Spending Review Daily Politics


Spending Review

Andrew Neil presents live coverage of George Osborne's Spending Review, with Nick Robinson, Stephanie Flanders and Robert Peston. Includes live Prime Minister's Questions.


Similar Content

Browse content similar to Spending Review. Check below for episodes and series from the same categories and more!

Transcript


LineFromTo

special on the Chancellor's latest Spending Review. George Osborne laid

:00:58.:01:03.

out the coalition spending plans back in 2010, and they took us to

:01:03.:01:07.

April 2015, just before the next election. By which time the

:01:07.:01:10.

government's annual deficit was supposed to have been almost

:01:10.:01:14.

eliminated. But slower economic growth than first predicted means it

:01:14.:01:17.

isn't quite working out like that. The government says it will still be

:01:17.:01:27.
:01:27.:01:30.

borrowing billions in the financial year 2015 to 2016, and that even to

:01:30.:01:32.

meet its revised deficit reduction plans, they will have to find

:01:32.:01:34.

another 11.5 billion in cuts for that financial year. Hence today's

:01:34.:01:37.

statement. With a general election in May 2015, the Chancellor may not

:01:37.:01:39.

be in the Treasury to implement what he's about to announce. Labour has

:01:39.:01:43.

said if it wins the election, it will reluctantly stick with Mr

:01:43.:01:49.

Osborne's overall spending totals. But it could tinker with where the

:01:49.:01:51.

Chancellor's axe falls. The Chancellor is about to leave the

:01:51.:01:57.

Treasury. That is our live shot there. It's only a short drive from

:01:57.:02:00.

the Treasury across Parliament Square to the House of Commons.

:02:00.:02:04.

There's no waving of the budget box, as there is on budget day here. It's

:02:04.:02:09.

a bit more workmanlike when it comes to a Spending Review. There's been

:02:09.:02:12.

months of argy-bargy between the Treasury and Cabinet ministers over

:02:12.:02:18.

what is to be cut. The most recalcitrant even formed what became

:02:18.:02:22.

known as the National union of ministers, to fight Treasury

:02:22.:02:27.

demands. The remaining differences were resolved at the weekend. Now

:02:27.:02:34.

the Chancellor comes to the Commons to tell us what has been decided. We

:02:34.:02:39.

will have live coverage of his speech and labour's response. The

:02:39.:02:42.

Chancellor gets to his feet and about an hours time. At noon, we

:02:42.:02:47.

will have Prime Minister 's questions. To guide us throughout,

:02:47.:02:52.

we have the BBC's finest in the studio. They paid me to say that!

:02:53.:02:57.

Plus reaction from beyond Westminster. I'm outside Parliament,

:02:57.:03:01.

talking to politicians of all stripes, getting their reaction to

:03:01.:03:04.

today's Spending Review and assessing how it will affect the

:03:04.:03:11.

political landscape. I'm in bustling Bury market in Lancashire, where you

:03:11.:03:15.

can buy just about anything. From gorgeous flowers to the famous black

:03:15.:03:20.

pudding. The Chancellor announces how he is going to cut another �11.5

:03:20.:03:24.

billion in spending in a few years time. I'll be talking to taxpayers

:03:24.:03:29.

here to find out what they think about his plans. And I will have

:03:30.:03:33.

your e-mails, texts and tweets come and explain what the Chancellor's

:03:33.:03:38.

announcements mean for you. And I'm in our virtual Treasury courtyard,

:03:38.:03:42.

looking at where the cuts might fall and which areas the Chancellor might

:03:42.:03:52.
:03:52.:03:57.

spare in this �11.5 billion spending squeeze. With me in the studio is

:03:57.:04:03.

Nick Robinson and our business editor, Robert Preston. Let's hear

:04:03.:04:08.

just what the Labour leader, Ed Miliband, had to say as he left his

:04:08.:04:14.

house this morning. Before that, let's get our live pictures of the

:04:14.:04:24.
:04:24.:04:25.

Chancellor leaving. A BBC employee shouting at him there! He's getting

:04:25.:04:28.

into his vehicle with Danny Alexander, the Chief Secretary.

:04:28.:04:33.

Danny Alexander, the man who had to do the detailed negotiations while

:04:33.:04:41.

the Chancellor looked after the overall situation. It's a nice,

:04:41.:04:47.

sunny day. The car is coming out, as it heads through Parliament Square

:04:47.:04:53.

and to the House of Commons. This is a very political Chancellor, so we

:04:53.:04:56.

can expect a lot of politics among the number crunching that has been

:04:56.:05:03.

going on. And a number of little surprises perhaps for the Labour

:05:03.:05:09.

Party will stop maybe just designed to see how Labour reacts. Even the

:05:09.:05:16.

Chancellor has to stop for the buses. I think one of these is one

:05:16.:05:20.

of the new Boris buses, that the Mayor of London said he would bring

:05:20.:05:24.

back. We will leave the Chancellor in the traffic jam. I don't think he

:05:24.:05:33.

will be late. Before we go to our experts in the studio, let's hear

:05:33.:05:36.

what Ed Miliband said in the run-up to this Spending Review this

:05:36.:05:42.

morning. This government has failed, and it's failed so badly that if

:05:42.:05:47.

Labour wins the next election, it will be extremely tough. And it is

:05:47.:05:50.

only responsible for us to promised to reverse cuts if we know exactly

:05:50.:05:54.

where the money is coming from. That is what the British people would

:05:54.:05:57.

expect from us, as a responsible opposition seeking to be in

:05:57.:06:01.

government. But we are also saying that invest now in the things that

:06:01.:06:08.

matter, the things that will get our economy going, construction workers

:06:08.:06:13.

back to work, that would be good for growth and make the choices down the

:06:13.:06:18.

road less painful. Ed Miliband doesn't get to reply and unlike the

:06:18.:06:22.

Budget, it will be the Shadow Chancellor providing -- applying to

:06:23.:06:28.

the Chancellor's statements. Why is the Chancellor doing this? 2015 to

:06:28.:06:33.

2016 is a long way away and he might not even be in power. Indeed, and

:06:33.:06:37.

these are cuts that were not meant to happen, that he didn't foresee

:06:37.:06:41.

happening, that he hoped would never happen. The first answer to your

:06:41.:06:45.

question is simply because the economy has not performed as the

:06:45.:06:48.

hoped and plan for it to do. And therefore the age of austerity, as

:06:49.:06:54.

George Osborne called it, has had to be extended by two yours. Instead of

:06:54.:07:04.
:07:04.:07:12.

doing deeper cuts for a year, announced it just before the

:07:12.:07:14.

election. It's largely for political reasons. He believed that the voters

:07:14.:07:16.

and the media would pose the question to Labour, the question

:07:16.:07:19.

that he saw Ed Miliband trying to address there. What would you do if

:07:19.:07:22.

you were in government? That is the really deep political reason that we

:07:22.:07:26.

are getting it today. As you suggested, there will be a lot of

:07:26.:07:32.

politics in this speech, designed to say, this is what we do. If we get

:07:32.:07:36.

back into government either on our own or with the Liberal Democrats,

:07:36.:07:41.

keep asking Ed Balls what he'd do. Hasn't Labour shot its box already

:07:41.:07:44.

by beginning the repositioning, implying, Ed Balls has said on

:07:44.:07:48.

various programmes, look, we will reluctantly accept the current

:07:48.:07:54.

spending plans for 2015 to 2016. We may tinker with how we do it but the

:07:54.:07:58.

overall envelope, all right, that is how we will come to power. There

:07:58.:08:03.

were a couple of speeches given by Ed Miliband and Ed Balls. It is

:08:03.:08:08.

clear the spending totals day-to-day, departmental, they will

:08:08.:08:13.

stick to it. Why do I emphasised those words? Because Labour are

:08:13.:08:18.

still saying that if they were in power now, they would borrow more

:08:18.:08:21.

than the government. But they are saying they wouldn't borrow more to

:08:21.:08:26.

reduce the level of cuts needed to run various Whitehall departments.

:08:26.:08:30.

They are saying they would borrow more to invest in infrastructure and

:08:30.:08:34.

building things. Ed Balls has set up to �10 billion more. He doesn't want

:08:34.:08:44.
:08:44.:08:47.

to put a figure on what that might be in two years time because he

:08:47.:08:49.

says, perfectly reasonably, we don't know what state the economy will be

:08:49.:08:52.

in then. But he's leaving it open. I'm sure George Osborne will bang on

:08:52.:08:54.

about this, that Labour would indeed spend more and borrow more. But

:08:54.:08:57.

Labour have made it clearer, there will not be money to reverse the

:08:57.:09:00.

sorts of cuts we are hearing today unless they can find a little bit

:09:00.:09:02.

more from one budget to subsidise another, or they announce a tax

:09:02.:09:07.

rise. As we've said, this is just a one-year Spending Review. The

:09:07.:09:11.

Chancellor is looking for �11.5 billion of departmental savings. So

:09:11.:09:15.

where will these cuts be made? It is in the Treasury, just across from

:09:15.:09:19.

the Houses of Parliament, the ministers have been making the big

:09:19.:09:22.

decisions, officials have been crunching the numbers there. At the

:09:22.:09:28.

heart of that building lies the circular courtyard. We built, no

:09:28.:09:31.

expense spared, our own virtual courtyard, where Stephanie Flanders

:09:31.:09:38.

has been doing some of her own number crunching.

:09:38.:09:42.

Treasury here may be virtual but the numbers are all too real. Today's

:09:42.:09:48.

statements about tax year 2015 to 2016. The government spending for

:09:48.:09:53.

that year is forecast to be �745 billion. But we are only talking

:09:54.:09:58.

about one part of that bill, the 314 billion that Whitehall departments

:09:58.:10:01.

get for day-to-day spending on things like schools, transport and

:10:01.:10:06.

the police. So where are the Chancellor's cuts going to come

:10:06.:10:10.

from? Let's start with what their budgets look like next year, April

:10:10.:10:16.

2014. You can see the big spenders are health and education, ranging

:10:16.:10:19.

down to foreign aid and the Home Office. So what might happen to

:10:19.:10:25.

these budgets in 2015, the year covered by today's review? If the

:10:25.:10:28.

Chancellor's savings were spread evenly across all these departments,

:10:29.:10:34.

every minister would be facing an extra 2.3% cut after inflation. But

:10:34.:10:37.

we know that won't happen because the government has again promised to

:10:37.:10:42.

ring fence and protect spending for several departments. So the health

:10:42.:10:46.

budget is protected will stop spending on that won't fall and

:10:46.:10:50.

could show a small rise in real terms. And the education budget will

:10:50.:10:54.

only fall a bit, because most of its budget, but money it spends on

:10:54.:10:59.

schools in England, has been ring-fenced. Foreign aid spending,

:10:59.:11:03.

that will go up. The government has promised it will grow as fast as the

:11:03.:11:08.

economy. But savings fairly evenly on all the other unprotected

:11:08.:11:12.

departments, you can see they'd all be looking at a real terms cut of

:11:12.:11:17.

6.1%. That is on top of the 20% or more they've already found in saving

:11:17.:11:22.

since 2010. But the cuts weren't spread that ease -- evenly in the

:11:22.:11:25.

last Spending Review. The Chancellor follows the same pattern as before,

:11:25.:11:30.

we can expect defence to come off relatively lightly, and another big

:11:30.:11:34.

squeeze the local government, the Home Office and transport. They will

:11:34.:11:39.

have then seen their budget cut by a third in real terms since 2010. But

:11:40.:11:43.

of course, what is missing from this picture is something we've heard a

:11:43.:11:49.

lot about recently. Welfare. In 2015, spending on benefits and tax

:11:49.:11:56.

credit is expected to be �220 billion, and nearly a third of

:11:56.:11:59.

spending. Many in his party would like the Chancellor to find more

:11:59.:12:05.

savings there, but it's not on the agenda today.

:12:05.:12:10.

The Spending Review was a very British event, but it takes place in

:12:10.:12:14.

an international context. We had a real banking scare in China last

:12:14.:12:18.

week, it sent tremors around the world. We've heard the US Federal

:12:18.:12:22.

Reserve saying it's going to begin to withdraw the money that it's been

:12:22.:12:27.

printing, that is pushing up bond yields. And we've got yet another

:12:27.:12:31.

gigantic financial scandal in Italy. The backdrop is not great.

:12:31.:12:37.

Know, the international picture isn't pretty at the moment. We had

:12:37.:12:40.

probably the most powerful player in the international markets, Ben

:12:41.:12:46.

Bonallack, the chairman of the Federal Reserve, talking out loud

:12:46.:12:51.

about ending mass of money creation, quantitative easing, that

:12:51.:12:56.

the US Federal Reserve has been engaging in to prop up the US

:12:56.:13:01.

economy. Investors didn't like what they heard. The price of US Treasury

:13:01.:13:06.

bonds, US government debt fell. That in effect put up the interest rate

:13:06.:13:11.

which the US government pays to borrow. The US government's interest

:13:11.:13:16.

rate is, in a way, the interest rate benchmark for the whole world. If

:13:16.:13:20.

the price that the US government has to pay to borrow goes up, so, too,

:13:20.:13:26.

does the price we have to pay. that has been happening.

:13:26.:13:30.

example, the price of British government debt has fallen and

:13:30.:13:33.

therefore the implied interest rate that the British government has to

:13:33.:13:40.

pay to go up has fallen really quite steeply. It raises the prospect not

:13:40.:13:44.

only of his interest bill going up at a time when he hasn't got a lot

:13:44.:13:50.

of money to spend, but of things that are worse than that. We had an

:13:50.:13:53.

interesting document published by the Bank of England which raised the

:13:53.:13:57.

possibility that because of the fall in all this debt which is held by

:13:57.:14:02.

the banks, there could be quite big losses for the banks and it's now

:14:02.:14:06.

conducting an investigation to find out if the price of that debt would

:14:06.:14:10.

continue to fall in a sharp way, how damaging would that be for our

:14:10.:14:18.

banking system, as it comes out of the last crisis and is attempting to

:14:18.:14:23.

strengthen itself? In China, we know that they have a problem with

:14:23.:14:27.

potentially really big, bad debts from a mass of lending spree that

:14:27.:14:33.

took place over the last few years. The financial backdrop to this very

:14:33.:14:38.

British event is unsettling. Indeed. This Spending Review could be taking

:14:38.:14:41.

place at a time when we are now at the beginning of the end of the

:14:41.:14:47.

cheap money that has been flooding into most Western economies. Along

:14:47.:14:50.

with that comes low interest rates. Today's programme, we will be

:14:50.:14:52.

getting reaction to the Chancellor's statement in Bury

:14:52.:15:02.
:15:02.:15:04.

market. We are waiting to find out where the Chancellor's knife will

:15:04.:15:09.

fall on spending in a few years' time. I'm joined by a councillor

:15:09.:15:12.

from the Local Government Association. Councils have had their

:15:12.:15:16.

budgets cut quite significantly over the past few years. Can they take

:15:16.:15:21.

another 10%? Councils have lost 20% of their budget. The Prime Minister

:15:21.:15:25.

says that local government is the most efficient of the public sector

:15:25.:15:29.

but a further 10% cut in our budget will mean a loss of essential

:15:29.:15:36.

services that people rely on to have a good quality of life, libraries,

:15:36.:15:40.

museums, Children's Centres and sports centres.

:15:40.:15:45.

There could be a loss of services that matter a lot to local people.

:15:45.:15:48.

The Government says you could downup services more etch feckively. What

:15:48.:15:54.

do you say to that -- effectively? We need Government to remove the

:15:54.:15:58.

ringfencing or spending around health and education, remove

:15:58.:16:02.

bureaucracy and red tape and get out the way so local councils can work

:16:02.:16:06.

together with health and education to join up local services and make

:16:06.:16:10.

them much more efficient, protect jobs and local services that people

:16:10.:16:13.

rely on. Thank you very much Mr Khan. That's the council view here

:16:13.:16:17.

in Bury market. The council is very involved in the running of this

:16:17.:16:21.

market which boasts something like nine million visitors a year, that's

:16:21.:16:27.

a lot of people. There are over 370 stalls and, as you look around here,

:16:27.:16:30.

it's buzzing. But is the picture that rosy for local businesses?

:16:30.:16:35.

Well, let's catch up with Bill Thompson who is standing by the hog

:16:35.:16:40.

roast stand. I understand that will be going at 2 o'clock. Is it good

:16:40.:16:46.

for business here at the moment? Well, obviously market day in Bury

:16:46.:16:51.

is always very busy. The Federation of Market businesses would like to

:16:51.:16:58.

see more done. We have wrote to Chancellor to ask how things will be

:16:58.:17:02.

financed. We have been advocating for many years to get away from the

:17:02.:17:07.

big high street banks to give alternatives to small businesses who

:17:07.:17:10.

can grow businesses. Without small businesses growing, the country

:17:10.:17:14.

isn't going to rebirth itself. structure would you like to see to

:17:14.:17:19.

help businesses in the region? brink banking, the road and rail

:17:19.:17:24.

network -- the British banking. The HS 2 has been looked at. The road

:17:24.:17:28.

network needs looking at and the Broadband issue in rural areas

:17:29.:17:31.

because there are very few businesses because there is no

:17:31.:17:34.

access to the Internet and Broadband.

:17:34.:17:37.

Phil Thompson, thank you very much. We also want to hear what you think.

:17:37.:17:45.

Our viewers. Who best to gauge reaction but from our expert, good

:17:45.:17:51.

morning to you from BBC Money Box live? People can contact us at

:17:51.:17:58.

Twitter, they can e-mail us at haveyoursay and the text is 61124.

:17:58.:18:03.

Many suggestions for cuts coming in. Sue from Twickenham says why does

:18:03.:18:08.

the Government persist in ringfencing overseas aid at the

:18:08.:18:14.

expense of Britain. HS2 another popular target and Trident, people

:18:14.:18:19.

want to get rid of that. My favourite, Paul, I said what should

:18:19.:18:24.

you cut and he said treasury biscuits! I wonder how much would be

:18:24.:18:29.

raised if they managed to cut out the biscuit budget. They spend �3

:18:29.:18:33.

million a year on biscuits in Whitehall we are told. That's a lot

:18:33.:18:38.

of biscuits. What do we already know? There is speculation that

:18:38.:18:41.

Winter Fuel Payments to UK pensioners living overseas may be

:18:41.:18:45.

cut if they live in warmer countries. Some can claim it even in

:18:45.:18:49.

the tropics. Public sector pay, could be further cuts in that which

:18:49.:18:53.

would be very bad news for the public sector workers watching and

:18:53.:18:58.

possibly an overall cap on welfare payments, so even if people can

:18:58.:19:01.

claim benefits, ultimately the Government will say no more than a

:19:01.:19:05.

certain amount. A difficult thing to do, but there 'll probably be a

:19:05.:19:09.

consultation on that. Paul, thank you very much. Keep contacting us

:19:09.:19:12.

over the next hour or so. We'll hear from the Chancellor in about 45

:19:12.:19:19.

minutes. Back to you, Andrew. Thanks, Jo Co. Bring us back a jumbo

:19:19.:19:25.

chicken, never mind the biscuits. �7 quid! I'll grab one. Lunch sorted

:19:25.:19:29.

for tomorrow! A quick reminder that you can get

:19:29.:19:32.

the latest on the spending review on the BBC website. You can find the

:19:32.:19:37.

link to the live page at www.bbc.co.uk/economy. You will find

:19:37.:19:40.

in-depth coverage there and, if you are out and about today, you can

:19:40.:19:46.

still follow all the latest developments and BBC analysis with

:19:46.:19:52.

BBC correspondents on Twitter. Go to BBC News and subscribe to the

:19:52.:19:57.

spending review Twitter list. It's free. Go on, do it!

:19:57.:20:01.

If you are just joining us, you are watching our special coverage of the

:20:01.:20:04.

spending review coming live from Westminster here in the heart of

:20:04.:20:10.

London. Let's join Matthew am Ralls wall loo outside the House of

:20:10.:20:16.

Commons. Thank you very much. We haven't heard the words green shoots

:20:16.:20:21.

from the Chancellor, but he's said the economy is of of intensive care.

:20:21.:20:25.

What is the real picture? We have pulled together some of the key

:20:25.:20:28.

indicators of recent weeks to get a better idea of how the economy is

:20:28.:20:38.
:20:38.:20:38.

Apology for the loss of subtitles for 81 seconds

:20:38.:21:59.

That's the economic backdrop. Let's discuss the politics of this. With

:21:59.:22:04.

me here is Harriet Baldwin, Cathy Jamieson and Stephen Williams. Thank

:22:04.:22:08.

you all for being here with me. Harriet Baldwin first of all, the

:22:08.:22:12.

very fact that we are having this spending review, is it an admission

:22:12.:22:17.

of failure. In 2010, George Osborne said we'd be finished by 2015?

:22:17.:22:20.

what we are doing is healing an economy that was in a difficult

:22:20.:22:24.

state with a big budget deficit and what we have encountered is problems

:22:24.:22:28.

in the eurozone which have slowed things down and so yes, I would

:22:28.:22:31.

agree, the economy has not been as strong as we'd have liked it over

:22:31.:22:35.

the last couple of years. The signs, as you say saw, is that we are going

:22:36.:22:39.

from the rescue phase into a more sustainable recovery and I hope what

:22:39.:22:42.

we'll hear today from the Chancellor is more initiatives that will back

:22:42.:22:46.

that. Isn't the truth that you have been blown off course because you

:22:46.:22:50.

are good at cutting Government spending in departments, but growth

:22:50.:22:54.

has alluded you, you have a one-legged strategy? Job growth has

:22:54.:22:58.

been very strong, so there are more people working today than ever in UK

:22:58.:23:02.

history. We have had 1. 3 million jobs that have been created in the

:23:02.:23:06.

private sectorment so I think that's an important part of examining how

:23:06.:23:10.

the economy's done. We have to see a higher rate of growth. You saw the

:23:10.:23:16.

figures out there? The survey data suggests those are more positive in

:23:16.:23:19.

terms of the forward looking numbers, but the survey data in

:23:19.:23:24.

terms to have outlook and the positive Septemberment amongst some

:23:24.:23:27.

of the sectors, which are very important, are significant, and I

:23:27.:23:32.

hope the Chancellor will back it with more infrastructure spending.

:23:32.:23:36.

Cathy Jamieson, we have heard your leader accept that the �11. 5

:23:36.:23:39.

billion, that spending cut envelope will be the starting point if you

:23:39.:23:43.

win the election. You have opposed for three years every cut. Now you

:23:43.:23:46.

have thrown in the towel and the Government's right on the deficit,

:23:46.:23:51.

aren't they? The aren we are having the spending review is that the

:23:51.:23:54.

Chancellor's got it wrong on the strategy, he hasn't achieved the

:23:54.:23:58.

growth figures he promised or cut the deficit and he's borrowing more

:23:58.:24:01.

than planned. As a responsible opposition, looking to be in

:24:01.:24:05.

Government, what we have said is that we will have to accept the

:24:05.:24:08.

overall spending envelope for the first year, but we'd not have done

:24:08.:24:12.

what the Chancellor's done up to now and we'd make different choices.

:24:13.:24:16.

What are the different choices? You have been talking about Universal

:24:16.:24:20.

benefits. Are they going to go? have mentioned particularly the

:24:20.:24:24.

issue about the onetering fuel allowances for the wealthiest of

:24:24.:24:30.

pension pensioners. What about bus passes, free TV licences? We have

:24:30.:24:34.

heard Ed Balls and Ed Miliband indicate those are not on the

:24:34.:24:37.

agenda. The important point for the figures was that it showed that

:24:37.:24:42.

manufacturing... Why not if you are talking about fairness? It's about

:24:42.:24:48.

the cost involved in doing that, for one thing, but also bus passes, you

:24:48.:24:52.

know, enables people to get around, it helps people with mobility and so

:24:52.:24:56.

on. To go back to the figures, manufacturing and construction

:24:56.:25:01.

sectors are not performing performing as well as we'd have

:25:01.:25:06.

thought. Some unemployment figures show that it's beginning to work?

:25:06.:25:11.

The sales figures showed improvements in manufacturing and

:25:11.:25:16.

that's why we need structure. accept that for the ordinary family

:25:16.:25:21.

out there watch, Stephen, things could not be tougher in terms of the

:25:21.:25:27.

disposable income? Lowest living standards for a decade? It's a very

:25:27.:25:31.

difficult time for the people out there. We have to make sure all the

:25:31.:25:36.

cuts we are making, which are necessary, are cushioning for the

:25:36.:25:40.

poorest in society and the richest will bear the brunt of the tax rises

:25:40.:25:44.

and changes. We have got a Conservative Chancellor, a Lib Dem

:25:44.:25:46.

can Chief Secretary, Lib Dem Business Secretary working together

:25:46.:25:55.

to try and get growth going in the economy. But a huge part of the

:25:55.:26:00.

budget is cuts. Why have you opposed cuts? Sweeping changes have been

:26:00.:26:04.

made. We need time for the changes to bed down and what we, as the

:26:04.:26:07.

