Autumn Statement Daily Politics


Autumn Statement

Live coverage of the Chancellor's Autumn Statement and Prime Minister's Questions. Followed by instant reaction from the City, business leaders and viewers.


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In just one hour's time, Chancellor George Osborne will deliver his

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long awaited Autumn Statement. We are in for more spending cuts, a

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squeeze on benefits and pension tax allowances, and more years of

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austerity, stretching all the way Good morning. Welcome to this Daily

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Politics Special on the Chancellor's Autumn Statement,

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broadcast live on BBC Two, the BBC News Channel and BBC Online. A year

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ago George Osborne had to admit defeat. Contrary to the original

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plan in his first Budget of June 2010, he was no longer able to

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eliminate the fiscal deficit within five years. In that game-changing

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Autumn Statement of 2011 we were told that austerity would continue

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for at least two more years to 2016/17. Today he will tell us what

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that extra austerity will look like in terms of tax increases and

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further spending cuts. We might discover that, even with the extra

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hard pounding, the Chancellor is still not able to meet his original

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fiscal rules on debt and deficit. And that even seven years of

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austerity won't be the end of it. The Chancellor is about to leave

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the Treasury for the short drive over to the House of Commons.

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Unlike Budget Days, there's no appearance outside Number 11 with

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the Treasury team for the Autumn Statement. But what he tells us

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today is the result of lengthy discussions and negotiations with

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his Lib Dem Treasury colleague, Chief Secretary Danny Alexander,

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and with the other two members of the Coalition Quad which sites at

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the top of this Coalition government, David Cameron and Nick

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Clegg. We'll have live coverage of the speech and Labour's response

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the moment the Chancellor gets to his feet at 12.30pm. Before that,

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at noon, we'll have Prime Minister's Questions. And to guide

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us throughout, we have the BBC's finest here in the studio. Plus

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reaction from Westminster and I'm outside Parliament talking to

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politicians of all shades, getting their reaction to today's mini-

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budget, and assessing the impact on the political landscape.

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I'm in Stoke-on-Trent at the Wedgwood factory, where I'll be

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joined by businesses from across Staffordshire and by Paul Lewis

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from BBC Radio 4's Moneybox programme. I'll be answering your

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questions and explaining what today's announcement means for your

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budget. I mean Canary Wharf at the heart banking and finance. I'll be

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speaking to market what has to find out the city's reaction to the

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Comprehensive coverage and the best analysis - what else would you

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expect from the BBC? With me is Nick Robinson, our economics editor,

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Stephanie Flanders, our business editor, Robert Peston. A veritable

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posse of BBC editors all in one room. The insurance policy will be

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:03:50.:03:51.

enormous! A hat-trick of BBC editors. The Budget in March was

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not Mr Osborne's finest hour. He needs to do better that this autumn

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statement that he hasn't got a lot of good news to give us. That is an

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understatement. Imagine if you'd said to George Osborne in the run-

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up to that general election, which he believed he'd win and the

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Conservatives would win outright, in two years' time you will get

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your chance as Chancellor. He was a debt is not boring, it is going up.

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Debt will not fall in accordance with your target, you won't meet it.

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The deficit will not be cleared and the budget will not be balanced in

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five years, not even seven, it will eventually, you hope, if the

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forecasts are right, the balanced in eight. Imagine it in that same

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statement you were to tell him a few years ago, you will get your

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feet, not on budget day, but on the Autumn Statement when you don't

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normally do them, and you will announce more tax rises, benefit

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cuts and cuts to departmental budgets. He would have shaken his

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head in disbelief and say, I would have been driven out of town. That

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is what you will get, though, from George Osborne today. Austerity for

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longer, targets missed, taxes up, spending squeezed. Ed Balls, the

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Shadow Chancellor, must think Christmas has come early. Yes, he

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will say, I told you so, it shouldn't have been like this. But,

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this is the fascinating and surprising politics, everything

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I've described should have made George Osborne in 2009 go, it's all

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over, and Ed Balls open the political champagne. And yet

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somehow George Osborne has managed to pull off the trip so far are

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always saying to the country, look, it might not be going to plan but

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let's stick to the plan because it would be a mistake to turn back.

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And saying to Ed Balls, forget all that stuff you said in the past,

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what matters is what you are saying about the future. If the Chancellor

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can politically pull off that trick today, stick to the course, will

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Labour match our well-fed cuts, that is a bit rich politically for

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the Coalition. If Ed Balls can say conclusively, you were wrong, I

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said you were wrong, you didn't need to be wrong, Labour starts to

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get some traction on the issue. This Chancellor came to office two-

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and-a-half years ago thinking that the economy would be growing by

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almost 3% this year. But it looks like it is barely growing at all in

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2012. That has stymied his deficit- reduction plans. I've got the

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gritty numbers to go with the analysis. You are right, he made

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this kind of a calculated gamble when he came into office in 2010,

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that the private sector would grow fast enough in this period for him

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to be able to balance the books in a single parliament. It just hasn't

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worked out that way. If you look at what has happened to quarterly

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growth since 2010, you can see there was a kind of recovery

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happening when he took office. But as we move into 2011, it never

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really got momentum. It was one step forward, one step back

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throughout that year. As the going to 2012, we can see the period at

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the beginning of this year when we officially went back into recession,

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the so-called double-dip. You know it is formally a recession when it

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drops bought two quarters in a road. A lot of people think that last

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quarter in the spring and early summer of declining economy

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actually was more due to be Jubilee extra bank holiday, which made

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those figures look particularly bad and made the next set of figures

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look rather good for George Osborne. We have this very good 1% growth

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figure for the three months to September. But I don't think anyone

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thinks that growth is going to continue at anything like that

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weight. The Governor of the Bank of England has warned the economy

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might even shrink again in the last few months of this year. Triple dip.

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That's the growth figures, it looks miserable. What have been the

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consequences for the core of his economic strategy, which is to cut

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the amount we borrow every year? Two things have made his life

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difficult. It is not just the slow growth, it's the fact that the

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Office for budget Responsibility, which he set up and now does the

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forecasts, has decided that a lot of the growth we didn't get we are

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never going to get. It was a permanent hit to our economy. That

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has made things harder for him because it's made the whole that

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much bigger in the public finances. These are the forecasts for the

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deficit, the measure of the deficit he wanted to get rid off when he

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was writing his first Budget win 2010. The OBR told him this was

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what borrowing was going to look like if he did the austerity. He

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would bring it back into balance well before the next election,

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within four years, though his rules set five years. Job done before the

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election. That looked nice at the time. But a year ago there was that

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massive autumn statement, the important moment when the OBR

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decided that we weren't going to get back a lot of this growth, it

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had a much gloomier picture of the underlying deficit. By the time we

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got to April this year, the last figures we had in the budget, this

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is what the deficit picture was looking like. It meant he just

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wouldn't be able to bring that back into the black by 2015. It was

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going to be an extra two years of austerity. Will be hearing more

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today about how those extra cuts might be divided across the welfare

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budget, tax increases for the rich. But we will also be listening for

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what happened to that next year? Is he going to have to push the

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austerity into 2017 because the figures are showing him that that

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measure of borrowing is not going to have disappeared by then? The

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crucial thing is it may also show that his measure of borrowing, his

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structural hole, is bigger now that he thought it was when he first

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came into office. He might not be in power by then. It's a long time

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after the election. Robert, business keeps on saying, if you

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want growth, you've got to do more to help business. Would he do more

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today? One of the big themes of this government has been cutting

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corporation tax. It's the one area, he's been trying to cut the tax

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burden. I'd be very surprised if we don't hear him talk a bit more

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about what he's doing a to help business in that sense. The other

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thing which is massively important is this. It's the sustainability of

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the government debt. The government has set great store by its triple-A

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credit rating. It has spent a lot of time boasting over the last

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couple of years that we are one of the few developed economies left

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with a triple-A. Do macro of the credit rating agencies are warning

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that we could lose that triple-A. It's one of the things I'm going to

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be thinking about Haagh. Whether or not what he says today will make

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that inevitable. If it does happen, if we do lose the trouble away, I

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think that is a political problem. It's a humiliation for the

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government. I, on the other hand, think that most investors have

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broadly written off the UK's triple-A. Whether in practice it

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will do much to the economy, I doubt in the sense that it is

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unlikely that simply a notch down on that rating will make it

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massively more expensive for the government to borrow. But as a

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political event, that would be very bad. The French and Americans have

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got away with the reduction. That political would-be hugely

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embarrassing. Yes, it will be interesting to see what he does to

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try and persuade the markets and credit agencies. He can't say we

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are meeting the targets. The one thing he could say is, you think

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this Coalition government can't take tough decisions. Boy, we can!

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He tries to do some eye-watering things in order to say, Look, we've

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got the result, which we might not have the results but we've got the

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result. But to much extent it's out of his hand. The reason that the

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credit agencies have put us under review for downgrade is because

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growth has not materialised in the UK. That makes it terribly

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difficult for him to generate a tax revenues he needs. He will not be

:12:08.:12:12.

able to magic up additional growth in the next year or two. For those

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reasons, that credit rating, in the view of most investors, is gone.

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are at the heart of the Westminster village. But throughout today's

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programme we will be getting reaction from business people in

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Yes, they've been making Wedgwood pots here in Stoke-on-Trent since

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the 17 hundreds. But three years ago, but Potter's wheels almost

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stopped turning for good when the company went bust. They were bought

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out by a New York venture capitalist firm and they merged

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with Royal Doulton and water would crystal. To talk about the

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company's Biteback is Wedgwood's chief financial officer, Anthony

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Jones, and from the construction Centre, Julie White, from a

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concrete cutting company. How hard was it to get Wedgwood back on its

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feet? A there is no doubt these are incredibly challenging times but

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I'm pleased that both our company and industry are fighting back. At

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Wedgwood, we are delighted that in the last three years, since

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successfully emerging from administration, we returned to

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profitability in our second year and delivered sales growth.

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have you done it? Two things. We repositioned and re-energised the

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brand. We turned it from a traditional table top brand into a

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luxury lifestyle brand in the wider home category. As important, we

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focused on improving every aspect of our business. We've done that to

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an operation of excellence programme. It has overhauled our

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supply chain and all of our business processes to build a

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strong foundation upon which we could grow. At UCATT staff and made

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it a more streamlined operation? we've focused on business processes

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and making us more efficient. We are still at the same level of

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staff we were at three years ago. We've started growing in the last

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year. Julie, for you on the business you are in, what is

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holding back growth? With being a specialist contractor in the

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construction industry, we need the government to be pushing

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infrastructure. We need to see something. What sort of projects

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would really help you? They keep talking about HS2 and an airport in

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the Thames Valley, but White now we need to have already sides to get

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going. We can start moving the economy are very quick at a

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construction sector like no other sector. How difficult has it been

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over the last 18 months? It really is tough. We are in a flat market.

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They say we are coming out of recession but construction is so

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flat right now. But we've been getting more of a market share.

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We've been striking up a bigger jobs with a lot of the bigger

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contractors. We've been bringing on more apprentices. We have grown.

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Julie is concerned about in the structure projects here. You are

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:15:08.:15:10.

What do you want George Osborne to do for you to break into that

:15:10.:15:15.

market? Anything that will enable us as exporters to be more

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competitive in what is a very challenging market place. Whilst we

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also welcome the recent focus on stimulating large infrastructure

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projects, and we are delighted to secure a �5 million grant as part

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of the regional growth fund, what we really need is a real package of

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fundamental measures to address the cost equations for UK manufacturers,

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essentially to make those more competitive. A couple of issues

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that impact on us, energy, apprenticeships, as an energy

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intensive manufacturer we urgently need energy market reform to create

:15:51.:15:54.

that competitive framework that doesn't penalise our industry. Over

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15% of our cost is represented by energy. We have suffered two

:15:59.:16:03.

consecutive 20% price increases in the last few years. With all of

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those kilns, you need the costs to come down. What about you? What is

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the biggest cost you could do with George Osborne addressing?

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actually ran a lot of fleets with vehicles so fuel. That would help

:16:20.:16:24.

everybody across the board. Also, helping us find the right funding

:16:24.:16:28.

for what we can achieve. Government has said there is money

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across the country that you can go to your local region and get. Have

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you managed to do that? It is hard over there. They keep talking about

:16:37.:16:42.

business bank, regional growth funding, I don't care where I get

:16:42.:16:46.

my funding from, I just need help finding it. If I am going to grow

:16:46.:16:54.

my company and employ people, I need help. Have you actually

:16:54.:16:59.

applied for it? Yes, regional growth fund. They said we were too

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good for it. We had to put in for more money than we needed, which

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made us more of a risk, and they gave it to us. So you applied for

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more and got more? Yes, but when we applied for the amount we needed,

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they said we could do it ourselves. What about finance and cashflow?

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Cashflow is also incredibly important to us. We were also

:17:20.:17:25.

successful in the last round of the regional growth fund. It leverage

:17:25.:17:28.

is Investment with public sector money, so we are also putting a lot

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of investment in on our side of the equation as well. What we need are

:17:33.:17:37.

the fundamental measures to address competitiveness in UK manufacturing.

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We will be here talking to Thank you. Good to hear the voices

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of industry. They are often very different from the way it seems in

:17:50.:17:53.

Westminster when politicians announce things. Maybe it doesn't

:17:53.:17:56.

quite happen on the ground? We will come back to that later in the

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programme. I am told that the Chancellor has left the Treasury.

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Let's see if we can see him. There is the Chancellor, coming out of

:18:07.:18:10.

one of several entrances to the Treasury. It is a huge building

:18:10.:18:15.

around a corner from where we are. There he is with Danny Alexander,

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the Lib Dem Chief Secretary to the Treasury, the man that the

:18:20.:18:25.

Chancellor regards as both an ally and somebody has to negotiate with.

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Mr Alexander is there to represent the Lib Dems. There has been debate,

:18:28.:18:31.

if the Chancellor wants more cuts on welfare, what is he going to do

:18:31.:18:35.

to make life a little bit more difficult for the rich? It's not a

:18:35.:18:39.

long drive, he will be there in a few minutes. Some would say he

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could have walked! Interesting, he didn't walk out of

:18:43.:18:48.

the front door, nobody can shout at him! No limousine, not the usual

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sleek saloon car. More functional security car. It is all trivial,

:18:53.:18:59.

but somebody has thought about it. A car for an austerity statement?

:18:59.:19:04.

He could have walked! Save the money, keep emissions down. You can

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get the latest on the Autumn Statement on the BBC website. You

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You will find in-depth coverage and discover what the measures mean for

:19:17.:19:21.

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

:19:21.:19:24.

BBC website, you can also take part in the conversation by following

:19:24.:19:31.

the debate on Twitter. All of our correspondents and experts will be

:19:31.:19:36.

using the hashtag that is on your screen now. You can keep tabs on

:19:36.:19:40.

their comments and insights and add your own. We get to read them as

:19:40.:19:44.

well. As Robert was saying, this government is able to borrow

:19:45.:19:49.

cheaply because the markets regard its fiscal deficit reduction plan

:19:49.:19:53.

as credible. But what would happen if it ceases to do so? It will be

:19:53.:19:57.

the city and the financial markets that will decide. Let's go to

:19:57.:20:03.

Susannah Streeter in Canary Wharf. I am at BGC Partners. It is a very

:20:03.:20:07.

busy morning. It has been very volatile markets of late, not

:20:07.:20:11.

simply due to the European debt crisis but also concerns about UK

:20:11.:20:16.

PLC, the lack of growth. Will the Chancellor come up with some new

:20:16.:20:20.

policies today or will he just put a bit of a shine on some old ones?

:20:20.:20:23.

Well, that is the question many traders will be wanting some

:20:23.:20:28.

answers too, particularly as today we have had very disappointing data

:20:28.:20:35.

coming out about the UK economy, a fall in factory orders, new orders

:20:35.:20:38.

since December 2010. Let's talk to Mike Ingram, market analyst at BGC

:20:38.:20:44.

Partners. There are concerns, particularly with the latest data

:20:44.:20:48.

coming out, about the health of the UK economy? Absolutely, very

:20:48.:20:51.

disappointing data. We are expecting there is going to be an

:20:51.:20:57.

acceleration in the service sector. But it fell further towards the

:20:57.:21:01.

danger zone. If you look at the chart, you can see that this is the

:21:01.:21:08.

50% mark that separates growth from contraction. 52%, just about

:21:08.:21:12.

keeping about her. That is the real focus, what is going to happen with

:21:12.:21:20.

growth? Robert Curtis is from HSBC. What is your focus going to be when

:21:20.:21:23.

you are listening to the statement a little bit later? What will you

:21:23.:21:27.

be interested in? I will be looking at the growth forecasts. They are

:21:27.:21:31.

so important. As we have just heard, the purchasing managers' data was

:21:31.:21:36.

very poor. Growth going forward, we know that they will revise it down,

:21:36.:21:42.

this year and next year. But will they get back to trend growth? 2.3%

:21:42.:21:47.

by 2015? Or will it go about that? If it doesn't, finances look a bit

:21:47.:21:51.

dicey. If it doesn't look like it is credible, the rating agencies

:21:51.:21:56.

might get involved. There might be a downgrade of UK plc. More from

:21:56.:22:01.

you're a little bit later. You can see the real tricky balancing act

:22:01.:22:04.

that the Chancellor has. All eyes are going to be on the bond markets,

:22:05.:22:10.

up what will happen to the UK government debt? Will be yields

:22:10.:22:13.

rise and have become more expensive for UK PLC to borrow? We will have

:22:13.:22:23.

If you have just joined us on BBC Two and the BBC News Channel, you

:22:23.:22:28.

are watching special coverage of the Autumn Statement at Westminster.

:22:28.:22:37.

Thanks very much. Since the Budget in March, we have been back into

:22:37.:22:41.

recession. We saw the figures for the last quarter getting us back on

:22:41.:22:48.

track. It has been a bumpy ride for the Chancellor and a very fragile

:22:48.:22:52.

recovery. What will he say to try to keep that going? We will discuss

:22:52.:22:59.

that with politicians from all main parties shortly. First, let's

:22:59.:23:09.
:23:09.:23:14.

remind ourselves of the global Look at us in the streets, look at

:23:14.:23:18.

us fighting. Look at the situation. Those measures are ruining our

:23:18.:23:24.

lives. We cannot go on this way, like Greece, Italy and Spain. All

:23:24.:23:27.

of these cuts are bringing more unemployment, more and more

:23:27.:23:35.

unemployment and worse conditions. They ECB is ready to do what ever

:23:35.:23:45.
:23:45.:24:07.

We cannot just cut our way to prosperity. If we are serious about

:24:07.:24:17.
:24:17.:24:17.

Apology for the loss of subtitles for 43 seconds

:24:17.:25:01.

reducing the deficit, we have to There it is, the toughest of

:25:01.:25:05.

economic backdrops. Let's speak to my guests, Conservative MP Claire

:25:05.:25:10.

Perry is here. Lisa Nandy is also with us for Labour, along with

:25:10.:25:14.

Liberal Democrat Pierre Matthew Hoh shot. Let's chew the fat. Claire

:25:14.:25:18.

Perry, first of all, in terms of the politics of this, doesn't it

:25:18.:25:23.

boiled down to one word for George Osborne, credibility? I think it

:25:23.:25:28.

does. I think what it boils down to his credibility of economic policy

:25:28.:25:32.

which, against the backdrop you have just shown of enormous global

:25:32.:25:37.

instability, is delivering growth. It has delivered more than 1

:25:38.:25:41.

million private sector jobs since the election. It is delivering

:25:41.:25:44.

falling unemployment and low interest rates. It has cut

:25:44.:25:49.

government deficit by a quarter since the election. I think we are

:25:49.:25:51.

there to hear a discussion of credibility and confirmation that

:25:51.:25:58.

it is working. But the credibility issue, after the last Budget,

:25:58.:26:03.

forecasts being slashed, a double- dip recession, a lot of the

:26:03.:26:06.

Chancellor's reputation is at stake? That's right, and we have to

:26:07.:26:11.

go back to the facts, against this backdrop of global instability, the

:26:11.:26:15.

headwind of decline in Europe, is the British economy in a better

:26:15.:26:19.

place? The answer is yes, we are growing sustainably... You say that,

:26:19.:26:23.

but he's going to announce that the austerity of programme is extended

:26:23.:26:30.

again, it became 2015, 2017, then 2018. That's a tough message?

:26:30.:26:33.

Things continue to be tough, but the answer is not what the shadow

:26:33.:26:37.

chancellor will call for, more borrowing. You do not borrow your

:26:37.:26:40.

way out of a borrowing crisis. We know that the Labour Party wants to

:26:40.:26:43.

cut the deficit, they have failed to say what they will cut. Until we

:26:43.:26:48.

hear that, they will have no credibility today. Lisa Nandy, the

:26:48.:26:52.

Government says to turn back now would be a disaster. You heard that

:26:52.:26:56.

the deficit has been cut by a quarter, 1 million private sector

:26:56.:27:00.

jobs. There is progress there? don't think anybody listening to

:27:00.:27:02.

this programme around the country would recognise the picture that

:27:02.:27:06.

she paints. We have people, particularly on low and middle

:27:06.:27:11.

incomes, suffering real pain. We have the weakest growth in the G7

:27:11.:27:14.

outside of Italy. This plan simply isn't working. The Chancellor has

:27:14.:27:19.

been forced to borrow more because he cannot get the economy moving.

:27:19.:27:24.

Even on his own terms, I think we are going to hear it has failed.

:27:24.:27:27.

The global downturn, the euro crisis, the meltdown, any

:27:27.:27:29.

projections you would have had would also have been blown off

:27:29.:27:34.

course? It is why we said two things very early, firstly that you

:27:34.:27:39.

do not cut the deficit this fast. If you cut the public sector, you

:27:39.:27:43.

also put the private sector very hard and stifled growth. It is also

:27:43.:27:47.

why we have consistently called for investment. A new school buildings,

:27:47.:27:50.

one of the first things that his government did was cancel the

:27:50.:27:54.

school building programme. That would have got people off benefits

:27:54.:27:59.

and into work, benefits go down, taxing take goes up and the economy

:27:59.:28:06.

gets moving again. We are halfway through the parliament, is the

:28:06.:28:08.

basic economic Strategy Working? You are part of this coalition

:28:08.:28:15.

government. Only one word matters and it is growth. Both parties came

:28:15.:28:20.

together to clear up the problems and get the deficit down. The

:28:20.:28:23.

economy did start growing and the deficit did start going down. Now

:28:23.:28:27.

we are going backwards again. The deficit is going up, growth has

:28:27.:28:31.

stopped. All around the country, in my day job, outside London, we are

:28:31.:28:35.

definitely still in recession. We have got to do more. Then a two

:28:36.:28:41.

black holes in the economy. The banks are not lending. That is the

:28:41.:28:45.

economy that has to happen, we have to get the bank's lending. Also, we

:28:45.:28:49.

need to get houses being built. Back to you in the studio.

:28:49.:28:54.

It is coming up to midday on BBC Two and the BBC News Channel. In a

:28:54.:28:57.

moment we will be crossing live to the Commons chamber for Prime

:28:57.:29:01.

Minister's Questions. If you're just joining us, let's remind

:29:01.:29:05.

ourselves of some of the things we are expecting any Autumn Statement.

:29:05.:29:08.

We learned yesterday that current government spending would be cut

:29:08.:29:14.

even further in 2013 and 2014, by 1% and 2%. That is meant to release

:29:14.:29:18.

�5 billion to pay for capital projects, investment, including, we

:29:18.:29:24.

are told, 100 new schools. We think they would approve as many as 30

:29:24.:29:28.

new gas power stations. It is seen by some as a source of cleaner and

:29:28.:29:31.

cheaper energy for the future. You might also want to look at deep

:29:32.:29:35.

tax-breaks and planning consent for shale gas. We expect welfare to

:29:35.:29:39.

take a hit, yet again. He could freeze more benefits, preventing

:29:39.:29:44.

them from rising in line with inflation, or he could cap them in

:29:44.:29:47.

a move that might be the compromise he had to make with the Lib Dems.

:29:47.:29:51.

He also want to show that the well- off are sharing the pain. He is

:29:52.:29:56.

widely expected to cut the amount that people contribute to their

:29:56.:30:05.

pensions. The amount they can put in three tax free is 30,000 at the

:30:05.:30:10.

moment. He might cut back. There will also beat potentially a cut

:30:10.:30:14.

down on tax avoidance. What would a Budget be without a crackdown on

:30:14.:30:20.

tax avoidance? We are told that could raise as much as �10 billion.

:30:20.:30:24.

Finally, his only piece of Christmas cheer, if it is even that,

:30:24.:30:28.

he is expected to cancel the 3p rise in fuel duty planned for

:30:29.:30:38.
:30:39.:30:43.

The latest poll had the Tories at 30 %, Labour at 44 %. A 14 point

:30:43.:30:47.

lead. The Tories at their worst bar once since they formed the

:30:47.:30:51.

Coalition government. Absolutely. What he said about the budget, what

:30:51.:30:56.

became known as the omnishambles, it absolutely led to that change in

:30:56.:31:00.

the opinion polls. It changed to produce a drop in George Osborne's

:31:00.:31:05.

ratings. Part of what he is trying to do, as well as the important

:31:05.:31:09.

economics, is get the politics right again, of at least looking

:31:09.:31:14.

like he's in charge, looking like there is a competent Chancellor,

:31:14.:31:17.

even if it is a Chancellor that people don't agree with. So when he

:31:18.:31:22.

looks as though he is actually running the Treasury, not just

:31:22.:31:27.

running around. The OBR will downgrade nearly all the forecasts.

:31:27.:31:34.

Will there be any forecasts that are good news? They Mel -- they may

:31:34.:31:38.

well be looking at the employment figures, because that has performed

:31:38.:31:41.

in the last couple of years. There's been a lot of jobs created

:31:41.:31:46.

in the private sector, and net increase of about 700,000. Little

:31:46.:31:50.

bits of good news but hard to find. Let's cross straight over to Prime

:31:50.:31:57.

Minister's Questions in the House I'm sure the whole House will want

:31:57.:32:00.

to congratulate the Duke and Duchess of Cambridge on the

:32:00.:32:03.

wonderful news they are expecting their first child. This is the

:32:03.:32:06.

perfect piece of news to end what has been an extraordinary Jubilee

:32:06.:32:11.

year. Turning to Afghanistan, the threat to global security from the

:32:11.:32:14.

Al-Qaeda presence in Afghanistan has been significantly reduced.

:32:14.:32:20.

This is in large part the result of the brave work of UK, I SADF and

:32:20.:32:23.

Afghan armed forces. We remain committed to Afghanistan for the

:32:23.:32:26.

long term and will continue to support the development of the

:32:26.:32:30.

Afghan national security forces after at 2014, through continued

:32:30.:32:34.

funding and involvement in training. Our continued contribution to

:32:34.:32:39.

Labour and the political process will underpin a state that is

:32:39.:32:43.

capable of policing its own lands. It is by this Papac Al-Qaeda would,

:32:43.:32:49.

I believe, be unable to re- establish itself in Afghanistan.

:32:49.:32:54.

The Taliban have been told when most of our troops will be leaving.

:32:54.:33:00.

They need to be told what sanctions to expect if they help out Cader to

:33:00.:33:06.

return. What would those sanctions be and would an Allied regional

:33:06.:33:11.

strategic base serve to make them credible? I think the most

:33:11.:33:15.

important sanction for everyone to bear in mind is the fact that the

:33:15.:33:20.

Afghan national security forces are already at a level of 335,000, and

:33:20.:33:23.

are increasingly capable and increasingly able to police and

:33:23.:33:27.

secure their own country. But of course we will continue to be

:33:27.:33:31.

involved, not least through the Officer Training Academy we will

:33:31.:33:34.

establish. The Americans will have a strong relationship, as we will

:33:34.:33:38.

have come up with the government of Afghanistan. We will want to help

:33:38.:33:42.

them in all the ways we can, to make sure that Afghan never again

:33:42.:33:50.

becomes a haven of international terror. Question number two, Mr

:33:50.:33:54.

