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


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


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


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


Politics Special on the Chancellor's Autumn Statement,


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


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


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


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


Autumn Statement of 2011 we were told that austerity would continue


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


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


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


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


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


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


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


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


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


today is the result of lengthy discussions and negotiations with


his Lib Dem Treasury colleague, Chief Secretary Danny Alexander,


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


the top of this Coalition government, David Cameron and Nick


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


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


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


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


reaction from Westminster and I'm outside Parliament talking to


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


budget, and assessing the impact on the political landscape.


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


joined by businesses from across Staffordshire and by Paul Lewis


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


questions and explaining what today's announcement means for your


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


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


Comprehensive coverage and the best analysis - what else would you


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


this is the fascinating and surprising politics, everything


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


quarter in the spring and early summer of declining economy


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


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


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


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


thinks that growth is going to continue at anything like that


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


massive autumn statement, the important moment when the OBR


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


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


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


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


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


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


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


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


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


austerity into 2017 because the figures are showing him that that


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


credit agencies have put us under review for downgrade is because


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


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


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


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


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


programme we will be getting reaction from business people in


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


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


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


out by a New York venture capitalist firm and they merged


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


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


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


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


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


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


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


successfully emerging from administration, we returned to


profitability in our second year and delivered sales growth.


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


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


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


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


an operation of excellence programme. It has overhauled our


supply chain and all of our business processes to build a


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


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


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


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


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


holding back growth? With being a specialist contractor in the


construction industry, we need the government to be pushing


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


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


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


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


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


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


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


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


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


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


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


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


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


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


also welcome the recent focus on stimulating large infrastructure


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


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


fundamental measures to address the cost equations for UK manufacturers,


essentially to make those more competitive. A couple of issues


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


intensive manufacturer we urgently need energy market reform to create


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


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


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


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


the biggest cost you could do with George Osborne addressing?


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


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


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


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


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


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


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


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


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


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


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


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


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


Cashflow is also incredibly important to us. We were also


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


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


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


the fundamental measures to address competitiveness in UK manufacturing.


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


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


Westminster when politicians announce things. Maybe it doesn't


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


cheaply because the markets regard its fiscal deficit reduction plan


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


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


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


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


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


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


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


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


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


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


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


Partners. There are concerns, particularly with the latest data


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


are watching special coverage of the Autumn Statement at Westminster.


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


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


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


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


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


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


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


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


of these cuts are bringing more unemployment, more and more


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


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


Apology for the loss of subtitles for 43 seconds


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


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


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


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


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


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


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


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


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


million private sector jobs since the election. It is delivering


falling unemployment and low interest rates. It has cut


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


there to hear a discussion of credibility and confirmation that


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


this programme around the country would recognise the picture that


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


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


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


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


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


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


projections you would have had would also have been blown off


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


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


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


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


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


school building programme. That would have got people off benefits


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


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


basic economic Strategy Working? You are part of this coalition


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


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


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


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


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


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


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


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


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


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


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


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


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


We learned yesterday that current government spending would be cut


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


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


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


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


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


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


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


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


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


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


widely expected to cut the amount that people contribute to their


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


to congratulate the Duke and Duchess of Cambridge on the


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


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


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


Al-Qaeda presence in Afghanistan has been significantly reduced.


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


Afghan armed forces. We remain committed to Afghanistan for the


long term and will continue to support the development of the


Afghan national security forces after at 2014, through continued


funding and involvement in training. Our continued contribution to


Labour and the political process will underpin a state that is


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


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


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


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


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


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


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


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


are increasingly capable and increasingly able to police and


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


involved, not least through the Officer Training Academy we will


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


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


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


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


Speaker. This morning I had meetings with ministerial


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


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


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


critically ill constituents in hospital last week. There were only


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


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


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


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


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


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


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


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


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


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


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


regulator, preferably without statutory underpinning? I think it


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


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


required. I think everyone agrees we need strong, independent


regulation along the lines Leveson suggests. Everyone agrees we need


million-pound fines. Everyone agrees prominent apologies,


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


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


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


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


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


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


congratulating the Duke and Duchess of Cambridge on their very happy


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


country. The Conservative Party manifesto published in 20th April


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


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


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


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


the figures directly from the head of the Office of National


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


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


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


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


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


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


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


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


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


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


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


should be grateful if the Department of Health could clarify


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


are equipping Britain for the global race. Unlike the party


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


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


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


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


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


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


drugs industry to have almost complete control over the evidence


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


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


that doctors, patients and My honourable friend has excellent


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


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


to the taxpayer, but also because of possible overstatement of


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


clinical trials data. We are committed to making sure that


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


From next year there will be a legal requirement to publish


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


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


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


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


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


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


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


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


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


being done there, also involving private sector organisations


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


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


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


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


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


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


future of shipbuilding, what reassurance can the Prime Minister


give me and 1500 shipbuilders that Portsmouth will remain integral to


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


The right honourable lady quite rightly speaks up for Portsmouth,


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


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


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


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


welcome the announced enterprise zone on the Peninsula, which could


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


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


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


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


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


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


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


the criminal convictions of the staff who repeatedly abused people


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


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


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


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


friend makes. There have been some appalling incidents of completely


unacceptable levels of care. People in those organisations are fully


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


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


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


Kingdom, is the price of electricity. Could the Prime


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


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


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


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


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


with energy-intensive industries, the Government has announced an


intention to exempt those industries from the cost of


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


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


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


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


and congratulating the Duke and Duchess of Cambridge on their


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


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


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


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


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


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


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


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


the Perth Commonwealth conference I chaired a meeting of the Prime


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


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


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


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


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


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


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


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


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


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


I welcome the Government commitment to increase efforts to tackle tax


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


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


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


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


Prime Minister now committed to publishing the names of those


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


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


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


warm words of support. We have recovered revenues from large


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


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


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


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


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


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


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


important that people feel they meet their responsibilities and pay


their taxes. Will my right honourable friend do everything he


can to ensure that education, health and social services work


together to jointly commission services that will make sure that


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


workable on the ground? Honourable Friend makes a very


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


local government operating in silos with different budgets and


different apartments not working together. I know that representing


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


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


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


announcements the Chancellor makes on pension tax relief in 30


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


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


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


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


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


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


right honourable friend will be making further announcement in a


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


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


Minister commit himself to maximising investment in that


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


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


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


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


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


industry. What we have done on decommissioning and new field


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


should be supporting his government for its health policy and telling


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


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


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


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


that the County Council has assigned funds to build a new


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


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


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


for parents and children with special needs. Sometimes quite


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


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


constituency. Following the Government's new funding formulas


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


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


Wolverhampton, despite meeting its targets, suffered a drop in


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


What guarantees can the Prime Minister gave that universities


such as Wolverhampton will not suffer year on year reduction in


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


that his government took difficult decisions to make sure that we


could maintain the numbers of people going to our universities.


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


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


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


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


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


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


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


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


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


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


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


prescriptions as private institutions. Will the Prime


Minister look again at the reasons for the different treatment of


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


demonstrate that both our Prime Minister and First Minister stand


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


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


We want these large multinational companies to pay proper taxes here


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


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


this specific issue of transfer payments, where some companies have


been pursuing rather strange practices to pretend that their


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


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


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


Residents in Southwark council were very excited when the Energy Bill


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


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


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


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


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


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


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


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


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


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


and apprenticeships and the government is fully committed to


making that happen. The Prime Minister obviously believes that


within the Leveson report there lurks something which is bonkers.


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


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


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


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


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


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


do have to have a frank conversation about the need to


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


British people want. Something which I remained firmly committed


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


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


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


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


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


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


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


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


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


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


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


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


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


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


that I have attended myself to discuss with nurses and nurse


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


as indeed if it becomes necessary I will appeal to government


backbenchers to afford a fair hearing to the Shadow Chancellor.


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


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


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


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


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


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


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


world economy where bond investors are fleeing countries they regard


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


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


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


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


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


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


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


this autumn statement we show that his Coalition government is


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


reaffirm our commitment to reducing the deficit, setting out the


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


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


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


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


succeed in the global race by switching from current spending to


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


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


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


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


Responsibility has today produced its latest economic forecast. It is


a measure of the constitutional achievement that it is taken for


granted there are countries -- that Arab countries forecasters now


produced independently of the Treasury, free from the political


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


members of the Budget Responsibility Committee and all


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


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


independent forecasts, we also get an independent explanation of why


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


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


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


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


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


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


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


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


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


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


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


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


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


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


assessed to be deeper than previously thought, with GDP


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


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


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


with credit rationing and impaired financial markets potentially


impeding the expansion of successful firms. They say the GDP


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


period, as credit conditions take longer to normalise and global


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


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


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


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


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


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


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


England we are directly addressing the problems of tight credit


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


might have expected. They have been three developments that have each


had a significant one-off impact on the public finances. In the report


today we publish clearly and transparently the impact of all


three. First, there is the transfer of the Royal Mail pension fund to


the public sector as part of its privatisation. This produces a one-


off reduction in the deficit of �28 billion this year, but it adds to


the deficit in the years after. Second, the previous government had


classified Bradford & Bingley and Northern Rock Asset Management as


off-balance sheet. Today it is brought on balance sheet, in line


with the judgment of the Office for National Statistics. This adds


around �70 billion to our national debt and reminds us of the price


the country is still paying for the failures of the past. Third, the


government has decided, with the agreement of the Bank of England,


to transfer excess cash held in the asset purchase facility to the


Exchequer. This is sensible cash management. It is in line with the


approach of the Bank of Japan and the US Federal Reserve. I welcome


the OBR's verdict that this is, in their words, more transparent than


the previous approach. I want to make sure its impact on the figures


is also completely transparent, so we have today publish the forecast


for the public finances with and without the impact of the HPF


decision. When we came to office, the deficit stood at 11.2 % - the


highest in our peacetime history. It was forecast to be the largest


of any major economy in the world. In the last two years the deficit


has fallen by a quarter. Today's figures show that with or without


the coupons, the deficit is forecast to fall this year as well.


And cash borrowing is forecast to fall, too. Last year the deficit


was 7.9 %. This year, with the coupons, it is forecast to be 6.9 %,


but that excludes the impact of the Royal Mail pension assets. It is


falling and will continue to fall each and every year to 6.1 % next


year, 5.2 % the year after, for 0.2 % in 2015 to 2016, then 2.6 %


before reaching 1.6 % in 2017-2018. In 2009-2010, the country was


borrowing �159 billion. This year we are borrowing �108 billion. That


is forecast to fall to 99 billion next year, 88 billion a year after


then 73 billion in 2015 to 2016 and 49,000,000,030 1 billion in the two


years after that. These are the central forecasts published by the


Op Art, with the asset purchase facility cash transfer included.


When the transfer is excluded. The deficit also false. From 7.9 % last


year to 7.7 % this year, then 6.9 % next year, and also in every single


year after that. Cash borrowing There are those who have been


saying that the deficit was going up this year. Indeed, I think I


heard it in Prime Minister's questions, but anyway you present


the figures, this is not what the forecasts show today from the OBR.


They say that the deficit is coming down. Coming down this year and


every year of this Parliament. Yes, the deficit is still far too high


for comfort. We cannot relax our efforts to make our economy safe.


But Britain is heading in the right direction. The road is hard, but we


are making progress. Mr Speaker, unlike the previous Government's


golden rule, the regime means that the Chancellor is no longer judge


and jury of their own fiscal rules and the OBR have assessed thus


against those rules. First, the fiscal mandate. This is the


commitment that we will balance the adjusted current budget over the


coming five years. I can tell the House that the OBR have assessed we


are in their words, on course, to meet our fiscal mandate. In other


words, we have a better-than-50% chance of -- a better than 50%


chance of relimb nating our -- eliminating our deficit. This is


true with or without the transfer of coupons, so we'll meet the


mandate, but the OBR assessed in their central forecast that we do


not meet the supplementary objective that aims to have debt


falling by 2015/16. The point at which debt starts to fall has been


delayed by one year. The OBR's central forecast is that net debt


will be 7 7.4% this year and 79% in 2014/15 and lower before falling to


79.2% in 2016/17. And 77.3% in 2017/18. In short, the tougher


economic conditions mean that while our deficit is forecast to go on


falling, instead of taking three years to get our debt falling, it's


going to take four. Mr Speaker, confronted with this news, some say


we should abandon our deficit plan and try to borrow more. They think


by borrowing more we can borrow less. That would risk higher


interest rates, more debt interest payments and a complete loss of


Britain's fiscal credibility. We are not taking that road to ruin.


Now, then there are those who say that despite all that has happened


in the world this year, we should cut even more now to hit the debt


target. That would require �17 billion of extra cuts a year, and


let me explain why I've decided not to take this course. We have always


argued we should let the automatic stabilisers work and we have not


argued we should chase down a cyclical or temporary deterioration


in the economy, particularly one which our own independent body says


is largely driven by problems abroad. That's also the judgment of


the IMF, the OECD and the Governor of the Bank of England. Our mim is


to reduce the -- aim is to reduce the structural deficit. The


permanent hole that won't be repaired as the economy recovers


and we are. We have cut the structural deficit by 3% in the


last two years, more than any other G7 country and it is set to go on


being cut at a similar rate in the years ahead. This lower deficit is


delivered by our public spending plans and we are going to stick


with those plans. Overall, we are not going faster or slower with


those plans, but the measures I'll announce in this Autumn Statement


are fiscally neutral across this Parliament. There is no net rise in


taxes today. Any taxes increased are offset by taxes cut. Mr Speaker,


in last year's Autumn Statement we committed the Government to


maintain the same pace of consolidation for two further years


beyond the end of the current spending review, in 2015 and


2016/17. In this year's Autumn Statement we extend the


consolidation for one further year into 2017/18. The OBR projects that


as a result the share of national income spent by the State will fall


from almost 48% of GDP in 2009/2010 to 39.5% by 2017/18. The document


shows total managed expenditure will continue to fall and will now


be 4.6 billion lower in 2017/18 than if it had been held flat in


real terms. No decision to cut spending is ever easy, but those


who object must explain whether instead they would have higher


taxes or higher borrowing or both. I also provide further details of


the done colation plans for -- consolidation plans for the last


year of this Parliament. I said two years ago that the correct balance


between spending and tax should be 80/20. I can confirm that by the


end of 2015, the decisions we announce today mean we will almost


exactly deliver on that mix. Total spending will fall in that final


year of this Parliament at the same rate as through the current


spending review. I can confirm today that the overall envelope for


total mefrpgd expenditure will be set at -- managed expenditure will


be set at �749 billion. The detail of departmental spending plans for


2015/16 will be set at a spending review, which will be announced


during the first half of next year. What we do today is to take steps


now to help deliver the plans and to go on reducing the deficit in a


way that is fair. This Government has shown that it is possible to


restore sanity to the public finances while improving the


quality of our public services. Crime has fallen. Hospital waiting


lists are down. School standards are up. And this is with a Civil


Service that is today smaller than at any time since the Second World


War. We are today publishing the reports we commissioned from the


Pay Review Body on market-facing pay. We commit to implement the


reports. This means continuing with national pay arrangements in the


NHS and Prison Service and we will not make changes to the Civil


Service arrangements either. But the school teachers' review body


does recommend much greater freedom to individual schools to set pay in


line with performance. My right honourable friend, the Education


Secretary, will set out how this will be implemented. Through the


efforts of individual departments and with the support from the


Minister in the Cabinet Office we have generated savings in Whitehall,


but we believe there is room to do more. If all departments reduce


spending on administration in line with the best-performing


departments like education, then another �1 billion could be saved.