Liberal Democrats have said, we don't want to ask for more from the

:26:07.:26:11.

poorest in society until we have taken more off the rich. That's why

:26:11.:26:15.

we are in favour of the mansion tax. We can't get agreement with

:26:15.:26:19.

coalition partners on that issue, so we have agreed to park welfare

:26:19.:26:23.

reform and tax rises on the rich and that will be an issue on the next

:26:23.:26:29.

general election. In one sentence, more cuts to come? All the

:26:29.:26:37.

projections, �23 or �24 billion for more savings in 2016, 2017, tax

:26:37.:26:41.

rises, isn't that the reality of what we'll face? We have tried to

:26:41.:26:45.

make sure we have given a tax cut to people in work by raising the

:26:45.:26:49.

personal threshold. 2015-16, the year we are talking about this year,

:26:49.:26:54.

we are looking a at a deficit of still �80 billion so it will be

:26:54.:26:56.

spending control for some time to come I think.

:26:56.:27:00.

There we have to leave it. Thank you all very much. From here, back to

:27:00.:27:05.

you in the studio. It's coming up to midday here on BBC

:27:05.:27:10.

Two and the BBC News Channel. In a moment, we'll cross live to the

:27:10.:27:13.

House of Commons for Prime Minister's Questions after which the

:27:13.:27:15.

Chancellor will get to his feet straight after the Prime Minister,

:27:15.:27:20.

to deliver the spending review. Beautiful shot there of the Palace

:27:20.:27:23.

of Westminster in what is a reasonable summers' day. Not many in

:27:23.:27:28.

London so far, but this is a decent one. Stephanie Flanders joins us to

:27:28.:27:34.

make up the BBC's three newsbling tiers assembling round the table on

:27:34.:27:38.

occasions like this. If he's looking for another �11 billion of cuts,

:27:38.:27:42.

Stephanie, does this mean he's assuming that even by 2015, there

:27:42.:27:46.

won't be much of a recovery? You are quite right that all of the numbers

:27:46.:27:50.

we are talking about today and all of the numbers the Chancellor's had

:27:50.:27:53.

to work from in thinking whether or not we needed to have further

:27:53.:27:56.

austerity are all based on what the office of budget responsibility

:27:56.:28:00.

thinks is going to happen to the economy. They started off, when he

:28:00.:28:04.

was writing his first plans in 2010, with a fairly pessimistic view of

:28:04.:28:08.

what the recovery would be like. They knew it might not be a normal

:28:08.:28:12.

recovery because we had a massive financial crisis. It turned out that

:28:12.:28:15.

that obviously things were much worse. They now have - the reason

:28:15.:28:20.

why we are looking at this cuts - they now have what many say would be

:28:20.:28:25.

a gloomy view, not just about what's happened in the last few years be,

:28:25.:28:28.

buzz what the economy is capable of. That's what makes the structural

:28:28.:28:33.

hole in the budget that he's trying to fill so large. We might have

:28:33.:28:37.

temporary borrowing if we had slow growth, it doesn't have to be

:28:37.:28:40.

permanent, buts the Office for Budget Responsibility decided it was

:28:40.:28:42.

permanent which is why we are here frankly. It's quite possible, when

:28:42.:28:47.

you look at the forecasts now for 2015, even though it's only the

:28:47.:28:51.

office of budget responsibility expecting us to going back to what

:28:51.:28:58.

we thought would have been a normal trend growth rate in 2015, which is

:28:58.:29:05.

seven or eight years after the crisis began. In the past, we have

:29:05.:29:12.

had forecasts revised up. You might have to do more of course. The

:29:12.:29:16.

directions of changes have gone in a negative direction, but it could be

:29:16.:29:19.

better or could turn out to be better.

:29:19.:29:23.

We got this picture, I think it was the Treasury released it last night,

:29:23.:29:28.

Nick, I want you to tell us about this. What is the political

:29:28.:29:33.

significance of this picture? half eaten burger, chips and diet

:29:33.:29:38.

coke, the an austerity dinner at the Treasury. Politicians in action,

:29:38.:29:42.

real guys, by the way, not out of touch is what Tweeting foe toes

:29:42.:29:48.

allow you to say. Are we allowed to film or do interviews? No, but we

:29:48.:29:51.

get these specially crafted, carefully produced images of what

:29:52.:29:55.

spin doctors would like us to think politicians' lives are like. Having

:29:55.:30:01.

been in that office under several Chancellors, there often is old

:30:01.:30:05.

pizza boxes as the officials and the spim doctors and ministers sit

:30:05.:30:15.
:30:15.:30:20.

around a table until very late at Chancellor, you know. What can we

:30:20.:30:30.
:30:30.:30:31.

say? Do you know what kind of burger it was? You have not managed to find

:30:31.:30:38.

that out? I resign on the spot!What is business going to be looking for?

:30:38.:30:42.

I think business will broadly take the view that this isn't much of a

:30:42.:30:45.

event for them. If he didn't deliver the cuts and therefore the outlook

:30:45.:30:55.
:30:55.:30:55.

Apology for the loss of subtitles for 81 seconds

:30:55.:31:42.

for the deficit was worst... interest rates low. Perhaps the

:31:43.:31:44.

for the deficit was worst... going to interrupt you admit that

:31:44.:31:54.
:31:54.:32:07.

Secretary said "work will begin immediately on 261 projects under

:32:07.:32:11.

the priority school building programme. " Can the Prime Minister

:32:11.:32:17.

tell the House how many have begun? What I can tell him is that

:32:17.:32:19.

infrastructure spending under this Government has been higher than it

:32:19.:32:23.

was under Labour and we have around �14 billion reserved for capital

:32:23.:32:28.

spending on our schools. We have had to clear up the appalling mess left

:32:28.:32:38.
:32:38.:32:43.

by the Building Schools for the Future programme. The answer is that

:32:43.:32:49.

261 schools were promised. Only one has started. Now perhaps you can

:32:49.:32:57.

explain why. We've had to recover from the appalling mess of the

:32:57.:32:59.

Building Schools for the Future programme. That is the mess that we

:32:59.:33:05.

inherited, as well as a record deficit. But it is this government,

:33:05.:33:08.

as the Chancellor will announce in a minute, that are providing half a

:33:08.:33:14.

million extra school places. I don't think he knew the answer to that

:33:14.:33:22.

one. In October 2011, he said he wanted to bring forward, I quote,

:33:22.:33:28.

every single infrastructure project that is in the pipeline. So out of

:33:28.:33:37.

576 projects set out, how many have been completed? Our annual

:33:37.:33:43.

infrastructure investment is �33 billion a year. That is four billion

:33:43.:33:47.

more every year than ever achieved under Labour. Now let me give him

:33:47.:33:52.

the figures for road schemes. We are investing more in major road schemes

:33:52.:33:57.

in each of the first... Order. The answer from the Prime Minister must

:33:57.:34:04.

be heard. Questions to him, from which ever side of the House, must

:34:04.:34:14.

be heard. It is very clear and simple. It is called democracy.

:34:14.:34:21.

You cannot build a nuclear power station overnight. By the way, they

:34:21.:34:26.

had 13 years, they didn't build a single one. Let me give him the

:34:26.:34:32.

figures. This government, on rail, is electrifying more than 300 miles

:34:32.:34:36.

of railway routes. Perhaps he could tell us how many were electrified

:34:36.:34:44.

under Labour, how many? Nine miles. That is the Labour record that this

:34:44.:34:52.

government is recovering from. new hospitals under a Labour

:34:52.:34:59.

government. 3700 schools rebuilt under a Labour government. 3500 new

:34:59.:35:05.

children's Centre all under a Labour government. He's got no answer so

:35:05.:35:12.

let me tell him the answer again. The answer is seven out of 576, and

:35:12.:35:16.

five of them were started under the last Labour government. He said it

:35:16.:35:20.

takes a long time to complete these projects. I thought he might say

:35:20.:35:26.

that. 80% of them haven't even been started, despite the promises of two

:35:26.:35:31.

years ago. More promises, no delivery. Let's see if he can answer

:35:31.:35:35.

another one. Last year, the government said new buying guarantee

:35:35.:35:41.

scheme would help 100,000 people buy a new home. How many has it helped

:35:41.:35:46.

so far? It has helped thousands of people and been welcomed by the

:35:46.:35:50.

entire industry. He talks about what was built under a Labour

:35:50.:35:54.

government, we saw the results. A PFI scheme that we are still paying

:35:54.:36:01.

the debt on. We saw the results at 11% of GDP budget deficit that this

:36:01.:36:06.

government will cut in half. That is the proof of what we are doing. We

:36:06.:36:12.

all know that the one question he has two answer is will he now admit

:36:12.:36:18.

he wants to put borrowing up, will you admit it? Every time I come to

:36:18.:36:22.

prime ministers questions, I ask a question and he doesn't and other

:36:22.:36:28.

question, he just asks me one. The only fact this House needs to know

:36:28.:36:33.

about borrowing is that contrary to the promised the Chancellor made in

:36:33.:36:38.

his Autumn statement, it went up last year. That is the truth. Let me

:36:38.:36:48.
:36:48.:36:48.

Apology for the loss of subtitles for 81 seconds

:36:48.:37:50.

answer the question he didn't know the answer to. He have to say that

:37:50.:38:00.
:38:00.:38:00.

is why half the country think he is from the Muppets. Will you admit

:38:00.:38:10.
:38:10.:38:18.

borrowing would go up under Labour? Borrowing was up last year. We said

:38:18.:38:23.

we are all in it together, but living standards are falling. He

:38:24.:38:29.

promised to get Britain building, they haven't. All you need to know

:38:29.:38:32.

about this Chancellor's Spending Review is that British people are

:38:32.:38:42.
:38:42.:38:42.

paying the price for their failure. Mr Speaker, let us remember what the

:38:42.:38:47.

leader of the opposition said at the time of the last Spending Review. He

:38:47.:38:51.

told us unemployment would go up, it's gone down. He told us crime

:38:51.:38:55.

would go up, it's gone down. He told us volunteering would go down, it's

:38:55.:38:59.

gone up. He told us that poorer students wouldn't go to university,

:38:59.:39:03.

the percentage as has gone up. We told us our immigration policy

:39:03.:39:07.

wouldn't work, but we've cut immigration by a third. As ever,

:39:07.:39:12.

wrong about the economy, wrong about everything, never trusted by the

:39:12.:39:22.
:39:22.:39:22.

British people. Thank you, Mr Speaker. Today, the government

:39:22.:39:27.

publishes the spending round for 2015 to 2016. Can the Prime Minister

:39:27.:39:31.

confirm that it rejects the representations to borrow less by

:39:31.:39:35.

borrowing more, as proposed by the party opposite? My honourable friend

:39:35.:39:39.

makes a very good point. On Saturday, the leader of the Labour

:39:39.:39:43.

Party told us there would be iron discipline on spending. On Sunday,

:39:43.:39:48.

the Shadow Chancellor was asked five times on the television and admits

:39:48.:39:52.

that, yes, borrowing would go up. They want to borrow less by

:39:52.:39:56.

borrowing more. They want to spend less by spending more. They want to

:39:56.:40:01.

cut welfare by spending more on welfare. No wonder it's not just

:40:01.:40:11.
:40:11.:40:20.

people at Wimbledon saying new balls, please! Order. Order. Order.

:40:20.:40:29.

In congratulating the honourable gentleman on his birthday, I called

:40:29.:40:39.
:40:39.:40:43.

Mr David Winick. Is the Prime Minister aware how shocking it was

:40:43.:40:46.

that the police apparently spent more time investigating the parents

:40:46.:40:53.

and friends of Stephen Lawrence than the racist murder itself, which took

:40:53.:40:57.

place in 1993? Is the Home Secretary, when she meets Mrs

:40:58.:41:03.

Lawrence, is she going to apologise for what occurred, and is it really

:41:03.:41:07.

right for the police to investigate itself? I think the honourable

:41:07.:41:12.

gentleman makes an extremely serious point. The Lawrence family have

:41:12.:41:16.

suffered appallingly. They lost their son. There was the failure to

:41:17.:41:20.

investigate properly for year after year. Now they hear these

:41:20.:41:23.

allegations that the police were trying to undermine them rather than

:41:23.:41:29.

help them. The Home Secretary set out in the House on Monday these two

:41:29.:41:34.

enquiries, independent enquiries already under way. She has met again

:41:34.:41:39.

with Mark Ellison to see this morning, to make sure his enquiry

:41:39.:41:43.

will cover the allegations that were made overnight about the bugging by

:41:43.:41:48.

the police of a friend of Stephen Lawrence. But nothing is off the

:41:48.:41:53.

table. If more needs to be done, if further investigations or enquiries

:41:53.:41:57.

need to be held, they will be held. This is not an acceptable situation

:41:57.:42:05.

and we must get to the bottom of it. My back to see constituency is

:42:05.:42:09.

attracting a large amount of inward investment for major infrastructure

:42:09.:42:12.

projects from around the world. Does the Prime Minister agree with me

:42:12.:42:16.

that one of the ways in which we are restoring the UK's credibility

:42:16.:42:20.

overseas is by dealing with our debts and showing how we fund public

:42:20.:42:27.

spending properly? Battersea Power Station, which for all those years

:42:27.:42:31.

under Labour stood there completely empty and unused, the redevelopment

:42:31.:42:35.

is going to be starting this year. Because under this government we

:42:35.:42:40.

take infrastructure seriously, we get investors to come into our

:42:40.:42:43.

country and beget project started. Unlike the wasted years under

:42:43.:42:51.

Labour. Never Battersea, what about Bassetlaw? In its last six years,

:42:51.:42:54.

the Labour government delivered �225 million worth of major

:42:54.:42:58.

infrastructure projects. Can the Prime Minister confirm that under

:42:58.:43:03.

his three years there has been zero delivery of such projects, the row

:43:03.:43:08.

starts of such projects, and when will the Prime Minister stopped

:43:08.:43:13.

faffing around and get the new flyover and the new Selby Park

:43:13.:43:17.

School, guaranteed by the last government, started in my

:43:18.:43:23.

constituency? The last government made a lot of guarantees, they wrote

:43:23.:43:28.

a lot of checks but they couldn't deliver. They left us with this

:43:28.:43:34.

enormous deficit. Let me give him the figures. Our spending on capital

:43:34.:43:38.

spending is higher than what Labour planned. The annual infrastructure

:43:38.:43:42.

investment is �33 billion. That is �4 billion higher than they achieved

:43:42.:43:46.

even in the boom years. That is what happened. They had an unaffordable

:43:46.:43:51.

boom, a painful bust and it is this government that is delivering the

:43:51.:43:59.

recovery. The Prime Minister knows Ipswich well. He knows it has some

:43:59.:44:04.

of the poorest wards in the country. He will know that two of those wards

:44:04.:44:08.

were promised schools by the previous government. They didn't

:44:08.:44:12.

deliver them in 13 years. I've just been to the topping out ceremony of

:44:12.:44:18.

one of them delivered by this government. When it comes to

:44:18.:44:24.

promises for the least advantaged people in our community, they are

:44:24.:44:29.

very good at promising. We deliver. My honourable friend is right. They

:44:29.:44:34.

don't like hearing the evidence of the new schools being built by this

:44:34.:44:40.

government in difficult times. Also, when we talk about the East of

:44:40.:44:46.

England, of course, year after year there were calls for improvements to

:44:46.:44:51.

the motorway. Never delivered, delivered by this government.

:44:51.:44:54.

staging of the G8 proved that Northern Ireland is open to the

:44:54.:44:59.

world for business. Now we need the business of the world to come to

:44:59.:45:04.

Northern Ireland. Can the Prime Minister give us an outline of what

:45:04.:45:08.

he will do in conjunction with the American administration and the

:45:08.:45:11.

Northern Ireland executive to deliver a very successful inward

:45:11.:45:15.

investment conference in October, to deliver thousands of much-needed

:45:15.:45:19.

private-sector jobs. I'm looking forward to coming to Northern

:45:19.:45:22.

Ireland for the vital investment conference. I think what we will be

:45:22.:45:28.

able to demonstrate is not only the success of the G8 and the great

:45:28.:45:32.

advertisement that was for Northern Ireland, but the coming together of

:45:32.:45:36.

the UK Government and the Northern Irish assembly, with the plans for

:45:36.:45:41.

economic development, and also for breaking down the barriers within

:45:41.:45:45.

Northern Ireland between different communities. I think that shared

:45:45.:45:48.

future agenda is not just important for the future of society in

:45:48.:45:50.

Northern Ireland, it's also important for the future of our

:45:50.:46:00.
:46:00.:46:01.

economy. . What reassurance can the Prime Minister give the women in

:46:01.:46:03.

Afghanistan that the Government will continue efforts to make sure that

:46:03.:46:07.

there is no return to the threats to women that they've seen in

:46:07.:46:11.

Afghanistan in the past? My right honourable friend makes an

:46:11.:46:14.

important point and we should continue to support the Afghan

:46:14.:46:18.

constitution which gives important guarantees in this regard. I spoke

:46:18.:46:24.

yesterday to President Karzai, including about this issue of the

:46:24.:46:28.

Afghan constitution and how important it is. We have making a

:46:28.:46:36.

major investment by supporting the forces and the programme to help

:46:36.:46:40.

secure these sorts of advances in Afghanistan that we all want to see.

:46:40.:46:43.

Thank you, Mr Speaker. Further to the question that the Prime Minister

:46:43.:46:48.

failed to answer last week, can he confirm that he's never had a

:46:48.:46:52.

conversation with Lynton Crosby about alcohol pricing or cigarettes?

:46:52.:46:56.

The question is not, has he been lobbied, the question is, has he had

:46:56.:47:01.

that conversation? As I said last week, I've never been lobbied by

:47:01.:47:04.

Lynton Crosby about anything, but the difference between me and

:47:04.:47:08.

frankly every member of the party opposite is, I can also put my hand

:47:08.:47:12.

on my heart and say I've never been lobbied by Trade Union after Trade

:47:12.:47:16.

Union making donation after donation, fixing Parliamentary

:47:16.:47:19.

selection after Parliamentary selection. That is the real problem

:47:19.:47:29.
:47:29.:47:33.

in British politics and it's time we Thank you, Mr Speaker. With Armed

:47:33.:47:35.

Forces Day... THE SPEAKER: It's a very important

:47:35.:47:39.

matter! Mr Berry must be heard. Mr Berry?

:47:39.:47:44.

Thank you, Mr Speaker. With Armed Forces Day in mind this weekend,

:47:44.:47:48.

would my right honourable friend join me in supporting a campaign

:47:48.:47:56.

being brought about in Rossendale and Darwin being supported by local

:47:56.:48:01.

newspapers encouraging local residents to pack boxes to those

:48:01.:48:06.

serving in Afghanistan. We hope to have packed 500 by the weekend.

:48:06.:48:08.

congratulate my right honourable friend and for everyone taking part

:48:08.:48:13.

in this excellent initiative, I think actually these boxes - I've

:48:13.:48:17.

seen them not only being packed here in Britain but also unloaded in

:48:17.:48:20.

Afghanistan - I can see the huge pleasure and support Thai give to

:48:20.:48:25.

our troops in Afghanistan. I also think we should continue to use the

:48:25.:48:29.

money that's been raised in fines from irresponsible bankers over the

:48:29.:48:33.

club lib inquiry continue to use that money to invest in the Armed

:48:33.:48:36.

Forces covenant. Under this Government, we are making real

:48:36.:48:39.

progress in delivering that help and support to Armed Forces and their

:48:39.:48:43.

families and their communities. Thank you, Mr Speaker. In October

:48:43.:48:48.

2010, the Prime Minister told the Conservative party Conference in

:48:48.:48:51.

five years e' time, we'll have balanced the books. That promise is

:48:51.:48:55.

going to be broken, isn't it, Prime Minister?

:48:55.:48:59.

We have cut the deficit by a third, we'll cut it further by the next

:48:59.:49:03.

election, but frankly, coming to this House, complaining about

:49:03.:49:07.

borrowing, when you've got plans to put it up, is a pretty odd political

:49:07.:49:13.

strategy. That's the question he's got to ask his frontbench - why, if

:49:13.:49:18.

borrowing is a problem, is the Labour policy to put it up? Thank

:49:18.:49:24.

you, Mr Speaker. In 2008, Labour buried three reports

:49:24.:49:30.

warning of a fear of culture in the NHS and inspections. Now we find the

:49:30.:49:34.

CQC has buried concerns over baby deaths. Will the Prime Minister

:49:34.:49:40.

support a root and branch review of the sinister culture of cover-up in

:49:40.:49:46.

our NHS over the last decade? First of all, can I commend my right

:49:46.:49:50.

honourable friend nor campaign she's fighting for, openness and

:49:50.:49:54.

transparency and clarity in our NHS. She does make an important point,

:49:54.:49:58.

which is, there was a culture under the last Government of not revealing

:49:58.:50:02.

problems in the NHS. The former Health Secretary is shaking his

:50:02.:50:09.

head, but frankly, this is what the former Head of The CQC, Baroness

:50:09.:50:14.

Young, appointed by the last Government said. I know they don't

:50:14.:50:17.

want to hear it but francsly they are going to have to because it's

:50:18.:50:22.

important to understand the culture that went wrong under Labour. "There

:50:22.:50:25.

was huge Government pressure because the Government hated the idea that a

:50:25.:50:29.

regulator would criticise it by didn't of criticising one of the

:50:29.:50:33.

hospitals or one of the service ofs it was responsible for. " That's

:50:33.:50:37.

what Barbara young said. She said "we were under more pressure when

:50:37.:50:40.

the right honourable gentleman became a minister under the

:50:40.:50:43.

politics. " There was a culture problem under Labour and the sooner

:50:43.:50:52.

they admit it, the better. We now know from the latest ONS

:50:52.:50:56.

figures that borrowing did rise last year and the Prime Minister will

:50:56.:51:00.

recall that the Chancellor of the Exchequer of two years ago said, we

:51:00.:51:04.

have asked the British people for all that is needed, there's no need

:51:04.:51:08.

to ask for more. Today, why is he asking for more?

:51:08.:51:14.

We have to have a Spending Review to cover the year 2016-16 which wasn't

:51:14.:51:17.

covered by previous Spending Reviews. We have got the deficit

:51:17.:51:21.

down by a third. It is hard, painful and difficult work, but frankly, we

:51:21.:51:25.

are clearing up the mess left when he was a minister in the last

:51:25.:51:31.

Government -- 2015-2016. Thank you, Mr Speaker.

:51:31.:51:34.

16-18-year-olds can receive free school meals in schools, academies,

:51:34.:51:39.

free schools and university keckical colleges but not in sixth form

:51:39.:51:42.

colleges and in further education colleges like those in my

:51:42.:51:45.

constituency. Will the Prime Minister act now to end this clear

:51:46.:51:51.

injustice left by the party opposite?

:51:51.:51:55.

I am happy to look at this issue. School meals are very much in the

:51:55.:51:59.

news this week because it's a week when we should be promoting healthy

:51:59.:52:04.

eating in schools. We have to this very carefully about how best to use

:52:04.:52:07.

the education budget to get money directly to schools for all our

:52:07.:52:17.
:52:17.:52:17.

children. I think the Prime Minister will

:52:18.:52:23.

agree with me that the OECD figures this morning, the report, shows the

:52:23.:52:27.

gravity of youth unemployment in our country, and can we please, at this

:52:27.:52:32.

late stage in this Government, have a determination to stop unemployment

:52:32.:52:36.

up to the age of 25 as they do in the Netherlands, why can't we

:52:36.:52:41.

deliver that for young people in our country? I absolutely agree that

:52:41.:52:45.

youth unemployment is a scourge. There is good news in the fact that

:52:45.:52:48.

unemployment has been coming down, and youth unemployment has been

:52:48.:52:51.

coming down, but where he's absolutely right is that it

:52:51.:52:56.

shouldn't be the case that we have youth unemployment at 55% in Spain

:52:56.:53:00.

and yet under 8% in Holland and we need to make sure here in the UK

:53:00.:53:04.

that we are performing alongside Holland and Germany and the

:53:04.:53:09.

countries with the lowest rates of youth unemployment. We do that by

:53:09.:53:13.

having a flexible Labour market, helping businesses invest and locate

:53:13.:53:17.

here. As we stand today, this untri, employment is growing faster here

:53:17.:53:21.

than it is in any other G7 country, including Germany. So we are doing

:53:21.:53:27.

the right thing, but we need to focus more on young people.

:53:27.:53:31.

I have the Prime Minister's helpful recent letter to me underlining in

:53:31.:53:35.

his own hand that housing development does not trump the green

:53:35.:53:41.

belt. I gave this letter to Martin Pike, the planning inspector

:53:41.:53:45.

reviewing Reigate and I regret to report that he upheld the principal

:53:45.:53:48.

that green fields in the green belt couldn't be identified for

:53:48.:53:53.

development against the wishes of local people. Will he now direct

:53:53.:53:57.

amendment of the national planning policy framework to better protect

:53:57.:54:01.

green fields in the green belt from unwanted development?

