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The Spending Review

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George Osborne wants Britain to live within its means.


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


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


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


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


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


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


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


all while balancing the books - which means big cuts


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


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


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


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


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


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


I'll be here outside Parliament getting reaction from from


across the political spectrum to a speech that could define


And you can follow the story and find all the best analysis


on the BBC news website, throughout the day.


Did I mention best analysis? Of course I did.


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


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


leaves the BBC, our outgoing economics editor Robert Peston.


We'll be frisking him before he leaves


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


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


It's Mr Osborne's thirrd Spending Review since he entered


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


departments and public services over the next four financial years.


Cumulatively, we're talking about well over ?3 trillion.


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


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


the latest official forecasts for inflation, employment, borrowing and


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


So a lot riding on today for the economy,


our public services, our national and economic security -


and, of course, for George Osborne himself.


We have seen George Osborne leave the Treasury a few minutes ago. He


made the trip safely. But the Prime Minister's car had a nasty prank


this morning outside Number Ten Downing St.


Do you think the Prime Minister was inside? I'm sure government


ministers will be hoping that is not a harbinger of things to come.


Laura, the Chancellor is under particular financial pressure, he


has promised to get us into surplus by the end of the decade. Every time


he turns a corner someone says, I want more money for this?


Absolutely. Today is where the rhetoric smashes up with reality and


their big aspiration is also their big faculty. How do you make a set


of hard-fought decisions, hefty cuts to many departments, look like they


are a programme, a coherent programme that matches the


priorities of the millions of voters in the middle, the floating voters


the Conservatives did not just want to get in this year, but want to


secure with an even bigger majority next time round. That is what it is


all about. The difficulties, with more money for health and housing,


less money to local council, cuts to social care and cuts to the police.


The most acute demonstration to this dilemma of all, what on earth will


he do to tax credits? Significant cuts to people who are already in


work. He had to signal a humiliating U-turn. The detail will be crucial


today. And he is a Chancellor only halfway through his deficit


reduction strategy which he started in 2010, he should have finished it


by now. And yet on health, security, tax credits, defence, he is being


asked to spend more money. lopsided approach to actually


balancing the books, which lopsided approach to actually


significant. There are people in lopsided approach to actually


Conservative Party think the ring-fencing of health and other


departments was fundamental strategic mistake. Instead of


looking at the books starting from zero, they are looking at the books


in a way which makes it completely lopsided and therefore making the


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


promised to do, it makes it almost impossible. OK.


promised to do, it makes it almost We should point out no one was


injured in the making of that crash, if crash is


Today's statement is fundamentally about finding


the further ?20 billion of savings the Chancellor says is needed to


eliminate the deficit and move into modest surplus by 2019-20.


We'll look in a moment at where he might find those savings.


First, Robert take us through the Osborne plan.


First, Robert take us through this school rules. Let's look at the


deficit he forecast for this this school rules. Let's look at the


in the July budget. -- famous fiscal rules. We already know he's going to


miss the deficit of ?70 billion. Over the course of the parliament in


the last budget, he saw that deficit declining and actually achieving a


surplus, I think you have already mentioned, of ?10 billion in


2019-20. My expectation is that surplus will be revised down,


because of the sort of surplus will be revised down,


have been talking to Laura about, the pressure just Ben Moore on


priorities like security and housing. So, let's put that now into


the context of the national debt, a whopping ?1.5 trillion in round


numbers. In percentage terms, that began the last Parliament just under


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


since then, and is currently a bit over 80% of GDP. In that last


budget, the Chancellor made a big thing about how this would be the


peak year for debt as a percentage of GDP. He might not achieve that.


Let's see what the OBR says and we will have to wait until April am


frankly, to find out the truth of that. Borrowing is not going quite


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


get the debt down significantly over the parliament. The last set of


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


national income. The background to all of this, it matters to him and


all of us, it is what happens to the economy in the round. He started the


last Parliament with very weak growth. It was 0.7% at its weakest


in the last Parliament. But then it grew progressively. It accelerated


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


the big developed economies, almost back to where we were before the


crash, but growth has weakened since then. We expect it to be about 2.4%


this year, and actually, we don't expect it frankly to accelerate much


from that in the coming years. It could even weaken the bit. Why?


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


have talked a lot about the slowdown in China. It is the big economic


event right now. We cannot rule out a Chinese crash. If that were to


happen, of course, everything we hear today becomes irrelevant. The


shock to the global economy in those circumstances would be significant.


He is making great play of making friends with China. He is assuming


the slowdown in China will be gradual and manageable. We will have


to wait and see. We will indeed. Thank you.


Today's Spending Review will set spending limits for every Whitehall


department for each of the next four financial years.


The Chancellor has been locked in discussions with his Cabinet


colleagues for weeks to agree the figures.


The meetings have taken place at the Treasury, just across the


The Chancellor claimed on Sunday the negotiations have been amicable.


That's not the word ministers whose departments


We'll find out who is bruised, bloodied or unbowed today.


At the heart of the Treasury is a circular courtyard - you might


recognise it because it's often used as a location for filming, including


the latest James Bond, which means it's now famous across the globe.


Now, we couldn't get Jo Coburn inside the real courtyard, despite


her being pretty famous - but here she is to tell us more about


Welcome to our virtual Treasury courtyard.


Now, they don't have one of these in the real courtyard,


but it represents everything that the Government is due to spend this


I'm going to start by highlighting a few of the most significant parts


You can see the ?217 billion that goes on social security.


That includes everything from jobseeker's allowance


And there's the ?35 billion the UK is due to spend this year


George Osborne says that's a figure he's is determined to bring down.


Now, the focus of today's statement is the money that goes on


administering and delivering public services - departmental spending.


You can see it's just under half of the total the Government spends.


Now, we're going to delve into the budgets of a few of the most


It's the NHS that accounts for the biggest chunk


Now, the Chancellor isn't going to find any of his savings here,


because he has promised to increase NHS funding in England


The Government has also promised a real-terms increase


That's part of its commitment to meeting the Nato target of spending


The Government has also committed to spending 0.7% of GDP


on overseas aid, meaning that budget is also protected.


So, the Chancellor is not going to find any of his ?20 billion


of savings says he he needs to make from either health, defence or aid.


So, where could it come from instead?


Well, what about from the education budget, a big part of what the state


Here, the Conservatives have promised


a cash increase per pupil in schools.


That means savings from here would be limited, although


the rest of the budget doesn't have any guaranteed protection.


Here is the money that goes to English local authorities.


This was one of the first departments to agree to big savings


The Home Office, on the other hand, took longer


The single biggest thing Theresa May's department spends


money on is the grant it gives to police forces in England and Wales,


although they also get some of their money from other sources, including


Some of the other departments that are going to have to find


big savings over the next four years are


the Departments of Business, Transport and Justice.


Let's go back to that big part of Government spending I mentioned


Of course, that is where a lot of the focus has been in the weeks


Now, again, here there is plenty the Chancellor won't touch.


The state pension is a massive part of the Budget.


But the Government has a long-standing promise not to cut it,


The other areas of big spending the Government has had to look to


are housing benefit, disability benefits and incapacity benefits.


And you can see that big sum of money, ?30 billion,


that is due to be spent on personal tax credits this year -


an area where the Chancellor has found that making savings can prove


Net speak to the BBC business editor now. One business that seems to be


very happy because of what was leaked by the Treasury, the


apparently 400,000 affordable homes, as the Chancellor calls them. This


morning, house-building shares went through the roof? They did indeed.


Listening to Laura and Robert, what is interesting is how it much the


Government need the private sector to support delivery. The strategic


purpose of George Osborne is to take pressure off microstate provision,


give it to the private sector and say, go on, help us provide the kind


of country and economy we want. In house-building, the centrepiece of


David Cameron's Conference speech, he said he didn't want Generation


Rent, he wanted to help people into affordable homes, that is an example


of that. The Government have struggled with the supply-side


problem. The issue they have had is that they have been constantly


increasing demand. So, the help to buy policy increases demand, the


support that we are hearing will be in the Autumn Statement that will


help people buy affordable homes, that increases demand. They are also


going to put some direct money into housing companies for them to build


affordable homes. The problem is that housing new-builds are down


slightly. That is because there is a real skill shortage in housing. Go


country, they can't find enough country, they can't find enough


in London, it had closed down by Thursday night, the builders had


their money for the week and they took Friday off. House-building


companies are building as many houses as they feel comfortable


with, and their profits are up hugely, 40%. The other thing to


watch for is how will social care changes, moving taxes down to local


authorities to provide support for social care, how will that have an


impact? The private sector provide the bulk of social care homes, they


have been complaining about the rise to the National Living Wage


affecting their business. They are being squeezed by having to pay more


for workers, a lot of them on minimum wage, and getting less money


from local authorities? Yes, those things, companies like Four


Seasons, the biggest provider in the UK, has been saying it is no longer


profitable to provide social care. It has become difficult. Sajid


Javid, the Business Secretary, one of the unprotected departments, how


much of an attack on his department will there be?


If you've just joined us on BBC2 and the BBC News Channel,


you're watching our coverage of the Spending Review and Autumn


Let's join Jane Hill now, who's outside the House of Commons.


Good morning, thank you very much. Let's get the thoughts of two of the


new intake of MPs. With us in a blustery House of Commons, Oliver


Dowden for the Conservatives and Rebecca longline for Labour. It is a


Spending Review, are we going to be looking at headlines about cats? Are


those the headlines that George Osborne is comfortable with? The


headlines he will be comfortable Osborne is comfortable with? The


with, remember we are still in a situation where the Government is


spending far more situation where the Government is


That means we are borrowing, and every pound of that is


future generations. We are determined to get that under


control, run a surplus by the determined to get that under


the parliament so that when the next crisis hits, we are spending less


than we earn and we are in a better position to deal with that. I think


that will be the central thrust. We know that is the thrust, but there


are plenty of economists, including the very respected IFS, who say that


the Chancellor has locked himself into a corner, and given the date,


he has boxed himself in? It's important we have a date, by 2019,


when we aim to run the surplus, the economy, hopefully, will have been


growing for ten years. If the economy has been growing for ten


years and we can't grow a surplus, how would we be able to cope when


the economy, inevitably, falls into another recession? We don't believe


boom and bust has been abolished. So it is just our custody, that has to


be cuts for those reasons? I agree with Oliver on the fact that we need


to reduce the deficit, but it needs to be done in a long term,


sustainable way. He has missed his financial targets time and again. He


referred the IFS making comments about it. They have stated in order


to meet its targets this time, he has to make cuts of an unprecedented


scale. The cuts are no doubt going to fall on areas of key economic


growth, such as education, skills, business investment. We need to


start planning the infrastructure, investment, manufacturing strategy.