If all departments made greater provision of digital services,


rationalised their property estates as some have done, then a further


�1 billion could be saved. Today, we are reducing departmental


resource budgets by 1% next year and 2% the year after. We'll


continue to seek efficiency savings in the NHS, in our schools, but


that money will be recycled to protect spending in these priority


areas. Local government budgets are already being held down next year


to deliver the freeze in council tax, so we will not seek the


further 1% saving next year, but we will look for the 2% saving the


year after. While the MoD is included in the measures, they'll


be given flexibility on their multi-year budget to ensure this


will not lead to reductions in military man power or the core


defence equipment programme over the Parliament. A mark of our


values as a society, is our commitment to the world's poorest.


We made a promise as a country to spend 0.7% of our gross national


income on international development and I'm proud to be part of the


first British government in history which will honour that commitment


and honour it as promised next year. We will not, however, spend more


than 0.7%, so as we did last year, we'll adjust the budget to reflect


the latest economic forecasts. In the medium-term, these savings


across Whitehall will help departments maintain the right


route for the years that follow Spending Review and help us to pay


off the deficit in the future. In the short-term, I'm switching the


current savings into capital, all the money saved in the first two


years will be reinvested as part of a �5 billion capital investment in


the infrastructure of our country. So despite Mr Speaker, the fiscal


challenges we face, public investment as a share of GDP will


be higher on average in that Parliament than it was under the


last Labour government. It is exactly what a government equipping


Britain to compete in the modern global economy should be doing. We


are committing an extra �1 billion to roads, including four major new


schemes to upgrade key sections of the A1, bringing the route from


London to Newcastle up to motorway standard. Linking the A5 with the


M1, and the A30 in Cornwall and upgrading the M25, which will


support the biggest port development in Europe and I pay


tribute to my friend for Thurrock for her campaigning. We have


already set out plans this autumn for a huge investment in rail and


my right honourable friend the Transport Secretary will set out in


the new year plans to take high speed II to the north-west and West


Yorkshire. I can today confirm a �1 billion loan and a guarantee to


extend the Northern Line to Battersea Power Station and support


a new development on a similar scale to the Olympic Park. We are


confirming funding and reforms to assist the construction of up to


120,000 new homes and delivering on flood defence schemes in more


cities. On top of broadband expansion for our countryside and


larger cities, we are funding ult fast broadband in 12 smallers


cities -- ultra fast broadband in 12 smaller cities. In addition to a


third of one billion for British science, we are today announcing


�600 million more for the UK's scientific research infrastructure


and since improving our education system is the best investment in a


competitive economy, I'm committing �270 million to fund improvements


in further education colleges and �1 million to expand good schools


and build 100 new free schools and academies. -- �1 billion. Scotland,


Wales and Northern Ireland will get their share of further capital


spending put at their disposal of their devolved administrations. On


top of that �5 billion of new capital spending in infrastructure


and support for business, we are ready to provide guarantees for up


to �40 billion more. Today, I can announce that projects worth �10


billion have already prequalified. We are offering �10 billion worth


of guarantees for housing too. Our country's pension funds will launch


their any independent infrastructure investment platforms


next year as well. We have today published full details of the


replacement for the discredited PFI since we can all see now that the


public sector was sharing the risk and we'll ensure we also share in


the reward. I commend my honourable friend for Hereford for his work in


this area. Taken together, this is a revolution in the sources of


finance for upgrading Britain's infrastructure and equipping


Britain to win in the global race. Annual average infrastructure


investment, which was �29 billion under the last Labour government,


is now �33 billion. Savings from Whitehall are not enough by


themselves to talkle our debt. We need toen -- to tackle our debt. We


need to find other ways. Those with the most should contribute the most


and they will, but fairness is also about being fair to the person who


leaves home every morning to go out to work and sees their neighbour


still asleep living a life on Let me start with tax. The vast


majority of people, which will otherwise, pay their taxes and make


their contribution. But there are still too many who illegally evade


their taxes or use aggressive tax avoidance in order not to pay their


fair share. This government has taken more action against these


people than any before it. Prosecutions for tax evasion are up


80 %. We will collect �7 billion more a year in tax that is due that


the last government. We are increasing by around 2500 the


number of tax inspectors going after the raiders and of August.


Next year, we will introduce the first ever General ante abuse role,


something that never happened in 13 years before we came to office.


Next year, for the first time in our history, money will be flowing


from bank accounts in Switzerland to Britain instead of the other way


round. Because of the treaty we've signed, we expect to receive �5


billion over the next six years from the undisclosed Swiss bank


accounts of UK residents. It is the largest tax evasion settlement in


British history. We are taking further steps today. Hundreds of


millions of pounds of tax loopholes are being closed with immediate


effect. We are investigating a abusive use of partnerships. HMRC


will not have its budget cut over the next two years, and like other


departments. Instead, we will spend �77 million more on fighting tax


avoidance, and not just for wealthy individuals. We want the most


competitive corporate tax system of any major economy in the world, but


we expect those corporate taxes to be paid. So today we are confirming


we will put more resources into ensuring multinational companies


pay their proper share of taxes. We are leading the international


efforts to prevent artificial transfers of profits to tax havens


with Germany at now France. We have asked the OECD to take this work


forward. We all make it an important priority of our G8


presidency next year. In total, we expect the action we announced


today will increase the amount of money collected from tax evasion


and avoidance by a further �2 billion a year. Fair and necessary


as this is, it is not enough by itself to close the deficit. We


need to ask more from... Punitive tax rates do nothing to raise money


and simply discourage enterprise and investment in Britain. Other


countries on our doorstep of trying that approach and are paying the


price. We are not going to make that mistake. HMRC data reveals


that in the first year of the 50 % tax rate, tax revenues from the


rich fell by �7 billion. The number of people declaring incomes of over


�1 million fell by half. A tax raid on the rich that raises almost no


money is a tax Con. We are going to have a top rate of tax that


supports enterprise and we are going to raise more money from the


bridge. Here is a simple fact. The richest will pay a greater share of


income tax revenues in every single year of his Coalition government


than in any one of the 13 years of the last Labour government. But we


need to make sure the deficit reduction remains fair. We need to


raise more. We've already... Raised stamp duty on multi-million-pound


homes and next week publish the legislation to stop the richest


avoiding stamp duty. But we won't introduce a new tax on property.


This would require a revaluation of hundreds of thousands of homes. In


my view it would be intrusive, expensive to Levy, raised a little


and the temptation for future Chancellors to bring ever more


homes into its net would be irresistible, so we are not having


a new homes tax. We have already reduced the amount of tax relief we


give to the very largest pension pots. From 2014-15, I will further


reduce the lifetime allowance from �1.5 million to �1.25 million, and


reduce the annual allowance from �50,000 to �40,000. This will


reduce the cost of tax relief to the public purse by an extra


billion pounds a year by 2016-17. 98 % of people currently


approaching retirement have a pension pot worth less than 1.25


million. Indeed, the medium pot for such people is just �55,000. 99 %


of pension savers make annual contributions to their pensions of


less than �40,000. The average contribution to a pension is just


�6,000 a year. I know these tax measures will not be welcomed by


all. Ways to reduce the deficit never are. But we must demonstrate


that we are all in this together and when you look for savings, I


think it's fair to look at the tax relief we give to the top 1%. I


want to help the great majority of savers. That is why we are


introducing a generous, new, single t a pension, so that people know it


always pays to save. That is why I will upgrade next April the up for


all eyes are limited to �11,520. We will consult on allowing investment


in SME equity markets, to be held directly and stocks and shared --


shares icesave macros. I've also encouraged the -- listened to


pensioners about draw down limits. The government will raise the cat


brought down limit from 100 % to 120 %, giving pensioners that these


arrangements the option of increasing their incomes. It is


also fair to look at the way we up rate benefits and some tax


threshold. The basic state pension has this year gone up by the


largest cash amount in its history. Next year, thanks to our triple


lock, I confirm it will rise by 2.5 %, higher than either earnings or


inflation. That takes the level of the basic state pension to �110.15


a week. When it comes to working age welfare, we've already made


substantial reforms. �18 billion a year has been cut from the welfare


bill. Benefits of being capped for the first time. So families out of


work will not get more than the average family gets for being in


work. We have increased efforts to fight welfare fraud. Today the


announced further measures and cheques to save over �1 billion in


the next four years, by reducing fraud, error and debt in the tax


credit system. Next year, my right honourable friend the work and


pensions Secretary will introduce the new Universal credit, so that


it always pays to work. And today we set the key parameters, such as


the levels of earnings disregards. But we have to acknowledge that


over the last five years, those on out-of-work benefits have seen


their incomes rise twice as fast as those in work. With pay restraint


in businesses and government, average earnings have risen by


around 10 % since 2007. Out-of-work benefits have gone up by around 20


%. That is not fair to working people who pay the taxes that fund


them. Those working in the public services who have seen their basic


pay frozen will now see it rise by an average of 1%. A similar


approach of a 1% rise should apply to those in receipt of benefits.


That is fair and will ensure that we have a welfare system that


Britain can afford. We will support the vulnerable, so carer's benefit


and disability benefits, including disability element of tax credits,


will be increased in line with inflation. We are extending support


for mortgage interest for two more years. But most working-age


benefits, including jobseeker's Allowance, employment and support


allowance and income support will be operated by 1% for the next


three years. We were also up rate elements of the child tax credit


and the working tax credits by 1% for the next three years. Although


previously planned freezers will go ahead. Local housing allowance


rates that are essential component of housing benefit will be rated in


line with the existing policy next April. Then we will cap increases


of 1% in the two years after that. For this measure, 30 % of the


savings will be used to exempt from the new cap. Those areas that the


highest rent increases. The earnings disregard for Universal


credit will also be up rated by 1% for two years from 20th April 14.


Child benefit is currently frozen. It, too, will rise by 1% but to --


for two years from April, 2014. Doing this means people get more


cash for less than the rate of inflation. Taken together, we will


save �3.7 billion in 2015-16, and deliver a permanent savings each


and every year from our country's welfare bill. To bring all these


decisions and many benefits for many years together, we will


introduce into Parliament primary legislation, the welfare up rating


Bill, and I hope it can then support from both sides of the


We will apply a similar approach to the upper rating of some of our tax


thresholds, as we have to welfare. The higher rate threshold will be


increased by 1% in the tax year's 2014-15, and 2015-16. So the income


at which people start paying the 40 % rate will go up from �41,450, to


afford �1,865, then to �42,285. I want to be completely clear with


people. This is an increase, in fact, it's the first cash increase


in the higher rate threshold in this Parliament, but it's not an


increase in line with inflation. So it raises �1 billion of revenue by


2015-16. Again, there are no easy ways to reduce the deficit. But


from year to year, no one would pay a penny more in income tax. In the


same way the capital gains tax annual exempt amount will be


increased by 1% up at the same period, reaching �11,100. The


inheritance tax nil band rate, which has been frozen since 2009 at


�325,000, will be increased by 1% to �329,000. Taken with the welfare


up rating decisions, this is a fairer approach to paying off


Britain's debts. But dealing with those debts is only one part of


making Britain fit to compete in the global race. Countries like


ours are risk being outsmarted, outwork and out competed by new,


emerging economies. We asked Michael Heseltine to report on how


to make the government work better for business and enterprise. It's


fair to say that his answer has captured the imagination of all


political parties. We will respond formally in the spring. But here is


what we will do now. First, government spending should be


aligned with the priorities of the local business community. We will


provide new money to support local enterprise partnerships. From April,


2015, the government will place more of the funding that currently


goes to local transport, housing, skills and getting people back to


work into a single pot that can be bid for. Details will be set out in


the Spending Review. Before then, we are putting more money into the


Regional Growth Fund, which is helping businesses create half a


million new jobs. Second, as Lord Heseltine also recommends, we are


going to support industries and technologies where Britain has a


clear advantage. With the Business Secretary's support, we will extend


our global lead on aerospace and support the supply chains of


Advanced Manufacturing. We are also taking big steps today to support


British companies to export to new, emerging markets in Asia, Africa


and the Americas. I am increasing the funding for UK t i by over 25 %


a year, so that it can help small firms build the capacity of


overseas British Chambers and maintain our country's position as


the number one destination in Europe for foreign investment. We


are launching a new �1.5 billion export finance facility to support


the purchase of British exports. Third, we are addressing the credit


problems for companies. We are creating a new business bank. Today


we confirmed we are providing it with �1 billion of extra capital,


which will leave her in private lending to help small and medium-


sized firms and bring together existing schemes. Fourth, we are


going to cut business taxes still further. The temporary doubling of


the small business rate relief scheme helps over 500,000 small


firms, or with a 350,000 firms pay no rates at all. The last


government were going to ended in 20th September 11. We've already


extended to next April. Today I extended to buy a further year to


April, 2014. We also confirmed today the tax relief for our


employer -- employee shareholders scheme. The Energy Bill provides


certainty and support for billions of pounds of investment in


renewable energy. Today we publish our gas strategy, to ensure we make


the best use of lower cost gas power, including new sources of gas


and that the land. We are consulting a new tax incentives for


shale gas and announcing the creation of a single office so that


regulation is safe but simple. We don't want British families and


businesses to be left behind as gas prices tumble on the other side of


the Atlantic. We are going to help our construction industry, too. The


last government abolished empty property relief. As excellent work


done by my honourable friends show, this has blighted development in


our towns and cities. The proposal from my colleagues that we create a


long grace period before new be completed buildings have to pay him


to property rates is a sensible one. We will introduce it next October.