:54:01.:54:04.

What I say to my right honourable friend and I remember underlining

:54:04.:54:08.

that part of the letser is the rules about green belt haven't changed. A

:54:08.:54:12.

local authority can only change the green belt by taking something out

:54:12.:54:15.

and putting something back in in consultation with local people. I

:54:15.:54:21.

know he's having that discussion with his local authority. I'm

:54:21.:54:24.

convinced that we can get the balance right between viement

:54:24.:54:29.

protection on the one hand and the need for more housing on the other.

:54:29.:54:33.

This afternoon, I shall vote enthusiastically for the high speed

:54:33.:54:38.

preparation Bill. But, can the Prime Minister explain why he's instructed

:54:38.:54:45.

his officials and ministers to oppose the extension of the

:54:45.:54:48.

trans-European network north of London which will mean that it would

:54:48.:54:52.

stay in the European Union, that High Speed Two and other transport

:54:52.:54:55.

links to the north of England will not be eligible for funding?

:54:55.:54:59.

Obviously we'll look at all the ways we can increase the funding

:54:59.:55:03.

available for high speed rail, but, as he said, it's very important, not

:55:04.:55:07.

only to achieve the high speed rail between London and Birmingham, but

:55:07.:55:12.

to build the next stages as well. Thank you, Mr Speaker. The Prime

:55:12.:55:17.

Minister knows how hard the structure MPs have worked to get a

:55:17.:55:20.

direct train service from London to Shrewsbury. Virgin want to implement

:55:20.:55:24.

that direct service in December. Unfortunately, Network Rail are

:55:24.:55:27.

trying to prevent that from happening. We were the only county

:55:27.:55:31.

town in England without a direct train service to London. Will he

:55:31.:55:37.

ensure this blockage is resolved? I'm happy to say that the Transport

:55:37.:55:43.

Secretary will meet with him to discuss this issue. In terms of the

:55:43.:55:46.

answer, I gave a moment ago on high speed rail, we have to recognise

:55:46.:55:50.

that there is a lot of congestion on the existing rail lines and high

:55:50.:55:55.

speed rail will help free up services so we can have more direct

:55:55.:55:59.

connections, particularly to important town towns like

:55:59.:56:03.

Shrewsbury. The Department for Business prop

:56:03.:56:07.

proses to abolish the protection for the name Sheffield that guarantees

:56:07.:56:13.

to quality of our manufacturered goodslet -- proposed. The MoD

:56:13.:56:17.

proposes to move the headquarters of our Territorial Army regiment out of

:56:17.:56:20.

the City. What has this Government got against the businesses and

:56:20.:56:25.

people of Sheffield? First of all, on the issue of the -

:56:25.:56:31.

Sheffield is a fantastic city, a very important part of Brun's

:56:31.:56:34.

industrial base and aisle proud of the fact that through the Regional

:56:35.:56:37.

Growth Fund and other schemes, we are investing in the future of

:56:37.:56:41.

Sheffield - on the issue of the reserves, we are putting more money

:56:41.:56:45.

into the reserves, an extra �1. 5 billion to make sure we can get the

:56:45.:56:50.

reserves up to the level of strength needed for force 2020. On the other

:56:50.:56:57.

issue, I'm reliably informed that she should have some confidence.

:56:57.:57:01.

Military bands are important, not only to Her Majesty's Armed Forces,

:57:01.:57:05.

but also the civilian population. The last Labour Government cut the

:57:05.:57:10.

number of Army bands by a quarter. In this Armed Forces week, will the

:57:10.:57:13.

Prime Minister give assurances that will will be no further cuts in the

:57:13.:57:17.

Army bands? The assurance I can give to my right

:57:17.:57:20.

honourable friend, as the Chancellor will say in a minute, yes of course

:57:20.:57:23.

we've had to make difficult fir sills in the Ministry of Defence,

:57:23.:57:28.

but there 'll be no further reductions in the size of our Army,

:57:28.:57:32.

Nay very or Air Force and we'll continue with an equipment programme

:57:32.:57:36.

that I think is second to none in terms of the capabilities we'll be

:57:36.:57:41.

giving our brave, arm ed sfs services -- armed services

:57:41.:57:48.

personnel. Mr Speaker, you will recall that it

:57:48.:57:53.

was over a year ago, and you will probably know the exact date, when

:57:54.:57:57.

the Prime Minister announced internal inquiry to be held by the

:57:57.:58:02.

lustrously named Lord Gold, into the cash for access scandal in which

:58:02.:58:07.

major Conservative Party donors were richly, if not Royally entertained

:58:07.:58:11.

at Downing Street and Chequers. When does the Prime Minister plan to

:58:11.:58:14.

produce the results and publish the result of this inquiry?

:58:15.:58:19.

I'm very happy to set out for him all of the things that Lord Gold

:58:19.:58:24.

recommended and all the steps that we'll be taking. But as we do so,

:58:24.:58:27.

perhaps he could impose on his frontbench on the issue of donations

:58:27.:58:31.

and he can ask them when they are going to pay back the taxes that

:58:31.:58:37.

they managed to dodge from their donor? Thank you, Mr Speaker. School

:58:37.:58:42.

dinners are a vitally important thing ensuring children eat

:58:42.:58:46.

healthily and in helping tackle childhood obesity. Would my right

:58:46.:58:50.

honourable friend the Prime Minister join me in welcoming the launch of

:58:50.:58:55.

national school meals week taking place in the Jubilee Room this

:58:56.:58:59.

afternoon? I certainly join my right honourable friend. It's a very

:58:59.:59:02.

important cause because we have several problems over the years with

:59:02.:59:05.

school meals, they are not being attractive enough for young people

:59:05.:59:08.

wanting to take them on, and also, having problems with obesity as

:59:08.:59:12.

well. Getting this right, which is something that has been happening

:59:12.:59:15.

over recent years, is extremely important. I speak as someone with

:59:15.:59:20.

two children who enjoy their school meals and I want the school to go on

:59:20.:59:24.

winning the battle for school meal, rather than having to do the packed

:59:24.:59:28.

lunch. The revelation that the Metropolitan

:59:28.:59:32.

Police may have withheld evidence from the Macpherson Inquiry, as

:59:32.:59:36.

quite rightly been met with public derision, but the Prime Minister's

:59:36.:59:41.

answer earlier on didn't go far enough. There's the public that are

:59:41.:59:43.

not satisfied with the police investigating the police, nor will

:59:44.:59:49.

an inquiry that's held in secret, no matter how eminent the QC satisfies

:59:49.:59:53.

public opinion, is will he give undertakings to hold a public

:59:53.:00:02.

inquiry with the power to summon people and hear evidence under oath?

:00:02.:00:08.

I rule nothing out. The two enquiries under way, one is Mark

:00:08.:00:13.

Anderson QC, who played a very major role in prosecuting some of those

:00:13.:00:17.

responsible, who met with the Home Secretary today. We need to make

:00:18.:00:22.

sure that they have all the powers and everything they need. As I said

:00:22.:00:30.

clearly, if we need to go further to get to the truth, we will. As the

:00:30.:00:34.

spending round is published, will the Prime Minister assure the House

:00:34.:00:38.

that HMRC will be given the resources to clamp down on tax

:00:38.:00:44.

avoidance, like the �700,000 avoided by the party opposite? My honourable

:00:44.:00:49.

friend makes a very good point. I'm going to mention this at every Prime

:00:49.:00:55.

Minister 's questions. It is a great pleasure to get this in again. They

:00:55.:01:01.

owe �700,000 of tax. That could be going to schools and hospitals. It's

:01:01.:01:04.

about time they realised what hypocrites they are and paid up the

:01:04.:01:12.

money. With over 400,000 house building plots with planning

:01:12.:01:16.

permission remaining an built on in this country, does the Prime

:01:16.:01:20.

Minister agree with me that we should now put pressure on companies

:01:20.:01:24.

to start building and creating jobs, rather than just the blue

:01:24.:01:27.

waiting for their profits to increase? I agree with the

:01:27.:01:32.

honourable weight -- honourable lady, that we need to do more to

:01:32.:01:36.

encourage businesses to build on the plots they already have. That's why

:01:36.:01:40.

we've -- we've taken unprecedented steps that are making available

:01:40.:01:50.
:01:50.:02:16.

the beginning of the year. Would he steps that are making available

:02:16.:02:17.

mortgages to young people. All The Cancer Drugs Fund has saved many

:02:17.:02:22.

lives. It has made available drugs to over 30,000 people. It has been

:02:22.:02:26.

expanded to include some treatments as well as drugs. I want to see this

:02:26.:02:33.

as a record we build on and in no way put at risk. Last week the Prime

:02:33.:02:36.

Minister said that people on these benches had forgotten about the

:02:36.:02:40.

bedroom tax. I can assure him that my constituents certainly haven't.

:02:40.:02:46.

In my city last week, only 20 31 bedroomed homes were available for

:02:46.:02:56.
:02:56.:02:56.

let. Of those, four of them had over 200 applicants. When is the Prime

:02:56.:03:01.

Minister going to admit that this is not the best way of reducing the

:03:01.:03:07.

housing benefit bill? The point I'd make is we are removing the spare

:03:07.:03:10.

room subsidy because it's right to be fair between people in private

:03:10.:03:13.

rented accommodation and people in socially rented accommodation. But

:03:13.:03:19.

this, in a way, is the perfect thing for the Spending Review we are about

:03:19.:03:22.

to hear about. Labour have told us they are now going to be responsible

:03:22.:03:25.

about spending, they will accept the cuts that have been made. We hear

:03:25.:03:31.

week after week, backbencher after backbencher, frontbencher at

:03:31.:03:34.

frontbenchers, complaining about the difficult decisions we've had to

:03:34.:03:37.

take and promising to reverse them. That is why they have no credibility

:03:37.:03:47.
:03:47.:03:52.

immediately be on his feet and deliver the Spending Review. George

:03:52.:03:57.

Osborne. This coalition came into office with a commitment to address

:03:57.:04:02.

with firmness and resolve, one of the biggest economic crises of the

:04:02.:04:07.

post-war era. And the action we have taken, together with the British

:04:07.:04:12.

people, has brought the deficit down by a third, helped a record number

:04:12.:04:16.

of people into work and taken our economy back from the brink of

:04:16.:04:24.

bankruptcy. And it allows us to say that while recovery from such a deep

:04:24.:04:27.

recession can never be straightforward, Britain is moving

:04:27.:04:33.

out of intensive care and from rescue to recovery. Today we

:04:33.:04:38.

announce the latest action to secure the recovery. We act on the half of

:04:38.:04:42.

every tax payer and every future taxpayer who once high quality

:04:42.:04:48.

public services at a price our country can afford. We act on behalf

:04:48.:04:53.

of everyone who knows that Britain has got to live within its means.

:04:53.:04:59.

And we have applied three principles to the spending round I set out

:04:59.:05:05.

today. Reform, to get more from every pound we spend. Growth, to

:05:05.:05:09.

give Brittany education, enterprise and economic infrastructure it needs

:05:09.:05:15.

to win the global race. -- to give Britain. And fairness, making sure

:05:15.:05:20.

we are all in it together, ensuring those with the broadest shoulders

:05:20.:05:26.

bare the largest burden. And making sure the unfairness of the something

:05:26.:05:32.

for nothing culture in our welfare system is changed. We've always

:05:32.:05:36.

understood that the greatest unfairness was loading debts onto

:05:36.:05:39.

our children that our generation didn't have the courage to tackle

:05:39.:05:46.

ourselves. We've always believed, against much opposition, that it is

:05:46.:05:50.

possible to get better public services at lower cost. That you can

:05:50.:05:56.

cut bureaucracy and boost enterprise by taking burdens off the back of

:05:56.:06:00.

business. In the face of all the evidence, the opposition to these

:06:00.:06:05.

ideas has collapsed into incoherence. We've always believed

:06:05.:06:09.

that the deficit mattered, that we needed to take tough decisions to

:06:09.:06:13.

deal with our debts. And the opposition to that has collapsed

:06:13.:06:19.

into incoherence, too. I announced the next stage of our economic plan

:06:19.:06:24.

to turn Britain around. Mr Speaker, let me start with the overall

:06:24.:06:28.

picture on spending. In its last year in office, the previous

:06:28.:06:35.

government was borrowing �1 in every �4 that it spent. It was a record

:06:35.:06:39.

for a British government in peace time and a calamitous risk with our

:06:39.:06:44.

economic stability. As the note we saw again this week from the

:06:44.:06:50.

outgoing chief secretary put it, I'm afraid there is no money. So we

:06:50.:06:57.

acted immediately. Three years ago, we set out plans to make savings and

:06:57.:07:02.

to reduce our borrowing. Instead of the �157 billion the last government

:07:03.:07:08.

was borrowing, this year we are set to borrow �108 billion. That is �49

:07:08.:07:13.

billion less in borrowing. That is virtually the entire education

:07:13.:07:20.

budget. So we made real progress putting right what went badly wrong.

:07:20.:07:25.

But while we've been acting, the challengers from abroad have grown,

:07:25.:07:30.

the eurozone in crisis, rising oil prices, the damage from our own

:07:30.:07:35.

banking crisis, worse than anyone feared. And the truth is, Mr

:07:35.:07:40.

Speaker, we have to deal with the world as it is, not as we would wish

:07:40.:07:45.

it to be. So this country has to continue to make savings will stop I

:07:45.:07:49.

can report to the House that the biggest single saving we made in

:07:49.:07:53.

government is the �6 billion a year left we are paying to service our

:07:53.:07:58.

debts than the previous government budgeted for. There that number in

:07:58.:08:04.

mind when you hear the opposition complaining about cuts. The deficit

:08:04.:08:10.

has come down by a third, yet at over 7% it remains far too high, so

:08:10.:08:14.

we must continue to take action. Not just because it's wrong to go on

:08:14.:08:20.

adding depth to our children's soldiers, but we know because of the

:08:20.:08:25.

global turbulence of the last few years that the economic risks are

:08:25.:08:31.

real and the recovery has to be sustained. If we abandon our deficit

:08:31.:08:37.

plan, Britain would be back in intensive care. So the figures today

:08:37.:08:42.

show that until 2017 to 2018, total managed expenditure, in other

:08:42.:08:44.

words, the total amount of government spending, will continue

:08:44.:08:50.

to fall in real terms at the same average rate is falling today. The

:08:50.:08:56.

task before us today is to spell out what that means four 2015 to 2015.

:08:56.:09:01.

Total managed expenditure will be �745 billion. To put that huge sum

:09:01.:09:05.

into context, consider this. If government spending had been allowed

:09:05.:09:09.

to rise through this Parliament at the average rates of the last three

:09:09.:09:14.

decades, that total would have been �120 billion higher. This government

:09:14.:09:21.

has taken... Order, order. You must not have to shout to be heard.

:09:22.:09:26.

Members know that I will always accommodate the interests of

:09:26.:09:30.

backbenchers on both sides in scrutinising these matters

:09:30.:09:34.

intensively. But the Chancellor and in due course the Shadow Chancellor

:09:34.:09:42.

must be properly and fairly heard. This government has taken

:09:42.:09:47.

unprecedented steps to achieve this expenditure control. But now we need

:09:47.:09:53.

to find �11.5 billion of further savings. I want to pay a personal

:09:53.:09:57.

tribute to my right honourable friend, the chief secretary, for the

:09:57.:10:02.

huge effort he has put into helping deliver them. Finding savings on

:10:02.:10:06.

this scale has not been easy. These are difficult decisions that will

:10:06.:10:11.

affect people in our country. But there never was an easy way to bring

:10:11.:10:16.

spending under control. Reform, growth and fairness are the

:10:16.:10:20.

principles. Let me take teaching term and start with reform, and the

:10:20.:10:26.

obligation we all have in this House to ensure we have more for every

:10:26.:10:30.

pound we spend of taxpayers' money. With the help of my right honourable

:10:31.:10:35.

friend the Minister for the Cabinet Office, we have been combing through

:10:35.:10:39.

Whitehall -- tall, renegotiating contracts and reducing the size of

:10:39.:10:42.

government. Cutting money the previous government was spending on

:10:42.:10:46.

marketing and consultants, reforming government IT and negotiating hard

:10:46.:10:52.

on behalf of the taxpayer has already saved almost �5 billion. In

:10:52.:10:57.

this spending round we find a further �5 billion of efficiency

:10:57.:11:01.

savings. That is nearly half of the total savings we need to achieve. We

:11:01.:11:06.

are reforming pay in the public sector. We are holding down pay

:11:06.:11:13.

awards. Public sector pay rises will be limited to an average of up to 1%

:11:13.:11:17.

for 2015 to 2016. But the biggest reform we make an pay is too

:11:17.:11:24.

automatic progression pay. This is the practice whereby many employees

:11:24.:11:28.

not only get a pay rise every year, but also automatically move up a pay

:11:28.:11:34.

grades every single year regardless of performance. Some public sector

:11:34.:11:38.

employees see annual pay rises of 7%. Progression pay can I best be

:11:38.:11:43.

described as antiquated. At worst, it's deeply unfair to other parts of

:11:43.:11:47.

the public sector who don't get it. And to the private sector who have

:11:47.:11:55.

to pay for it. So we will end automatic progression pay in the

:11:55.:12:00.

civil service by 2015 to 2016. We are working to remove automatic pay

:12:00.:12:07.

rises simply for time served in our schools, NHS, prisons and police.

:12:07.:12:10.

The armed forces will be excluded from these reforms. Keeping pay

:12:10.:12:13.

awards down and ending automatic progression pay means that for every

:12:13.:12:17.

pound we have to save in central administration, we can better

:12:17.:12:22.

limited job losses. I don't want to disguise from the House that there

:12:22.:12:26.

will be further reductions in the number of people working in the

:12:26.:12:29.

public sector. The old BR has forecast that the total number of

:12:29.:12:36.

people working for the government will fall by a further 144000 x 2015

:12:36.:12:39.

to 2016. I know that for those affected this is difficult. That is

:12:39.:12:44.

the consequence of the country spending far beyond its means. When

:12:44.:12:49.

I presented the spending round three years ago, I said then that around

:12:49.:12:54.

half a million posts in the public sector were forecast to have to go.

:12:54.:12:59.

That is indeed what has happened. We are saving �2 billion ago with a

:12:59.:13:05.

civil service now smaller than at any time since the war. But I also

:13:05.:13:08.

said three years ago that I was confident that job creation in the

:13:08.:13:14.

private sector would more than make up for the losses. That prediction

:13:14.:13:18.

created more controversy than almost anything else at the time. This is

:13:18.:13:22.

what the opposition said. The Shadow Chancellor called it a complete

:13:22.:13:27.

fantasy. Instead, every job loss that the public sector has had has

:13:27.:13:33.

been offset by three new jobs in the private sector. In the last year,

:13:33.:13:43.
:13:43.:14:06.

five new jobs have been created for The Treasury will lead by example.

:14:06.:14:13.

Our resource budget will be reduced by 10%. The Cabinet Office will also

:14:13.:14:18.

see its resource budget reduced by 10%. But within that we will

:14:18.:14:22.

continue to fund support for social action, including the National

:14:22.:14:27.

citizens service, 90,000 places will be available for young adults in the

:14:27.:14:32.

citizens service next, rising to 150000 x 2016. It's a fantastic

:14:32.:14:36.

programme that teaches young people about their responsibilities as well

:14:36.:14:46.
:14:46.:15:00.

as their rights, and we are expanding it. Local government will

:15:00.:15:05.

He has agreed to a further 10% saving in his resource budget. But

:15:05.:15:09.

we are committing to over �3 billion of capital investment in affordable

:15:09.:15:14.

housing. We will extend the troubled families programme to reach 400,000

:15:14.:15:17.

more vulnerable families who need extra support. We are proving that

:15:18.:15:22.

you can save money and create more progressive government. That is the

:15:22.:15:32.
:15:32.:15:33.

right priority. Here is another priority - helping families with the

:15:33.:15:36.

cost-of-living. Because we know times are tough, we have helped keep

:15:36.:15:39.

mortgage rates low, increase the personal allowance, cut fuel duty

:15:39.:15:43.

and we have frozen the council tax. That council tax freeze is due to

:15:43.:15:48.

come to an end next April, and I don't want that to happen. So I can

:15:48.:15:51.

tell you today, that because of the savings we've made, we can help

:15:51.:15:56.

families with their bills, we will fund councils to freeze council tax

:15:56.:16:04.

for the next two years. That's nearly �100 off the average council

:16:04.:16:09.

tax bill for families, bringing the savings to �600 over this

:16:09.:16:13.

Parliament. It demonstrates our commitment to all those who want to

:16:13.:16:21.

work hard and to get on. There's one more thing we can do to

:16:21.:16:26.

help the cost-of-living in one part of the country. Those in the

:16:27.:16:30.

south-west face exceptionally high water bills. Nothing was done until

:16:30.:16:35.

we came to office. Now we've cut the water bills by �50 a household every

:16:35.:16:39.

year until 2015. My right honourable friend, the member for Camborne and

:16:39.:16:44.

Redruth and many others, have campaigned to extend that rebate

:16:44.:16:50.

beyond 2015 and I'm happy to confirm today that we'll do that. Taking

:16:50.:16:54.

money out of the cost of Government and putting it into the pockets of

:16:54.:17:00.

families is what we mean by reform. Local government has already taken

:17:00.:17:03.

difficult decisions to reduce staff numbers, share services and make

:17:03.:17:09.

savings, and I want to pay tribute to mayor rim Coppull for all he's

:17:09.:17:13.

done in showing how this can be achieved. We were told by the scare

:17:13.:17:16.

mongerers that savings in local government could decimate local

:17:16.:17:23.

services. Instead, public satisfaction with local council

:17:23.:17:29.

services have gone up. That is because with our reforms,

:17:29.:17:34.

communities have more control over their own destiny, that's because we

:17:34.:17:36.

have devolved power and responsibility to manage budgets

:17:36.:17:41.

locally. That's because we have let councils benefit from the tax

:17:41.:17:49.

receipts that come when the local economy grows.let today we give more

:17:49.:17:54.

freedom, including greater flexibility among assets and have

:17:54.:17:58.

greater emergency services. I want to thank the honourable member for

:17:58.:18:03.

Bourne moth East for services in this area which has helped us. We

:18:03.:18:07.

are embarking on major reforms to the way we spend locally through the

:18:07.:18:11.

single local growth fund that Lord Heseltine proposed. This will be �2

:18:11.:18:16.

billion a year, that's at least �10 billion over the next Parliament and

:18:16.:18:21.

that is a sum the Local Enterprise Partnerships can bid for, details to

:18:21.:18:27.

be set out tomorrow. Our philosophy is simple - trust people to make

:18:27.:18:30.

their own decisions and they'll urgely make better decisions. But in

:18:30.:18:35.

return for the freedoms, we have to ask local government for the kind of

:18:35.:18:38.

sacrifices central Government is making. The local government and

:18:38.:18:44.

resource budget will be reduced by 10% in 2015-16, but when all the

:18:44.:18:48.

changes affecting local government I will set out are taken into account,

:18:48.:18:51.

including local income and other central government funding, local

:18:51.:18:55.

government spending reduces by around 2%. I set out today the block

:18:55.:19:00.

grants to the devolved administrations. Because we have

:19:00.:19:05.

prioritised health and schools in England, this feeds through the

:19:05.:19:08.

Barnet formula to resource savings of around 2% in Scotland, Wales and

:19:08.:19:12.

Northern Ireland. The Scottish resource budget will be

:19:12.:19:16.

set at 25. 7 billion pounds and Scotland will benefit from new

:19:16.:19:21.

capital borrowing powers of almost �300 million. Being part of the

:19:21.:19:26.

United Kingdom means Scotland will see its capital spending power

:19:26.:19:30.

increase by almost 13% in real terms in 2015-16. It's rightly for the

:19:30.:19:35.

Scottish Parliament to decide how best to use that. That is devolution

:19:35.:19:42.

within a united kings Dom delivering. Delivering to Scotland.

:19:42.:19:49.

The Welsh budget will be �13. 6 billion and we'll shortly publish

:19:49.:19:53.

our response on further devolution of taxation and borrowing. When we

:19:53.:19:59.

do so, Well be able to say more about the plans to improve the M4 in

:19:59.:20:02.

South Wales that my right honourable friend for the Vale of Glamorgan and

:20:02.:20:05.

others have been campaigning for. The Northern Ireland resource budget

:20:05.:20:12.

will be �9. 6 billion and we have agreed to provide an additional �31

:20:12.:20:17.

million in 2015 to help the Police Service of Northern Ireland tackle

:20:17.:20:21.

terrorism. Those police officers do an incredibly brave job on our

:20:21.:20:25.

behalf and we salute them. Separately, we'll make 10% savings

:20:25.:20:30.

to the Scotland, Wales and Northern Ireland officerings.

:20:30.:20:34.

