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


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


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


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


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


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


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


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


decisions, but they laid the platform for sustained economic


growth and jobs. Education in Bradford is facing a


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


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


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


the highly successful London challenge? And will he stopped the


dangerous changes to the school funding formula that will drag the


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


neglect? We made commitments at the last


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


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


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


also spending much more on new school places in this Parliament


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


also helping with building new academy chains and free schools.


They are available for his constituency as others.


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


northern Iraq and Syria gives opportunities to resolve


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


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


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


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


Russia over Syria? What I would say to my honourable


friend is I think there are opportunities for sensible


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


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


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


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


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


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


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


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


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


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


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


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


at 31% since I became Prime Minister.


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


Prime Minister planning to prosecute a bombing campaign that does not


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


becoming the new Budapest? We will set out the arguments


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


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


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


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


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


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


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


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


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


honourable friend join me in congratulating all the staff of the


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


role supporting the vulnerable people that this government has left


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


local projects on their work and reassure the House that this


governor to protect the current level of national lottery funding


earmarked for charities and community projects? I can certainly


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


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


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


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


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


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


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


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


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


Chancellor of the Exchequer! Mr Speaker, this Spending Review


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


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


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


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


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


security provide the foundations for everything we want to support.


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


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


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


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


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


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


that Britain becomes the most prosperous and secure of all the


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


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


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


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


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


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


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


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


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


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


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


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


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


billion of welfare savings we committed to add to the election


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


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


would strengthen our national defences, take the fight to the


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


Today this Spending Review delivers the resources to make sure that


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


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


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


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


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


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


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


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


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


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


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


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


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


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


Since this budget new economic data has been published which confirms


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


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


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


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


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


consumption, exports have grown faster than imports and the North


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


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


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


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


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


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


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


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


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


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


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


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


expectations for world growth and world trade have been revised down


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


are being educated in good outstanding schools and public


satisfaction with our local government services has risen. The


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


people are making similar claims about this Spending Review as we


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


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


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


economy will grow robustly every year, living standards will rise


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


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


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


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


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


Charter for added responsibility commits us to reducing the debt to


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


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


OBR has today acidified that the economic plan that would present


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


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


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


our public finances. Since these budget Housing Associations in have


been reclassified by our independent office for National statistics, and


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


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


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


forecast to include Housing Associations, so that we can compare


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


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


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


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


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


stays for a considerable period after his statement to respond to


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


question a minister. Yes, they will! LAUGHTER


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


will be heard! Lunch Mac CHEERING


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


making faster progress towards eliminating and lowering the doubt,


fixing the roof when the sun is shining.


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


faster progress to building the infrastructure our country needs.


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


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


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


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


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


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


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


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


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


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


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


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


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


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


Helping with the transition obviously means that we will not be


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


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


later part of this Parliament. Indeed on the figures published


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


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


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


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


to those in the private rented sector who received the same


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


paying housing benefit and pension credit payments to people who have


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


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


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


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


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


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


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


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


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


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


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


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


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


continues to fall and fall and falls to fall and fall still lower in


every single year after that, to 28 -- 20 4.8 8,000,000,020 17-18, four


.6 billion the following year, and in 2020 we reach a surplus of ?10.1


billion. That is higher than was forecast in the budget. Britain out


of the red and into the black. In 2020-21 the surplus rises to 14.7


billion. The deficit falls every year. We are borrowing ?8 billion


less than we expected overall. And we reach a bigger surplus. We have


achieved this while at the same time helping working families as we move


to lower welfare, higher wage economy, and we have the economic


security of knowing our country is paying its way in the world. That


brings me to our plans for public expenditure and taxation. I want to


thank my right honourable friend, the chief secretary, other


ministerial colleagues and the brilliant officials who have


assisted us for the long hours and hard work they have put into


developing these plans. We said ?5 billion would come from the levels


on tax avoidance, evasion and imbalances. Those measures were


announced in the Budget. Together we go further today with new penalties


for the General Anti-Abuse Rule which this comment introduced,


action undisguised renumeration schemes and stamp duty avoidance,


and we will stop abuse of the intangible fixed assets scheme. We


will all show ensure... HMRC is making efficiencies of 18% in its


own Budget. In the digital age we do not need taxpayers to pay for paper


processing or 170 separate tax offices around the country. We are


reinvesting some of those savings with an extra ?800 billion in the


fight against tax evasion and investment return of almost ten


times the tax collected. We're going to build one of the most digitally


advanced tax administrations in the world, so that every individual and


every small business will have their own digital tax account by the end


of the decade in order to manage their tax online. From 2019, when


these accounts are up and running, we will require Capital Gains Tax to


be paid within 30 days of completion of any disposal of residential


property. These form part of the digital revolution we are bringing


to Whitehall with this Spending Review. The digital service will


receive an additional ?450 million. The court Cabinet budget will be


cut. The cost of all Whitehall administration will be cut by ?1.9


billion. These form part of the ?12 billion of savings in government


departments iron and -- I am announcing today. In 2010,


government spending took up 45%. This figure we could not sustain


because it was neither practical nor sensible to raise taxes high enough


to pay for that. We ended up with a massive structural deficit. Today


the state accounts for just under 40% of national income and is


forecast to reach 36.5% by the end of the Spending Review. The


structural spending this represents is at a level of a modern economy


can sustain. It is a level B British people are prepared to pay their


taxes for. It is precisely because this government believes in decent


public services and a properly funded welfare state that we are


insistent they are sustainable and affordable. To simply argue all the


time the public spending must always increase, never be cut, is


irresponsible and lets down the people who rely on public services


most. Equally to fund the things we want the Government to provide in


the modern world, we have to be prepared to provide the resources. I


am setting the limits for total managed expenditure as follows. This


year public spending will be ?756 billion. 773 billion next year, 787


the year after, 801 billion before reaching 821,000,000,020 19-20. The


year we are forecast to eliminate the deficit and cheaper surplus.


After that, the forecast public spending rises roughly in line with


the growth of the economy. The figures from the OBR show that over


the next five years welfare spending falls as a percentage of national


income, while departmental capital investment is maintained and is


higher at the end of the period. That is precisely the right switch


for a country serious about investing in its long-term economic


success. People will want to know what the levels of public spending


mean in practice and the scale of the cuts we are asking government


departments to undertake. The day-to-day spending of government


departments is set to fall by an average of 0.8% per year in real


terms. That compares to an average fall of 2% in the past five years.


The savings we need are considerably smaller. This reflects the


improvement in the public finances and the progress we have already


made. The overall rate of annual cuts I set out in today's Spending


Review are less than half of those delivered over the last five years.


Britain is spending a lower proportion of its money on welfare


and a higher proportion on infrastructure. They Budget balanced


with cuts half what they were in the last parliament, making the savings


we need, no more, no less, and providing people with a country with


a surplus that lives within its means. This not -- this does not


mean that decisions are easy. Nor should we lose sight of the fact


this Spending Review commits ?4 trillion over the next five years.


It is a huge commitment of the hard earned cash of British taxpayers.


And all of those who dedicate their lives to public service will want to


make sure it is well spent. Our approach is not simply


retrenchment. It is to reform and rebuild. These reforms will support


our objectives. First, to develop a modern integrated health and social


care system that supports people at every stage of their lives. Second,


to spread economic power and wealth through devolution revolution and


invest in long-term infrastructure. Third, to extend opportunity by


attacking the big social failures that for too long have helped people


back. Fourth, to reinforce our national security with the


re-sources to protect us at home and protect our values abroad. The


resorts is allocated are driven by these four Gaults. The first


priority is the first priority of the British people, our National


Health Service. Health spending was cut by the Labour administration in


Wales. We Conservatives have been increasing spending on the NHS in


England. And in this Spending Review we do so again. We will work with


our health professionals to deliver the best value for that money. That


means ?22 billion of efficiency savings across the service. It means


a 25% cut in the Whitehall budget of the Department of Health. It means


modernising the way we fund students of health care. There is a cap on


student nurses. Over half of all applicants are turned away and it


leaves hospital is relying on agencies and overseas staff. We will


replace direct funding with loans for new students so we can abolish


the self-defeating cap and create up to 10,000 more training places in


this Parliament. Alongside these reforms we will give the NHS the


money it needs. We made a commitment to a ?10 billion increase in the NHS


budget and we deliver that today with the first ?6 billion delivered


upfront next year. This fully funds the five-year view the NHS put


forward as the plan for its future. As the Chief Executive of NHS -- NHS


England said, the NHS has been heard and actively supported. Let me


explain what that means in cash. The NHS budget will rise from ?101


billion today to ?120 billion by 2020. This is a half of equipment to


the NHS over this Parliament. -- commitment. The largest to the NHS


since its creation. We have a clear plan for improving the NHS. We fully


funded it. And in return patients will see more than ?5 billion in


health research in everything from Gene Ormsby antimicrobial


resistance, to a new dimension Institute and a new world-class


public health facility in Harlow, and more. 800,000 more elected


hospital admissions. 5 million more outpatient appointments. 2 million


more diagnostic tests. New hospitals in Cambridge, Sandwell and


Brighton. Cancer testing within four weeks and a brilliant NHS are


available seven days a week. Mr Speaker, there is one part of our


NHS that has been neglected for too long, mental health. I want to thank


the all-party group led by my right honourable friend for Sutton


Coldfield, the Right Honourable member for North Norfolk and


Alastair Campbell for their work in this area. In the last Parliament we


made a start by laying the foundations for the quality of


treatment for waiting times for mental health. Today we are building


on that. We are providing additional funding. By 2020 is significantly


more people will have access to talking therapies, perinatal


services and crisis care. All possible because we made a promise


to the British people to give our NHS the funding it needs and in this


Spending Review we have delivered. The health service cannot function


effectively without good social care. The truth we need to confront


is this. Many local authorities are not going to be able to meet the


growing social care needs unless they have new sources of funding.