The previous government also plans to increase the small companies tax


rate to 22 %. We have cut it to 20 %. But I'd like to help small and


medium-sized firms more. I want to thank my honourable friends for


Burnley and Pendle for their thoughts in this area. Starting on


1st January, and for the next two years, I am therefore going to


increase by tenfold the annual investment allowance in plant and


machinery. Instead of �25,000 worth of investment being eligible for


100 % relief, �250,000 of investment will now qualify. This


capital allowance will cover the total annual investment undertaken


by 99 % of all the business in Britain. It is a huge boost to all


those who run a business, who aspire to grow, expand and create


I also want Britain to have the most competitive business tax


regime of any major economy in the world. I have already cut the main


rate of corporation tax from 28% to 24% and it's set to fall further to


22%. This has helped British companies and frankly left other


countries scrambling to keep up. They will have to try harder for I


am today cutting the main rate of corporation tax again by a further


1%. In America, the rate is 40%. In France, it is 33%. In Germany, it


is 29%. From April 2014, the corporation tax rate in Britain


will stand at 21%. This is the lowest rate of any major western


economy. It is an advert for our country that says, "Come here,


invest here, create jobs here. Britain is open for business." Mr


Speaker, we will not pass the benefit of this reduced rate on to


banks and to ensure we meet our revenue commitments, the bank levy


rate will be increased to 0.130% next year. Making banks contribute


more is part of our major reforms to the banking system. We also have


to be on the side of those who want to work hard and get on. I know how


difficult many families have found the cost of living. In dealing with


the deficit, we have had to save money, but whenever we have been


able to help, we have. We have helped councils freeze council tax


for two years running. And we are helping them to freeze it again


next year. We have put a cap on rail fare rises for the next two


years, so commuters are not punished for travelling to work and


we are forcing energy companies to move families on to the lowest


tariffs for bills. And we have helped motorists with the cost of


petrol. We have cancelled the last Government's escalator and I'm


moving inflation-only rises to September. Fuel is 10 pence per


litre cheaper than it would have been if we had stuck to Labour's


tax plans. I want to keep it that way. As I note to my colleagues,


like my honourable friend to Harlow. There is a rise planned for this


January. Now, some have suggested that we delay that three pence rise


until April. I disagree. I suggest we can is tell altogether. There


will be no three pence fuel tax rise this January. That is real


help, with the cost of living for families and they fill up their


cars across the country. And it will help everyone. We will have


had no increases for two-and-a-half years. In fact, they've been cut.


We have helped working people by increasing the they can earn before


paying tax. When this Government came to office the personal tax


allowance was �6 account 274. It will rise to �9,205. 24 million


taxpayers have seen their income tax cut. Two million of the lowest-


paid have been taken out of tax altogether. And because of the


difficult decisions we have taken today, we can go even further. From


next April the personal allowance will rise by �235. That means a


total increase next year of �1,335. The highest cash increase ever.


People will be able to earn �9,440 before paying any income tax at all.


This is a direct boost to the incomes of people working hard to


provide for their families. It's �47 extra in cash next year. In


total �267 cash increase next year. People working full-time on the


minute numb wage will have seen their bill cut in half -- minute


numb wage will have seen their -- minimum wage will have seen their


tax rate cut in half. In real terms a typical higher-rate taxpayer will


be better off next year and no worse off in total by the year


after. Mr Speaker, today, we have helped working people. But I do not


want to distract from the tough, economic situation we face in the


world. The public know there are no miracle cures, just the hard work


of dealing with our deficit and ensuring Britain wins the global


race. That work is under way. The deficit is down. Borrowing is down.


Jobs are being created. It is a hard road, but we are making


progress. And everything we do, we are helping those who want to work


hard and get on. Thank you. Chancellor sits down. We'll hear


now from the Shadow Chancellor, Ed Balls. We can see and people can


feel in the country, the true scale of this Government's economic


failure. Our economy this year is contracting. The Chancellor has


confirmed Government borrowing is revised up this year, next year and


every year. The national deficit is not rising - is rising, it's not


falling. I'll say it again, our economy is contracting this year.


Government borrowing and the deficit is revised up this year,


next year and every year and the national debt is rising. It is not


falling. It is people already struggling to make ends meet,


middle and lower-income families and pensioners who are paying the


price, while millionaires get a tax cut, a �3 billion welfare hand out


to the people who need it -- handout to the people who need it


least. Let me spell out the full facts to the House. They should


listen. They might learn something, Mr Speaker! In June 2010 the Office


for Budget Responsibility forecast our economy to grow by 2.8% this


year. In March of this year, they said there would still be growth,


but revised it down to just 0.8%. Today, we have learned the


Chancellor has not even managed that. Growth has not only been


downgraded yet again, but he's confirmed, following the double-dip


recession, that our economy is now forecast to actually contract


inside this year. That's by 0.1%. Let me remind the House what the


Chancellor promised over two years ago in the June Budget. He said,


"We have the provided the foundations for economic recovery


in all parts of our nation." He said, "We have set the course for a


balanced budget and falling national debt by the end of this


Parliament." He said, "The richest paying the most, the most


vulnerable protected." That was the promise, Mr Speaker. But far from


securing our recovery, our economy has flat-lined since Spending


Review in 2010. Over the last two years, the Chancellor was expecting


4.6% growth. He's actually achieved 0.6% growth. Compared to 1.7 in


France, to 3.6 in Germany and to 4.1% in America, falling behind in


the global race, Mr Speaker! What we learn today is that growth has


been downgraded this year, next year, the year after, the year


after and the year after that too. The longest double-dip recession


since the Second World War now followed by the slowest recovery in


the last 100 years. The result of this stagnation, rising


unemployment, long-term damage to our economy, falling behind now as


other countries move ahead, is that the Chancellor's fiscal strategy


has been completely derailed. The defining purpose of the Government,


the cornerstone of the coalition, the one test they set themselves to


balance the books and get the debt falling by 2015 is now in tatters.


What we have learnt today is that borrowing has -- is that Government


borrowing has been revised up this year, next year and the year after


that. We now know that compared to the Chancellor's forecast two years


ago borrowing is now forecast to be well above the �150 billion of


extra borrowing that he was forecasting in March. And they


should listen to this - the Chancellor has confirmed that the


Prime Minister's pledge to balance the books in 2015 is not met in


2015. It's not met in 1016 and it's not met in 2017 either. -- 2016 and


it's not met in 2017 either. The fact is there's pour borrowing, Mr


Speaker. We will look in detail when we get the figures, because it


was very disappointing. The Chancellor failed to give us the


cash figures adjusted for borrowing this year, next year and the year


after. The unusual thing is that just a few weeks ago the


independent forecasters were saying that borrowing would be �6 billion


higher this year. We will examine the detail of those figures to see


whether there has been any dodgy dealing. We will find out in the


coming hours. I don't know. I don't know, because I've not seen the


figures, but what I do know is there's more borrowing this year


and next year and pour borrowing the year after and the result of


that -- more borrowing the year after and the result is that the


OBR now shows more borrowing and higher deficits means higher


national debt, Mr Speaker. The national debt - the Prime Minister


should listen to this. It might be rather shocking to find out. The


national debt will be higher at the end of this Parliament than the


level inherited. It's going to be higher at the end of this


Parliament than forecasted in the plans he inherited and it's no


longer falling as a per centage of GDP in 2015. It's rising in 2015


and it's rising again in 2016 too, breaking the fiscal rule for


falling debt upon which this Chancellor said his entire


credibility depended. In last year's Budget, the Chancellor said,


"Our deficit reduction plan is on course. We will not waiver." On


course? Not waivering? He's not waivering, he's drowning. Now, the


Chancellor is trying to claim his failure on growth and his failure


on borrowing and the debt breaking his own fiscal rule, he's trying to


claim it's not his fault. That no- one could have foreseen it. What


nonsense, Mr Speaker. Because, he was warned that a tough medium-term


plan to cut the deficit, tax rises, spending cuts, could only work if


the Government first put in place a plan for jobs and growth. He was


warned it was a huge gamble to go too far, too fast and rely on


exports to bail him out. He was warned there was a hurricane


brewing in the eurozone and that was not the time to rip out the


fundations of the house built here in Britain. Once again, the


Chancellor is trying to blame high oil prices and the eurozone crisis


for negative growth this year. But it affected all countries, Mr


Speaker. It affected all countries. Why, over the last -- THE SPEAKER:


Members must calm themselves. Mr Biles, I thought you were normally


a model of restraint and civility. Good heavens man, I don't know


what's come over you. Calm yourself. Take a pill if necessary. Keep calm.


They don't like it, do they? They don't like it at all. Once again,


the Chancellor is trying to blame high oil prices and the euros and


crazes. Let me ask him why, over the past two years, has Britain


grown by just one 10th of the growth rates of the G20 countries?


And why is growth here in Britain even slower than in the eurozone?


Mr Speaker, it is not the rest of the world's fault, it is his


policies that have failed. He claims that rising VAT, alongside


accelerated spending cuts, would boost confidence, secure Recovery


and get the deficit down. But they depress confidence, choked off the


recovery and borrowing has been revised up. Let me ask the


Chancellor whatever happened to his Treasury view, his Theory of


expansionary fiscal contraction? It it is the economy which has


contracted and the borrowing and the debt that have expanded. That


is the truth. I have to say, when the latest figures show that


business confidence is falling, when the world economy is slowing,


when the eurozone is in such chronic difficulty, that on current


plans the fiscal straitjacket tightens further next year, it is


simply reckless and deeply irresponsible of this Chancellor to


plough on with a fiscal plan that we all know is failing under the


terms he said. That is the trip. -- truth. What a wasted opportunity


this was. Can he confirm that the OBR looked at the figures he


announced today, their verdict has been revised down this year, next


year and the year after. Let me congratulate the Chancellor for


taking our advice and stopping January's fuel duty rise. Even


though they all voted against it just a month ago, they all voted


against it... We welcome the U-turn on defence, in part, the U-turn on


bargaining in the NHS, the U-turn on capital allowances. After


churches, charities, pasties, skips, fuel and caravans, I think you


turning is catching on. Whatever happened to the plans for the


Business Investment Bank? As for the announcement on infrastructure


spending, the extra money for schools is just a fraction of the


cats and cancellations of the Building Schools for the Future.


We've been here before. A year ago, the Prime Minister boasted of a


national infrastructure plan. 12 months on, not a single road scheme


has started. Why can't he see that he won't get the deficit down


without a plan for jobs and growth? Why is he not using the 4G money to


get homes built? Why is he not giving a national insurance holiday


for small firms? Why not a temporary tax cut for families?


Even though mayor was supporting that. Why is he not repeating the


bank bonus tax? The Chancellor says he cannot do this because it would


lead to higher borrowing. Even his political attacks are backfiring.


This Chancellor's failed plan has given us more welfare spending,


higher borrowing and more debt. That is the truth. He has failed on


growth and the deficit. What is his answer? More of the same. Let me


remind the Chancellor what he told the House in the Budget of 2011. He


said, we have already asked the British people for what is needed


and we do not need to ask for more. 18 months on, the Chancellor has


come back for more. Whom does he think should pay? Not the 80,000


millionaires, said to get over �100,000 each in April. I have to


say to the Liberal Democrats, whatever happened to the mansion


tax? Don't they realise, even with these changes in personal allowance,


the other things they have supported me is that the average


family, with children, or �20,000, is worse off, Mr Speaker. That is


before the VAT rise. The Chancellor claims that his decision to


restrict pension tax relief will make the system fair at the top.


Can he confirm the �1 billion he is raising is less than the �1.6


billion that he gave back in pension tax relief in June 2010?


And it is just a fraction of the top rate tax cut. A �3 billion top


rate tax cut, while at the same time the Chancellor is cutting tax


credits for working families, cutting child benefit for middle


income families, raising taxes on pensioners in April and cutting


benefits for the unemployed. Mr Speaker, we do need to reform and


modernise our welfare state and reduce its costs. Those who work,


those who can work should work, no IFS or buts. We support a benefit


cap, done fairly, with a higher level in London. Let us be clear,


the Chancellor claimed he would cut the welfare bill. But higher


inflation and long-term unemployment means that the


benefits bill is forecast to be billions high up in this Parliament


than the Chancellor boasted. Let me help him, Mr Speaker. Welfare to


work. The clue is in the domain. You cannot have a successful


welfare-to-work programme, without work. We know that the work


programme has just totally failed, with only two people in 100


actually going into permanent jobs. Mr Speaker, we should be requiring


every young and long-term unemployed person to take a job and


making sure that there is one there. Let me ask the Chancellor about an


nervous, one of the thousands cut from the NHS in the last two years,


now struggling to find a new job. - - a nurse. For that nurse, he has


announced he is cutting hair jobseeker's allowance for the next


three years. How can that be fair when he is cutting the top rate of


tax? How can that be fair when someone earning �228,000 a year


will get a top rate tax cut of �75 a week in April, which is more than


the �71 that she gets to live on? I have to say, what we learned today,


he is not just hitting those looking for work. The majority of


people who lose from his cuts to tax credits are people in work.


