Autumn Statement Daily Politics

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-