That in the end comes from the taxpayer. In future those local


authorities responsible for social care will be able to levy a new


social care precept of up to 2% on council tax. The money raised will


have to be spent exclusively on adult social care and if all


authorities make full use of it, it will bring almost ?2 billion more


into the care system. It is part of a major reform we are undertaking to


integrate health and social care by the end of this decade. To help


achieve that I am today increasing the better care fund to support that


integration, with local authorities able to access a next ?1.5 million


by 2019-20. The steps taken in this Spending Review mean that by the end


of the parliament social care spending will have risen in real


terms by the end of the Parliament. To help businesses with the


administration of this important boost will -- we will align the next


two phases with the tax years. The best way to afford generous pension


benefits is to raise the pension age in line with life expectancy as


we're set to do in this Parliament. That allows us to maintain a triple


lock on the value of the state pension, so never again do


Britain's pensioners receive a derisory increase of 75p. As a


result of our commitment to those who have worked hard all their lives


and contributed to this society I confirmed that next year the basic


state pension will rise by ?3 35 to ?119 30 a week is the biggest


real-time is increased the basic state pension 15 years. Taking all


of our increases together over the last five years, pensioners will be


?1125 better off a year than they were when we came into office. We


also undertaking the biggest change in the state pension for 40 years to


make it simple and fair by introducing the new single tier


pension for pensioners from next April. I'm today setting the full


rate the state pension at ?155, 65p. Higher than the current means tested


benefit for the lowest income pensioners in this society and


another example of progressive government in action. Instead of


cutting these savings credit as in previous fiscal events and will be


frozen at its current level where income is not changed. So the first


objective of this Spending Review is to give unprecedented support to


health, social care and pensioners. The second is to spread economic


power and wealth across this nation. In recent weeks great metropolitan


areas like Sheffield, Liverpool, the north-east and the West Midlands


have joined Greater Manchester in agreeing to create elected Mayers in


return for far-reaching new powers over transport skills and the local


economy. It is the most determined effort to change the geographical


imbalance that has bedevilled the British economy far half-century. We


are today setting aside the ?12 billion we promised for the local


growth fund and I'm announcing the creation of 26 new extended and


enterprise zones including 15 zones in towns and rural areas from


Carlisle to Dorset to Ipswich. But if we want to shift power in this


country we must give all local councils the tools to drive business


growth in their area, and the rewards that come when you do so. So


I can confirm today that, as we set out last month, we will abolish the


uniform is Ms rate, by the end of the Parliament local government will


keep all the revenues from business rates, we will give councils the


power to cut rates and make the area more active to businesses and


elected mayors will be able to raise rates provided they fund specific


infrastructure projects supported by the local business community.


Because the amount we raise in business rates is greater than the


amount we give to local councils through the government grant will


phase out that ground over this Parliament. And we'll also devolve


additional responsibilities. The temporary accommodation management


fee will no longer be paid through the benefit system. Instead councils


will get ?10 million a year more up front to provide more help to


homeless people. Alongside savings in the public health grant we will


consult on transferring new powers and responsibility for its funding


and elements of the administration of housing benefit. Local government


is sitting on property worth one quarter of ?1 trillion so we will


let councils spend 100% of the receipts from the assets they sell


to improve their local services. Councils increase their reserves by


almost ?10 billion over the last Parliament. We would encourage them


to draw on these reserves as they undertake reforms. Mr Speaker, this


amounts to a big package of new powers but also new responsibilities


for local councils. It is a revolution in the way that we govern


this country and if you take into account both the falling grant and


the rise in comes it means that by the end of this Parliament local


government will spend the same in cash terms as does today. Mr


Speaker, the devolved administrations of the UK will also


have available to them unprecedented new powers to drive their economies.


The conclusion last week of the political talks in Northern Ireland


mean additional spending power for the executive to support the full


temperament issue of the Stormont has agreement. That opens the door


to the devolution of corporation tax which the parties have now confirmed


they wish to set at the rate of 12.5%. If huge prize for business in


Northern Ireland. The onus is now on the Northern Ireland executive to


play their part and deliver sustainable budget so that we can


move forward on that. The Northern Ireland's lock grant will be over


?11 billion by 2019-20 and funding for new investment and


infrastructure will rise by over ?600 million over five years so that


Northern Ireland can invest in its long-term future. For many years


Wales has asked for a funding floor to protect public spending. Within


months of coming to office, this Conservative government is answering


that call and providing that historic funding guarantee for


Wales. I can announce that we will introduce the new funding floor and


set it for this Parliament at 115%. The Welsh Secretary and I also


confirm that we will legislate so that the devolution of income tax


can take place without a referendum. We will also help fund a new Cardiff


City deal. So the Welsh block grant will reach almost ?15 billion by


2019-20, while capital spending will rise by over 500 million pounds over


five years. -- capital spending will rise. Scotland voted to remain in


the United Kingdom. Mr Speaker, this must be underpinned by a fiscal


framework that is fair to all taxpayers and we are now ready to


reach an agreement. The ball is in the Court of the Scottish


Government. Let's have a deal that is fair to Scotland and to the UK,


and is built to last. We are implementing the city deal for


Glasgow and negotiating deals with Aberdeen and Inverness as well. If


Scotland had voted for independence they would have had their own


Spending Review this autumn. And with world oil prices falling and


revenues from the North Sea forecast by the OBR today to be down 94%, we


would have seen catastrophic cuts in Scottish public services. But


thankfully, Scotland remains a strong part of a stronger United


Kingdom. Pareja CHEERING


So the Scottish block grant will be over ?30 million in 2019-20 while


capital spending available will rise by ?1.9 billion until 2021. The UK


Government giving Scotland the resources to invest in its long-term


future. For the UK Government, the funding of the Scotland, Wales, and


northern Ireland offices will all be protected in real terms. We are


devolving power across this country and spending on the Icahn and


infrastructure that connects the nation. Something Britain hasn't


done enough of for a generation. Now by making the tough decisions to


save on day-to-day costs in departments were involved in -- we


will be investing in new roads, rails, and flood defence needed. We


started in the last Parliament. Britain has just topped the league


of the best places in the world to invest in infrastructure. In this


Spending Review we go much further. The Department for times but's


operational budget will fall by 37%. Peshmerga Department for


Transport's budget. The biggest increase for a generation. That


funds the largest road investment programme since the 1970s. We are


the builders. It means the construction of a just two, to link


the northern powerhouse to the south can begin, the electric version of


lines like the great Western can go ahead, we will fund our new


transport for the North to get it up and running. London will get an


investment of ?11 billion in its transport infrastructure, and having


met with my honourable friend for Folkestone and the Kent MPs are


relieve the pressure from Operation Stack within a quarter of a million


pound investment in facilities there. We will make a commitment of


?300 million to cycling as promised and spent over ?5 billion on roads


maintenance in this Parliament. And thanks to the incessant lobbying of


my honourable friend for Northampton North, Britain now has a permanent


potholes and! -- pothole fund! Nuno Espirito Santo


CHEERING We are investing in what we need and


in flood defences. The Defra budget will fall by 15% but we are


committing more than ?2 billion to protect householders from flooding.


Our commitment to farming and the countryside is reflected in the


funding of national parks and forests. We won't make that mistake


again! I can tell the House that in recognition of the higher costs they


face, Mr Speaker, we will continue to provide ?50 off the water bills


of South West water customers for the rest of this Parliament. A


promise made to the south-west and a promise kept. Investing in the


long-term economic structure of this country is the goal of this Spending


Review. -- one of the goals. There is no more important structure than


energy. We are doubling our commitment to research and


supporting the creation of the shale gas industry by ensuring that


communities and are fed from a shale wealth fund which could be worth up


to ?1 billion, -- that they benefit from a shale wealth fund. The


development and sale of ultralow emission vehicles will continue to


be supported but in the light of the slower than expected introduction of


a more rigorous EU emissions testing we were delayed removal of the


diesels supplement from company cars until 2021. We support the


international efforts to tackle climate change and to show our


commitment to the Paris talks next week as the Prime Minister just


explained, we are increasing our support for climate finance by 50%


over the next five years. DECC's day-to-day budget will fall,


Alderweireld reform the renewable energy initiative and we will


permanently exempt energies like chemicals from the cost of


environmental tariffs so we keep them competitive and keep them here.


I can announce that we are introducing a cheaper domestic


energy efficiency schemes that wrap is and is Twitter replaces ego. The


new scheme will save an average of ?30 a year from the energy bills of


20 former the households. Because this government believes that going


green should not cost the earth. And we are cutting other bills, we will


bring forward reforms to the compensation culture around minor


motorcycle accident injuries which were removed more than ?1 billion


from the cost of motor insurance. We expect the industry to pass on the


savings so motorists will see an average saving of ?40 -?50 a year


from the insurance bills. Mr Speaker, this is a government that


backs all our businesses, large and small. We on this side of the House


and a standard that there is no growth, no jobs about a vibrant


private sector and successful entrepreneurs. -- no jobs without a


vibrant sector. Business needs competitive taxes. I've already


announced a reduction in our corporation tax rate to 80%. Our


overall review of business rates were reported in the Budget. Today I


am helping 600,000 small businesses by extending our small business rate


relief scheme for one more year. Businesses also need an active,


sustained industrial strategy. And that strategy, launched in the last


Parliament, continues on this one. We commit to the same level of


support for our aerospace and automotive industries, not just for


the next five years, for the next decade. Spending on our new cut


above centres will increase. We will protect cash support that we give


through Innovate UK, we can afford to do this by offering ?165 million


of new loans to companies instead of grants, has funds has successfully


done for many years. It is one of the savings that helps us reduce the


business budget by 17%. In the modern world one of the best ways to


back business is by backing science. That is why, in the last


Parliament, I protected the resource budget for science in cash terms. In


this Parliament I am protecting it in real terms. So that it rises to


?4.7 billion. That's ?500 million more by the end of the decade,


alongside the ?6.9 billion capital budget as well. Funding the new


Royce Institute in Manchester and new agri- tech centres in


Shropshire, York, Bedford and Edinburgh, we will come and ?75


million to a transformation of the Cavendish laboratory is in Cambridge


where our knowledge of the universe was expanded. To make the most of


our investment in science I have asked one more of our Nobel Prize


laureates, Paul Knows, to conduct a review of the research councils and


I want to thank him for his excellent report and will implement


his recommendations. Britain is brilliant at culture. One


of the best things we can do is invest in culture, made as. --


culture, the and is. The core administration budget will fall by


20%. I am increasing the cash that will go to the arts Council, our


national museums and galleries will keep free museum entry and look at a


new tax credit to support their exhibitions. I will help UK sport,


which has been living on diminishing reserves, with a 29% increase in


their budget, so we'd go for gold in Rio and Tokyo. Mr Speaker, the Right


Honourable member and former Home Secretary has personally asked me to


support his city's Europe culture in Hull. His campaign has contributed


to the arts while his front bench contributes to comedy. The money for


a Hull... Mr Speaker, the money for Hull is all part of a package to the


Northern Powerhouse which includes funding the iconic new factory in


Manchester and the great exhibition in the North. In Scotland we will


support the Burrell connection. In London, we will help the V and the


science Museum move their exhibitions for display. We are


increasing the funding for the BBC World Service so British values of


freedom and free expression are heard around the world. And all this


be achieved without raiding the Big Lottery Fund as some had feared. It


will continue to support the work of hundreds of small charities across


Britain. So too will our support for social impact bonds. There are many


great charities who work to support vulnerable women. Indeed a point


raised in Prime Minister's Questions. The Honourable member for


Colchester has proposed a brilliant way to give them help. 300,000


people have signed a petition arguing that no VAT should be


charged on sanitary products. We already tried the lowest rate


allowable under European law. We are committing -- committed to getting


the EU to change its rules. The money raised from the tampon tax


will fund women's health and charities, and supports charities.