Millions of families, striving hard to do with the right thing. What


kind of government believes that you can only make low-paid, working


people work harder by cutting the tax credits, but you only make


millionaires work harder by cutting their taxes? I'll tell you,


certainly not a one-nation government. They must really


believe that if you cut taxes at the top, the wealth will trickle


down. Let me remind the House what the Chancellor said to the


Conservative Party conference in October 2009. He said, we could not


even think, we could not even think of abolishing the 50 pence rate on


the rich while, at the same time, I am asking many of our public sector


workers to accept a pay freeze to protect their jobs. The


Chancellor's words. He said, I think we can all agree that would


be grossly unfair. What has changed? What has changed? Nothing


has changed. It was all Akon and the mask slipped. We now know that


this Chancellor cannot say that we are all in this together without a


smirk on his face. They wanted us to think there were compassionate


Conservatives. Now we find out by are the same old Conservatives and


the Liberal Democrats have gone along with all of it, yet again.


May I say, Mr Speaker, what a pity. What a pity not to see the


honourable member for Mid Bedfordshire in her place. Back


from off the jungle. She may not have succeeded in talking to the


nation on many things, but she did speak to the nation when she called


the Prime Minister and the Chancellor two arrogant posh boys


who do not know the price of milk. Mr Speaker, no wonder this Prime


Minister keeps on losing his temper. His worst nightmare is coming true.


Not snakes and spiders in the jungle, but their fiscal role


broken, they economic credibility in tatters, exposed now as


incompetent and unfair. Yes, Mr Speaker, he is the Chancellor,


can't somebody getting out of here? -- get him out of here. Borrowing


revised up, fiscal rules broken. On every target they set themselves,


failing, failing, failing. Cutting the NHS and not the deficit. Over


�212 billion more borrowing than a promise two years ago. Cutting


taxes for the rich, while struggling families and pensioners


pay the price. Unfair, incompetent We leave the House of Commons now.


If you want to continue watching the Autumn Statement debate and


question and answer, you can switch-over to BBC Parliament or go


Now, Ed Balls took 20 minutes to reply to the Chancellor's 50 minute


Autumn Statement. It was a dense, complicated statement by the


Chancellor. Particularly some redefinition of how the deficit is


calculated to or complicated factors on how much borrowing the


Government is doing. We will try, as we go through the documents, we


are already wading through them at the moment and this is just a small


part of them, let's take a look at the main points as we understand


them at the moment. We start with economic growth. The OBR, the


Office For Budget Responsibility, an independent forecasters set up


by Mr Osborne, is predicting there will be a small contraction in the


economy this year of 0.1%. I understand within that forecast it


expects the economy to actually go back into negative territory in the


4th quarter of this year. That will be politically very dangerous for


the Government, because it will mean that three out of the four


quarters of this year would have been in negative territory. Very,


very slow growth in 2013 of 1.2%, getting up to 2% in 2014, 2.3 in


2015 and almost 3% in 2017. Take the final years with a pinch of


salt, it really doesn't mean very much. It is this year, 2013 and


then 2014 that matters. As a consequence of this growth, the


Government has to decide how much it needs to borrow to finance


spending, given that it does not tax enough to be able to meet all


of its spending plans. Here is where it gets complicated. We need


to look at the somewhat more carefully. The Government is now


saying that in this financial year borrowing will be 108 billion. This


is because of a number of changes that have been made. If you do not


make these changes, we think it still comes in at about 120 billion,


which is what the target was. It complicates the debate because both


the Labour Party and independent observers were saying that


borrowing was going to rise this year, compared to last year and be


higher than the target. The way the Chancellor is presenting these


figures, it actually falls in this year, against last year. It


continues to fall in 2013 and 2014. It's down to 88 billion by 14/15. I


have other figures here, car filleting them a different way,


which suggest that the Government will still be borrowing 56 billion


by 2017 and 2018. We need to unravel that, it's been made very


complicated. Let's look at whether this means the Government has met


its targets. The Government says that it is on course to meet its


fiscal mandate. But it has missed the debt target, the accumulated


deficit over all of the years that we as a nation have borrowed


through our government as a share of GDP. It will not fall, as the


Chancellor predicted. It will not fall in 2014 or 2015, indeed it


will not fall until 2016/17. On tax and spending, this is where the


austerity gets extended. Fiscal consolidation will be extended to


2017/18. That is a fancy way of saying that the cuts continue. Not


for five years, as originally planned, not for seven as it


changed to, but for eight years. Departmental budgets, widely leaked,


this is what the Whitehall departments themselves spend. That


will be reduced by 1% next year, another 2% the year after that. It


releases money that the Government tends to spend on public investment.


A slight surprise, not entirely unexpected, corporation tax, the


tax companies pay on profits, or should pay on their profits, is now


cut to 21% in 20th April 14. The Chancellor has made a number of


cats. Indeed, our corporation tax, that will be as low as it gets


among the major corporations of the world. I think the OECD has a floor


Given that inflation is likely to be more than 1%, at the moment it's


around 3, this means in real terms these benefits will fall. But it


doesn't affect the state pension. The state pension will continue to


rise roughly in line with inflation. Also, disability and care benefits


will also be upgraded in line with inflation. That's a big chunk out


of future increases in working-age welfare benefits, the Chancellor


has taken back. Now personal taxes. Personal income tax - the allowance


will rise by �235. This is the amount that you're allowed to earn


before you pay any tax at all. That will take place in April. It brings


it to around �9,440 that you'll be allowed to earn before you start to


pay the 20% tax. He's also putting up a little bit, 1%, the higher


rate. That's not the 45 or the 50, but the 40%. That's up by 1%. Still


less than the rate of inflation. If you're on that, you'll get a real


rise in taxes. The higher rate, which was widely thought to be


capped is now capped at 40,000. He also said too that the size of the


pension pot cue go for he's reducing from 1.5 million to 1.25


million. It won't affect that many, but some. Now, fuel and energy.


This is where for a brief moment we could say that the Chancellor


turned into Santa. It was belief. Blink and you might have missed it.


He announced not only would the three pence rise in fuel duty be


cancelled in January. Not only postponed, but there are no plans


for a rise in the foreseeable future. He's announcing separately


a shale gas strategy. An attempt to get it out of the ground in Britain


like in the United States. He want to talk about tax incentives and a


new quango for this is the Office for Unconventional Gas. It would


have been simpler to call it the Office For Shale. There's a lot on


infrastructure spending here. has managed to find �5 billion by


cutting some current spending. Most Civil Servants will be laid off.


He's got �5 billion for extra capital investment in various


infrastructure, including some new roads and he says 100 new schools.


�1 billion to go on that, new schools and academies. That is a


summary of what the Chancellor has summary of what the Chancellor has


suggested so far let us see if we can just unpick this. Stephanie, I


come to you first. Have you managed, putting you on the spot, because


it's complicated, I saw three ways in which you can calculate the


deficit depending on what you include. Can you enlighten? We know


two things, which is sort of interesting. One, that he's


claiming that all the figures that he gave us are sort of independent


of the one-off factors that we knew about, that is the transfer of the


pension fund and the Royal Mail and the effect of this sort of switch


of the money that the Bank of England has been making on QE, so


we know in a sense that he's not being creative on that score. What


we are not so clear about is how borrowing is falling this year,


despite all of the expectations that it would rise and what is


particularly interesting to me, when you look at the figures - I


always say don't just look at the overall borrowing, but look at his


measure, the structural deficit, the hole he wanted to fill.


Everyone was expecting that on the basis of what we know about what


the office calculates these things, everyone was expecting that to go


up with this new forecast. It's down. What the interesting


implication of that is, is that they seem to be saying that the


growth we have lost this year maybe won't be lost permanently and


that's had a positive effect on all the future figures, so the point


where he doesn't need the extra year of austerity that he announced


today in order to meet that rule. That's what is strange. At the


moment this mosture looks like it will come into surplus the same


time we thought on the last figures, which is 2016/17. There's possibly


room for that year to be taken back, if you are thinking about making


plans for an election. He doesn't need that austerity on these


figures to meet his targets for deficit. Of course, we had that


admission that the debt stock was not going to fall in 2015. That


moment will be deferred another year and who knows what will happen


after that? The details of why borrowing is still falling I'm


afraid I'm still trying to get to the bottom of it. I don't blame it.


The risk for the Chancellor is he's been too clever by half. The


brightest people in the country will pour them and these people are


in this room. I just sail in behind them. They will pour over them. In


the City and in the think-tanks and the Labour Party and it may not


being as simple. We know it's not as simple as it seems. It could


unravel. Remember, borrowing figures are essentially a forecast


and the question of whether they exactly go up or go down is


politically psychologically, hugely important to the Chancellor, and


threw Ed Balls off his stride, it seems, but nickically a bit this


and that way is not what matters. The big picture remains. The


Chancellor said, "I told you I would get debt down by the end of


this Parliament before the election. I'm not going to do so. I told you


I would get the deficit sorted. The books balanced by the election. I'm


not going to do that. It will take another three years from the


original target." The core message remains bad, but it is intriguing,


Andrew, that despite all that, he looked confident, the Shadow


Chancellor was totally thrown off his side by the jeers of the other


side. The question is is that political calculation right? At its


core is this - George Osborne thinks that if the country believes


borrowing's the problem, the deficit hawks, whether they are


missing their own targets or not, are the people the country will


turn to. They won't turn to the Labour Party, who don't think


borrowing's the primary problem, but they think growth is the route


to get borrowing down. That's what he's banking on. Labour were


banking on today saying, "If you are even failing your own targets,


if you are even failing in your own terms, surely the country will then


say they've tried that and let's try something else?" Robert? What


is striking to me is that the big, in a sense, economic event in the


numbers is the 3.5 billion proceeds from selling the 3G spectrum. Sorry


4G. I must get the technology right on this. That is essentially the


sale of the airwaves to produce even faster smartphones and all


that. What's he done? Broadly, that pays for the deficit reduction, or


the debt reduction that he gets one year later. Indeed, the deficit


reduction. If you strip that out, he would have had to have made much,


much bigger cuts to public spending or put up taxes rather more. What


is quite interesting is if you look at the so-called total policy


decisions that the net effect of what he's done is, because the


money comes in, in this year, it looks like there's a tightening,


but in all the subsequent years he's more than spending what he's


getting in. Actually, the net effect in subsequent years of what


he's doing is to try to stimulate the economy. The interesting


question is whether or not that will have the effect of getting


growth going in the run-up to the general election. He's saying a


one-off lump will be spent in subsequent years and he hopes that


will generate growth as we get to 2015. The funny thing about this


3.5 billion that if we are not for the proceeds, which they are


putting in for this year, even though they haven't had the


auctions for the 4G spectrum, but borrowing - he's putting it in the


book - so borrowing would have risen maybe by a couple of billion


had he not put that for this year. However, as Robert says, he's


spending it in the next few years, which is what the Labour Party has


told him he should do, spending those on investment and growth.


Briefly, Labour had a huge windfall when it sold the last set


technologies, 3G and actually Labour used it to reduce the debt.


It didn't spend the proceeds, so it's quite interesting. The sun is


shining now! It is. The growth figures are interesting. The


country will decline by a small amount according to the OBR. It


says 1.2%. He doesn't know that. It could easily - it's within a margin


of error that we could have another year of no growth. In a sense the


politics is based on forecasts from a bunch of guys who are independent,


but all their forecasts have been wrong. Every single year since the


election and what's more they are exueming bouncing back in


investment and they're -- assuming bouncing back in investments and


they're wrong. We are not talking about taking the temperature


outside, but we are talking about whether the forecasts suggest you


might be on course. Now, may economically may not be terribly


important, but politically it gives vital ballast to George Osborne


when he has a good bit of news, which for him is this figure. But


it also gives a ball loss to his opponents when by the forecasts he


getting it wrong on the deficit and debt. They've been changing their


view of the economy. They were initially felt to be in the first


couple of years they were felt to be quite optimistic about the


supply capacity of the economy. This crucial thing. Then last year


they very radically downgraded their estimates and increased them


again and they are much more optimistic than six months ago. I


don't think any economists had say anything had happened to justify


that change, but it's had a huge impact on the numbers. If the OBR's


right the Chancellor will not be in for a good year, because the


economy will go into decline. That's what the OBR is forecasting.


Back to Jo who is in the Potteries. Thank you. George Osborne may have


been limited on his spending power, but no expense is being spared here


at the Wedgwood factory as 22 carat-gold paste is being applied


to the plates. We'll find out whether businesses in the area are


feeling flush after hearing that Autumn Statement from the


Chancellor. I'm joined by three guests. Karen from the Federation


of Small Businesses, Mike from an estate agent and a member from the


CAB. We heard at the beginning that the economy is haling. Does it feel


like that on the -- healing. Does it feel like that for you on the


front line? I don't think is does. One of the biggest disappointments


that we have seen today is not being able to see any move forward


on the small business bank and actually the access to finance


issues. It's very, very difficult for small businesses in particular


to access affordable, reasonable finance. Even with the funding and


lending scheme in place, why aren't they giving out the money? Well,


people go to the banks, but they've restricted the criteria and they've


made it very difficult to finance. The one billion was announced in


the Liberal Democrats' conference earlier this year. That has been no


surprise. The surprise is there's been no move forward on the issues


that were discussed earlier this year. You are disappointed? Yes.