Speaker. This morning I had meetings with ministerial

:33:54.:34:03.

colleagues and others. In addition to duties in this House... You

:34:03.:34:08.

would have thought I'd got used to it by now! In addition to my duties

:34:08.:34:14.

in his house, I shall have further meetings later today. I visited my

:34:14.:34:20.

critically ill constituents in hospital last week. There were only

:34:20.:34:25.

two nurses on a ward of 30 very ill patients. She has asked me to ask

:34:25.:34:32.

the Prime Minister why he has cut the number of nurses. The number of

:34:32.:34:36.

clinical staff in our NHS since this government came to power has

:34:36.:34:42.

gone up. The number of managers is significantly down. But as my right

:34:42.:34:45.

honourable friend the Health Secretary said, we are not in the

:34:45.:34:50.

slightest bit complacent. There are parts of our NHS where standards of

:34:50.:34:54.

care and standards of nursing are not acceptable. That is why we are

:34:54.:34:58.

introducing things like the friends and family test, to make sure that

:34:58.:35:04.

all hospitals, to the highest standards of the best. Following

:35:04.:35:08.

the publication of the Leveson report last week, does my right

:35:08.:35:12.

honourable friend agree that what we need is a strong, independent

:35:12.:35:18.

regulator, preferably without statutory underpinning? I think it

:35:18.:35:23.

is a moment when we should try and maximise the amount of consensus

:35:23.:35:25.

that they raised in this House and in the country about what is

:35:25.:35:30.

required. I think everyone agrees we need strong, independent

:35:30.:35:35.

regulation along the lines Leveson suggests. Everyone agrees we need

:35:35.:35:39.

million-pound fines. Everyone agrees prominent apologies,

:35:39.:35:43.

independently handled complaints. This is vital. I've been encouraged

:35:43.:35:46.

by the meetings I've had with editors of national newspapers that

:35:46.:35:51.

they will put in place that compliant regulation. I wish to

:35:51.:35:54.

continue the cross-party talks and make sure we can deliver a

:35:54.:35:59.

regulatory system which this House, this country but, above all, the

:36:00.:36:05.

victims can be proud. Let me join the Prime Minister in

:36:05.:36:07.

congratulating the Duke and Duchess of Cambridge on their very happy

:36:08.:36:11.

news. They have the best wishes not just of his house but of the whole

:36:11.:36:17.

country. The Conservative Party manifesto published in 20th April

:36:17.:36:20.

10 said, I quote, we will increase health spending in real terms every

:36:20.:36:25.

year. At the head of the statistics Authority says clearly and

:36:25.:36:32.

unequivocally that hasn't happened. What is today's excuse? This

:36:32.:36:38.

government is putting �12.6 billion extra into the NHS. Let me quote in

:36:38.:36:44.

the figures directly from the head of the Office of National

:36:44.:36:51.

Statistics. In real terms, spending in 2010 was 104.2 billion in real

:36:51.:36:57.

terms. In 2011, it was 104.3 billion. That is a real-terms

:36:57.:37:04.

increase. There will be further real-terms increases in 2012, 2013,

:37:04.:37:10.

2014, whereas there would be cuts under Labour. Let me just say to

:37:10.:37:13.

the Prime Minister that even by his standards that was the most

:37:13.:37:21.

slippery answer that could possibly happen. It is unbelievable. He has

:37:21.:37:25.

come to this House 26 times since he became Prime Minister and

:37:26.:37:29.

boasted about how he is increasing health spending every year of this

:37:29.:37:36.

Parliament. He has failed to meet the promise. It's not an argument

:37:36.:37:42.

between me and him. We have a ruling from the chair of the

:37:42.:37:46.

independent UK statistics authority who says it hasn't happened, and I

:37:46.:37:49.

should be grateful if the Department of Health could clarify

:37:49.:37:53.

the statements made. Instead of his usual bluster, why doesn't he just

:37:53.:37:59.

correct the record? It's a very simple point. The spending figures

:37:59.:38:03.

for 2010 were set by the last Labour government. Those are the

:38:03.:38:07.

figures we inherited. All the right honourable gentleman is doing is

:38:07.:38:11.

proving that his government was planning for an NHS cut. And we

:38:11.:38:16.

have taken that figure in 2010. We have increased it in 2011 and we

:38:16.:38:20.

will increase it again in every year of this Parliament. People

:38:20.:38:24.

don't have to look at manifestos for a contrast. They can look at

:38:24.:38:30.

what Labour is doing in Wales. The Labour Party is in charge in Wales

:38:30.:38:35.

and they have cut the NHS in Wales by 8%. As a result, waiting times

:38:35.:38:39.

are up, waiting lists are down, quality is down. That is what you

:38:39.:38:47.

get with Labour and the NHS. knows the reality, which is that he

:38:47.:38:50.

made a promise, there's no point in him shaking his head and getting

:38:50.:38:55.

annoyed, he made a promise that he would keep the NHS budget rising in

:38:55.:39:00.

real terms every year of the parliament. Labour's plan that we

:39:00.:39:05.

set out at the election was to increase the health budget in 2010

:39:05.:39:09.

to 2011, and he cut the budget. He knows the reality. Let me give him

:39:09.:39:14.

one more opportunity. He made a solemn promise to the British

:39:14.:39:17.

people for year-on-year increases in the health budget including in

:39:17.:39:23.

2010 to 2011. He failed to meet the promise. Why don't you just admit

:39:23.:39:27.

it? I don't know that I need to remind the right honourable

:39:27.:39:32.

gentleman be general election was after the 2010 year had begun. This

:39:32.:39:35.

was Labour's plan. What we have done is increasing every year. If

:39:35.:39:39.

he doesn't believe that, perhaps he'd listen to the Labour health

:39:39.:39:43.

secretary who gave an interview in the New Statesman when he said this

:39:43.:39:46.

about the Tories. They are not ring-fencing it, they are

:39:46.:39:51.

increasing it. Cameron has been saying it every week in the Commons.

:39:51.:39:55.

Oh, the Shadow Health Secretary wants to spend less on health and

:39:55.:40:02.

us. Question, which is true, isn't it? Yes, it's true. That's my point.

:40:02.:40:07.

Confirmed. It is official. Labour want to cut our NHS. It would never

:40:07.:40:17.
:40:17.:40:23.

be safe with them again. No, the reality is... My right honourable

:40:23.:40:27.

friend left a rising health budget and this Prime Minister could do it.

:40:27.:40:32.

That is the reality. Let me try him on another fact which I'm sure

:40:32.:40:42.

he'll be able to give to the House. Can you tell us how big an income

:40:42.:40:46.

tax could he is giving next April to people earning over �1 million a

:40:46.:40:51.

year, as a result of the reduction in the top rate of tax? I'm not

:40:51.:40:57.

surprised he wants to get of Health... That was the biggest own-

:40:57.:41:03.

goal I think I've ever seen. On the issue of the top rate of tax, when

:41:03.:41:08.

his government put the top rate of tax up to 50p, what it actually

:41:08.:41:13.

meant was many fewer millionaires paid that operate. As a result, the

:41:14.:41:18.

tax take suffered by �7 billion. I would remind him that under this

:41:18.:41:22.

government the top rate of tax will be high in every year than any year

:41:22.:41:28.

it was when he was working in the Treasury. I will give him the

:41:28.:41:36.

answers. Next April, everyone earning over �1 million will have a

:41:36.:41:46.

tax cut of �107,000 a year. It is no good the Deputy Prime Minister

:41:46.:41:53.

shouting from a central position, he went along with it! The party of

:41:53.:41:59.

Lloyd George. He went along with it. He hasn't kept his promise on all

:41:59.:42:03.

being in it together. Let's ask him about his central promise. Two

:42:03.:42:08.

years ago he said that by 2015, I quote, we will have balanced the

:42:08.:42:14.

books. Can he explain why he is so badly failing to keep that promise?

:42:14.:42:17.

Let me give him the figures on the top rate of tax because it is

:42:17.:42:22.

important. In 2009-2010 there were 16,000 people earning more than 1

:42:22.:42:28.

million, with a tax liability of 13 billion. When the rate went up in

:42:28.:42:36.

2011, this plummeted to 6000 people. So therefore, because of his

:42:36.:42:42.

election gambit 50p, it cost the country �7 billion. When it is he

:42:42.:42:47.

going to realise setting tax rates is about raising money not about

:42:47.:42:53.

punishing success? That's what we need to understand. In terms of the

:42:53.:42:58.

deficit, we have cut the budget deficit by 20 % -- 25 %. They'll be

:42:58.:43:04.

getting an of -- update on progress in a minute. But how can you deal

:43:04.:43:09.

with a borrowing problem by pledging to borrow more? Let's just

:43:09.:43:19.

be clear about his answer on 50 P. The answer to the problem of tax

:43:19.:43:23.

avoidance is to give the people doing it a tax cut. That is the

:43:23.:43:32.

answer he gave up. Give them a big giveaway. The reality of Prime

:43:32.:43:36.

Minister couldn't get away from, the deficit is going up not down on

:43:36.:43:41.

his watch. We all remember the posters, with his airbrushed face

:43:41.:43:46.

saving, I'll cut the deficit not the NHS. The facts speak for

:43:46.:43:53.

themselves. He has cut the NHS and he is not cutting the deficit.

:43:53.:43:57.

is 100 % wrong. We are increasing spending on the NHS and cutting the

:43:57.:44:04.

deficit. We have cut the deficit by 25 %. They Iraq 1 million more

:44:04.:44:08.

private sector jobs. Businesses are starting up at a higher rate than

:44:08.:44:12.

at any time in our history. This economy is on the right track. We

:44:12.:44:14.

are equipping Britain for the global race. Unlike the party

:44:14.:44:18.

opposite, we are on the side of people who work hard and want to do

:44:18.:44:21.

the right thing. And what is his answer? More borrowing, more

:44:21.:44:25.

spending, more of the things that got us into the mess in the first

:44:25.:44:34.

place. Mr Speaker, three years ago the NHS spent �500 million on

:44:34.:44:37.

Tamiflu without having seen all the data on effectiveness or safety.

:44:37.:44:43.

Given that far from being an isolated case, it is normal for the

:44:43.:44:46.

drugs industry to have almost complete control over the evidence

:44:46.:44:50.

based upon which crucial decisions are made, will the Prime Minister

:44:50.:44:54.

ask them to make available the full clinical reports on Tamiflu, so

:44:54.:45:02.

that doctors, patients and My honourable friend has excellent

:45:02.:45:05.

work on behalf of the taxpayer through the very good questions and

:45:05.:45:09.

work that he does. He raises the issue not only because of the cost

:45:09.:45:12.

to the taxpayer, but also because of possible overstatement of

:45:12.:45:16.

benefits to patients. There does need to be more transparency in

:45:16.:45:19.

clinical trials data. We are committed to making sure that

:45:19.:45:24.

happens. The European Medicines Agency's work is supported on this.

:45:24.:45:27.

From next year there will be a legal requirement to publish

:45:27.:45:34.

reports from clinical trials. week, we learned that, despite

:45:34.:45:38.

assurances and exhaustive checks that were taking place, that the UK

:45:38.:45:44.

border agency made minimal checks to trace 124,000 asylum seekers and

:45:44.:45:50.

migrants with 150 boxes left unopened. Does this not show that

:45:50.:45:54.

the 20% cuts to the Border Agency has put at risk our efforts to

:45:54.:46:00.

secure our borders? First of all, I think this is a week to recognise

:46:00.:46:03.

the fact that we said we would cut immigration and net immigration is

:46:03.:46:08.

down by 25% under this government. I want us to do far better in terms

:46:08.:46:17.

of chasing down illegal overstayers and illegal migrants. Good work is

:46:17.:46:21.

being done there, also involving private sector organisations

:46:21.:46:25.

finding these people. Yes, we had to make reductions in the Border

:46:25.:46:29.

Agency budget, as we did because all budgets. But he should have

:46:29.:46:32.

noticed that government is about, these days, getting more for less.

:46:33.:46:36.

The Prime Minister will be aware that Portsmouth has been the home

:46:36.:46:40.

of the Royal Navy and a working dockyard for over 500 years. Given

:46:40.:46:44.

that the Business Secretary appears to have prejudged a study into the

:46:44.:46:47.

future of shipbuilding, what reassurance can the Prime Minister

:46:47.:46:52.

give me and 1500 shipbuilders that Portsmouth will remain integral to

:46:52.:46:57.

the Bill Bernard export of warships and to the base port of our Future

:46:57.:47:05.

The right honourable lady quite rightly speaks up for Portsmouth,

:47:05.:47:09.

which is and will continue to be an excellent home for the Royal Navy.

:47:09.:47:12.

Whatever decision is taken on the future of shipbuilding, the Navy

:47:12.:47:16.

will remain a major employer in the city, not least once the new

:47:16.:47:22.

carriers arrived in a few months' time. I am sure she will also

:47:22.:47:26.

welcome the announced enterprise zone on the Peninsula, which could

:47:26.:47:33.

create 1200 jobs. In June 2010, the Prime Minister said that, despite

:47:33.:47:37.

the Government's deficit reduction plan, he would ensure that there

:47:37.:47:42.

was, and I quote, no increase in child poverty. Does he still

:47:42.:47:46.

standby that assurance? The we are doing everything we can to tackle

:47:46.:47:53.

child poverty and child poverty, on some estimates, has come down. The

:47:53.:47:57.

point we specifically did is that we increased the element of the

:47:57.:48:02.

child tax credit that goes to the poorest families. In the wake of

:48:02.:48:06.

the criminal convictions of the staff who repeatedly abused people

:48:06.:48:08.

living at Winterbourne View Hospital, is it not time that those

:48:08.:48:13.

who take the fees, are employed a staff and supervise those staff are

:48:13.:48:17.

themselves held to account with a new offence of corporate neglect?

:48:17.:48:21.

Well, I listened very carefully to the point my right honourable

:48:21.:48:25.

friend makes. There have been some appalling incidents of completely

:48:25.:48:30.

unacceptable levels of care. People in those organisations are fully

:48:30.:48:34.

subject to the law, as they should be. If the law has been broken,

:48:34.:48:38.

that proper consequences should follow. Mr Speaker, one of the

:48:38.:48:45.

greatest issues in my area, in my constituency, and all of the United

:48:45.:48:50.

Kingdom, is the price of electricity. Could the Prime

:48:50.:48:53.

Minister tell the House what action he is taking to mitigate spiralling

:48:53.:48:57.

costs, especially in Northern Ireland? For consumers, we have

:48:57.:49:01.

announced our plans to make sure that companies put people on the

:49:01.:49:04.

lowest tariff, which I think is warmly welcomed across the House

:49:04.:49:07.

and the country. In terms of business, where there is an issue

:49:08.:49:11.

with energy-intensive industries, the Government has announced an

:49:11.:49:15.

intention to exempt those industries from the cost of

:49:15.:49:19.

differences and a reform. That is subject to consultation, but I

:49:19.:49:23.

think it shows that the Government is working hard to help those

:49:23.:49:26.

industries and make sure that they continue to compete and succeed in

:49:26.:49:31.

Britain. The whole house does indeed join with the Prime Minister

:49:31.:49:34.

and congratulating the Duke and Duchess of Cambridge on their

:49:34.:49:39.

excellent good news. Will the Prime Minister please confirm to the

:49:39.:49:43.

House that the Commonwealth has, at last, after many of us have been

:49:43.:49:48.

asking for this for years, at last agreed to change the rules on royal

:49:48.:49:53.

succession? Will the Prime Minister undertake to bring before the House

:49:53.:49:59.

a bill very soon so that if this baby is a girl she can follow in

:49:59.:50:02.

the footsteps of her much-loved great-grandmother and become our

:50:02.:50:09.

Queen? I am very grateful to my Honourable Friend for her question.

:50:09.:50:13.

I think I can answer positively on all the points that she made. At

:50:13.:50:16.

the Perth Commonwealth conference I chaired a meeting of the Prime

:50:16.:50:20.

Ministers of all of the different realms. We agreed we and should

:50:20.:50:23.

bring forward legislation to deal with this issue. All of the realms

:50:23.:50:27.

have agreed to do this. We will be introducing legislation into this

:50:28.:50:32.

house very shortly. It will write down in law what we agreed in 2011,

:50:32.:50:36.

that if the Duke and Duchess of Cambridge's first child is a girl,

:50:36.:50:41.

she can one day be Allah Queen. That is the key point. It's

:50:41.:50:45.

important to explain that the changes will apply to a child born

:50:45.:50:50.

after that date of the announcement last year, even if the bird is

:50:50.:50:53.

before the legislation is passed. I hope it will not take long,

:50:53.:50:57.

certainly not nine months, but just in case there would not be a

:50:57.:51:04.

I welcome the Government commitment to increase efforts to tackle tax

:51:04.:51:14.
:51:14.:51:15.

avoidance. Starbucks has now caved in to public pressure and announced

:51:15.:51:21.

that it will review the tax arrangements in the UK. Clearly,

:51:21.:51:28.

naming and shaming works. Surely it is time to stop companies engaged

:51:28.:51:35.

in tax-avoidance from hiding behind taxpayer confidentiality? Will the

:51:35.:51:39.

Prime Minister now committed to publishing the names of those

:51:39.:51:44.

companies found by HMRC to have avoided paying their fair share of

:51:44.:51:51.

I very much welcome the right honourable lady's initiative on

:51:51.:51:58.

this and what her committee is looking at. I thank her for their

:51:58.:52:04.

warm words of support. We have recovered revenues from large

:52:04.:52:08.

businesses in the last six years, including �4 billion in the last

:52:08.:52:14.

four years from these transfer requiring systems alone, one of the

:52:14.:52:17.

issues covered in such detail in the press. I am committed to doing

:52:17.:52:20.

all we can to look at the options to make sure that companies pay

:52:20.:52:24.

taxes properly. I agree with what she said about public and even some

:52:24.:52:28.

political pressure. On some occasions, I myself have made one

:52:28.:52:33.

or two remarks that were seen as controversial. I think it's

:52:33.:52:36.

important that people feel they meet their responsibilities and pay

:52:37.:52:40.

their taxes. Will my right honourable friend do everything he

:52:40.:52:46.

can to ensure that education, health and social services work

:52:46.:52:52.

together to jointly commission services that will make sure that

:52:52.:52:55.

the much welcome reforms in the children and families bill will be

:52:55.:53:01.

workable on the ground? Honourable Friend makes a very

:53:01.:53:05.

important point. We need to get away from the idea of government or

:53:05.:53:07.

local government operating in silos with different budgets and

:53:07.:53:11.

different apartments not working together. I know that representing

:53:11.:53:14.

Swindon, as he does, Swindon Borough Council has to get huge

:53:14.:53:19.

steps in bringing agencies together and working in the area of problem

:53:19.:53:24.

families. I commend them for the work that they do. Whatever

:53:24.:53:28.

announcements the Chancellor makes on pension tax relief in 30

:53:28.:53:33.

minutes' time, is it not a fact that when this government came to

:53:33.:53:37.

power its changes to pension tax relief gave a tax cut of �1.6

:53:37.:53:42.

billion to people earning more than �150,000? I see the Chancellor has

:53:42.:53:47.

to give the Prime Minister his crib sheet. I'm afraid the Honourable

:53:47.:53:51.

Lady is wrong. We inherited a plan to raise �4 billion from the

:53:51.:53:56.

wealthiest people in terms of taxes. We raised about �4 billion. My

:53:56.:53:59.

right honourable friend will be making further announcement in a

:53:59.:54:04.

moment. The north-east of Scotland makes a major contribution to the

:54:05.:54:09.

UK economy through the offshore oil and gas industry. Will the Prime

:54:09.:54:12.

Minister commit himself to maximising investment in that

:54:12.:54:16.

industry so that we get the maximum number of jobs, energy security and

:54:16.:54:21.

taxation for the future of this country? My honourable friend quite

:54:21.:54:26.

rightly speaks are for the North Sea industry and for everyone who

:54:26.:54:30.

works in it in Scotland. I have been incredibly impressed, when I

:54:30.:54:33.

visited Aberdeen, to see the health and wealth generated by that

:54:33.:54:37.

industry. What we have done on decommissioning and new field

:54:37.:54:41.

allowances, I think, has helped brings uncertainty. We should keep

:54:41.:54:44.

working on that to make sure that we recover as much oil and gas from

:54:44.:54:47.

the North Sea as possible and make the most of this precious natural

:54:47.:54:56.

asset. 7000 fewer nurses, longer waits in accident and emergency,

:54:56.:55:01.

hospitals, according to Dr Foster, told to bursting. The Prime

:55:01.:55:05.

Minister is cutting the NHS while the deficit rises. Will he put that

:55:05.:55:10.

on his posters for the next generation? -- election? I think he

:55:10.:55:16.

was describing the situation in Wales, when Labour had put in place

:55:16.:55:23.

an 8% cut. Let me tell him what is happening in the NHS in England. We

:55:23.:55:26.

have 1350 extra clinical staff. We have taken down the number of

:55:26.:55:32.

managers by 6700. Mixed-sex accommodation is right down. The

:55:32.:55:35.

Cancer Drugs Fund is making sure many more people get access to

:55:35.:55:39.

those drugs. Waiting times are down, the number of people waiting a long

:55:39.:55:43.

time is down. The number of people waiting longer than 52 weeks to

:55:43.:55:46.

start treatment is at its lowest level since records began. He

:55:46.:55:50.

should be supporting his government for its health policy and telling

:55:50.:55:57.

his front bench to stop cutting the NHS. Does my right honourable

:55:57.:56:00.

Friend recall receiving a visit at number 10 from the pupils of market

:56:00.:56:06.

feel special school, whose school had become nicknamed shared city,

:56:06.:56:13.

there were so many demountables on aside? Does he share my delight

:56:13.:56:18.

that the County Council has assigned funds to build a new

:56:18.:56:22.

school, and may I thank him for his support on that campaign? I am

:56:22.:56:27.

grateful to my Honourable Friend for his question. I am a big

:56:27.:56:30.

supporter of Britain's schools. I think they provide a vital service

:56:30.:56:33.

for parents and children with special needs. Sometimes quite

:56:33.:56:37.

acute needs. I am proud of the fact that his government has invested in

:56:37.:56:40.

special schools and they are doing such a good job, including in his

:56:40.:56:47.

constituency. Following the Government's new funding formulas

:56:47.:56:51.

for universities this year, student numbers drop to, or student

:56:51.:56:56.

admissions dropped, by over 50,000. My own local university,

:56:56.:57:02.

Wolverhampton, despite meeting its targets, suffered a drop in

:57:02.:57:07.

allocation and has been told that there will be another cut next year.

:57:07.:57:11.

What guarantees can the Prime Minister gave that universities

:57:11.:57:15.

such as Wolverhampton will not suffer year on year reduction in

:57:15.:57:20.

student numbers as a result of this new formula? The whole point is

:57:20.:57:23.

that his government took difficult decisions to make sure that we

:57:23.:57:27.

could maintain the numbers of people going to our universities.

:57:27.:57:30.

Really, the question goes right back to the party opposite. If you

:57:30.:57:35.

don't support a proper system of student contributions, how on a

:57:35.:57:38.

earth are you going to pay for universities? We have set out our

:57:38.:57:43.

plans. They are actually working well. You don't start paying that

:57:43.:57:46.

money until you in �21,000. You don't start paying back in full

:57:46.:57:51.

until you are paying �35,000. We have a method for making sure we

:57:51.:57:57.

invest in universities, the party opposite hasn't got a clue. Niaomi

:57:57.:58:00.

House's Children's Hospice, which serves my constituency, receives

:58:00.:58:03.

just 10% of funding from the Department of Health. That is

:58:03.:58:07.

different from adult hospices, which receive rather more. This is

:58:07.:58:13.

especially difficult, as they have to pay for all of their

:58:13.:58:15.

prescriptions as private institutions. Will the Prime

:58:15.:58:19.

Minister look again at the reasons for the different treatment of

:58:19.:58:25.

children and adult hospices and meet with me and the hospice's

:58:25.:58:29.

professor to discuss the different funding levels? I'm happy to

:58:29.:58:34.

discuss the issue with my honourable friend. For many years,

:58:34.:58:38.

my family used Day Hospice in Oxford that got no state support at

:58:38.:58:42.

all. What this government has done is continue with the �10 billion

:58:42.:58:45.

annually to support children's hospices. This year, we have added

:58:45.:58:50.

an extra �720,000. What we want to put in place and what we are

:58:50.:58:54.

discussing with the providers of both adult and children's hospices

:58:54.:59:00.

is a system for eight per patient funding system that would be for

:59:00.:59:04.

all hospices. I think that would bring better logic and consistency

:59:04.:59:08.

for how we support this essential part of our health service and, I

:59:08.:59:14.

would argue, our Big Society. the Prime Minister aware that Abbas

:59:14.:59:18.

and turned over �3.3 billion in the UK this year, paid not a single

:59:18.:59:23.

penny in corporation tax, but at the same time were rewarded with a

:59:23.:59:27.

�10 million grant from the SNP's Scottish government? Doesn't this

:59:27.:59:30.

demonstrate that both our Prime Minister and First Minister stand

:59:30.:59:34.

up for the wrong people? When will this government move away from

:59:34.:59:38.

punishing the poorest in society and focus on those that abide and

:59:38.:59:48.
:59:48.:59:50.

We want these large multinational companies to pay proper taxes here

:59:50.:59:54.

in the UK. We believe that you do that by having low tax rates, and

:59:54.:59:58.

by making sure they declare their income properly. That's why it on

:59:58.:00:02.

this specific issue of transfer payments, where some companies have

:00:02.:00:07.

been pursuing rather strange practices to pretend that their

:00:07.:00:10.

revenues aren't delivered here in the UK and run down their tax bills.

:00:10.:00:14.

In the last four years we've recovered �4 billion in tax revenue

:00:14.:00:24.
:00:24.:00:24.

in this way. The HMRC knows there is very much more we can do.

:00:24.:00:26.

Residents in Southwark council were very excited when the Energy Bill

:00:26.:00:29.

was published last week, because it now gives a potential green light

:00:29.:00:33.

to the building of Sizewell C nuclear power station, with many

:00:33.:00:37.

jobs. Will the Prime Minister commit to continuing to invest in

:00:37.:00:41.

apprenticeships and skills training, so that Suffolk people can get the

:00:41.:00:47.

jobs that are created? She is right. The entry of the Energy Bill to

:00:47.:00:50.

Parliament means we can get out there and sell to all of the energy

:00:50.:00:54.

companies the very clear and stable framework that the UK has for

:00:54.:00:59.

offshore wind, nuclear, renewables and Pugaca. I think it's a very

:00:59.:01:03.

positive development. There's a huge amount of potential, pent-up

:01:03.:01:06.

investment. We need to make sure that that results in British jobs

:01:06.:01:09.

and apprenticeships and the government is fully committed to

:01:09.:01:13.

making that happen. The Prime Minister obviously believes that

:01:13.:01:16.

within the Leveson report there lurks something which is bonkers.

:01:16.:01:20.

Given that, how would the Prime Minister characterise the views of

:01:20.:01:23.

his Planning Minister, who has just said that over the coming months

:01:23.:01:27.

and years, tens of thousands of new homes will have to be built on

:01:27.:01:32.

greenfield sites? The point I make about, let me deal with the

:01:32.:01:36.

planning minister first, yes, we should build on brownfield land,

:01:36.:01:40.

yes, we should try and deal with the problem of empty homes. But we

:01:40.:01:42.

do have to have a frank conversation about the need to

:01:42.:01:47.

build more flats and houses, so we don't have the current situation we

:01:47.:01:51.

have where if you don't have the help from the Bank of mum and dad,

:01:51.:01:54.

people are in their mid-thirties before buying their first home. I

:01:54.:01:58.

don't think that is acceptable. All credit to the Planning Minister for

:01:58.:02:02.

trying to fix this problem. On the issue of the Leveson report, I

:02:02.:02:05.

think there is a wide degree of agreement about what a new

:02:05.:02:08.

regulatory system ought to look like. It is set out there in black

:02:08.:02:12.

and white. We need to challenge the press to introduce it. If they

:02:12.:02:18.

don't then we would have to take further action. With more men in

:02:18.:02:21.

work than ever before, with more women in work than ever before,

:02:21.:02:27.

with a deficit cut by 25 % and interest rates at historic lows,

:02:27.:02:31.

does my right honourable friend not agree with me that the opposition

:02:31.:02:39.