I doubt we will have any of that from the Chancellor today. Our


business editor was just saying that share prices are up in


house-building companies, if we get lots of positive news about


house-building, is that going to be the one positive that even your


party would agree with, the desperate need for housing? I think


that the Chancellor is definitely a shrewd political operator, he will


offer some sweeteners to lessen the blow. In terms of house-building,


the devil is always in the detail. I welcome the pledge to build 400,000


more houses. We want to see where those houses are going to be and if


they are going to be put in the social rented sector. A quick


thought about a more political side to it, this is about George


Osborne's personal ambitions, he's got to shake things so that the pain


comes soon, so by the time he has his eyes on a even bigger job, the


bulk of the cuts have gone? I think his ambition is on turning his


country around. It is interesting what Rebecca was saying about


investment. One of the decisions he has taken is to protect things like


investment in schools, so it is maintained every year, per pupil. On


housing, the massive investment in housing to make sure young people


get on the housing ladder. The Chancellor wants to make sure that


everybody gets the best start in life, investment in schools, housing


in young people or for old people, so when they have worked hard all


their lives, they get dignity and security in retirement, which is why


there has been a big increase in the state pension. That is where his


efforts are focused. We must leave it there, thank you very much. Much


more from the once we have heard from the Chancellor.


George Osborne's going to be talking a lot


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


At the heart of that is the city of Birmingham.


Jo Coburn has left her virtual Treasury courtyard and is already


Who needs HS2 when you have the magic of television?


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


centre in Birmingham. I'm here to talk about the Autumn Statement and


George Osborne's five-year spending plan. First to talk to us, a


representative from Unison and from the Taxpayers' Alliance. The


announcement that extra cash to the NHS would be front loaded, welcome


news? Any extra money is to be welcomed, but it is too little, too


late. The real issue is the chronic underfunding of social care. It


means elderly patients cannot be discharged quickly enough back into


their homes, which means they are taking up beds and we are definitely


going to end up with a real crisis in A this winter. There will be a


lot of focus on savings and cuts that George Osborne has pledged to


make in the Spending Review and over the course of the parliament. Does


he really want to be known as the Chancellor of austerity? He ought to


be known as the Chancellor that balances the nation 's books. If


he's to do that, he has to make savings. This year, the Government


is spending ?70 billion more than it raised in revenue. That means


borrowing and the national debt is going up and we are paying more debt


interest payments and we are spending on defending the nation,


the defence Budget. That is unacceptable. He needs to balance


the books, get the nation living within its means to ensure future


prosperity. Lets get a little bit more about growing the economy.


Let's talk to somebody from the Greater Birmingham Chamber Of


Commerce. We were talking about austerity against growth. What is


more important to businesses? Got to be a mix. We recognise that the UK


deficit is out of control, the Government spending more than the


defence Budget servicing the interest on the debt. It really does


need to be put in line, but it can't be at the expense of facilitating


business growth. That is what we are looking for today, how the


Chancellor was going to help businesses, which helps grow jobs


and, in turn, helps increase the tax receipts to get the deficit down.


What particularly would you like to see him do? We would like some


clarity on a number of points, the apprenticeship levy, how it is going


to work. Businesses are really keen to boost the skills and


employability of youngsters in the region, but we don't know how the


funding is going to work. Clarity would be fantastic. We would like to


see further announcements on business rates. The Chancellor was


going to devolve spending on that, but we need reform and more


certainty on whether there will be small business rates relief into


next year. Henrietta, thank you. One of the things that will be most


important to people as they are starting to think about Christmas


shopping is personal finances. Their financial security. So, who better


to talk to than our personal finance expert, Annie Shaw? One thing is


people were worried about is cuts to tax credits. George Osborne run into


problems with those plans, and there are expectations he will soften that


in some way. If he does, where else could he get savings? This is the


big question. Is he going to go back to the same people and try to get


the money out of them in other ways? Things like cuts to housing benefit,


that would be affected by cuts to their tax credits. Is he going to go


around the periphery? I think I would be slightly worried about


these pensions... Pension scene. He said he won't do any major pension


reforms until after the Budget, but I think there could be some measures


stopping the buy now while stocks last, people doing last-minute


avoidance things like stuffing pensions now. I would watch out for


tinkering with pension issues. If you have any questions to put to our


guests saw any stories, if you are in Birmingham, you can e-mail us,


tweet us or you can send us a text message. It's too much for me to


remember without my Hundi -- handy iPad.


And you can also take advantage the BBC's range of expert analysis


and all the latest developments on the BBC website.


It's coming up midday here at Westminster -


very soon we'll go over to the House of Commons


and that will be followed by the Chancellor's statement.


First, let's look at some of the measures that have been


already announced, and others we're expecting to hear today.


The biggest was the announcement earlier this week, we were told the


NHS in England, equivalent spending will be for Scotland, Wales and


Northern Ireland, it needs to get an extra ?4 billion above inflation


next year, part of the frontloading that the NHS has been asking for to


get the money in now as it rises towards an extra ?8 billion towards


the end of the parliament. Schools and foreign aid are protected


departments, so no cuts expected in these areas. Defence was not


protected, it is now, indeed, it got an extra ?12 billion earlier this


week to spend on defence equipment over the next five years, taking the


total on defence equipment to 178 billion. Locked in, like foreign


aid, as a percentage of GDP, 2%. Tax credits, the Chancellor came out


with a number of cuts in the July Budget. It is only November, but


he's already having to roll back on that. It will cost him money and we


will look to see how he does it. We expect tax credit changes to be


eased. The latest thing to be leaked by the Treasury leak machine is the


idea that the Government will encourage, preside over the building


of 400,000 affordable homes at a cost of ?7 billion. There


of 400,000 affordable homes at a an alert on these, a warning, the


Government often set is kind of targets, whether they meet them is


another matter. Because central government spending and local


government spending has been squeezed, the Chancellor will allow


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


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


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


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


most, it tends to be the poorer areas, we'll get that much from a 2%


rise in council tax, those are all things we will be keeping an eye on


and discussing as this three and a half hours goes on. Laura, we have a


pretty fair idea what he's going to do, they have helpfully leaked a lot


of it! do, they have helpfully leaked a lot


is the rabbit? I'm not do, they have helpfully leaked a lot


going to be a rabid today. There will be surprises, I'm


understanding, but I don't think, or I have


understanding, but I don't think, or be led back to their


constituencies... Which he has been be led back to their


famous for? Indeed he has, I don't think we will see it. There will be


surprises, cunning wheezes, but I'm not too sure about that. May be like


a little mouse, rather than a rabbit? He has an astute political


as well as economic brain. On this occasion, the judgments are similar


for him personally. We are still relatively early in Parliament.


Personally, he has had a bit of a popularity dip as a result of the


tax credit debacle. I think he will be thinking what I need to do is to


make some quite tough decisions, because the last thing he wants is


for things to go wrong when he is running for the Tory party


leadership. Everyone in this House and everyone


watching at home know from Yes, Prime Minister, the central role


that Bernard plays in the life of the Prime Minister and Number Ten


Downing St. This morning, my Bernard, my principal private sector


we died of cancer. Chris Martin was only 42. He was one of the most


loyal, hard-working, dedicated public servants I have come across.


I have no idea what his politics were but he would go to the ends of


the Earth and back again, for his Prime Minister, for ten and the team


we work for. Today, we are leaving the seat where he used to sit empty,


as a mark of respect to him. We think of his wife, Zoe, his family,


the wider Number Ten family, because it is like a family, and we feel


like we have lost someone between a father and brother to all of us, and


whatever happens, we will never forget him.


Mr Speaker, this morning I had meetings with ministerial colleagues


and others, and in addition to the duties of the House, I will have


further meetings today. Can I firstly echoed the prime Mr's


sentiments regarding the passing of Chris Martin. I'm sure all members


will have heartfelt thoughts and prayers today and we would be


grateful if they could be conveyed to the family at this time. The


Prime Minister is a champion of family life, so could he confirm


that the announcements he will make today will pass the family test for


vulnerable people? Can I thank the honourable member for her words.


Families are the best welfare state we have. They teach us the right


Phileas, they bring up our children and they care for us when they are


sick and unwell. We will boost the national Living Wage, delivered tax


cuts and crucially help with childcare. All of these policies


should pass the test of helping Britain's families.


Jeremy Corbyn. Thank you, Mr Speaker. On the half of the


opposition, could I also express my condolences regarding Chris Martin.


The Prime Minister told me how it will he was on Remembrance Sunday


and I'm glad he could visit him at that time. Many members of


government appreciates the work he did in the very highest and best


traditions in the civil service of this country. If our condolences


could be passed on, I think that would be very helpful.


This week, 55 Labour councils has made a commitment for their areas to


be running entirely on green energy by 2050. With the Paris climate


talks just days away, with the Prime Minister commend those councils? I


certainly commend councils for wanting to promote green energy and


we have had green tariffs and other measures to help, particularly solar


power and also wind power. We will be taking part in the Paris climate


talks because it is absolutely vital to get that global deal, but we have


to make sure we take action locally as well as globally. I would make


the point that if you compare the last Parliament, to the previous


parliament, we saw something like a trebling of the installation of


renewable electricity. The commitment of those Labour


councils is a bit of a contrast to the Prime Minister's performance. He


used to tell us that his was the greenest government ever. Does he


remember those days? Does he agree with the Energy Secretary that


Britain is likely to miss its target of getting 15% of our energy from


renewables by 2020? First of all, I believe that the


last government does rightly claim that record, the world's first green


investment bank, pioneered in Britain. The trebling of renewable


energy, a meeting of all our climate change targets contributing to an EU


deal that means we go to the climate change conference in Paris, with a


very strong European record and the ability to say to other countries


that they should step up to the plate. It was in the last


Parliament, we spent record sums helping developing countries to go


green, and in the next five years, we will be spending $9 billion on


helping other countries, which will be crucial to building the Paris


deal next week. The problem with the prime and is


the's answer is, the gap between Britain's 2020 target and our


current share of renewable energy, is the biggest in the European


Union. Some of his decisions he has made recently, such as cutting


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


green deal, cutting support for wind turbines, putting a new tax of


renewable energy, increasing subsidy for diesel generators, is it any


wonder that the chief scientists of the United Nations environment


programme has criticised Britain for going backwards on renewable energy?


The facts paint a different picture. As I said, trebling of wind power in


the last Parliament. That is an enormous investment. Also, he makes


the point about solar panels. Of course, when the cost of


manufacturing solar panels plummets as it has, it is right to reduce the


subsidy. If we don't reduce the subsidy, we ask people to pay higher


energy bills, something I seem to remember the Labour Party in the


last Parliament making a lot of. I think if you look for the


secretaries climate change's speech, you can make the right


balance between affordable energy and making sure we meet our green


targets. That is what we are committed to. In addition to that,


building the first new clip power station for decades in our country,


something the Labour Party talked about a lot in government but we are


putting into action now we are in government -- first new nuclear


power station. In the past weeks, thousands have


been lost in solar companies in Britain as they have gone bust. I


have a question from some apprentices solar fitters. They say


cutting feed in tariffs means you are stopping solar projects that


they need to help our environment give us jobs. They asked the Prime


Minister this: Wide you want to throw all this away? We are doubling


investment in renewable energy in this Parliament and as for solar


panels, I think I am right in saying, in the last Parliament, over


a million homes were fitted with solar panels. It is right we go on


supporting that industry, but we should do it recognising that the


cost of manufacturing solar panels has plummeted, and so therefore the


subsidy should be what is necessary to deliver solar power, not as what


is necessary to pump up the bills of hard-working families.