When it comes to housing and planning, the Government has said


time and again that that must be the drive for the economy. What is


actually stopping big building projects going ahead? Is it really


planning? It's part of it, but it's most encouraging that the


Government have said there's a clear focus on economic


regeneration in the planning system. That's being embraced by most local


authorities, but clearly it has to work through the system. One of the


big issues relates to smaller and medium-sized companies having the


right sort of finance available to allow them to invest in new plant


and machinery and property and we would welcome the new capital land


regime announced today. That will help. That will allow businesses to


invest up to �250,000 with 100% tax relief? Yes. Will some of your


projects start? It will help. It's part of an overall package that


needs to help generate more economic regeneration. Right. In


terms of fairness, we hear the Chancellor saying that time and


again that we are all in this together. How did you think it came


across to the sort of people you are talking to on a daily basey at


the CAB? I think we misunderstand the terms, "people on benefits." We


equate it to people out of work, but the vast majority are actually


in work if they're not of pension age. The growing poverty in this


country is the poverty of people in work. We are seeing people who own


their own homes using food banks. I would urge the Government to think


about protecting those on the lowest incomes in work by raising


the tariff that applies to benefits. Thank you to you all. We'll


probably speak to you in a bit. We want your reaction and I'm joined


now by Paul Lewis from BBC Radio 4's Money Box programme. Give us


your headlines from what you got The interesting bit was the


increasing how much we can end without paying tax. We can actually


not pay any tax on an income up to �9,440. Slightly worse news for


those on higher incomes. The rate at which you pay higher rate tax is


coming down to �41,450. They will get some of the benefit of that,


but not all. On the business front, as you have been discussing, a rise


in capital allowances so that businesses can invest and unlock


the cash they have. It's very good news for businesses and people that


are self-employed. One of the things that got a big cheer when I


was sitting with the businesses was the cancellation of that three


pence duty on fuel? It has be postponed twice. To this Bonett a


third time would seem a bit silly. It's not just 3p, it is 3p and a


bit, plus about E. It's more like 3.6, maybe even 4p. That will not


happen again. It's good news for motorists and businesses, because


that's a big part of expenditure. You want people to e-mail with


questions? Could you read some of them that you have had? Yes, the


other big thing was the cut in the increase in welfare benefits from


April. This is jobseeker's allowance, but also employment and


support alliance, which often is seen as a disability benefit. Now


that is going to be raised by only 1%. Derek says, my wages have been


frozen for five years, why should I pay for increases for those in


welfare? He will be glad it is only a 1% rise. Michael in Londonderry


says that in my city, every new job is hard fought for with thousands


of applicants. Lots of people have no choice but to live on benefits.


That cut, or at least not raising it with inflation, is going to save


�1.5 billion per year by 2014/15. The fairness agenda is something


that George Osborne has focused on a lot? Fairness between people in


work and people out of work, that is how he sees it. More comments,


please. E-mail, Twitter or send us We will be Backworth more business


reaction and more e-mails. -- back with.


We have been discussing the economic picture before we went to


join Jo. Before we get political reaction, a couple of things that


affect all of us as individuals. If you are paying income tax, there is


a small tax cut for you. The level at which you start to pay income


tax has been increased by a couple of hundred pounds. If you are on


benefits, working benefits, you are in for a 1% rise, not very much and


lower than the rate of inflation. Although it is a 1% rise, in real


terms, with rising prices, it probably means a cut. If you are a


higher in a, fewer pension perks, including the amount of money you


can put in tax free to your pension pot. Broadly, you are in a flat-


lining economy. It's going to go down a bit this year, says the OBR,


and only at a bit next year. Both within margins of error. Basically,


the economy is just going along the bottom. If you are a motorist or in


a haulage business, there will be no fuel duty rise. The price of


petrol, as far as tax is concerned, will stay the same. A few things


that affect you beyond the macro- economic picture and all of us as


individuals. Let's go back to Matthew on the famous College Green


outside the House of Commons. Let's discuss what we have heard


with a former Chancellor and a former party leader, Sir Mingus


Campbell. Lord Lawson is also with me. We were hoping that Alastair


Darling it was going to join us. Perhaps he will in the coming


minutes'. First of all, a snapshot of what you heard? It was like a


budgie, wasn't it? -- Budget. The important thing is that he did the


right thing in terms of sticking to the budget deficit reduction plan,


sticking firmly to Plan A. That was the most important thing he has


done. He has had to take some uncomfortable positions in order to


do it, but it is the right thing to do. One other thing that I was glad


about, the go-ahead for gas in the UK. That is terribly important. One


piece of good news that we have at the present time. Your headline


thoughts? Very much like a Budget. As Nigel Lawson says, he has three


confirmed the commitment to plan a. The deficit and debt is not coming


down as fast as we like, but it is coming down. To say that we are not


going to implement the proposed increase in petrol tax for January,


we are going to help small businesses and we are going to


reduce corporation tax by 1%, these are things that cheer it up the


people sitting behind them. In contrast to some of the faces on


the opposition side. He said he was sticking to Plan A and you were


glad about that, but the bottom line is that austerity stretches


even further, not just to 2017, but on to 2018? Sadly, that is a


combination of the very difficult world we live in, notably the


eurozone crisis which has plunged the European Continent into


recession and disarray. But there are other problems as well. And


there is the terrible inheritance of the deficit, which is coming


down. We are making progress and the projections, not his


projections but the Independent Office of Budget Responsibility,


are for steady growth over the coming years. But the misery is


extended. Do you not think that part of the equation for that, you


talk about what is happening in the global economy, the eurozone, what


about the basic economic policy, that the cuts were simply too fast?


We are going ahead, the cut were not too fast at all. If you want to


do anything more to make more progress on the economy, you don't


want to do it by abandoning the budget deficit reduction plan. What


you want to do is to get banks' lending again. That is the key,


particularly to small and medium- size businesses. I hope that he is


working on that. This is not a budgetary measure, but I hope that


something would be coming forward on that front. You may not have


seen it, but part of the way through that statement we saw Nick


Clegg sitting behind the statement, shaking his head when George


Osborne went through the reasons why he was not going to have a new


band of council tax for very rich homes. That is not something I have


seen before. It is no secret that there was a division of opinion on


the decision... Whether it is a larger tax will not, the joint


decision was not to proceed. But what came out was that the economy


shrank by 6.3% in 2007. That was the inheritance. A much more


serious inheritance than was anticipated. Another quick thought


from you, how comfortable like you to see benefits raised by only 1%


for some of the poorest people in society? Are you comfortable with


that? I wish it was possible to raise them by much more. But all


public sector employees have been confined to an increase of 1%.


final question to you, Lord Lawson, on growth. We saw those figures


downgraded in the years ahead. Do you think there's enough of what


you heard, we heard from the British Chamber of Commerce,


talking about the blizzard of announcements, they said many of


those ended up being pie-in-the-sky. They want is to be tangible and now.


That has to go beyond rhetoric, to delivery? Well, look, if you could


just press a button and deliver growth, any Chancellor would do


that. But it's not like that. You have to be patient. The projections


from the Independent Office of Budget Responsibility are that we


will be steadily growing over coming years. I think we are on the


right track. Thanks very much for your time. More from me in a little


We and are joined by the Chief Secretary to the Treasury, Danny


Alexander. Welcome to this Daily Politics special. The economy is


going to decline this year. It will decline in the 4th quarter, it will


barely rise at all next year. If you are on benefits, you will have


a real cut in the big standards. If you work in the public sector, you


will have a real cut as well. These are bad times? The these are tough


times for the country, absolutely right. This is an Autumn Statement


about the world as it is, not a world as we might have hoped it


would be when we started in office. What we are taking today is


decisions that recognise the fact that the period of fiscal restraint


has to carry on for longer. Those who have the most are contributing


the most of the next phase of deficit-reduction. We are using


some of the revenues we generate from that in the earlier years to


support the economy, create jobs, cut taxes in the short term for


businesses so they can get on with Investment. Crucially, through


reducing fuel duty and increasing the personal allowance, something


Liberal Democrats a campaign for for a long time, that we get more


money into the pockets of people that are working hard and


struggling to make ends meet. you are on benefits, your real


living standards will fall. If you work for the public sector, your


living standards will fall. It will serve it in Whitehall, you have a


pretty good chance of losing your job. Maybe not the poorest in


society, but some of those on ordinary incomes are suffering a


lot more than most. That is absolutely right. In fact, there is


an important piece of information in the Autumn Statement itself


which shows that since the financial crisis the incomes of


people in work have increased by about 10%. The income of people on


benefits over the same period had increased by 20%. In that context,


say to people, yes, you will get a raised this year and they year


Wrafter, but it will be under inflation, on top of decisions that


make the wealthy pay more tax, on top of clampdowns on tax avoidance,


it is part of a package to answer the question of how we sort out the


country's finances. We inherited a mess from the previous government,


and if we fail to sort that out the problems will be much worse.


have made the issue of borrowing so complicated now that none of us can


follow it properly. I am sure that the is intentional. But we have


managed to unravel... Not in the least. The Office of Budget


Responsibility presented the figures very clearly, with or


without the transfer of the coupons and the asset purchase facilities,


with and without... This OBR is to your government what the iron dome


is for Israel! You hide under everything from it. Can I make a


serious point? We have created the OBR as an independent body so that


we do not, as politicians, have a chance to skew the figures. We have


an independent body which tells us, as they see it, how the economy is.


I'm prepared to accept their numbers and the analysis behind it.


If you take off the distortions and one-offs, the Royal Mail, the banks,


taking back the money that you have paid as a government to the Bank of


England in interest, you take that back and put it on your own books,


in this current year your borrowing will be 120 billion. Just a little


bit upon what you said in March. But the way you present it, it is a


huge fall? The borrowing is falling on any of the measures that the OBR


presented. In their report, though analysts will see that it has been


presented with and without all of these factors are so that it is


transparently available. The OBR, the central forecast, it is that


borrowing will fall this year compared to last year. It will fall


next year, the year after. I am quite happy to admit that the


borrowing is not falling as fast as we wanted where we started out.


Because they say the economy is in a worse situation because of what


is going on in the year rose and... It's not falling at all this year,


if you strip out the factors. Last year you borrowed 120 billion. This


year, your borrowing 120 billion. It is the same. So your borrowing


is not falling? When you strip out the Asset Purchase Facility and so


on, I think it is falling by �1.5 billion this year, compared to last.


You put a lot of emphasis on infrastructure programmes in this


budget. Since you came to power, you have announced 18 new major


road schemes. How many have started? I don't know the precise


answer of the top of my head. I know quite a few have started. I


was down in Bristol, seeing the M 5, I was down in Torbay seeing the


bypass being built. Yes, some of these were under way before you


came to power. These are things that we have announced as a


government. Well, our evidence is that almost no major new road


schemes have started. I don't agree with that. In the last Autumn


Statement, you said that you would leverage 21 billion of new private


sector investment into public- sector investment. How much have


you leverage? Well, we have a national infrastructure plan,


dinners or an update published today which sets out in detail...


How much? Let me just finish the answer. Once we have announced in


the last few months the new infrastructure projects, pension


funds have put �2 billion into the pensions infrastructure platform.


We announce today an extra �5 billion of government money.


Actually, the Government investment into its infrastructure is a


greater share of the economy than it was in Labour's time in office.


That might be CRU, an interesting answer, but he doesn't answer the


question I asked. Of the �21 billion new private sector


investment... Are I don't know the It is when the money hits the


ground that people want to know. Our understanding is that of the 21


billion, so far you only have a commitment for 700 million. And


it's not been spent? I have no idea what those figures refer to, I


would happily look at them after the show. Of the �5 billion you


have added on to this, is it true that only 700 million of that will


be spent in the current financial It will almost be spent starting


next April and the April after. We have an investment programme in new


college building and new school building, in some new road schemes


and maintenance, which is crucially important to communities all around


the country. These are schemes that can get under way to create jobs


and we crucially raise the quality of infrastructure. Dueshing the


last Government's time in office we -- during the last Government's


time in office we fell in the league tables in infrastructure.


That's why we are increasing the amount of money in infrastructure.


Why is house building falling? You are always talking about that and


the way of getting growth into the economy. Because of lack of demand


for mortgages and because of the problems in the banking system that


we're trying to address through the scheme. So people can get mortgages


easier. It's falling for a whole range. Will it continue to fall?


I'm not sure what the OBR forecasts on that. I'm not going to offer a


forecast. You should have a hotline to them, so you know what to say.


Government investment in house building is increasing. Part of the


package announced to is new money to unblock sites and to bring in


tens of thousands of more housing starts over the next two years, so


part of house building that is supported by the Government will


see a big increase over the next few years. The Chancellor announced


some tough and deep spending cuts today, but as I understand it,


there's another �10 billion of cuts for you to find in the spending


round that you'll be doing? That's right. In the first half of next


year I'll be carrying out a public spending round to find an extra �10


billion of savings from unpected departments to maintain the


protections that were put in place through the Parliament in terms of


increasing health spending and school spending and meeting our


overseas aid commitment. I'll be sitting down over the next few


months to work out where they can be found. People might see the pain


today, taxes up and spending down and think that's bad, but it's far


from it. There are a lot of other cuts may be programmes not just


bureaucrats. Perhaps squeezes on working people's benefits not just


the unemployed still to come? are. We have to fill out all the


details of what Government will spend on what. It's in a year when


this Government will be in power for the first two weeks and we have


to do it, oh that means asking questions of departments. I'm


committed to making sure in doing that we focus on protecting


spending that is good for the economy and that supports economic


growth, but you are quite right, there will be a lot more tough


choices down the track. If the Government has set enormous store


by the AAA credit rating, most nan lists expect you to lose that in


the first few months of the year, because of the deterioration in


growth, which has been confirmed today and the worsening in


borrowing, which has been confirmed today. How serious an embarrassment


to you will that be if you lose AAA? Thear not the be all and end


all. What matters -- they are not the be all and end all. What


matters to me is we have a fiscal plan to ensure the markets can have


confidence in us. This is a country that can pay its way in the world


because we can keep our interest rates as low as they are. One of


the things today is information about what the impact would be of a


rise in interest rates. 1% in mortgages would cost �12 billion a


year, and that's why we place heavy emphasis on maintaining the


credibility. You would distance yourself from the Prime Minister


and Chancellor who boasted about that AAA? I wouldn't at all, but


what lies behind that is not an obsession with ratings, but making


sure that the country continues to have a strong and credible fiscal


policy, which we maintained very strongly and sticking to the road


we started out on, through the decisions in the statement today.


If the economy fails to recover in the way that you hope, do you think


that the Liberal Democrats and the Tories can hold together in terms


of the future path of economic policy I've absolutely no doubt


that we will, because we have set out on this task together and it is


what caused the coalition to be formed to sort out the country's


problems to clean up the mess that Labour left. Yes, it is taking


longer and because of the problems in the eurozone and around the


world, growth is slower than we would have hoped for, but we're on


the right road and making progress and I think that the best thing for


this country, speaks as a Liberal Democrat and I'm sure George would


say as a Conservative, is to stick to the road. Before you go, you do


have to rush, I'm told, is that right? I'm happy to answer some


more questions. I can't think of anything more important than being


on The Daily Politics. I always enjoy this. Stephanie can ask a few


questions. Did you get enough out of the Tories for this? You are


going to have to put up with real cuts in welfare payments and


continued freezes in public-sector pay effectively. You didn't get a


mansion tax or higher council tax bands. All you've got is the


inability of well-off people to put more into their pension funds than


they would have done. There's not much there? The most important


things about the details in the statement today is it's balanced.