Danby, code for more debt, would jeopardise all those achievements?

:02:39.:02:43.

-- Plan B. We are making progress. Of course it is tough when there

:02:43.:02:47.

are so many economic head wins against us. But a million more

:02:47.:02:51.

private sector jobs, the deficit down by 25 %, a record number of

:02:51.:02:55.

businesses started up last year. Plan B stands for bankruptcy. That

:02:55.:03:05.
:03:05.:03:07.

is what Labour would give us. universal health care system free

:03:07.:03:11.

at the point of delivery is what the overwhelming majority of the

:03:11.:03:16.

British people want. Something which I remained firmly committed

:03:16.:03:22.

to. However, there are increasing complaints about nurses who failed

:03:22.:03:28.

to show care and compassion to their patients. What exactly will

:03:28.:03:33.

the Prime Minister do about that? The honourable lady speaks for the

:03:33.:03:36.

whole house and the whole country in raising this issue. I know how

:03:36.:03:40.

painful it must have been with what she has witnessed in her own life

:03:40.:03:45.

and with her own family. I am, as she is, a massive fan of our

:03:46.:03:48.

National Health Service, an enormous fan of the factor is free

:03:48.:03:52.

at the point of use, that you don't produce a credit card when you go

:03:52.:03:55.

to hospital or start my own family has had extraordinary care through

:03:55.:04:00.

our NHS. But we don't do our NHS or nurses any favours if we don't. Out

:04:00.:04:03.

there are some very real problems in parts of our health and care

:04:03.:04:09.

systems. As a constituency MP, I see quite a few letters from people,

:04:09.:04:12.

particularly elder -- elderly people and their relatives, who are

:04:12.:04:16.

not getting the sort of care that is appropriate. I set up a forum

:04:16.:04:20.

that I have attended myself to discuss with nurses and nurse

:04:20.:04:24.

leaders these issues. There is no magic wand, but some simple steps

:04:24.:04:29.

like asking every hospital to carry out a friends and family test.

:04:29.:04:32.

Asking the patients and staff, would you be happy for your family

:04:32.:04:36.

or friends to be treated in this hospital? That can make a real

:04:36.:04:42.

difference. The idea that four elderly patients and this should be

:04:42.:04:45.

there by your bedside once an hour, checking that UCATT water,

:04:45.:04:48.

something to eat, you haven't got bedsores and are properly looked

:04:48.:04:52.

after. We shouldn't have to dictate these things. I think a proper

:04:52.:04:57.

conversation with our nurses, who are angels by the vast degree, can

:04:57.:05:02.

get this sort it out for all our relatives. Order. Statement, the

:05:02.:05:12.
:05:12.:05:15.

Mr Speaker, it has taken time but the British economy is healing.

:05:15.:05:21.

After the biggest financial crash of our lifetimes, people know that

:05:21.:05:28.

we face deep-seated problems at home and abroad. At home we live

:05:28.:05:33.

with the decade of debt and the failure to equip Britain to compete

:05:33.:05:39.

in the modern world. And we face a multitude of problems from abroad.

:05:39.:05:45.

The US fiscal Cliff, the slowing growth in China. Above all, the

:05:45.:05:50.

eurozone are now in recession. People know that there are no quick

:05:50.:05:55.

fixes to these problems are. But they want to know that we're making

:05:55.:05:59.

progress. The message from today's Autumn Statement is that we are

:05:59.:06:05.

making progress. It is a hard road but we are getting there. Britain

:06:05.:06:13.

is on the right track. Can I ask the Chancellor to resume his seat?

:06:13.:06:18.

Let's be clear, each side should be heard with courtesy. A house does

:06:18.:06:23.

well enough by now that I will afford a very full opportunity for

:06:23.:06:27.

questioning of the Chancellor. But the more interruption, the greater

:06:27.:06:32.

the noise, the longer the session will take, and that cannot be right.

:06:32.:06:36.

I appeal to members pleased to give the Chancellor a courteous hearing,

:06:36.:06:41.

as indeed if it becomes necessary I will appeal to government

:06:41.:06:44.

backbenchers to afford a fair hearing to the Shadow Chancellor.

:06:44.:06:54.
:06:54.:06:54.

That is how it should be. The Britain is on the right track.

:06:54.:06:59.

Turning back now would be a disaster. We have much more to do.

:06:59.:07:05.

The deficit has fallen by a quarter in just two years. And today's

:07:05.:07:12.

figures show it is forecast to continue to fall. Exports of goods

:07:12.:07:15.

to the major emerging economies, which were pitifully low, have

:07:15.:07:21.

doubled since 2009. Since this Coalition government came to office,

:07:21.:07:28.

1.2 million new jobs have been created in the private sector. In a

:07:28.:07:32.

world economy where bond investors are fleeing countries they regard

:07:32.:07:37.

as whisky, Investment is flowing into UK gilts, instead of flying

:07:37.:07:43.

from them. We have to keep it that way. Two years ago, Britain was in

:07:43.:07:47.

no danger zone. Now we are seen as one of the safe havens, able to

:07:47.:07:50.

borrow money at lower interest rates than at any time in our

:07:50.:07:59.

history. And today's forecast shows a �33 billion saving on the debt

:07:59.:08:04.

interest payments it was predicted we would have to pay two years ago.

:08:04.:08:10.

That is as much as the entire defence budget. Which is why in

:08:10.:08:13.

this autumn statement we show that his Coalition government is

:08:13.:08:18.

confronting the country's problems instead of ducking them. Today, we

:08:18.:08:22.

reaffirm our commitment to reducing the deficit, setting out the

:08:22.:08:28.

details of our spending plans for 2015-2016, and rolling forward an

:08:28.:08:35.

outline framework into 2017-2018. We show our determination to do

:08:35.:08:38.

this fairly, with further savings from bureaucracy, from the benefits

:08:38.:08:43.

bill and from the better off. We go one the equipping Britain to

:08:43.:08:46.

succeed in the global race by switching from current spending to

:08:46.:08:53.

Capital Investment in science, roads and education. We offer a new

:08:53.:08:56.

support for business and enterprise, so that they can create the jobs we

:08:56.:09:00.

need. In everything we do, we will show today we are on the side of

:09:00.:09:07.

those who want to work hard and get on. The Office for budget

:09:07.:09:12.

Responsibility has today produced its latest economic forecast. It is

:09:12.:09:16.

a measure of the constitutional achievement that it is taken for

:09:16.:09:21.

granted there are countries -- that Arab countries forecasters now

:09:21.:09:23.

produced independently of the Treasury, free from the political

:09:24.:09:29.

interference of the past. I want to thank Robert Chote, his fellow

:09:29.:09:33.

members of the Budget Responsibility Committee and all

:09:33.:09:38.

their staff at the OBR for their rigorous approach. One of the

:09:38.:09:42.

advantages of the creation of the OBR is that not only do we get

:09:42.:09:45.

independent forecasts, we also get an independent explanation of why

:09:45.:09:52.

the forecasts are as they are. If, for example, lower growth was the

:09:52.:09:56.

result of the Government's fiscal policy, they would say so. But they

:09:56.:10:00.

do not. They say the economy has performed less strongly than

:10:00.:10:09.

expected. They forecast growth this year of minus 0.1 %. These are

:10:09.:10:13.

their words, the weaker than expected growth can be more than

:10:13.:10:17.

accounted for by over-optimism regarding net trade. Because the

:10:17.:10:21.

OBR has previously assumed that the eurozone would begin to recover in

:10:21.:10:26.

the second half of this year. Instead, it has continued to

:10:26.:10:31.

contract. That has hit our exports to these markets and the net trade

:10:31.:10:36.

numbers. The eurozone crisis has also, the OBR say, spilled over

:10:36.:10:41.

into tighter credit conditions and elevated UK bank funding costs. And

:10:41.:10:44.

in their words, these problems will constrain growth for several years

:10:44.:10:49.

to come. There are domestic problems, too, that they referred

:10:49.:10:56.

to. In the report today, the contraction in 2008-2009 is now

:10:56.:11:01.

assessed to be deeper than previously thought, with GDP

:11:01.:11:08.

shrinking by a staggering 6.3 %. A lot just a shock to our economy

:11:08.:11:14.

since the Second World War. -- the largest shock. The aftermath of

:11:14.:11:17.

this shock continues to weigh on the productivity of the UK economy,

:11:17.:11:21.

with credit rationing and impaired financial markets potentially

:11:21.:11:25.

impeding the expansion of successful firms. They say the GDP

:11:25.:11:29.

growth is now expected to be lower in every year of the forecast

:11:29.:11:33.

period, as credit conditions take longer to normalise and global

:11:33.:11:37.

growth remains, in their words, weaker than previously expected. As

:11:37.:11:43.

a result, the OBR forecast that the economy will grow by 1.2 % next

:11:43.:11:53.
:11:53.:11:54.

year, then 2% in 2014, 2.3 % in 2015, 2.7 % in 2016 and 2.8 % in

:11:54.:11:58.

2017. So the economy is recovering and it is recovering more quickly

:11:58.:12:03.

than many of our neighbours. The IMF estimates that the UK next year

:12:03.:12:08.

will grow more strongly than either France or Germany. Are credible

:12:08.:12:13.

fiscal policy allows for supported monetary policy. With the Bank of

:12:13.:12:18.

England we are directly addressing the problems of tight credit

:12:18.:12:21.

through the �70 billion funding for lending scheme. In the OBR's view

:12:21.:12:26.

today, this has reduced UK bank funding costs, lower interest rates

:12:26.:12:32.

in the real economy and will add to the level of real GDP. One area

:12:32.:12:35.

where the British economy has done much better than forecast is in

:12:35.:12:40.

creating jobs. Since early 2010, the private sector has created 1.2

:12:40.:12:47.

million new jobs, 600,000 more than was predicted. Youth unemployment

:12:47.:12:53.

has been falling. Instead of peaking at 8.7 %, the OBR now

:12:53.:12:57.

expect unemployment to peak at 8.3 %. This at a time when the

:12:57.:13:03.

unemployment rate in Spain is 26 %, in France it is almost 11 % and

:13:03.:13:08.

across the whole eurozone it is almost 12 %. Employment, already at

:13:08.:13:13.

a record high, is set to go on rising each year of the forecast.

:13:13.:13:17.

Everyone jobless in the public sector, two new jobs are expected

:13:17.:13:21.

to be created in the private sector. Britain now has a greater

:13:22.:13:26.

proportion of its people in work than either the eurozone or the

:13:26.:13:33.

United States of America. More jobs means that the impact of the weaker

:13:33.:13:36.

than forecast GDP on the public finances has been less than some

:13:36.:13:41.

might have expected. They have been three developments that have each

:13:41.:13:48.

had a significant one-off impact on the public finances. In the report

:13:48.:13:51.

today we publish clearly and transparently the impact of all

:13:51.:13:55.

three. First, there is the transfer of the Royal Mail pension fund to

:13:55.:13:59.

the public sector as part of its privatisation. This produces a one-

:13:59.:14:03.

off reduction in the deficit of �28 billion this year, but it adds to

:14:03.:14:08.

the deficit in the years after. Second, the previous government had

:14:08.:14:11.

classified Bradford & Bingley and Northern Rock Asset Management as

:14:11.:14:16.

off-balance sheet. Today it is brought on balance sheet, in line

:14:16.:14:21.

with the judgment of the Office for National Statistics. This adds

:14:21.:14:25.

around �70 billion to our national debt and reminds us of the price

:14:25.:14:30.

the country is still paying for the failures of the past. Third, the

:14:30.:14:38.

government has decided, with the agreement of the Bank of England,

:14:38.:14:42.

to transfer excess cash held in the asset purchase facility to the

:14:42.:14:47.

Exchequer. This is sensible cash management. It is in line with the

:14:47.:14:51.

approach of the Bank of Japan and the US Federal Reserve. I welcome

:14:51.:14:56.

the OBR's verdict that this is, in their words, more transparent than

:14:56.:14:59.

the previous approach. I want to make sure its impact on the figures

:14:59.:15:03.

is also completely transparent, so we have today publish the forecast

:15:03.:15:09.

for the public finances with and without the impact of the HPF

:15:09.:15:15.

decision. When we came to office, the deficit stood at 11.2 % - the

:15:15.:15:19.

highest in our peacetime history. It was forecast to be the largest

:15:19.:15:22.

of any major economy in the world. In the last two years the deficit

:15:22.:15:28.

has fallen by a quarter. Today's figures show that with or without

:15:28.:15:33.

the coupons, the deficit is forecast to fall this year as well.

:15:33.:15:39.

And cash borrowing is forecast to fall, too. Last year the deficit

:15:39.:15:45.

was 7.9 %. This year, with the coupons, it is forecast to be 6.9 %,

:15:45.:15:49.

but that excludes the impact of the Royal Mail pension assets. It is

:15:49.:15:53.

falling and will continue to fall each and every year to 6.1 % next

:15:53.:16:00.

year, 5.2 % the year after, for 0.2 % in 2015 to 2016, then 2.6 %

:16:00.:16:10.
:16:10.:16:11.

before reaching 1.6 % in 2017-2018. In 2009-2010, the country was

:16:11.:16:16.

borrowing �159 billion. This year we are borrowing �108 billion. That

:16:16.:16:23.

is forecast to fall to 99 billion next year, 88 billion a year after

:16:23.:16:29.

then 73 billion in 2015 to 2016 and 49,000,000,030 1 billion in the two

:16:29.:16:32.

years after that. These are the central forecasts published by the

:16:32.:16:38.

Op Art, with the asset purchase facility cash transfer included.

:16:38.:16:45.

When the transfer is excluded. The deficit also false. From 7.9 % last

:16:45.:16:50.

year to 7.7 % this year, then 6.9 % next year, and also in every single

:16:50.:17:00.
:17:00.:17:02.

year after that. Cash borrowing There are those who have been

:17:02.:17:07.

saying that the deficit was going up this year. Indeed, I think I

:17:07.:17:11.

heard it in Prime Minister's questions, but anyway you present

:17:11.:17:15.

the figures, this is not what the forecasts show today from the OBR.

:17:15.:17:20.

They say that the deficit is coming down. Coming down this year and

:17:20.:17:25.

every year of this Parliament. Yes, the deficit is still far too high

:17:25.:17:29.

for comfort. We cannot relax our efforts to make our economy safe.

:17:29.:17:36.

But Britain is heading in the right direction. The road is hard, but we

:17:36.:17:42.

are making progress. Mr Speaker, unlike the previous Government's

:17:42.:17:46.

golden rule, the regime means that the Chancellor is no longer judge

:17:46.:17:50.

and jury of their own fiscal rules and the OBR have assessed thus

:17:50.:17:55.

against those rules. First, the fiscal mandate. This is the

:17:55.:17:59.

commitment that we will balance the adjusted current budget over the

:17:59.:18:03.

coming five years. I can tell the House that the OBR have assessed we

:18:03.:18:07.

are in their words, on course, to meet our fiscal mandate. In other

:18:07.:18:15.

words, we have a better-than-50% chance of -- a better than 50%

:18:15.:18:22.

chance of relimb nating our -- eliminating our deficit. This is

:18:22.:18:26.

true with or without the transfer of coupons, so we'll meet the

:18:26.:18:30.

mandate, but the OBR assessed in their central forecast that we do

:18:31.:18:34.

not meet the supplementary objective that aims to have debt

:18:34.:18:39.

falling by 2015/16. The point at which debt starts to fall has been

:18:39.:18:46.

delayed by one year. The OBR's central forecast is that net debt

:18:46.:18:56.
:18:56.:18:59.

will be 7 7.4% this year and 79% in 2014/15 and lower before falling to

:18:59.:19:07.

79.2% in 2016/17. And 77.3% in 2017/18. In short, the tougher

:19:07.:19:11.

economic conditions mean that while our deficit is forecast to go on

:19:11.:19:14.

falling, instead of taking three years to get our debt falling, it's

:19:14.:19:21.

going to take four. Mr Speaker, confronted with this news, some say

:19:21.:19:26.

we should abandon our deficit plan and try to borrow more. They think

:19:26.:19:32.

by borrowing more we can borrow less. That would risk higher

:19:32.:19:35.

interest rates, more debt interest payments and a complete loss of

:19:35.:19:39.

Britain's fiscal credibility. We are not taking that road to ruin.

:19:39.:19:43.

Now, then there are those who say that despite all that has happened

:19:43.:19:49.

in the world this year, we should cut even more now to hit the debt

:19:49.:19:53.

target. That would require �17 billion of extra cuts a year, and

:19:53.:19:58.

let me explain why I've decided not to take this course. We have always

:19:58.:20:03.

argued we should let the automatic stabilisers work and we have not

:20:03.:20:07.

argued we should chase down a cyclical or temporary deterioration

:20:07.:20:10.

in the economy, particularly one which our own independent body says

:20:11.:20:15.

is largely driven by problems abroad. That's also the judgment of

:20:15.:20:20.

the IMF, the OECD and the Governor of the Bank of England. Our mim is

:20:20.:20:23.

to reduce the -- aim is to reduce the structural deficit. The

:20:24.:20:28.

permanent hole that won't be repaired as the economy recovers

:20:28.:20:32.

and we are. We have cut the structural deficit by 3% in the

:20:32.:20:37.

last two years, more than any other G7 country and it is set to go on

:20:37.:20:43.

being cut at a similar rate in the years ahead. This lower deficit is

:20:43.:20:46.

delivered by our public spending plans and we are going to stick

:20:46.:20:51.

with those plans. Overall, we are not going faster or slower with

:20:51.:20:55.

those plans, but the measures I'll announce in this Autumn Statement

:20:55.:20:59.

are fiscally neutral across this Parliament. There is no net rise in

:21:00.:21:05.

taxes today. Any taxes increased are offset by taxes cut. Mr Speaker,

:21:05.:21:09.

in last year's Autumn Statement we committed the Government to

:21:09.:21:12.

maintain the same pace of consolidation for two further years

:21:12.:21:18.

beyond the end of the current spending review, in 2015 and

:21:18.:21:23.

2016/17. In this year's Autumn Statement we extend the

:21:23.:21:30.

consolidation for one further year into 2017/18. The OBR projects that

:21:30.:21:35.

as a result the share of national income spent by the State will fall

:21:35.:21:45.
:21:45.:21:45.

from almost 48% of GDP in 2009/2010 to 39.5% by 2017/18. The document

:21:45.:21:49.

shows total managed expenditure will continue to fall and will now

:21:49.:21:54.

be 4.6 billion lower in 2017/18 than if it had been held flat in

:21:54.:22:00.

real terms. No decision to cut spending is ever easy, but those

:22:00.:22:03.

who object must explain whether instead they would have higher

:22:03.:22:11.

taxes or higher borrowing or both. I also provide further details of

:22:11.:22:15.

the done colation plans for -- consolidation plans for the last

:22:15.:22:20.

year of this Parliament. I said two years ago that the correct balance

:22:20.:22:25.

between spending and tax should be 80/20. I can confirm that by the

:22:25.:22:30.

end of 2015, the decisions we announce today mean we will almost

:22:30.:22:35.

exactly deliver on that mix. Total spending will fall in that final

:22:35.:22:40.

year of this Parliament at the same rate as through the current

:22:40.:22:44.

spending review. I can confirm today that the overall envelope for

:22:44.:22:51.

total mefrpgd expenditure will be set at -- managed expenditure will

:22:51.:23:01.

be set at �749 billion. The detail of departmental spending plans for

:23:01.:23:04.

2015/16 will be set at a spending review, which will be announced

:23:04.:23:09.

during the first half of next year. What we do today is to take steps

:23:09.:23:13.

now to help deliver the plans and to go on reducing the deficit in a

:23:13.:23:18.

way that is fair. This Government has shown that it is possible to

:23:18.:23:21.

restore sanity to the public finances while improving the

:23:21.:23:29.

quality of our public services. Crime has fallen. Hospital waiting

:23:29.:23:35.

lists are down. School standards are up. And this is with a Civil

:23:35.:23:38.

Service that is today smaller than at any time since the Second World

:23:38.:23:45.

War. We are today publishing the reports we commissioned from the

:23:45.:23:50.

Pay Review Body on market-facing pay. We commit to implement the

:23:50.:23:55.

reports. This means continuing with national pay arrangements in the

:23:55.:23:58.

NHS and Prison Service and we will not make changes to the Civil

:23:59.:24:04.

Service arrangements either. But the school teachers' review body

:24:04.:24:09.

does recommend much greater freedom to individual schools to set pay in

:24:09.:24:14.

line with performance. My right honourable friend, the Education

:24:14.:24:20.

Secretary, will set out how this will be implemented. Through the

:24:20.:24:25.

efforts of individual departments and with the support from the

:24:25.:24:28.

Minister in the Cabinet Office we have generated savings in Whitehall,

:24:28.:24:33.

but we believe there is room to do more. If all departments reduce

:24:33.:24:38.

spending on administration in line with the best-performing

:24:38.:24:41.

departments like education, then another �1 billion could be saved.

:24:41.:24:47.

If all departments made greater provision of digital services,

:24:47.:24:50.

rationalised their property estates as some have done, then a further

:24:50.:24:56.

�1 billion could be saved. Today, we are reducing departmental

:24:56.:25:00.

resource budgets by 1% next year and 2% the year after. We'll

:25:00.:25:04.

continue to seek efficiency savings in the NHS, in our schools, but

:25:04.:25:10.

that money will be recycled to protect spending in these priority

:25:10.:25:13.

areas. Local government budgets are already being held down next year

:25:13.:25:18.

to deliver the freeze in council tax, so we will not seek the

:25:18.:25:21.

further 1% saving next year, but we will look for the 2% saving the

:25:22.:25:28.

year after. While the MoD is included in the measures, they'll

:25:28.:25:32.

be given flexibility on their multi-year budget to ensure this

:25:32.:25:36.

will not lead to reductions in military man power or the core

:25:36.:25:39.

defence equipment programme over the Parliament. A mark of our

:25:39.:25:43.

values as a society, is our commitment to the world's poorest.

:25:43.:25:48.

We made a promise as a country to spend 0.7% of our gross national

:25:48.:25:52.

income on international development and I'm proud to be part of the

:25:52.:25:55.

first British government in history which will honour that commitment

:25:55.:26:02.

and honour it as promised next year. We will not, however, spend more

:26:02.:26:07.

than 0.7%, so as we did last year, we'll adjust the budget to reflect

:26:07.:26:12.

the latest economic forecasts. In the medium-term, these savings

:26:12.:26:15.

across Whitehall will help departments maintain the right

:26:15.:26:20.

route for the years that follow Spending Review and help us to pay

:26:20.:26:25.

off the deficit in the future. In the short-term, I'm switching the

:26:25.:26:27.

current savings into capital, all the money saved in the first two

:26:28.:26:33.

years will be reinvested as part of a �5 billion capital investment in

:26:33.:26:39.

the infrastructure of our country. So despite Mr Speaker, the fiscal

:26:39.:26:42.

challenges we face, public investment as a share of GDP will

:26:42.:26:46.

be higher on average in that Parliament than it was under the

:26:46.:26:53.

last Labour government. It is exactly what a government equipping

:26:53.:26:57.

Britain to compete in the modern global economy should be doing. We

:26:57.:27:02.

are committing an extra �1 billion to roads, including four major new

:27:02.:27:07.

schemes to upgrade key sections of the A1, bringing the route from

:27:07.:27:11.

London to Newcastle up to motorway standard. Linking the A5 with the

:27:11.:27:16.

M1, and the A30 in Cornwall and upgrading the M25, which will

:27:16.:27:20.

support the biggest port development in Europe and I pay

:27:20.:27:25.

tribute to my friend for Thurrock for her campaigning. We have

:27:25.:27:29.

already set out plans this autumn for a huge investment in rail and

:27:29.:27:32.

my right honourable friend the Transport Secretary will set out in

:27:32.:27:37.

the new year plans to take high speed II to the north-west and West

:27:37.:27:42.

Yorkshire. I can today confirm a �1 billion loan and a guarantee to

:27:42.:27:44.

extend the Northern Line to Battersea Power Station and support

:27:44.:27:48.

a new development on a similar scale to the Olympic Park. We are

:27:48.:27:54.

confirming funding and reforms to assist the construction of up to

:27:54.:27:58.

120,000 new homes and delivering on flood defence schemes in more

:27:58.:28:01.

cities. On top of broadband expansion for our countryside and

:28:01.:28:10.

larger cities, we are funding ult fast broadband in 12 smallers

:28:10.:28:19.

cities -- ultra fast broadband in 12 smaller cities. In addition to a

:28:19.:28:24.

third of one billion for British science, we are today announcing

:28:24.:28:29.

�600 million more for the UK's scientific research infrastructure

:28:29.:28:34.

and since improving our education system is the best investment in a

:28:34.:28:38.

competitive economy, I'm committing �270 million to fund improvements

:28:38.:28:43.

in further education colleges and �1 million to expand good schools

:28:43.:28:53.
:28:53.:28:55.

and build 100 new free schools and academies. -- �1 billion. Scotland,

:28:55.:28:58.

Wales and Northern Ireland will get their share of further capital

:28:58.:29:02.

spending put at their disposal of their devolved administrations. On

:29:02.:29:06.

top of that �5 billion of new capital spending in infrastructure

:29:06.:29:10.

and support for business, we are ready to provide guarantees for up

:29:10.:29:14.

to �40 billion more. Today, I can announce that projects worth �10

:29:15.:29:18.

billion have already prequalified. We are offering �10 billion worth

:29:18.:29:22.

of guarantees for housing too. Our country's pension funds will launch

:29:23.:29:24.

their any independent infrastructure investment platforms

:29:24.:29:29.

next year as well. We have today published full details of the

:29:29.:29:37.

replacement for the discredited PFI since we can all see now that the

:29:37.:29:42.

public sector was sharing the risk and we'll ensure we also share in

:29:42.:29:45.

the reward. I commend my honourable friend for Hereford for his work in

:29:45.:29:50.

this area. Taken together, this is a revolution in the sources of

:29:50.:29:53.

finance for upgrading Britain's infrastructure and equipping

:29:53.:29:57.

Britain to win in the global race. Annual average infrastructure

:29:57.:30:01.

investment, which was �29 billion under the last Labour government,

:30:01.:30:08.

is now �33 billion. Savings from Whitehall are not enough by

:30:08.:30:15.

themselves to talkle our debt. We need toen -- to tackle our debt. We

:30:15.:30:18.

need to find other ways. Those with the most should contribute the most

:30:18.:30:22.

and they will, but fairness is also about being fair to the person who

:30:22.:30:25.

leaves home every morning to go out to work and sees their neighbour

:30:25.:30:35.
:30:35.:30:42.

still asleep living a life on Let me start with tax. The vast

:30:42.:30:46.

majority of people, which will otherwise, pay their taxes and make

:30:46.:30:50.

their contribution. But there are still too many who illegally evade

:30:50.:30:52.

their taxes or use aggressive tax avoidance in order not to pay their

:30:53.:30:56.

fair share. This government has taken more action against these

:30:56.:31:02.

people than any before it. Prosecutions for tax evasion are up

:31:02.:31:07.

80 %. We will collect �7 billion more a year in tax that is due that

:31:07.:31:11.

the last government. We are increasing by around 2500 the

:31:11.:31:15.

number of tax inspectors going after the raiders and of August.

:31:15.:31:19.

Next year, we will introduce the first ever General ante abuse role,

:31:19.:31:23.

something that never happened in 13 years before we came to office.

:31:24.:31:27.

Next year, for the first time in our history, money will be flowing

:31:27.:31:31.

from bank accounts in Switzerland to Britain instead of the other way

:31:31.:31:36.

round. Because of the treaty we've signed, we expect to receive �5

:31:36.:31:40.

billion over the next six years from the undisclosed Swiss bank

:31:41.:31:46.

accounts of UK residents. It is the largest tax evasion settlement in

:31:46.:31:52.