The first ?5 million, Mr Speaker... The first ?5 million will be


distributed to the ease appeal, Saint lives and women's aid and


haven. I invite bids from other such good causes. It is similar to how we


use LIBOR funds. Today I make further awards from them. We support


a host of military charities from guide dogs for military veterans to


care after combat. We renovate our military museums from the Royal


Marines and the DDA museums in Portsmouth to the National Army


Museum and the former HQ of RAF fighter command in Bentley Priory.


In the Budget I funded one of those campaign bunkers. More have emerged.


We will support the fellowships awarded by funding the Winston


Churchill Memorial trust. We will fund the graves of those who have


died fighting for our country since the Second World War and we will


contributed to a memorial to those victims of terrorism who died on the


bus in Tavistock Square ten years ago. It is a reminder we always face


threats to our way of life and we have never allowed them to defeat


us. We deliver security so we can spread opportunity. And that is the


third objective that drives this Spending Review. We showed in the


last five years that sound public finances and bold public service


reform can help the most disadvantaged in our society.


Inequality is down, child poverty is down, the gender pay gap is at a


record low. In the richest now pay more in taxes compared to the rest


of the country together. The other side talks of social justice. This


side delivers it. We are all in this together. In the next five years, it


starts with education. That is the door to opportunity. This Spending


Review commits us to a comprehensive reform of the Wade is provided from


childcare to college. We start with the largest ever investment in free


childcare is working families get the help they need. From 2017 we


fund 30 years of free childcare for working families for three and


four-year-olds. ?10,000 of childcare costs tax-free. This support will


only be available to parents working more than 16 hours a week and with


incomes of less than ?100,000. We will maintain the free childcare we


offer to the most disadvantaged two-year-olds and support nurseries


by increasing the funding to that sector by ?300 million. Taken


together that is a ?6 billion childcare commitment to the working


families of Britain. Next, schools. We build on our far-reaching reforms


of the last parliament that have seen schools standards rise, as


exams become more rigorous. We will maintain funding for free info


school meals, protect rates for the pupil premium and increase the cash


of the dedicated school ground. We maintain the current national base


rate of funding for 16 to 19-year-old students for the whole


Parliament. We're going to open 500 new free schools and university


technical colleges, invest ?23 billion in school building and


600,000 new school places. And to help older children make the


transition to adult hood and learn not just about their rights but


their responsibilities, we will expand the National citizens


service. Today 80,000 students go on national citizen service. By the end


of the decade we will fund 300,000 students on this. Five years ago 200


schools... We will help every secondary school to become an


Academy. We will let sixth form colleges become academies as well so


they no longer have to pay VAT. We will make local authorities running


schools a thing of the past and this will help us save around ?600


million from the educational services grant. I can tell the house


that as a result of this Spending Review not only is the schools


budget protected in real terms what the total financial support for


are extended further and higher are extended further and higher


education, will increase by ?10 billion. That is a real terms


increase for education, too. We are going to phase out the arbitrary and


unfair school funding system, which has systematically underfunded


schools. Under the current arrangements a child from a


disadvantaged background in one school can receive half as much


funding as a child in identical circumstances in another school. In


its place we will introduce a new national funding formula. I commend


the many MPs from all parties who have campaigned for many years to


see this day come. It will be introduced from 2017. The Education


Secretary will consult in the New Year. Education continues in further


education colleges and so do our reforms. We will not cut core adult


skills funding for further education colleges. We will protected in cash


terms. In the Budget I announced we would replace on affordable student


maintenance grants with larger student loans. That saves us more


than ?2 billion a year. It means we can extend support to students who


have never before had government help. Today I can announce that


part-time students will be able to receive maintenance loans, helping


some of our poorer students. For the first time we will provide tuition


fee loans for those studying in further education, and


postgraduates, too. Almost 260,000 extra students will benefit from


this new support I am announcing today. Mr Speaker, the


apprenticeship programme, the flagship of our commitment to


skills, in the last Parliament we wore than doubled the number of


apprenticeships to 2 million. By 2020 we want to see 3 million. And


to make sure they are high-quality apprenticeships, we will increase


the funding per place. The Business Secretary will create a new business


led body to set the standards. We will be spending twice as much on


apprenticeships by 2020 compared to when we came to office. To ensure


large businesses share the cost of training the workforce, I announced


in the Budget that we will introduce a new apprenticeship levy from April


2017. Today I am setting the rate of 0.5% of the pay bill of an


employer. Every employer will receive a ?15,000 allowance to


offset against a levy, which means 98% of all employers and businesses


who pay bills of less than ?3 million will pay no levy at all. The


apprenticeship levy will raise ?3 billion a year and fund 3 million


apprenticeships. Those paying will get out more than a pudding. It is a


huge reform to raise the skills of the nation and address one of the


enduring weaknesses. Mr Speaker, education and skills are run that


smacked the foundation of opportunity. We need to help people


into work. The number claiming unemployment benefits has fallen to


just 2.3%. The lowest rate since 1975. We are not satisfied the job


is done. We want to see full employment. Today we can from we


will extend the same support and conditionality we can't expect of


those on JSA 2/1 million more benefit claimants. Those signing on


will to attend the job centre every week for the first three months. We


will increase in real terms the help provided to people with disabilities


to help them into work. This will be delivered within the 14% savings we


make to the Rhys West budget of the Department for Work and Pensions,


including by reducing the size of their estate. It is the way to save


money while improving the front-line service we offer people and


providing more support for those who are the most vulnerable and most in


need of help. Mr Speaker, you cannot say you are fearlessly tackling the


most difficult social problems if you turn a blind eye to what goes on


in our prisons and Criminal Justice Act system. The Lord Chancellor has


worked with the lord chief justice and others to put forward a typical


that -- typically bold and radical plan to transform our courts so they


are fit for the modern age. The money saved will be used to fund an


investment in new technology that will bring further and permanent


long-term savings and speed up the process of justice. Old Victorian


prisons in our cities that are not suitable for rehabilitating


prisoners will be sold. This will also bring long-term savings and


means we can spend over ?1 billion in this parliament building nine


modern new prisons. Today the transformation gets underway with


the announcement that the Justice Secretary has just made. Holloway


prison, the biggest women's jail in Western Europe, will close. In the


future women prisoners will serve their sentences in more humane


conditions, better designed to keep them away from crime. Mr Speaker, by


selling these old prisons we will create more space for housing in our


inner cities. For another of the great social failures of our age has


been the failure to build enough houses. In the end, Spending


Reviews like this come down to what your priorities are. I am clear that


in this Spending Review we choose to build. Above all, we choose to build


the homes people can buy. There is a growing crisis of home ownership in


our country. 15 years ago around 60% of people under 35 on their own


home. Next year it is set to be just half that. We made a start and


tackling that in the last Parliament and with schemes like Help to Buy


the number of first-time buyers rose by nearly 60%. We have not done


nearly enough yet. It is time to do much more. Today we set out our bold


plan to back families who aspire to buy their own home. I am doubling


the housing budget. Doubling of to ?2 billion per year. And we will


deliver 400,000 affordable new homes by the end of the decade and


affordable means not just affordable to rent but affordable to buy as


well. Biggest house-building programme by


any government since the 1970s. Almost half will be starter homes


sold at 20% of market value to first time buyers, and those will be


banned and the help by shared ownership removing restrictions on


shared ownership, who can buy them, who they can be sold on to. The


second part of the plan delivers on our manifesto commitment to extend


the right to buy two Housing Association tenants. From midnight


tonight tenants of five Housing Associations will be able to start


the process of buying their own home. Mr Speaker the third element


of the plan involves accelerating housing supply, we are announcing


further reforms to the planning system so it delivers more homes,


more quickly. We are releasing public and suitable for 160,000


homes and read designating and used commercial land. Towns. We will


extend loans for small builders, regenerate rundown estates and vest


over ?300 million in Ebbsfleet, the first Garden City for almost a


century. Fourthly Gutmann 12 help address the housing crisis in London


with a new scheme, London helped by. Londoners are the housing crisis in


London with a new scheme, London help to buy. Londoners with a 5%


deposit will be able to get an interest free loan worth 40% of the


value of the newly built home. My honourable friend for Richmond Park


has campaigned for affordable homeownership in London and today


we're back him all the way. The fifth part of the housing plan,


addresses the fact that more and more homes are being bought as buy


to let, or second homes. Many of these are cash purchases not


affected by the restrictions introduced in the Budget on mortgage


relief and many are bought by those not resident in this country. People


buying a home to let should not squeeze out families who can't


afford a home to buy. So I'm introducing new rates of Stamp Duty


that will be 3% higher on the purchase of additional properties


like buy to lets and second homes. It will be introduced from next


April and will consult on the details so that corporate property


development is not affected. This extra Stamp Duty will raise almost


?1 billion by 2021 and we will reinvest some of that money in local


communities in London and places like Cornwall which are being priced


out of home ownership. The funds that we raise will help in building


these new homes, so this Spending Review delivers a doubling of the


housing budget, 400,000 new homes and extra support for London,


estates regenerated, the right to buy, payments on buy to let a second


homes delivered by a Conservative government will want to help working


people to buy their own homes. For we are the builders! Mr Speaker, the


fourth and final objective of this Spending Review is national


security. On Monday, the prime ministers set at the House the


strategic defence and Security review. It commits Britain to


spending 2% of our income on defence and details how these resources will


be used to provide new got bad for our war fighting military, nuke