It's asking as much from the wealthy in terms of tax increases


as much as it is asking from the welfare rates that we talked about


earlier and re-investing money back into helping people on middle and


lower incomes, to a further increase in the tax allowances. You


know the number one policy in the 2010 manifesto that I wrote, was to


lift the income tax threshold to �10,000. We are only a short hop


away. As a result, from next April, working people will have an extra


�50 a month in their pockets, thanks to the decisions the


Government has made in delivering that policy. It's a balanced


package, but most importantly, it's a package that keeps the country on


the right track economically. was interesting to me that the


Chancellor didn't mention his target measure of borrowing in the


speech and of course, spectical as I am, I thought maybe that means


that the story's not very good, but it's interesting to me that


actually the story is better than it was even six months ago and much


better than anyone expected the OBR to give. It hasn't actually meant -


I'm a bit surprised if you are balancing your target measure of


the deficit in the same year that you were before, in 2016/17, why do


you need the extra year of austerity in 2017? Is that


something that will be taken away before the election? No, it's a


good yes. -- question. It goes back to what Andrew was talking about.


The OBR said and George said that we meet the fiscal mandate over the


five-year period. With the asset purchase facility coupons, as you


were saying, it's in 16/17 and without it it takes another year


and it's right for us to plan on the basis that we are going to need


to continue to take further difficult decisions, particularly


to ensure that we hit the target and also to ensure that we get the


debt falling, because in the end we are going to be spending �60


billion by debt interest repayments and we need to make sure it comes


down. The savings on the benefits, those that you are making that are


quite significant the year after next, are most of those coming from


people who are out of work or from the change in the uprating of all


the people who are in work, but who get working tax credits? It's a 1%


uprating policy across the policy. Most of the savings won't be from


the people behind the blinds and the scroungers that the Chancellor


talks about? It comes from both groups. I would also say to you


that the people in work will be the most substantial beneficiaries of


the increase in the income tax personal allowance. Those people


will be gaining significantly in terms of paying less tax, albeit


that the benefits and tax credits they receive will go up by less.


Nick, just one question on that. You said that the amount gotten


from the rich, as it were, is the same from the poor. I get this as


3.5 billion is raised from curbing benefits. But the only tax rise I


can see on individuals, as against on banks for example, as against


tax avoidance and so on, actually someone says, "I will now pay more


tax." That is that pensions tax relief which raises much, much less


than 3.5 billion? The pensions measure raises around �1 billion a


year. Not uprating the higher rate, which affects not the wealthy, but


the better off, it raises another �1 billion. In 15/16 we get another


�1 billion from the yield from the Swiss deal, which is money that is


hidden overseas by wealthy people in the country who thought they


would get away without paying tax. They may saying getting money out


of us that has been hidden is not in any sense equalised by taking


money away from people who depending on welfare. It's your job


anyway. Getting this money if from people who thought they could hide


their money from the British tax system is a very, very good thing.


It's a one-off. It is spread over a number of years. We also have a


number of avoidance policies which don't feature on the score card at


this time, about the extra investment we are putting into HMRC


which will raise a further �2 billion by the end of the


Parliament. There is a lot going on to make sure that everyone pays


their way. If you look at the distribution analysis you will see


all that set out in some detail. Thank you very much for giving us


more time than you were allocated. Though not more than you deserved.


I'm glad you went to see the by pass being built because it was


first proposed more than 50 years ago. INAUDIBLE. As I said that, I


just thought that's what he's going to say! We'll just see houpbgz it


takes you to finish -- how long it takes you to finish. Back to


Matthew on The Green. Thank you. We heard from the Conservatives and


the Liberal Democrats. We'll hear from Labour and speak to Chris


Leslie, Shadow Treasury Minister. Thank you very much for being here.


What did you make of what you heard from the Chancellor? I think the


difficulties that we have seen in terms of the economy in 2012 have


caused real problems with borrowing and with debt. We have seen more


revised borrowing figures getting worse and worse and we have seen


the debt figures looking very, very bad indeed. It turns out, and we


have had a chance in the last 30 minutes to look through the details


of it, that the Chancellor can only claim that his borrowing figures


look reasonably better because he's pencilled in the proceeds from the


sale of the 4G spectrum auction, even though the proceeds for that


haven't yet been realised. There are some questions now about the


way in which the Chancellor is presenting the borrowing statistics,


putting into the public finances 3. 5 billion of revenue which have not


materialised. Targets aside, but most people's daily lives are the


most important thing, petrol, that was good news, wasn't it? We were


calling for a freeze in that. Of course, it's gone up by three pence


because of the VAT increases. Don't forget, anybody filling their tank


won't be seeing prices coming down, but they won't be going up at fast.


Of course it's welcome. When we voted on it, the Government voted


against that, so I'm not sure they won't make that announcement then.


Schools and science and transports - �5 billion? We'll see where they


are getting the money from. There is the issue of giving to Peter and


taking from Paul. They took �3 billion out of the schools'


infrastructure budget when they were elected. Putting one billion


back if doesn't make up that gap. All the things that potentially


people will welcome, you respond to in a Qual tide way. Where would you


get opinion from? There isn't mathying money out there? I think


what you have to do is look at the priorities. We wouldn't give �3


billion away to the wealthiest in society, the millionaires who will


get a tax cut in April and spend �3 billion reorganising the National


Health Service. There has to be pay restraint, but there are other


choices. We should have a reduction in the EU budget, but the key thing


we have to come back to is growth. Unless you recognise that a healthy


economy drives the health of public finances you'll never solve this


and we have seen the Chancellor yet again kicking the can further down


the road, and not dealing with the fundamental issues and breaking his


promise to balance the books by 2015. We heard the Chancellor


challenge you and others. He said people who don't want to cut


spending they have to raise the taxes or the debt or both and


that's your exclusion to spend more? I think there are key


critical developments that need to be made now to stimulate growth and


get confidence back. If we can continue, as the Chancellor himself


had to admit, having a shrinking economy, so the economy actually


gets smaller in 2012, then there's no wonder the public finances


continue to deteriorate. How many more years will very to say to the


Chancellor focus on growth and think about the health of the


economy and the public finance issues will flow from that? Thank


you very much. Andrew, back to you. We are not the only people in this


town doing some number cinching. They're doing it in the Sit --


crunching. They're doing it in the City. Over now to Susannah Streeter


in the City. There's a sense of relief following the Chancellor's


statement. Relief that the UK is still on that path to austerity.


There were concerns that the bond market could plummet really, but in


fact gilts, UK Government debts have risen, which many say is good


news for future borrowing for UK plc, but there's not been much


Let's talk to Mike Ingram, a market watcher. Tell me what you took from


the statement, as far as trying to restore growth in UK PLC? Given the


very limited room for manoeuvre that George Osborne had, and we all


know that the numbers are extremely tight, I think he did a reasonably


good job. He stuck to the principle of trying to read direct revenues,


expenditure, away from current expenditure, away from overhead,


into capital expenditure, spending that might see some sort of return


in terms of developing businesses and support for the all-important


SMEs. There was that announcement as well, a big increase in relief


for capital expenditure. How much will that impact the small-to-


medium businesses that are the lifeblood of the economy? I think


it to be very significant indeed. As George Osborne pointed out, that


includes 90% of corporates in the UK. Having his 100% tax relief,


from 25,000, up to 250,000, its a big boost. We heard about that �5


billion fund for capital expenditure round things like new


homes, for example, what impact will that have on growth in the


long term? Andrew Smith is chief economist at KPMG. What to do take


on the statement? Did you think there was anything that would help


the economy return to growth and health? There are bits and pieces.


The Chancellor has been tried to combine deficit-reduction with


economic recovery. He's not actually getting much of either, as


he had to admit. He tended by low growth and, on the other side, by


his fiscal rules. There will be a small alleviation, but at the end


of the day we are looking at a multi year fiscal contraction,


which is going on to 2080 now. Thank you very much. More from you


a little bit later. You can see it is still a very tough tightrope


that the Chancellor is walking. So far, from the city, a cautious


You are watching live coverage and analysis of the Chancellor's Autumn


Statement on BBC Two and the BBC News Channel. If you have just


joined us, let's bring you have to date with a couple of the key


points from George Osborne's statement. Let's begin with the


forecast, not his forecast, but the forecast of the Independent Office


for Budget Responsibility. It is now saying the economy will shrink,


not by much, but certainly no signs of growth. Nothing like the third


quarter, where we had growth of about 1%. Next year, not much


better. The Government is on course to get its structural deficit down.


But it is taking longer to do that. It's not on course to get net debt,


the accumulation of all of the deficits that we'd have racked up


over the years, called the national debt, that is not going to fall as


a share of our national wealth until some time after 2016. That's


a target that the Chancellor didn't make. What about taxes? Any joy


there? Income tax, the personal allowance rises to 900 and --


�9,440. You don't start paying tax until you ironing that amount of


money. For those on higher incomes, the 40% tax threshold is rising by


1% in both 2014/15 and 2015/16. In real terms, you will be paying more.


If you run a business, corporation tax is down, the Chancellor has


made many cuts to corporation tax. Other measures, if you are wrong


working-age benefits, such as jobseeker's allowance, your


increases over the next three years will be capped at 1%. Again, that


is less than the rate of inflation. However, if you are a motorist, the


three pence rise in fuel duty is coming through in January, it has


not just been postponed, it has been scrapped altogether says the


Chancellor. If you are a civil servant working in Whitehall,


departmental budgets are going to be cut by 1% next year and another


2% the year after that. That on top of the 17% cuts already laid down


in previous Chancellor statements and budgets. It is likely,


therefore, to mean some redundancies.


Let's get some more political reaction and talk to Angus


Robertson for the SNP and Elfyn Llwyd from Plaid Cymru. They are in


the Central Lobby. Angus Robertson, or public spending, more public


investment, Scotland will get its share, what are you going to spend


it on? First off, it's important to note that the growth forecasts are


as problematic as they are. It's a problem in Scotland and Wales, the


whole of the airship kingdom. It's a real cause for concern. -- United


Kingdom. Capital projects coming on line, those are shove already


projects that the Scottish government have had ready to start


immediately. About half of those projects will be returned to


Scotland. I'm not sure if you have reported that North Sea oil


receipts will contribute �10 billion in the next financial year.


Scotland is contributing significantly to the UK. You would


not expect me to overlook the comparison that we would be able to


make far better decisions in Scotland around the budget, given


that Scotland is in a better budgetary situation than the UK.


That is the great advantage of an independent vote in 2014, when we


can secured the decision-making powers of Scotland to make them


closer to home, rather than having a Tory government we did not elect


making bad decisions. I expected you to get to that point, in spite


of my question being about something else! The Government, or


the Prime Minister in Prime Minister's Questions, pointed out


that the money in the health service in Wales is being cut. Will


you have a chance to increase that with money coming your way from the


overall spending settlement? depends what the Labour government


decide to do. Their priorities clearly are not in the area of


health, which she would have thought would have been a priority.


That is the first point. We have campaigned for a long time for


borrowing powers for borrowing powers for the Welsh government.


That has been welcomed by the Silk Commission. No mention of it today,


but we need those powers to kick- start the economy and make sure


that capital projects within health, with their many public service, are


brought forwards. Clearly, they are not at the moment. I'm disappointed


with the general thrust of today's announcements. As Angus said, his


figures, are they dependable? I'm not sure if they are. In 2010, he


was talking of a growth rate of 2.8%. This year we are talking


about 0.1%. In fact, his 5 billion towards closing the gap, as it were,


is going to be negligible in terms of effect, according to the IFS.


Ernst and Young say that in order to increase GDP by 0.5% per annum,


you actually need �14 billion per annum invested. It is really going


to be negligible. It is more austerity. Incidentally, hitting


the ball, the easy targets. I don't know if people realise, it's clever


sleight of hand. -- hitting the poor. Benefits were going to go up


by RPI, then they were switched to CPI, now it is in accordance with


average wages, lower again. I think that is awful. It shows that the


Tory party are still the nasty party, here they are at work.


they're not even going to be going up in line with wages, less than


that. Time now to say goodbye to viewers


in Scotland. Goodbye. They are going to join Andrew Kerr for


politics Scotland. We can now talk to Alan Moreton


Island business editor Jim Fitzpatrick, outside Stormont. --


Alan Northern Ireland business editor. How is it going down there?


Cringing the figures, it looks like Northern Ireland is actually a win


out of this one. The public spending is the economy in Northern


Ireland. It accounts for 70% of our economy. We rely on �10.5 billion


from Westminster to keep this place ticking over, that is the amount we


take, as opposed to what we get back. How it turns out to date is


that we will see an increase of capital spending over the next


couple of years of �131 million. We will see a decrease in resource


spending of �32 million. Pretty much a gain of almost �100 million


for Stormont to spend on infrastructure. That will, of


course, be welcomed. Something else that has been sneaked in, which


might be of interest of those that followed the energy industry. The


carbon floor tax, Northern Ireland is going to be exempt from that.


The argument is that we are an island, it would put generators in


Northern Ireland and it's an advantage compared to the republic.


That has been sneaked in and it Just looking at the growth figures,


the OBR, the official growth forecast of just over 1%, 1.2% for


next year, up to 2% for 2014. Just two point out that the OBR is still


more optimistic on growth than the average of independent forecasters.


They don't even think the economy is going to grow by as much as the


OBR. As we were saying, the record of the OBR has been that it has


been far too optimistic. I wouldn't bet the bank on these forecasts. Jo


is with Paul Lewis in Stoke-on- Trent.