British history. We are taking further steps today. Hundreds of

:31:52.:31:55.

millions of pounds of tax loopholes are being closed with immediate

:31:55.:32:00.

effect. We are investigating a abusive use of partnerships. HMRC

:32:00.:32:05.

will not have its budget cut over the next two years, and like other

:32:05.:32:10.

departments. Instead, we will spend �77 million more on fighting tax

:32:10.:32:14.

avoidance, and not just for wealthy individuals. We want the most

:32:14.:32:17.

competitive corporate tax system of any major economy in the world, but

:32:17.:32:22.

we expect those corporate taxes to be paid. So today we are confirming

:32:22.:32:25.

we will put more resources into ensuring multinational companies

:32:25.:32:29.

pay their proper share of taxes. We are leading the international

:32:29.:32:34.

efforts to prevent artificial transfers of profits to tax havens

:32:34.:32:38.

with Germany at now France. We have asked the OECD to take this work

:32:38.:32:42.

forward. We all make it an important priority of our G8

:32:42.:32:47.

presidency next year. In total, we expect the action we announced

:32:47.:32:50.

today will increase the amount of money collected from tax evasion

:32:50.:32:54.

and avoidance by a further �2 billion a year. Fair and necessary

:32:54.:32:58.

as this is, it is not enough by itself to close the deficit. We

:32:58.:33:03.

need to ask more from... Punitive tax rates do nothing to raise money

:33:03.:33:08.

and simply discourage enterprise and investment in Britain. Other

:33:08.:33:11.

countries on our doorstep of trying that approach and are paying the

:33:11.:33:15.

price. We are not going to make that mistake. HMRC data reveals

:33:15.:33:19.

that in the first year of the 50 % tax rate, tax revenues from the

:33:20.:33:25.

rich fell by �7 billion. The number of people declaring incomes of over

:33:25.:33:29.

�1 million fell by half. A tax raid on the rich that raises almost no

:33:29.:33:34.

money is a tax Con. We are going to have a top rate of tax that

:33:34.:33:38.

supports enterprise and we are going to raise more money from the

:33:38.:33:44.

bridge. Here is a simple fact. The richest will pay a greater share of

:33:44.:33:48.

income tax revenues in every single year of his Coalition government

:33:48.:33:54.

than in any one of the 13 years of the last Labour government. But we

:33:54.:34:00.

need to make sure the deficit reduction remains fair. We need to

:34:00.:34:10.

raise more. We've already... Raised stamp duty on multi-million-pound

:34:10.:34:13.

homes and next week publish the legislation to stop the richest

:34:13.:34:18.

avoiding stamp duty. But we won't introduce a new tax on property.

:34:18.:34:22.

This would require a revaluation of hundreds of thousands of homes. In

:34:22.:34:27.

my view it would be intrusive, expensive to Levy, raised a little

:34:27.:34:30.

and the temptation for future Chancellors to bring ever more

:34:30.:34:35.

homes into its net would be irresistible, so we are not having

:34:35.:34:42.

a new homes tax. We have already reduced the amount of tax relief we

:34:42.:34:49.

give to the very largest pension pots. From 2014-15, I will further

:34:49.:34:55.

reduce the lifetime allowance from �1.5 million to �1.25 million, and

:34:55.:35:00.

reduce the annual allowance from �50,000 to �40,000. This will

:35:00.:35:03.

reduce the cost of tax relief to the public purse by an extra

:35:03.:35:09.

billion pounds a year by 2016-17. 98 % of people currently

:35:09.:35:13.

approaching retirement have a pension pot worth less than 1.25

:35:13.:35:19.

million. Indeed, the medium pot for such people is just �55,000. 99 %

:35:19.:35:22.

of pension savers make annual contributions to their pensions of

:35:22.:35:28.

less than �40,000. The average contribution to a pension is just

:35:28.:35:32.

�6,000 a year. I know these tax measures will not be welcomed by

:35:32.:35:38.

all. Ways to reduce the deficit never are. But we must demonstrate

:35:38.:35:42.

that we are all in this together and when you look for savings, I

:35:42.:35:52.
:35:52.:35:52.

think it's fair to look at the tax relief we give to the top 1%. I

:35:52.:35:57.

want to help the great majority of savers. That is why we are

:35:57.:36:02.

introducing a generous, new, single t a pension, so that people know it

:36:02.:36:08.

always pays to save. That is why I will upgrade next April the up for

:36:08.:36:13.

all eyes are limited to �11,520. We will consult on allowing investment

:36:13.:36:21.

in SME equity markets, to be held directly and stocks and shared --

:36:21.:36:28.

shares icesave macros. I've also encouraged the -- listened to

:36:28.:36:31.

pensioners about draw down limits. The government will raise the cat

:36:31.:36:37.

brought down limit from 100 % to 120 %, giving pensioners that these

:36:37.:36:41.

arrangements the option of increasing their incomes. It is

:36:41.:36:45.

also fair to look at the way we up rate benefits and some tax

:36:46.:36:49.

threshold. The basic state pension has this year gone up by the

:36:50.:36:54.

largest cash amount in its history. Next year, thanks to our triple

:36:54.:36:59.

lock, I confirm it will rise by 2.5 %, higher than either earnings or

:36:59.:37:04.

inflation. That takes the level of the basic state pension to �110.15

:37:04.:37:08.

a week. When it comes to working age welfare, we've already made

:37:08.:37:13.

substantial reforms. �18 billion a year has been cut from the welfare

:37:13.:37:18.

bill. Benefits of being capped for the first time. So families out of

:37:18.:37:21.

work will not get more than the average family gets for being in

:37:21.:37:28.

work. We have increased efforts to fight welfare fraud. Today the

:37:28.:37:32.

announced further measures and cheques to save over �1 billion in

:37:32.:37:36.

the next four years, by reducing fraud, error and debt in the tax

:37:36.:37:42.

credit system. Next year, my right honourable friend the work and

:37:42.:37:44.

pensions Secretary will introduce the new Universal credit, so that

:37:44.:37:49.

it always pays to work. And today we set the key parameters, such as

:37:49.:37:53.

the levels of earnings disregards. But we have to acknowledge that

:37:54.:37:56.

over the last five years, those on out-of-work benefits have seen

:37:56.:38:01.

their incomes rise twice as fast as those in work. With pay restraint

:38:01.:38:04.

in businesses and government, average earnings have risen by

:38:04.:38:09.

around 10 % since 2007. Out-of-work benefits have gone up by around 20

:38:09.:38:14.

%. That is not fair to working people who pay the taxes that fund

:38:14.:38:19.

them. Those working in the public services who have seen their basic

:38:19.:38:24.

pay frozen will now see it rise by an average of 1%. A similar

:38:24.:38:28.

approach of a 1% rise should apply to those in receipt of benefits.

:38:28.:38:31.

That is fair and will ensure that we have a welfare system that

:38:31.:38:37.

Britain can afford. We will support the vulnerable, so carer's benefit

:38:37.:38:40.

and disability benefits, including disability element of tax credits,

:38:40.:38:45.

will be increased in line with inflation. We are extending support

:38:45.:38:48.

for mortgage interest for two more years. But most working-age

:38:48.:38:52.

benefits, including jobseeker's Allowance, employment and support

:38:52.:38:56.

allowance and income support will be operated by 1% for the next

:38:56.:39:02.

three years. We were also up rate elements of the child tax credit

:39:02.:39:06.

and the working tax credits by 1% for the next three years. Although

:39:06.:39:11.

previously planned freezers will go ahead. Local housing allowance

:39:11.:39:15.

rates that are essential component of housing benefit will be rated in

:39:15.:39:19.

line with the existing policy next April. Then we will cap increases

:39:19.:39:24.

of 1% in the two years after that. For this measure, 30 % of the

:39:24.:39:27.

savings will be used to exempt from the new cap. Those areas that the

:39:28.:39:31.

highest rent increases. The earnings disregard for Universal

:39:31.:39:38.

credit will also be up rated by 1% for two years from 20th April 14.

:39:38.:39:46.

Child benefit is currently frozen. It, too, will rise by 1% but to --

:39:46.:39:51.

for two years from April, 2014. Doing this means people get more

:39:51.:39:57.

cash for less than the rate of inflation. Taken together, we will

:39:57.:40:01.

save �3.7 billion in 2015-16, and deliver a permanent savings each

:40:01.:40:08.

and every year from our country's welfare bill. To bring all these

:40:08.:40:11.

decisions and many benefits for many years together, we will

:40:11.:40:16.

introduce into Parliament primary legislation, the welfare up rating

:40:16.:40:20.

Bill, and I hope it can then support from both sides of the

:40:20.:40:30.
:40:30.:40:32.

We will apply a similar approach to the upper rating of some of our tax

:40:32.:40:38.

thresholds, as we have to welfare. The higher rate threshold will be

:40:38.:40:46.

increased by 1% in the tax year's 2014-15, and 2015-16. So the income

:40:46.:40:54.

at which people start paying the 40 % rate will go up from �41,450, to

:40:54.:41:00.

afford �1,865, then to �42,285. I want to be completely clear with

:41:00.:41:05.

people. This is an increase, in fact, it's the first cash increase

:41:05.:41:08.

in the higher rate threshold in this Parliament, but it's not an

:41:08.:41:13.

increase in line with inflation. So it raises �1 billion of revenue by

:41:13.:41:18.

2015-16. Again, there are no easy ways to reduce the deficit. But

:41:18.:41:23.

from year to year, no one would pay a penny more in income tax. In the

:41:23.:41:26.

same way the capital gains tax annual exempt amount will be

:41:26.:41:32.

increased by 1% up at the same period, reaching �11,100. The

:41:32.:41:37.

inheritance tax nil band rate, which has been frozen since 2009 at

:41:37.:41:44.

�325,000, will be increased by 1% to �329,000. Taken with the welfare

:41:44.:41:47.

up rating decisions, this is a fairer approach to paying off

:41:47.:41:52.

Britain's debts. But dealing with those debts is only one part of

:41:52.:41:56.

making Britain fit to compete in the global race. Countries like

:41:56.:42:01.

ours are risk being outsmarted, outwork and out competed by new,

:42:01.:42:05.

emerging economies. We asked Michael Heseltine to report on how

:42:05.:42:09.

to make the government work better for business and enterprise. It's

:42:09.:42:13.

fair to say that his answer has captured the imagination of all

:42:13.:42:17.

political parties. We will respond formally in the spring. But here is

:42:17.:42:21.

what we will do now. First, government spending should be

:42:21.:42:24.

aligned with the priorities of the local business community. We will

:42:24.:42:29.

provide new money to support local enterprise partnerships. From April,

:42:29.:42:33.

2015, the government will place more of the funding that currently

:42:33.:42:37.

goes to local transport, housing, skills and getting people back to

:42:37.:42:42.

work into a single pot that can be bid for. Details will be set out in

:42:42.:42:46.

the Spending Review. Before then, we are putting more money into the

:42:46.:42:49.

Regional Growth Fund, which is helping businesses create half a

:42:49.:42:53.

million new jobs. Second, as Lord Heseltine also recommends, we are

:42:53.:42:57.

going to support industries and technologies where Britain has a

:42:57.:43:01.

clear advantage. With the Business Secretary's support, we will extend

:43:01.:43:04.

our global lead on aerospace and support the supply chains of

:43:05.:43:09.

Advanced Manufacturing. We are also taking big steps today to support

:43:09.:43:13.

British companies to export to new, emerging markets in Asia, Africa

:43:13.:43:18.

and the Americas. I am increasing the funding for UK t i by over 25 %

:43:18.:43:23.

a year, so that it can help small firms build the capacity of

:43:23.:43:26.

overseas British Chambers and maintain our country's position as

:43:26.:43:29.

the number one destination in Europe for foreign investment. We

:43:30.:43:35.

are launching a new �1.5 billion export finance facility to support

:43:35.:43:39.

the purchase of British exports. Third, we are addressing the credit

:43:39.:43:44.

problems for companies. We are creating a new business bank. Today

:43:44.:43:48.

we confirmed we are providing it with �1 billion of extra capital,

:43:48.:43:51.

which will leave her in private lending to help small and medium-

:43:51.:43:56.

sized firms and bring together existing schemes. Fourth, we are

:43:56.:44:02.

going to cut business taxes still further. The temporary doubling of

:44:02.:44:06.

the small business rate relief scheme helps over 500,000 small

:44:06.:44:10.

firms, or with a 350,000 firms pay no rates at all. The last

:44:10.:44:15.

government were going to ended in 20th September 11. We've already

:44:15.:44:21.

extended to next April. Today I extended to buy a further year to

:44:21.:44:26.

April, 2014. We also confirmed today the tax relief for our

:44:26.:44:29.

employer -- employee shareholders scheme. The Energy Bill provides

:44:29.:44:32.

certainty and support for billions of pounds of investment in

:44:32.:44:35.

renewable energy. Today we publish our gas strategy, to ensure we make

:44:35.:44:41.

the best use of lower cost gas power, including new sources of gas

:44:41.:44:44.

and that the land. We are consulting a new tax incentives for

:44:44.:44:47.

shale gas and announcing the creation of a single office so that

:44:47.:44:51.

regulation is safe but simple. We don't want British families and

:44:51.:44:55.

businesses to be left behind as gas prices tumble on the other side of

:44:55.:45:02.

the Atlantic. We are going to help our construction industry, too. The

:45:02.:45:06.

last government abolished empty property relief. As excellent work

:45:06.:45:12.

done by my honourable friends show, this has blighted development in

:45:12.:45:17.

our towns and cities. The proposal from my colleagues that we create a

:45:17.:45:20.

long grace period before new be completed buildings have to pay him

:45:20.:45:26.

to property rates is a sensible one. We will introduce it next October.

:45:26.:45:30.

The previous government also plans to increase the small companies tax

:45:30.:45:36.

rate to 22 %. We have cut it to 20 %. But I'd like to help small and

:45:36.:45:41.

medium-sized firms more. I want to thank my honourable friends for

:45:41.:45:46.

Burnley and Pendle for their thoughts in this area. Starting on

:45:46.:45:49.

1st January, and for the next two years, I am therefore going to

:45:49.:45:54.

increase by tenfold the annual investment allowance in plant and

:45:54.:46:02.

machinery. Instead of �25,000 worth of investment being eligible for

:46:02.:46:08.

100 % relief, �250,000 of investment will now qualify. This

:46:08.:46:12.

capital allowance will cover the total annual investment undertaken

:46:12.:46:19.

by 99 % of all the business in Britain. It is a huge boost to all

:46:19.:46:23.

those who run a business, who aspire to grow, expand and create

:46:23.:46:32.

I also want Britain to have the most competitive business tax

:46:32.:46:38.

regime of any major economy in the world. I have already cut the main

:46:38.:46:44.

rate of corporation tax from 28% to 24% and it's set to fall further to

:46:44.:46:47.

22%. This has helped British companies and frankly left other

:46:47.:46:51.

countries scrambling to keep up. They will have to try harder for I

:46:51.:46:55.

am today cutting the main rate of corporation tax again by a further

:46:55.:47:04.

1%. In America, the rate is 40%. In France, it is 33%. In Germany, it

:47:04.:47:08.

is 29%. From April 2014, the corporation tax rate in Britain

:47:08.:47:14.

will stand at 21%. This is the lowest rate of any major western

:47:14.:47:18.

economy. It is an advert for our country that says, "Come here,

:47:18.:47:25.

invest here, create jobs here. Britain is open for business." Mr

:47:25.:47:29.

Speaker, we will not pass the benefit of this reduced rate on to

:47:29.:47:33.

banks and to ensure we meet our revenue commitments, the bank levy

:47:34.:47:40.

rate will be increased to 0.130% next year. Making banks contribute

:47:40.:47:45.

more is part of our major reforms to the banking system. We also have

:47:45.:47:50.

to be on the side of those who want to work hard and get on. I know how

:47:50.:47:54.

difficult many families have found the cost of living. In dealing with

:47:54.:47:58.

the deficit, we have had to save money, but whenever we have been

:47:58.:48:04.

able to help, we have. We have helped councils freeze council tax

:48:04.:48:07.

for two years running. And we are helping them to freeze it again

:48:07.:48:13.

next year. We have put a cap on rail fare rises for the next two

:48:13.:48:17.

years, so commuters are not punished for travelling to work and

:48:17.:48:21.

we are forcing energy companies to move families on to the lowest

:48:21.:48:25.

tariffs for bills. And we have helped motorists with the cost of

:48:25.:48:29.

petrol. We have cancelled the last Government's escalator and I'm

:48:29.:48:34.

moving inflation-only rises to September. Fuel is 10 pence per

:48:34.:48:37.

litre cheaper than it would have been if we had stuck to Labour's

:48:37.:48:45.

tax plans. I want to keep it that way. As I note to my colleagues,

:48:46.:48:49.

like my honourable friend to Harlow. There is a rise planned for this

:48:49.:48:55.

January. Now, some have suggested that we delay that three pence rise

:48:55.:49:01.

until April. I disagree. I suggest we can is tell altogether. There

:49:02.:49:05.

will be no three pence fuel tax rise this January. That is real

:49:05.:49:08.

help, with the cost of living for families and they fill up their

:49:08.:49:18.
:49:18.:49:23.

cars across the country. And it will help everyone. We will have

:49:23.:49:28.

had no increases for two-and-a-half years. In fact, they've been cut.

:49:28.:49:33.

We have helped working people by increasing the they can earn before

:49:33.:49:38.

paying tax. When this Government came to office the personal tax

:49:38.:49:46.

allowance was �6 account 274. It will rise to �9,205. 24 million

:49:46.:49:50.

taxpayers have seen their income tax cut. Two million of the lowest-

:49:50.:49:54.

paid have been taken out of tax altogether. And because of the

:49:54.:50:00.

difficult decisions we have taken today, we can go even further. From

:50:00.:50:05.

next April the personal allowance will rise by �235. That means a

:50:05.:50:11.

total increase next year of �1,335. The highest cash increase ever.

:50:11.:50:21.

People will be able to earn �9,440 before paying any income tax at all.

:50:21.:50:26.

This is a direct boost to the incomes of people working hard to

:50:26.:50:32.

provide for their families. It's �47 extra in cash next year. In

:50:32.:50:36.

total �267 cash increase next year. People working full-time on the

:50:36.:50:42.

minute numb wage will have seen their bill cut in half -- minute

:50:42.:50:52.
:50:52.:50:53.

numb wage will have seen their -- minimum wage will have seen their

:50:53.:51:01.

tax rate cut in half. In real terms a typical higher-rate taxpayer will

:51:01.:51:05.

be better off next year and no worse off in total by the year

:51:05.:51:10.

after. Mr Speaker, today, we have helped working people. But I do not

:51:10.:51:15.

want to distract from the tough, economic situation we face in the

:51:15.:51:19.

world. The public know there are no miracle cures, just the hard work

:51:19.:51:23.

of dealing with our deficit and ensuring Britain wins the global

:51:23.:51:29.

race. That work is under way. The deficit is down. Borrowing is down.

:51:29.:51:34.

Jobs are being created. It is a hard road, but we are making

:51:34.:51:37.

progress. And everything we do, we are helping those who want to work

:51:37.:51:47.
:51:47.:51:50.

hard and get on. Thank you. Chancellor sits down. We'll hear

:51:51.:51:58.

now from the Shadow Chancellor, Ed Balls. We can see and people can

:51:58.:52:01.

feel in the country, the true scale of this Government's economic

:52:01.:52:10.

failure. Our economy this year is contracting. The Chancellor has

:52:10.:52:13.

confirmed Government borrowing is revised up this year, next year and

:52:13.:52:21.

every year. The national deficit is not rising - is rising, it's not

:52:21.:52:31.
:52:31.:52:32.

falling. I'll say it again, our economy is contracting this year.

:52:32.:52:35.

Government borrowing and the deficit is revised up this year,

:52:35.:52:40.

next year and every year and the national debt is rising. It is not

:52:40.:52:47.

falling. It is people already struggling to make ends meet,

:52:47.:52:51.

middle and lower-income families and pensioners who are paying the

:52:51.:52:58.

price, while millionaires get a tax cut, a �3 billion welfare hand out

:52:58.:53:01.

to the people who need it -- handout to the people who need it

:53:01.:53:05.

least. Let me spell out the full facts to the House. They should

:53:06.:53:15.
:53:16.:53:17.

listen. They might learn something, Mr Speaker! In June 2010 the Office

:53:17.:53:23.

for Budget Responsibility forecast our economy to grow by 2.8% this

:53:23.:53:27.

year. In March of this year, they said there would still be growth,

:53:27.:53:33.

but revised it down to just 0.8%. Today, we have learned the

:53:33.:53:37.

Chancellor has not even managed that. Growth has not only been

:53:37.:53:40.

downgraded yet again, but he's confirmed, following the double-dip

:53:40.:53:44.

recession, that our economy is now forecast to actually contract

:53:44.:53:51.

inside this year. That's by 0.1%. Let me remind the House what the

:53:51.:53:56.

Chancellor promised over two years ago in the June Budget. He said,

:53:56.:53:59.

"We have the provided the foundations for economic recovery

:53:59.:54:05.

in all parts of our nation." He said, "We have set the course for a

:54:05.:54:09.

balanced budget and falling national debt by the end of this

:54:09.:54:14.

Parliament." He said, "The richest paying the most, the most

:54:14.:54:19.

vulnerable protected." That was the promise, Mr Speaker. But far from

:54:19.:54:23.

securing our recovery, our economy has flat-lined since Spending

:54:23.:54:32.

Review in 2010. Over the last two years, the Chancellor was expecting

:54:32.:54:39.

4.6% growth. He's actually achieved 0.6% growth. Compared to 1.7 in

:54:39.:54:46.

France, to 3.6 in Germany and to 4.1% in America, falling behind in

:54:46.:54:53.

the global race, Mr Speaker! What we learn today is that growth has

:54:53.:54:56.

been downgraded this year, next year, the year after, the year

:54:56.:55:02.

after and the year after that too. The longest double-dip recession

:55:02.:55:06.

since the Second World War now followed by the slowest recovery in

:55:06.:55:14.

the last 100 years. The result of this stagnation, rising

:55:14.:55:18.

unemployment, long-term damage to our economy, falling behind now as

:55:18.:55:23.

other countries move ahead, is that the Chancellor's fiscal strategy

:55:23.:55:28.

has been completely derailed. The defining purpose of the Government,

:55:28.:55:32.

the cornerstone of the coalition, the one test they set themselves to

:55:32.:55:38.

balance the books and get the debt falling by 2015 is now in tatters.

:55:38.:55:45.

What we have learnt today is that borrowing has -- is that Government

:55:45.:55:51.

borrowing has been revised up this year, next year and the year after

:55:51.:55:57.

that. We now know that compared to the Chancellor's forecast two years

:55:57.:56:03.

ago borrowing is now forecast to be well above the �150 billion of

:56:03.:56:10.

extra borrowing that he was forecasting in March. And they

:56:10.:56:18.

should listen to this - the Chancellor has confirmed that the

:56:18.:56:24.

Prime Minister's pledge to balance the books in 2015 is not met in

:56:24.:56:34.

2015. It's not met in 1016 and it's not met in 2017 either. -- 2016 and

:56:34.:56:39.

it's not met in 2017 either. The fact is there's pour borrowing, Mr

:56:39.:56:43.

Speaker. We will look in detail when we get the figures, because it

:56:43.:56:49.

was very disappointing. The Chancellor failed to give us the

:56:49.:56:52.

cash figures adjusted for borrowing this year, next year and the year

:56:52.:56:57.

after. The unusual thing is that just a few weeks ago the

:56:57.:57:01.

independent forecasters were saying that borrowing would be �6 billion

:57:01.:57:05.

higher this year. We will examine the detail of those figures to see

:57:05.:57:09.

whether there has been any dodgy dealing. We will find out in the

:57:09.:57:18.

coming hours. I don't know. I don't know, because I've not seen the

:57:18.:57:21.

figures, but what I do know is there's more borrowing this year

:57:21.:57:26.

and next year and pour borrowing the year after and the result of

:57:26.:57:30.

that -- more borrowing the year after and the result is that the

:57:30.:57:34.

OBR now shows more borrowing and higher deficits means higher

:57:34.:57:41.

national debt, Mr Speaker. The national debt - the Prime Minister

:57:41.:57:45.

should listen to this. It might be rather shocking to find out. The

:57:45.:57:49.

national debt will be higher at the end of this Parliament than the

:57:49.:57:53.

level inherited. It's going to be higher at the end of this

:57:53.:57:57.

Parliament than forecasted in the plans he inherited and it's no

:57:57.:58:03.

longer falling as a per centage of GDP in 2015. It's rising in 2015

:58:03.:58:10.

and it's rising again in 2016 too, breaking the fiscal rule for

:58:10.:58:14.

falling debt upon which this Chancellor said his entire

:58:14.:58:24.

credibility depended. In last year's Budget, the Chancellor said,

:58:24.:58:31.

"Our deficit reduction plan is on course. We will not waiver." On

:58:31.:58:40.

course? Not waivering? He's not waivering, he's drowning. Now, the

:58:40.:58:49.

Chancellor is trying to claim his failure on growth and his failure

:58:49.:58:53.

on borrowing and the debt breaking his own fiscal rule, he's trying to

:58:53.:59:01.

claim it's not his fault. That no- one could have foreseen it. What

:59:02.:59:11.

nonsense, Mr Speaker. Because, he was warned that a tough medium-term

:59:11.:59:19.

plan to cut the deficit, tax rises, spending cuts, could only work if

:59:19.:59:22.

the Government first put in place a plan for jobs and growth. He was

:59:22.:59:27.

warned it was a huge gamble to go too far, too fast and rely on

:59:27.:59:30.

exports to bail him out. He was warned there was a hurricane

:59:30.:59:35.

brewing in the eurozone and that was not the time to rip out the

:59:35.:59:39.

fundations of the house built here in Britain. Once again, the

:59:39.:59:43.

Chancellor is trying to blame high oil prices and the eurozone crisis

:59:43.:59:48.

for negative growth this year. But it affected all countries, Mr

:59:48.:59:56.

Speaker. It affected all countries. Why, over the last -- THE SPEAKER:

:59:56.:00:02.

Members must calm themselves. Mr Biles, I thought you were normally

:00:02.:00:07.

a model of restraint and civility. Good heavens man, I don't know

:00:07.:00:15.

what's come over you. Calm yourself. Take a pill if necessary. Keep calm.

:00:15.:00:25.
:00:25.:00:27.

They don't like it, do they? They don't like it at all. Once again,

:00:27.:00:31.

the Chancellor is trying to blame high oil prices and the euros and

:00:31.:00:37.

crazes. Let me ask him why, over the past two years, has Britain

:00:37.:00:42.

grown by just one 10th of the growth rates of the G20 countries?

:00:43.:00:48.

And why is growth here in Britain even slower than in the eurozone?

:00:48.:00:53.

Mr Speaker, it is not the rest of the world's fault, it is his

:00:53.:00:58.

policies that have failed. He claims that rising VAT, alongside

:00:58.:01:02.

accelerated spending cuts, would boost confidence, secure Recovery

:01:02.:01:07.

and get the deficit down. But they depress confidence, choked off the

:01:07.:01:11.

recovery and borrowing has been revised up. Let me ask the

:01:12.:01:17.

Chancellor whatever happened to his Treasury view, his Theory of

:01:17.:01:22.

expansionary fiscal contraction? It it is the economy which has

:01:22.:01:26.

contracted and the borrowing and the debt that have expanded. That

:01:26.:01:31.

is the truth. I have to say, when the latest figures show that

:01:31.:01:35.

business confidence is falling, when the world economy is slowing,

:01:35.:01:41.

when the eurozone is in such chronic difficulty, that on current

:01:41.:01:46.

plans the fiscal straitjacket tightens further next year, it is

:01:46.:01:49.

simply reckless and deeply irresponsible of this Chancellor to

:01:49.:01:52.

plough on with a fiscal plan that we all know is failing under the

:01:53.:02:01.

terms he said. That is the trip. -- truth. What a wasted opportunity

:02:01.:02:06.

this was. Can he confirm that the OBR looked at the figures he

:02:06.:02:12.

announced today, their verdict has been revised down this year, next

:02:12.:02:18.

year and the year after. Let me congratulate the Chancellor for

:02:18.:02:25.

taking our advice and stopping January's fuel duty rise. Even

:02:25.:02:29.

though they all voted against it just a month ago, they all voted

:02:29.:02:39.
:02:39.:02:45.

against it... We welcome the U-turn on defence, in part, the U-turn on

:02:45.:02:50.

bargaining in the NHS, the U-turn on capital allowances. After

:02:50.:02:56.

churches, charities, pasties, skips, fuel and caravans, I think you

:02:56.:02:59.

turning is catching on. Whatever happened to the plans for the

:02:59.:03:06.