abilities for special forces, new defences for our cyberspace -- new


capabilities, and investments in our intelligence agencies. By 2020-21


the single intelligence account will reach ?2.8 billion in the defence


budget will rise from ?34 billion today ?240 billion. Britain also


commits to spend on our overseas developer and we will reorder and it


-- reorientate our budget so that we help the poorest and have a fragile


state on the borders. It is in our national interest to do is. The


overseas aid budget will increase to ?16.3 billion by 2020. Britain is


unique in making these twin commitments to funding both military


might and the soft power of international development. It


enables us to protect ourselves, protect our influence and promote


our prosperity. We do so, supported by the Foreign Secretary and our


outstanding diplomatic service. To support them in their vital work I


am today protecting in real terms the budget of the Foreign and


Commonwealth Office. But Security starts at home. Our police are on


the front line of the fight to keep us safe. In the last Parliament we


make savings in police budgets. Thanks to the reforms of the Home


Secretary and the hard work of police officers, crime fell and the


number of neighbourhood officers increased. But reform must continue


in this Parliament. We need to invest in new state-of-the-art


mobile medications for our emergency services, introduce new technology


on borders and increase the counterterrorism budget by 30%. We


should allow elected police and crime commission is greater


flexibility in those areas where they have been historically low. And


further savings can be made in the police as different forces merge


their back offices and share expertise. And we will provide a new


fund to help with this reform. Mr Speaker, I have had rubbers and


Asians from the Shadow Home Secretary that police budgets should


be cut by 10%. But now is not the time for further police cuts. Now is


the time to back our police and give them the tools to do the job. I am


announcing that they will be no cuts in the police budget at all. --


there will be no cuts at all. In real terms, protection for police


funding. Mr Speaker... The police protect us and we are going to


protect the police! CHEERING


Mr Speaker. Five years ago, when I presented my first Spending Review,


the country was on the brink of bankruptcy and our economy was in


crisis. We took the difficult decisions back then, and five beers


later, a report and an economy growing faster than its competitors


-- five years later. And public finances set to reach is a plus of


?10 billion. Today we set out the further decisions necessary to build


the future of this country. Sometimes difficult, yes, but


decisions that build the great public services that families rely


on, build the homes people need, build stronger defences against


those who threaten our way of life and build strong public finances


upon which all these things depend. We were elected as a 1 nation


government. Today, we deliver the Spending Review of one nation


government, the guardians of economic security, the protectors of


national security, the builders of our better future. This government,


the mainstream representatives of the working people of Britain.


CHEERING STUDIO: The Chancellor sits down,


you spoke for more than one hour. Tonnes of stuff to go through, which


we will between now and 3:30pm. The Leader of the Opposition would


respond, it's the Shadow Chancellor, John McDonnell. Mr Speaker, like me,


you will have witnessed many Autumn Statement 's and statements by the


Chancellor of the Exchequer. And you will know that there is such a thing


as the iron law of Chancellor 's statements. That law is that the


louder the cheers of the statement on the day, the greater the


disappointment by the weekend when the analysis goes in! From what we


have heard today, we do not need until the weekend for this statement


to fall apart. Of the last five years, there has barely been a


target that the Chancellor has said that he has not missed or has not


ignored. Five years ago, the newly elected Chancellor and the Prime


Minister came to this house and want to us that because of the Diagne


situation, that our country faced, what was needed -- because of the


terrible situation, what was needed was a five-year progress of


austerity. Job cuts, cuts and public services, and wage freezes. We were


promised specifically by this Chancellor that, by today, the


deficit would be eliminated. CHEERING


And debts would be under control. And falling dramatically. People put


their trust in that commitment. Order! I said earlier, the Prime


Minister would be heard, the Shadow Chancellor will be heard too. Order!


If people think they are being clever, shouting their heads off,


don't bother asking a question. Try to have the sense to realise the


conflict between the two. Mr John McDonnell. The Prime Minister also


issue and us, Mr Speaker, that it would be hard and sacrifices would


be made, we were all in it together. Five years on, can I just say today,


this Chancellor has got some front to come to this House and talk about


the deficit. And to lecture us about deficit-reduction! Today is the day


when the Chancellor was supposed to announce that austerity was over and


the deficit was controlled. From what we've heard today, I think they


will feel betrayed. The reality is this. After five years, the deficit


has not been eliminated, and this year it is predicted to be over ?70


billion. Instead of taking five years to eliminate the deficit, as


he promised, it will take ten. And debt to GDP will not be the 69% that


he promised five years ago, as he said today, it will be 82.5%. And we


are potentially to bequeath to our children a debt of ?1.5 trillion.


SHOUTING Their debt... The Chancellor... The


Chancellor continues to miss... Both sides are still shouting. Very


down-market, very low grade. Widely deprecated by the public. How it is


that people think that it is legitimate to behave in that way and


tried to reconnect with the electorate's disillusioned with


politics is bizarre. If some people are so unintelligent that they


cannot grasp the point, we did them. John McDonnell. After five


years as Chancellor with that level of debt there is no one else for him


to blame. There is only so long that you can blame past governments.


There are no more excuses for this Chancellor after five years. We were


also promised that if sacrifices had to be made to tackle the deficit,


not to worry, we were all in this together. No we are not. 85% of the


money saved on tax and benefits cuts in the last parliament came out of


women's pockets. Disabled people were hit 18 times harder than anyone


else. 4.1 children now live in absolute poverty. An increase of


500,000 from 2009-2010. And the fiasco of tax credits, demonstrated


once and for all that we were not in this together. At the same time as


the Chancellor was planning to cut tax credits to working families, he


cut inheritance taxes for some of the wealthiest families in this


country. When the Chancellor and the Prime Minister were first elected to


their positions they were attacked for being posh boys. I disagreed


with that strongly. It was not fair. People do not choose what class they


are born into the wealth they inherit. Nevertheless if you are


fortunate enough to have wealth, or good incomes, the onus is upon us to


take particular care when taking decisions about the lives of those


last fortunate than yourselves. -- less fortunate. What shocked and


angered many, not just in this House but across the country was the way


there was no attempt by the Chancellor to understand the effects


of the decision to cut tax credits. For many families, and would have


been a choice between children being able to go on that school trip like


the other children, or having a decent Christmas or a winter coat.


Today the Chancellor has been forced into a U-turn on his tax credits.


And I want to congratulate the members of this House on all sides


who have made this happen. I want to congratulate the members of the


other house as well. I am glad that he has listened to Labour, and seen


sense. Accent as ever, with this Chancellor, -- we await


clarification on the details. Particularly if the limit to two


children remains and we are aware of the impact on Universal Credit. It


appears that 14,000 families already on Universal Credit will still


suffer the full cut. And all families that would nearly qualify


for tax credits in 2018 will suffer the full cut under Universal Credit.


So this is not a full and fair reversal as we pleaded for. And the


Chancellor remains committed to ?12 billion of welfare cuts over this


Parliament. And we know where they will fall, on the most vulnerable,


the poorest, and those struggling to survive.


Some believe the Chancellor is using the deficit and austerity to reshape


the role of the British state a Machiavellian scheme. I do not. I am


convinced this is sheer economic illiteracy based on incompetence and


poor judgment. Poor judgment. Today, only four weeks ago, he


brought to this House the Charter for fiscal responsibility. An


essential part of this was our essential part of this was our


adherence to his welfare cap. We supported it. Today he has broken


what we said before. He said what we said before. He said


himself, introducing the cap last year, breaking it would be, and I


called the Chancellor, a failure of public expenditure control. On his


own terms and his own language, condemned. The government is cutting


today and not investing in the future. He is putting us all at


future risk. Let me say this, I want to congratulate the honourable


member for a league for the campaign on policing cuts, forcing a U-turn.


We do not forget though... Mr Speaker, we do not forget though we


face the highest level of risk from terrorist attacks in a generation.


But we have already lost 17,000 police officers under this comment.


We know that the first line of intelligence are the offices in the


local community. We claimed today as another Labour again and victory.


Let me say also, there are concerns now about the impact of the local


council cuts and freezers in expenditure on other emergency


services. We feel for people's safety as more firefighters jobs are


cut and fire stations close as a result of this settlement. In


health, the Chancellor has announced he is front-loading part of the


additional ?8 billion worth of funding. In reality, this will only


plug some of the gap in the huge deficits health trust in our


reporting. But the Government is also relying on ?22 billion worth of


unrealistic savings to be found. The extra money seems to be coming from


the training of nurses, the Public health budget and other aspects of


local authority support. This will be a false economy which will cause


more burdens to reform the NHS. All of the signs are that we are facing


a massive winter crisis in the NHS and yet again we will have two rely


on our professional dedication of our staff. The Health Secretary


refusing to go to a cast to settle the junior doctors dispute is no way


to maintain the morale amongst our NHS professionals. One of the


greatest scandals under this Chancellor has been the attack on


social care. 3000 beds, 3000 beds have been lost already. And


according to the Association of directors of adult services, the


Care precept, the 2% announced by the Chancellor, is not nearly enough


to fill the funding gap this government has created. The result


is that some of the most vulnerable people in our society will be at


risk. And more people will be forced to resort to their local hospital


further care. -- for their care. We know much more about the scale of


people suffering from mental health problems and we welcome the


additional devoted to mental health. But it is no use funding through the


health service from mental health service when local authority support


is being cut as a result. More people will be left vulnerable. In


education the Government claims school budgets will be protected.


Let me say this. We fear the Government will use the new funding


formula to take away from the pupils who most need it, the most deprived.


And we will monitor the funding format carefully to ensure equity.