Yes, George Osborne, the Chancellor, has painted a pretty tough picture


with more gloomy times ahead. As far as he is concerned, he's got to


try to find and generate that elusive problem of more growth in


the economy. Let's talk to Paul Lewis from BBC Radio Four's


Moneybox programme. Was there anything in a statement that said


you are that this will generate growth? The big thing was the


increase in capital allowances for businesses. You can spend �25,000


and write it off in the first year. It's going to be �250,000, a


tenfold increase. The businesses I have spoken to say it is a very


good thing. They can spend money, it will boost the economy and they


can get full tax relief. Do you think it will be enough? Big


corporations are sitting on, they admit, quite a lot of cash they


don't want to invest? I think it will help smaller businesses more


than big ones. What big business needs is the feeling that if they


start investing the economy is going to grow. As we have seen, the


Chancellor says it has actually shrunk for the whole of 2012.


really that optimistic in terms of what people can expect? What have


people been sending you e-mails about? Edward in Oxford is in


business and he said he would have liked a national insurance holiday


so he could take on new staff about the expense of national insurance.


That hasn't happened. We certainly have people liking to cut... Sorry,


not the cut, they're not been a rise in fuel duty. That's gone


altogether. That's important for people in rural areas. Also for


businesses that rely on fuel. Everything we have in our homes has


been delivered by road somewhere. That is a big saving and could help


business a lot. On the personal side, a rise in tax allowance in


April from what we were expecting by another remand, �9,440 before we


pay tax. That will put a bit of cheer back in people who face pay


cuts and pay freezes. Let's get local reaction and talk


to our guests who come from across the region. I am joined by Barry


Proctor, who runs a haulage company. Julie White owns a concrete cutting


company. Mike Benniston is a pub landlord. That 3p rise in fuel duty


not happening, will that have an effect? It really pleased, I would


like to thank the lobbying from fair pay on fuel. Also welcome news


is the Investment allowance. Will you take advantage, or other


companies? We will take advantage, yes. What about the state of the


construction industry? That's my biggest concern. We are heavily


involved in the construction industry. My major customer


operates nine Brickworks in the UK. At this moment there is not a


single works producing a brick. Any improvement in house building would


be very welcome. There was nothing in the Autumn Statement that would


inspire you to think that would happen? A little bit, but not much.


What is your biggest concern? the infrastructure. They have been


talking about it, I think it is �33 billion they are talking about


comedy at the structure they are putting into roads, housing and


schools. But nothing is happening. We really need a push. We need to


actually get the sites ready and going. It takes six months, nearly,


to tender and then get to start. When the Chancellor says we are


releasing this money to go to capital investment and


infrastructure, we are talking about at least another six months?


Even from now to them. So we need more time. The other thing is no


apprentices. They didn't mention anything at apprentices. We have


companies like Wedgwood, why can't we get a national insurance holiday


for every employee we hired? It would be great for small businesses


and young people. For you and your business, I presume the idea of


what they call fiscal consolidation, more austerity until 2018, what


will that do to your spending power of your customers? It will give


them less money in an industry that is already depreciating on an


average of about 12 pubs week now closing. The thought of a third --


further five years of less money in people's pockets, it has an adverse


effect on our business because people have not got the money in


their pockets. If they have got the We have to diversify. From our


original business, we are diversifying in different ways. We


have put in planning permission to open a village shop, as part of a


community-based project. So, our original business is developing


into other areas. In terms of diversification, have you had to


lay any one-off? Not yet, but at the moment, I have got a third of


my fleet doing traction only. Coming up to Christmas, the food


chain gets very busy, so we have got a third of the fleet doing


traction, delivering to supermarkets and things like that.


We are hoping that in January, things will pick up, and we will


have them back on the bricks. There needs to be an awful improvement in


house building. I do not understand, with the amount of money we are


paying out at the moment in housing benefit, but we are not building


more houses for these people, rather than lining the pockets of


very wealthy landlords. As far as staff are concerned, the Chancellor


said that employment has been a better picture than had been


thought - do you agree with that, or are people doing Les hours, is


that how you have managed to keep hold of people? Well, we have


diversified. I have bought a company, and we have started two


new technologies, within the area of cutting. But it is tough. Thank


you very much to all of you. We will be coming back to the Wedgwood


factory in the next hour or so. We are joined now by Paul Johnson,


from the Institute for Fiscal Studies, something of a default


think tank at moments like this! We went into this with the following


deficit figures - we had a deficit of �121 billion in 2011 / 12. We


were then forecast �120 billion for this current year, then �90 billion


in 2013, and �75 billion in 2014/15, so it was going down, but not


dramatically. What has happened? The good news is that the budget


deficit this year does not look like it will be any worse than it


was forecast to be back in March. That is partly because the


Government is expecting departments to underspend, partly because tax


revenues are holding up reasonably well, and partly because they are


getting some extra money from selling 4G licences. Going forward,


it looks rather worse. Three or four years out, it looks like the


deficit will be �30 billion or so more. That is a big problem. What


is causing that? Lack of economic growth, that is all. It is much


lower than it was expected to become a back in March. Lower


growth, higher borrowing. That is it. Never mind the forecasts, the


borrowing for the first seven months of this financial year, 2012


/ 13, is more than the last financial year, leading many people


to predict that borrowing this year would be substantially higher than


last year - what happened to that? Just one week ago, we were


expecting that borrowing would be more this year than last. I did not


want to mention that it was you! Three things seem to have happened.


First of all, the Office for Budget Responsibility is being relatively


optimistic for tax receipts. Secondly, department will spending


seems to be coming in even lower than had been expected. Secondly --


thirdly, there is this one off �3.5 billion, from the 4G auction. So,


he has got three things which are going towards making that number.


But in some of the figures I have seen, this year's deficit was going


to be about the same as last year's, and you still think that is where


we are? He is saying the deficit will be �108 billion this year?! Is


that jiggery-pokery? We have all sorts of different numbers. That is


why he has confused us to! The one he quoted, the �108 billion, I


think included the transfer of money from the Bank of England. The


comparable number is �120 billion. Essentially he is saying that


borrowing this year will be near as damn it the same as last year.


it is not really deficit-reduction? It is certainly not much of one.


is interesting that it does seem to make quite a big difference to the


structural picture. I was very optimistic initially looking at


these figures, but then I realised there wasn't yet another * But I


should have followed, to get another shot, -- to yet another


chart, to take account of these transfers from the Bank of England.


Is it right, is it actually a long- term improvement, that the


Chancellor has actually been help - - helped by the Bank of England's


decision to buy all of this debt to help the economy? Well, if it has


had a good effect on the economy, which it was intended to do, then


it will have that effect. It has made it cheaper to borrow was well.


He is getting the interest back that he was given to the Bank of


England. The overall story is of a structural deficit which is bigger


than was inspected in March, so there is some help, but it is not


taking us out of a hole. Can you just explain to people watching


this programme, who have to pay their credit card bills and balance


their accounts every week and every month, a system whereby the


Treasury cells and are set to the Bank of England, called gilts, and


it pays interest on that, and that interest goes into the Bank of


England's balance sheet as income, and then, after a while, the


Treasury says, give us that income back, we wanted on our balance


sheet! If any individual did that, you would end up in jail? It is a


strange but of accounting, but it does not change anything real..


is using it to change the figures are! Unfortunately in his speech he


used figures which included those numbers. But in the main


documentation, you can see the numbers without that. It is not


changing anything. We are still going through. Do not go away. We


have got a lot more to ask you. I must try the idea of paying


interest and then asking for it back with my own bank account!


Stefani, thanks for being with us. I have got to go to the Office for


Budget Responsibility, to see how they explain it all. You will be


there all night! Let's see what some members of Her Majesty's press


have got to say about this. We can go back to Matthew, on College


green. I am sure he will be able to do a Leveson-compliant interview!


Yes, we have got Polly Toynbee, from The Guardian, as well as


journalists from the Economist macro and from the Evening Standard.


What have you made of it? It is very grim, worse than we might have


thought. All the forecasts turn out to have been wrong, yet again. Time


and time again, the OBR seems to get it spectacularly wrong. Away


the pain has been shared has been yet again singularly unfair. Four


times more taken from the poorest tenth than from the richest.


think he was trying to do two things with this statement. First


of all, he has been trying to get a quality of suffering theme going,


so you will find the tax thresholds have changed, so that over the next


three years, if you were any more, you will certainly be contributing


more. I think what he is trying to do, squeezing benefits at the other


end, he wants people to have every possible reason to going to work.


So yes, it is tough, on that account. In terms of real lives,


what he wants to do is to say, I am going to be easing off on petrol,


but at the same time, it is hard, targets are not being met at the


moment, and it would not be the first government where targets have


been missed. You mentioned fairness - George Osborne said he was


targeting bureaucracy, benefits, the well-off. He thought that was


fair - you think not? He makes a very unfair distinction between the


strikers and the skivers, between people on benefits and people in


work. The truth is, he is cutting tax credits, and three-quarters of


people on tax credits are in work. The idea that you can make a


distinction between people on benefits and people in work is


utterly wrong, and he knows it, and most people know it. Tax credits


are very important to ordinary, working families, and yet he blurs


the edges of that, by talking about people who are still asleep in the


morning. Most of the people out of work desperately want to find jobs.


Most of the people whose benefits have been cut are in work,


enclosing their housing benefits. Most of the people going on to


housing benefit are in work. terms of the political argument,


one question raised was, could George Osborne convince people that


this was the only strategy, however painful? Do you think he managed to


convince people? He will not convince people who thought from


the beginning that this was the wrong tactic, and that we should


simply borrow more and continue with fiscal indiscipline. They were


never going to be convinced. But in terms of austerity, I would say


that the wavering voters broadly feel this is necessary. They wish


that things were better, but they will have had to concede that it


has been harder than he had said at the outset. The polls are beginning


to switch, interestingly. Many more people are saying they think we


have had enough cuts, compared with the number saying that what counts


is the deficit only. If only he had borrowed in order to invest, but


borrowing is going up anyway. We have an economy which is shrinking


Apology for the loss of subtitles for 43 seconds


On BBC Two we have Paul Johnson still with us. One of the issues we


were talking about is the impact of the 1% rise in benefits for a


three-year period has quite big distributional impact, doesn't it?


Those dependent on benefits, those on the lowest incomes, not


pensioners, and this is not affecting pensioners, only goes on


working age, they will seek their real incomes fall by just over 1% a


year. But it is worth saying that over the last two or three years,


earnings have been increasing a lot slower than benefits. You could


argue that this is partially reversing a situation in which


those dependent on benefits have been doing better than those


dependent on innings. Robert? of what will determine things like


if these allegedly more cautious deficit assumptions are going to be


hit in years to come, will we keep our credit rating and the rest of


it, is what happens to growth. If you look at the OBR forecast of


growth, it is expecting something of a recovery next year. If you


drill down bits of it, you can take for granted they are going to be


negative. For the first time, general government consumption is


going to fall. Government investment is going to continue to


be squeezed. You can assume that these negative things are going to


happen. Then they say that we do expect consumer spending to bounce


quite a lot, up 0.9%, business investment to go up 0.9%. A


positive contribution from trade. In recent years, all of that has


disappointed. There are pretty good reasons to be cautious, I think, in


assuming we are going to get that kind of private sector recovery


next year. Do you think that this growth forecast is credible? It's


probably as credible as you can get. So it's not credible!? It's not


massively out of line with other forecasts. In its a little more


optimistic. It is less optimistic than last year. There is clearly a


risk that it will yet again have to be taken down in a year's time.


Let's put this in context. We have now had former careers of the worst


growth we have ever had, certainly since the 1920s. There is a very


real sense in what the OBR is suggesting, and do the forecasts,


it is unbelievably pessimistic given how bad things have been,


assuming that we have not lost very large swathes of the economy, at


some point we will move back. The problem that everybody has got his


when it starts to turn around. was looking at that distributional


figure, that the Labour Party are drawing people's attention to, the


charts produced by the Treasury to show who gains from these measures.


Anybody in the bottom half of society loses, people just above


the halfway mark gain a little, presumably from the personal tax


allowance and fuel duty. Then the richest 10% take quite a big hit.


In other words, it is sometimes misleading when you say that the


rich suffer, the poor suffer, there are quite a lot of people just


below the middle who suffer more than those just above the middle.


It's interesting what we mean by the rich. We usually mean somebody


slightly richer than us! If you are in the proper sense -- top 10%, it


might not feel like the super rich. What you have got is a set of


measures, the fuel duty, the personal allowance, that will help


those in the upper middle. Those dependent on benefits might be


losing as a result of the changes. Just as those who are earners have


lost because their earnings are falling. When you strip out the


extra things that have been put in, the Royal Mail, the Bank of England


giving back its interest to the Treasury, financial intervention


transfers, I'm not quite sure what that is, but strip that out as well,


is the deficit... It falls, but it doesn't seem to be falling that


fast. It's still going to be 60 billion in the 2016/17. Has he had


to revise yet again the fall in the size of his borrowing? Yes, he has


had to say that my borrowing has fallen significantly slower than I


hope last year, which was itself falling much slower than he had


hoped here before. He had to push out his target to get us back into


structural balance by an extra year, or of the way through to 2017/18.


He's had to announce another set of spending cuts. So, yes, he is


borrowing more now than he hoped to be back in March. Even back in


March? A lot more than back in autumn of last year when he told us


he was going to borrow a lot more than he told us in June of 2010?


It's all been going in the same rather unhelpful direction, yes.


Final points before we move on? That's the interesting part, the


politics. Do you look at these statements and dredge them against


what the Conservatives said when they were trying to get into office,


or do you judge them against the extraordinarily low expectations


that have been created in the last few weeks? In the latter, it is


just a little bit better than we thought. Borrowing has not gone up.


If you judge them by six months ago, a year ago, two years ago, they are


dreadful in every possible description. We measured debt


differently in this country from how the European Union measures


debt. On their measure, I guess we get to pretty much 100% of GDP?


Even on these figures, we are rising up to 80%, more than we had


hoped for before. Yes, it would be significantly higher on eurozone


measures. I think Nick is right, these are terrible numbers on a


long-term basis. But it's perhaps we get used to how bad things are.


We shouldn't, we should continue to be appalled by how bad things are.


Consider us appalled! That's for being with us.


-- thanks. Let's bring you have to date with the key points in the


Chancellor's Autumn Statement. Let's begin with tax and duties.