Business Investment Bank? As for the announcement on infrastructure

:03:06.:03:10.

spending, the extra money for schools is just a fraction of the

:03:10.:03:14.

cats and cancellations of the Building Schools for the Future.

:03:14.:03:19.

We've been here before. A year ago, the Prime Minister boasted of a

:03:19.:03:23.

national infrastructure plan. 12 months on, not a single road scheme

:03:24.:03:31.

has started. Why can't he see that he won't get the deficit down

:03:31.:03:36.

without a plan for jobs and growth? Why is he not using the 4G money to

:03:36.:03:41.

get homes built? Why is he not giving a national insurance holiday

:03:41.:03:45.

for small firms? Why not a temporary tax cut for families?

:03:45.:03:50.

Even though mayor was supporting that. Why is he not repeating the

:03:50.:03:53.

bank bonus tax? The Chancellor says he cannot do this because it would

:03:53.:03:58.

lead to higher borrowing. Even his political attacks are backfiring.

:03:58.:04:03.

This Chancellor's failed plan has given us more welfare spending,

:04:03.:04:10.

higher borrowing and more debt. That is the truth. He has failed on

:04:10.:04:16.

growth and the deficit. What is his answer? More of the same. Let me

:04:16.:04:20.

remind the Chancellor what he told the House in the Budget of 2011. He

:04:21.:04:25.

said, we have already asked the British people for what is needed

:04:25.:04:32.

and we do not need to ask for more. 18 months on, the Chancellor has

:04:32.:04:38.

come back for more. Whom does he think should pay? Not the 80,000

:04:38.:04:45.

millionaires, said to get over �100,000 each in April. I have to

:04:45.:04:48.

say to the Liberal Democrats, whatever happened to the mansion

:04:48.:04:52.

tax? Don't they realise, even with these changes in personal allowance,

:04:52.:04:54.

the other things they have supported me is that the average

:04:54.:05:00.

family, with children, or �20,000, is worse off, Mr Speaker. That is

:05:00.:05:05.

before the VAT rise. The Chancellor claims that his decision to

:05:05.:05:09.

restrict pension tax relief will make the system fair at the top.

:05:09.:05:14.

Can he confirm the �1 billion he is raising is less than the �1.6

:05:14.:05:18.

billion that he gave back in pension tax relief in June 2010?

:05:18.:05:24.

And it is just a fraction of the top rate tax cut. A �3 billion top

:05:24.:05:27.

rate tax cut, while at the same time the Chancellor is cutting tax

:05:27.:05:31.

credits for working families, cutting child benefit for middle

:05:31.:05:36.

income families, raising taxes on pensioners in April and cutting

:05:36.:05:42.

benefits for the unemployed. Mr Speaker, we do need to reform and

:05:42.:05:47.

modernise our welfare state and reduce its costs. Those who work,

:05:47.:05:53.

those who can work should work, no IFS or buts. We support a benefit

:05:53.:06:02.

cap, done fairly, with a higher level in London. Let us be clear,

:06:02.:06:06.

the Chancellor claimed he would cut the welfare bill. But higher

:06:06.:06:08.

inflation and long-term unemployment means that the

:06:08.:06:13.

benefits bill is forecast to be billions high up in this Parliament

:06:13.:06:20.

than the Chancellor boasted. Let me help him, Mr Speaker. Welfare to

:06:20.:06:24.

work. The clue is in the domain. You cannot have a successful

:06:24.:06:31.

welfare-to-work programme, without work. We know that the work

:06:31.:06:35.

programme has just totally failed, with only two people in 100

:06:35.:06:42.

actually going into permanent jobs. Mr Speaker, we should be requiring

:06:42.:06:44.

every young and long-term unemployed person to take a job and

:06:44.:06:51.

making sure that there is one there. Let me ask the Chancellor about an

:06:51.:06:56.

nervous, one of the thousands cut from the NHS in the last two years,

:06:56.:07:01.

now struggling to find a new job. - - a nurse. For that nurse, he has

:07:01.:07:05.

announced he is cutting hair jobseeker's allowance for the next

:07:05.:07:11.

three years. How can that be fair when he is cutting the top rate of

:07:11.:07:18.

tax? How can that be fair when someone earning �228,000 a year

:07:18.:07:24.

will get a top rate tax cut of �75 a week in April, which is more than

:07:24.:07:32.

the �71 that she gets to live on? I have to say, what we learned today,

:07:32.:07:38.

he is not just hitting those looking for work. The majority of

:07:38.:07:44.

people who lose from his cuts to tax credits are people in work.

:07:44.:07:49.

Millions of families, striving hard to do with the right thing. What

:07:49.:07:54.

kind of government believes that you can only make low-paid, working

:07:54.:07:59.

people work harder by cutting the tax credits, but you only make

:07:59.:08:02.

millionaires work harder by cutting their taxes? I'll tell you,

:08:02.:08:08.

certainly not a one-nation government. They must really

:08:09.:08:12.

believe that if you cut taxes at the top, the wealth will trickle

:08:12.:08:16.

down. Let me remind the House what the Chancellor said to the

:08:16.:08:20.

Conservative Party conference in October 2009. He said, we could not

:08:20.:08:27.

even think, we could not even think of abolishing the 50 pence rate on

:08:27.:08:32.

the rich while, at the same time, I am asking many of our public sector

:08:32.:08:36.

workers to accept a pay freeze to protect their jobs. The

:08:36.:08:40.

Chancellor's words. He said, I think we can all agree that would

:08:40.:08:45.

be grossly unfair. What has changed? What has changed? Nothing

:08:45.:08:53.

has changed. It was all Akon and the mask slipped. We now know that

:08:53.:08:56.

this Chancellor cannot say that we are all in this together without a

:08:56.:09:01.

smirk on his face. They wanted us to think there were compassionate

:09:02.:09:06.

Conservatives. Now we find out by are the same old Conservatives and

:09:06.:09:10.

the Liberal Democrats have gone along with all of it, yet again.

:09:10.:09:16.

May I say, Mr Speaker, what a pity. What a pity not to see the

:09:16.:09:19.

honourable member for Mid Bedfordshire in her place. Back

:09:19.:09:26.

from off the jungle. She may not have succeeded in talking to the

:09:26.:09:30.

nation on many things, but she did speak to the nation when she called

:09:30.:09:33.

the Prime Minister and the Chancellor two arrogant posh boys

:09:33.:09:41.

who do not know the price of milk. Mr Speaker, no wonder this Prime

:09:41.:09:49.

Minister keeps on losing his temper. His worst nightmare is coming true.

:09:49.:09:53.

Not snakes and spiders in the jungle, but their fiscal role

:09:53.:10:00.

broken, they economic credibility in tatters, exposed now as

:10:00.:10:04.

incompetent and unfair. Yes, Mr Speaker, he is the Chancellor,

:10:04.:10:12.

can't somebody getting out of here? -- get him out of here. Borrowing

:10:12.:10:17.

revised up, fiscal rules broken. On every target they set themselves,

:10:17.:10:25.

failing, failing, failing. Cutting the NHS and not the deficit. Over

:10:25.:10:28.

�212 billion more borrowing than a promise two years ago. Cutting

:10:29.:10:33.

taxes for the rich, while struggling families and pensioners

:10:33.:10:43.
:10:43.:10:47.

pay the price. Unfair, incompetent We leave the House of Commons now.

:10:47.:10:51.

If you want to continue watching the Autumn Statement debate and

:10:51.:10:55.

question and answer, you can switch-over to BBC Parliament or go

:10:55.:11:05.
:11:05.:11:05.

Now, Ed Balls took 20 minutes to reply to the Chancellor's 50 minute

:11:06.:11:09.

Autumn Statement. It was a dense, complicated statement by the

:11:09.:11:14.

Chancellor. Particularly some redefinition of how the deficit is

:11:14.:11:18.

calculated to or complicated factors on how much borrowing the

:11:18.:11:22.

Government is doing. We will try, as we go through the documents, we

:11:22.:11:25.

are already wading through them at the moment and this is just a small

:11:25.:11:29.

part of them, let's take a look at the main points as we understand

:11:29.:11:34.

them at the moment. We start with economic growth. The OBR, the

:11:34.:11:37.

Office For Budget Responsibility, an independent forecasters set up

:11:37.:11:41.

by Mr Osborne, is predicting there will be a small contraction in the

:11:41.:11:45.

economy this year of 0.1%. I understand within that forecast it

:11:45.:11:49.

expects the economy to actually go back into negative territory in the

:11:49.:11:53.

4th quarter of this year. That will be politically very dangerous for

:11:53.:11:56.

the Government, because it will mean that three out of the four

:11:56.:12:01.

quarters of this year would have been in negative territory. Very,

:12:01.:12:09.

very slow growth in 2013 of 1.2%, getting up to 2% in 2014, 2.3 in

:12:09.:12:15.

2015 and almost 3% in 2017. Take the final years with a pinch of

:12:15.:12:23.

salt, it really doesn't mean very much. It is this year, 2013 and

:12:23.:12:26.

then 2014 that matters. As a consequence of this growth, the

:12:26.:12:28.

Government has to decide how much it needs to borrow to finance

:12:28.:12:33.

spending, given that it does not tax enough to be able to meet all

:12:33.:12:37.

of its spending plans. Here is where it gets complicated. We need

:12:37.:12:41.

to look at the somewhat more carefully. The Government is now

:12:41.:12:45.

saying that in this financial year borrowing will be 108 billion. This

:12:45.:12:49.

is because of a number of changes that have been made. If you do not

:12:49.:12:53.

make these changes, we think it still comes in at about 120 billion,

:12:54.:12:58.

which is what the target was. It complicates the debate because both

:12:58.:13:01.

the Labour Party and independent observers were saying that

:13:01.:13:04.

borrowing was going to rise this year, compared to last year and be

:13:04.:13:07.

higher than the target. The way the Chancellor is presenting these

:13:07.:13:12.

figures, it actually falls in this year, against last year. It

:13:12.:13:21.

continues to fall in 2013 and 2014. It's down to 88 billion by 14/15. I

:13:21.:13:25.

have other figures here, car filleting them a different way,

:13:25.:13:29.

which suggest that the Government will still be borrowing 56 billion

:13:29.:13:35.

by 2017 and 2018. We need to unravel that, it's been made very

:13:35.:13:38.

complicated. Let's look at whether this means the Government has met

:13:38.:13:42.

its targets. The Government says that it is on course to meet its

:13:42.:13:49.

fiscal mandate. But it has missed the debt target, the accumulated

:13:49.:13:53.

deficit over all of the years that we as a nation have borrowed

:13:53.:13:57.

through our government as a share of GDP. It will not fall, as the

:13:57.:14:04.

Chancellor predicted. It will not fall in 2014 or 2015, indeed it

:14:04.:14:11.

will not fall until 2016/17. On tax and spending, this is where the

:14:11.:14:16.

austerity gets extended. Fiscal consolidation will be extended to

:14:16.:14:21.

2017/18. That is a fancy way of saying that the cuts continue. Not

:14:21.:14:26.

for five years, as originally planned, not for seven as it

:14:26.:14:31.

changed to, but for eight years. Departmental budgets, widely leaked,

:14:31.:14:34.

this is what the Whitehall departments themselves spend. That

:14:34.:14:40.

will be reduced by 1% next year, another 2% the year after that. It

:14:40.:14:43.

releases money that the Government tends to spend on public investment.

:14:43.:14:49.

A slight surprise, not entirely unexpected, corporation tax, the

:14:49.:14:53.

tax companies pay on profits, or should pay on their profits, is now

:14:53.:14:57.

cut to 21% in 20th April 14. The Chancellor has made a number of

:14:57.:15:04.

cats. Indeed, our corporation tax, that will be as low as it gets

:15:04.:15:12.

among the major corporations of the world. I think the OECD has a floor

:15:13.:15:22.
:15:23.:15:30.

Given that inflation is likely to be more than 1%, at the moment it's

:15:30.:15:34.

around 3, this means in real terms these benefits will fall. But it

:15:34.:15:38.

doesn't affect the state pension. The state pension will continue to

:15:38.:15:43.

rise roughly in line with inflation. Also, disability and care benefits

:15:43.:15:47.

will also be upgraded in line with inflation. That's a big chunk out

:15:47.:15:51.

of future increases in working-age welfare benefits, the Chancellor

:15:51.:15:59.

has taken back. Now personal taxes. Personal income tax - the allowance

:15:59.:16:04.

will rise by �235. This is the amount that you're allowed to earn

:16:04.:16:08.

before you pay any tax at all. That will take place in April. It brings

:16:08.:16:14.

it to around �9,440 that you'll be allowed to earn before you start to

:16:14.:16:20.

pay the 20% tax. He's also putting up a little bit, 1%, the higher

:16:20.:16:30.

rate. That's not the 45 or the 50, but the 40%. That's up by 1%. Still

:16:30.:16:34.

less than the rate of inflation. If you're on that, you'll get a real

:16:34.:16:38.

rise in taxes. The higher rate, which was widely thought to be

:16:38.:16:42.

capped is now capped at 40,000. He also said too that the size of the

:16:42.:16:48.

pension pot cue go for he's reducing from 1.5 million to 1.25

:16:48.:16:53.

million. It won't affect that many, but some. Now, fuel and energy.

:16:53.:16:56.

This is where for a brief moment we could say that the Chancellor

:16:56.:17:00.

turned into Santa. It was belief. Blink and you might have missed it.

:17:00.:17:05.

He announced not only would the three pence rise in fuel duty be

:17:05.:17:12.

cancelled in January. Not only postponed, but there are no plans

:17:12.:17:18.

for a rise in the foreseeable future. He's announcing separately

:17:18.:17:22.

a shale gas strategy. An attempt to get it out of the ground in Britain

:17:22.:17:28.

like in the United States. He want to talk about tax incentives and a

:17:28.:17:38.

new quango for this is the Office for Unconventional Gas. It would

:17:38.:17:43.

have been simpler to call it the Office For Shale. There's a lot on

:17:43.:17:48.

infrastructure spending here. has managed to find �5 billion by

:17:48.:17:52.

cutting some current spending. Most Civil Servants will be laid off.

:17:52.:17:55.

He's got �5 billion for extra capital investment in various

:17:55.:18:00.

infrastructure, including some new roads and he says 100 new schools.

:18:00.:18:07.

�1 billion to go on that, new schools and academies. That is a

:18:07.:18:10.

summary of what the Chancellor has summary of what the Chancellor has

:18:10.:18:14.

suggested so far let us see if we can just unpick this. Stephanie, I

:18:14.:18:20.

come to you first. Have you managed, putting you on the spot, because

:18:20.:18:23.

it's complicated, I saw three ways in which you can calculate the

:18:23.:18:26.

deficit depending on what you include. Can you enlighten? We know

:18:26.:18:29.

two things, which is sort of interesting. One, that he's

:18:29.:18:33.

claiming that all the figures that he gave us are sort of independent

:18:33.:18:37.

of the one-off factors that we knew about, that is the transfer of the

:18:37.:18:40.

pension fund and the Royal Mail and the effect of this sort of switch

:18:40.:18:44.

of the money that the Bank of England has been making on QE, so

:18:44.:18:48.

we know in a sense that he's not being creative on that score. What

:18:48.:18:52.

we are not so clear about is how borrowing is falling this year,

:18:52.:18:55.

despite all of the expectations that it would rise and what is

:18:55.:18:59.

particularly interesting to me, when you look at the figures - I

:18:59.:19:03.

always say don't just look at the overall borrowing, but look at his

:19:03.:19:09.

measure, the structural deficit, the hole he wanted to fill.

:19:09.:19:14.

Everyone was expecting that on the basis of what we know about what

:19:14.:19:18.

the office calculates these things, everyone was expecting that to go

:19:18.:19:21.

up with this new forecast. It's down. What the interesting

:19:21.:19:25.

implication of that is, is that they seem to be saying that the

:19:25.:19:30.

growth we have lost this year maybe won't be lost permanently and

:19:30.:19:33.

that's had a positive effect on all the future figures, so the point

:19:33.:19:36.

where he doesn't need the extra year of austerity that he announced

:19:36.:19:40.

today in order to meet that rule. That's what is strange. At the

:19:40.:19:44.

moment this mosture looks like it will come into surplus the same

:19:44.:19:49.

time we thought on the last figures, which is 2016/17. There's possibly

:19:49.:19:54.

room for that year to be taken back, if you are thinking about making

:19:54.:19:58.

plans for an election. He doesn't need that austerity on these

:19:58.:20:03.

figures to meet his targets for deficit. Of course, we had that

:20:03.:20:07.

admission that the debt stock was not going to fall in 2015. That

:20:07.:20:10.

moment will be deferred another year and who knows what will happen

:20:10.:20:14.

after that? The details of why borrowing is still falling I'm

:20:14.:20:18.

afraid I'm still trying to get to the bottom of it. I don't blame it.

:20:18.:20:23.

The risk for the Chancellor is he's been too clever by half. The

:20:23.:20:30.

brightest people in the country will pour them and these people are

:20:30.:20:35.

in this room. I just sail in behind them. They will pour over them. In

:20:35.:20:38.

the City and in the think-tanks and the Labour Party and it may not

:20:38.:20:44.

being as simple. We know it's not as simple as it seems. It could

:20:44.:20:47.

unravel. Remember, borrowing figures are essentially a forecast

:20:47.:20:53.

and the question of whether they exactly go up or go down is

:20:53.:20:56.

politically psychologically, hugely important to the Chancellor, and

:20:56.:21:01.

threw Ed Balls off his stride, it seems, but nickically a bit this

:21:01.:21:05.

and that way is not what matters. The big picture remains. The

:21:05.:21:09.

Chancellor said, "I told you I would get debt down by the end of

:21:09.:21:12.

this Parliament before the election. I'm not going to do so. I told you

:21:12.:21:17.

I would get the deficit sorted. The books balanced by the election. I'm

:21:17.:21:24.

not going to do that. It will take another three years from the

:21:24.:21:29.

original target." The core message remains bad, but it is intriguing,

:21:29.:21:32.

Andrew, that despite all that, he looked confident, the Shadow

:21:32.:21:37.

Chancellor was totally thrown off his side by the jeers of the other

:21:37.:21:42.

side. The question is is that political calculation right? At its

:21:42.:21:47.

core is this - George Osborne thinks that if the country believes

:21:47.:21:50.

borrowing's the problem, the deficit hawks, whether they are

:21:50.:21:53.

missing their own targets or not, are the people the country will

:21:53.:21:56.

turn to. They won't turn to the Labour Party, who don't think

:21:56.:22:00.

borrowing's the primary problem, but they think growth is the route

:22:00.:22:04.

to get borrowing down. That's what he's banking on. Labour were

:22:04.:22:08.

banking on today saying, "If you are even failing your own targets,

:22:08.:22:13.

if you are even failing in your own terms, surely the country will then

:22:13.:22:19.

say they've tried that and let's try something else?" Robert? What

:22:19.:22:26.

is striking to me is that the big, in a sense, economic event in the

:22:26.:22:33.

numbers is the 3.5 billion proceeds from selling the 3G spectrum. Sorry

:22:33.:22:39.

4G. I must get the technology right on this. That is essentially the

:22:39.:22:46.

sale of the airwaves to produce even faster smartphones and all

:22:46.:22:54.

that. What's he done? Broadly, that pays for the deficit reduction, or

:22:54.:23:00.

the debt reduction that he gets one year later. Indeed, the deficit

:23:00.:23:06.

reduction. If you strip that out, he would have had to have made much,

:23:06.:23:12.

much bigger cuts to public spending or put up taxes rather more. What

:23:12.:23:18.

is quite interesting is if you look at the so-called total policy

:23:18.:23:23.

decisions that the net effect of what he's done is, because the

:23:23.:23:27.

money comes in, in this year, it looks like there's a tightening,

:23:27.:23:30.

but in all the subsequent years he's more than spending what he's

:23:30.:23:34.

getting in. Actually, the net effect in subsequent years of what

:23:34.:23:39.

he's doing is to try to stimulate the economy. The interesting

:23:39.:23:43.

question is whether or not that will have the effect of getting

:23:43.:23:48.

growth going in the run-up to the general election. He's saying a

:23:48.:23:51.

one-off lump will be spent in subsequent years and he hopes that

:23:51.:23:57.

will generate growth as we get to 2015. The funny thing about this

:23:58.:24:02.

3.5 billion that if we are not for the proceeds, which they are

:24:02.:24:05.

putting in for this year, even though they haven't had the

:24:05.:24:09.

auctions for the 4G spectrum, but borrowing - he's putting it in the

:24:09.:24:13.

book - so borrowing would have risen maybe by a couple of billion

:24:13.:24:17.

had he not put that for this year. However, as Robert says, he's

:24:17.:24:21.

spending it in the next few years, which is what the Labour Party has

:24:21.:24:27.

told him he should do, spending those on investment and growth.

:24:27.:24:31.

Briefly, Labour had a huge windfall when it sold the last set

:24:31.:24:36.

technologies, 3G and actually Labour used it to reduce the debt.

:24:36.:24:43.

It didn't spend the proceeds, so it's quite interesting. The sun is

:24:43.:24:50.

shining now! It is. The growth figures are interesting. The

:24:50.:24:56.

country will decline by a small amount according to the OBR. It

:24:56.:25:01.

says 1.2%. He doesn't know that. It could easily - it's within a margin

:25:01.:25:11.
:25:11.:25:13.

of error that we could have another year of no growth. In a sense the

:25:13.:25:19.

politics is based on forecasts from a bunch of guys who are independent,

:25:19.:25:24.

but all their forecasts have been wrong. Every single year since the

:25:24.:25:29.

election and what's more they are exueming bouncing back in

:25:29.:25:33.

investment and they're -- assuming bouncing back in investments and

:25:33.:25:37.

they're wrong. We are not talking about taking the temperature

:25:37.:25:39.

outside, but we are talking about whether the forecasts suggest you

:25:39.:25:44.

might be on course. Now, may economically may not be terribly

:25:44.:25:48.

important, but politically it gives vital ballast to George Osborne

:25:48.:25:52.

when he has a good bit of news, which for him is this figure. But

:25:52.:25:58.

it also gives a ball loss to his opponents when by the forecasts he

:25:58.:26:01.

getting it wrong on the deficit and debt. They've been changing their

:26:01.:26:04.

view of the economy. They were initially felt to be in the first

:26:04.:26:09.

couple of years they were felt to be quite optimistic about the

:26:09.:26:13.

supply capacity of the economy. This crucial thing. Then last year

:26:13.:26:17.

they very radically downgraded their estimates and increased them

:26:17.:26:21.

again and they are much more optimistic than six months ago. I

:26:21.:26:23.

don't think any economists had say anything had happened to justify

:26:23.:26:28.

that change, but it's had a huge impact on the numbers. If the OBR's

:26:28.:26:31.

right the Chancellor will not be in for a good year, because the

:26:31.:26:36.

economy will go into decline. That's what the OBR is forecasting.

:26:36.:26:42.

Back to Jo who is in the Potteries. Thank you. George Osborne may have

:26:42.:26:48.

been limited on his spending power, but no expense is being spared here

:26:48.:26:53.

at the Wedgwood factory as 22 carat-gold paste is being applied

:26:53.:26:57.

to the plates. We'll find out whether businesses in the area are

:26:57.:26:59.

feeling flush after hearing that Autumn Statement from the

:26:59.:27:04.

Chancellor. I'm joined by three guests. Karen from the Federation

:27:04.:27:12.

of Small Businesses, Mike from an estate agent and a member from the

:27:12.:27:16.

CAB. We heard at the beginning that the economy is haling. Does it feel

:27:16.:27:20.

like that on the -- healing. Does it feel like that for you on the

:27:20.:27:23.

front line? I don't think is does. One of the biggest disappointments

:27:23.:27:26.

that we have seen today is not being able to see any move forward

:27:26.:27:30.

on the small business bank and actually the access to finance

:27:30.:27:33.

issues. It's very, very difficult for small businesses in particular

:27:33.:27:38.

to access affordable, reasonable finance. Even with the funding and

:27:38.:27:45.

lending scheme in place, why aren't they giving out the money? Well,

:27:45.:27:50.

people go to the banks, but they've restricted the criteria and they've

:27:50.:27:54.

made it very difficult to finance. The one billion was announced in

:27:54.:27:57.

the Liberal Democrats' conference earlier this year. That has been no

:27:57.:28:00.

surprise. The surprise is there's been no move forward on the issues

:28:00.:28:04.

that were discussed earlier this year. You are disappointed? Yes.

:28:04.:28:07.

When it comes to housing and planning, the Government has said

:28:07.:28:11.

time and again that that must be the drive for the economy. What is

:28:11.:28:16.

actually stopping big building projects going ahead? Is it really

:28:16.:28:18.

planning? It's part of it, but it's most encouraging that the

:28:18.:28:21.

Government have said there's a clear focus on economic

:28:21.:28:25.

regeneration in the planning system. That's being embraced by most local

:28:25.:28:29.

authorities, but clearly it has to work through the system. One of the

:28:29.:28:34.

big issues relates to smaller and medium-sized companies having the

:28:34.:28:37.

right sort of finance available to allow them to invest in new plant

:28:37.:28:42.

and machinery and property and we would welcome the new capital land

:28:42.:28:46.

regime announced today. That will help. That will allow businesses to

:28:47.:28:53.

invest up to �250,000 with 100% tax relief? Yes. Will some of your

:28:53.:28:58.

projects start? It will help. It's part of an overall package that

:28:58.:29:03.

needs to help generate more economic regeneration. Right. In

:29:03.:29:05.

terms of fairness, we hear the Chancellor saying that time and

:29:05.:29:08.

again that we are all in this together. How did you think it came

:29:08.:29:13.

across to the sort of people you are talking to on a daily basey at

:29:13.:29:19.

the CAB? I think we misunderstand the terms, "people on benefits." We

:29:19.:29:23.

equate it to people out of work, but the vast majority are actually

:29:23.:29:27.

in work if they're not of pension age. The growing poverty in this

:29:27.:29:30.

country is the poverty of people in work. We are seeing people who own

:29:30.:29:34.

their own homes using food banks. I would urge the Government to think

:29:34.:29:39.

about protecting those on the lowest incomes in work by raising

:29:39.:29:44.

the tariff that applies to benefits. Thank you to you all. We'll

:29:44.:29:48.

probably speak to you in a bit. We want your reaction and I'm joined

:29:48.:29:52.

now by Paul Lewis from BBC Radio 4's Money Box programme. Give us

:29:52.:30:02.
:30:02.:30:03.

your headlines from what you got The interesting bit was the

:30:03.:30:07.

increasing how much we can end without paying tax. We can actually

:30:07.:30:13.

not pay any tax on an income up to �9,440. Slightly worse news for

:30:13.:30:17.

those on higher incomes. The rate at which you pay higher rate tax is

:30:17.:30:22.

coming down to �41,450. They will get some of the benefit of that,

:30:22.:30:27.

but not all. On the business front, as you have been discussing, a rise

:30:27.:30:30.

in capital allowances so that businesses can invest and unlock

:30:30.:30:34.

the cash they have. It's very good news for businesses and people that

:30:34.:30:38.

are self-employed. One of the things that got a big cheer when I

:30:38.:30:41.

was sitting with the businesses was the cancellation of that three

:30:41.:30:46.

pence duty on fuel? It has be postponed twice. To this Bonett a

:30:46.:30:51.

third time would seem a bit silly. It's not just 3p, it is 3p and a

:30:51.:30:58.

bit, plus about E. It's more like 3.6, maybe even 4p. That will not

:30:58.:31:07.

happen again. It's good news for motorists and businesses, because

:31:07.:31:11.

that's a big part of expenditure. You want people to e-mail with

:31:11.:31:17.

questions? Could you read some of them that you have had? Yes, the

:31:17.:31:20.

other big thing was the cut in the increase in welfare benefits from

:31:20.:31:24.