That is not much help to those who are losing their jobs in the solar


industry at the present time. However, I would like to ask the


Prime Minister something else. Today is the International Day for the


elimination of violence against women. On average, two women a week


are killed by a current or former partner, and domestic violence


accounts for a quarter of all violent crime. Can the Prime


Minister explain why one third of those referred to women's refuges in


England are now being turned away? We have put more money into refuges


and the Chancellor will have something to say about funding


women's charities in his Autumn Statement today. The fact is, when


it comes to rape crisis centres that we protect or domestic violence


centres that we fund, this government has a good record on


helping women and making sure that the crime of domestic violence is


properly investigated by the police and prosecuted in our courts. 20, Mr


Speaker. The late Denise Marshall who was chair of a domestic violence


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


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


very best service and the community owes you a right to recover. In


2012, the Prime Minister's government signed the Istanbul


convention on preventing and combating violence against women.


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


stopped the closure of Eve's. Will the primers to tell the House when


he will ratify the Istanbul convention. We are going further


than that. We will be putting more money into women's charities,


including charities which fight domestic violence, which fight rape


and make sure we cut out these appalling crimes in our country. In


addition to that, we have also done more than any previous government,


in terms of preventing forced marriage and preventing the horrors


of FGM which do not just happen in Nigeria and countries in North


Africa, they happen here in our country as well. I don't think any


government before this one has a stronger record on those grounds.


Thank you, Mr Speaker. I have many constituents and Lewis who come to


my surgery desperate to end their own home. Many of them are on a low


income and they recognise that a monthly mortgage payment would be


significantly lower than that current monthly rental payments.


Does my right honourable friend share in the excitement of any of my


constituents, towards the starter homes initiative contained in the


housing bill which will see affordable housing lower than the


monthly outgoings of many people in this country?


I do share my honourable friend's enthusiasm for that. Clearly there


are lots of individual interventions like help by which has basically put


buying homes in the of many more people by reducing the deposits they


need. We can help people to save which we do with our Help to Buy ISA


will stop our biggest contribution we can make is by building more


housing which we will be doing during this Parliament, and


crucially by maintaining during this Parliament, and


secure and stable economy with low interest rates so people can afford


to take out a mortgage. May I begin by associating the


Scottish National Party with the condolences of the Prime Minister.


Having spoken to him last condolences of the Prime Minister.


aware of how much a personal loss it is to him and also to


aware of how much a personal loss it Martin's family and friends. The


fatal dangers of Martin's family and friends. The


consequences and escalation in Syria, are clear for everybody to


consequences and escalation in see in these days. It is agreed that


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


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


which countries does the Prime Minister having his plan for Syria?


Firstly, can I thank the right honourable gentleman for his


comments on Chris Martin who I know helped all members of this House


when they had enquiries. Let me deal with the issue of Syria.


I am not for one moment arguing that action from the air alone can solve


the very serious problem we have with Isil. Clearly we need a


political settlement in Syria and government in Syria which can act on


pensively with us against Isil. The question for the House that we need


to address tomorrow and in the to come, can we afford to wait for that


political settlement before we act? My view is, we cannot wait for that


political settlement. Should we should work as hard as we can for it


but we should be acting now with our allies, because it is about keeping


our own people and our own country safe. He asked specifically about


ground troops. There are troops in Syria. The three Syrian army and the


Kurdish forces that would work Syria. The three Syrian army and the


us to help eliminate Isil, but the full range of ground troops will


only be a valuable when there is a political settlement in Syria. The


question is simple, can we wait for that political settlement before


taking action to keep our people safe at home, and my answer is, we


cannot afford to wait. The United Kingdom spent 13 times more bombing


Libya then investing in its reconstruction after the overthrow


of the Gaddafi regime. We construct in Syria will be essential to


of the Gaddafi regime. We construct restore stability and allow refugees


to return. How much does the Prime Minister estimate this will cost and


how much has he allocated from the UK?


We have one of the largest development budgets anywhere in the


world as is the support that we have given to Syrian refugees which


stands at one of the largest development budgets anywhere in the


world as is the support that we have given to Syrian refugees which


stands at ?1.2 billion in demonstrates. Part of our plan will


be to help fund the reconstruction and rebuilding of Syria alongside


the political deal that we believe is necessary. I would far rather


frankly spend the money reconstructing Syria, than in


supporting people kept away from their homes, kept away from their


country, who do you want to return. I know that my right honourable


friend was aware of the growing cause of concern surrounding the


conviction of Alexander Blackman, the former Royal Marine


non-commissioned officer who shot an insurgent in 2011. If there is


indeed new evidence and many feel that has been a miscarriage of


justice, would my right honourable friend agree with me that it is


right that this matter should be looked into again? This is exactly


what the Criminal Cases Review Commission is there to look at,


where there may have been a miscarriage of justice. We gave the


internal report of the Naval services to Sergeant Blackman's


legal advisers. There is proper disclosure in this case and the


legal team have said they look at the option of applying to the


Criminal Cases Review Commission. Let me say while we are on this


point that our Royal Marines have a worldwide reputation as one of the


world's elite fighting forces. They have made an success, and incredible


conservation to our country and we should pay tribute to them. The


Government's handle of child sexual abuse inquiries has done little to


instil public confidence so far. The Gothard inquiry announced they had


accidentally and permanently deleted all of the victim testimony


submitted through the website over an 18 day period, without anyone


from the inquiry ever reading now. These victims deserve justice, and


for their voices to be heard. Can the Prime Minister please tell the


House what independent investigation has taken place to establish the


cause of the data loss and to establish whether or not there was


any criminality behind it? I am sure the whole House will welcome the


fact that the Goddard inquiries about running. The best way to get


justice for these victims is to make sure we have the full independent


inquiry. The specific issue she raises, it is a matter for the


inquiry, if there is further details, I will write to her, what


matters is that it is up and running. 3000 jobs in Newark were


lost and a Labour. This month, we celebrate the 10,000 new job in


Newark since 2010. Does the Prime Minister agree that once again


Newark leads the way to a strong economy, high employment, higher


wages and lower welfare? I'm delighted to hear that Newark has


met this landmark and it is worth remembering that these 10,000


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


with the chance to support their families. I well remember visiting


my honourable friend's constituency. I can't promise to visit as many


times in this Parliament as the last, but I do recognise a business


that we visited announced the creation of over 200 jobs. I am sure


others will follow. Has the Prime Minister ever heard of Alan


Cartwright, Stefan Appleton? Teenagers that were stabbed to death


on the streets of Islington last year. Vaso was murdered just two


days ago. Given the growing culture of drugs, guns and violence in my


borough and many others like it, does the Prime Minister really think


it is in the interests of my constituents, for their safety and


security, to cut the Metropolitan Police? First of all, every life


lost in a way that she talks about is a tragedy. Many of these lives


have been lost because of drugs, gangs and because of my crime.


Overall, knife crime has come down over the last few years, which is


welcome. There are still too many people carrying a knife and not


recognising that not only is it against the law, it is also an


enormous danger to themselves and others. We will continue with the


tough approach on knife crime, with the work we're doing to disband and


break of gangs and the work to try to deal with the problems of drugs.


When it comes to policing, what we have seen in London is an increase


in neighbourhood policing. The Metropolitan Police have done a good


job at cutting back-office costs and putting police on streets. After


many years of neglect under Labour, Cornwall is once again seeing


investment in roads, railways, airport and in tourism. But Cornwall


is ambitious to diversify its economy and become a centre for the


UK aerospace industry. Indeed, Newquay airport is to be the


forerunner for the creation of a UK spaceport. Could the Prime Minister


provide an update on the decision, and does he agree with me that


Newquay would be the perfect place for it? It is good in this


Parliament we have such strong voices for Cornwall speaking up for


that county and making sure that it makes the resources it needs. I'm a


strong supporter of the airport, not just as a user, but also I think it


provides the opportunity for a hope of great businesses in Cornwall. We


want to become the European hub for space flight, which will attract


further investment into the UK and create jobs. There are a number of


other airports in the running, I wish them all well and I can tell


him we are aiming to launch selection process next year. The


Government and I disagree on much of what constitutes progress on gender


equality, but I agreed with the Prime Minister when he pledged to


change the law to include mothers on marriage certificates. I have heard


nothing since. I wondered if the Prime Minister agreed with me that,


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


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


take this important, symbolic step to ensure that mothers are not


written out of history? This is an area where the honourable lady and I


agree. My understanding is that the proposals for legislation have gone


to the relevant committee in Government and she has made a very


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


session. Will the Prime Minister join with me in commending the


French government for facing down terror are continuing with the


climate summit in Paris next week, and will acknowledge the important


role of legislators such as at the Globe Summit on the fourth and 5th


of December, does he agree with me that his personal presence in Paris


sends a message out to the world about our continuing commitment to a


lasting climate deal? I am grateful for what my honourable friend says.


I will certainly be going to Paris to the start of this vital


Conference, to set out what Britain and the European Union will be doing


to bring about this deal. What we put on the table in terms of climate


finance, nearly $9 billion over the next five years, is one of the most


generous offers made by any country anywhere in the world. The good news


about the Paris Conference is that we are going to see China and


America as signatories to a deal. That means that much more of the


world's emissions are going to be covered by the deal. What we have to


make sure we achieve is to make sure it is a proper deal with proper


review clauses, to make sure we keep to 2 degrees. Nobody should be in


any doubt that Britain is playing a leading role, and has lead by


example and with money. Mr Speaker, there will never be a future where


we do not need steel, but the Government is spending millions of


pounds to compensate for the use of you... -- loss of UK steel-making.


Guy Aston Prime Minister he will send a clear signal that he will do


whatever it takes to back a sustainable, cutting-edge UK steel


future? We want to see more steel across the world stamped with made


in Britain. I completely agree with the honourable lady. We want to


support the steel business, which is why we are taking action on


procurement. When we look at what we have done through the Royal Navy,


what we can do through Railtrack and other organisations, we can back


British Steel. We are also going to be exempting users like British


Steel from energy usage charges. It does go to the questions asked by


the leader of the position. If we endlessly pressure builds for


everybody else, it costs more to exempt the high users. Everything we


can do to help British Steel, including a very clear


infrastructure plan you will be hearing about in a minute, is all to


the good. In 2010, unemployment in my


constituency stood at 5% of the population. It has now dropped to


just 1.6%. I am sure my honourable friend agrees with me, to help those


people still unemployed and boost productivity and wages in places


like wire forest, we need to offer more opportunities for skills


training. Does my right honourable friend agree with that, and what


more can the Government offer in order to help places like Wyre


Forest? All young people should have a real choice of being able to take


on in chilly an apprenticeship, or to be able to go to a university. We


don't want everybody left behind. Everybody should have that choice.