In today's statement the Chancellor has announced there would be a


settlement that restricts F32 Cats protection. That means sixth forms


and further education colleges will be under threat of risk of closure


around the country. Just at the time the economy is crying out for a


skilled educated workforce, the Government is denying access to


young people to the local courses they need. And with regard to


childcare announced today, we note it is delayed yet again a load --


and other two years. Another delay in a commitment given. The


Chancellor's much vaunted increase in house building is cobbled


together from reheated promises from the past. The vast majority of


already been announced. The Tories should be judged by their actions,


not their words. The Chancellor's first act in office was to slash


housing investment by 60%. His plans today could still mean 40% less to


build the homes we need compared to the investment programme he


inherited from Labour. House-building now as a result


remains at the lowest in peace time since the 1920s. As the member for


Wakefield said this morning, if hot-air built homes, Conservative


ministers would have solved our housing crisis. I worry that the


vast majority of young people hoping for a new homes will be disappointed


by the Chancellor's failure to deliver. His record on building


anything so far does not inspire confidence at all. Over the last


year the Chancellor has forced himself on to building sites all


around the country to secure a photograph with a high visibility


jacket. When the Chancellor did his Bob the builder 's speech at the


Tory party conference, what he did not tell delegates was that he has


an abysmal investment record. Only 9% of the project started under his


infrastructure pipeline in two years. In 2012 the announced ?40


billion guarantee scheme. Three years on, only 9% has been signed


off. In 2011 he announced a ?20 billion pensions infrastructure


platform. Four years on, only 1 billion of commitments has been


ensured. The construction industry is shrinking and going into


recession. He has also failed to invest in skills. The Royal


Institute of chartered surveyors has said the biggest infrastructure


programmes could grind to a halt unless the Government adopts new


measures to tackle the skills and funding. And the most ironic cut of


all must be the virtual closure of large sections of the Department for


Business, Innovation and Skills. There are 146,000 unfilled vacancies


due to lack of a skilled workforce. So naturally the Government's


solution is to move to actually close the one department tasked with


closing school levels. On the environment, the Government has


announced today various measures. Let's be clear. Comment ministers


can go to the Paris summit on climate change with the proud record


of nearly killing off once flourishing solar energy sector. The


international aid budget is supposedly protected but is now to


be raided for defence spending. In defence, the Government has


previously commissioned and aircraft carriers our last year. And at least


woken up to the fact it needed aircraft as well. But the funding of


the defence review is to come from ?11 billion worth of cuts with the


inevitable loss of thousands of defence worker jobs. Specialist


skills will be lost forever. Alongside these cuts are many more


to help dig himself out of the financial hole he has got himself


into. The Chancellor is selling off whatever public assets he can. This


is no longer the family silver up for sale. This is the furniture, the


fixtures and the fittings. And we know who is the first in line to


buy. I never envisaged that when it came to nationalising I would be


outdone by a Conservative Chancellor. The only difference


between us is that I would like to bring services like rail back into


the ownership of the British people. The Chancellor wants to sell


them to the people's Republic of China. Nationalisation is OK for him


as long as it is by any other state but ours. To assist comrades


Osborne, I brought him along a little red book. Let me quote, Mr


Speaker. Order! I want to hear about the


contents of the book! I think you'll find this invaluable.


You are a rather excitable one. I thought this would help him, Mr


Speaker. Let us quote from mouse a junk.


The wave. We must learn to do economic work from all who know how.


No matter who they are, we must esteem them as teachers, respect


them conscientiously but we must not pretend to know what we do not know.


I thought it would come in handy for him.


Mr Speaker, I am sure... I am sure, Mr Speaker... I am sure, Mr Speaker


that Tory backbenchers will be under instruction to shoehorn into their


speeches at every opportunity references to the mythical long-term


economic plan. What we have been presented with today is not a Lamela


-- an economic plan but a political fix. It is not a plan when you


ridiculously commit yourself to unachievable forces and leave


yourself no room to manoeuvre. It is not a plan when you sell off every


long-term asset you have for short-term gain. It is not a plan


when you leave important industries to go to the wall, as they have done


with steel. And it is not a plan when you cut the support for those


in work and leave working families to rely on food banks. And it is not


a plan when you force councils up and down the line to close services


people depend upon. And it is not a plan when you invest so little in


schools and infrastructure and put our future at risk. Instead what we


have seen today is the launch of a manifesto for the Conservative


leadership election. Our long-term economic security is being


sacrificed for the benefit of one man's career. I say to the


honourable member from Maidenhead, I say to the honourable lady from


Maidenhead, and the honourable member for Oxbridge, don't worry.


The economic reality that is emerging in our economy will mean


that this will be seen as the apex of the Chancellor's career. The


honourable member for Oxbridge... The honourable member... The


honourable member for Oxbridge, who exudes classical references in his


speech, will recognise in his -- in the Chancellor, Icarus, the boy who


flew too close to the sun and burnt and crashed. I fear for the


Chancellor it is all downhill from here. On this side the house we will


do -- do all we can to ensure he does not take this country and the


economy down with him. This debate is about what sort of society we


want to live in. In the end this debate is about what sort of society


we want to live in. The government is systematically dismantling all of


those aspects of our society that make our community worth living in


and celebrating. The Chancellor is not just putting our services today,


he is selling off our future. There is an alternative. And our


alternatives will be that we will eliminate the deficit but we will do


it fairly and effectively. We will do it by ensuring that we end the


tax cuts to the rich. We tackle tax evasion and avoidance and we invest


to grow. And we will grow our economy on the basis of the


investments in skills and infrastructure. We will become an


addition to the financial centre of Europe with the research in science


and technology will become the technology centre of Europe under a


government. And that means high skills, high investment, high


wages. That is what we are committed to on this side. And that is what we


will secure when we returned to office.


So, the Shadow Chancellor, John McDonnell, finishes his response to


the Chancellor's spending review and Autumn Statement. We leave the House


of Commons for the debate, which continues in the tender. If you want


uninterrupted coverage of that, you can get it live on BBC Parliament.


Let's now take a moment to take you through the headlines from the


spending review and Autumn Statement. The main headline today


is clearly that tax credit cuts are to be avoided altogether. The cuts


planned in July announced by the Chancellor have not been


ameliorated, changed, reformed or delayed. They have been avoided


altogether. They didn't survive the year, even though he only announced


them in July. He also announced that education funding would now be


protected in real terms, which takes it beyond the early protection he


had given in the March and July budgets of this year, which


concentrated on schools. The other headline is that there will be no


cuts to police budgets in England and Wales, police being a devolved


matter for Scotland, Wales and Northern Ireland. The Chancellor has


decided he will not cut the police budget. And the NHS budget in


England, with consequent rises in other parts of the UK, will rise


from its current ?101 billion a year to 120 billion by the first year of


the new parliament, 2021. Housing featured large in the Autumn


Statement as well. The Chancellor has doubled the housing budget. His


aim is to provide 400,000 new homes, as was leaked to the papers


this morning. It is an extension of giving people a discount by homes,


provided they are under a certain value. Not for rent, though, an


emphasis on home ownership from the Chancellor. The apprenticeship levy


is set at 0.5% of an employer's wage bill. It is designed for large


employers, to encourage them to do their own apprenticeships, because


the more people they came, the less they will have to pay this levy.


Capital spending on transport is to increase by a substantial amount.


Also today, the Chancellor had to give some new economic forecasts.


The first is that public spending will rise to 821 billion by


2019-20. But despite a substantial rise in public spending, the


Chancellor is still predicting that as a percentage of our GDP, the


country's national debt will start to fall. He aims to get us into a


budget surplus of just over 10 billion by 2020. There had been


speculation that he might not be able to meet that figure, given the


demands on extra spending, but he has. He has added 100 million to


show he has done better, but I would ignore the 0.1 decimal point on


forecasts. They are almost five years out. Growth forecasts are


biased up, but only by a smidgen. Essentially, the OBR thinks this


economy is going to grow at about 2.5% for the rest of the decade. So,


what does all this mean for borrowing?


So this is a massive Autumn Statement and spending review, a


huge amount of detail. The paperwork is only now coming into the studio.


We are getting some of it online. There is a lot to pour over. The


devil will be in the detail. And as is always the case, there are things


the Chancellor put into the paperwork, but did not tell us in


his announcement. He would not be the first Chancellor to do that. We


are joined now in the studio by a man who has been described variously


as the real Chancellor, the most important man in government you have


never heard of, and even one half of George Osborne's brain, which could


mean it is but a small half. Rupert Harrison used to be George


Osborne's chief of staff. He now works for the massive fund managers


Blackrock. And he joins us for what I believe is your first television


appearance. Come out from behind the curtain. First, let's get reaction


to the speech from our BBC editors. Laura, what is your take on this?


George Osborne clearly wants us to see this as, after 2010-2015, which


he described as the rescue mission for the economy, is now being on the


rebuilding of the economy. He said that by 2020, the state will make up


35% of national income compared to nearly 50% when he first took office


as Chancellor. That is a significant reshaping of the balance of the


economy in the country. Fascinatingly, the huge cheers from


the Conservative benches do not hide the fact that there were big climb


downs. They were not about his political ideology, but reality.


Firstly, on tax credits. Not tinkering or tweaking, but dropping


those cuts altogether, although there will still be cuts to


universal credit and its report is on. That is a big victory for the


House of Lords, the Labour Party and some Tory backbenchers including


Boris Johnson. The second big climb down was not cutting the police


budget at all. Many people believe in the last few days, after what


happened in Paris, it was just not politically possible to go ahead


with the kind of cuts that had been expected. Interestingly, two big


changes. Labour will claim them as victories, but of course,


conveniently for George Osborne, that kills off two of Labour's


strongest attacks on the government at a time when they have not been


effective at coming up with ways to put him under pressure. I will come


to Robert Peston in a minute, because some of this arithmetic


needs delving into. Kamal, what do you think? We are seeing a huge


movement of costs in three significant ways. Firstly, there is


the social care issue. A new tax-raising power will begin to


local authorities to pay for social care. Private care providers who are


complaining about the cost of social care will say that the ?2 billion


raised from that will not go far enough and there will still be a ?1


billion shortfall, so he has moved costs from central government and


local government. And then the apprenticeship levy, ?3 billion to


be raised from the largest private businesses for funding 3 million


apprentices by 2020, he says will start again, putting the duty on the


private sector to deliver on things like skills, so vital to our


economy. And of course, on housing. Direct funding support for housing,


businesses and building companies to build houses themselves. Again, he


is saying, private sector, it is up to you to solve the supply-side


problem in housing. There are lots of questions over whether the


housing industry can deliver or even wants to deliver. Or has the skills


to deliver. This will be a monotonous repetition over the next


announcing big numbers on things announcing big numbers on things


like capital investment, transport, they are only announcements, not


delivery. The government has found it difficult to deliver the big


schemes that the Chancellor says we need to make sure our economy is


thriving in the future. The big picture is that there is a big move


from responsibility on the state to responsibility on local authorities,


devolved powers and the private sector. Robert, here is a Chancellor


who has says he has to balance the budget. He is not increasing any


data taxes, although there are tax rise is built into this. He is


spreading money around all over the press, yet he still says he will


reach the surplus. Is there something going on here that we


don't know about? It seems suspicious. Well, he has been bailed


out by the Office for Budget Responsibility, the forecasting


agency he created, forecasting significantly higher tax revenues


than it was expecting in July and a significant reduction in interest


payments on the government's big debt. That is not to do with new


taxes imposed today, that is just the OBR being more optimistic. It


says the reason it is more optimistic is because it has new


data on the rate at which taxes are now being paid, which has allowed it


to make what it thinks is a rational judgment. Let's be clear, these


judgments. They are not accurate scientific forecasts is. The OBR


might get it wrong. But George Osborne is banking on that windfall.