April. This is jobseeker's allowance, but also employment and

:31:25.:31:29.

support alliance, which often is seen as a disability benefit. Now

:31:29.:31:36.

that is going to be raised by only 1%. Derek says, my wages have been

:31:36.:31:40.

frozen for five years, why should I pay for increases for those in

:31:40.:31:45.

welfare? He will be glad it is only a 1% rise. Michael in Londonderry

:31:45.:31:50.

says that in my city, every new job is hard fought for with thousands

:31:50.:31:54.

of applicants. Lots of people have no choice but to live on benefits.

:31:54.:32:00.

That cut, or at least not raising it with inflation, is going to save

:32:00.:32:05.

�1.5 billion per year by 2014/15. The fairness agenda is something

:32:05.:32:10.

that George Osborne has focused on a lot? Fairness between people in

:32:10.:32:14.

work and people out of work, that is how he sees it. More comments,

:32:14.:32:24.
:32:24.:32:28.

please. E-mail, Twitter or send us We will be Backworth more business

:32:28.:32:32.

reaction and more e-mails. -- back with.

:32:32.:32:36.

We have been discussing the economic picture before we went to

:32:36.:32:40.

join Jo. Before we get political reaction, a couple of things that

:32:40.:32:45.

affect all of us as individuals. If you are paying income tax, there is

:32:45.:32:50.

a small tax cut for you. The level at which you start to pay income

:32:50.:32:54.

tax has been increased by a couple of hundred pounds. If you are on

:32:54.:32:59.

benefits, working benefits, you are in for a 1% rise, not very much and

:32:59.:33:03.

lower than the rate of inflation. Although it is a 1% rise, in real

:33:03.:33:08.

terms, with rising prices, it probably means a cut. If you are a

:33:09.:33:12.

higher in a, fewer pension perks, including the amount of money you

:33:12.:33:17.

can put in tax free to your pension pot. Broadly, you are in a flat-

:33:17.:33:21.

lining economy. It's going to go down a bit this year, says the OBR,

:33:21.:33:26.

and only at a bit next year. Both within margins of error. Basically,

:33:26.:33:31.

the economy is just going along the bottom. If you are a motorist or in

:33:31.:33:36.

a haulage business, there will be no fuel duty rise. The price of

:33:36.:33:41.

petrol, as far as tax is concerned, will stay the same. A few things

:33:41.:33:45.

that affect you beyond the macro- economic picture and all of us as

:33:45.:33:49.

individuals. Let's go back to Matthew on the famous College Green

:33:49.:33:54.

outside the House of Commons. Let's discuss what we have heard

:33:54.:33:58.

with a former Chancellor and a former party leader, Sir Mingus

:33:58.:34:03.

Campbell. Lord Lawson is also with me. We were hoping that Alastair

:34:03.:34:07.

Darling it was going to join us. Perhaps he will in the coming

:34:07.:34:11.

minutes'. First of all, a snapshot of what you heard? It was like a

:34:11.:34:21.
:34:21.:34:22.

budgie, wasn't it? -- Budget. The important thing is that he did the

:34:22.:34:25.

right thing in terms of sticking to the budget deficit reduction plan,

:34:25.:34:29.

sticking firmly to Plan A. That was the most important thing he has

:34:29.:34:33.

done. He has had to take some uncomfortable positions in order to

:34:33.:34:37.

do it, but it is the right thing to do. One other thing that I was glad

:34:37.:34:44.

about, the go-ahead for gas in the UK. That is terribly important. One

:34:44.:34:48.

piece of good news that we have at the present time. Your headline

:34:48.:34:57.

thoughts? Very much like a Budget. As Nigel Lawson says, he has three

:34:57.:35:00.

confirmed the commitment to plan a. The deficit and debt is not coming

:35:01.:35:05.

down as fast as we like, but it is coming down. To say that we are not

:35:05.:35:10.

going to implement the proposed increase in petrol tax for January,

:35:10.:35:13.

we are going to help small businesses and we are going to

:35:14.:35:17.

reduce corporation tax by 1%, these are things that cheer it up the

:35:17.:35:23.

people sitting behind them. In contrast to some of the faces on

:35:23.:35:27.

the opposition side. He said he was sticking to Plan A and you were

:35:27.:35:30.

glad about that, but the bottom line is that austerity stretches

:35:30.:35:37.

even further, not just to 2017, but on to 2018? Sadly, that is a

:35:37.:35:41.

combination of the very difficult world we live in, notably the

:35:41.:35:47.

eurozone crisis which has plunged the European Continent into

:35:47.:35:56.

recession and disarray. But there are other problems as well. And

:35:56.:35:59.

there is the terrible inheritance of the deficit, which is coming

:35:59.:36:03.

down. We are making progress and the projections, not his

:36:03.:36:07.

projections but the Independent Office of Budget Responsibility,

:36:07.:36:11.

are for steady growth over the coming years. But the misery is

:36:11.:36:15.

extended. Do you not think that part of the equation for that, you

:36:15.:36:19.

talk about what is happening in the global economy, the eurozone, what

:36:20.:36:25.

about the basic economic policy, that the cuts were simply too fast?

:36:25.:36:30.

We are going ahead, the cut were not too fast at all. If you want to

:36:30.:36:33.

do anything more to make more progress on the economy, you don't

:36:33.:36:37.

want to do it by abandoning the budget deficit reduction plan. What

:36:37.:36:43.

you want to do is to get banks' lending again. That is the key,

:36:43.:36:46.

particularly to small and medium- size businesses. I hope that he is

:36:46.:36:50.

working on that. This is not a budgetary measure, but I hope that

:36:50.:36:54.

something would be coming forward on that front. You may not have

:36:54.:36:58.

seen it, but part of the way through that statement we saw Nick

:36:58.:37:03.

Clegg sitting behind the statement, shaking his head when George

:37:03.:37:08.

Osborne went through the reasons why he was not going to have a new

:37:08.:37:11.

band of council tax for very rich homes. That is not something I have

:37:11.:37:19.

seen before. It is no secret that there was a division of opinion on

:37:19.:37:25.

the decision... Whether it is a larger tax will not, the joint

:37:25.:37:29.

decision was not to proceed. But what came out was that the economy

:37:29.:37:35.

shrank by 6.3% in 2007. That was the inheritance. A much more

:37:35.:37:41.

serious inheritance than was anticipated. Another quick thought

:37:41.:37:44.

from you, how comfortable like you to see benefits raised by only 1%

:37:44.:37:48.

for some of the poorest people in society? Are you comfortable with

:37:48.:37:54.

that? I wish it was possible to raise them by much more. But all

:37:54.:37:57.

public sector employees have been confined to an increase of 1%.

:37:57.:38:02.

final question to you, Lord Lawson, on growth. We saw those figures

:38:02.:38:06.

downgraded in the years ahead. Do you think there's enough of what

:38:06.:38:09.

you heard, we heard from the British Chamber of Commerce,

:38:09.:38:11.

talking about the blizzard of announcements, they said many of

:38:11.:38:16.

those ended up being pie-in-the-sky. They want is to be tangible and now.

:38:16.:38:21.

That has to go beyond rhetoric, to delivery? Well, look, if you could

:38:21.:38:24.

just press a button and deliver growth, any Chancellor would do

:38:24.:38:29.

that. But it's not like that. You have to be patient. The projections

:38:29.:38:35.

from the Independent Office of Budget Responsibility are that we

:38:35.:38:39.

will be steadily growing over coming years. I think we are on the

:38:39.:38:43.

right track. Thanks very much for your time. More from me in a little

:38:43.:38:50.

We and are joined by the Chief Secretary to the Treasury, Danny

:38:50.:38:54.

Alexander. Welcome to this Daily Politics special. The economy is

:38:54.:38:59.

going to decline this year. It will decline in the 4th quarter, it will

:38:59.:39:02.

barely rise at all next year. If you are on benefits, you will have

:39:02.:39:06.

a real cut in the big standards. If you work in the public sector, you

:39:06.:39:11.

will have a real cut as well. These are bad times? The these are tough

:39:11.:39:15.

times for the country, absolutely right. This is an Autumn Statement

:39:15.:39:19.

about the world as it is, not a world as we might have hoped it

:39:19.:39:23.

would be when we started in office. What we are taking today is

:39:23.:39:28.

decisions that recognise the fact that the period of fiscal restraint

:39:28.:39:32.

has to carry on for longer. Those who have the most are contributing

:39:32.:39:35.

the most of the next phase of deficit-reduction. We are using

:39:35.:39:40.

some of the revenues we generate from that in the earlier years to

:39:40.:39:44.

support the economy, create jobs, cut taxes in the short term for

:39:44.:39:47.

businesses so they can get on with Investment. Crucially, through

:39:47.:39:53.

reducing fuel duty and increasing the personal allowance, something

:39:53.:39:56.

Liberal Democrats a campaign for for a long time, that we get more

:39:56.:39:58.

money into the pockets of people that are working hard and

:39:58.:40:02.

struggling to make ends meet. you are on benefits, your real

:40:02.:40:05.

living standards will fall. If you work for the public sector, your

:40:05.:40:09.

living standards will fall. It will serve it in Whitehall, you have a

:40:09.:40:12.

pretty good chance of losing your job. Maybe not the poorest in

:40:12.:40:16.

society, but some of those on ordinary incomes are suffering a

:40:16.:40:20.

lot more than most. That is absolutely right. In fact, there is

:40:20.:40:23.

an important piece of information in the Autumn Statement itself

:40:23.:40:25.

which shows that since the financial crisis the incomes of

:40:25.:40:30.

people in work have increased by about 10%. The income of people on

:40:30.:40:34.

benefits over the same period had increased by 20%. In that context,

:40:34.:40:40.

say to people, yes, you will get a raised this year and they year

:40:40.:40:45.

Wrafter, but it will be under inflation, on top of decisions that

:40:45.:40:50.

make the wealthy pay more tax, on top of clampdowns on tax avoidance,

:40:50.:40:54.

it is part of a package to answer the question of how we sort out the

:40:54.:40:59.

country's finances. We inherited a mess from the previous government,

:40:59.:41:03.

and if we fail to sort that out the problems will be much worse.

:41:03.:41:06.

have made the issue of borrowing so complicated now that none of us can

:41:06.:41:11.

follow it properly. I am sure that the is intentional. But we have

:41:11.:41:15.

managed to unravel... Not in the least. The Office of Budget

:41:15.:41:19.

Responsibility presented the figures very clearly, with or

:41:19.:41:22.

without the transfer of the coupons and the asset purchase facilities,

:41:22.:41:29.

with and without... This OBR is to your government what the iron dome

:41:29.:41:35.

is for Israel! You hide under everything from it. Can I make a

:41:35.:41:39.

serious point? We have created the OBR as an independent body so that

:41:39.:41:43.

we do not, as politicians, have a chance to skew the figures. We have

:41:43.:41:48.

an independent body which tells us, as they see it, how the economy is.

:41:48.:41:52.

I'm prepared to accept their numbers and the analysis behind it.

:41:52.:41:58.

If you take off the distortions and one-offs, the Royal Mail, the banks,

:41:58.:42:02.

taking back the money that you have paid as a government to the Bank of

:42:02.:42:06.

England in interest, you take that back and put it on your own books,

:42:06.:42:09.

in this current year your borrowing will be 120 billion. Just a little

:42:09.:42:14.

bit upon what you said in March. But the way you present it, it is a

:42:14.:42:19.

huge fall? The borrowing is falling on any of the measures that the OBR

:42:19.:42:24.

presented. In their report, though analysts will see that it has been

:42:24.:42:27.

presented with and without all of these factors are so that it is

:42:28.:42:32.

transparently available. The OBR, the central forecast, it is that

:42:32.:42:34.

borrowing will fall this year compared to last year. It will fall

:42:34.:42:38.

next year, the year after. I am quite happy to admit that the

:42:38.:42:42.

borrowing is not falling as fast as we wanted where we started out.

:42:42.:42:45.

Because they say the economy is in a worse situation because of what

:42:45.:42:49.

is going on in the year rose and... It's not falling at all this year,

:42:49.:42:54.

if you strip out the factors. Last year you borrowed 120 billion. This

:42:54.:42:59.

year, your borrowing 120 billion. It is the same. So your borrowing

:42:59.:43:03.

is not falling? When you strip out the Asset Purchase Facility and so

:43:03.:43:07.

on, I think it is falling by �1.5 billion this year, compared to last.

:43:07.:43:12.

You put a lot of emphasis on infrastructure programmes in this

:43:12.:43:19.

budget. Since you came to power, you have announced 18 new major

:43:19.:43:23.

road schemes. How many have started? I don't know the precise

:43:23.:43:26.

answer of the top of my head. I know quite a few have started. I

:43:26.:43:35.

was down in Bristol, seeing the M 5, I was down in Torbay seeing the

:43:35.:43:38.

bypass being built. Yes, some of these were under way before you

:43:38.:43:41.

came to power. These are things that we have announced as a

:43:41.:43:45.

government. Well, our evidence is that almost no major new road

:43:45.:43:49.

schemes have started. I don't agree with that. In the last Autumn

:43:49.:43:56.

Statement, you said that you would leverage 21 billion of new private

:43:56.:44:00.

sector investment into public- sector investment. How much have

:44:00.:44:04.

you leverage? Well, we have a national infrastructure plan,

:44:04.:44:07.

dinners or an update published today which sets out in detail...

:44:07.:44:14.

How much? Let me just finish the answer. Once we have announced in

:44:15.:44:19.

the last few months the new infrastructure projects, pension

:44:19.:44:28.

funds have put �2 billion into the pensions infrastructure platform.

:44:29.:44:31.

We announce today an extra �5 billion of government money.

:44:31.:44:40.

Actually, the Government investment into its infrastructure is a

:44:40.:44:43.

greater share of the economy than it was in Labour's time in office.

:44:43.:44:47.

That might be CRU, an interesting answer, but he doesn't answer the

:44:48.:44:51.

question I asked. Of the �21 billion new private sector

:44:51.:45:00.

investment... Are I don't know the It is when the money hits the

:45:00.:45:06.

ground that people want to know. Our understanding is that of the 21

:45:06.:45:10.

billion, so far you only have a commitment for 700 million. And

:45:10.:45:14.

it's not been spent? I have no idea what those figures refer to, I

:45:14.:45:18.

would happily look at them after the show. Of the �5 billion you

:45:19.:45:23.

have added on to this, is it true that only 700 million of that will

:45:23.:45:31.

be spent in the current financial It will almost be spent starting

:45:31.:45:35.

next April and the April after. We have an investment programme in new

:45:35.:45:40.

college building and new school building, in some new road schemes

:45:40.:45:44.

and maintenance, which is crucially important to communities all around

:45:44.:45:48.

the country. These are schemes that can get under way to create jobs

:45:48.:45:52.

and we crucially raise the quality of infrastructure. Dueshing the

:45:52.:45:55.

last Government's time in office we -- during the last Government's

:45:55.:45:59.

time in office we fell in the league tables in infrastructure.

:45:59.:46:04.

That's why we are increasing the amount of money in infrastructure.

:46:04.:46:07.

Why is house building falling? You are always talking about that and

:46:07.:46:12.

the way of getting growth into the economy. Because of lack of demand

:46:12.:46:15.

for mortgages and because of the problems in the banking system that

:46:15.:46:21.

we're trying to address through the scheme. So people can get mortgages

:46:21.:46:24.

easier. It's falling for a whole range. Will it continue to fall?

:46:24.:46:28.

I'm not sure what the OBR forecasts on that. I'm not going to offer a

:46:28.:46:34.

forecast. You should have a hotline to them, so you know what to say.

:46:34.:46:37.

Government investment in house building is increasing. Part of the

:46:37.:46:42.

package announced to is new money to unblock sites and to bring in

:46:42.:46:47.

tens of thousands of more housing starts over the next two years, so

:46:47.:46:49.

part of house building that is supported by the Government will

:46:49.:46:54.

see a big increase over the next few years. The Chancellor announced

:46:54.:46:58.

some tough and deep spending cuts today, but as I understand it,

:46:58.:47:02.

there's another �10 billion of cuts for you to find in the spending

:47:02.:47:07.

round that you'll be doing? That's right. In the first half of next

:47:07.:47:11.

year I'll be carrying out a public spending round to find an extra �10

:47:11.:47:14.

billion of savings from unpected departments to maintain the

:47:14.:47:18.

protections that were put in place through the Parliament in terms of

:47:18.:47:22.

increasing health spending and school spending and meeting our

:47:22.:47:25.

overseas aid commitment. I'll be sitting down over the next few

:47:25.:47:31.

months to work out where they can be found. People might see the pain

:47:31.:47:34.

today, taxes up and spending down and think that's bad, but it's far

:47:34.:47:39.

from it. There are a lot of other cuts may be programmes not just

:47:39.:47:43.

bureaucrats. Perhaps squeezes on working people's benefits not just

:47:43.:47:49.

the unemployed still to come? are. We have to fill out all the

:47:49.:47:53.

details of what Government will spend on what. It's in a year when

:47:53.:47:56.

this Government will be in power for the first two weeks and we have

:47:56.:48:00.

to do it, oh that means asking questions of departments. I'm

:48:00.:48:04.

committed to making sure in doing that we focus on protecting

:48:04.:48:06.

spending that is good for the economy and that supports economic

:48:06.:48:10.

growth, but you are quite right, there will be a lot more tough

:48:10.:48:18.

choices down the track. If the Government has set enormous store

:48:18.:48:25.

by the AAA credit rating, most nan lists expect you to lose that in

:48:25.:48:30.

the first few months of the year, because of the deterioration in

:48:30.:48:33.

growth, which has been confirmed today and the worsening in

:48:33.:48:39.

borrowing, which has been confirmed today. How serious an embarrassment

:48:39.:48:44.

to you will that be if you lose AAA? Thear not the be all and end

:48:44.:48:48.

all. What matters -- they are not the be all and end all. What

:48:48.:48:52.

matters to me is we have a fiscal plan to ensure the markets can have

:48:52.:48:56.

confidence in us. This is a country that can pay its way in the world

:48:56.:48:59.

because we can keep our interest rates as low as they are. One of

:48:59.:49:04.

the things today is information about what the impact would be of a

:49:04.:49:09.

rise in interest rates. 1% in mortgages would cost �12 billion a

:49:09.:49:13.

year, and that's why we place heavy emphasis on maintaining the

:49:14.:49:15.

credibility. You would distance yourself from the Prime Minister

:49:15.:49:21.

and Chancellor who boasted about that AAA? I wouldn't at all, but

:49:21.:49:25.

what lies behind that is not an obsession with ratings, but making

:49:25.:49:28.

sure that the country continues to have a strong and credible fiscal

:49:28.:49:32.

policy, which we maintained very strongly and sticking to the road

:49:32.:49:36.

we started out on, through the decisions in the statement today.

:49:36.:49:40.

If the economy fails to recover in the way that you hope, do you think

:49:40.:49:44.

that the Liberal Democrats and the Tories can hold together in terms

:49:44.:49:48.

of the future path of economic policy I've absolutely no doubt

:49:48.:49:53.

that we will, because we have set out on this task together and it is

:49:54.:49:56.

what caused the coalition to be formed to sort out the country's

:49:56.:50:00.

problems to clean up the mess that Labour left. Yes, it is taking

:50:00.:50:03.

longer and because of the problems in the eurozone and around the

:50:03.:50:06.

world, growth is slower than we would have hoped for, but we're on

:50:06.:50:10.

the right road and making progress and I think that the best thing for

:50:10.:50:13.

this country, speaks as a Liberal Democrat and I'm sure George would

:50:13.:50:17.

say as a Conservative, is to stick to the road. Before you go, you do

:50:17.:50:22.

have to rush, I'm told, is that right? I'm happy to answer some

:50:22.:50:25.

more questions. I can't think of anything more important than being

:50:25.:50:32.

on The Daily Politics. I always enjoy this. Stephanie can ask a few

:50:32.:50:34.

questions. Did you get enough out of the Tories for this? You are

:50:34.:50:40.

going to have to put up with real cuts in welfare payments and

:50:40.:50:44.

continued freezes in public-sector pay effectively. You didn't get a

:50:44.:50:49.

mansion tax or higher council tax bands. All you've got is the

:50:49.:50:53.

inability of well-off people to put more into their pension funds than

:50:53.:50:57.

they would have done. There's not much there? The most important

:50:57.:51:00.

things about the details in the statement today is it's balanced.

:51:00.:51:03.

It's asking as much from the wealthy in terms of tax increases

:51:03.:51:08.

as much as it is asking from the welfare rates that we talked about

:51:08.:51:13.

earlier and re-investing money back into helping people on middle and

:51:13.:51:16.

lower incomes, to a further increase in the tax allowances. You

:51:16.:51:21.

know the number one policy in the 2010 manifesto that I wrote, was to

:51:21.:51:25.

lift the income tax threshold to �10,000. We are only a short hop

:51:25.:51:28.

away. As a result, from next April, working people will have an extra

:51:28.:51:31.

�50 a month in their pockets, thanks to the decisions the

:51:31.:51:35.

Government has made in delivering that policy. It's a balanced

:51:35.:51:40.

package, but most importantly, it's a package that keeps the country on

:51:40.:51:43.

the right track economically. was interesting to me that the

:51:43.:51:47.

Chancellor didn't mention his target measure of borrowing in the

:51:47.:51:50.

speech and of course, spectical as I am, I thought maybe that means

:51:50.:51:55.

that the story's not very good, but it's interesting to me that

:51:55.:51:58.

actually the story is better than it was even six months ago and much

:51:58.:52:05.

better than anyone expected the OBR to give. It hasn't actually meant -

:52:05.:52:08.

I'm a bit surprised if you are balancing your target measure of

:52:08.:52:12.

the deficit in the same year that you were before, in 2016/17, why do

:52:12.:52:15.

you need the extra year of austerity in 2017? Is that

:52:15.:52:19.

something that will be taken away before the election? No, it's a

:52:19.:52:25.

good yes. -- question. It goes back to what Andrew was talking about.

:52:25.:52:29.

The OBR said and George said that we meet the fiscal mandate over the

:52:29.:52:33.

five-year period. With the asset purchase facility coupons, as you

:52:33.:52:37.

were saying, it's in 16/17 and without it it takes another year

:52:37.:52:40.

and it's right for us to plan on the basis that we are going to need

:52:40.:52:42.

to continue to take further difficult decisions, particularly

:52:43.:52:46.

to ensure that we hit the target and also to ensure that we get the

:52:46.:52:52.

debt falling, because in the end we are going to be spending �60

:52:52.:52:57.

billion by debt interest repayments and we need to make sure it comes

:52:57.:53:04.

down. The savings on the benefits, those that you are making that are

:53:04.:53:06.

quite significant the year after next, are most of those coming from

:53:06.:53:11.

people who are out of work or from the change in the uprating of all

:53:11.:53:19.

the people who are in work, but who get working tax credits? It's a 1%

:53:19.:53:23.

uprating policy across the policy. Most of the savings won't be from

:53:23.:53:27.

the people behind the blinds and the scroungers that the Chancellor

:53:27.:53:30.

talks about? It comes from both groups. I would also say to you

:53:30.:53:34.

that the people in work will be the most substantial beneficiaries of

:53:34.:53:37.

the increase in the income tax personal allowance. Those people

:53:37.:53:41.

will be gaining significantly in terms of paying less tax, albeit

:53:41.:53:48.

that the benefits and tax credits they receive will go up by less.

:53:48.:53:52.

Nick, just one question on that. You said that the amount gotten

:53:52.:53:57.

from the rich, as it were, is the same from the poor. I get this as

:53:58.:54:03.

3.5 billion is raised from curbing benefits. But the only tax rise I

:54:03.:54:07.

can see on individuals, as against on banks for example, as against

:54:07.:54:13.

tax avoidance and so on, actually someone says, "I will now pay more

:54:13.:54:19.

tax." That is that pensions tax relief which raises much, much less

:54:19.:54:24.

than 3.5 billion? The pensions measure raises around �1 billion a

:54:24.:54:29.

year. Not uprating the higher rate, which affects not the wealthy, but

:54:29.:54:36.

the better off, it raises another �1 billion. In 15/16 we get another

:54:36.:54:39.

�1 billion from the yield from the Swiss deal, which is money that is

:54:39.:54:43.

hidden overseas by wealthy people in the country who thought they

:54:43.:54:47.

would get away without paying tax. They may saying getting money out

:54:47.:54:52.

of us that has been hidden is not in any sense equalised by taking

:54:52.:54:56.

money away from people who depending on welfare. It's your job

:54:56.:55:00.

anyway. Getting this money if from people who thought they could hide

:55:00.:55:04.

their money from the British tax system is a very, very good thing.

:55:04.:55:10.

It's a one-off. It is spread over a number of years. We also have a

:55:10.:55:13.

number of avoidance policies which don't feature on the score card at

:55:13.:55:18.

this time, about the extra investment we are putting into HMRC

:55:18.:55:23.

which will raise a further �2 billion by the end of the

:55:23.:55:29.

Parliament. There is a lot going on to make sure that everyone pays

:55:29.:55:32.

their way. If you look at the distribution analysis you will see

:55:32.:55:36.

all that set out in some detail. Thank you very much for giving us

:55:36.:55:42.

more time than you were allocated. Though not more than you deserved.

:55:42.:55:46.

I'm glad you went to see the by pass being built because it was

:55:46.:55:55.

first proposed more than 50 years ago. INAUDIBLE. As I said that, I

:55:55.:56:00.

just thought that's what he's going to say! We'll just see houpbgz it

:56:00.:56:05.

takes you to finish -- how long it takes you to finish. Back to

:56:05.:56:08.

Matthew on The Green. Thank you. We heard from the Conservatives and

:56:08.:56:12.

the Liberal Democrats. We'll hear from Labour and speak to Chris

:56:12.:56:15.

Leslie, Shadow Treasury Minister. Thank you very much for being here.

:56:15.:56:20.

What did you make of what you heard from the Chancellor? I think the

:56:20.:56:27.

difficulties that we have seen in terms of the economy in 2012 have

:56:27.:56:31.

caused real problems with borrowing and with debt. We have seen more

:56:31.:56:34.

revised borrowing figures getting worse and worse and we have seen

:56:34.:56:38.

the debt figures looking very, very bad indeed. It turns out, and we

:56:38.:56:42.

have had a chance in the last 30 minutes to look through the details

:56:42.:56:47.

of it, that the Chancellor can only claim that his borrowing figures

:56:47.:56:52.

look reasonably better because he's pencilled in the proceeds from the

:56:52.:56:56.

sale of the 4G spectrum auction, even though the proceeds for that

:56:56.:56:59.

haven't yet been realised. There are some questions now about the

:56:59.:57:04.

way in which the Chancellor is presenting the borrowing statistics,

:57:04.:57:11.

putting into the public finances 3. 5 billion of revenue which have not

:57:11.:57:15.

materialised. Targets aside, but most people's daily lives are the

:57:15.:57:18.

most important thing, petrol, that was good news, wasn't it? We were

:57:18.:57:23.

calling for a freeze in that. Of course, it's gone up by three pence

:57:23.:57:27.

because of the VAT increases. Don't forget, anybody filling their tank

:57:28.:57:32.

won't be seeing prices coming down, but they won't be going up at fast.

:57:32.:57:35.

Of course it's welcome. When we voted on it, the Government voted

:57:35.:57:40.

against that, so I'm not sure they won't make that announcement then.

:57:40.:57:44.

Schools and science and transports - �5 billion? We'll see where they

:57:44.:57:48.

are getting the money from. There is the issue of giving to Peter and

:57:48.:57:52.

taking from Paul. They took �3 billion out of the schools'

:57:52.:57:55.

infrastructure budget when they were elected. Putting one billion

:57:55.:58:00.

back if doesn't make up that gap. All the things that potentially

:58:00.:58:05.

people will welcome, you respond to in a Qual tide way. Where would you

:58:05.:58:07.

get opinion from? There isn't mathying money out there? I think

:58:07.:58:12.

what you have to do is look at the priorities. We wouldn't give �3

:58:12.:58:17.

billion away to the wealthiest in society, the millionaires who will

:58:17.:58:21.

get a tax cut in April and spend �3 billion reorganising the National

:58:21.:58:24.