Mr Speaker, we believe that the cultural heritage of our nations are

:20:34.:20:39.

not just an economic asset but have an intrinsic value too. When times

:20:39.:20:42.

are tough, they too must make a contribution to the savings this

:20:42.:20:46.

country requires. The Department for Culture, media and sport, will make

:20:46.:20:50.

savings of 7% in its resource budget, elite sports will be

:20:50.:20:55.

protected while the funding of community sports, arts and museums,

:20:55.:21:01.

will be reduced by just 5%. But because we recognise the value of

:21:01.:21:05.

our great galleries and museums and English Heritage, we are giving them

:21:05.:21:08.

much greater freedom from state control which they have long called

:21:08.:21:13.

for, applying our reforming pri across across-the-board, empowering

:21:13.:21:18.

those on the front line who know best what the Director of The

:21:18.:21:22.

British Museum calls good news in a tough economic climate. While we are

:21:22.:21:26.

at it, we'll make sure that the site of the Battle of Waterloo is

:21:26.:21:32.

restored in time for the 200th anniversary, to commemorate those

:21:32.:21:38.

who died there and to celebrate a great victory of coalition forces

:21:38.:21:48.
:21:48.:21:57.

and very discredited former regime armed forces in the world and we

:21:57.:22:02.

intend to keep it that way. The first line of national defence

:22:02.:22:07.

is sound public finances and a balanced defence budget. My right

:22:07.:22:10.

honourable friend, the Defence Secretary, is helping deliver both.

:22:10.:22:14.

He and his predecessor, my right honourable friend for North Somerset

:22:14.:22:20.

have filled the �38 billion black hole they inherited in the finances

:22:20.:22:25.

of the Ministry of Defence. We continue to ensure we get maximum

:22:25.:22:30.

value for money from what will remain. 2% of our GDP, one of the

:22:30.:22:34.

largest defence budgets in the world. The defence resource budget

:22:34.:22:39.

will be maintained in cash terms of �24 billion, the equipment budget

:22:39.:22:44.

will be �14 billion and will grow by 1% in real terms thereafter. We'll

:22:44.:22:48.

further reduce the civilian workforce and allowances,

:22:48.:22:52.

renegotiate more of the hopeless PFI contracts signed in the last decade

:22:52.:22:56.

and overhaul the way we buy equipment. My right honourable

:22:56.:23:00.

friend, thement be, has rightly been clear throughout that he's not

:23:00.:23:05.

prepared to see a reduction in Britain's military capabilities.

:23:05.:23:08.

This spending round not only protects the capabilities, but

:23:08.:23:13.

enhances them, with the latest technologies. We will not cut the

:23:13.:23:17.

number of soldiers, sailors or airmen. We need them to defend our

:23:17.:23:23.

country. We'll give them the best kit to do their job. The new

:23:23.:23:27.

aircraft carriers, submarines, stealth fighters, destroyers and

:23:27.:23:32.

state-of-the-art armoured vehicles. We also make a major commitment to

:23:32.:23:35.

invest in cyber, the new frontier of defence, and a priority for this

:23:35.:23:41.

government. We will look after the families

:23:41.:23:44.

who've lost their loved ones and those who've been injured protecting

:23:44.:23:50.

us lock after the wars are over. We previously committed to the military

:23:51.:23:54.

to five years, today easy will commit to fund the Armed Forces

:23:54.:23:57.

covenant permanently and we'll do this from the money we have

:23:57.:24:02.

collected from the LIBOR fines, those who represented the very worst

:24:02.:24:05.

values will support those who represent the very best of British

:24:06.:24:11.

values. Our veterans will not be forgotten.

:24:11.:24:16.

The Intelligence Services are on the frontline too.

:24:16.:24:23.

Often heroically, these they protect us. We'll protect them in return

:24:23.:24:27.

with a 3. 4% increase in their combined resource budget. The

:24:27.:24:31.

Foreign Office is the public face of diplomacy and my right honourable

:24:31.:24:34.

friend, the member for Richmond, is quite simply the best Foreign

:24:34.:24:43.

Secretary we've had in a generation. He too has demonstrated how we can

:24:43.:24:48.

make our taxpayers money go further, while making savings in his budget

:24:48.:24:53.

he's managed to expand our network of embassies in the emerging world

:24:53.:24:56.

and focus his diplomats on Brun's commercial interests. There 'll be

:24:56.:25:01.

further savings in that budget of 8% in 20 #15rks but my right honourable

:25:01.:25:04.

friend is still committing to strengthen our embassy network in

:25:04.:25:10.

high growth markets from Shanghai to Abuja -- 2015. The Foreign Office

:25:10.:25:15.

protects our values abroad. The Home Office protects our values here in

:25:15.:25:20.

Britain. Police reform is a model of what we can achieve across

:25:20.:25:27.

Government. Police forces are more accountable to the public with

:25:27.:25:32.

modern working practices, the latest equipment and democratic oversight.

:25:32.:25:42.
:25:42.:25:43.

All on a... Yes, she is the best Home Secretary!

:25:43.:25:49.

And a hell of a lot better than the onings that went -- ones that went

:25:49.:25:58.

before! And what was the prediction from the benches opposite? They

:25:58.:26:02.

said, crime would rise. What has happened instead? Crime has fallen

:26:02.:26:09.

by more than 10%. Thanks to the hard work of the police officers up and

:26:09.:26:15.

down this country, crime is at its lowest for 13 years. What was the

:26:15.:26:19.

prediction in we heard from the benches opposite about the borders.

:26:19.:26:24.

They said the cuts would mean we were not going to be able to control

:26:24.:26:27.

immigration. What has happened instead? Net immigration is down by

:26:27.:26:34.

more than a third. This Home Secretary is demonstrating

:26:34.:26:37.

that responsibility budgets and reform can deliver better services

:26:37.:26:43.

for the public. In 2015, she will work with a resource budget of �let.

:26:44.:26:50.

9 billion, a saving of 6% -- 9. 9 billion.

:26:50.:26:56.

There will be savings in the department, some visa fees will go

:26:56.:27:00.

up, but protecting Britain from the terrorist threat remains top

:27:00.:27:03.

priority, so I can confirm the police counter-terrorism budget will

:27:03.:27:07.

not be cut at all. For the police to do their job, they need a criminal

:27:07.:27:13.

justice system that works a lot better. A case of common assault can

:27:13.:27:18.

take 200 days to pass through the courts, involves five separate sets

:27:18.:27:22.

of case papers and is generated on three different computer systems. In

:27:22.:27:27.

some prisons, the cost of keeping a prisoner is �40,000 a year. In

:27:27.:27:31.

others, it's one third of that. The cost of legal aid per head is double

:27:31.:27:34.

the European average. My right honourable friend the Lord

:27:34.:27:39.

Chancellor is reforming all of these things and by doing that, he'll make

:27:39.:27:43.

savings of 10% in his departmental budget.

:27:43.:27:47.

He'll do that while offering for the first time Probation Services for

:27:47.:27:51.

those who've served short sentences to help end the revolving door of

:27:51.:27:57.

crime and reoffending. Mr Speaker, it's an example of the

:27:57.:28:00.

reform we are bringing across government and every step of the

:28:00.:28:06.

way, every penny saved, every programme reformed, every

:28:06.:28:10.

entitlement reduced, every difficult choice taken, has been opposed by

:28:10.:28:13.

vested interests and those who got Britain into this mess in the first

:28:13.:28:17.

place. We will not let up. I will not let

:28:17.:28:21.

that happen. The reform will continue.

:28:21.:28:26.

Now, Mr Speaker, government spending does not alone create sustainable

:28:26.:28:30.

growth. Enterprise does.

:28:30.:28:35.

The job of the state is to provide the schools, the science, the

:28:35.:28:40.

transport links and the reliable energy that enable business to grow.

:28:40.:28:43.

Britain was once the place where the future was invented from the railway

:28:43.:28:48.

to the jet engine to the worldwide web. We can be that country again

:28:48.:28:53.

and today we set out how to get there, a huge amount of innovation

:28:53.:28:58.

and discovery still goes on. Successive governments of all

:28:58.:29:02.

colours have put short-term pressures over the long-term needs

:29:02.:29:05.

and refused to commit capital spending plans that match the

:29:05.:29:09.

horizons of a modern economy. Today, we change that.

:29:09.:29:15.

We commit now to �50 billion of capital investment in 2015 from

:29:15.:29:19.

roads to railways, bridges to Broadband, science to schools, it

:29:19.:29:25.

will amount to over �300 million of capital spending guaranteed to the

:29:25.:29:31.

end of this decade. Today we raise our national game. This means that

:29:32.:29:36.

Britain will spend on average more as a percentage of its national

:29:37.:29:41.

income on capital investment in this decade, despite the fact money is

:29:41.:29:46.

tight, than in the previous decade when government spending was being

:29:46.:29:56.
:29:56.:30:02.

will be set out. With specific plans for more than �100 billion of

:30:02.:30:06.

infrastructure projects. But this is what it means for departments. The

:30:06.:30:10.

Department for Transport will make a 9% saving in its day-to-day resource

:30:10.:30:14.

spending, bearing down on the running costs of Transport for

:30:14.:30:20.

London and on Reagan Administration. It will rise to �9.5 billion, the

:30:20.:30:23.

largest rise of any part of government. And we will repeat that

:30:23.:30:29.

commitment for every year to 2020. We are already massively expanding

:30:29.:30:33.

investment on major road schemes, but we will do more. So we are

:30:33.:30:37.

announcing the largest programme of investment in our roads for over

:30:38.:30:41.

half a century. We've already expanded our investment in the

:30:41.:30:45.

railways, but we will do more. So we are committing to the largest

:30:45.:30:51.

investment in our railways since the Victorian age. And with the

:30:51.:30:53.

legislation before this House today, we should give the green light to

:30:53.:30:59.

HS2, a huge boost to the north of England and a transformation of the

:30:59.:31:04.

economic geography of this country. Here in London, we are digging

:31:04.:31:08.

Crossrail, the largest urban infrastructure project in Europe.

:31:08.:31:13.

But we will do more. Looking now at the case for Crossrail 2, linking

:31:13.:31:17.

London from north to south. And we are going to give the mayor almost

:31:17.:31:21.

�9 billion of capital spending and additional financing power to the

:31:21.:31:26.

end of this decade. He's a lot better than Ken Livingstone, that's

:31:26.:31:36.
:31:36.:31:36.

for sure! Mr Speaker, investing in our economic infrastructure also

:31:36.:31:42.

means investing in energy. So we will provide the certainty investors

:31:42.:31:46.

are crying out for in Western countries. This country is already

:31:46.:31:50.

spending more on renewables than ever before. Now we will provide

:31:50.:31:54.

future strike prices for low carbon. We are restarting our civil

:31:54.:31:58.

nuclear programme, when other countries are unable to continue

:31:58.:32:06.

theirs. Our exploitation of gas and the North Sea are second to none.

:32:06.:32:11.

Now we make the tax and planning changes that will put Britain at the

:32:11.:32:15.

forefront of exploiting shale gas. We will provide our country with the

:32:15.:32:20.

energy of the future at a price that we can afford. And, taken together,

:32:20.:32:24.

this should support over �100 billion of private sector investment

:32:24.:32:28.

in energy. The Department for energy and climate will do this while

:32:28.:32:33.

reducing -- dissing its budget by 8%. The Department of rural affairs

:32:33.:32:38.

will see a 10% reduction. But we will set out plans for a major

:32:38.:32:43.

commitment to nuclear defences for the rest of this decade.

:32:43.:32:47.

Prioritising long-term capital through day-to-day cost savings are

:32:47.:32:52.

exactly the tough choices that Britain should be making. It is not

:32:52.:32:56.

enough to have roads and power stations and flood defences. These

:32:56.:33:00.

are just the physical infrastructure you need to compete in a

:33:00.:33:03.

21st-century. We need the intellectual capital, too. This

:33:03.:33:08.

country needs to invent and pioneer and export around the world. That

:33:08.:33:13.

means backing the Department for business that helps us to do this.

:33:13.:33:17.

It means taking tough decisions about what we should support. My

:33:17.:33:21.

right honourable friend has agreed to a reduction of 6% in the cost of

:33:21.:33:24.

the department. That means we are making savings to student

:33:24.:33:29.

maintenance, keeping grants but not increasing them, and the cost of the

:33:29.:33:33.

central department will also be cut further. But this means that within

:33:33.:33:38.

this reduced budget, we can put more money into apprenticeships and

:33:38.:33:43.

continue with the dramatic increase in support we provided to exporters.

:33:43.:33:47.

And we're not going to shift medical training and research out of this

:33:47.:33:52.

department, because they are working well where they are. In this

:33:52.:33:57.

department, too, we can shift from day-to-day spending to a huge 9%

:33:57.:34:02.

increase in capital investment will stop this includes a huge investment

:34:02.:34:05.

in science. Scientific discovery is first and foremost an expression of

:34:05.:34:10.

the relentless new research to learn more about our world, but it's also

:34:10.:34:14.

an enormous strength for a modern economy. From synthetic biology to

:34:14.:34:18.

graph scene, written is very good at it and we are going to keep it that

:34:18.:34:22.

way. I am committing today to maintain the resource budget for

:34:22.:34:27.

science at �4.6 billion, to increase the capital budget for science in

:34:27.:34:32.

real terms to �1.1 billion and to maintain that a real increase to the

:34:32.:34:37.

end of this decade. Investment in science is an investment in our

:34:37.:34:42.

future. So, yes, from the next generation of jet engines to

:34:42.:34:45.

cutting-edge supercomputers, we say keep inventing, keep delivering,

:34:45.:34:50.

this country will back you all the way. But when you've got

:34:50.:34:53.

infrastructure and you've got science, you still need the educated

:34:53.:34:58.

workforce to make it happen. And because of our ongoing reforms to

:34:58.:35:04.

our universities, they are now better funded than before. People

:35:04.:35:10.

will remember that the reforms to higher education were bitterly

:35:10.:35:16.

contested in this House. We remember the scaremongering about fees, the

:35:16.:35:21.

claims that they would destroy social mobility, put off students

:35:21.:35:26.

from poorer communities applying, and what has happened since? The

:35:26.:35:29.

highest proportion of students from the most deprived neighbourhoods

:35:29.:35:39.

applying to university 's ever. And we should all welcome that. But

:35:39.:35:42.

there's no greater long-term investment a country can make than

:35:42.:35:46.

in the education and skills of children. Because of the tough

:35:46.:35:50.

decisions we've taken elsewhere, we've been able to invest in

:35:50.:35:54.

education and accelerate school reform. When we took office, our

:35:54.:35:57.

country's education system was falling behind other parts of the

:35:57.:36:02.

world. Now thanks to the brilliant programme of reform by my right

:36:02.:36:06.

honourable friend the Education Secretary and the schools Minister,

:36:07.:36:13.

we are once again leading the way. We've applied our reform principles

:36:13.:36:23.
:36:23.:36:23.

here, to. Turning the majority of secondary schools into academies. In

:36:23.:36:28.

this spending round, this momentum for reform will grow. So the

:36:28.:36:33.

education Department's overall budget will increase to �53 billion,

:36:33.:36:38.

and school spending will be protected in real terms, fulfilling

:36:38.:36:41.

the pledge we made at this Parliament for all offers

:36:41.:36:47.

Parliament. And we will transfer power and money from town halls and

:36:48.:36:52.

central bureaucracy to schools, so that more of this money for

:36:52.:36:56.

education is spent on education. While grants to councils and

:36:56.:37:00.

spending on central agencies are reduced, the cash going to schools

:37:00.:37:05.

will go up. I can announce today that school spending will be

:37:05.:37:11.

allocated in a fairer way than ever before. School funding across the

:37:11.:37:16.

country is not equally distributed. But distribution on a historical

:37:17.:37:21.

basis does not have a logical reason. The result is that some

:37:21.:37:25.

schools get much more than others in the same circumstances will stop it

:37:25.:37:32.

is an affair and we are going to put it right. Many MPs from all sides of

:37:32.:37:37.

this House have campaigned for it. My honourable friend for Worcester

:37:37.:37:41.

has been a particular champion in this Parliament. Now the lowest

:37:41.:37:45.

funded Local Authorities in this country will at last receive an

:37:45.:37:50.

increase in their per-pupil funding, as we introduce a national

:37:50.:37:54.

funding formula to ensure that no child in any part of our country is

:37:54.:37:57.

to ensure that no child in any part of our country is disseminated

:37:57.:38:01.

against. And we will consult on all the details until we get this

:38:01.:38:05.

historic reform right. The pupil premium we've introduced also makes

:38:05.:38:08.

sure we are fair to children from low-income backgrounds. It will be

:38:09.:38:14.

protected in real terms, so every poor child will have more cash spent

:38:14.:38:21.

on their future than ever before. The capital budget will be set at

:38:21.:38:26.

�4.6 billion in 2015 to 2016, with over �21 billion of investment over

:38:26.:38:30.

the next Parliament. We will tackle the backlog of maintenance in

:38:30.:38:36.

existing schools. And we will invest in new school places. We will fund

:38:36.:38:42.

20 new studio schools, 20 new university technical colleges, those

:38:42.:38:46.

are outstanding new vocational institutions. Free schools are

:38:46.:38:50.

giving parents the opportunity to aspire to a better education for

:38:50.:38:55.

their children. The opposition have said they want no more of these

:38:56.:39:02.

schools. We can't allow that attack an aspiration to happen. Instead, we

:39:02.:39:06.

must accelerate the programme and bring more hope to children. That is

:39:06.:39:11.

why I can announce that we will fund an unprecedented increase in the

:39:11.:39:16.

number of free schools. We will provide for 180 great new free

:39:16.:39:22.

schools. The schools budget protected, fairer funding across the

:39:22.:39:27.

nation, the pupil premium extended to more students ever before and a

:39:27.:39:31.

transformation in the preschool programme. We will not make our

:39:32.:39:36.

children pay for the mistakes of the past. We will give them every chance

:39:36.:39:39.

for the future, because that is the single best investment that Britain

:39:39.:39:48.

can make. Our education... Is also consistent with the third and final

:39:48.:39:52.

principle of this spending round. Fairness. It's not possible to

:39:52.:39:55.

reduce a deficit of this size without asking all sections of the

:39:55.:39:58.

population to play their part. But those with the broadest shoulders

:39:58.:40:04.

should bear the greatest burden. And the Treasury distribution analysis

:40:04.:40:08.

shows that the top fifth of the population lose the most after this

:40:08.:40:13.

spending round. And the independent Institute for Fiscal Studies are

:40:13.:40:18.

unequivocal that the richest 10% have paid the most. In every year of

:40:18.:40:22.

this Parliament, the rich will pay a greater proportion of income tax

:40:22.:40:26.

revenues than in any one of the 13 years under the last Labour

:40:26.:40:35.

government. So when it comes to Her Majesty's Revenue & Customs, despite

:40:35.:40:40.

the fact that this department will see a 5% reduction in its resource

:40:40.:40:45.

budget, we are committed to extra resources to tackle tax evasion. The

:40:45.:40:50.

result is we expect to raise over �1 billion more in tax revenues from

:40:50.:40:56.

those who try and avoid to pay their fair share. Fairness also means

:40:57.:41:02.

refusing to balance the budget on the backs of the world 's poorest. I

:41:02.:41:06.

know that not everyone believes we should fulfil our commitment to

:41:06.:41:11.

spend .7% of our national income on development. But I do, and I'm proud

:41:11.:41:17.

to support a government that is in the first of our history to meet our

:41:17.:41:22.

pledge and meet it not only this year but next year and vigour after.

:41:22.:41:27.

Of course, oversees the parliament is about more than just this budget,

:41:27.:41:30.

and we comply with internationally policed rules. But that budget is

:41:30.:41:37.

the lion 's share and it will be set at �11.1 billion in 2015 to 2016.

:41:37.:41:42.

Even in these tough times, the decisions we make mean we keep to

:41:42.:41:47.

our commitments. And that includes our commitment to the National

:41:47.:41:51.

Health Service, an institution which is the very embodiment of fairness

:41:51.:41:57.

in our society. The NHS is much more than the government's priority, it

:41:57.:42:03.

is the People's priority. When we came to office, the health budget

:42:03.:42:08.

was �96 billion. In 2015 to 2016, it will be �110 billion. And capital

:42:08.:42:14.

spending will rise to �4.7 billion. New medical treatments and an ageing

:42:14.:42:21.

population means the demand for NHS services is rising. So we've not

:42:21.:42:26.

spared in also demanding reform and valuable money in this service. This

:42:26.:42:32.

will not insulated the health service from top choices, there are

:42:32.:42:36.

already 7000 fewer managers. The NHS will continue to make efficiency

:42:36.:42:40.

savings. But these savings will enable new investment in mental

:42:41.:42:45.

health and the funding for new treatments for cancers, like

:42:45.:42:50.

prostate and breast cancer. Let me respond directly to the breast

:42:50.:42:54.

Cancer research campaign that so many have taken part in. We will

:42:54.:42:59.

continue to back the charity research support fund and look into

:42:59.:43:02.

making it easier for these organisations to benefit from gift

:43:02.:43:08.

aid. Many older people do not just use the NHS, they also use the

:43:08.:43:13.

social care system. If we are honest, they often fall between the

:43:13.:43:17.

cracks of the two Systems, being pushed from pillar to post and not

:43:17.:43:19.

getting the care they should. And not getting the care they should.

:43:19.:43:25.

Non-others here would want that for our parents or grandparents, and in

:43:25.:43:29.

a compassionate society no one should endure it. It's a failure

:43:29.:43:35.

that also cost us billions of pounds and Britain can do better. In the

:43:35.:43:39.

2010 Spending Review, we said that the NHS would make available around

:43:39.:43:43.

�1 billion a year to support the health needs of people in social

:43:43.:43:46.

care. It worked and saved hundreds of millions in the process. Last

:43:46.:43:48.

year, these improvements meant almost 50,000 fewer bed days were

:43:49.:43:53.

lost to the NHS. So today I can announce that I will be bringing

:43:53.:43:58.

together a significant chunk of the health and social care budgets. I

:43:58.:44:01.

want to make sure everyone gets a properly joined up service, where

:44:01.:44:06.

they won't have to worry about services coming from the NHS or the

:44:06.:44:09.

local council. Let's stop the tragedy of people being dropped in

:44:09.:44:12.

A&E on a Friday night to spend the weekend in hospital because we can't

:44:12.:44:17.

look after them properly and -- in social care. By 2015 to 2016, over

:44:17.:44:21.

�3 billion will be spent on services that are commissioned jointly and

:44:21.:44:25.

seamlessly by the local NHS and local councils working together. It

:44:25.:44:28.

is a huge and historic commitment of resources to social care. It ties to

:44:29.:44:33.

real reform on the ground. To help end the scandal of older people

:44:33.:44:37.

trapped in hospitals because they cannot get a social care bed. This

:44:37.:44:40.

will help relieve pressures on accident and emergency. It will help

:44:40.:44:44.

local government deliver on its obligations. And it save will the

:44:44.:44:48.

NHS at least �8 billion. Integrated health and social care. No longer a

:44:48.:44:51.

vague aspiration but a concrete reality, transforming the way we

:44:51.:44:58.

look after people who need care most.

:44:58.:45:02.

So, Mr Speaker, these are the three principles of the spending round,

:45:02.:45:07.

reform, growth and fairness. And nowhere could these principles be

:45:07.:45:10.

more clearly applied than in our approach to welfare.

:45:10.:45:14.

Two groups of people need to be satisfied with our welfare system,

:45:14.:45:18.

those who need it who're old, vulnerable, disabled or have lost

:45:18.:45:22.

their job, and who we, as a compassionate society, want to

:45:22.:45:26.

support. And there's a second group. The people who pay for this welfare

:45:26.:45:31.

system, who go out to work, who pay their taxes and expect it to be fair

:45:31.:45:37.

on them too. So we have taken huge steps to reform welfare. Changinger

:45:37.:45:41.

working age benefits with Universal credit so that work always pays,

:45:41.:45:47.

removing child benefit from the better off, capping benefits so no

:45:47.:45:57.

family out of work gets more than the average family gets in work. The

:45:57.:46:00.

steps we have taken will save �18 billion a year and every single one

:46:00.:46:10.

of them was opposed by the welfare party opposite. Now we propose to do

:46:10.:46:13.

three further welfare reforms. First, as I said in the budget, we

:46:13.:46:17.

are going to introduce a new welfare cap to control the overall costs of

:46:17.:46:22.

the benefit bill. We have already capped the benefits

:46:22.:46:26.

of individuals and now we cap the system as a whole. Under that system

:46:26.:46:30.

we inherited, welfare spending was put into a daft glory called

:46:30.:46:32.

annually managed expenditure, but the problem was, it wasn't managed

:46:33.:46:40.

at all. The cost of welfare went up by a staggering 50% even before the

:46:40.:46:44.

crash -- category. The welfare cap will stop that happening again. The

:46:44.:46:48.

cap will be set each year of the budget for four years. It will apply

:46:48.:46:52.

from April 2015, it will we flect forecast inflation but it will be

:46:52.:47:00.

set in cash terms. In future, when a Government looks to breach the cap,

:47:00.:47:03.

because it's failling to control welfare, the OBR will issue a public

:47:04.:47:08.

warning and the government will be forced to take action to cut welfare

:47:08.:47:13.

costs or publicly breach the cap and explain that to Parliament.