They are most interesting to individuals. Income-tax, the


personal allowance, the amount before you have to start paying tax


is rising in April of 2013 to �9,440. If you are a much higher


paid person than that, the amount that you can put into your pension


fund and get tax relief on is now down to �40,000, from �50,000. Also,


the lump sum that you are allowed to grow, we don't have the details,


but that has been reduced from �1.5 million, down to about �1.25


million. If you are a motorist, the three pence rise planned for


January is not going to happen. Benefits, one of the big areas


where the Government is clawing back a lot of money by making


changes. Working-age benefits, the increase would be capped at 1% for


three years. I presume that is 1% a year for three years, not 1% over


three years. Even so, if we assume inflation is 2%, it is a real-terms


cut. The changes will save almost �4 billion by 2015/16, which is


what the Chancellor needed to get borrowing to continue to fall. The


state pension is not touched, it will rise by 2.5%, the working


assumption of inflation that the Government is making, to �110.15


next year for the single state pension. What about business?


Businesses got a bit of a surprise cut. It wasn't expecting a


corporation tax cut. It gets one, but has to wait until 2014, when it


will be down to 21%, about the lowest of any of the major


economies in the Western world. The Investment allowance, particularly


to encourage small businesses to invest, that has increased tenfold


from �25,000, up to �250,000. Desperate, the Chancellor, to see


small businesses making investments, to get the economy growing. That is


tax relief to encourage them to do so. They can write it off very


quickly. Small business rate relief has been extended until 2014.


So, that is some of the things the Chancellor thought would please


business. Let's get an overall reaction to what is pleasing the


markets and how the City sees it. Let's go over to Susannah Streeter


in Canary Wharf. Hello, I am after BGC Partners,


where I have been all day, gauging their reaction of economists,


market watchers and tax advisers to the Autumn Statement. Also, on ways


to restore the UK economy to good health. The City doesn't like


surprises and there were not many for them. There has been there for


reaction in the stock markets, the FTSE 100. Also, stocks and shares


of companies involved in the UK infrastructure, for example in


communications, transport and construction, they have not changed


much. The bond markets, there has been a slight lift in gilts. That


is a change. Let's talk to Allister Heath, the editor of City AM. Gilts


have risen, UK government debt shows that there is a bit more


confidence in what the Chancellor is doing. The market could have


dropped dramatically? The real story is that nothing has really


changed. The national debt is still going up at a very fast rate. The


deficit is massive, it is going to be bigger than we previously


thought. Really, what we are going to see his, year after year, the


unending austerity has been pushed back another year. The plan will


last for seven years, rather than six or four, as previously thought.


We had a few measures, the relief on capital expenditure is going up


quite dramatically. Also, this 5 billion capital fund for investment


in infrastructure. How much of an impact would that have won growth?


One or two of the measures that have an impact. This new rule will


make it cheaper or easier to invest, buy new factories and computers.


That has been welcomed. The cuts to corporation tax will be good news


and will boost the UK's attractiveness as a place for


companies to come. There are also some negative measures. The pension


industry was hit by a reduction in tax relief. There was another raid


on banks at a time when the Government wants them to lend more


money. It sort of balance itself out. On balance, there are a few


more pro-growth measures, rather than the anti-growth measures. A


lot of debt, a lot of deficit, I don't think that picture has


changed. We are still going to see years and years of austerity.


sure that is good to be the headline in City AM. Something


along those lines, years of austerity to come. For the City, it


has been viewed as business as usual.


Let's get some more political reaction to the Autumn Statement of


2012. We are joined by the leader of the UK Independence Party, Nigel


Farage. You must be pretty happy to see the deficits continuing to go


down, growth coming back into the economy, Britain beginning to look


a little bit better again? haven't spotted any of that. We are


two and-a-half years into the Government, the deficit is still


enormous, growth is Pitt Report. Nothing has really improved at all.


What we have today are another series of forecasts, heading out


for the next three, four, five years, that frankly look like


fantasy land given what is going on. By giving courage and complement


the Chancellor of what he has done to encourage shale gas development,


on what he has done to encourage investment. But I don't think they


have done enough to get growth into the economy. But where are the cut?


This was a government that was going to hack back quangos. I can't


see anything like that being proposed at all. I don't think he


is being radical enough. proposed a new quango for a


conventional gas, an interesting title to have. Other than leaving


Europe, let's park your raison d'etre, what else would you have


them do? Well, leaving Europe would of course Sadie 1% of your


expenditure. There is also a fairly urgent need to look at much of the


foreign aid budget, which is not reaching the right destinations.


They are the short term, easy things to do. Under those years of


Labour government, we grew something like an extra million


people working throughout quangos, the civil servants and deep


bureaucratic layer in this country. And we have got to make some big,


very deep cuts in those areas. And I don't think that this government


has got the courage to do it. I believe it needs to be done.


came a distant second in Rotherham and you didn't do badly in some of


the other by-elections. Bjorn nip and tuck with the Lib Dems, now in


the polls, you are sometimes ahead. What are you going to do for an


encore? We are going to keep on going and show people we are not


just a party that talks about who governs Britain and why we should


not be part of the European Union. We are also a party talking about


how that Britain should be governed. What I would like to see today,


particularly for Britain's 4.2 million small businesses, I would


like to see some changes to employment regulations. We saw none


Let's go back to Jo Coburn, in Stoke-on-Trent. The Government is


fond of saying that those with the broadest shoulders should bear the


heaviest load. So, was that evident in the announcements made by the


Chancellor today? What is certain is that the Government has admitted


that austerity will last until 2018, and that is likely to lead to


further belt-tightening. Let's discussed that with my local --


with my three guests, a local says the agent, a member of the TUC, and


a representative of the Confederation of British Industry.


Is anybody buying and selling houses? The only people selling are


those that feel forced to. If you look at inflation, the numbers are


down by 26%. The only people selling are forced, and the only


people really buying our investors, who have the funding available to


buy, to let them out. Getting a mortgage, is that the big problem,


or is it that people are unsure about the future? In this area, we


have one of the highest rates of unemployment in the country, so


there are very few people who are in a position to apply for a


mortgage, and those who are just do not have the deposit. How are


Estate Agents managing? We also do nettings. The rental market is very


strong. We are quite focused on those who are in receipt of housing


benefit, because they make up such a large part of this local area.


The Chancellor is talking today about people who make a lifestyle


choice to stay in bed while others go to work, and quite frankly, that


is not the case in Stoke-on-Trent. People do not have the choice.


Let's talk about that lifestyle choice, because George Osborne says


he has got to share the pain fairly - is he doing that? Absolutely not.


Here in Stoke, four people are chasing every job. In areas like


Stoke, it has been economically on its knees. Taking �3.5 billion from


benefits, the majority of which go to people in work, it is the wrong


cure at the wrong time. He painted a picture of somebody sitting in


their room with the blinds closed and not working, is that what you


think? The majority of people claiming benefit are in work. Raids


on working tax credits and on child credit across the board are


squeezing family income. They are then not spending in the local


economy, and shops are struggling. Let's take that point. People will


not have much more disposable income after today - how does that


affect businesses - cake we have to realise, there is not a magic cure


to the economic situation. The Chancellor mentioned about the UK


having to compete in the world, and there was some good news today


about encouraging companies to export. There was the cut in


corporation tax, amongst others. But there is no magic solution.


There you go, there is no magic wand, and George Osborne says, the


richest in society are paying their fair share of taxes. It is simply


not the case. We said in 2010 that cutting so hard and putting more


people on the dole was not the right solution, and we have been


proved right. But employment has stood up better than might have


been expected. As has been said, under-employment is a huge issue.


People are not earning enough money. When things are going wrong, it is


about time we admitted it, and acknowledged that we cannot keep


putting these targets back time and again, but we actually need to


invest in jobs and services. People will remember that what got a lot


of the economy into trouble was an overheated housing market - you


would not want to go back to that, would you? We would not. But we


have got a housing shortage. In the West Midlands we estimate 17,000


new households were formed, and only 8,500 houses were built. So,


we are building up a shortage of homes. We would like to see


investment in housebuilding, to create jobs and to supply the


housing for the future. Briefly, is that what you would like to see as


well we would like to see more investment in infrastructure and in


construction generally. That's it from us here. Back to the studio.


We are joined by the Shadow Chief Secretary to the Treasury, Rachel


Reeves. Welcome to the show. Labour said the deficit was going up this


year, but the OBR shows it is either static or going down, so you


were wrong. In the first six months of this year, the deficit has risen.


The only way the Chancellor can say that the deficit is going to fall


is because he has just put the sale of the 4G licence in, but that


option has not happened yet, so he is banking on it arriving before


the end of March, which may or may not happen. It does not change the


underlying picture, which is that for every year of this Parliament,


bowling has been revised up, and by the end of Parliament, debt will


still be going up as a share of GDP, in contrast to what the Chancellor


said, which was that debt would be falling, and that the structural


deficit would be eliminated within this Parliament. But he has said


many times that he has cut the deficit inherited from Labour by


25%. That is true, and the Office for Budget Responsibility forecast


confirms that, does it not? Well, they said they were going to


eliminate the deficit during this Parliament. It is not that they


have not put up taxes for ordinary families, and cut public spending,


because they have done both of these things, but the reason the


borrowing has gone up is because the economic recovery has been


chopped off, the economy is going to shrink this year, and we have


had the double-dip recession, the longest and deepest since the


Second world War. As a result, welfare bills are going up, and tax


receipts have collapsed. We have got to have jobs and growth to get


the deficit down. Will you vote for the 1% Benefit uprating deal urged


that we will need to see the detail, and we have not seen yet all of the


different benefits which will be affected by it. It is for those in


work, so, although we have not seen the detail, it is pretty clear, it


is like Jobseeker's Allowance. it is also a tax credit, people in


low-income jobs, like young mothers. So, for working benefits, will you


vote for a 1% rise? We would need to see the detail. We do not know


which tax credits will be affected, whether it will be maternity,


paternity... What about Jobseeker's Allowance? Let's see whether we can


amend the bill. At a time when taxes are being cut for


millionaires, who will get an average tax cut next April of


�100,000, it cannot be right to be cutting support for those people on


modest incomes, and people who through no fault of their own have


lost their jobs. So, vote against it? We are hoping we can amend the


bill. How would you do that? need to look at the detail of it.


It looks at the moment like the biggest losers will be those people,


not who are out of work, but those in low-paid jobs, who are relying


on tax credits. So you would vote against that? We need to see the


detail. It sounds like you know the detail! We do not! But the


principle cannot be right, that next April, millionaires are


getting a tax cut, whilst people on modest incomes are getting a tax


increase. The logical conclusion would seem to be to vote against


the bill. I do not want to say I am going to vote against the bill!


have said welfare spending is wising - what is the basis of


saying that? Well, it is rising. What other figures? I do not have


the latest figures, but welfare payments are going up because there


are more people claiming benefits, and also many more people in part-


time work. But unemployment is falling. Unemployment is higher


than it was at the general election, and long-term unemployment is I


think 890,000 people, one third of people in total, out of work, and


out of work for more than a year. You say the welfare bill is going


up, but actually, it is not, in real terms. In the year of the


election, the welfare bill was �188 billion. This year, it is �203


billion, but that is in money terms, not in real terms. And it includes


the rise in pensions, indeed, most of it is the rise in pensions. If


you take out pensions, because everybody wants to do, because we


are talking about welfare payments, and do it in real terms, the


welfare bill is not rising. Well, I would dispute those figures. These


are the Government figures. I do not know whether those numbers


include tax credits. Yes, they do. There are and many more people who


want to be working, in fact, 3 million people who are working


part-time, who would like to be working full-time, and as a result


are paying more -- we are paying more out of benefits. Those numbers


show a �20 billion increase, that is a 10% increase. That includes


pensions. That is almost 5% per year, higher than inflation. That


suggests a real-terms increase. �13 billion of that is pensions.


Welfare payments are going up... But, they are not going up, on the


basis of the figures! Watt bit do you not understand?! If you are


saying they have gone up by �20 billion, that's 10 defeat, over 2.5


years. That is higher than inflation, so that is a real-terms


increase. Also, tax revenues are plummeting, because income tax


receipts are going down, and so are corporation tax receipts. Nick


Robinson... This debate that you two have been having in a sense


will reflect the debate that George Osborne wants parliament to have.


He has deliberately focused on the squeeze on benefits, he has


deliberately put a piece of legislation in, because he wants it


to be awkward for the Labour Party to know whether to vote for it or


against it. What Rachel is reflecting is that the Labour Party


would not want to jump into a hole marked, we are in favour of this,


because they want to say, certain benefit rises are good, and certain


ones are not. Talking of holes, the Liberal Democrats have just jumped


into one. They have issued a press release saying that the


Conservatives, quotes, the only tax cuts they support, are for the very


rich. When it was pointed out that this was a curious thing to say


about your coalition partners, the Liberal Democrats pointed out that


it was in fact an old press release, which they did not mean to release.


That paragraph was 2.5 years old, we are told. But at least they are


not in government. Oh, no, they are. I do not often agree with the


Liberal Democrats, but on that, I do. What will the line of attack be


now on this? Well, the economic plan has failed. We said that the


Government had neglected jobs and growth and everything, but the


Chancellor said, judges on whether we get rid of the structural


deficit, and whether debt is falling as a share of GDP. Even


against his own targets, he has now failed, which is what the Office


for Budget Responsibility has said today. It is time for a different


plan, this one is not working. now looks fairly likely that the UK


will lose its AAA credit rating. Most people would say, if you had


been elected and followed Alastair Darling's plan, we would have lost


it already. Does it not matter? don't think you should set economic


policy by this credit rating. They were giving Lehman Brothers a clean


bill of health right up until the financial crisis. The Chancellor


has said that we will be keeping this rating, so if we to lose it,


it is another nail in the coffin of credibility for the Chancellor.


politics of this for the Government is still very difficult. 14 points


behind in the polls, and not much good news today. No, grim news. If


this was what George Osborne had been told a while ago, he would


have had his head in his hands. One bit of good use today, borrowing is


not going up. Everything else is grim. The measures are grim, they


are tough. This is not going to cheer anybody up. But intriguingly,


the Tories enjoyed today's statement, and Labour did not. That


can be parliamentary politics for you. We shall see about that. That


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