Health Service. There has to be pay restraint, but there are other

:58:24.:58:28.

choices. We should have a reduction in the EU budget, but the key thing

:58:28.:58:33.

we have to come back to is growth. Unless you recognise that a healthy

:58:33.:58:36.

economy drives the health of public finances you'll never solve this

:58:36.:58:40.

and we have seen the Chancellor yet again kicking the can further down

:58:40.:58:45.

the road, and not dealing with the fundamental issues and breaking his

:58:45.:58:49.

promise to balance the books by 2015. We heard the Chancellor

:58:49.:58:52.

challenge you and others. He said people who don't want to cut

:58:52.:58:57.

spending they have to raise the taxes or the debt or both and

:58:57.:59:01.

that's your exclusion to spend more? I think there are key

:59:01.:59:04.

critical developments that need to be made now to stimulate growth and

:59:04.:59:08.

get confidence back. If we can continue, as the Chancellor himself

:59:08.:59:13.

had to admit, having a shrinking economy, so the economy actually

:59:13.:59:17.

gets smaller in 2012, then there's no wonder the public finances

:59:17.:59:21.

continue to deteriorate. How many more years will very to say to the

:59:21.:59:23.

Chancellor focus on growth and think about the health of the

:59:23.:59:26.

economy and the public finance issues will flow from that? Thank

:59:26.:59:36.
:59:36.:59:37.

you very much. Andrew, back to you. We are not the only people in this

:59:37.:59:42.

town doing some number cinching. They're doing it in the Sit --

:59:42.:59:49.

crunching. They're doing it in the City. Over now to Susannah Streeter

:59:49.:59:58.

in the City. There's a sense of relief following the Chancellor's

:59:58.:00:02.

statement. Relief that the UK is still on that path to austerity.

:00:02.:00:09.

There were concerns that the bond market could plummet really, but in

:00:09.:00:14.

fact gilts, UK Government debts have risen, which many say is good

:00:14.:00:20.

news for future borrowing for UK plc, but there's not been much

:00:20.:00:30.
:00:30.:00:32.

Let's talk to Mike Ingram, a market watcher. Tell me what you took from

:00:32.:00:37.

the statement, as far as trying to restore growth in UK PLC? Given the

:00:37.:00:41.

very limited room for manoeuvre that George Osborne had, and we all

:00:41.:00:45.

know that the numbers are extremely tight, I think he did a reasonably

:00:45.:00:49.

good job. He stuck to the principle of trying to read direct revenues,

:00:49.:00:54.

expenditure, away from current expenditure, away from overhead,

:00:54.:00:57.

into capital expenditure, spending that might see some sort of return

:00:57.:01:01.

in terms of developing businesses and support for the all-important

:01:01.:01:06.

SMEs. There was that announcement as well, a big increase in relief

:01:06.:01:11.

for capital expenditure. How much will that impact the small-to-

:01:11.:01:14.

medium businesses that are the lifeblood of the economy? I think

:01:14.:01:19.

it to be very significant indeed. As George Osborne pointed out, that

:01:19.:01:26.

includes 90% of corporates in the UK. Having his 100% tax relief,

:01:26.:01:36.
:01:36.:01:36.

from 25,000, up to 250,000, its a big boost. We heard about that �5

:01:36.:01:39.

billion fund for capital expenditure round things like new

:01:39.:01:44.

homes, for example, what impact will that have on growth in the

:01:44.:01:49.

long term? Andrew Smith is chief economist at KPMG. What to do take

:01:49.:01:53.

on the statement? Did you think there was anything that would help

:01:53.:01:59.

the economy return to growth and health? There are bits and pieces.

:01:59.:02:03.

The Chancellor has been tried to combine deficit-reduction with

:02:03.:02:07.

economic recovery. He's not actually getting much of either, as

:02:07.:02:11.

he had to admit. He tended by low growth and, on the other side, by

:02:11.:02:16.

his fiscal rules. There will be a small alleviation, but at the end

:02:16.:02:19.

of the day we are looking at a multi year fiscal contraction,

:02:19.:02:26.

which is going on to 2080 now. Thank you very much. More from you

:02:26.:02:30.

a little bit later. You can see it is still a very tough tightrope

:02:30.:02:35.

that the Chancellor is walking. So far, from the city, a cautious

:02:35.:02:45.
:02:45.:02:46.

You are watching live coverage and analysis of the Chancellor's Autumn

:02:46.:02:49.

Statement on BBC Two and the BBC News Channel. If you have just

:02:49.:02:52.

joined us, let's bring you have to date with a couple of the key

:02:52.:02:55.

points from George Osborne's statement. Let's begin with the

:02:55.:03:01.

forecast, not his forecast, but the forecast of the Independent Office

:03:01.:03:06.

for Budget Responsibility. It is now saying the economy will shrink,

:03:06.:03:11.

not by much, but certainly no signs of growth. Nothing like the third

:03:11.:03:15.

quarter, where we had growth of about 1%. Next year, not much

:03:16.:03:20.

better. The Government is on course to get its structural deficit down.

:03:20.:03:25.

But it is taking longer to do that. It's not on course to get net debt,

:03:25.:03:29.

the accumulation of all of the deficits that we'd have racked up

:03:29.:03:33.

over the years, called the national debt, that is not going to fall as

:03:33.:03:39.

a share of our national wealth until some time after 2016. That's

:03:39.:03:43.

a target that the Chancellor didn't make. What about taxes? Any joy

:03:43.:03:52.

there? Income tax, the personal allowance rises to 900 and --

:03:52.:03:56.

�9,440. You don't start paying tax until you ironing that amount of

:03:56.:04:01.

money. For those on higher incomes, the 40% tax threshold is rising by

:04:01.:04:11.

1% in both 2014/15 and 2015/16. In real terms, you will be paying more.

:04:11.:04:14.

If you run a business, corporation tax is down, the Chancellor has

:04:14.:04:23.

made many cuts to corporation tax. Other measures, if you are wrong

:04:23.:04:27.

working-age benefits, such as jobseeker's allowance, your

:04:27.:04:32.

increases over the next three years will be capped at 1%. Again, that

:04:32.:04:39.

is less than the rate of inflation. However, if you are a motorist, the

:04:39.:04:43.

three pence rise in fuel duty is coming through in January, it has

:04:43.:04:47.

not just been postponed, it has been scrapped altogether says the

:04:47.:04:51.

Chancellor. If you are a civil servant working in Whitehall,

:04:51.:04:55.

departmental budgets are going to be cut by 1% next year and another

:04:55.:05:01.

2% the year after that. That on top of the 17% cuts already laid down

:05:01.:05:04.

in previous Chancellor statements and budgets. It is likely,

:05:04.:05:10.

therefore, to mean some redundancies.

:05:11.:05:14.

Let's get some more political reaction and talk to Angus

:05:14.:05:19.

Robertson for the SNP and Elfyn Llwyd from Plaid Cymru. They are in

:05:19.:05:26.

the Central Lobby. Angus Robertson, or public spending, more public

:05:26.:05:30.

investment, Scotland will get its share, what are you going to spend

:05:30.:05:38.

it on? First off, it's important to note that the growth forecasts are

:05:38.:05:41.

as problematic as they are. It's a problem in Scotland and Wales, the

:05:41.:05:46.

whole of the airship kingdom. It's a real cause for concern. -- United

:05:46.:05:50.

Kingdom. Capital projects coming on line, those are shove already

:05:51.:05:54.

projects that the Scottish government have had ready to start

:05:54.:06:01.

immediately. About half of those projects will be returned to

:06:01.:06:04.

Scotland. I'm not sure if you have reported that North Sea oil

:06:04.:06:09.

receipts will contribute �10 billion in the next financial year.

:06:10.:06:13.

Scotland is contributing significantly to the UK. You would

:06:13.:06:18.

not expect me to overlook the comparison that we would be able to

:06:18.:06:23.

make far better decisions in Scotland around the budget, given

:06:23.:06:27.

that Scotland is in a better budgetary situation than the UK.

:06:27.:06:32.

That is the great advantage of an independent vote in 2014, when we

:06:32.:06:34.

can secured the decision-making powers of Scotland to make them

:06:35.:06:39.

closer to home, rather than having a Tory government we did not elect

:06:39.:06:44.

making bad decisions. I expected you to get to that point, in spite

:06:44.:06:49.

of my question being about something else! The Government, or

:06:49.:06:52.

the Prime Minister in Prime Minister's Questions, pointed out

:06:52.:06:56.

that the money in the health service in Wales is being cut. Will

:06:56.:07:00.

you have a chance to increase that with money coming your way from the

:07:00.:07:03.

overall spending settlement? depends what the Labour government

:07:03.:07:07.

decide to do. Their priorities clearly are not in the area of

:07:07.:07:10.

health, which she would have thought would have been a priority.

:07:10.:07:14.

That is the first point. We have campaigned for a long time for

:07:14.:07:17.

borrowing powers for borrowing powers for the Welsh government.

:07:17.:07:23.

That has been welcomed by the Silk Commission. No mention of it today,

:07:23.:07:26.

but we need those powers to kick- start the economy and make sure

:07:26.:07:30.

that capital projects within health, with their many public service, are

:07:30.:07:35.

brought forwards. Clearly, they are not at the moment. I'm disappointed

:07:35.:07:39.

with the general thrust of today's announcements. As Angus said, his

:07:39.:07:44.

figures, are they dependable? I'm not sure if they are. In 2010, he

:07:44.:07:49.

was talking of a growth rate of 2.8%. This year we are talking

:07:49.:07:55.

about 0.1%. In fact, his 5 billion towards closing the gap, as it were,

:07:55.:07:59.

is going to be negligible in terms of effect, according to the IFS.

:07:59.:08:06.

Ernst and Young say that in order to increase GDP by 0.5% per annum,

:08:06.:08:10.

you actually need �14 billion per annum invested. It is really going

:08:10.:08:15.

to be negligible. It is more austerity. Incidentally, hitting

:08:15.:08:19.

the ball, the easy targets. I don't know if people realise, it's clever

:08:19.:08:24.

sleight of hand. -- hitting the poor. Benefits were going to go up

:08:24.:08:28.

by RPI, then they were switched to CPI, now it is in accordance with

:08:28.:08:34.

average wages, lower again. I think that is awful. It shows that the

:08:34.:08:38.

Tory party are still the nasty party, here they are at work.

:08:39.:08:42.

they're not even going to be going up in line with wages, less than

:08:42.:08:45.

that. Time now to say goodbye to viewers

:08:45.:08:49.

in Scotland. Goodbye. They are going to join Andrew Kerr for

:08:49.:08:55.

politics Scotland. We can now talk to Alan Moreton

:08:55.:09:00.

Island business editor Jim Fitzpatrick, outside Stormont. --

:09:00.:09:04.

Alan Northern Ireland business editor. How is it going down there?

:09:04.:09:08.

Cringing the figures, it looks like Northern Ireland is actually a win

:09:08.:09:15.

out of this one. The public spending is the economy in Northern

:09:15.:09:21.

Ireland. It accounts for 70% of our economy. We rely on �10.5 billion

:09:21.:09:24.

from Westminster to keep this place ticking over, that is the amount we

:09:24.:09:29.

take, as opposed to what we get back. How it turns out to date is

:09:29.:09:31.

that we will see an increase of capital spending over the next

:09:31.:09:37.

couple of years of �131 million. We will see a decrease in resource

:09:37.:09:46.

spending of �32 million. Pretty much a gain of almost �100 million

:09:46.:09:50.

for Stormont to spend on infrastructure. That will, of

:09:50.:09:54.

course, be welcomed. Something else that has been sneaked in, which

:09:54.:10:02.

might be of interest of those that followed the energy industry. The

:10:02.:10:07.

carbon floor tax, Northern Ireland is going to be exempt from that.

:10:07.:10:14.

The argument is that we are an island, it would put generators in

:10:14.:10:16.

Northern Ireland and it's an advantage compared to the republic.

:10:16.:10:26.

That has been sneaked in and it Just looking at the growth figures,

:10:26.:10:31.

the OBR, the official growth forecast of just over 1%, 1.2% for

:10:31.:10:38.

next year, up to 2% for 2014. Just two point out that the OBR is still

:10:38.:10:44.

more optimistic on growth than the average of independent forecasters.

:10:44.:10:47.

They don't even think the economy is going to grow by as much as the

:10:47.:10:52.

OBR. As we were saying, the record of the OBR has been that it has

:10:52.:10:59.

been far too optimistic. I wouldn't bet the bank on these forecasts. Jo

:10:59.:11:02.

is with Paul Lewis in Stoke-on- Trent.

:11:02.:11:07.

Yes, George Osborne, the Chancellor, has painted a pretty tough picture

:11:07.:11:13.

with more gloomy times ahead. As far as he is concerned, he's got to

:11:13.:11:17.

try to find and generate that elusive problem of more growth in

:11:17.:11:21.

the economy. Let's talk to Paul Lewis from BBC Radio Four's

:11:21.:11:27.

Moneybox programme. Was there anything in a statement that said

:11:27.:11:30.

you are that this will generate growth? The big thing was the

:11:30.:11:35.

increase in capital allowances for businesses. You can spend �25,000

:11:35.:11:40.

and write it off in the first year. It's going to be �250,000, a

:11:40.:11:44.

tenfold increase. The businesses I have spoken to say it is a very

:11:44.:11:48.

good thing. They can spend money, it will boost the economy and they

:11:48.:11:52.

can get full tax relief. Do you think it will be enough? Big

:11:52.:11:56.

corporations are sitting on, they admit, quite a lot of cash they

:11:56.:11:59.

don't want to invest? I think it will help smaller businesses more

:11:59.:12:03.

than big ones. What big business needs is the feeling that if they

:12:03.:12:07.

start investing the economy is going to grow. As we have seen, the

:12:07.:12:11.

Chancellor says it has actually shrunk for the whole of 2012.

:12:11.:12:15.

really that optimistic in terms of what people can expect? What have

:12:15.:12:20.

people been sending you e-mails about? Edward in Oxford is in

:12:20.:12:23.

business and he said he would have liked a national insurance holiday

:12:23.:12:28.

so he could take on new staff about the expense of national insurance.

:12:28.:12:34.

That hasn't happened. We certainly have people liking to cut... Sorry,

:12:34.:12:42.

not the cut, they're not been a rise in fuel duty. That's gone

:12:42.:12:47.

altogether. That's important for people in rural areas. Also for

:12:47.:12:51.

businesses that rely on fuel. Everything we have in our homes has

:12:51.:12:55.

been delivered by road somewhere. That is a big saving and could help

:12:55.:12:59.

business a lot. On the personal side, a rise in tax allowance in

:12:59.:13:05.

April from what we were expecting by another remand, �9,440 before we

:13:05.:13:09.

pay tax. That will put a bit of cheer back in people who face pay

:13:09.:13:14.

cuts and pay freezes. Let's get local reaction and talk

:13:14.:13:17.

to our guests who come from across the region. I am joined by Barry

:13:17.:13:23.

Proctor, who runs a haulage company. Julie White owns a concrete cutting

:13:23.:13:33.
:13:33.:13:34.

company. Mike Benniston is a pub landlord. That 3p rise in fuel duty

:13:34.:13:40.

not happening, will that have an effect? It really pleased, I would

:13:40.:13:44.

like to thank the lobbying from fair pay on fuel. Also welcome news

:13:44.:13:50.

is the Investment allowance. Will you take advantage, or other

:13:50.:13:54.

companies? We will take advantage, yes. What about the state of the

:13:54.:13:58.

construction industry? That's my biggest concern. We are heavily

:13:58.:14:02.

involved in the construction industry. My major customer

:14:02.:14:06.

operates nine Brickworks in the UK. At this moment there is not a

:14:06.:14:11.

single works producing a brick. Any improvement in house building would

:14:11.:14:15.

be very welcome. There was nothing in the Autumn Statement that would

:14:15.:14:19.

inspire you to think that would happen? A little bit, but not much.

:14:19.:14:23.

What is your biggest concern? the infrastructure. They have been

:14:23.:14:26.

talking about it, I think it is �33 billion they are talking about

:14:27.:14:30.

comedy at the structure they are putting into roads, housing and

:14:30.:14:37.

schools. But nothing is happening. We really need a push. We need to

:14:37.:14:41.

actually get the sites ready and going. It takes six months, nearly,

:14:41.:14:48.

to tender and then get to start. When the Chancellor says we are

:14:48.:14:50.

releasing this money to go to capital investment and

:14:50.:14:54.

infrastructure, we are talking about at least another six months?

:14:54.:14:58.

Even from now to them. So we need more time. The other thing is no

:14:58.:15:05.

apprentices. They didn't mention anything at apprentices. We have

:15:05.:15:11.

companies like Wedgwood, why can't we get a national insurance holiday

:15:11.:15:15.

for every employee we hired? It would be great for small businesses

:15:15.:15:20.

and young people. For you and your business, I presume the idea of

:15:20.:15:24.

what they call fiscal consolidation, more austerity until 2018, what

:15:24.:15:29.

will that do to your spending power of your customers? It will give

:15:29.:15:35.

them less money in an industry that is already depreciating on an

:15:35.:15:45.
:15:45.:15:47.

average of about 12 pubs week now closing. The thought of a third --

:15:47.:15:52.

further five years of less money in people's pockets, it has an adverse

:15:52.:15:56.

effect on our business because people have not got the money in

:15:56.:16:06.
:16:06.:16:08.

their pockets. If they have got the We have to diversify. From our

:16:08.:16:12.

original business, we are diversifying in different ways. We

:16:12.:16:17.

have put in planning permission to open a village shop, as part of a

:16:17.:16:21.

community-based project. So, our original business is developing

:16:21.:16:26.

into other areas. In terms of diversification, have you had to

:16:26.:16:31.

lay any one-off? Not yet, but at the moment, I have got a third of

:16:31.:16:36.

my fleet doing traction only. Coming up to Christmas, the food

:16:37.:16:41.

chain gets very busy, so we have got a third of the fleet doing

:16:41.:16:45.

traction, delivering to supermarkets and things like that.

:16:45.:16:48.

We are hoping that in January, things will pick up, and we will

:16:48.:16:53.

have them back on the bricks. There needs to be an awful improvement in

:16:53.:16:57.

house building. I do not understand, with the amount of money we are

:16:57.:17:01.

paying out at the moment in housing benefit, but we are not building

:17:01.:17:05.

more houses for these people, rather than lining the pockets of

:17:05.:17:11.

very wealthy landlords. As far as staff are concerned, the Chancellor

:17:11.:17:15.

said that employment has been a better picture than had been

:17:15.:17:21.

thought - do you agree with that, or are people doing Les hours, is

:17:21.:17:26.

that how you have managed to keep hold of people? Well, we have

:17:26.:17:32.

diversified. I have bought a company, and we have started two

:17:32.:17:38.

new technologies, within the area of cutting. But it is tough. Thank

:17:38.:17:43.

you very much to all of you. We will be coming back to the Wedgwood

:17:43.:17:53.
:17:53.:17:55.

factory in the next hour or so. We are joined now by Paul Johnson,

:17:55.:17:57.

from the Institute for Fiscal Studies, something of a default

:17:57.:18:02.

think tank at moments like this! We went into this with the following

:18:02.:18:10.

deficit figures - we had a deficit of �121 billion in 2011 / 12. We

:18:10.:18:19.

were then forecast �120 billion for this current year, then �90 billion

:18:19.:18:24.

in 2013, and �75 billion in 2014/15, so it was going down, but not

:18:24.:18:29.

dramatically. What has happened? The good news is that the budget

:18:29.:18:32.

deficit this year does not look like it will be any worse than it

:18:32.:18:36.

was forecast to be back in March. That is partly because the

:18:36.:18:40.

Government is expecting departments to underspend, partly because tax

:18:40.:18:43.

revenues are holding up reasonably well, and partly because they are

:18:43.:18:48.

getting some extra money from selling 4G licences. Going forward,

:18:48.:18:53.

it looks rather worse. Three or four years out, it looks like the

:18:53.:18:57.

deficit will be �30 billion or so more. That is a big problem. What

:18:57.:19:02.

is causing that? Lack of economic growth, that is all. It is much

:19:02.:19:06.

lower than it was expected to become a back in March. Lower

:19:06.:19:15.

growth, higher borrowing. That is it. Never mind the forecasts, the

:19:15.:19:22.

borrowing for the first seven months of this financial year, 2012

:19:22.:19:26.

/ 13, is more than the last financial year, leading many people

:19:26.:19:29.

to predict that borrowing this year would be substantially higher than

:19:29.:19:33.

last year - what happened to that? Just one week ago, we were

:19:33.:19:38.

expecting that borrowing would be more this year than last. I did not

:19:38.:19:43.

want to mention that it was you! Three things seem to have happened.

:19:43.:19:49.

First of all, the Office for Budget Responsibility is being relatively

:19:49.:19:54.

optimistic for tax receipts. Secondly, department will spending

:19:55.:19:59.

seems to be coming in even lower than had been expected. Secondly --

:19:59.:20:04.

thirdly, there is this one off �3.5 billion, from the 4G auction. So,

:20:04.:20:09.

he has got three things which are going towards making that number.

:20:09.:20:13.

But in some of the figures I have seen, this year's deficit was going

:20:13.:20:19.

to be about the same as last year's, and you still think that is where

:20:19.:20:25.

we are? He is saying the deficit will be �108 billion this year?! Is

:20:26.:20:31.

that jiggery-pokery? We have all sorts of different numbers. That is

:20:31.:20:37.

why he has confused us to! The one he quoted, the �108 billion, I

:20:37.:20:41.

think included the transfer of money from the Bank of England. The

:20:42.:20:46.

comparable number is �120 billion. Essentially he is saying that

:20:46.:20:49.

borrowing this year will be near as damn it the same as last year.

:20:49.:20:58.

it is not really deficit-reduction? It is certainly not much of one.

:20:58.:21:03.

is interesting that it does seem to make quite a big difference to the

:21:03.:21:05.

structural picture. I was very optimistic initially looking at

:21:05.:21:11.

these figures, but then I realised there wasn't yet another * But I

:21:11.:21:18.

should have followed, to get another shot, -- to yet another

:21:18.:21:26.

chart, to take account of these transfers from the Bank of England.

:21:26.:21:30.

Is it right, is it actually a long- term improvement, that the

:21:31.:21:36.

Chancellor has actually been help - - helped by the Bank of England's

:21:36.:21:40.

decision to buy all of this debt to help the economy? Well, if it has

:21:40.:21:44.

had a good effect on the economy, which it was intended to do, then

:21:44.:21:49.

it will have that effect. It has made it cheaper to borrow was well.

:21:49.:21:52.

He is getting the interest back that he was given to the Bank of

:21:52.:21:56.

England. The overall story is of a structural deficit which is bigger

:21:56.:22:01.

than was inspected in March, so there is some help, but it is not

:22:01.:22:06.

taking us out of a hole. Can you just explain to people watching

:22:07.:22:11.

this programme, who have to pay their credit card bills and balance

:22:11.:22:17.

their accounts every week and every month, a system whereby the

:22:17.:22:21.

Treasury cells and are set to the Bank of England, called gilts, and

:22:21.:22:26.

it pays interest on that, and that interest goes into the Bank of

:22:26.:22:30.

England's balance sheet as income, and then, after a while, the

:22:30.:22:35.

Treasury says, give us that income back, we wanted on our balance

:22:35.:22:41.

sheet! If any individual did that, you would end up in jail? It is a

:22:41.:22:45.

strange but of accounting, but it does not change anything real..

:22:45.:22:50.

is using it to change the figures are! Unfortunately in his speech he

:22:51.:22:54.

used figures which included those numbers. But in the main

:22:54.:22:58.

documentation, you can see the numbers without that. It is not

:22:58.:23:02.

changing anything. We are still going through. Do not go away. We

:23:02.:23:09.

have got a lot more to ask you. I must try the idea of paying

:23:09.:23:13.

interest and then asking for it back with my own bank account!

:23:13.:23:20.

Stefani, thanks for being with us. I have got to go to the Office for

:23:20.:23:24.

Budget Responsibility, to see how they explain it all. You will be

:23:24.:23:28.

there all night! Let's see what some members of Her Majesty's press

:23:28.:23:32.

have got to say about this. We can go back to Matthew, on College

:23:32.:23:40.

green. I am sure he will be able to do a Leveson-compliant interview!

:23:40.:23:45.

Yes, we have got Polly Toynbee, from The Guardian, as well as

:23:45.:23:48.

journalists from the Economist macro and from the Evening Standard.

:23:48.:23:52.

What have you made of it? It is very grim, worse than we might have

:23:52.:23:57.

thought. All the forecasts turn out to have been wrong, yet again. Time

:23:57.:24:04.

and time again, the OBR seems to get it spectacularly wrong. Away

:24:04.:24:09.

the pain has been shared has been yet again singularly unfair. Four

:24:09.:24:15.

times more taken from the poorest tenth than from the richest.

:24:15.:24:19.

think he was trying to do two things with this statement. First

:24:19.:24:24.

of all, he has been trying to get a quality of suffering theme going,

:24:24.:24:29.

so you will find the tax thresholds have changed, so that over the next

:24:29.:24:33.

three years, if you were any more, you will certainly be contributing

:24:33.:24:38.

more. I think what he is trying to do, squeezing benefits at the other

:24:38.:24:42.

end, he wants people to have every possible reason to going to work.

:24:42.:24:48.

So yes, it is tough, on that account. In terms of real lives,

:24:48.:24:55.

what he wants to do is to say, I am going to be easing off on petrol,

:24:55.:25:00.

but at the same time, it is hard, targets are not being met at the

:25:00.:25:03.

moment, and it would not be the first government where targets have

:25:03.:25:08.

been missed. You mentioned fairness - George Osborne said he was

:25:08.:25:12.

targeting bureaucracy, benefits, the well-off. He thought that was

:25:12.:25:17.

fair - you think not? He makes a very unfair distinction between the

:25:17.:25:20.

strikers and the skivers, between people on benefits and people in

:25:20.:25:25.

work. The truth is, he is cutting tax credits, and three-quarters of

:25:25.:25:28.

people on tax credits are in work. The idea that you can make a

:25:28.:25:31.

distinction between people on benefits and people in work is

:25:31.:25:36.

utterly wrong, and he knows it, and most people know it. Tax credits

:25:36.:25:39.

are very important to ordinary, working families, and yet he blurs

:25:39.:25:43.

the edges of that, by talking about people who are still asleep in the

:25:43.:25:48.

morning. Most of the people out of work desperately want to find jobs.

:25:48.:25:52.

Most of the people whose benefits have been cut are in work,

:25:52.:25:54.

enclosing their housing benefits. Most of the people going on to

:25:54.:25:58.

housing benefit are in work. terms of the political argument,

:25:58.:26:02.

one question raised was, could George Osborne convince people that

:26:02.:26:07.

this was the only strategy, however painful? Do you think he managed to

:26:07.:26:10.

convince people? He will not convince people who thought from

:26:10.:26:14.

the beginning that this was the wrong tactic, and that we should

:26:14.:26:20.

simply borrow more and continue with fiscal indiscipline. They were

:26:20.:26:24.

never going to be convinced. But in terms of austerity, I would say

:26:24.:26:29.

that the wavering voters broadly feel this is necessary. They wish

:26:29.:26:35.

that things were better, but they will have had to concede that it

:26:35.:26:40.

has been harder than he had said at the outset. The polls are beginning

:26:40.:26:43.

to switch, interestingly. Many more people are saying they think we

:26:43.:26:48.

have had enough cuts, compared with the number saying that what counts

:26:48.:26:54.

is the deficit only. If only he had borrowed in order to invest, but

:26:54.:27:02.

borrowing is going up anyway. We have an economy which is shrinking

:27:02.:27:12.
:27:12.:27:12.

Apology for the loss of subtitles for 43 seconds

:27:12.:29:01.

On BBC Two we have Paul Johnson still with us. One of the issues we

:29:01.:29:11.
:29:11.:29:12.

were talking about is the impact of the 1% rise in benefits for a

:29:12.:29:18.

three-year period has quite big distributional impact, doesn't it?

:29:18.:29:22.