He is right that unemployment has fallen in his constituency, as


around the company. The fact is, Britain, over those five years, has


grown as fast as any other G-7 country in terms of economic


performance. You can now look back and see that the decisions made in


2010, 2011, 2012, difficult decisions, but they laid the


platform for decisions, but they laid the


growth and jobs. Education in Bradford is facing a funding and


school places crisis and we remain at the bottom of the league tables.


Bradford's children cannot be failed any longer. Will the Prime Minister


support my call for a Bradford Challenge, based on the highly


successful London Challenge? Will he stop the dangerous changes to the


schools funding formula that will drag the children Bradford further


into the land of inequality, despair and neglect? We made commitments at


the last election about funding our schools, funding school places. We


will be keeping all of those commitments, not just the revenue


that we provide for schools, where we will not be reducing the amount


per pupil, but also spending much we will not be reducing the amount


more on new school places in this Parliament than in the Parliament


that preceded Parliament than in the Parliament


Minister. We are also helping with building new academy chains and free


schools, they are available for his constituency, as for others. Does my


right honourable friend the Prime Minister agree with me that the


turmoil in northern Iraq and Syria gives opportunities to resolve


long-standing international disputes, not least with Russia?


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


something that never happened in the whole of the duration of the Cold


War, was disproportionate, and we need to make sure absolutely that we


do not get into conflict with Russia over Syria? What I would say to my


honourable friend is, look, I think there are opportunities for sensible


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


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


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


last week. He mentions the issue of the downed Russian jet. The facts on


this not yet clear. I think we should respect Turkey's right to


respect its airspace, as we defend our own. I think we have to get to


the bottom of what happened. The Prime Minister very often tells us


that the first duty of any government is to protect the


public. Will he give an undertaking to restore the cuts to the police


and emergency services to ensure that the public in this country are


protected? I think this Government has a good record of protecting the


public, not least because we protected counterterrorism policing


and we had a funding situation with the police that enabled them to help


in a cut of crime of 31% since I became Prime Minister.


Thank you, Mr Speaker. John Wharton, a good driver, destroyed the lives


of Amy Baxter and Hayley Jones, with Miss Baxter being so severely


injured she is paralysed from the neck down and in hospital 16 months


later. He was sentenced to just a 3 month driving ban, a fine and a 20


week tag. Weeks later he successfully applied to Bolton


Magistrates' Court for his type to be removed so he could go on holiday


to a stag party. Would my right honourable friend looked to issue


guidance to magistrates that a tag, when part of a sentence, should


never be removed to allow criminals to go on holiday? I think my


honourable friend makes a very powerful point and I will look at


this very carefully. Let me first of all express my sympathy to the


victim and her family, in what is, undoubtedly, a very distressing


case. It is always very difficult to comment on specific cases, I was not


sitting in the courthouse and here all the arguments that were made,


but the point he makes seems to be very sensible, a punishment as a


punishment and he's making a case. The Middle East is increasingly


resembling the central Europe of a century ago, minorities, linguistic,


religious or sexual, find themselves under more pressure than ever. I, my


constituents and the Scottish National Party understand the threat


posed to these groups by Daesh. How is the Prime Minister planning to


prosecute a bombing campaign that does not alter the demographic map


of the Middle East, preventing Ross Hill becoming the new Budapest? We


will set up the items tomorrow, but there is a clear and present danger


to the United Kingdom of Isil, based in Syria, planning attacks against


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


a perfect strategy, but we can deliver a clear, long-term strategy


that can work. He talks about the lessons we learned from the last


century. One of the lessons I say we should learn from the last century


is when your country is under threat, when you face aggression


against your country, you cannot endlessly sit around and dream about


a perfect world, you need to act in the world we are in. Will my right


honourable friend join me in congratulating all the staff at a


local birthing unit. They scored 100% on their friends and family


survey for satisfaction and care. The commitment of midwives is only


matched by the Conservatives' commitment to the NHS. With two


elections in a row, we have promised and delivered greater investment in


our National Health Service than Labour.


Can I say to my honourable friend, she is absolutely right to highlight


the friends and family test. It is a simple way of measuring whether our


hospitals are delivering great care. As well as good schemes to make sure


you would want your friends and family treated in a hospital, we


need to provide the resources for that hospital and that is what we


are doing with the spending figures announced today. Crucially on


childbirth, it is not often I stand here" the Daily Mirror, but it is


worth looking at what they are raising about the importance of a


seven-day NHS and making sure we have high standards across our NHS


every day of the week. As well as the extra money this government is


putting into the NHS, a seven-day NHS would also mean a much stronger


NHS. The big lottery fund supports local


projects in my constituency, including the Gate, a small children


was a playground and a women's project which plays a vital role in


supporting the vulnerable people this Parliament has left behind.


Would-be Prime Minister join me in congratulating these local projects


on their work, and reassure the House that this government will


protect the lottery funding earmarked for charity and community


projects? We will certainly protect the big


lottery fund. It does an excellent job. One of the things the United


Kingdom brings is a bigger National Lottery, a bigger pot which can


support Scottish charities and let me just make this point, following


what has happened to the oil price, if there was a Scottish November


Autumn Statement, it would be a statement that was about cuts, cuts,


cuts, taxes, taxes, taxes and no relief from the National Lottery.


Order. Order. Mr Brendan McNeill. Mr Angus Brendan McNeill. Calm


yourself. You may be a cheeky chappie, but you also an


exceptionally noisy one. Statement, the Chancellor of the Exchequer.


Mr Speaker. This Spending Review delivers on the commitment we made


to the British people that we would put security first. To protect our


economic security by taking the difficult decisions to live within


our means, and bring down our debt. And to protect our national security


by defending our country's interests abroad and keeping our citizens safe


at home. Economic and national security provide the foundations for


everything we want to support. Opportunity for all. The aspirations


of families, the strong country we want to build. Five years ago, when


I presented our first Spending Review, our economy was in crisis,


and as their letter said, there was no money left. We were borrowing ?1


in every forward is spent, and our job then was to rescue Britain.


Today, as we present this Spending Review, our job is to rebuild


Britain, build our finances, build our defences, build our society, so


that Britain becomes the most prosperous and secure of all the


major nations of the world. And so we leave to the next generation a


stronger country than the one we inherited. That is what this


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


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


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


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


borrow forever, and are ready for whatever storms lie ahead. We


promise to bring our debts down. Today, the forecast I present shows


that after the longest period of rising debt in our modern history,


this year, our debt will fall and keep falling in every year that


follows. We promised to move Britain from being a high welfare low-wage


economy, to being a lower welfare are higher wage economy. Today I can


tell the House that the ?12 billion of welfare savings we committed to


at the election will be delivered in full, and delivered in a way that


helps families as we make the transition to our national Living


Wage. We promised that we would strengthen our national defences,


take the fight to our nation's enemies, and protect our country's


influence abroad. Today, this Spending Review delivers the


resources to make sure Britain, unique in the world, will meet its


twin obligations to spend 7% of its income on development, and 2% on the


defence of the realm. At this Spending Review not only ensures the


economic and national security of our country, it builds on it. It


sets out far-reaching changes to what the state does and how it does


it. It reforms our public services so we truly extend opportunity to


all, whether it is the way we educate our children, train our


workforce, rehabilitate our prisoners, provide homes for our


families, deliver care for our elderly and sick, or the way we hand


back power to local communities, this is a big Spending Review by a


government that does big things. It is a long-term economic plan for our


country's future. Mr Speaker, nothing is possible without the


foundations of a strong economy. Let be turned to the new forecast


provided by the independent Office for Budget Responsibility and let me


thank Robert choked and his team for their work. Since the summer budget,


new economic data has been published which confirms this, since


new economic data has been published economy in the G7 has grown faster


than Britain -- Robert Chote. We have grown three times faster than


Japan, twice as fast as France, faster than Germany and the same


rate as the United States. That growth has not been fuelled by an


irresponsible banking boom such as in the last decade.


irresponsible banking boom such as investment has grown twice as fast


as consumption. Exports faster than imports and the North


has grown faster than the south. We are determined that this will be an


economic recovery felt in all parts of our nation. That is already


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


jobs growth? Not just in our capital city, the Midlands is creating jobs


three times faster than London and the south-east. In the past year we


have seen more feeble in work in the Northern Powerhouse than ever


before. And where do we have the highest employment rate of any pout


of our country? In the south-west of England. Our long-term economic plan


is working. But the OBR reminds us today of the huge challenges we


still face at home and abroad. Our debts are too high and our deficit


remains. Productivity is growing but we still lag behind most of our


competitors. I can tell the House that in today's forecast, the


expectations for world growth and world trade have been revised down


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


are rising concerns about debts in emerging economies. These are yet


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


protect our economic security. That brings me to the forecast for our


own GDP. Even with the weaker global picture, our economy this year is


predicted to grow by 2.4%. Growth is then revised up from the Budget


forecast in the next two years, to two years, and two x 5%. If then


starts to return to its long-term trend with growth of 2.4% in 2018


and 2.3% in 2019 and 2020. That growth this more balanced than in


the past. Whole economy investment is set to grow faster in Britain


than in any other major advanced economy in the world, this year, the


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


first Spending Review in 2010, I set this country on the path of living


within its means. Our opponents claimed the growth would be choked


off, and million jobs would be lost and inequality would rise. Every


single one of those projections has proved to be completely wrong --


predictions. So too did the claim that Britain had to choose between


sound public finances and great public services. It is a false


choice. If you are bowled with your reforms, you can have both. That is


why when we have been reducing government spending, crime has


fallen, and million more children have been educated in good and


outstanding schools and public satisfaction with our local services


has risen. That is the exact opposite of what our critics


predicted. And yet now, the same people are making similar claims


about this Spending Review, as we seek to move Britain out of deficit


and into surplus. They are completely wrong again. The OBR has


seen our public expenditure plans, analysed our effect on our economy.


Forecast today is that the economy will grow robustly every year,


living standards will rise every year, and more than a million extra


jobs will be created over the next five years. That is because sound


public finances are not the enemy of sustained growth, they are its


precondition. Our economic plan puts the security of working people


first, so we are prepared for the inevitable storms that lie ahead.