You can see that in the most important women in the Office for


Budget Responsibility's enormous book that it publishes when it is


the most direct effect of the government's policy decisions has


been to push borrowing higher between 2016-17 and 20 219-20. That


means the things he has done today, reversing example, the cuts in tax


credits, freezing the budget for the police, and limiting cuts in


individual departments, the cuts are significantly less than the


speculation was and that he outlined. He was talking about 20


billion only a few weeks ago. So the direct effect of all of that is to


push borrowing higher. But borrowing actually comes down because the OBR


thinks the economy's ability to generate tax is better than it was.


There is this big shift that he has made. I read it in a blog. You read


your own blog? Occasionally. There is a shift in terms of shifting


costs, doing a lot of the stuff we expect the state to do from the


state, to the private sector. All right. Let me come to Rupert


Harrison. How is it credible to suddenly produce a ?27 billion


underlying improvement in the nation's finances between July and


November? I think it's an interesting pattern. If we think


about George Osborne's period of being Chancellor in a sense the


first few years were a period where we saw downgrades to the growth


forecasts, the eurozone crisis. The second half of the last parliament


was when the economy looked to be picking up but tax receipts were


perhaps not picking up at the same rate. It looked possible we are now


into a third phase where finally the tax receipts are starting to come


through and the OBR are moving from what was a cautious view on that,


perhaps because the economy's growing they're more confident about


earnings. He is assuming ?47 billion, not he, but the OBR, there


will be ?47 billion in extra tax without putting tax up because of


tax buoyancy. Where is the evidence for that? If you look at the October


borrowing figures the October borrowing figures were the worst


since October 2009 and that was partly because tax receipts


underperformed in every major category, VAT, corporation tax,


income tax, national insurance. How is it suddenly produce an extra ?37


billion? Two points. We are always don't -- ?47 billion. Don't place


too much on one month of data. The whole of the financial year it's


still bad. The OBR will have seen those figures but won't have had a


chance to radically change their forecasts because of them and


probably nor should they because it's one month of figures. The big


picture, you should always evaluate big events by the hand the


Chancellor is dealt and how he choose to play it. He was dealt by a


growing economy and more tax receipts a better hand than he


expected but interestingly, he choose to play that hand by


essentially taking risks off the table. Instead of new tax cuts or


giveaways he is essentially taking the tax credit issue off the table


completely, taken police cuts off the table. That's a sign of, first


of all, we are early in a parliament and that's a phase where any money


you have got you are about reducing risks and also I think a reflection


of we have a Government that doesn't have a small majority in the House


of Commons. He is taking risks. He is spending the ?47 billion in tax


buoyancy the OBR is predicting. He is assuming the - he is also the OBR


is assuming that the extra dwroet is going to produce more tax receipts


too. The increase in the OBR forecasts are 0. 1 of a percentage.


You were in the Treasury. The OBR has no idea whether the economy is


going to grow by 2. 4% or 2. 5% by 2018. But the Chancellor's banked


it. Several points to that. First of all, they're not his numbers. That's


very important. I said the OBR. These are independent numbers he


gets given. The OBR has been at the cautious end of the spectrum. Their


forecast is still relatively cautious compared to other


independent forecasters like the Bank of England. Not for 18-19. If


you look at independent forecasts most people don't... City consensus


is 2. 5. For the next few years they're at the cautious end and have


been for tax receipts. More importantly the main criticism from


the Chancellor's opponents has always been you are cutting too


much, there is no need to run a surplus. The main accusation


normally levied against him is he is too cautious. He is still on these


independent numbers delivering a ?10 billion surplus. It's hard to argue


he is taking risks on that front. One question and then I will bring


in my colleagues. Why did he make such a complete Horlicks of tax


credits? We must not lose sight of the fact he is still making ?12


billion of save initial Government departments. Why did he get the tax


credits wrong? I will answer the question. Why did he brand the party


to be... Next thing he does is smash the working poor? It's difficult to


save money. You have to see this in the context of a consolidation over


?100 billion. It hasn't been done in this country in living memory. You


are not going to get everything right. In the last parliament


probably sort of lost in the mists of political history now, but we did


things, for example, we proposed that after a year of being on


jobseeker's allowance it would get cut by 10%. That didn't go down


well. We dropped it. We made proposals that we would take child


benefit away from higher rate taxpayers, that didn't go down well,


we changed the threshold from about 42,000 up to between 50 and 60,000.


When you are making ?100 billion plus savings you are not going to


get everything right. When you have a problem fix it properly so you


don't have to come back to it. He has listened to Denis Healy's, when


you are in one hole, stop digging. Why did it take the Chancellor so


long to realise the size of this problem? Let's not forget for weeks


and weeks the Treasury was digging themselves further in. They were


determined that there would be no mitigation. When he finally realised


or perhaps it was pointed out to him perhaps by Number 10, just how bad


this might have been around the time before the Lords' defeat, in the end


he saw he would have to change course. Someone described to me that


moment as being the moment when he really decided that he wanted to be


Prime Minister, rather than a successful Chancellor. That's a


little unfair. The policy is the policy until the policy changes. You


can't go hinting in the meantime you might be changing. After today what


people are going to remember is he ditched the tax credit cuts. They're


not going to remember that he spent months with people speculating. We


will! You will, Andrew. Many of his colleagues will. I suspect you are


not representative of most people, most voters. You may say that. Watch


this programme and tonight and papers tomorrow, they'll get, OK, he


listened, he Devoned them. There are sort of slightly intuitive issues


raised by the OBR. One, for example, is you have got growth remaining


pretty robust. In a global economy actually which is a lot weaker than


we thought it would be a few months ago. You are also increasing the


costs that are being imposed on the private sector and yet expecting the


private sector to increase its investment, not to lay people off. I


think just intuitively one wonders actually whether this is going to


work out quite as the OBR and the Chancellor assumes? You have to put


what are relatively small tweaks today in the context of the big


picture, he is still cutting public spending down towards 36%, that's at


the near the historical lows in recent history. All right. A quick


question from you. I wondered, Rupert, has the housing supply issue


which has been a big problem since 2010, how much has that been an


issue around the house building companies simply not having the


energy or the desire to deliver on housing? If you speak to the chief


executives in the house building sector their profits are already up


40%. They feel themselves full stretched, they have a massive


skills shortage and don't seem to be convinced although they'll make


noises today about the announcements made, how much of a problem was it


for you and how can it be solved? It's a very good question. It's one


of the biggest economic issues that we face as a country. The house


building rates are beginning to pick up. There were two big factors and


one is the one you are talking about. One big factor was planning.


That is now at least a bit better and planning is easier to get. There


was an issue that if we go back to the boom years when more houses were


building built, about half were built by the big guys, people you


are talking about, but there was another sector in the market, the


small builder who perhaps would build three or four houses, sell


them, move on and build another one. A lot of those guys got wiped out or


they're still in debt and banks won't lend to them. There is a


supply issue but it's starting to mend. Skills shortage is a huge


issue. It's been an issue since I have been in short trousers! We will


move on. Fancy getting into politics after this? I am not in politics any


more. I know that. Fancy getting into it? I am happy... Like a


politician you have learned how not to answer the question, try it! I am


enjoying what I am doing. Thank you for being with us, Rupert Harrison.


Let's go to Birmingham and Jo. Yes, Andrew, so much to chew over.


And the improved state of the public finances has given George Osborne


more room, hence he announced he was not going to go ahead with planned


cuts on things like tax credits. With that in mind, my guest here,


the Conservative leader of Solihull council is here, he has heralded the


northern powerhouse, now the Midlands engine, is it as good as it


sounds? It's a good deal for Midlands and devolution basically.


The new money unlocks ?8 billion worth of new investment for skills,


transport connectivity, he has also devolving the skills budget which is


important to us to train people up to take those jobs. There are other


funds available for the future, as well. It's a pretty good deal at


this stage. It will transfer into real growth here in this region? ?36


million a year will unlock ?1 billion worth of funding which we


can use to create the ?8 billion fund across the West Midlands and


that's what we intend to do. The big headline of course and the thing


that he faced most opposition to was this cut to tax credits. He said


they're not going to go ahead. Labour have already said it's not a


full and fair reversal of those planned cuts. Laura is, is that how


you see it too? Many working families would have struggled to


cope with a cut to tax credits. It's welcome news this is to be avoided


and siem sure many families will be relieved to history that. However,


people will face a change in their finances as they move on to


universal credits. So it's really important that people prepare and


plan their finances now so that they can adapt to changes in the future.


We already see lots of people struggling with debt or managing


bills or balancing working child care. If you do have any worries


about your finances or questions, come and talk to Citizens Advice,


get advice and we will help you think it through. Is your first


impression that those families who are not going to face those cuts


coming Barff Christmas, coming into place -- coming before Christmas,


coming into place next year will have more time for transition in the


hope they'll get higher wages? Absolutely. It's important that


people are able to have that time to plan and prepare and come and talk


to us to help do that. One of the other big announcements was this


increase that councils will be allowed to put on council tax ks up


to 2% as long as it's for social care, what will that mean Father a


lot of customers? Council tax debt is already one of the biggest issues


we help people with at Citizens Advice, it's for people to have


support and advice to really help them plan and manage those changes.