Those dependent on benefits, those on the lowest incomes, not

:29:22.:29:28.

pensioners, and this is not affecting pensioners, only goes on

:29:28.:29:34.

working age, they will seek their real incomes fall by just over 1% a

:29:34.:29:41.

year. But it is worth saying that over the last two or three years,

:29:42.:29:45.

earnings have been increasing a lot slower than benefits. You could

:29:45.:29:50.

argue that this is partially reversing a situation in which

:29:50.:29:54.

those dependent on benefits have been doing better than those

:29:54.:30:03.

dependent on innings. Robert? of what will determine things like

:30:03.:30:05.

if these allegedly more cautious deficit assumptions are going to be

:30:06.:30:11.

hit in years to come, will we keep our credit rating and the rest of

:30:11.:30:15.

it, is what happens to growth. If you look at the OBR forecast of

:30:15.:30:21.

growth, it is expecting something of a recovery next year. If you

:30:21.:30:25.

drill down bits of it, you can take for granted they are going to be

:30:25.:30:28.

negative. For the first time, general government consumption is

:30:28.:30:32.

going to fall. Government investment is going to continue to

:30:32.:30:35.

be squeezed. You can assume that these negative things are going to

:30:35.:30:41.

happen. Then they say that we do expect consumer spending to bounce

:30:41.:30:47.

quite a lot, up 0.9%, business investment to go up 0.9%. A

:30:47.:30:51.

positive contribution from trade. In recent years, all of that has

:30:51.:30:57.

disappointed. There are pretty good reasons to be cautious, I think, in

:30:57.:30:59.

assuming we are going to get that kind of private sector recovery

:30:59.:31:05.

next year. Do you think that this growth forecast is credible? It's

:31:05.:31:11.

probably as credible as you can get. So it's not credible!? It's not

:31:11.:31:15.

massively out of line with other forecasts. In its a little more

:31:15.:31:19.

optimistic. It is less optimistic than last year. There is clearly a

:31:19.:31:25.

risk that it will yet again have to be taken down in a year's time.

:31:25.:31:30.

Let's put this in context. We have now had former careers of the worst

:31:30.:31:35.

growth we have ever had, certainly since the 1920s. There is a very

:31:35.:31:41.

real sense in what the OBR is suggesting, and do the forecasts,

:31:41.:31:45.

it is unbelievably pessimistic given how bad things have been,

:31:45.:31:50.

assuming that we have not lost very large swathes of the economy, at

:31:50.:31:54.

some point we will move back. The problem that everybody has got his

:31:54.:31:58.

when it starts to turn around. was looking at that distributional

:31:58.:32:03.

figure, that the Labour Party are drawing people's attention to, the

:32:03.:32:09.

charts produced by the Treasury to show who gains from these measures.

:32:09.:32:15.

Anybody in the bottom half of society loses, people just above

:32:15.:32:18.

the halfway mark gain a little, presumably from the personal tax

:32:18.:32:24.

allowance and fuel duty. Then the richest 10% take quite a big hit.

:32:24.:32:30.

In other words, it is sometimes misleading when you say that the

:32:30.:32:36.

rich suffer, the poor suffer, there are quite a lot of people just

:32:36.:32:40.

below the middle who suffer more than those just above the middle.

:32:40.:32:50.

It's interesting what we mean by the rich. We usually mean somebody

:32:50.:32:59.

slightly richer than us! If you are in the proper sense -- top 10%, it

:32:59.:33:04.

might not feel like the super rich. What you have got is a set of

:33:04.:33:07.

measures, the fuel duty, the personal allowance, that will help

:33:08.:33:12.

those in the upper middle. Those dependent on benefits might be

:33:12.:33:19.

losing as a result of the changes. Just as those who are earners have

:33:19.:33:23.

lost because their earnings are falling. When you strip out the

:33:23.:33:27.

extra things that have been put in, the Royal Mail, the Bank of England

:33:27.:33:32.

giving back its interest to the Treasury, financial intervention

:33:32.:33:36.

transfers, I'm not quite sure what that is, but strip that out as well,

:33:36.:33:42.

is the deficit... It falls, but it doesn't seem to be falling that

:33:42.:33:49.

fast. It's still going to be 60 billion in the 2016/17. Has he had

:33:49.:33:54.

to revise yet again the fall in the size of his borrowing? Yes, he has

:33:54.:33:57.

had to say that my borrowing has fallen significantly slower than I

:33:57.:34:02.

hope last year, which was itself falling much slower than he had

:34:02.:34:06.

hoped here before. He had to push out his target to get us back into

:34:06.:34:11.

structural balance by an extra year, or of the way through to 2017/18.

:34:11.:34:17.

He's had to announce another set of spending cuts. So, yes, he is

:34:17.:34:21.

borrowing more now than he hoped to be back in March. Even back in

:34:21.:34:25.

March? A lot more than back in autumn of last year when he told us

:34:25.:34:29.

he was going to borrow a lot more than he told us in June of 2010?

:34:29.:34:33.

It's all been going in the same rather unhelpful direction, yes.

:34:33.:34:38.

Final points before we move on? That's the interesting part, the

:34:38.:34:41.

politics. Do you look at these statements and dredge them against

:34:41.:34:45.

what the Conservatives said when they were trying to get into office,

:34:45.:34:49.

or do you judge them against the extraordinarily low expectations

:34:49.:34:53.

that have been created in the last few weeks? In the latter, it is

:34:53.:34:58.

just a little bit better than we thought. Borrowing has not gone up.

:34:58.:35:03.

If you judge them by six months ago, a year ago, two years ago, they are

:35:03.:35:10.

dreadful in every possible description. We measured debt

:35:10.:35:12.

differently in this country from how the European Union measures

:35:12.:35:19.

debt. On their measure, I guess we get to pretty much 100% of GDP?

:35:19.:35:24.

Even on these figures, we are rising up to 80%, more than we had

:35:24.:35:27.

hoped for before. Yes, it would be significantly higher on eurozone

:35:27.:35:32.

measures. I think Nick is right, these are terrible numbers on a

:35:32.:35:36.

long-term basis. But it's perhaps we get used to how bad things are.

:35:36.:35:41.

We shouldn't, we should continue to be appalled by how bad things are.

:35:41.:35:46.

Consider us appalled! That's for being with us.

:35:46.:35:50.

-- thanks. Let's bring you have to date with the key points in the

:35:50.:35:54.

Chancellor's Autumn Statement. Let's begin with tax and duties.

:35:54.:35:58.

They are most interesting to individuals. Income-tax, the

:35:59.:36:01.

personal allowance, the amount before you have to start paying tax

:36:01.:36:10.

is rising in April of 2013 to �9,440. If you are a much higher

:36:11.:36:14.

paid person than that, the amount that you can put into your pension

:36:14.:36:21.

fund and get tax relief on is now down to �40,000, from �50,000. Also,

:36:21.:36:25.

the lump sum that you are allowed to grow, we don't have the details,

:36:25.:36:33.

but that has been reduced from �1.5 million, down to about �1.25

:36:33.:36:43.
:36:43.:36:46.

million. If you are a motorist, the three pence rise planned for

:36:46.:36:51.

January is not going to happen. Benefits, one of the big areas

:36:51.:36:53.

where the Government is clawing back a lot of money by making

:36:53.:37:00.

changes. Working-age benefits, the increase would be capped at 1% for

:37:01.:37:06.

three years. I presume that is 1% a year for three years, not 1% over

:37:06.:37:15.

three years. Even so, if we assume inflation is 2%, it is a real-terms

:37:15.:37:19.

cut. The changes will save almost �4 billion by 2015/16, which is

:37:19.:37:23.

what the Chancellor needed to get borrowing to continue to fall. The

:37:23.:37:29.

state pension is not touched, it will rise by 2.5%, the working

:37:29.:37:34.

assumption of inflation that the Government is making, to �110.15

:37:34.:37:38.

next year for the single state pension. What about business?

:37:38.:37:42.

Businesses got a bit of a surprise cut. It wasn't expecting a

:37:42.:37:47.

corporation tax cut. It gets one, but has to wait until 2014, when it

:37:47.:37:51.

will be down to 21%, about the lowest of any of the major

:37:51.:37:56.

economies in the Western world. The Investment allowance, particularly

:37:56.:38:00.

to encourage small businesses to invest, that has increased tenfold

:38:00.:38:06.

from �25,000, up to �250,000. Desperate, the Chancellor, to see

:38:06.:38:11.

small businesses making investments, to get the economy growing. That is

:38:11.:38:14.

tax relief to encourage them to do so. They can write it off very

:38:14.:38:21.

quickly. Small business rate relief has been extended until 2014.

:38:21.:38:24.

So, that is some of the things the Chancellor thought would please

:38:24.:38:28.

business. Let's get an overall reaction to what is pleasing the

:38:28.:38:32.

markets and how the City sees it. Let's go over to Susannah Streeter

:38:32.:38:37.

in Canary Wharf. Hello, I am after BGC Partners,

:38:37.:38:41.

where I have been all day, gauging their reaction of economists,

:38:41.:38:46.

market watchers and tax advisers to the Autumn Statement. Also, on ways

:38:46.:38:50.

to restore the UK economy to good health. The City doesn't like

:38:50.:38:57.

surprises and there were not many for them. There has been there for

:38:57.:39:02.

reaction in the stock markets, the FTSE 100. Also, stocks and shares

:39:02.:39:07.

of companies involved in the UK infrastructure, for example in

:39:07.:39:09.

communications, transport and construction, they have not changed

:39:09.:39:15.

much. The bond markets, there has been a slight lift in gilts. That

:39:16.:39:22.

is a change. Let's talk to Allister Heath, the editor of City AM. Gilts

:39:22.:39:27.

have risen, UK government debt shows that there is a bit more

:39:27.:39:32.

confidence in what the Chancellor is doing. The market could have

:39:32.:39:35.

dropped dramatically? The real story is that nothing has really

:39:35.:39:38.

changed. The national debt is still going up at a very fast rate. The

:39:38.:39:43.

deficit is massive, it is going to be bigger than we previously

:39:43.:39:52.

thought. Really, what we are going to see his, year after year, the

:39:52.:39:55.

unending austerity has been pushed back another year. The plan will

:39:56.:39:59.

last for seven years, rather than six or four, as previously thought.

:39:59.:40:03.

We had a few measures, the relief on capital expenditure is going up

:40:03.:40:09.

quite dramatically. Also, this 5 billion capital fund for investment

:40:09.:40:12.

in infrastructure. How much of an impact would that have won growth?

:40:12.:40:17.

One or two of the measures that have an impact. This new rule will

:40:17.:40:22.

make it cheaper or easier to invest, buy new factories and computers.

:40:22.:40:26.

That has been welcomed. The cuts to corporation tax will be good news

:40:26.:40:29.

and will boost the UK's attractiveness as a place for

:40:29.:40:33.

companies to come. There are also some negative measures. The pension

:40:33.:40:36.

industry was hit by a reduction in tax relief. There was another raid

:40:36.:40:39.

on banks at a time when the Government wants them to lend more

:40:39.:40:45.

money. It sort of balance itself out. On balance, there are a few

:40:45.:40:49.

more pro-growth measures, rather than the anti-growth measures. A

:40:49.:40:53.

lot of debt, a lot of deficit, I don't think that picture has

:40:53.:40:59.

changed. We are still going to see years and years of austerity.

:40:59.:41:02.

sure that is good to be the headline in City AM. Something

:41:02.:41:06.

along those lines, years of austerity to come. For the City, it

:41:06.:41:10.

has been viewed as business as usual.

:41:10.:41:14.

Let's get some more political reaction to the Autumn Statement of

:41:14.:41:18.

2012. We are joined by the leader of the UK Independence Party, Nigel

:41:18.:41:22.

Farage. You must be pretty happy to see the deficits continuing to go

:41:22.:41:27.

down, growth coming back into the economy, Britain beginning to look

:41:27.:41:33.

a little bit better again? haven't spotted any of that. We are

:41:33.:41:35.

two and-a-half years into the Government, the deficit is still

:41:35.:41:40.

enormous, growth is Pitt Report. Nothing has really improved at all.

:41:40.:41:44.

What we have today are another series of forecasts, heading out

:41:44.:41:47.

for the next three, four, five years, that frankly look like

:41:47.:41:51.

fantasy land given what is going on. By giving courage and complement

:41:51.:41:54.

the Chancellor of what he has done to encourage shale gas development,

:41:54.:42:04.
:42:04.:42:05.

on what he has done to encourage investment. But I don't think they

:42:05.:42:09.

have done enough to get growth into the economy. But where are the cut?

:42:09.:42:13.

This was a government that was going to hack back quangos. I can't

:42:13.:42:17.

see anything like that being proposed at all. I don't think he

:42:17.:42:22.

is being radical enough. proposed a new quango for a

:42:22.:42:27.

conventional gas, an interesting title to have. Other than leaving

:42:27.:42:32.

Europe, let's park your raison d'etre, what else would you have

:42:32.:42:37.

them do? Well, leaving Europe would of course Sadie 1% of your

:42:37.:42:41.

expenditure. There is also a fairly urgent need to look at much of the

:42:41.:42:45.

foreign aid budget, which is not reaching the right destinations.

:42:45.:42:49.

They are the short term, easy things to do. Under those years of

:42:49.:42:54.

Labour government, we grew something like an extra million

:42:54.:42:58.

people working throughout quangos, the civil servants and deep

:42:58.:43:03.

bureaucratic layer in this country. And we have got to make some big,

:43:03.:43:06.

very deep cuts in those areas. And I don't think that this government

:43:06.:43:11.

has got the courage to do it. I believe it needs to be done.

:43:11.:43:15.

came a distant second in Rotherham and you didn't do badly in some of

:43:15.:43:20.

the other by-elections. Bjorn nip and tuck with the Lib Dems, now in

:43:20.:43:24.

the polls, you are sometimes ahead. What are you going to do for an

:43:24.:43:28.

encore? We are going to keep on going and show people we are not

:43:28.:43:31.

just a party that talks about who governs Britain and why we should

:43:31.:43:35.

not be part of the European Union. We are also a party talking about

:43:36.:43:40.

how that Britain should be governed. What I would like to see today,

:43:40.:43:43.

particularly for Britain's 4.2 million small businesses, I would

:43:43.:43:47.

like to see some changes to employment regulations. We saw none

:43:47.:43:56.

Let's go back to Jo Coburn, in Stoke-on-Trent. The Government is

:43:56.:44:00.

fond of saying that those with the broadest shoulders should bear the

:44:00.:44:05.

heaviest load. So, was that evident in the announcements made by the

:44:05.:44:10.

Chancellor today? What is certain is that the Government has admitted

:44:10.:44:16.

that austerity will last until 2018, and that is likely to lead to

:44:16.:44:21.

further belt-tightening. Let's discussed that with my local --

:44:21.:44:27.

with my three guests, a local says the agent, a member of the TUC, and

:44:27.:44:29.

a representative of the Confederation of British Industry.

:44:29.:44:34.

Is anybody buying and selling houses? The only people selling are

:44:34.:44:44.

those that feel forced to. If you look at inflation, the numbers are

:44:44.:44:48.

down by 26%. The only people selling are forced, and the only

:44:48.:44:52.

people really buying our investors, who have the funding available to

:44:52.:44:57.

buy, to let them out. Getting a mortgage, is that the big problem,

:44:57.:45:02.

or is it that people are unsure about the future? In this area, we

:45:02.:45:05.

have one of the highest rates of unemployment in the country, so

:45:05.:45:09.

there are very few people who are in a position to apply for a

:45:09.:45:18.

mortgage, and those who are just do not have the deposit. How are

:45:18.:45:25.

Estate Agents managing? We also do nettings. The rental market is very

:45:25.:45:29.

strong. We are quite focused on those who are in receipt of housing

:45:29.:45:33.

benefit, because they make up such a large part of this local area.

:45:33.:45:37.

The Chancellor is talking today about people who make a lifestyle

:45:37.:45:41.

choice to stay in bed while others go to work, and quite frankly, that

:45:41.:45:46.

is not the case in Stoke-on-Trent. People do not have the choice.

:45:46.:45:50.

Let's talk about that lifestyle choice, because George Osborne says

:45:50.:45:55.

he has got to share the pain fairly - is he doing that? Absolutely not.

:45:56.:46:03.

Here in Stoke, four people are chasing every job. In areas like

:46:03.:46:10.

Stoke, it has been economically on its knees. Taking �3.5 billion from

:46:10.:46:15.

benefits, the majority of which go to people in work, it is the wrong

:46:15.:46:19.

cure at the wrong time. He painted a picture of somebody sitting in

:46:19.:46:23.

their room with the blinds closed and not working, is that what you

:46:23.:46:31.

think? The majority of people claiming benefit are in work. Raids

:46:31.:46:35.

on working tax credits and on child credit across the board are

:46:36.:46:39.

squeezing family income. They are then not spending in the local

:46:39.:46:44.

economy, and shops are struggling. Let's take that point. People will

:46:44.:46:49.

not have much more disposable income after today - how does that

:46:49.:46:54.

affect businesses - cake we have to realise, there is not a magic cure

:46:54.:46:58.

to the economic situation. The Chancellor mentioned about the UK

:46:58.:47:01.

having to compete in the world, and there was some good news today

:47:01.:47:06.

about encouraging companies to export. There was the cut in

:47:06.:47:13.

corporation tax, amongst others. But there is no magic solution.

:47:13.:47:19.

There you go, there is no magic wand, and George Osborne says, the

:47:19.:47:23.

richest in society are paying their fair share of taxes. It is simply

:47:23.:47:28.

not the case. We said in 2010 that cutting so hard and putting more

:47:28.:47:32.

people on the dole was not the right solution, and we have been

:47:32.:47:36.

proved right. But employment has stood up better than might have

:47:36.:47:44.

been expected. As has been said, under-employment is a huge issue.

:47:44.:47:50.

People are not earning enough money. When things are going wrong, it is

:47:50.:47:54.

about time we admitted it, and acknowledged that we cannot keep

:47:54.:47:58.

putting these targets back time and again, but we actually need to

:47:58.:48:02.

invest in jobs and services. People will remember that what got a lot

:48:02.:48:06.

of the economy into trouble was an overheated housing market - you

:48:06.:48:11.

would not want to go back to that, would you? We would not. But we

:48:11.:48:16.

have got a housing shortage. In the West Midlands we estimate 17,000

:48:16.:48:22.

new households were formed, and only 8,500 houses were built. So,

:48:22.:48:26.

we are building up a shortage of homes. We would like to see

:48:26.:48:29.

investment in housebuilding, to create jobs and to supply the

:48:29.:48:33.

housing for the future. Briefly, is that what you would like to see as

:48:33.:48:37.

well we would like to see more investment in infrastructure and in

:48:37.:48:47.
:48:47.:48:50.

construction generally. That's it from us here. Back to the studio.

:48:50.:48:56.

We are joined by the Shadow Chief Secretary to the Treasury, Rachel

:48:56.:48:59.

Reeves. Welcome to the show. Labour said the deficit was going up this

:48:59.:49:06.

year, but the OBR shows it is either static or going down, so you

:49:06.:49:10.

were wrong. In the first six months of this year, the deficit has risen.

:49:10.:49:15.

The only way the Chancellor can say that the deficit is going to fall

:49:15.:49:22.

is because he has just put the sale of the 4G licence in, but that

:49:22.:49:25.

option has not happened yet, so he is banking on it arriving before

:49:25.:49:30.

the end of March, which may or may not happen. It does not change the

:49:30.:49:34.

underlying picture, which is that for every year of this Parliament,

:49:34.:49:37.

bowling has been revised up, and by the end of Parliament, debt will

:49:37.:49:41.

still be going up as a share of GDP, in contrast to what the Chancellor

:49:42.:49:45.

said, which was that debt would be falling, and that the structural

:49:46.:49:50.

deficit would be eliminated within this Parliament. But he has said

:49:50.:49:53.

many times that he has cut the deficit inherited from Labour by

:49:53.:50:03.

25%. That is true, and the Office for Budget Responsibility forecast

:50:03.:50:13.
:50:13.:50:13.

confirms that, does it not? Well, they said they were going to

:50:13.:50:16.

eliminate the deficit during this Parliament. It is not that they

:50:16.:50:21.

have not put up taxes for ordinary families, and cut public spending,

:50:21.:50:25.

because they have done both of these things, but the reason the

:50:25.:50:29.

borrowing has gone up is because the economic recovery has been

:50:29.:50:33.

chopped off, the economy is going to shrink this year, and we have

:50:33.:50:37.

had the double-dip recession, the longest and deepest since the

:50:37.:50:41.

Second world War. As a result, welfare bills are going up, and tax

:50:41.:50:46.

receipts have collapsed. We have got to have jobs and growth to get

:50:46.:50:52.

the deficit down. Will you vote for the 1% Benefit uprating deal urged

:50:52.:50:57.

that we will need to see the detail, and we have not seen yet all of the

:50:57.:51:07.
:51:07.:51:10.

different benefits which will be affected by it. It is for those in

:51:10.:51:15.

work, so, although we have not seen the detail, it is pretty clear, it

:51:15.:51:20.

is like Jobseeker's Allowance. it is also a tax credit, people in

:51:20.:51:29.

low-income jobs, like young mothers. So, for working benefits, will you

:51:29.:51:35.

vote for a 1% rise? We would need to see the detail. We do not know

:51:35.:51:42.

which tax credits will be affected, whether it will be maternity,

:51:42.:51:47.

paternity... What about Jobseeker's Allowance? Let's see whether we can

:51:47.:51:50.

amend the bill. At a time when taxes are being cut for

:51:50.:51:55.

millionaires, who will get an average tax cut next April of

:51:55.:51:59.

�100,000, it cannot be right to be cutting support for those people on

:51:59.:52:03.

modest incomes, and people who through no fault of their own have

:52:03.:52:10.

lost their jobs. So, vote against it? We are hoping we can amend the

:52:10.:52:14.

bill. How would you do that? need to look at the detail of it.

:52:14.:52:19.

It looks at the moment like the biggest losers will be those people,

:52:19.:52:24.

not who are out of work, but those in low-paid jobs, who are relying

:52:24.:52:30.

on tax credits. So you would vote against that? We need to see the

:52:30.:52:40.
:52:40.:52:40.

detail. It sounds like you know the detail! We do not! But the

:52:40.:52:44.

principle cannot be right, that next April, millionaires are

:52:44.:52:48.

getting a tax cut, whilst people on modest incomes are getting a tax

:52:48.:52:54.

increase. The logical conclusion would seem to be to vote against

:52:54.:53:00.

the bill. I do not want to say I am going to vote against the bill!

:53:00.:53:03.

have said welfare spending is wising - what is the basis of

:53:03.:53:09.

saying that? Well, it is rising. What other figures? I do not have

:53:09.:53:13.

the latest figures, but welfare payments are going up because there

:53:13.:53:17.

are more people claiming benefits, and also many more people in part-

:53:17.:53:21.

time work. But unemployment is falling. Unemployment is higher

:53:21.:53:27.

than it was at the general election, and long-term unemployment is I

:53:27.:53:31.

think 890,000 people, one third of people in total, out of work, and

:53:31.:53:38.

out of work for more than a year. You say the welfare bill is going

:53:38.:53:43.

up, but actually, it is not, in real terms. In the year of the

:53:43.:53:49.

election, the welfare bill was �188 billion. This year, it is �203

:53:49.:53:55.

billion, but that is in money terms, not in real terms. And it includes

:53:55.:53:59.

the rise in pensions, indeed, most of it is the rise in pensions. If

:53:59.:54:03.

you take out pensions, because everybody wants to do, because we

:54:03.:54:06.

are talking about welfare payments, and do it in real terms, the

:54:06.:54:14.

welfare bill is not rising. Well, I would dispute those figures. These

:54:14.:54:24.
:54:24.:54:26.

are the Government figures. I do not know whether those numbers

:54:26.:54:32.

include tax credits. Yes, they do. There are and many more people who

:54:32.:54:36.

want to be working, in fact, 3 million people who are working

:54:36.:54:40.

part-time, who would like to be working full-time, and as a result

:54:40.:54:47.

are paying more -- we are paying more out of benefits. Those numbers

:54:47.:54:52.

show a �20 billion increase, that is a 10% increase. That includes

:54:52.:55:00.

pensions. That is almost 5% per year, higher than inflation. That

:55:00.:55:08.

suggests a real-terms increase. �13 billion of that is pensions.

:55:08.:55:14.

Welfare payments are going up... But, they are not going up, on the

:55:14.:55:18.

basis of the figures! Watt bit do you not understand?! If you are

:55:19.:55:24.

saying they have gone up by �20 billion, that's 10 defeat, over 2.5

:55:24.:55:29.

years. That is higher than inflation, so that is a real-terms

:55:29.:55:33.

increase. Also, tax revenues are plummeting, because income tax

:55:33.:55:38.

receipts are going down, and so are corporation tax receipts. Nick

:55:38.:55:45.

Robinson... This debate that you two have been having in a sense

:55:45.:55:49.

will reflect the debate that George Osborne wants parliament to have.

:55:49.:55:52.

He has deliberately focused on the squeeze on benefits, he has

:55:52.:55:56.

deliberately put a piece of legislation in, because he wants it

:55:56.:55:59.

to be awkward for the Labour Party to know whether to vote for it or

:55:59.:56:03.

against it. What Rachel is reflecting is that the Labour Party

:56:03.:56:08.

would not want to jump into a hole marked, we are in favour of this,

:56:08.:56:12.

because they want to say, certain benefit rises are good, and certain

:56:12.:56:17.

ones are not. Talking of holes, the Liberal Democrats have just jumped

:56:17.:56:22.

into one. They have issued a press release saying that the

:56:22.:56:27.

Conservatives, quotes, the only tax cuts they support, are for the very

:56:27.:56:32.

rich. When it was pointed out that this was a curious thing to say

:56:32.:56:35.

about your coalition partners, the Liberal Democrats pointed out that

:56:35.:56:39.

it was in fact an old press release, which they did not mean to release.

:56:39.:56:47.

That paragraph was 2.5 years old, we are told. But at least they are

:56:47.:56:57.
:56:57.:56:57.

not in government. Oh, no, they are. I do not often agree with the

:56:57.:57:02.

Liberal Democrats, but on that, I do. What will the line of attack be

:57:02.:57:09.

now on this? Well, the economic plan has failed. We said that the

:57:09.:57:11.

Government had neglected jobs and growth and everything, but the

:57:11.:57:15.

Chancellor said, judges on whether we get rid of the structural

:57:15.:57:18.

deficit, and whether debt is falling as a share of GDP. Even

:57:19.:57:23.

against his own targets, he has now failed, which is what the Office

:57:23.:57:26.

for Budget Responsibility has said today. It is time for a different

:57:26.:57:32.

plan, this one is not working. now looks fairly likely that the UK

:57:32.:57:36.

will lose its AAA credit rating. Most people would say, if you had

:57:36.:57:40.

been elected and followed Alastair Darling's plan, we would have lost

:57:40.:57:46.

it already. Does it not matter? don't think you should set economic

:57:46.:57:50.

policy by this credit rating. They were giving Lehman Brothers a clean

:57:50.:57:53.

bill of health right up until the financial crisis. The Chancellor

:57:53.:57:58.

has said that we will be keeping this rating, so if we to lose it,

:57:58.:58:03.

it is another nail in the coffin of credibility for the Chancellor.

:58:03.:58:07.

politics of this for the Government is still very difficult. 14 points

:58:07.:58:13.

behind in the polls, and not much good news today. No, grim news. If

:58:13.:58:16.

this was what George Osborne had been told a while ago, he would

:58:16.:58:20.

have had his head in his hands. One bit of good use today, borrowing is

:58:20.:58:24.

not going up. Everything else is grim. The measures are grim, they

:58:24.:58:30.

are tough. This is not going to cheer anybody up. But intriguingly,

:58:30.:58:34.

the Tories enjoyed today's statement, and Labour did not. That

:58:35.:58:39.

can be parliamentary politics for you. We shall see about that. That

:58:39.:58:45.

Presented by Andrew Neil with live coverage of the Chancellor's Autumn Statement and Prime Minister's Questions. Including analysis from the BBC's Robert Peston, Stephanie Flanders and Nick Robinson with instant reaction from the City, business leaders and viewers.


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