That is why our charter for budget responsibility commits us to


reducing the debt to GDP ratio in each and every year of Parliament,


reaching a surplus in 2019-20, and keeping that surplus at normal


times. I can confirm that the OBR has certified that the economic plan


we present delivers on our commitment. Mr Speaker, that brings


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


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


of our public finances. Since the summer budget, housing associations


in England have been reclassified by our independent Office for National


Statistics, and their borrowing and debts have been brought on to the


public balance sheet and that change will be backdated to 2008. This is a


statistical change and therefore, the OBR has recalculated its


previous budget forecast to include housing associations, so we can


compare like with like. On that new measure, debt was forecast in July


to be 83.6% of national income this year. Now today in the sort and


statement, we forecast debt to be lower at 82.5% -- now today in this


Autumn Statement. It then falls every year... Order, order. Mr


Lewis, get a grip of yourself, man! Calm, take up yoga, you will find it


beneficial, man. The Record shows that the Chancellor stays for a very


considerable period after his statement, to respond to questions,


and members will always find the chair a friend if they wish to


question the Minister. Yes, they will. Those who have questions to


ask will be heard. Meanwhile, the Chancellor will be heard. The


Chancellor of the Exchequer. Mr Speaker, I am looking forward to


it. Now, on that new measure, debt was forecast in July to be 83.6% of


national income. Now today in this Autumn Statement they forecast debt


to be lower at it then falls every year down to 81.7% next year, down


to 77.9%, then 77.3%, reaching 71.3% in 2020, 2021. In every single year,


the national debt as a share of national income is lower than when I


presented the Budget for months ago. And this improvement in the


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


receipts to be stronger, a sign that our economy is healthier than


thought. Second, debt interest payments are expected to be lower,


reflecting the further fall in the rates we paid to our creditors.


Combine the effects of better tax receipts and lower debt interest,


overall the OBR calculates, aiming to 27 7p improvement in our public


finances over the forecast period compared to where we were at the


Budget. This improvement in the nation's finances allows me to do


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


making faster progress towards eliminating the deficit and paying


down the debt, fixing the roof when the sun is shining. Second, we will


spend ?12 billion more on capital investments, making faster progress


to building the infrastructure our country needs. Third, the improved


public finances allow us to reach the same goal of a surplus, while


cutting less in the early years. We can smooth the path to the same


destination. That means we can help on tax credits. I have been asked to


to help in the transition as we move to the higher wages, lower welfare


society that the country wants to see. I have heard representations


that these changes to tax credits should be phased in. I have listened


to the concerns, I hear and understand them, and because I have


been able to announce today an improvement in the public finances,


the simple thing to do is not to phase them in, but to avoid them


altogether. Tax credits are being phased out anyway as we introduce


Universal Credit. What that means is that the tax credit tabor rate and


threshold remain unchanged, the disregard will be ?2500. I propose


no further changes to the Universal Credit taper or the work allowances,


beyond those passed through Parliament last week. The minimum


income floor in Universal Credit will rise with the National Living


Wage. I set a lower welfare cap in the Budget. The House should know


that helping with the transition obviously means we will not be


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


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


the later part of this Parliament, indeed, on the figures published


today, we still achieve indeed, on the figures published


billion per year of welfare savings we promised. Now, that is because of


the permanent savings we have already made, and the further


long-term reforms we announced today. The rate of housing benefit


in the social sector will be capped at the relevant local housing


allowance, in other words, the same rate paid to those in the private


rented sector who receive the same benefit. That will apply to new


tenants is only. It will also stop paying housing benefit and pension


credit payments for people that have left the country more than a month.


The welfare system should be fair to those that need it, and fair to


those who pay for it as well. Improved public finances our


continued commitment to form mean we continue to be on target for a


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


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


give the OBR forecast for deficit we inherited was estimated to be


11.1% of we inherited was estimated to be


it is set to be almost a third of that, 3.9%. Next year, it falls to


less than a quarter of what we inherited, 2.5%.


less than a quarter of what we down again to


less than a quarter of what we to just 0.2% a year after that,


before moving to just 0.2% a year after that,


of national income in 1919-20, rising to 0.6% the following year.


Let me turn to the cash borrowing figures. With house borrowing


figures included, the OBR predicted at the time of the Budget that


Britain would borrow ?74.1 billion this year. They now forecast we will


borrow less than that, at 73.5 billion. Borrowing them falls to


49.9 billion next year. It continues to fall, and falls to lower than was


forecast in the Budget in every single year after that, to 24.8


billion next year. It continues to fall, and falls to lower than was


forecast in the Budget in every single year after that, to 24


2018-19, in 2019-20, we reach a surplus of ?10.1 billion. That is


higher than was forecast in the Budget. Britain out of the red and


into the black. Surplus rises to 40.7 billion a year after that. So,


Mr Speaker, the deficit falls every year. The debt share is lower in


every year than previously forecast. We are borrowing ?8 billion less


than we expected overall and we reach a bigger surplus. We have


achieved this, well, the same time, helping working families as we move


to a higher wage, lower welfare economy, and we have the security of


knowing our country is paying its way in the world. Mr Speaker, that


brings me to our plans for public expenditure and taxation. I want to


thank my right honourable friend the Chief Secretary, other ministerial


colleagues at the Treasury and the brilliant officials that have


assisted us for the long hours and hard work they have put into


developing these plans. We said ?5 billion would come from the measures


on tax avoidance, evasion and imbalances. Those measures were


announced in the Budget. Together, we go further today with new


penalties for the general anti-abuse rule that the Government


introduced, action on the Government introduced, action undisguised


numeration schemes and Stamp Duty avoidance, and we will stop abuse of


the intangible fixed assets regime and capital allowances. We also


exclude energy generation from the venture capital schemes, to ensure


they remain well targeted at high risk companies. HMRC is making


efficiencies of 18% in its own Budget. In the digital age, we do


not need taxpayers to pay for paper processing or 170 separate tax


offices around the country. Instead, we are reinvesting some of those


savings with an extra ?800 million in the fight against tax evasion,


with a return of almost ten times the additional tax collected. We are


going to build one of the most digitally advanced tax


administrations in the wilderness Parliament so that every individual


and every small business will have their own digital tax account by the


end of the decade to manage their tax online. From 2019, once the


accounts are up and running, we require Apple gains tax to be paid


within 30 days of completion of any disposal of residential property.


Together, these form part of the digital revolution that we're


bringing to Whitehall that the Spending Review. The court Cabinet


Office Budget will be cut by 26%, matching a 24% cut in the Budget of


the Treasury. The cost of all Whitehall administrations will be


cut by ?1.9 billion. These form part of the ?12 billion of savings to


government departments I am announcing today. In 2010,


Government spending took up 45% of national income. This was a figure


we could not sustain because it was neither practical sensible to raise


taxes high enough to pay for that. We ended up with a massive


structural deficit. Today, the state accounts for just under 40% of


national income and it is forecast to reach 36.5% by the end of the


Spending Review. The structural spending this represents is at a


level that a competitive, modern, developed economy can sustain and it


is a level that the British people are prepared to pay their taxes for.


It is precisely because this Government believes in decent public


services and a properly funded welfare state that we are insistent


that they are sustainable and affordable. To simply argue all the


time that public spending must always go up, never be cut, is


irresponsible and lets down the people that rely on public services


most. To fund the things we want the Government to provide in the modern


world, we have to be prepared to provide the resources. Mr Speaker, I


am setting the limits for total managed expenditure as follows. This


year, public spending will be ?756 billion. 773 billion next year, 780


billion a year after, 801 billion, before reaching 821,000,000,020


19-20, the year we are forecast to eliminate the deficit and a surplus.


After this, the focus of public spending rises broadly in line with


the growth of the economy and will be at 857 in 2020-21. The figures


from the OBR show over the next five years, welfare spending falls as a


percentage of national income, while departmental capital income is


maintained and is higher at the end of the period. That is the right


switch for a country that is serious about investing in long-term


economic success. People will want to know what the levels of public


spending mean in practice, and the scale of the cuts we are asking


government departments to undertake. In this Spending Review, the


day-to-day spending of Governor departments is set to fall by an


average of 0.8% per year in real terms. That compares to an average


fall of 2% over the last five years. So, the savings we need are


considerably smaller. This reflects the improvement in the public


finances and the progress we have already made. Indeed, the overall


rate of annual cuts I set out in today's Spending Review are less


than half of those delivered over the last five years. So, Britain is


spending a lower proportion of money on welfare and a higher proportion


on the structure. The Budget balanced, with cuts half what they


were in the last Parliament, making the savings we need, no less and no


more, and providing economic security so the working people of a


country with a surplus lives within its means. This does not mean that


the decisions required to deliver the savings are easy. Nor should we


lose sight of the the Spending Review commits ?4 trillion over the


next five years. It is a huge amendment of the hard earned cash of


British tax payers and all those that dedicate their lives to public


service will want to make sure it is well spent. Our approach is not


simply retrenchment, it is to reform and rebuild. These reforms will


support our objectives for the country. First, to develop a modern,


integrated health and social care system that supports people at every


stage in their lives. Second, to spread economic power and wealth


through a devolution revolution and invest in long-term infrastructure.


Third, to extend opportunity by tackling the big social failures


that for too long have helped people back in our country. Fourth, to


reinforce national security with the resources to protect us at home and


project our values abroad. The resources allocated by this Spending


Review are driven by these four goals. The first priority of this


government is the first priority of the British people, the National


Health Service. The Health Service was cut by the Labour administration


in Wales, but we, the Conservatives, have been increasing health spending


in England. In this Spending Review, we do so again. We will work with


our health professionals to deliver the very best value for that money.


That means ?22 billion of efficiency savings across the service, it means


a 25% cut in the Whitehall Budget for the Department of Health, it


means modernising the way we fund students of health care. Today,


there is a cap on student nurses. Over half of all applicants are


turned away and it leaves hospital is relying on agencies and overseas


staff. We will replace direct funding with loans for new students


so we can abolish this self-defeating cap and creativity


10,000 new training places in this Parliament. Alongside these reforms,


we will give the NHS the money it needs. We made a commitment to a ?10


billion real increase in the health service Budget. We fully deliver


that today with the first ?6 billion delivered up front, next year. It


fully funds the five-year plan that the NHS put forward as its plan for


its future, as the chief executive of NHS England, Simon Stephen, said,


the NHS has been heard and actively supported. Let me explain what that


means in cash. The NHS Budget will rise from ?101 billion today to ?120


billion by 2020-21. This is a half ?1 trillion commitment to the NHS


over this Parliament, the largest investment in the health service


since its creation. So, we have a clear plan for improving the NHS. We


fully funded it and, in return, patients will see more than ?5


billion of health research in everything from genome is to


antimicrobial resistance, to a new dimension Institute and a new


world-class public health facility in Harlow, and more. 800,000 more


elective hospital admissions. 5 million more outpatient


appointments. 2 million more diagnostic tests. New hospitals


funded in Cambridge, Sandwell and Brighton. Cancer testing within four


weeks and a brilliant NHS available seven days a week. Mr Speaker, there


is one part of our NHS that has been neglected too long, and that is


mental health. I want to thank the all-party group, led by my right


honourable friend for Sutton Coldfield, the right honourable


member for North Norfolk and Alistair Campbell, for their work in


this vital area. In the last Parliament we made a start by laying


the foundations for equality of treatment with the first-ever


waiting time standards for mental health. Today we are building on


that with ?600 million of additional funding, meaning that by 2020


significantly more people will have access to talking therapies,


perinatal mental health services and crisis care. It is all possible


because we made a promise to the British people to give our NHS the


funding it needs. In this Spending Review, we have delivered. Mr


Speaker, the Health Service cannot function effectively without good


social care. Many local authorities are not going to be able to meet the


growing social care needs unless they have new sources of funding.