:47:13.:47:17.

We'll exclude a small number of the most cyclical benefits that directly

:47:17.:47:24.

rise or fall within the um employed to have the stabiliser, Housing

:47:24.:47:27.

Benefit, disability benefits and pensioner benefits and Tax Credits

:47:27.:47:36.

will all be included, but the state pension will not be.

:47:36.:47:38.

Mr Speaker, I've heard representations that we should

:47:38.:47:42.

include the basic state pension in the welfare camp. That would mean

:47:42.:47:46.

that a future government could offset a rise in working age

:47:46.:47:51.

benefits by cutting the pensions of older people. E.-be- penalises those

:47:51.:47:56.

who've worked hard all their lives, cutting pensions to pay for working

:47:56.:48:00.

age benefits is a choice this government is certainly not prepared

:48:00.:48:06.

to make, it's unfair, we won't do it and we reject those represent

:48:06.:48:12.

stations completely. The new welfare cap is proof that

:48:12.:48:15.

Britain is serious about living within its means, controlling

:48:15.:48:20.

spending, protecting the taxpayer, fundamentally fair. Today, we are

:48:20.:48:25.

introducing a limit on the nation's credit card.

:48:25.:48:30.

The principles enshrined in the cap apply to our second reform today.

:48:30.:48:34.

We will actually ensure that we'll stop the cost of paying the Winter

:48:34.:48:39.

Fuel Payments made no those who live abroad, rising in a way that no-one

:48:39.:48:44.

ever intended. EU law now says that people living in the European

:48:44.:48:48.

economic area can claim Winter Fuel Payments from us even if they didn't

:48:48.:48:53.

get them before they left the UK. Paying out even more money to people

:48:53.:48:57.

from all nationalities who may have worked in this country years ago but

:48:57.:49:02.

no longer live here is not a fair use of the nation's cash.

:49:02.:49:07.

So from the autumn of 2015, we'll link the Winter Fuel Payment to a

:49:07.:49:12.

temperature test. People in hot countries will no longer get it. It

:49:12.:49:19.

is after all a payment for winter fuel.

:49:19.:49:25.

Mr Speaker, the third welfare reform I announce today is about making

:49:25.:49:30.

sure we do everything to help people get into work.

:49:30.:49:34.

My right honourable friend, the Work and Pensions Secretary, has changed

:49:34.:49:39.

the national debate about welfare and he has comprehensively won the

:49:39.:49:46.

argument. He has committed to finding a

:49:46.:49:49.

further 9. 5% savings in the department's running costs. That

:49:49.:49:54.

will require a difficult drive for efficiency and a hard assessment of

:49:54.:49:58.

underperforming programmes. But welfare reform is about much more

:49:58.:50:03.

than saving money. Vital though that is. It's about reducing dependency

:50:03.:50:09.

and changing people's lives for the better. I'm determined to go further

:50:09.:50:13.

to reduce worklessness with all its social consequences. Where is the

:50:13.:50:16.

fairness in condemning people to a life on benefits because the system

:50:16.:50:22.

won't hope them get back into work. So today, we are introducing upfront

:50:22.:50:26.

work search. We are going to make sure people

:50:26.:50:30.

turn up with a CV, register for online job search and start looking

:50:30.:50:36.

for work and only they think -- then will they get their benefits. Thanks

:50:36.:50:41.

to this government, lone parents who're out of work can get free

:50:41.:50:47.

childcare for all their three and four-year-olds so it's reasonable to

:50:47.:50:51.

ask they prepare to return to work. There are further changes we

:50:51.:50:55.

announce today. Half of all jobseekers need more help looking

:50:55.:51:00.

for work, so we'll require them to come to the Jobcentre every week,

:51:00.:51:08.

rather than once a fortnight. We are going to give people more time with

:51:08.:51:12.

Jobcentre advisers and proper progress reviews every three months.

:51:12.:51:17.

We are going to introduce a new seven-day wait before people can

:51:17.:51:21.

claim their benefits. Those first few days should be spent looking for

:51:21.:51:26.

work, not looking to sign on. We are doing these things because we

:51:26.:51:30.

know they help people stay off benefits and help those on benefits

:51:30.:51:37.

get back into work faster. Here is a further change. From now

:51:37.:51:42.

on, if claimants don't speak English, they'll have to attend

:51:42.:51:47.

language courses until they do. This is a reasonable requirement in this

:51:47.:51:51.

country. It will help people to find work, but if you are not prepared to

:51:51.:51:57.

learn English, your benefits will be cut.

:51:57.:52:01.

Taken together, this new contract with people on benefits will save

:52:01.:52:06.

over �350 million a year and all that money will enable us to afford

:52:07.:52:12.

extra support to help people get into work. Help to work, incentives

:52:12.:52:16.

to work and an expectation that people should do everything they can

:52:16.:52:21.

to find work. That's fair for people out of work and it's fair for those

:52:21.:52:27.

in work who pay for them. Together, these reforms bring the total

:52:27.:52:34.

additional welfare savings in 2015 up to �4 billion. Mr Speaker, step

:52:34.:52:39.

by step, this reforming government is making sure that Britain lives

:52:39.:52:44.

within its means. The decisions we take today are not

:52:44.:52:48.

easy and these are difficult time times, but with this statement, we

:52:48.:52:53.

make more progress towards an economy that prospers, a state we

:52:53.:52:58.

can afford, a deficit coming down and a Britain on the rise. I commend

:52:58.:53:07.

this economic plan to the country. The Chancellor finishes his spending

:53:07.:53:10.

recue. He spoke for about 50 minutes. We'll now hear immediately

:53:10.:53:13.

from the Shadow Chancellor, Ed Balls.

:53:13.:53:18.

The Chancellor spoke for over 50 minutes. He spoke for over 50

:53:18.:53:23.

minutes, but not once did he mention the real reason for this Spending

:53:23.:53:31.

Review today. His comprehensive failure on living standards rose and

:53:31.:53:36.

the deficit too. Prices rising faster than wages, families worse

:53:36.:53:42.

off, long-term unemployment up, welfare spending soaring, the

:53:42.:53:47.

economy flatlining, the slowest recovery for over 100 years and the

:53:47.:53:54.

result of this failure for all the budget boasts, borrowed last year,

:53:54.:53:59.

not up but down, Mr Speaker, not balancing the books as he promised,

:53:59.:54:05.

but in 2015, a deficit of �96 billion.

:54:05.:54:11.

More brothering to pay for his economic failure. That is why this

:54:11.:54:15.

Chancellor has been forced to come to the House today to make more cuts

:54:15.:54:19.

to our Public Services. So, Mr Speaker, let me ask the

:54:19.:54:25.

Chancellor, does he recall what he said to this House two years ago? He

:54:25.:54:29.

said we have already asked the British people for what is needed

:54:29.:54:36.

and we do not need to ask for more. We do not need to ask for more.

:54:36.:54:40.

Isn't his economic failure the reason why he's back here asking for

:54:40.:54:45.

more today? More cuts to the police, more cuts

:54:45.:54:51.

to our defence budgets, more cuts to our local services. This out of

:54:51.:54:55.

touch Chancellor has failed on living standards, growth and the

:54:55.:54:59.

deficit and families and businesses are paying the price for his

:54:59.:55:03.

failure. Of course, Mr Speaker, it wasn't

:55:03.:55:09.

supposed to turn out like this. Let me ask the Chancellor, does he

:55:09.:55:14.

remember what he told the House three years ago in its first budget

:55:14.:55:19.

and Spending Review? He said the economy would grow by

:55:19.:55:26.

But it's growing by just 1%. He pledged to get the banks lending,

:55:26.:55:29.

but bank lending is down month on month on month.

:55:29.:55:35.

He made the number one test of his economic credibility keeping the

:55:35.:55:39.

triple-A credit rating, but on his watch we've been downgraded not once

:55:39.:55:44.

but twice, Mr Speaker. He promised living standards would

:55:44.:55:49.

rise. But they are falling year on year on year. He said we are all in

:55:49.:55:55.

this together, but then he gave a huge tax cut to millionaires, Mr

:55:55.:55:59.

Speaker. He promised to balance the books and that promise is in

:55:59.:56:05.

tatters. Failed tests, broken promises. His friends call him

:56:05.:56:13.

George, the President calls him Jeffrey, but to everyone else, he's

:56:13.:56:23.
:56:23.:56:29.

just Bungle, Mr Speaker. I can see even Zippy on the

:56:29.:56:33.

frontbench can't stop smiling, Mr Speaker.

:56:33.:56:39.

Calm down, Zippy, calm down! And did we get an admission that his plan

:56:39.:56:43.

has worked? That Britain needs to change course?

:56:43.:56:48.

Did he get the plan B for growth and jobs that we and the International

:56:48.:56:53.

Monetary Fund have called for? Mr Speaker, it doesn't have to be this

:56:53.:57:00.

way. Instead of planning cuts in 2015, two years ahead, surely the

:57:00.:57:04.

Chancellor should be taking bold action now to boost growth this year

:57:04.:57:08.

and next. Investment that would get our

:57:08.:57:13.

economy growing, get the tax revenues coming in, more revenues

:57:13.:57:18.

which would mean our police, Armed Forces and Public Services would not

:57:18.:57:24.

face such deep cuts in 2015. Let me ask the Chancellor, why didn't he

:57:24.:57:30.

listen to the International Monetary Fund and bring forward �10 billion

:57:30.:57:33.

in infrastructure investment this year?

:57:33.:57:38.

With house building at the lowest level since the 20s, why isn't he

:57:38.:57:42.

building 400,000 more affordable homes this year and next?

:57:42.:57:47.

Mr Speaker, if the Chancellor continues with his failing economic

:57:47.:57:52.

plan, it will be for the Next Labour Government to turn the economy

:57:52.:57:57.

around, to take the tough decision to get the deficit down in a fair

:57:57.:58:04.

way, Mr Speaker. I have to say, I have to say to the Chancellor, there

:58:04.:58:09.

is no point boasting about infrastructure investment in five or

:58:09.:58:13.

seven years' time. We need action now, Mr Speaker.

:58:13.:58:19.

I have to say to him, he ought to brief the Prime Minister better for

:58:19.:58:22.

Prime Minister's Questions because three years after the infrastructure

:58:22.:58:29.

plan was launched, out of 576 projects announced, just seven

:58:29.:58:35.

completed. Over 80% not even started, just one school, Mr

:58:35.:58:41.

Speaker. The first three months of this year, infrastructure investment

:58:41.:58:46.

down by 50%. On infrastructure, we need bold

:58:46.:58:50.

action now, not just more empty promises for the future.

:58:50.:58:53.

As for the idea this spending are eview's going to strengthen our

:58:53.:59:01.

economy for the long-term, let me ask him, where is the proper British

:59:01.:59:06.

investment bank? Where is the 2030 decarbonisation target which the

:59:06.:59:10.

energy companies say they need to be able to invest for the future?

:59:11.:59:15.

is the power to break up the banks if there's not reform which the

:59:15.:59:18.

Parliamentary Commissioners call for? I have to say, whatever

:59:18.:59:25.

happened to the Heseltine plans, much heralded, �49 billion single

:59:25.:59:30.

pot growth fund for the regions, �2 billion, it's pathetic, Mr Speaker.

:59:30.:59:35.

Isn't this the truth. Instead of action to boost growth and long-term

:59:35.:59:40.

investment, all we got today is more of the same from a failing

:59:40.:59:45.

Chancellor and more of the same on social security and welfare spending

:59:45.:59:51.

too. We have plenty of tough talk and devisive rhetoric from the

:59:52.:59:55.

Chancellor and the Prime Minister, but on their watch, the benefits

:59:55.:00:03.

bill is soaring. Social security is up �21 billion compared to their

:00:03.:00:13.
:00:13.:00:25.

plans. Mr Speaker, we have called Chancellor tried to set a cap in

:00:25.:00:29.

2010 on social security spending. He has overspent his cap by �21

:00:29.:00:35.

billion. If he really wants to get the bills of social security down,

:00:35.:00:41.

why not get young people and the unemployed back to work? With a

:00:41.:00:45.

compulsory jobs guaranteed paid for by tax on bank bonuses. Why not get

:00:45.:00:50.

our housing benefit bill down by tackling high rents and the shortage

:00:50.:00:56.

of affordable homes? Why not stop paying the winter allowance to the

:00:56.:01:04.

richest 5% of pensioners? And why not make work pay, with a mansion

:01:04.:01:08.

packs dash-macro/10p tax band, instead of huge tax cuts for

:01:08.:01:14.

millionaires? The Chancellor is making the wrong choices on growth

:01:14.:01:18.

and social security. He is making the wrong choices on departmental

:01:18.:01:23.

spending as well. Let me ask him, when thousands of front-line police

:01:23.:01:29.

officers are being cut why is he spending more on police

:01:29.:01:37.

commissioners than the old police authorities? Why is he spending �3

:01:37.:01:40.

billion on a reckless NHS reorganisation that the public

:01:40.:01:46.

doesn't support? Why is he funding new free schools in areas with

:01:46.:01:49.

enough school places, while parents in other areas can't get their

:01:49.:01:55.

children into a local school? We will study his departmental spending

:01:55.:02:02.

plan for 2015 to 2016. There's a lot of detail he didn't provide for the

:02:02.:02:05.

House. We look forward to seeing whether he is going to confirm the

:02:05.:02:10.

continuation of three national museum entry. -- free national

:02:10.:02:16.

museum entry. But the country needs to know the detail. Will this

:02:16.:02:26.

Spending Review mean fewer police officers in 2015 to 2016, on top of

:02:26.:02:29.

the 15,000 we are losing in this Parliament? Will it mean fewer

:02:29.:02:37.

nurses in 2015, on top of the 4000 we've lost so far? Will it mean

:02:37.:02:42.

fewer sure start children's centres on top of the 500 already closed?

:02:42.:02:49.

And will he continue to impose deeper cuts on local authorities in

:02:49.:02:56.

areas with the greatest need when already in this Parliament the ten

:02:56.:03:00.

most deprived local authorities are losing six times the spending per

:03:00.:03:06.

head of the ten least deprived areas? People want to know the

:03:06.:03:10.

answers to these questions, and they should be in no doubt that the scale

:03:11.:03:17.

of the extra cuts the Chancellor has announced today to our police,

:03:17.:03:20.

defence and services are the direct result of his abject failure to get

:03:20.:03:27.

the economy to grow. The Chancellor is failing on living standards, they

:03:27.:03:30.

are falling. He has failed on both, it's flatlining. He is failing on

:03:30.:03:35.

the deficit, and all we got was more of the same. No plan to turn the

:03:35.:03:41.

economy around, no hope for the future and Britain's families and

:03:41.:03:51.
:03:51.:03:57.

our public services are paying the now. If you want to continue

:03:57.:04:02.

watching proceedings there, you can do so by switching over to BBC

:04:02.:04:07.

Parliament, or by going to the democracy live website. Let's take a

:04:07.:04:12.

look at the main points from the statement. It lasted for about 50

:04:12.:04:16.

minutes, longer than some had predicted. The Chancellor did

:04:16.:04:22.

confirm that he needed �11.5 billion worth of spending cuts in 2015 to

:04:22.:04:28.

2016 to hit its deficit target. He told us total government spending

:04:28.:04:32.

would be 745 billion. That is no change from what he told us in

:04:32.:04:38.

March. Here are the departmental cuts. Here is how the axe fell. The

:04:38.:04:44.

Home Office took a 6% cut, business a 6% cut, work and pensions leading

:04:44.:04:51.

the pack at 9.5%. Energy, 8%. Environment and justice both taking

:04:51.:04:57.

a 10% cut. Culture, which is always lobbied by those in the

:04:57.:05:01.

entertainment and arts business has got a 7% cut. The foreign office

:05:01.:05:07.

added 8% cut. The Treasury, to coin a phrase, we are all in this

:05:07.:05:12.

together, even the Treasury had to volunteer a 10% cut. The communities

:05:12.:05:17.

Department took a 10% cut as well, which local government will feel the

:05:17.:05:22.

impact on that. On defence, which has come out of this review rather

:05:22.:05:27.

well. The defence resource budget is frozen in cash terms at �24 billion.

:05:27.:05:29.

frozen in cash terms at �24 billion. That is simply a small cut in real

:05:29.:05:32.

frozen in cash terms at �24 billion. That is The equipment budget of 14

:05:32.:05:38.

billion would be 14,000,000,020 16, then it would rise by 1% a year. The

:05:38.:05:44.

Chancellor went out of his way to say there will be no cuts in

:05:44.:05:47.

front-line personnel. But there have been in previous statements, there

:05:47.:05:50.

have been substantial cuts in front-line personnel. If you are in

:05:50.:05:55.

the military, no more, says the Chancellor. The education budget,

:05:55.:05:59.

that is going to increase to 53 billion by 2015 to 2016. There will

:05:59.:06:04.

be a new national funding formula for school spending. The Chancellor

:06:04.:06:09.

said the current one wasn't fair. He wants to put some petrol into the

:06:09.:06:14.

free schools movement. He will find funding for 180 new free schools in

:06:14.:06:18.

2015. Here we come to the infrastructure now, which was a lot.

:06:18.:06:22.

50 billion on capital investment in 2015. That sounds a lot, but he's

:06:22.:06:29.

using a gross figure. Those figures tend to be down on net public-sector

:06:29.:06:33.

investment. The 50 billion is a little misleading there. He says as

:06:33.:06:38.

a result of increasing capital and then dashed back spending every

:06:38.:06:42.

year, there effectively 300 billion guaranteed total spending throughout

:06:42.:06:47.

this decade. It seems to me they are saying they will have invested 300

:06:47.:06:51.

billion over the ten years of the decade ending in 2020. Projects

:06:51.:06:56.

worth �100 billion are going to be announced tomorrow. The Chancellor

:06:56.:07:00.

wanting to top up his infrastructure plans to counter some of the cuts

:07:00.:07:04.

he's had to make in departmental spending. NSAIDs. Let's have a look.

:07:04.:07:10.

The Chancellor announced a new welfare cup from April 2015, just a

:07:10.:07:16.

month before the next election. However, it excludes a number of

:07:16.:07:21.

things, those benefits that changes with business, unemployment

:07:21.:07:27.

benefits, jobless allowance. And a massive welfare budget area, state

:07:27.:07:31.

pensions are also excluded. Winter fuel payments will be removed from

:07:31.:07:35.

British expats who live in hot countries. Though I guess that will

:07:35.:07:40.

partly depend on where they live in these particular hot countries.

:07:40.:07:46.

There will also be a new seven-day wait before claiming benefits. Major

:07:46.:07:50.

announcements on public sector pay. Public sector pay rises will be

:07:50.:07:56.

capped at 1% in 2015 to 2016. That is probably not a surprise. But and

:07:56.:08:00.

this was billed in the run-up, the automatic progression of pay in the

:08:00.:08:03.

civil service, whereby you get a pay rise simply for staying on for

:08:04.:08:10.

another year, that'll be abolished in 2015 to 2016. No more automatic

:08:10.:08:14.

pay rises. The Chancellor also announced his intention to remove

:08:14.:08:18.

this particular automatic progression on pay rises from the

:08:18.:08:26.

NHS, schools and police. The civil service get it from 2015. On other

:08:26.:08:31.

spending, the Chancellor announced funding for two further years of a

:08:31.:08:35.

council tax freeze, from April 2014. There's been a breeze in play for a

:08:35.:08:38.

couple of years, it's part of the idea of trying to do something about

:08:38.:08:43.

the squeeze on living standards. There are a number of reports about

:08:43.:08:47.

what would happen to the intelligence services. Those who

:08:47.:08:50.

said the budget would be increased, they turned out to be right. It's

:08:50.:08:56.

gone up by 3.4%. The health budget, which was 96 billion when the

:08:56.:09:06.
:09:06.:09:06.

coalition came to power, will be 110 billion by 2015 to 2016. �14 billion

:09:06.:09:12.

rise in the health budget over the lifetime of this government. Health

:09:12.:09:22.
:09:22.:09:26.

2015. 2015 was a date when the current spending plans ran out. But

:09:26.:09:30.

it became clear the more the Chancellor spoke, he really had his

:09:30.:09:34.

eye on the key marker in 2015, the date of the general election. The

:09:34.:09:37.

longer it went on, the more political it became. He announced

:09:37.:09:42.

there would be a welfare cap, a cap on overall welfare spending, not

:09:42.:09:47.

including the state pension, which would come in, when? On the eve of

:09:47.:09:51.

that general election. Clearly designed to be something the

:09:51.:09:53.

Conservatives and possibly the coalition in agreement will be able

:09:53.:09:58.

to deploy just before a general election, able to say to Labour,

:09:58.:10:02.

would you match it? A further squeeze on welfare for the jobless.

:10:02.:10:06.

A weight of seven days in terms of the signing on time between losing

:10:06.:10:10.

your job and being able to get your benefits. Also promised that if you

:10:10.:10:14.

couldn't speak English, you would be forced to have English-language

:10:14.:10:17.

courses or you would lose that benefit, together with the more

:10:17.:10:21.

predictable promises of protection for health spending, school

:10:21.:10:25.

spending, a boost for the intelligence services, a boost for

:10:25.:10:30.

social care. All of those seemed to be designed to put the best possible

:10:30.:10:33.

political gloss on some pretty gloomy economic news. The obvious

:10:33.:10:39.

and final point to make is this. We get these very big numbers for

:10:39.:10:42.

squeezes in government departments, 10% environment, justice, Cabinet

:10:42.:10:47.

Office, Scotland, Wales, Northern Ireland, 8% in departments like

:10:47.:10:51.

climate change the foreign office. What we haven't yet got is what does

:10:51.:10:55.

that mean for jobs lost, pay squeezed, programmes cancelled? It

:10:55.:11:03.

deliberate. We only get the headlines. Is it possible, is it

:11:03.:11:08.

clear who are the winners and losers in this spending round? Some of the

:11:08.:11:13.

winners we can see quite clearly. Defence does seem to be a bit of a

:11:13.:11:20.

winner. In its resource budgets, it's only been cut by just under 2%

:11:20.:11:25.

in real terms. That will mean overall, since 2010, it will be

:11:25.:11:31.

looking at about 10% real cut. When you look at environment, energy, a

:11:31.:11:35.

lot of local government, all of those have been cut, going into

:11:35.:11:40.

this, over 20%, now looking at 30 and in some cases even 40%.

:11:40.:11:44.

Transport investment is a big winner. But it's worth saying that

:11:44.:11:48.

the resource budget for transport has actually been cut. Some people

:11:48.:11:52.

have been reminding me that that includes road maintenance and some

:11:52.:11:57.

of the things you might think of as investment. The filling in holes is

:11:57.:12:03.

not in the capital budget. That is quite crucial. Communities

:12:03.:12:09.

definitely looks like another big loser. Also on their investment,

:12:09.:12:13.

that's been cut quite a lot. On the basis of this, relative to

:12:14.:12:18.

expectations, I'd say the NHS was a bit of a loser will stop there's no

:12:18.:12:23.

real cut in NHS spending. But if you look at the year-on-year growth for

:12:23.:12:29.

that year, it's 0.1%, the barest amount. Most people in the NHS will

:12:29.:12:34.

be not feeling very protected at all. Given that inflation in health

:12:34.:12:40.

is huge. Much higher than the average level of inflation. There

:12:40.:12:44.

was this puzzle that the headline cut to local councils, get the

:12:44.:12:48.

speech said in effect its 2%. I've been treated by the communities

:12:48.:12:52.

secretary. He is claiming that the extra money that councils will get,

:12:52.:12:57.

more money to schools and more money in the spot for social care, means

:12:57.:13:00.

that the effective cut the local councils is much less than 10%. I

:13:00.:13:04.

can imagine a lot of councillors will dispute that, but that is the

:13:04.:13:11.

claim. They can't all not be cut. is true they are putting more money

:13:11.:13:16.

into the hands of local government, so it makes it harder to judge these

:13:16.:13:19.

things. On the paid progression thing, that is quite significant.

:13:19.:13:22.

What we've seen in the last few years is a much greater than

:13:22.:13:27.

expected loss of jobs in the public sector, which has been offset by

:13:27.:13:31.

growth in private sector jobs. But the pay bill and paper head in the

:13:31.:13:35.

public sector has not been... It's grown much faster than they

:13:35.:13:39.

expected, even despite that pay freeze. There has been a feeling

:13:39.:13:42.

that these increments, these progressions that people get

:13:42.:13:45.

automatically, have played quite a big part in that. The police will

:13:45.:13:49.

say they haven't been employing these progressions. You would have

:13:49.:13:54.

thought he would have realised that originally. What do we make of this

:13:54.:14:01.

huge emphasis on infrastructure spending? We've been here before.

:14:01.:14:07.