Thank you very much. Of course for shoppers here just


weeks before Christmas they'll be thinking about the money in their


pocket and how it's going to affect their personal finances. One of the


big announcements was also about the state pension. With us is our


personal finances expert. Tell us about peoples' pensions, it's going


to go up? It is, we knew this, there wasn't really a lot we didn't know.


We already had worked out how much the state pension was going to be


because of the triple lock. We knew as soon as the inflation and


earnings figures came out how much it was going to be. It's going up by


?3. 35 to ?119. 30. That's what they call the old state pension, that's


the one that's before the April 2016 changes. The key thing that was new


that we do know because it was announced for the first time today


is that this new state pension, the so-called flat rate, which isn't at


all, but that's going to be 1 a 55. 65. George Osborne always said this


will be above the level of pension credit under the old system. It's 5p


so he has kept his promise, but not by a great deal. We will have to


leave it there. Keep economies and e-mails coming to us and we will try


and get some next time. -- questions and e-mails. Thank you. As they were


saying there the state pension is going up to over ?119, if you were


worried about losing your tax credits as a result of the July


budget, that will now not happen. You will not see a dmination at


least until welfare credit comes in. If you were worried that the


Government at a time of heightened security threat was going to cut


police numbers, then the Chancellor said he is not going to do so.


Some of the issues that affect everybody in the country, rather


than just a great number crunching. But the number crunching is


important. That tells us whether or not the Chancellor's projections are


credible. The man who gets to mark the Chancellor's homework is Paul


Johnson, director of the Institute for Fiscal Studies. I am sure he has


his red pen. We are puzzled here as to how the Chancellor still


determined to get a surplus by the end of this parliament has so much


money to do so many things. Is it credible? .


Well, he got lucky in that there are more tax revenues expected to come


in and he will be spending a bit less on debt interest. He has also


increased taxes reasonably significantly. There is a 3 billion


cost on is Mr pay for the new apprenticeship. Wasn't that in the


Labour manifesto? I don't know. I think it might have been. It wasn't


in the figures in July. And there have been increases in council tax


and some other increases. So he has done thee things, taken advantage of


increased revenues, he has increased tax a bit and he has used that money


to damp down the cuts in spending. to damp down the cuts in spending.


And because the cuts in spending were on a relatively limited part of


government, the effect of that bit of extra money is to significantly


reduce the overall level of cuts. But everyone is assuming the economy


will grow by roughly 2.5% a year till the end of the decade. We knew


that interest rates were staying low for another while yet and that that


would affect the debt interest, the service on the national debt that he


had to pay. We know that if an economy is growing, there is a


certain buoyancy in tax revenues at some stage. So if we knew all that,


why does all this come as a surprise? Therein lies the risk. The


changes in the OBR's forecasts are small. They are if you billion


pounds, but you are five years out in terms of tax revenues and the


economy. Those are small changes, and the Chancellor has used most of


and reduce the spending cuts he and reduce the spending cuts he


would otherwise have done. The risk for him is that if that turns just a


bit, as it may well do, he will have to do more in terms of tax increases


or go back to those departments and cut them further. In the last


Parliament, when things looked worst, he did not increase spending


cuts to meet his target. This time, when things are looking better, he


is not using that to have a bigger surplus to have tax cuts, he is


using it to protect public services. This is the Chancellor's third


"Budget" this year. It is a form of Budget called the Autumn


Statement/spending review. If there is a 27 billion difference in the


underlying improvement in revenues between July this year and


mid-November, when these figures were put together, he should have a


Budget every three months if the figures are so wrong! Please, don't


wish for that! 27 million is one of these silly numbers. But it allows


him to get the surplus. It only comes out to 4 billion or 5 billion


in the end, plus he has 6 billion in tax increases in the end. The reason


it makes such a big difference is that he is only playing with a small


bit of public spending. The whole of welfare is separate. Why didn't you


see this coming? You are the expert. We don't do anything unless


you tell us. We have always said there is a lot of risk around this


because of the Guerin between a relatively small amount spending and


small changes in taxing and borrowing. If you look at these


numbers, there are still some big cuts. There's a 15% cut for justice,


there are still cuts for local governments and big cuts in


day-to-day spending for transport. There is 12 billion of cuts for


those unprotected departments, which is still a substantial cut. It is


not as big as it would have been in the July Budget numbers, because the


Chancellor has decided to use the extra money he has not to cut taxes


or increase the surplus, but to protect public services. To that


extent, given that the political strategy was to move the


Conservatives on to the centre ground in the July Budget as they


saw Labour moving to the left, there were a lot of things in the July


Budget that had been in the Labour manifesto, this is a continuation of


that? It is certainly using the money not to do what you might think


of as conservative things like cutting taxes and increasing


spending. He has used it to increase spending. It is important to be


clear that he has changed nothing in the long-running. In the long one,


the cuts to universal credit that were announced in the July Budget,


which are on a similar scale to the cuts to tax credits, will come in.


Politically, he has got through that. It is just a matter of time.


So the kind of cuts that were envisaged in the July tax credit


statement do it eventually come round in a different way by the time


universal credit comes in? People on tax credits should realise that.


Nobody will face the cash losses they would have faced with the tax


credits because, even as you go on to universal credit, you are


protected relative to what you were on tax credits. But every new


claimant will get the new amount. So George Osborne is achieving what he


wanted. But he has postponed it. Robert? It is worth pointing out


that if you look at all of the managed spending, it is now flat in


real terms, adjusted for inflation, throughout the Parliament. In other


words, this is not a government that is any longer cutting. This is the


moment when one can say that austerity, in the extreme form, is


over. Within that, because there are number of departments that get


useful increases, defence is up 2.3%, a reasonable increase, health


is up 3.3%. Because of these protective departments, they're big


cuts elsewhere. One should not underestimate that this will be


painful for those who depend on the services provided by those


departments. But this is not the kind of Armageddon that people were


talking about before the general election. It is a big political


shift. Laura, can we say he has decided not to cut taxes in the old


Tory weight but to increase public spending, not to cut the police and


rent back on tax credit, is it a continuation of the Chancellor's


strategy to put his tanks on the centre ground? No question about it.


Particularly after his speech at the conference, that was an attempt to


roll his tanks onto Labour's lawn, and we have seen it again today.


Here, he could have chosen to pay down the debt quicker. He could have


chosen to pull back further. We are four years from a general election


with a Labour opposition that have not found a groove yet. That may


well be part of the story today. We have got so much to pack in. Paul


Press conference tomorrow? Of Press conference tomorrow? Of


course. Excellent. Now, in the run up to today's statement, we heard


some dire warnings about the impact of spending cuts on front line


policing, but as we have been saying, a surprise announcement is


that the Chancellor did not do as much as people said he was planning.


He decided there would be no further cuts to police budgets in England


and Wales. There has been a meeting of chief constables and elected


police and crime commission is taking place at Manchester Townhall


today. It is being covered by our home affairs correspondent, who is


there now. What has been the reaction? As you say, this was a


dramatic, unexpected announcement. We were all expecting cuts of up to


25% for police in England and Wales. Perhaps the Chancellor would pull a


rabbit out of his hat to soften the blow. Instead, he said no cuts at


all for policing until 2020. Joining me to gauge the reaction is Kevin


Hurley, the Police and Crime Commissioner for Surrey. You were


watching the announcement. What was the response? It was almost like


euphoria if your football team had scored a goal. The Police and Crime


Commissioner 's and chief constables are delighted. Of course, we should


remember that we are already in the process of implementing cuts. So all


is not well in the world and we will seek further reductions in policing,


but this is good news. Fair play to the Chancellor. He has listened, and


we are happy. Can you explain why you have to make further cuts?


Shouldn't it stop now? No, because the budgets are allocated further


upstream. So we have plans for the next three years where we will


gradually reduce staff. Some forces will be cut significantly. In


Surrey, it will not be so bad. But the good news is that the Chancellor


will also allow us to take some extra money on the council tax


side, which means some forces such as mine in the wealthier south can


be almost completely cosseted from this. It will not be so good in the


north. Dr Steve Davis from the Institute of Economic Affairs, what


do you think has brought about this shift in George Osborne's thinking?


I think he has got better than expected figures for the annual


growth rate, so he now thinks that economic growth and higher tax


receipts will save him the political pain of making such large cuts. To


add to what Kevin said, it is worth bearing in mind that there was a 31%


real increase in police spending between 2001 and 2010. The cuts we


have had so far have taken us back to where we were in 2003. I don't


remember there being a complete collapse of policing at that time.


Had the anticipated cuts taken place, they would have taken us back


to 2001. So our police now going to be binning or the plans they had to


make cuts of up to 25%, and should they do that? Well, they will be in


a lot of the plans they had, although some things are already in


train that they will put through. But I think they should take this as


an opportunity to think about how they might reorganise the way they


work. Do we need 43 police forces, for example? Why do we have each


police force buying its own equipment? It makes more sense to do


that nationally. And that question remains. Should always be thinking


about that. Private sector businesses typically look to reduce


their costs by 4% every year. There is no reason why the public sector


should not also look to spend money more effectively. A final word from


Kevin. There was news about extra funding for firearms capability.


That is really good news. And I agree that 43 police forces is a


silly business model. I would like the Police and Crime Commissioner to


be made redundant. Let's reduce the number of forces. Perhaps George


Osborne and Theresa May are listening. If they are, I am sure


they will take note for the next announcement of government plans.