That, in the end, comes from the taxpayer. In future, those local


authorities who are responsible for social care will be able to levy a


new social care precept of up to 2% of council tax. The money raised


will have to be spent exclusively on adult social care and if all


authorities make full use of it it will bring almost ?2 billion more


into the care system. It is part of a major reform we are undertaking to


integrate health and social care by the end of this decade,


integrate health and social care by achieve that I am today


integrate health and social care by the Better Care Fund to support that


integration, with local authorities able to access an extra ?1.5 billion


by 2019-20. The steps taken able to access an extra ?1.5 billion


will have risen in real terms. A civilised and prosperous society


like ours should support its vulnerable citizens and that


includes a decent income in retirement. Many people have already


been auto enrolled into a pension thanks to our reforms in the last


Parliament. A booster will align contributions with the tax years.


The best way to reform pension benefits is to raise the pension age


as we are set to do in the next parliament. That allows us to


maintain a triple lock on the value of the state pension, so never again


do Britain's pensioners received a derisory increase of 75p. As a


result of our commitment to those who have worked hard all their lives


and contributed to our six IT, I can confirm that next year the basic


state pension will rise to ?119 30 a week. That is the biggest increase


to the basic state pension in 15 years. Taking all of our increases


together, over the next five years pensioners will be 1000 ?100 better


off year than when we came to office. We are also undertaking the


biggest change in the state pension for 40 years, to make it simpler and


fairer, to introduce a new pension. It will be higher than the current


meantime -- means tested benefits and an example of a progressive


government in action. Instead of cutting the savings credit, it will


be frozen at its current level where income is unchanged. The first


objective of this Spending Review is to give unprecedented support to


health, social care and to our pensioners. The second is to spread


economic power and wealth across our nation. In recent weeks, great


metropolitan areas such as Sheffield, Liverpool, the Tees


Valley and the North Midlands has joined Greater Manchester in


creating mayors. It's the most determined effort to change the


geographical imbalance which has bedevilled the British economy over


half a century. We are setting aside ?12 billion for the local growth


fund and I am announcing the creation of 26 new or extended


enterprise zones including 15 zones in towns and rural areas from


Carlisle to Dorset and Ipswich. If we really want to shift power in our


country, we have to give all local councils the tools to drive business


growth in their area and the rewards that come when you do so. I can


confirm today, that as we set out last month, we will abolish the


uniform business rate. By the end of the parliament, local government


will keep all of the revenues from business rates, will give councils


the power to cut rates and make their area more attractive to


business and elected mayors will be able to raise rates provided they


are used to fund specific infrastructure projects, supported


by the local business community. Because the amount we raise in


business rates is in total much greater than the rates we give to


councils through the local government grants, we will phase


that grant out entirely over this Parliament. We will also devolve


additional responsibilities. The temporary management fee will no


longer be paid through the benefit system. Instead, councils will


receive ?10 billion a year up front to provide more help for homeless


people, alongside savings in the public health grant, we will consult


on transferring new powers and the responsibility for its funding and


elements of the administration of housing benefit. Local government is


sitting on property worth a quarter of a quarter of ?1 trillion. We will


let councils spend 100% of the receipts of the assets they sell to


improve local services. Councils increase their reserves by nearly


?10 billion over the last Parliament. We will encourage them


to draw on their reserves as they undertake reforms. Mr Speaker, this


amounts to a big package of new powers, but also new


responsibilities for local councils. It is a revolution in the way we


govern this country, and if you take into account both the falling grant


and rising counselling comes, it means by the end of this Parliament,


local government will be spending the same in cash terms as it does


today. Mr Speaker, the devolved administrations of the United


Kingdom will also have available to them unprecedented new powers to


drive their economies. The conclusion last week of the


political talks in Northern Ireland means additional spending power for


the executive to ensure the full implementation of the Stormont House


agreement. But opens the door to the devolution of corporation tax which


the parties confirmed have said they wished to set at 12.5%. That is huge


prize for business in Northern Ireland and the onus is on the


Northern Ireland Executive to play their part and deliver sustainable


budget so we can move forward on that. Northern Ireland's block grant


will be over ?11 billion and funding for new capital in will rise over


five years, ensuring Northern Ireland can invest in its long-term


future. For years, Wales has asked for a slender in -- funding floor to


protect spending. Now this Conservative government is answering


that call and providing that historic funding guarantee for


Wales. I can announce today we will introduce the new funding floor and


set it for this Parliament at the Welsh Secretary and I have also


confirmed that we will legislate so the devolution on income tax can


take place without a referendum. We will also help fund a new Cardiff


City deal. The Welsh block grant will reach ?15 million by 2019-20


while the capital spending will rise over ?900 million over five years.


As Lord Smith confirmed, the Scotland Bill meets the vow made by


the parties... Mr Speaker, it must be underpinned by a fiscal framework


that is fair to all taxpayers and we are ready now to reach an


agreement. The ball is in the Court of the Scottish government. Let's


have a deal that is fair to Scotland, said the UK and is built


to last. We are and entering the city deal for Glasgow and


negotiating deals with Aberdeen and Inverness as well. If Scotland had


voted for independence, they would have had their own Spending Review


this autumn. With world oil prices falling, and revenues from the North


Sea forecast by the OBR today to be down 94%, we would have seen


catastrophic cuts in Scottish public services. Thankfully, Scotland


remains a strong part of a stronger United Kingdom. So the Scottish


block grant will be over ?30 million and 2019-20, while capital spending


available will rise by ?1.9 billion through to 2021. UK government


giving Scotland the resources to invest in its long-term future. For


the UK government, the funding of the Scotland, Wales and Northern


Ireland offices, we'll all be protected in real terms. Mr Speaker,


we are devolving power across our country and will also spending on


economic infrastructure that connects our nation. That is


something Britain has not done enough for a generation. Now by


making the difficult decisions to save on day-to-day costs, we can


invest in new roads, roadways, signs and flood defences that Britain


needs. We made a start in the last and in the last year, Britain topped


a league table of the best places in the world to invest in


infrastructure. The Department for transport's operational budget will


fall by 37%. Transport capital spending will increase by 50% to a


total of ?61 billion, the biggest increase for a generation. That


funds the largest road investment programme since the 1970s, for we


are the builders. It means the construction of High Speed Two, to


link the Northern Powerhouse to the south can begin. The electrification


of lines like the trans-Pennine, the Midland mainline and the great


Western can go ahead. We will fund our new transport for the North to


get it up and running. London will get an ?11 billion investment in its


transport infrastructure, and having met with my honourable member for


Folkestone and other Kent MPs, I will relieve the roads in


Folkestone and other Kent MPs, I operation Stack with the new quarter


of the billion pound investment in new facilities there. We are making


a new ?300 million commitment to cycling that we promised, and we


will be spending over ?5 million on roads maintenance in this


Parliament. Thanks to the incessant lobbying from my Honourable friend


from Northampton North, Britain now has a permanent pothole fund.


Mr Speaker, we are investigating in the transport we need and the flood


defences as well. DEFRA's day-to-day budget. 15% in this Spending Review,


but we are committing ?2 billion to protect 300,000 homes from flooding.


Our commitment to farming and the countryside is reflected in the


protection of funding for our national parks and our forests. We


will not national parks and our forests. We


again! I can tell the House that in recognition of the higher cost they


face, we will continue to provide ?50 of the water bills of Southwest


water customers for the rest of this Parliament, a Conservative promise


made to the south-west and a promise kept. Mr Speaker, investing in the


long-term economic infrastructure of this country is a goal of our


spending reviewed and there is no more important infrastructure than


energy. We are doubling our spending on energy research with a commitment


to Smallman modular nuclear reactors. Also supporting the shale


gas industry to assure that communities benefit from a shell


wealth fund which could be worth up to ?1 billion. Support for low


carbon energy and renewables will more than double. The sale of


ultralow emission vehicles will continue to be supported. In light


of the slower than expected and the introduction of emissions testing,


we will remove the testing of diesel vehicles until 2021. We are


increasing our support for vehicles until 2021. We are


finance. Day-to-day resource urge it will fall I20 2%. We will reform the


renewable heat incentive to will fall I20 2%. We will reform the


our energy industries such as steel to keep them here. We will introduce


a cheaper energy efficiency scheme. This will save ?30 a year from the


energy bills of 24 million households. This government believes


going green should not cost the earth. We are putting other builders


of. We will bring reforms to the compensation culture around minor


motor accident injuries. We expect the industry to pass on the savings


are most see an average saving of 40 to ?50 every year of their insurance


bills. Mr Speaker, this is a government that backs all our


businesses, large and small, and we on this side of


businesses, large and small, and we that there is no growth, no jobs


without a vibrant private sector and successful entrepreneurs. This


Spending Review delivers what business needs. Business needs


competitive taxes. I have already announced a reduction in our


corporation tax rate to 18%. Our overall view of business rates will


report in the Budget but I am helping 600,000 of our smallest is


Mrs by extending our rate relief scheme for another year. Businesses


also need an active and sustained industrial strategy and that


strategy launched in the last Parliament continues in this one. We


commit to the same level of support for our aerospace and automotive


industries, not just for the next five years, but for the next decade.


Spending on our new catapult centres will increase. We will support the


cash support we give through Innovate UK, something we can afford


to do by offering ?165 million of new loans to companies, instead of


grants, as France has successfully done for many years. It is one of


the figures that has helped us reduce the Budget by 17%. In the


modern world, one of the best ways you can back business is by backing


science. That is why in the last Parliament hide protected the


resource Project for science in cash terms. In this Parliament I am


protecting it in real terms, so it rises to ?4.7 billion. That is ?500


billion more by the end of the decade, alongside the capital


Budget. We are funding the new Institute in Manchester and the new


centres in Shropshire, York, Bedfordshire and Edinburgh and we


are going to commit ?75 billion to a transformation of the famous


Cavendish laboratories in Cambridge, where our knowledge of the universe


was expanded, to make sure we get the most from our investment in


science. I asked another Nobel laureate, Paul nurse, to conduct a


review of the research councils. I want to thank him for the excellent


report he has published and we will complement his recommendations.


Britain is not just brilliant at science, it is brilliant at culture


as well. One of the best investments we can make as a nation is in our


extraordinary arts, museums, heritage and sport. ?100 million per


year in grants and a quarter of a billion pounds into our economy. The


core administration Budget will fall by 20%, but I am increasing the cash


that will go to the Arts Council, our national museums and galleries.


We will keep free museum entry and look at a new tax credit to support


that exhibitions. I will help UK Sport, which has been living on


diminishing reserves, with a 29% increase in their Budget, so we go


for gold in Rio and Tokyo. Mr Speaker, the right honourable


member, the former Home Secretary, the Member for whole west and


hassle, has personally asked me to support his city's year of culture.