It's been rather overdone. He made this great play in his speech,

:14:07.:14:12.

spending 50 billion will stop it rather implies that it is a rise. If

:14:12.:14:17.

you look at the figures that they've just put out, there is no rise. He

:14:18.:14:25.

was actually planning to spend �50.4 billion in 2014 to 2015. He is

:14:25.:14:31.

planning to spend �50.4 billion in 2015 to 2016. It is flat. It's the

:14:31.:14:41.
:14:41.:14:41.

gross figure. Actually, in that important period it is flat. �50.4

:14:41.:14:46.

billion is a rise on where it is right now. It is a rise on what

:14:46.:14:52.

we've seen so far this Parliament. The fact that he has maintained it

:14:52.:14:57.

will be seen by some as OK. But what he implied which was that there was

:14:57.:15:03.

a great increase in that period, is simply not borne out by the

:15:03.:15:07.

figures. And there are some very interesting details, in terms of

:15:07.:15:13.

what's happening. For example, there is a very big drop from 4.8 billion

:15:13.:15:19.

to 3.1 billion, that's a drop of 35.6% capital spending within the

:15:19.:15:23.

community 's budget. Some of that is presumably things like libraries,

:15:23.:15:32.

sports facilities... Real buildings that affect people 's lives. There

:15:32.:15:36.

are bits of the capital budgets that people will lament because they are

:15:36.:15:46.
:15:46.:15:48.

being squeezed. 57 drop in a year in media, culture

:15:48.:15:53.

and sport, in a year capital budget. It's a small capital budget.

:15:53.:15:59.

it's an indication of where you can cut in places. They are always very

:16:00.:16:08.

articulate. All right. Where are we going next? We are going to go to

:16:08.:16:18.
:16:18.:16:20.

get reaction from experts Jo Co in Bury. It's lunch time here in Bury

:16:20.:16:25.

market and we are all digesting what the Chancellor has announced in his

:16:25.:16:28.

Spending Review. Let's chew over some of the headline figures with

:16:28.:16:33.

Robert Oxley from the Taxpayers' Alliance. Good afternoon. One of the

:16:33.:16:36.

big headline figures was the �50 billion in capital investment in

:16:36.:16:42.

infrastructure. That sounded like a big number to me? The worry is that

:16:42.:16:48.

we have seen too often the capital investment is a white elephant,

:16:48.:16:52.

�2,000 on every family's shoulders, which isn't going to deliver any of

:16:52.:16:56.

the benefits the Chancellor is promising. The other part of the

:16:56.:16:59.

investment could be offshore wind leading to higher energy bills to

:17:00.:17:04.

families already struggling. What about the announcement of cuts to

:17:04.:17:09.

Government departments? Most we were expecting, but ranging from 6-10%,

:17:09.:17:13.

apart from the protected departments of health, international aid and

:17:13.:17:18.

education? He took �11. 5 billion off the department and is still

:17:18.:17:23.

ringfencing international aid. There is �120 billion of waste to actually

:17:23.:17:28.

get out of Government waste so more could be done. We have seen the Sa

:17:28.:17:34.

L'ami slicing and not the radical cuts. How would you sum it up?He's

:17:34.:17:39.

done well on public sector pay, but there's still a lot more work to do

:17:39.:17:45.

if he's to ease the pressure on those paying a huge amount of tax.

:17:45.:17:50.

Thank you very much. Robert mentioned public sector pay. The

:17:51.:17:54.

Chancellor spoke about having to have Public Services that we can

:17:54.:17:57.

afford and that there could be further cuts to bureaucracy. Let's

:17:57.:18:03.

talk about that with my next guest, Catt vint Nelson from unitnison. Did

:18:03.:18:08.

you agree that more cuts could be made to bureaucracy in Public

:18:08.:18:17.

Services in order to keep in tune with austerity -- Tevan Nelson from

:18:17.:18:22.

unison? I think the reality is that there's no easy cuts to be made any

:18:22.:18:25.

more in Local Government in particular. Putting aside the

:18:25.:18:27.

theatrer in Parliament today, I think we have to keep some

:18:27.:18:30.

proportion about what's been announced. There is a statement of

:18:30.:18:36.

intent. They will take basically on the next general election. Our main

:18:36.:18:40.

concern is that this sets the scene for austerity to continue beyond

:18:40.:18:42.

2015 when the initial commitment of the Government was for it to end

:18:43.:18:47.

that year. Labour has said we are signed up to the spending plans as

:18:47.:18:50.

our starting point if we win the next election so everybody is in on

:18:50.:18:54.

this? We hope Labour think again about that because it gives the

:18:54.:18:57.

public no choice when the general election comes around. If both

:18:57.:19:02.

parties are signed up to the cuts up to perhaps 2020, it gives little

:19:02.:19:07.

real alternative to the voters and we hope Labour think again about

:19:07.:19:11.

embracing the spending cuts. Public sector pay, he wants to end

:19:11.:19:14.

automatic rises? It's not viable. He announced this in March in the

:19:14.:19:20.

budget, we have seen no proposals since and it portrays absolute

:19:20.:19:23.

ignorance about development in Public Services workers like nurses

:19:23.:19:26.

and social work workers, they are linked to training and development,

:19:26.:19:31.

what is the alternative if they are removed. All right, Kevan Nelson,

:19:31.:19:36.

thank you very much. That's the view from unions and Taxpayers' Alliance.

:19:36.:19:40.

We heard what the Chancellor had to say in a Spending Review that he

:19:40.:19:44.

didn't have to do. He could have waited until next year but perhaps

:19:44.:19:48.

for political reasons he did it now. Let's find out what people thought

:19:48.:19:52.

about what the Chancellor had to say. Hell lop again sitting in the

:19:52.:19:55.

sunshine, good sport you have got here, Paul Lewis. What have people

:19:55.:20:01.

been saying? The -- hello. The reactions have been swift. Thes

:20:01.:20:05.

Chancellor said if you lost your job, you would have to wait seven

:20:05.:20:08.

days before you claim. At the moment, the three days, it will be

:20:08.:20:13.

another four, people are saying seven days with no money in torture

:20:13.:20:17.

says Barbara and another comment along similar lines, why should

:20:17.:20:20.

anyone have to wait seven days. That's causing prove sill. There's

:20:20.:20:26.

also the question of cutting the pay -- controversy. Cutting automatic

:20:26.:20:30.

pay rises for the Civil Service, I had an e-mail saying, is this legal,

:20:30.:20:33.

surely it's a contractual right and I think the Chancellor made it clear

:20:33.:20:37.

he'd have to renegotiate the contracts that hundreds of thousands

:20:37.:20:40.

of civil servants are on which enables them to have the regular

:20:40.:20:44.

rises. The other change, scrapping Winter Fuel Payments for people

:20:44.:20:51.

living abroad. Now, some people get those in the tropics, in French

:20:51.:20:55.

colonies. The Chancellor's said that will save �30 million a year, and

:20:55.:21:03.

from the winter of 2015, no no UK peckser which has a temperature

:21:03.:21:06.

higher than the UK will be able to claim. No more detail than that, but

:21:06.:21:12.

it will be a difficult one I think. -- pensioner. We may not be in the

:21:12.:21:15.

tropics, but it's certainly heating up here in Bury. Back to you,

:21:15.:21:18.

Andrew. We are heating up among the ex-pats

:21:18.:21:21.

watching this programme too who'll no doubt be pointing out that in

:21:21.:21:26.

winter, it's a lot colder in Paris than it is in Nice. Political

:21:26.:21:32.

reaction to the Chancellor's speech now and we can join Matthew

:21:32.:21:36.

Amroliwala. The Chancellor was on his feet for a

:21:36.:21:42.

little over 45 minutes. Let's get the thoughts of my political guests.

:21:42.:21:46.

Printy poo pel forthe Conservative, Lord Oakeshott for the Liberal

:21:46.:21:56.
:21:56.:21:57.

Democrats. -- Pritti Patel. Do you acknowledge the cuts will cause

:21:57.:22:02.

problems? I'm afraid we are looking actually at the way to say to the

:22:02.:22:08.

country, we are in a state with the finances if. The Chancellor spoke

:22:08.:22:12.

about growth and investment and investment in education and capital

:22:12.:22:16.

spending as well, so that's thinking about the future while we manage the

:22:16.:22:21.

challenges we have and reform Government, deal with the

:22:21.:22:24.

inefficiencies on the wasting Government spending while looking to

:22:24.:22:31.

reform welfare and bring gator fairness. I'll come to some of the

:22:31.:22:35.

issue in in a moment, but do you acknowledge the pain? They'll be

:22:35.:22:38.

difficult outcomes of course, that's ine tab, but it's about Government

:22:38.:22:42.

making difficult choices in terms of Government spending and also future

:22:42.:22:52.
:22:52.:22:54.

projections when it comes to expenditure as If you can't get

:22:54.:22:58.

growth going, you will struggle... If you look at the way the economy

:22:58.:23:02.

is developing, it is growing marginaling Liverpool any, but we

:23:02.:23:06.

have had positive indicators, there's been over 1. 3 million

:23:06.:23:10.

private sector jobs in this country which have come on since 2010, so if

:23:10.:23:13.

this is the way forward, and it really is, we can't talk down the

:23:13.:23:16.

economy and say cuts will automatically lead to a negative

:23:16.:23:21.

situation in the country. We are seeing capical investment by the

:23:21.:23:26.

government and private sector growth and that should be welcomed. Up to a

:23:26.:23:30.

few weeks ago, you might well have opposed the cuts, this is now your

:23:30.:23:32.

starting point for Labour if they win the election, both the Prime

:23:32.:23:37.

Minister and the Chancellor taunted your party today, saying your whole

:23:37.:23:41.

economic position has collapsed, it has, hasn't it? Well, the big

:23:41.:23:45.

difference is, how do you get growth in the economy and where is the

:23:45.:23:48.

infrastructure going to be and when's it going to start? The

:23:48.:23:53.

Chancellor wants the infrastructure to be virtually all in London and he

:23:53.:23:58.

reiterated that today. But it isn't starting. Ayous the country, we are

:23:58.:24:01.

not seeing the major infrastructure problems that will get people back

:24:01.:24:06.

to work and get the economy growing again -- across the country. This

:24:06.:24:09.

economy isn't growing and the Chancellor's done nothing today to

:24:09.:24:14.

make it grow. There's more money for schools, counter-terrorism, council

:24:14.:24:18.

tax will be frozen for another two years, all of which I suppose you

:24:18.:24:24.

would support. You support the idea of ending automatic pay rises in the

:24:24.:24:29.

public sector? What the Government's been doing is

:24:29.:24:34.

using inflationary 1970s approaches in order to try and cut the deficit.

:24:34.:24:37.

It isn't working. It isn't working because there isn't the growth

:24:37.:24:41.

there. The answer to the question though, do you support the notion of

:24:41.:24:45.

stopping automatic pay rises for public sector workers? You can't

:24:45.:24:49.

simply say one system and brutally alter it will work, as the problem

:24:49.:24:53.

is, how do you keep good people in there, for example, in the police?

:24:53.:24:57.

It's a simplistic slogan and I think the practicality of it is far more

:24:57.:25:02.

complex than the Chancellor's making out. Labour's position now is all

:25:02.:25:06.

about priorities, different priorities, same spending envelope

:25:06.:25:09.

but different priorities, you are also talking about borrowing more.

:25:09.:25:15.

How does that fit in coherently? I don't understand? The wrong kind of

:25:15.:25:20.

cuts, the wrong things being cut, but as well, infrastructure. You

:25:20.:25:24.

rebuild the economy by getting the big capital schemes going, in other

:25:24.:25:28.

words building things. That is not happening and the Government failed

:25:28.:25:34.

to start from the promises. How much would you borrow? Enough to get the

:25:34.:25:38.

major infrastructure. But what is enough? If you were in Government,

:25:38.:25:43.

what extra amount would you need to borrow? All we'd need to do this

:25:43.:25:46.

year is make the commitments happen to stimulate the economy. This

:25:47.:25:51.

Government, even on existing plans, has failed to get more than 7% of

:25:51.:25:59.

those projects going. That's the big problem. They are not delivering.

:25:59.:26:03.

terms of the basic cuts that we have had announced today, are they in the

:26:03.:26:09.

right areas? Are they fair? You have had two straight questions and two

:26:09.:26:19.
:26:19.:26:19.

dodgy answers from my colleagues here. I asked you... Are they in the

:26:19.:26:23.

right areas? We have done our best to stop them being too painful. For

:26:23.:26:28.

example, Vince Cable has fought very hard and has got the lowest cuts of

:26:28.:26:32.

any unprotected department, as it's called, to protect spending for

:26:32.:26:36.

growth, Education and Skills. We also managed to fight off a very

:26:36.:26:42.

nasty attack by the Tories. Are they fair? It's not a dodgy answer - we

:26:42.:26:45.

are doing our best to keep them fair. We'd rather they were not

:26:45.:26:49.

necessary and I agree with John Mann that because economic growth's been

:26:49.:26:52.

disappointing after a good start, we are in more pain than we should be.

:26:52.:26:56.

The key thing is the announcements tomorrow, it's about capital

:26:56.:27:00.

spending and getting house building growing. We have wasted �20 billion

:27:00.:27:03.

a year on house building because Labour and Conservatives sold off

:27:04.:27:08.

too many council houses. Interesting what Nick Clegg was saying yelled

:27:08.:27:14.

about the help-to-buy scheme and showing his frustration saying the

:27:14.:27:18.

gap between announcements and delivery. If you asking businesses

:27:18.:27:22.

out there, that's their frustration as well, they hear things in this

:27:22.:27:28.

building... Irishes If I decide to do something, it happens next week.

:27:28.:27:32.

It's slow in Government getting house building going and the problem

:27:32.:27:37.

with the so far, the things that were announced - indeed I talked to

:27:38.:27:41.

you six monthings ago about it - is that they are only affecting house

:27:41.:27:45.

mortgages but not building. We have had hundreds of billions of pounds

:27:45.:27:48.

waiting to come in from pension funds if we can really free up

:27:48.:27:51.

councils to build up Housing Associations to borrow, we can

:27:51.:27:55.

really get that going. 100,000 more houses a year, half a million more

:27:55.:27:59.

jobs and half a million people off benefit. There we have to leave it.

:27:59.:28:03.

Thanks to all of you. Andrew, back to you. More from you later.

:28:03.:28:08.

Let's pick up on the point about house building that was in Matthew's

:28:08.:28:11.

discussion there, Robert. I didn't hear the Chancellor say much about

:28:11.:28:15.

housing at all, yet there's always talk that what we need, as in the

:28:15.:28:20.

1930s, is to get a house building boom going to help get us out of

:28:20.:28:24.

slow growth into recovery? They've got a policy for trying to stimulate

:28:24.:28:31.

the housing market. They have two forms of guarantees to help those

:28:31.:28:36.

who haven't got deposits, and they are claiming that one of those Gar

:28:36.:28:42.

tee schemes is stimulating private sector house building.

:28:42.:28:44.

But there are those who argue, including the opposition, that they

:28:44.:28:49.

ought to be doing more with public money to build social housing and we

:28:49.:28:52.

heard nothing about that. In fact, the implication of the figures is

:28:52.:29:00.

that there is no increase in that particular budget. It was quite odd

:29:00.:29:02.

that you will see in Prime Minister's Question Time before that

:29:02.:29:05.

that the Prime Minister looked rather on the defensive about all of

:29:05.:29:08.

that, claiming that there were thousands of houses being built but

:29:08.:29:13.

not able to provide any stats. The reason they can't provide them is

:29:13.:29:16.

that it's because it's not a priority of theirs. The communities

:29:16.:29:20.

department which, in days gone by, helped to fund house building

:29:20.:29:25.

through the local authorities, that's's a budget that's been...

:29:25.:29:28.

said they were one of the big losers. The capital budget had

:29:28.:29:33.

already been cut by 74% in real terms and it's got more than a third

:29:33.:29:38.

cut in real terms in this year for this Spending Review. Now, for the

:29:38.:29:42.

2015 year, that is. What happened rightly or wrongly, George Osborne

:29:42.:29:46.

looked at the system for providing affordable housing or social housing

:29:46.:29:51.

in the UK when he came in and said this doesn't work and lots of

:29:51.:29:56.

experts said the same. A lot of the cut in capital investment that came

:29:56.:30:00.

in that year, they decided they would take out of the traditional

:30:00.:30:04.

social housing programmes. One thing the crickets say is, that's all very

:30:04.:30:08.

well, but the replacement for that which was being planned using the

:30:08.:30:11.

private sector, trying to make all these things more efficient, have

:30:11.:30:14.

more signalling, that's taken a long time to come on stream and they

:30:14.:30:18.

threw up the planning system which has been influx. All these things

:30:18.:30:21.

have added uncertainty to the housing industry and made it harder,

:30:21.:30:25.

not easier to build homes. I think that's another reason why he's

:30:25.:30:29.

defensive. Still a lot of questions about how

:30:29.:30:33.

the spending cut will fall. Let's get the overall package and City

:30:33.:30:36.

reaction to the review to what it means for interest rates, bond

:30:36.:30:40.

prices, the size of the deficit and how much the Government will

:30:40.:30:44.

continue to borrow? How is City going to react. Louise Cooper joins

:30:44.:30:54.
:30:54.:30:59.

us. What do you think the reaction We've had some disappointing US

:30:59.:31:05.

first-quarter GDP numbers out just half an hour ago. So at the moment,

:31:06.:31:11.

markets are focusing far more on that disappointing GDP data than

:31:11.:31:16.

anything in the Spending Review. can understand what is taking the

:31:16.:31:21.

markets' attention, which is the rising bond yields. The beginning of

:31:21.:31:25.

the end of the United States of the printing of money. It's not just the

:31:25.:31:30.

beginning of the end in the states. What we've seen in the last couple

:31:30.:31:34.

of months is very volatile money markets. These are short-term

:31:34.:31:39.

interest rates. You've seen a big increase in both Spanish and Italian

:31:39.:31:42.

three-month borrowing costs, where the Italian and Spanish governments

:31:42.:31:46.

borrow for three months. Those rates have shot up. All of the other money

:31:47.:31:51.

markets, you've seen the same thing there. In the UK, we're now seeing

:31:51.:31:55.

money markets predict a rise in base rates in the next nine to 12

:31:55.:31:59.

months. Most people have not cottoned onto this. Big change, the

:31:59.:32:04.

end of cheap money approaching. It is the beginning of the end, it's

:32:04.:32:08.

not about to stop now, but that is what financial markets are telling

:32:08.:32:12.

us. I don't think that's really been picked up by the media. Know, though

:32:12.:32:16.

we did begin this programme by pointing out that the eve of cheap

:32:16.:32:21.

money was coming to an end. But we are not the whole media, I take that

:32:21.:32:27.

point, just the better part of it! still hear questions. If we don't

:32:27.:32:32.

get growth? Actually, the UK, I think the risk is we get much better

:32:32.:32:37.

growth. That we have a surge in growth. That is what everybody is

:32:37.:32:42.

missing at the moment. That is the real risk for the UK economy, is it

:32:42.:32:45.

recovers too quickly. For folks watching, a rise in interest rates

:32:45.:32:50.

makes them worry about their mortgage payments. It also makes a

:32:50.:32:53.

number of small businesses worry. They are servicing debt. If they

:32:53.:32:56.

face bigger interest bills, some of them could be in trouble, the

:32:56.:33:01.

so-called zombie companies. But the other big implications is the

:33:02.:33:05.

government is still going to continue to borrow a shed load of

:33:05.:33:10.

money for the foreseeable future, and its borrowing costs are now

:33:10.:33:15.

going to rise. Tenure borrowing costs have already risen about one

:33:15.:33:22.

percentage point. #10 year. They are still at incredibly low levels,

:33:22.:33:27.

about 2.6%. But the interest bill on this incredibly low borrowing cost

:33:27.:33:33.

is still �50 billion a year and rising. We cannot afford borrowing

:33:33.:33:40.

costs to go up that far, all much more than here. That is the problem.

:33:40.:33:44.

We have so much debt, borrowing costs are already large. If

:33:44.:33:54.
:33:54.:33:57.

borrowing costs go up further, that could be really quite damaging.

:33:57.:34:01.

is... Let's bring you an update of some of the key points in the

:34:01.:34:06.

statement today. Here are the main measures. Departmental cuts of �11.5

:34:06.:34:13.

billion. A new welfare cap from April 2015, a month before the

:34:13.:34:17.

election, but the welfare cap with a few holes in it as well a big one,

:34:18.:34:22.

pensions is not included. Seven-day waiting for new benefit claims. And

:34:22.:34:27.

an end to automatic pay rises in the public sector. That is on top of the

:34:27.:34:30.

freezing public sector pay that we've had for some time. Some other

:34:30.:34:38.

main measures in an attempt to keep down... To keep living standards

:34:38.:34:42.

under control, to make sure they don't go up even more than they

:34:42.:34:45.

have, funding of two further years of the council tax freeze from April

:34:45.:34:49.

2014. That is almost becoming a permanent part of the British system

:34:49.:34:56.

these days. The defence resource budget maintained at 24 billion. Mr

:34:56.:35:01.

Hammond will be reasonably pleased. So will be Education Secretary,

:35:01.:35:07.

because he is going to get funding for 180 new free schools. These are

:35:07.:35:12.

some of the main measures. It was quite a long statement for a

:35:12.:35:16.

Spending Review for one year. If it had been for the usual three years,

:35:16.:35:20.

we'd probably have still been listening to him! We are joined by

:35:20.:35:30.
:35:30.:35:34.

money and low interest rates is now coming to an end? It's far too early

:35:34.:35:39.

to say that. One of the key drivers of the government's policy, the

:35:39.:35:42.

tough action on public spending that we continue to take, measures to

:35:42.:35:46.

deal with the deficit, is precisely to maintain the confidence and

:35:46.:35:49.

credibility of this country in the financial markets, to keep our

:35:49.:35:54.

borrowing costs as low as possible. But they are already rising.

:35:54.:35:58.

still have some of the lowest borrowing costs of any country in

:35:58.:36:07.

the world. In terms of what is going on in the financial markets are

:36:07.:36:11.

driving that news from the US and so on, I will happily discuss it with

:36:11.:36:18.

Louise in more detail. What we are doing is maintaining this country's

:36:18.:36:23.

fiscal credibility to get away from the situation where interest rates

:36:23.:36:28.

were tracking countries like Spain and Italy, when we came in, to being

:36:28.:36:33.

amongst the lowest in the world. rate at which the government

:36:33.:36:37.

borrowed has already risen almost a full percentage point already. Do

:36:37.:36:41.

you accept, if this trend continues and almost every expert thinks it

:36:41.:36:47.

will, that in future, when you come to borrow these billions, if you are

:36:47.:36:51.

planning to borrow billions upon billions more, that your borrowing

:36:51.:36:57.

costs will now rise and could rise quite substantially? Is the case

:36:57.:37:07.
:37:07.:37:10.

that if interest rates get higher and stay higher, that that has a

:37:10.:37:13.

fiscal cost to the government. The point I'm making to you is one of

:37:13.:37:15.

the key objectives from the very start of this coalition government,

:37:15.:37:17.

in terms of clearing up the economic mess that Labour left, is to

:37:17.:37:19.

maintain this country's fiscal credibility and keep our interest

:37:19.:37:24.

rates as low as they can be. But do you accept they are going to rise?

:37:24.:37:30.

What I accept it was if the rise was permanent, that has a cost. I agree

:37:30.:37:33.

with that statement. Let me come onto this infrastructure spending,

:37:33.:37:39.

of which the Chancellor is making so much, implying there's a whole new

:37:39.:37:45.

you were of infrastructure spending coming out. In the March Budget, I

:37:45.:37:50.

would use the gross figure, you announced infrastructure spending of

:37:50.:37:53.

50.4 billion in 2015 to 2016. The Chancellor has announced

:37:53.:37:57.

infrastructure spending in the same year of 50.4 billion. No change.

:37:57.:38:01.

Tomorrow I will be setting out in a separate Parliamentary statement the

:38:01.:38:05.

details of our infrastructure 's plans, what we are spending the

:38:05.:38:11.

money on over a longer... But you will not be changing the overall

:38:11.:38:17.

total. I will not. In the March budget we added an extra �3 billion

:38:17.:38:23.

to our capital spending in 2015 to 2016 and for the rest of the

:38:23.:38:27.

parliament. What we are setting out today and tomorrow is how we spend

:38:27.:38:31.

that extra money. The envelope for the spending round, both for current

:38:31.:38:36.

and capital spending, was set at the Budget by promising to take

:38:36.:38:39.

additional tough decisions on short-term current spending. We are

:38:39.:38:46.

able to set aside long-term... the Spending Review today, this has

:38:46.:38:51.

not added any extra money to investment, is that correct? That's

:38:51.:38:54.

correct. We are allocating the budgets that we set out in the in

:38:54.:38:58.

March. If you are so keen on infrastructure and investment, why

:38:58.:39:03.

did you cut it so much in the first couple of years? We inherited plans

:39:03.:39:07.

for very deep cuts in capital spending. Since we came into office,

:39:07.:39:13.

we've added money to those plans. We added in the spending round in 2010.