That is the view from Manchester. That is the first voluntary


redundancy offer we have had today. Let's go to Jane Hill on College


Green. Yes, let's get reaction to everything we have heard from the


Liberal Democrats and from Ukip, Baroness Kramer is with me and


Douglas Carswell, Ukip MP. I want to talk about tax credits and the


police. We were just listening to that, and you made some strident


points about what is going on here. On the face of it, positive that


there no cuts to police. It is interesting. George Osborne has said


no cuts to the police budget, but in the small print, we will see a


massive increase in the police precept. So the government in


Whitehall will not get blamed for that, but local police and crime


commissioners will get it in the neck. George has been clever in


shifting responsibility for finance for the police. That is politics. It


is good politics. I am not sure it is great for the country. We need a


Chancellor who understands that we need new priorities. This is the


first year where the Home Office budget will be less than the


overseas aid budget. This is going to be really tough for more deprived


communities. Council taxpayers will suddenly find there is a charge


turning up to pay for the police and to pay for all people with the


social care budget, and it will fall hardest on the most deprived


communities that have the least ability to raise council tax. At the


same time, they will get less money on their business rates. Kensington


and Chelsea can go home laughing, but if you are a deprived community,


did you get whacked today? There is more and more pressure being put on


local councils. And I worry about the bus network, because we just


heard that the central Department for Transport will have its


operational budget slashed. Does that mean that paying for buses


outside of the big cities will now fall on councils as well? There are


a lot of issues. If I could sum it up, this is a


Blairite budget. The Labour Party has lurked so far to the extreme


left, their shadow Chancellor was even quoting Chairman Mao, that's


allowed George Osborne to create a space for a Blairite budget. It


sounds better than it turns out to be. There is a lot in the small


print that we will find unpalatable. Do you understand how he has done


it, still talking about welfare cuts and auto U-turn on tax credits which


I assume makes you happy? We still have ?12 billion in welfare cuts so


it's coming. There has been magic with what's going to come in in


terms of tax receipts and br owing to offset some changes he has made.


We still have ?12 billion cuts in welfare. I am delighted that he


stopped the cuts for tax credits on working families. And one of the


ironies is had George Osborne been in the House of Lords he would have


voted for the Democrat motion to absolutely kill those cuts in tax


credits stone dead. He wouldn't have voted with either the Labour Party


or the Conservatives. Interesting. Thank you both very much for your


reactions. Andrew, back to you. Thank you. The sun looks like it's


come out there. We are always kept in the dark here! We are grateful


for that picture. A moment ago we went through a number of issue that


had come up in this budget. Let's just go through them again.


Here are the main measures announced in this Autumn Statement/Spending


Review. Tax credits announced in the July post-election budget. The


changes planning, cuts planning have been cancelled in their entirety.


But there will still be universal credit coming in which will embody


some of what the tax credit cuts had involved. We will talk about that in


a minute. There will be no cuts to the police


budget in England and Wales. There was thought the Chancellor was


under pressure to reduce the cuts he was planning, the result is that


there are no cuts at all. I think the word Paris comes into


mind when you look at that. NHS budget in England will rise from


?101 billion today to ?120 billion by 2020-21 and rises for the health


budgets in Scotland, Wales and Northern Ireland.


And, as local authorities are squeezed and one of the main roles


in the community is to provide social care, as that money gets


squeezed, there they will be allowed to increase council tax by 2% to pay


for social care. And only social care. What else?


We have got a ?10 billion increase for education and child care, that's


through the life of the parliament, over five-year period. An


apprenticeship levy eight at 0. 5% of employer's wage bill. This is


mainly designed for major employers to encourage them to do more to give


people apprenticeships and skills and if they do that, they get some


of that levy back. It's actually not a new idea. It was introduced by the


Wilson Government in a version of it in the 1960s. There it is around


again. And 400,000 new homes, the big story


leaked overnight to the papers and broadcasters.


The Government getting into the property development business.


It seems to have a pot of money of about ?7 billion able to do that.


Capital spending on transport to increase, as well.


That's by the end of the decade. Capital spending to rise by 50% even


as the adminive bill for the transport department is cut as the


Government tries to find ways to save money.


We spoke a while ago to the former advisor to George Osborne, giving


him his first interview on television. We are joined now by


another former adviser to the Chancellor, he had a lot of them,


Matt Hancock, it's definitely not his first interview and probably not


his last either. You can be the judge of that. Depends what happens!


He is a Minister from the Cabinet Office. Can we now enter the


department of honesty. And admit that if it hadn't been for the


attacks in Paris we would not be seeing a freeze in any further cuts


to the police budget? Well, this Spending Review has been in the


planning for several months. You know, I don't know exactly when that


decision was taken. Crucially, the whole purpose of the Spending Review


is centred around national security and economic security. That goes


back to the manifesto, we set out the manifesto, it was about national


and economic security and national security of course includes all the


defense items that were outlined this week. But it's also about


safety closer to home. Before Paris the Home Secretary was digging in


her kitten heels and trying to avoid any further cuts to police budgets.


The Treasury was pushing them to come up with more as part of the


departmental round of cuts the Treasury needed. Now there are to be


no cuts. What happened in between, it's Paris. It would seem crazy most


people would think for a Conservative Government or any


Government to proceed with cuts to the police budget beyond what you


have already introduced. That's the truth of the situation, isn't it? I


don't know exactly when that decision was taken. Crucially, the


question is what do you do over a four-year Spending Review and how do


you spend the four trillion worth of taxpayers' money and as national


security and economic security are the bedrock of what we feel that we


were elected on, independenting it's perfectly reasonable to make sure


the police are protected. At a time when this country faces the greatest


terrorist threat in its history, terrorist threat, not the greatest


threat ever, the Nazis obviously beat that one, the terrorist threat,


bigger than the 30-year war from the IRA. In what way does it make sense


for the overseas aid budget now to be bigger than the Home Office


budget? Hold on, look at what we are going to be doing with the aid


budget. Of course you have to be working around the world and our


moral obligation to the world's poor, we signed up for that. We are


also redirecting the aid budget to support failed states on Europe's


borders. No, that may work down the road. I hope it does. But if you


have been following the news in Paris and Belgium you will be aware


that a lot of the bad guys are already here. The overseas aid is


for future years. They're here or heading this way now. Yet you are


spending more on overseas aid than you are on the Home Office. Does


that really make sense? The whole package makes sense because we are


protecting the police budget. We are increasing the counterterrorism


element of the budget by 30%. We are increasing more conventional defense


with the defense review we saw. I am talking about the terrorist. We are


making sure when we spend aid money we are spending it at source trying


to stop the terrorists threat at source. Let me give you an example.


No, but the point, these people... That may stop them coming. That may


stop them coming in five years, a couple of ?200million will do in


Somalia or Syria is another matter. I am talking about the ones already


on their way or already here. We need to tackle both. You are right


on that level. We have to support police domesticicly, we have to


support counterterrorism and officers and the agencies, but we


also have got to do everything we can to stop failed states and to


make sure that in those refugee camps people don't come here with


the risk attached, especially if foreign fighters come, of then


bringing terrorism with them. I think that an overall package that


includes protection at home and trying to support failed states on


Europe's borders makes sense. You have to look at the whole thing as a


package, all about national security and economic security. What kind of


Government comes up with a major change to tax credits in July and


abandon it is in November? Well, we got an improved set of forecasts.


These forecasts said there was ?27 billion extra. And that allow us us


to bring the debt down faster than we were planning to in the July


budget. And also to spend more on capital infrastructure, which is


important, I think you probably agree. Were you wrong to introduce


these tax credits in the first place? I thought they were sensible


measures. Why are you not proceeding with them? We lost in the House of


Lords. You could have gone back. The difference between then and now is


that in the new forecasts the OBR said they expect ?27 billion extra


and I think it's a perfectly reasonable use of some of that money


to mitigate the impact of this change. The key point is this, on


benefits we were elected on a mandate to find ?12 billion worth of


benefits savings. We discussed that loads at the time. You never told us


what they would be. We didn't specifically say which ones it would


be. We are going to meet the ?12 billion but we are going to do it in


a different way to how we set out at the previous budget but we have the


money. Can we stay in the department of honesty and just be clearer,


although the tax credit cuts are not going to hit people now, when


universal credit comes in elements of what you were planning to do in


the tax credits will be introduced? You will limit the child element in


tax credits to two children from April 17 who are abolishing the


family element in tax credits worth ?540 a year. This is simply some


pain for the poorest families postponed, not eliminated? That's


not quite right. We are still making the ?12 billion of savings that we


said in the manifesto that we would make and we are still meeting the


?10 billion of surplus by the end of the parliament that we set out in


July. But the difference is that when people move on to universal


credit, unless their circumstances change, they're protected and so


they don't lose cash in cash terms. That means that you can make this


transition in a far more sensible way and make sure that we get the


savings to the benefits savings by the end of the parliament that are


just as big as we planned. Crucially, it is delivering on what


we promised in the manifesto. We are up against the time limit, we have


to deal with other parts of the great... It's interesting when you


start going through the detail. There is some analysis of what the


Chancellor's statement really means. This is a big tax-raising Autumn


Statement. Tax-raising on businesses, you have the apprentice


levy we spoke about, the stamp duty increase we have spoken about. Also


a lot of transference of grants for research and development support


being changed into loans. Business corporation tax too. What we are


going to get out of this, when you go through the detail, I am looking


at the business department, the Government will reduce the teening


grant by ?120 million, they're -- teaching grant. Changing grants to


loans. There is a lot of cuts in here which are small scale. There


will be overwhelmed by the announcements on the tax credits and


announcements on security, but in here is actually a lot of


tax-raising powers which actually means that this is not a giveaway


Autumn Statement in the slightest, but actually it's raising large


amounts of money as well as all the issues made. What other bits are


hidden in the small print? Well, loads and loads of changes because


we are reforming the way that the state works. You have hidden loads


and loads of changes in the small print? No, the Chancellor set out in


the big things in the statement and then we publish the book and the


crucial... For instance on the business changes just mentioned, the


Chancellor said in his speech that there is a 17% saving in the


business department. Of course there is. So there do have to be savings,


they're about half as big in the last parliament but absolutely there


is savings. Robert, a quick point. You spent most of the last


parliament attacking Labour for being too optimistic in forecasting


rises in tax revenues when this was in power and spending on the back of


that. Some would say there is a shift, some perhaps would describe


it as a hypocrisy that here we have a Chancellor who always said he is


Conservative - huge forecast increases in tax revenues that may


turn out to be illusaro. Figures were not included in the Office for


Budget Responsibility. The OBR did have details. This is the


independent office for budget responsibility. I used to be an


economic forecaster. I am glad politicians no longer do that. It's


done independently by experts. Very well. We will look at it with a fine


toothcomb. Thank you, Matt Hancock. We are on air on BBC Two until 3.




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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