I'm happy to do so with a grunt. His city has contributed to the arts,


while his front bench contributes to comedy. The money for Hull is part


of a package for the Northern Powerhouse which includes funding


the iconic new Factory Manchester. In Scotland we will support the


world famous Burrell collection, in London we will help the British


Museum, science Museum and the Victoria and Albert move their


collections into display. We are increasing the funding for the BBC


World Service so British values of freedom and free expression I heard


around the world. All of this can be achieved without raiding, as the


Prime Minister said, the big lottery fund, some had feared. It will


continue to support the work of hundreds of small charities across


Britain. So will the ?20 million per year of new support for social


impact bonds. There are many great charities that work to support


vulnerable women. A point that was raised in Prime Minister's


Questions, indeed. The Member for Colchester has proposed a brilliant


way to give them more help. 300,000 people have signed a petition


arguing that no VAT should be charged on sanitary products. We


already charge the lowest 5% rate allowable under European law and we


are committed to cutting the EU to change its rules. Until that


happens, I am going to use the ?15 million per year raised to fund


women's health charities and support charities. The first ?5 million, Mr


Speaker... The first ?5 million will be distributed to the Eve Appeal,


Safe Lives, and I invite bids from other worthy causes. We will support


a host of military charities, from guide dogs for military veterans, to


Karanka Combat. From the museums of Portsmouth, to the National Museum,


to the aerodrome and the former HQ of fighter command at Bentley. In


the Budget, I funded one of these bunkers, more have emerged since


then. At the suggestion of my right honourable friend for Mid Sussex, we


will support the fellowships awarded in the name of his grandfather by


funding the Winston Churchill Memorial trust. We will fund the


Commonwealth War Graves Commission, so it can tend to the graves of


those that died fighting for our country, and we will contribute to a


memorial for the victims of terrorism who died on the bus at


Tavistock Square ten years ago. It is a reminder that we have always


faced threats to our way of life and we have never allowed them to defeat


us. We deliver security so we can spread opportunity. That is the


third objective that drives the Spending Review. We showed in the


last five years that sound public finances and bold public service


reform can help the most disadvantaged in our society. That


is why inequality is down, child poverty is down, the gender pay gap


is at a record low and the richest fifth now pay more in taxes than the


rest of the country put together. The other side talks of social


justice. This side delivers it. We are all in this together. In the


next five years, we will be even bolder in social reform. It starts


with education. That is the door to opportunity in our society. This


permits us to reform and the weight is provided from childcare to


college. We start with the largest ever investment in free childcare so


working families get the help they need. From 2017 we will fund 30


hours of free childcare for working families with three and four year


olds. We will support ?10,000 of childcare costs tax free. To make it


affordable, the extra support will only be available to parents working


more than 16 hours a week and with incomes of less than ?100,000. We


will maintain the free places to parents, we will increase the


funding to the sector by ?300 million. Taken together, it is a ?6


billion childcare commitment to the working families of Britain. Next,


schools. We build our far-reaching reforms of the last Parliament that


have seen school standards rise, even as exams become more rigorous.


We will maintain funding for free infant school meals, protect rates


for the Pupil Premium and increase the cash in the dedicated school


grant. We will maintain the current national base rate of funding for


our 16-19 year-old students for the whole Parliament. We are going to


open 500 new free schools and university technical colleges,


invest ?23 billion in school building and 600,000 new school


places. To help all of our children make the transition to adulthood and


learn not just about their rights but their responsibilities to, we


will expand the national citizen service. Today, 80,000 students go


on National Citizen Service. Five years ago, 200 schools were


academies. Today, 5000 schools are. Our goal is to complete this school


revolution and help every secondary school become an academy. We will


announce that we will allow sixth form colleges to become academies as


well, so they no longer have to pay VAT. We will make local authorities


running schools a thing of the past and this will help us save around


?600 million from the education services ground. Mr Speaker, I can


tell the House that, as a result of the Spending Review, not only is the


schools Budget protected in real terms, but the total financial


support for education, including childcare and our extended further


and higher education loans will increase by ?10 billion. That is a


real terms increase for education as well. We are going to phase out the


arbitrary and unfair school funding system that has systematically


underfunded schools in whole swathes of the country. The current


arrangements, a child from a disadvantaged background in one


school can receive half as much funding as a child an identical


circumstances in another school. In its place, we will introduce a new


national funding formula. I commend to the many MPs from all parties who


have campaigned for many years to see this day come. It will start to


be introduced from 2017. My right honourable friend the Education


Secretary will consult in the New Year. Education continues in our


further education colleges and universities, and so do our reforms.


We will not come as many predicted, cut for adult skills funding for


colleges. Instead, we will protected in cash terms. In the Budget, I


announce we will replace an affordable student maintenance


grants with larger student loans that saves us over ?2 billion each


year in the Spending Review. It means we can extend support to


students who have never before had government help. Today I can


announce that part-time students will be able to receive maintenance


loans helping some of our poorest students which, will for the first


time, provide tuition fee loans for those pursuing higher skills in


further education. Almost 250,000 extra students will benefit from all


this new support I am announcing today. Mr Speaker, there is then the


apprenticeship programme, the flagship of our commitment to


skills. In the last Parliament we more than doubled the number of


apprenticeships to 2 million. By 2020, we want to see 3 million


apprentices. To make sure they 2020, we want to see 3 million


will increase the funding per place. My right honourable friend the


Business Secretary will create a new business led body to set the


standards. As a result will be spending twice as much on


apprenticeships by 2020 compared to when we to office. To ensure large


businesses share the cost of training and workforce, I announced


in the Budget we will introduce a new apprenticeship levy from April


2017. Today I am setting the rate at 0.5% of an employer's pay bill.


Every employer will receive a ?15,000 allowance to offset against


the levy, which means 98% of all employers and all businesses who pay


bills of less than ?3 billion will pay no levy at all. It means the


apprentice ships levy will raise ?3 billion per year, and will fund 3


million apprentice ships. With those paying is able to get more than they


put in, it is a huge reform to raise the skills of the nation and address


one of the enduring weaknesses of the British economy. Mr Speaker,


education and skills are the foundation of opportunity in our


country. Next we need to help people into work. The number claiming


unemployment benefits has fallen to just 2.3%, the lowest rate since


1975. But we are not satisfied that the job is done. We want to see full


employment. Today, we confirm we will extend the same support and


conditionality we currently expect of those on JSA 2/1 million more


benefit claimants. Those signing on will have to attend a Jobcentre


every week for the first three months and will increase, in real


terms, they help we provide for those with disabilities to get them


into words. This will all be delivered within the 14% savings we


make to the resource Budget for the Department for Work and Pensions,


including by reducing the side of their estate and co-locating job


centres with local authority buildings. It is the way to save


money while improving the front-line service we offer people and


providing more support for those that are the most vulnerable and


most in need of our help. You cannot say you are fearlessly tackling the


most difficult social problems if you turn a blind eye to what goes on


in our prisons and criminal justice system. My right honourable friend


the Lord Chancellor has worked with the Lord Chief Justice and others to


put forward a typically bold and radical plan to transform our courts


so they are fit for the modern age. Underused courts will be closed. I


can announce today the money saved will be used to fund a ?700 million


investment in new technology that will bring further and permanent


long-term savings and speed up the process of justice. Old Victorian


prisons in our cities that are not suitable for rehabilitating


prisoners will be sold. This will also bring long-term savings and


means we can spend over ?1 billion in this Parliament building nine


modern new prisons. Today, the transformation gets under way, with


the announcement that the Justice Secretary has just made. I can tell


the House that Holloway prison, the biggest women's jail in Western


Europe, will close. In the future, women prisoners will serve sentences


in more humane additions, better designed to keep them away from


crime. -- conditions. By selling these old prisons, we will create


more space for housing in inner cities, for another of the great


social failures of our age has been the failure to build enough houses.


In the end, spending reviews like this come down to choices about what


your priorities are. I am clear in the Spending Review that we choose


to build. Above all, we choose to build the homes that people can buy,


for there is a growing crisis of home ownership in our country. 15


years ago around 60% of people under 35 own their own home. Next year it


is said to be half that. We made a start on tackling this in the last


Parliament. With schemes like help to buy, the number of first-time


buyers rose by nearly 60%. But we haven't done nearly enough yet, so


it is time to do much more. Today we set out our bold plan to back


families that aspire to buy their own home. First, I am doubling the


housing Budget. Doubling the housing Budget. Dublin yet to ?2 billion a


year. -- doubling it. We will deliver, with government help,


400,000 affordable new homes by the end of the decade. Affordable means


not just affordable to rent, but affordable to buy as well. That is


the biggest house-building programme by any government since the 1970s.


Almost half of them will be our starter homes sold


at 20% of the market value from new buyers. We will remove many of the


restrictions on shared ownership, who can buy them and who they can be


sold on to. The second part of our housing plan delivers on the


manifesto commitment. I can tell the House this starts with the new pilot


and from midnight tonight, tenants of five housing associations will be


able to start the process of buying their own home. The third element of


the plan involves accelerating housing supply, announcing further


reforms to our planning system so that it delivers more homes more


quickly. We are releasing public land suitable for homes and we said


-- designating commercial land for homes. We will regenerate more


rundown estates and deliver the first new garden city in nearly a


century. The Government will help address the housing crisis in our


capital city with the new scheme, London helped to buy. Londoners with


a 5% deposit will be able to get an interest-free loan. My honourable


friend for Richmond Park has been campaigning on affordable home


ownership for London. Today we back him all the way. And the fifth part


of our housing plan addresses the fact that more and more homes are


being bought as buy to lets or second homes. Many are cash purses


his -- purchases which are not restricted by the Budget when many


are bought by people not in this country. People buying at home to


let should not be squeezing out families who cannot afford a home to


buy. I am introducing a new Stamp Duty which will be 3% higher on


additional homes. It will be introduced from April next year and


will consult on the details so that corporate property development is


not affected. This will raise nearly ?1 billion by 2021 and we will


reinvest some of that money in local communities in London and places


like Cornwall which are being priced out of home ownership. The funds we


will rose will help build these new homes. This Spending Review delivers


a doubling of the House and budget, 400,000 new homes with extra support


for London, estates regenerated, Right to Buy rolled out, paid for by


attacks on buy to lets and second homes, delivered by a Conservative


government committed to helping working people who want to buy their


own home, for we are the builders. Mr Speaker, the fourth and final


objective of this Spending Review is national security. On Monday, the


Prime Minister set out to the House the strategic defence and Security


review. It commits Britain to spending 2% of our income on defence


and it details how these resources will be used to provide new


equipment from war fighting military, new defences for our


cyberspace and you just meant -- investment in our intelligence


agencies. The single intelligence account will reach 2.8 billion and


the defence budget will rise from ?34 billion a day. Britain also


commits to spend zero x seven centre of a -- 0.7% of our commitment to


the overseas budget. It is overwhelmingly in our national


interest that we recommit our borders. Britain is unique in the


world to making these twin commitments to funding both the hard


power of military might and the soft power of international development.