:39:13.:39:17.

We've added at every fiscal event since then, as we were able to find

:39:17.:39:19.

ways of making more savings and current spending, we are reinvesting

:39:19.:39:23.

some of that money invaluable capital spending. What we can't do

:39:23.:39:28.

is say that we will borrow ever more for this. Instead, we have to make

:39:28.:39:31.

difficult choices on current spending in order to afford the

:39:31.:39:35.

capital investment that this country needs. In essence, what you did was

:39:35.:39:38.

cut capital spending when you could have borrowed to pay for it when

:39:38.:39:43.

borrowing costs work at an historic low. You are now going to increase

:39:43.:39:46.

capital spending to borrow more at a time when borrowing costs are

:39:46.:39:49.

returning to a higher normal level. You got it the wrong way round,

:39:49.:39:53.

didn't you I don't think we did. We inherited plans for even deeper

:39:53.:39:58.

cuts. You didn't have to implement them. As I was just explaining,

:39:58.:40:01.

we've added money to those things. By setting up longer-term plans, we

:40:01.:40:06.

can get more projects for the money we have. We have delivered the

:40:06.:40:08.

Olympic project. We are changing the way that infrastructure is delivered

:40:08.:40:11.

within government, to make it more effective and commercially

:40:11.:40:17.

realistic, and to get more value for the capital investment of the spend.

:40:17.:40:21.

You have accepted the principle that capital spending does more for both

:40:21.:40:28.

short and long-term growth prospects than current spending. And that is

:40:28.:40:32.

manifest in the priorities you've set out today. If you look at an

:40:32.:40:38.

organisation like the IMF, they would say that one of the reasons

:40:38.:40:42.

why the British economy slowed down so sharply was indeed those capital

:40:42.:40:47.

spending cuts. Given that the consensus is you should be doing it,

:40:47.:40:50.

including your own view, why don't you bring the capital spending

:40:50.:41:00.
:41:00.:41:00.

forward? I'm waiting for the question to end! We accept that

:41:00.:41:04.

capital spending is good for the economy, but not all capital

:41:04.:41:08.

spending is the same. What we have done in government, we did this in

:41:09.:41:12.

2010 and we've done it again, is to look at the projects around

:41:12.:41:15.

government, to assess them on the basis of what has the best impact on

:41:15.:41:20.

the economy and put our money on those things. In this current four

:41:20.:41:23.

year period, we are spending more on transport and investment in this

:41:23.:41:26.

country than our predecessors bit dashed back predecessors did. More

:41:26.:41:33.

on our road network, rail networks, broadband infrastructure. Why not

:41:33.:41:37.

housing? In the autumn of 2010 you announced the national

:41:37.:41:42.

infrastructure plan, 550 projects. How many have been completed?

:41:42.:41:49.

have been completed. I'd how many? Let me answer the question. Many of

:41:49.:41:52.

those headings are programmes that contain many different projects

:41:52.:41:55.

underneath them. You talk about the Highways Agency maintenance

:41:55.:41:59.

programme. That is something that needs to go on for a long time

:41:59.:42:02.

because it has been left over the years with a massive backlog in

:42:02.:42:06.

maintenance. There are dozens of projects in that heading which have

:42:06.:42:15.

been completed. White many dashed back How many have been completed?

:42:15.:42:21.

The Labour Party left us with... The idea you can build a nuclear power

:42:21.:42:27.

station is... That sun and Sally. You still haven't even started

:42:27.:42:32.

building a nuclear power station. The infrastructure platform, meant

:42:32.:42:38.

to raise 20 billion pension money. How much have you raised? It has

:42:38.:42:42.

been set up by the pensions industry themselves. They've raised the

:42:42.:42:45.

initial billion pounds of investment. �20 billion is over a

:42:45.:42:52.

multi-year period. I think this is a real success story because, for the

:42:52.:42:57.

first time, we've created a way for small, UK pension fronts to invest

:42:57.:43:01.

directly in UK infrastructure. They would say to you that we've made

:43:01.:43:07.

good progress. How much of that 20 billion has been invested? I don't

:43:07.:43:14.

think they've made any investments yet. You announced the UK guarantee

:43:14.:43:19.

scheme, which was to encourage money to come in from the private sector,

:43:19.:43:22.

guaranteed by the government's balance sheet. How many projects

:43:22.:43:28.

have you signed off under that? projects have been signed off. The

:43:28.:43:32.

Battersea developer and and the Drax power station refurbishment. A

:43:32.:43:36.

further 20 to 30 projects have been prequalified. I will have more to

:43:36.:43:41.

say about that tomorrow in my statement. Turning to welfare, why

:43:41.:43:45.

is it fair, particularly for your party, to say to somebody who's just

:43:45.:43:49.

lost their job and maybe on very low wages and have no reliable source of

:43:49.:43:54.

income, you will have to wait seven days until what you get the dole,

:43:54.:43:58.

instead of three days, is that just targeting people who haven't got

:43:58.:44:02.

much money? You currently have a three-day period in the system.

:44:02.:44:06.

France, Sweden, Germany and other countries around the world have

:44:06.:44:09.

seven-day waiting periods or even longer. We wanted to reinvest money

:44:09.:44:15.

in making our job centres and our job search requirements from

:44:15.:44:19.

job-seekers even more effective. The work that the DWP has done has shown

:44:19.:44:23.

that there are things that we can invest money in that make it more

:44:23.:44:27.

likely that people get off benefit and into work more quickly. You want

:44:27.:44:34.

the job seekers to pay for an improved service. Both in our fiscal

:44:34.:44:38.

consolidation, where the wealthiest pay the most towards deficit

:44:38.:44:42.

reduction. Also, the wealthiest in this country are paying a greater

:44:42.:44:46.

share of income tax than they ever have done before. The best thing for

:44:46.:44:49.

someone who has just left their job is to find another job. We need the

:44:49.:44:53.

systems to be in place to make that as intensive, and strong supportive

:44:53.:44:58.

framework as possible. Meeting a similar timescale to that of other

:44:58.:45:01.

countries is a perfectly reasonable way of ensuring that all that money

:45:01.:45:04.

is reinvested in getting more people off benefits and into work. I

:45:04.:45:14.
:45:14.:45:14.

support this. Stephanie On the distributional point and whether the

:45:14.:45:18.

cuts and changes in public service spending have been evenly spread,

:45:18.:45:23.

your own chart suggests that the bottom fifth of people are going to

:45:23.:45:28.

lose 3. 9% of their net income as a result of all this changes since

:45:28.:45:33.

120, 4% for the top fifth. Do you accept the top fifth are paying as

:45:33.:45:39.

much of a share of the net income as the bottom, a difference of 0. 1%?

:45:39.:45:43.

They'll pay more as a share of a much larger income. People might

:45:43.:45:47.

think they are paying a lot more and they are paying a tiny amount which

:45:47.:45:51.

they can more easily afford? If I may answer the question. They'll pay

:45:51.:45:55.

more in cash terms, they are paying more as a share of the income and

:45:55.:45:57.

benefits in kind that they receive from Public Services. Of course,

:45:57.:46:03.

many of the savings that are described in the tables are

:46:03.:46:07.

efficiently savings in the delivery of Public Services so the public

:46:07.:46:09.

service outcomes many people are receiving and Public Services are

:46:09.:46:12.

consumed much more by people on lower incomes and rightly so, the

:46:13.:46:16.

quality of the services is being maintained because we are reforming

:46:16.:46:20.

them and making them more efficient. Some efficiency savings still show

:46:20.:46:25.

up. You talk about the cash terms. When you look at the effect of the

:46:25.:46:28.

changes in Tax Credits and benefits, it's interesting to meal that

:46:28.:46:32.

actually it's not just as a share of income, but in cash terms, the

:46:32.:46:37.

bottom fifth are losing out more from the changes to benefits in Tax

:46:37.:46:41.

Credits. That makes it sound like the changes have been very skewed

:46:41.:46:45.

towards the bottom? We publish a fiscal events table showing the

:46:45.:46:49.

impact of changes to Tax Credits, welfare changes and taxation. Of

:46:49.:46:53.

course, the wealthiest in the land by and large don't consume benefits

:46:53.:46:59.

expenditure. We have taken away child Ben from it from that group.

:46:59.:47:02.

There are other reforms we could make in that area, instead we have

:47:02.:47:08.

put up taxes. The wealthiest 10% are paying the greatest by far. We are

:47:08.:47:11.

running out of time usmt what is the point of a welfare cap which is full

:47:11.:47:17.

of holes? The The idea is to bring more expenditure within a framework

:47:17.:47:24.

of control. Excludeing pensions? When we started, there was Correct?

:47:24.:47:32.

Let me explain. Annual managed expenditure. There was a controlled

:47:32.:47:40.

framework for pensions. The best way to control costs was in the state

:47:40.:47:44.

pension system. We put in place a control work for environmental

:47:44.:47:50.

levies, spending under an annually managed eexpenditure. Today we are

:47:50.:47:54.

announcing a welfare cap which will control the costs of other parts of

:47:54.:48:00.

the benefits system. Doesn't include jobseeker's allowance? And also the

:48:00.:48:05.

benefits passport. How much of the welfare budget does the cap cover?

:48:05.:48:10.

About �100 billion of the �200 billion. So it's not a cap, it's

:48:10.:48:14.

like a baseball cap and somebody's taken half of it out? We have

:48:14.:48:18.

already put in a different framework in the Pensions Bill and in the

:48:18.:48:21.

legislation I put through on public service pensions, there is a cost

:48:21.:48:31.
:48:31.:48:31.

cap. Politically important decision for you, that cap is due to come in

:48:32.:48:35.

just before a general election. Do you think that 'll be a coalition

:48:35.:48:38.

agreed cap or is it possible that a Conservative Chancellor wants a

:48:38.:48:43.

lower cap than you do and you choose at that stage not to support it?

:48:43.:48:49.

Well, I put the cap in place for the first time for April 15 in the

:48:49.:48:52.

previous years' budget. That's something we'll need to agree as a

:48:52.:48:56.

coalition. We all agree that having a control mechanism which forces the

:48:57.:49:01.

Chancellor to account to Parliament, either for decisions taken to bring

:49:01.:49:08.

welfare down or to explain why that action hasn't been taken, is a

:49:08.:49:13.

sensible reform to ensure spending isn't just able to rise without

:49:13.:49:18.

accountability year on year. Very quickly, almost everybody says that

:49:18.:49:24.

the big problem facing rich Western countries, including the UK is the

:49:24.:49:28.

rise in age related expenditure whether it's pensions or health.

:49:28.:49:32.

These are two areas which you are to an extent ringfencing and

:49:32.:49:35.

protecting. Aren't you taking a very is short-term political view and

:49:36.:49:40.

again putting the British economy at risk? No-one who's looked at the

:49:40.:49:44.

decisions we have made on the state pension age in the last few years

:49:45.:49:48.

and overtime increasing it has said we are not taking tough decisions in

:49:48.:49:51.

that year. The biggest single reform in the spending round statement

:49:51.:49:55.

today was about the integration of health and social care. That's about

:49:55.:49:58.

ensuring that as our population ages and people have more care needs,

:49:59.:50:02.

that our services are better eight able to immediate the needs in an

:50:02.:50:07.

effective way, rather than causing more people to become a burden on

:50:07.:50:13.

the NHS when they could be burdens on the homes. If it's easier to get

:50:13.:50:18.

efficiency savings, why don't you just cut now? Ewe are making savings

:50:18.:50:23.

now. Well well ahead of the programme we set out in the 2010...

:50:23.:50:28.

Why do you need to do �11. 5 billion in 2015? It's appropriate and right

:50:28.:50:36.

to carry on doing this in a measured way. We are taking the country from

:50:36.:50:39.

repair to renewal in a steady way and we'll continue to do that.

:50:39.:50:45.

Thank you for coming over from the Commons. We have been to the North

:50:45.:50:50.

to Jo in Bury and let eats head south now to the beautiful town of

:50:50.:50:54.

Winchester. Robert Hall is there. Andrew, in a county which has saved

:50:54.:50:59.

�130 million over the last couple of years, 10% cuts will make more

:50:59.:51:03.

difficult decisions very, very likely. Cuts to transport, perhaps

:51:03.:51:07.

to community facilities, to the cash available to those who need it most.

:51:07.:51:11.

Let's talk about that with Martin able radio rams who campaigns for

:51:11.:51:16.

rural transport and the Deputy Leader of Hampshire Council. Are we

:51:16.:51:21.

talking about a transport system in crisis, not just here but in the UK?

:51:21.:51:24.

We think we are and we are still going through the finer points but

:51:24.:51:27.

we have found that a 10% cut to local authority budgets is going to

:51:27.:51:31.

mean further cuts to buses and we'd say to the Chancellor that enough is

:51:31.:51:36.

enough, there's been a lot of cuts and people are suffering as a

:51:36.:51:41.

result, especially in rural areas. Young people are finding it really

:51:41.:51:45.

difficult to access job, education, training, older people rely on buses

:51:45.:51:50.

as a lifeline to independence and well-being. Unemployed people need

:51:50.:51:54.

buses to access job opportunities and get to job interviews. We have

:51:54.:52:01.

now heard that the signing on benefit has been cut to seven days,

:52:01.:52:05.

so people are going to have to sign on after seven days, which will add

:52:05.:52:10.

more pressures to bus services and we'll say enough is enough.

:52:10.:52:13.

balancing act between community facilities like the library and

:52:13.:52:17.

those people who need your help most, it's another difficult few

:52:17.:52:23.

months ahead isn't it? Yes, it is. When we took over bus subsidies from

:52:23.:52:26.

the district councils, we put more money into those for the very

:52:26.:52:29.

reasons that have already been said. We were conscious of the needs of

:52:29.:52:33.

the young and the needs of elderly. But you are absolutely right. It's

:52:33.:52:37.

not going to be an easy few years ahead, but we are planning for it

:52:37.:52:42.

because we started early in looking at the previous series of cuts. And

:52:42.:52:46.

what our golden rule is, is the last thing we want to pot is the

:52:46.:52:50.

frontline. We want to find other ways of ensuring we maintain our

:52:50.:52:53.

frontline services by forming partnerships with the Health

:52:53.:52:57.

Service, with the police for common facilities and with other public

:52:57.:53:01.

departments. At the same time, we want to increase the amount of

:53:01.:53:05.

income that the county earns from the services it provides outside the

:53:05.:53:12.

county. A good example of that, on July 1st, we formally take over

:53:12.:53:15.

education on the Isle of Wight and we believe that will be a benefit to

:53:15.:53:18.

the Isle of Wight and to Hampshire. Martin, very briefly because we have

:53:18.:53:22.

to stop in a minute, but it's going to be about partnerships isn't it,

:53:22.:53:28.

groups like you just keeping on? is about working together. We are

:53:28.:53:31.

also quite concerned about the big announcements on infrastructure

:53:31.:53:37.

spending that the Chancellor announced a huge road building

:53:37.:53:40.

programme, for example, and that money could be better spent on

:53:40.:53:45.

filling in potholes, improving roads, for bus users, cyclists and

:53:45.:53:49.

the public as a whole. We have got to stop. A very business programme.

:53:49.:53:52.

Thank you both very much indeed. From the lovely city of Winchester,

:53:53.:53:57.

Andrew, back to you. Thank you very much. The sun is

:53:57.:54:03.

shining there. Let's get some more political reaction from Matthew.

:54:03.:54:11.

I'm joined by Stuart from the SNP and a member of the Plaid Cymru.

:54:11.:54:15.

What did you think about what you heard? Awful. This Chancellor

:54:15.:54:19.

doesn't learn from history or his own mistakes. He's trying to cut his

:54:19.:54:24.

way to growth and it will fail this time like last time. I agree. The

:54:24.:54:28.

IMF are telling him, you must spend far more on infrastructure and do it

:54:28.:54:33.

quickly and he's ignoring them. It's a bad situation to be in. Labour

:54:33.:54:37.

said they'll use it as a starting point in 2015 if they were to win.

:54:37.:54:41.

Is that a position that you accept from your parties? No, it's not. It

:54:41.:54:45.

appears now that all the London-based parties are austerity

:54:45.:54:50.

parties. The only choice it seems to me in Wales is ourselves and our

:54:50.:54:53.

friends in Scotland. We can think creatively of saving money without

:54:53.:54:56.

sacking people. Seems to be the way to do it is to hit the public sector

:54:56.:55:00.

as hard as you can with the least respect you can muster if you think

:55:00.:55:04.

you are going to come out of it. It's not going to work. What is the

:55:04.:55:10.

magic formula? �100 billion savings, do away with Trident, �25 billion in

:55:10.:55:16.

the first year, transaction tax will bring in �20 billion per annum and

:55:16.:55:21.

do away with the obvious tax avoidance loopholes that exist, a

:55:21.:55:25.

further �25 to �32 billion without sacking a single person. Stewart, in

:55:25.:55:29.

terms of the priorities we have heard, has the Chancellor in these

:55:29.:55:32.

difficult times made the right choices do you think in where he's

:55:32.:55:38.

decided to come? He's made difficult choices. The things he's ringfenced

:55:39.:55:44.

and these are political choices. We have to understand that there are

:55:44.:55:47.

more revenue cuts across all departments, including in skoonled

:55:47.:55:52.

Wales. The capital expenditure which has been talked about certain isly

:55:52.:55:57.

in Scotland isn't real capital expenditure, it's loans and funny

:55:57.:56:00.

money financial transactions at a time when we need direct capital

:56:00.:56:03.

investment to kick start the economy. He is not delivering what

:56:03.:56:06.

he needed to deliver. A final point to you both. We were hearing about

:56:06.:56:10.

the welfare cap that will come in just before the election. He was

:56:10.:56:14.

talking about stopping the automatic pay rises for the public sector

:56:14.:56:20.

perhaps. What do you think of those ideas? I think what they tell us is

:56:20.:56:25.

the welfare cap, this Government have a ratio of 4-1 in terms of cuts

:56:25.:56:29.

to tax rises. He's balancing the books on the back of the poor and

:56:29.:56:33.

nothing he's said today will change that. I think it's pushing the

:56:33.:56:39.

envelope. Labour have signed up to all of this. Labour are in favour of

:56:39.:56:42.

great austerity. This is pushing the envelope to see whether they can

:56:42.:56:45.

Labour to rise to this particular bait.

:56:45.:56:50.

Thank you very much gentlemen. More from here later. Back to you,

:56:50.:56:54.

Andrew. We can now talk to our Northern Ireland Business Editor,

:56:54.:56:58.

Jimmy Fitzpatrick in Belfast. Not quite as exciting as a G8 meeting in

:56:58.:57:02.

Northern Ireland, but what are you making of it? Yeah, I mean I suppose

:57:02.:57:07.

the anticipation was great for G8 and in terms of this, a certain

:57:07.:57:10.

amount of nervousness, but because health and education are such big

:57:10.:57:13.

parts of the Northern Ireland budget, it was never going to be a

:57:13.:57:18.

huge impact. In fact, Northern Ireland has emerged relatively

:57:18.:57:23.

unscathed, cuts of about 2% in 2015-16, still �9. 6 billion going

:57:24.:57:27.

to Northern Ireland departments to spend. We are a public sector

:57:27.:57:31.

dominated economy, so what is going to be the issue to look at? I think

:57:31.:57:38.

it's going to be the ending of automatic progression pay. That will

:57:38.:57:42.

mean tens of thousand us of civil servants could see an end to the

:57:43.:57:46.

automatic increases which they've enjoyed even during austerity and a

:57:46.:57:52.

period when pay freezes have been in place, in terms of the numbers, we

:57:52.:57:56.

are talking about 28% of workers paid directly out of the public

:57:56.:58:02.

purse. Anything up to 20,000 -- 200,000 people affected. Extra money

:58:02.:58:07.

for the police because of national security issues and extra money for

:58:07.:58:11.

the Northern Ireland Executive. Northern Ireland emerged relatively

:58:11.:58:18.

unscathed. Pf Thank you very much. We are going to

:58:18.:58:24.

talk about the pay progression issue in a moment, starting with the civil

:58:24.:58:33.

servants. Before that, back to Jo Co in Bury with Paul Lewis.

:58:33.:58:37.

It's a glorious day here. Paul Lewis is enjoying his cappuccino. Now, we

:58:37.:58:44.

have heard the Chancellor saying what he said. In terms of cutting

:58:44.:58:47.

though, what did the viewers say? They are disappointed that he

:58:47.:58:50.

committed himself to the high speed rail and to overseas aid. Many

:58:50.:58:56.

people still want those to be cut. On public sector pay, Mick has

:58:56.:59:00.

e-mailed to say he works toer a local authority, he was dismissed

:59:00.:59:04.

and re-employed on lower pay already and Karen came to me at this table,

:59:04.:59:09.

she works for the NHS, her job's been outsource and she says she's

:59:09.:59:13.

had a 47% pay cut already. Right. So people already

:59:13.:59:17.

experiencing some of the things the Chancellor's been talking about.

:59:17.:59:22.

What about changes to lone parents? I found out that what is going to

:59:22.:59:26.

happen with them, already they have to apply for a job, they have to

:59:26.:59:29.

become jobseekers as soon as their youngest child is five and now, when

:59:29.:59:33.

the youngest child is three, they are going to have to start preparing

:59:33.:59:38.

for work. That may mean learning English in some cases which he said

:59:38.:59:47.

everyone will have to do to get the allowance.

:59:47.:59:52.

Gingerbread said the DWP is saving �420 million on efficiency savings,

:59:52.:59:57.

how can they implement these new things. Winter Fuel Payment, to be

:59:57.:00:01.

taken away from people in warmer countries - Glynis is in Spain and

:00:01.:00:05.

says she already has to wear her dressing gown in the winter because

:00:05.:00:08.

it's cold. Must be in the mountains! How will she manage without it?

:00:08.:00:12.

She's not happy. One of the other announcements which we'd already

:00:12.:00:16.

heard and certainly talked about was a welfare cap that would be

:00:16.:00:20.

announced ever are I Yahoo!er in the budget from 2015. Let's get reaction

:00:20.:00:27.

on that from Karen Dyson from the Sainsbury in Manchester. What will

:00:27.:00:32.

be the impact on your clients -- Citizens Advice Barrow? We are not

:00:32.:00:36.

entirely sure how it will be put into practice, but if it means no

:00:36.:00:41.

those who claim benefits are no going to have the same rights as

:00:41.:00:44.

those who claim earlier in the year, that's a source of concern for us.

:00:44.:00:48.

What about local authorities? We were talking to a councillor, they

:00:48.:00:58.
:00:58.:01:05.

said they have had big cuts already, further, again, we have serious

:01:05.:01:10.

concerns there won't be the infrastructure there to support the

:01:10.:01:14.

welfare reform successfully. Thank you. You can grab a coffee. One of

:01:14.:01:19.

the other announcements that the Chancellor claimed has been a

:01:19.:01:23.

success is that for every public sector job lost it has been offset

:01:23.:01:26.

by three new private sector jobs. Let's talk about that with John

:01:26.:01:31.

Holden, from a Manchester think tank. Has that been the case in the

:01:31.:01:34.

Northwest? Greater Manchester has certainly played its part in

:01:34.:01:39.

achieving strong private sector jobs growth. The priority is ensuring

:01:39.:01:42.

that growth continues. That's why we were pleased today to see the

:01:42.:01:46.

announcements about an additional investment in infrastructure,

:01:46.:01:50.

particularly the announcement around HS2 and making that happen, because

:01:50.:02:00.
:02:00.:02:10.

that is crucial to the increase in the government's capital spend on

:02:10.:02:12.

science. There were some disappointments in the announcement

:02:12.:02:14.

around the local growth fund. From the report by Michael Heseltine, we

:02:14.:02:17.

thought that might be as big a �70 billion but it's only going to be �2

:02:17.:02:20.

billion. But for replaced by Greater Manchester, that could be a lot

:02:20.:02:22.

extra a year that could contribute to local growth and jobs. Nice to

:02:22.:02:26.

see the sun shining there. It's time now to say goodbye to viewers in

:02:26.:02:34.

Scotland. Let's bring you up to date with some of the key points in the

:02:34.:02:42.

statement. As widely expected, the Chancellor is cutting �8.5 billion

:02:42.:02:48.

from departmental budgets in the 2015 to 2016 budget. Among the

:02:48.:02:54.

casualties of that, though not one casualties of that, though not one

:02:54.:02:56.

of the big ones, defence resource budget is frozen at 24 billion,

:02:56.:03:01.

which means a small cut in real terms. The health budget will rise

:03:01.:03:06.

to 110 billion, but it's not rising by very much in real terms. And the

:03:06.:03:10.

education budget, mainly on the schools side, will rise 53 billion.

:03:10.:03:19.

There will be a new welfare cap from April 2015. Though, as we were

:03:19.:03:24.

discussing, there are a few holes in that cap, there's a big one called

:03:24.:03:29.

pensions. He told us it will only cover about 50% of the welfare

:03:29.:03:33.

budget. State pension is excluded. Seven-day waiting for unemployment

:03:33.:03:40.

benefits. Remarkably, that's meant to save about �230 million. And the

:03:40.:03:44.

winter fuel payments will be removed from expats in hot countries. I

:03:44.:03:51.

guess if you are an expat in Ireland, you will be all right. On a

:03:51.:03:55.

public sector pay front, that pay cap has been at 1% for quite a

:03:55.:04:00.

while. It's days capped at 1% rises. This is a big announcement

:04:00.:04:03.

that the Chancellor made, the automatic progression pay in the

:04:03.:04:08.

civil service will be abolished. No more rises just full length of

:04:08.:04:12.

service or because you've completed another year. That will now go. The

:04:13.:04:17.

Chancellor indicated that he wants to remove these automatic pay rises

:04:17.:04:27.
:04:27.:04:30.

in the NHS, schools and police. But director of the Institute for Fiscal

:04:30.:04:37.

Studies. What have you found out that we haven't yet had a chance to

:04:37.:04:43.

find out ourselves? Not a lot. There wasn't a lot we found out that we

:04:43.:04:49.

didn't know several hours ago. It has been confirmed that this year,

:04:49.:04:53.

despite anything else, a huge reduction in a whole series of areas

:04:53.:04:56.

of public service spending, on top of what have been a range of big

:04:56.:05:00.

reductions. Some of the things you've been talking about were very

:05:00.:05:05.

well trailed, the pay changes pretty much the same as what he said at the

:05:05.:05:09.

Budget. The changes, the introduction of the welfare cap, he

:05:09.:05:13.

said there was going to be one of those. We've got a bit more detail

:05:13.:05:18.

now but not a great deal more. I think we will hear more in the

:05:18.:05:22.

Autumn statement and we might even get a number about next March. Nine

:05:22.:05:26.

months to work out how they are going to do that. There must be

:05:26.:05:31.

something hidden in the small print. I'm sure there is but I haven't

:05:31.:05:34.

found it. He did make something of a new national funding formula for

:05:34.:05:41.

schools. We found that a little hard to understand what it meant. Except

:05:41.:05:45.

it was thought the current formula was unfair. It's a potentially big

:05:45.:05:49.

change which will have a significant effect on individual schools up and

:05:49.:05:54.

down the country. The idea will be to have a single formula which will

:05:54.:05:59.

translate central government money into the money each school gets.

:05:59.:06:04.

It's based on a sort of a formula, sort of history, what local

:06:04.:06:08.

authorities do differently between themselves. So it is the case, as

:06:08.:06:13.

the Chancellor said, that similar schools can end up with very

:06:13.:06:16.

different amounts of money. But inevitably, when you make a

:06:16.:06:20.

perfectly rational reform like this, there will be winners and losers.

:06:20.:06:25.

That will be politically difficult, if, technically, it's the right

:06:25.:06:31.

thing to do. George Osborne praise a Tory backbencher who he said had

:06:31.:06:37.

campaigned for this. Yes.Looking at the speeches he has given in the

:06:37.:06:42.

past on this, he claimed that schools in Worcestershire, he says

:06:42.:06:48.

some of them are in areas which are among some of the 5% most deprived

:06:48.:06:54.

in the country, are getting per pupil, more than �700 less than

:06:54.:06:57.

neighbouring schools in Birmingham. That doesn't sound right, but that

:06:57.:07:02.

means some school in Birmingham is now going to face a cut in order

:07:02.:07:07.

that a school in neighbouring Worcestershire can get theirs.

:07:07.:07:13.

are not talking about a change in the total amount of money going to

:07:13.:07:18.

schools, that continues to be ring-fenced. But it is the case that

:07:18.:07:23.

because partly of the vagaries of history and partly because different

:07:23.:07:26.

authorities allocated differently according to the characteristics of

:07:26.:07:32.

their schools, similar schools get really very different amounts.

:07:32.:07:36.

are the expert on all things fiscal. We've also been talking about the

:07:36.:07:41.

rise in the government's borrowing costs. This may have been imported

:07:41.:07:45.

from a bit of Bond mayhem in the States. The fact is that bond yields

:07:45.:07:49.

have risen, which means it costs more for government to borrow. How

:07:49.:07:52.

much could that throw the government's projections of course,

:07:52.:07:57.

how much more might it has to end up cutting if these interest rates

:07:57.:08:02.

continue to rise? If they were to rise significantly, this makes a big

:08:02.:08:05.

difference. The level of outstanding debt continues to rise and rise

:08:05.:08:13.

fast. It's heading for �1.5 trillion. For all the talk of the

:08:13.:08:16.

deficit falling, the total amount of debt on which we are paying interest

:08:16.:08:18.

continues to rise pretty fast. The level of interest that we are

:08:18.:08:21.

currently paying is one of the big reasons why what the Chancellor

:08:21.:08:26.

referred to as annually managed expenditure continues to rise. It is

:08:26.:08:30.

not significantly created by welfare spending on the biggest change is

:08:30.:08:35.

the increase in debt interest. Plus the public services. The rise in

:08:35.:08:42.

interest rates would affect existing debt, that's already been gone away

:08:42.:08:46.

in the greedy yield. It's when the government has to issue new debt.

:08:46.:08:53.

It's not just completely new debt. You don't need to be an accountant

:08:54.:09:03.

to work out that 4% of 1.5 trillion is a lot more than 2%. It's about

:09:03.:09:09.

double, I reckon! It's a lot of money, that's the point. Even a

:09:09.:09:13.

smallish rise in interest rates can result in a big increase in the

:09:13.:09:20.

deficit. In terms of rolling over existing borrowing, it's about 150

:09:20.:09:26.

billion a year. If you are borrowing at 4% on 150 billion rather than 2%,

:09:26.:09:32.

that's a lot of money. The pay progression was one of the big

:09:32.:09:36.

announcements. My understanding is that when the implemented the freeze

:09:36.:09:42.

and then the 1% rise, they couldn't work out why it was that public

:09:42.:09:46.

sector pay continue to rise, it was supposed to be frozen. Then it

:09:46.:09:52.

dawned on them that there were so many categories where there was an

:09:52.:09:56.

automatic pay rise every year, in addition to that which had been

:09:56.:10:02.

agreed by collective-bargaining. So he's now, I assume, brought that in

:10:02.:10:07.

to stop it. That's quite a of what's been going on. Despite the public

:10:07.:10:12.

sector freeze and now the 1% increase is, actually, the public

:10:12.:10:16.

sector pay bill, earnings of the public sector, have still been going

:10:16.:10:20.

up a bit faster than in the private sector. That mostly reflects that

:10:20.:10:25.

they in the private sector has been doing very badly. There is still

:10:25.:10:29.

quite a lot of progression building to the public sector. And we are

:10:29.:10:32.

still getting to the end of the transition period from some of the

:10:32.:10:35.

big reforms from the last government. As I understand, the

:10:35.:10:38.

changes announced today re-announced, because he said

:10:38.:10:41.

something very similar in the Budget. He will be looking to

:10:41.:10:43.

increasingly move every central Whitehall department to a situation

:10:43.:10:47.

where there is no progression pay. There are already some where that is

:10:47.:10:51.

the case. Then he will take on other bits of the public sector. He didn't

:10:51.:10:57.

put a time limit on sorting that out. Is it still the case that

:10:57.:11:04.

despite these extra cuts of 11.5 billion for 2015 to 2016, the

:11:05.:11:11.

current 2016 to 2017 and 2018, to get the deficit reduction plan

:11:11.:11:15.

continuing as currently rejected, whoever is in power has got to find

:11:15.:11:20.

another 23 billion? That the numbers in the Budget Redbook. That is what

:11:21.:11:25.

the Chancellor set out as a way of getting to something adjusted. It

:11:25.:11:31.

will still be a very big deficit, even after those big cuts. That is

:11:31.:11:37.

what he has set out. That means this level of cuts again in the coming

:11:37.:11:41.

years, unless whoever is the next Chancellor said, well, there's got

:11:41.:11:48.

to be more taxes or we borrow some more. A lot of people have raised

:11:48.:11:51.

the possibility that you could have higher taxes to pay for this instead

:11:51.:11:55.

of more spending cuts. But there is another possibility, which is the

:11:55.:11:58.

Office for Budget Responsibility decides, as it did in 2011, that the

:11:58.:12:02.

economy is going to look very different in the next few years and

:12:02.:12:06.

that structural hole is smaller than they think. On historical record,

:12:06.:12:09.

that is perfectly possible. In either direction, the numbers could

:12:09.:12:15.

change a lot. Reason we've had some of the big changes over the last

:12:15.:12:19.

couple of years has been because the economy has done worse than expected

:12:19.:12:23.

and the obi are has changed its mind quite significantly about what will

:12:23.:12:30.

happen in the future. Even these bad figures are based on the assumption

:12:30.:12:35.

that the economy bounces back big time in the next few years. On the

:12:35.:12:39.

welfare cup, how meaningful do you think it will be, given that it

:12:39.:12:43.

looks like it will only cover about half of welfare spending? Cole the

:12:43.:12:48.

basic state pension is a very large chunk of welfare spending. If you

:12:48.:12:54.

get rid of that, it's a very large chunk of everything that isn't basic

:12:54.:12:58.

and additional pensions. The meaningfulness of it will come out

:12:58.:13:01.

whether it makes a difference to how the government actually goes about

:13:01.:13:11.
:13:11.:13:11.

that spending. Do you think this is sensible? It's quite a technocratic

:13:11.:13:17.

change. It's something that the Treasury and the DWP could do now if

:13:17.:13:22.

they wanted to. They could say, it looks as though spending on housing

:13:22.:13:25.

fell as if they wanted to. They could say, it looks as though

:13:25.:13:27.

spending on housing fell at a fit or disability allowance is rising, we

:13:27.:13:32.

will take it under control. They are providing themselves with an

:13:32.:13:39.

external impetus to do. I know we've got to let you go and we've got to

:13:39.:13:43.

move on, forget whether it's a structural deficit or just the

:13:43.:13:47.

normal bog-standard deficit. We are adding to the deficit, the national

:13:47.:13:51.

debt every year for the foreseeable future. When now do we start paying

:13:51.:13:56.

back this national debt of around 1.5 trillion? It starts falling as a

:13:57.:14:01.

proportion of national income not until about 2017, two years after

:14:01.:14:07.

the Chancellor wanted it to. One of the fiscal rules was the debt starts

:14:07.:14:13.

falling as a proportion of national income in 2015. It will be at least

:14:13.:14:17.

2017 and possibly later until that happens. Let's go back to Matthew on

:14:17.:14:27.
:14:27.:14:27.

College Green. With me is Kevin Maguire, from the

:14:27.:14:34.

mirror, and Anne McElvoy, from the Economist. What will you be writing?

:14:34.:14:38.

It's clearly a failure by George Osborne. He wasn't supposed to be

:14:38.:14:42.

still in austerity. He's borrowed billions extra over the period.

:14:42.:14:46.

These cuts, once you look behind those headline figures, there were

:14:46.:14:49.

some pretty mean moves. Look what he's doing with the unemployed. You

:14:49.:14:53.

lose your job and you will not be able to claim jobseeker's allowance

:14:53.:14:57.

for a week, no matter how long you've paid national insurance

:14:57.:15:01.

Contributions Bill �72. Every time your contract of two months or so

:15:02.:15:07.

finishes, you will not be able to claim an employment. I do not see

:15:07.:15:10.

where the fairness is in that policy. I think he has found himself

:15:10.:15:13.

in a difficult position. He can't defend Plan A, we are not out of the

:15:13.:15:20.

austerity that we would be out of. But on his side he does have quite a

:15:20.:15:24.

lot of interesting indicators. The eurozone looks like it's in a worse

:15:24.:15:28.

state than we are. All right, you can pick around who has given to or

:15:28.:15:33.

who has been taken away from in this review, but you can't get away from

:15:33.:15:37.

the big picture which will determine the argument in the next election.

:15:37.:15:40.

And that is, are we gradually getting better or worse compared to

:15:40.:15:49.

other countries? In terms of the choices he's made, is he right?

:15:49.:15:53.

have a different view to Kevan on that, but there was still money to

:15:53.:15:56.

be taken out of the department. It's interesting, despite a lot of fuss,

:15:56.:16:02.

you didn't hear a massive cry of resistance. David Cameron at Prime

:16:02.:16:05.

Minister's Questions taunted Ed Miliband, he said on the deficit, on

:16:05.:16:07.

immigration and welfare, he was on the wrong side of the argument, the

:16:07.:16:12.

wrong side of public opinion. We have seen a shift there from Labour.

:16:12.:16:16.

They are signed up to this now? are always on the wrong side in was

:16:17.:16:21.

fare. We saw with Tax Credits where Labour voted against them, I think

:16:21.:16:28.

they won the argument with the public. But they signed up to the

:16:28.:16:33.

cuts? Quite right that Ed Miliband has blurred some red lines that

:16:33.:16:37.

should be thicker and clearer between him and the Chancellor and

:16:37.:16:41.

David Cameron. Clearly, Cameron was setting a lot of traps for Labour on

:16:41.:16:46.

things like would you restore that weeks' unemployment pay that will be

:16:46.:16:51.

taken from people who'll lose their job, what about public service

:16:51.:16:57.

wages, public servants do real jobs, a three-year freeze, your pay is

:16:57.:17:07.
:17:07.:17:08.

going up less than inflation. need to have this? It was there to

:17:08.:17:12.

signal a behavioural change. There is another view that you need the

:17:12.:17:15.

behavioural nudges built into policy that you could possibly get to get

:17:15.:17:20.

people to go to work and stay at work. The childrening you have just

:17:20.:17:25.

described is not very good for people and it's not very good in

:17:25.:17:31.

terms of... Decisions do you think were put off until after the next

:17:31.:17:35.

election. We were just hearing from the IFS and the projected cuts to

:17:35.:17:39.

come. Duping the big and bold decisions, they've just not been

:17:39.:17:42.

honest. Two things about that, on welfare,

:17:42.:17:48.

we have moved along. -- do you think the big and bold decisions. The

:17:48.:17:51.

Labour Party's moved towards the idea of a cut and that is a really

:17:51.:17:54.

big change. We have made progress on that in this Parliament. After the

:17:55.:18:00.

next election, it depend on the public finances. What you call the

:18:00.:18:04.

bold, it will hurt them most. He's postponed those until after the next

:18:04.:18:08.

election. The only way to get out of this mess is economic growth and

:18:08.:18:11.

that's the one thing George Osborne hasn't got because he's strangled it

:18:11.:18:14.

at birth. Thank you very much for those early

:18:14.:18:18.

thoughts and pointers. Andrew, back to you.

:18:19.:18:24.

More political reaction now from Tim Acre of the UK Independence Party.

:18:24.:18:31.

What do you make of it all -- Tim Aker? Interesting that your viewers

:18:31.:18:37.

are again spending �32 billion on high High Speed Two and 11. 5

:18:37.:18:47.
:18:47.:18:48.

billion on foreign aid. We are building HS2 in Britain, that's not

:18:48.:18:53.

abroad? The foreign aid's obviously going abroad, but the High Speed

:18:53.:18:57.

Two, a trainline from London to Birmingham, look, it's a budget

:18:57.:19:01.

that's very political and it's going to come in, conveniently enough,

:19:01.:19:05.

during the next election campaign. The national debt is growing.

:19:05.:19:09.

many high speed rail lines did the UKIP call for at the last general

:19:09.:19:14.

election? Upgrading existing lines. It calls for two high speed rail

:19:14.:19:18.

lines? No, we looked at this and the manifesto called for high speed

:19:18.:19:24.

rail. Upgrading existing lines. The problem with High Speed Two is it's

:19:24.:19:27.

completely uneconomical and the people don't want it. That was shown

:19:27.:19:31.

in the county council elections where the route that high speed goes

:19:31.:19:35.

through, it could do very well. to like the idea of compulsory

:19:35.:19:38.

English language lessons? I don't like the idea of the taxpayer having

:19:38.:19:43.

to pay for it. If you want to come and live and work here, it would be

:19:43.:19:46.

nice if you spoke English beforehand. Indeed. Thank you very

:19:46.:19:50.

much. That's the UKIP reaction. We are joined by the Shadow Chancellor,

:19:50.:19:55.

Ed Balls, who you saw performing in the House. He's now arrived here.

:19:55.:20:02.

You may change the composition of the �11. 5 billion of the cuts for

:20:02.:20:06.

15-16, but I do take it you will accept that as the envelope for

:20:07.:20:16.
:20:17.:20:21.

spending in 15-16? I have to say, the disappointing thing is, he

:20:21.:20:25.

didn't do anything to get growth moving and tax revenues coming in

:20:25.:20:29.

this year and next year, no increase in capital spending, no house

:20:29.:20:34.

building. In 15-16, they are cutting in real terms cam tap spending. My

:20:34.:20:38.

argument today was, if there was actual growth to get the economy

:20:38.:20:45.

moving, then we'd be able to do less deep cuts for police and defence in

:20:45.:20:49.

2016 -- capital spending. If George Osborne carries on with a failing

:20:49.:20:58.

plan, we'd have to do that. It felt like failing deck chairs. Not the

:20:58.:21:01.

Titanic though, the analogy usually used? I switched it half way

:21:01.:21:07.

through, did you notice? The Titanic was fine when it left Belfast! Do

:21:07.:21:12.

you oppose any cuts announced today? The problem when you read the

:21:12.:21:17.

documentation is that there's not a huge amount of detail in there. I

:21:17.:21:22.

asked the Chancellor questions about policing and nursing. Sure. Do you

:21:22.:21:28.

oppose any of the cuts announced for 2015-16? It will me an exampleI'm

:21:28.:21:34.

asking you. That's how it works? terms of detail... I'm happy to...

:21:34.:21:39.

In terms of the overall numbers of 15-16, I think the cuts are deeper

:21:39.:21:42.

than they need to be, but they are failing on the economy and the

:21:42.:21:46.

deficit's going to be �96 billion. I don't want to see the scale of cuts

:21:46.:21:50.

but this is what we are going to have to deal with and work from.

:21:50.:21:54.

Within the totals, it's such a thin document, we have almost no detail

:21:54.:22:03.

but the individual cuts. Is it still your plan? The

:22:03.:22:07.

Government's capital spending hasn't changed from the announcement in the

:22:07.:22:15.

Budget, the just about �50 billion in 2015-16, gross, net, a lot less

:22:15.:22:21.

than that after depreciation. Would bit your sgention to borrow more to

:22:21.:22:27.

have more infrastructure investment in 2015-16? I'm not going to make

:22:27.:22:31.

that decision and that commitment at this stage two years ahead. What we

:22:31.:22:38.

said is for 2015-16, if we come into Government, we'll work from and

:22:38.:22:43.

inherit the current spending plans. On capital spending, they should be

:22:43.:22:48.

spending �10 billion more this year and next to boost house building and

:22:48.:22:55.

capital. We are worried that it's a 1. 7% real terms cut, 35% cut in

:22:55.:22:58.

Local Government budget, so therefore there is a case if the

:22:58.:23:01.

economy is still weak, and we need to build more homes to get the

:23:01.:23:05.

Housing Benefit bill down, there else a case for doing more. I said

:23:05.:23:09.

that on Sunday. You are not making a commitment on that yet? No.All

:23:09.:23:13.

right. The Government's excluded the basic state pension from the welfare

:23:13.:23:18.

cap. Would you? It's quite confusing what they've done over the last few

:23:18.:23:21.

weeks on this, because two weeks ago when I came on your programme, they

:23:21.:23:26.

were going to exclude all pension spending from the cap. You've incan

:23:26.:23:29.

colluded that in the cap when I interviewed you? Yes.So you would

:23:29.:23:35.

include it this en? I said we'd look at all social security and welfare

:23:35.:23:40.

spending because we should try to control all of it. If the Government

:23:40.:23:43.

despies to have a small welfare cap, but not the basic pension, that

:23:43.:23:47.

would be fine by us because we've said we'll stick with the triple

:23:47.:23:52.

lock alongside George Osborne anyway. If you are talking a 20, 30,

:23:52.:23:55.

40-year view of social security spending which I thought we were

:23:55.:23:58.

debating because it makes sense to plan these things long-term, of

:23:58.:24:03.

course you can't then, from a long-term view and cap, you can't

:24:03.:24:07.

then exclude pension spending which is actually about today's working

:24:07.:24:10.

age population. The Chancellor said exactly the same thing as me on

:24:10.:24:14.

Sunday, so a long-term plan, of course you have to look at all

:24:14.:24:17.

long-term spending, a short-term cap within the next Parliament, if the

:24:17.:24:20.

Chancellor can excuse the basic state pension because he's intending

:24:20.:24:26.

to have to triple lock, fine by us. I see. All right. Still not clear

:24:26.:24:30.

where you are including pensions in the cap or not? I explained if there

:24:30.:24:33.

is a short-term cap, which I think is what he's saying and he's

:24:33.:24:37.

sticking with the triple lock, we'll stick to that on the basic pension,

:24:37.:24:44.

so whether pensions are in or out is irinvestigate rant.

:24:44.:24:49.

-- irrelevant. I understand.

:24:49.:24:53.

When you look at what's happened to the cost of borrowing, just in the

:24:53.:24:58.

past month or so, and you look at events in the United States and in

:24:58.:25:03.

China, do you accept that if you get to power, when it comes to extra

:25:04.:25:08.

borrowing, it's going to cost you to lot more to borrow than it has in

:25:08.:25:12.

the last couple of years and the rising cost of borrowing will

:25:12.:25:17.

inhibit your ability to promise to borrow more? It depends on the what

:25:17.:25:20.

the long-term bond yield rises are telling you. If this is about the

:25:20.:25:26.

economies returning to normality, to growth with low in inflation but

:25:26.:25:31.

with more nor that will interest rates... That inhibits your ability

:25:31.:25:37.

to... Well it will increase the cost, clearly. However, what's gone

:25:37.:25:42.

on in financial markets is equity markets that are falling, worries

:25:42.:25:46.

from Turkey to Indonesia, Brazil, the China slowdown alongside the

:25:46.:25:50.

withdrawal of QE, the danger is in China and maybe more widely, we may

:25:50.:25:57.

see actually the credit crunch continuing and that may be there's

:25:57.:26:01.

some nervousness about investors about where economies are going.

:26:01.:26:07.

That may make it more important to have growth. The Chancellor's being

:26:07.:26:10.

very complacent in the British economy. This has been billed as a

:26:10.:26:17.

big event. As the IFS has pointed out, if the Government is to hit it

:26:17.:26:22.

own target of reducing debt as a share of GDP by 2018, so not getting

:26:22.:26:28.

the debt down to 2018, we are going to have to have many more years of

:26:28.:26:35.

these sorts of cuts. Do you agree that 2018 is an appropriate year to

:26:35.:26:45.
:26:45.:26:46.

start getting debt down? I'm fearful about coming back, with

:26:46.:26:49.

Spending Review, Spending Review, that the debt is higher than we

:26:49.:26:54.

thought and we'll go back to more cuts which goes back to my point,

:26:54.:27:00.

don't shift the deck chairs, get the growth moving. We have only got two

:27:00.:27:05.

minutes. Quick question, Nick, and then Stephanie? Chancellor said he'd

:27:05.:27:08.

get rid of pay progression in the Public Services with Labour,

:27:08.:27:11.

Chancellor says people should work seven days before they get the dole,

:27:11.:27:16.

or the GSA, would Labour back it? need to look at the detail

:27:16.:27:21.

obviously. On the welfare, English language for incoming migrants

:27:21.:27:25.

definitely. I think for the seven day, we have it three days at the

:27:25.:27:30.

moment, seven days, is it going to be a blank check? If it saves money

:27:30.:27:35.

and works, fine, in terms of paid progression, we have to look at

:27:35.:27:40.

this. Is it going to save money? I don't know the answer, but we'll

:27:40.:27:46.

study it. Anything you like in the review? Any caught your fancy?

:27:46.:27:53.

honest, I found it incredibly depressing. The economy's flatlined,

:27:53.:27:56.

the deficit's high and the Chancellor has a chance to come and

:27:56.:28:00.

say I'll get the economy moving and he wanted to talk capital and did

:28:00.:28:04.

nothing for the next three years, zero. What a missed opportunity. I

:28:04.:28:10.

find it very, very gloomy. I fear for what is going to be the future

:28:10.:28:13.

of Public Services and the state of our country for our children.

:28:13.:28:17.

that raising of the spirits note, we'll leave it there. Ed Balls,

:28:17.:28:20.

thank you very much. That's all for viewers on BBC Two. There's

:28:20.:28:24.

continued coverage of today's Spending Review over on the BBC News

:28:24.:28:28.

Channel. I'll be back with Jo Co with the Daily Politics at 11

:28:28.:28:31.

Andrew Neil presents live coverage of George Osborne's Spending Review, with expert analysis from Nick Robinson, Stephanie Flanders and Robert Peston with political reaction from Westminster and around the country. Includes live coverage of Prime Minister's Questions.


Download Subtitles

SRT

ASS