It enables us to project our -- protect ourselves, project our


prosperity. We are supported by our outstanding diplomatic service. I'm


protecting in real terms the Budget of the Foreign and Commonwealth


Office. Security starts at home. Our police are on the front line of the


fight to keep us safe. In the last Parliament we made savings in police


budgets but thanks to the reforms of my right honourable friend the Home


Secretary and the hard work of police officers, crime fell and the


number of neighbourhood offices increased. That reform must continue


in this Parliament. We must invest in new state-of-the-art mobile


communications for our emergency services, it increased new


technology at the border and increase the counterterrorism budget


by 13%. We should allow policing crime commission is greater


flexibility and further savings can be made in the police as different


forces merge their back-office and share their expertise and we will


provide a new fund to help with this reform. Mr Speaker, I have had


representations from the Shadow Home Secretary that the police budget


should be cut by 10%. But now is not the time for further police cuts.


Now is the time to back our police and give them the tools to do the


job. I am today announcing that there will be no cuts in the police


budget at all. It will mean real terms protection for police funding.


Mr Speaker, the police protect us and we are going to protect the


police. Five years ago, when I presented my first Spending Review,


the country was on the presented my first Spending Review,


bankruptcy and our economy was in crisis. We took the


bankruptcy and our economy was in decisions back them and five years


later I report on an economy growing faster than its competitors and we


are set to reach a faster than its competitors and we


billion. Today we have set out the further decisions necessary to build


this country's future. Some science difficult, yes. -- sometimes


difficult, yes. To build the homes people need, stronger defences


against those who threaten our life and build the strong public finances


on which all these things depend. We were elected as a 1 nation


government. Today, we delivered the Spending Review of a 1 nation


government. The guardians of economic security, protectors of


national security, the builders of our better future, this government,


the mainstream representatives of the working people of Britain.


Opposition who responds. Here is Opposition who responds. Here is


Mr Speaker, like me, you will Opposition who responds. Here is


witnessed many Autumn Statement and statements from the Chancellor of


fixed. And you will know that there is such a thing as the iron roar of


Chancellor's statements. And the iron law of Chancellor's statements


Chancellor's statements. And the is the louder the cheers for the


Chancellor's statements. And the the disappointment by the weekend


when the analysis goes in. From what we have heard today, we do not need


until the weekend for this statement to fall apart. Over the last five


until the weekend for this statement years, that has barely been a target


the Chancellor has set, hasn't missed or has ignored. Five years


ago, the newly elected Chancellor and the Prime Minister came to this


House and warned us that because of the dire economic situation our


country faced, what was needed was a five-year programme of austerity


measures. Job cuts, wage freezes and cuts in public services. But we were


promised specifically by this Chancellor, that by today, the


deficit would be eliminated. And debts would be under control. And


that would be under control and falling dramatically. People put


their trust in that commitment. Order. I said earlier, the Prime


Minister would be heard. The Shadow Chancellor will be heard, too. If


people think they are being clever shouting their heads off, don't


bother trying to ask a question. Try at least to have the sense to


realise the conflict between the two. Mr John McDonnell.


The Prime Minister also assured us, Mr Speaker, that there would be hard


earned sacrifices to be made. We were all in it together. Five years


on. Can I just say today, this Chancellor has got some front to


come to this House and talk about deficit and let -- lecture us about


deficit reduction. Today is the day when the Chancellor was supposed to


announce austerity was over, the deficit was cleared. From what we


have heard today, I think they will feel betrayed. The reality is this,


after five years, the deficit has not been eliminated and this year it


is predicted to be over ?17 billion. Instead of taking five years to


eliminate the deficit as he promised, it will take ten. And debt


to GDP will not be the 69% he promised five years ago. As he said


today, it would be 82.5%. We are now potentially to be quite to our


children a debt of 1.5 trillion. -- to bequeath to our children. Their


debt. The Chancellor continues... Both sides are still shouting their


heads off. It is very down-market. It is Rory low-grade. It is Bray


widely deprecated by the public. How it is that people think it is


legitimate to behave in that way and reconnect with the electorate


disillusioned with politics is bizarre. If some people are so


unintelligent they still cannot grasp the point, I pity them. John


McDonnell. After five years as Chancellor with that level of debt,


there is nobody else for him to blame. There is only so long you can


blame past governments. There is no more excuses for this Chancellor


after five years. And we were also promised it sacrifices had to be


made to tackle the deficit, not to worry, we were all in this together.


No we are not. 85% of the money saved from tax and benefit cuts in


the last parliament came directly out of women's pockets. Disabled


people were hit 18 times harder than anybody else. 4.1 children now live


in absolute poverty, an increase of 500,000 from 2009-10. And the fiasco


over tax credits demonstrated once and for all that we were not in this


together. At the same time as the Chancellor was planning to cut tax


credits to working families, he cut inheritance tax is for some of the


wealthiest families in this country. When the Chancellor and the Prime


Minister were first elected to their current positions, they were


attacked for being posh boys. I disagreed with that strongly. It was


unfair. People don't choose what class they are born into all the


wealth they inherit. Nevertheless, if you are fortunate enough to have


wealth or good incomes, as with all MPs, the onus is upon us to take


particular care when taking decisions for people with lives less


fortunate than ourselves. What angered many in this House and


across the country is the way there was no attempt by the Chancellor to


understand the effects of the decision to cut tax credits. For


many families it would have been a choice between children being able


to go on that school trip like other children or having a decent


Christmas or a winter coat. Today, the Chancellor has been forced into


a U-turn on his tax credits. And I want to congratulate the members of


this House on all sides who make this happen. I want to congratulate


the members in the other House as well. I am glad he has listened to


Labour and seen sense. But as ever, with this Chancellor, we await


further clarification on the details, particularly the limit --


if the limit to two children remains, and we are aware of the


impact on Universal Credit. It appears the 14,000 families already


on Universal Credit will still suffer the full cut. And all


families who would newly qualify for tax credits in 2018 will suffer the


full cut under Universal Credit. So this is not a full and fair reversal


as we pleaded for. And the Chancellor remains committed to ?12


billion of welfare cuts over the course of this Parliament. And we


know where they will fall, on the most vulnerable, the poorest and


those just struggling to survive. Some believe that the Chancellor is


using the deficit and austerity to reshape the role of the British


state. That this is some well thought through Machiavellian


scheme. I don't any more. I am convinced this is sheer economic


illiteracy, built upon incompetence and poor judgment. Today, only four


weeks ago, only four weeks ago he brought to this House a charter for


fiscal responsibility. A central part of that was adherence to his


welfare cap, which we supported. Today, he has broken his own welfare


cap. Let me say what he said before. He said himself, introducing the cap


last year, breaking it would be, and I quote the Chancellor, a failure of


public expenditure control. On his own terms, his own language,


condemned. The Government is putting today and not invest in the future.


-- cutting. He is putting us all that future risk. I want to


congratulate the honourable member who campaigned on policing cuts,


which has caused a U-turn. We don't forget, though... Mr Speaker, we


don't forget that we faced the highest level of risk from terrorist


attack in a generation. But we have already lost 17,000 police officers


undercuts under this Government. We know the first line of intelligence


collection, prevention and response are the local police officers in the


community. So we claim today, as another Labour gain and victory. Let


me say also, there are concerns now about the impact


me say also, there are concerns now council cuts and bruises in


expenditure on other emergency services. -- cuts and freezes. We


fear for safety as more firefighters jobs are cut and fire stations


closed as a result of the settlement today. In health, the Chancellor has


announced he is frontloading part of the additional ?8 billion worth of


funding. In reality, this will only plug some of the gap in the huge


deficits health trusts are reporting. But the Government is


also relying upon ?22 billion worth of unrealistic savings to be found.


The extra money seems to be coming from nurse training, the public


health Budget and other aspects of Local Authority Support around care.


This would be a false economy that would simply cause more burdens to


fall on the NHS. All the signs are that we are facing a massive winter


crisis in our NHS and, yet again, we will have to rely on our


professional dedication of our staff. The Health Secretary,


refusing to go to ACAS to settle the junior doctors dispute is no way to


maintain the morale amongst our NHS professionals. One of the greatest


scandals and list -- under this to cancel has been the attack on social


care. 3000 beds have been lost already. According to the


Association of directors of adult services, the care preset, the 2%


announced by the Chancellor, is not nearly enough to fill the funding


gap this Government has created. The result is that some of the most


vulnerable people in our society will be at risk and more people will


be forced to resort to their local hospital for their care. We also


know much more hospital for their care. We also


people suffering from mental health problems and we welcome the


additional funding today devoted to mental health. But it is no use of


funding through the Health Service for mental health support, when


Local Authority Support is being cut as a result of this settlement. More


people will be left vulnerable. In education, the Government claims


that school budgets will be protected. Let me say this, we fear


that the Government will use the new funding formula to take away from


the pupils who most need it, the most deprived. We will monitor the


funding carefully to ensure equity. In today's statement, the Chancellor


has announced that for further education, there will be a


settlement that restricted to cash. That means that sixth form and


education colleges around the country will be at threat of


closure. Just at a time when the economy is crying out for a


skilled, educated workforce, the Government was denying access to


young people for the local courses they need. With regard to childcare,


announced today, we noted his yet again, another two years, another


delay in a commitment. The Chancellor's much vaunted pledge on


house-building is cobbled together from reheated promises from the


past, the vast majority have already been announced. The Tories should be


judged by their actions, not their words. The Chancellor's first act in


office was to slash housing investment by 60%. His plans today


could still mean 40% less to build the homes we need, compared to the


investment programme he inherited from Labour. House-building now, as


a result, remains at the lowest peacetime level since the 1920s. As


my honourable member for Wakefield said this morning, if hot-air built


homes, Conservative Ministers would have sold our housing crisis. I


worry that the vast majority of young people hoping for new homes


will be disappointed by the Chancellor's failure to deliver. His


record on building anything so far does not inspire confidence at all.


Over the last year, the Chancellor has forced himself on to building


sites all around the country, to obtain a photo with a high viz


jacket. When the Chancellor did his Bob the Builder speech at Tory party


Conference, what he didn't tell delegates was that his abysmal


investment record, only 9% of the project started and his


infrastructure pipeline in two years. In 2012, he announced a ?40


billion guarantee scheme. Three years on, only 9% has been signed


up. In 2011, he announced a ?20 billion pensions infrastructure


platform. Four years on, only ?1 billion of commitment has been


secured. The construction industry is actually shrinking and going into


recession. He has also failed to invest in schools. The Royal


Institute of chartered surveyors has said that the biggest infrastructure


programmes could grind to a halt unless the Government adopts new


measures to tackle skills and funding. The most ironic cut of all


must be the virtual closure of large sections for the Department for


Business, Innovation and Skills. There are 46,000 unfilled vacancies


due to the lack of a skilled workforce. Naturally, the Government


solution is to move to effectively close the one department tasked with


improving skill levels. On the environment, the Government has


announced today various measures. Let's be very clear. Government


Ministers can go to the Paris summit on climate change with the proud


record of nearly killing off our once flourishing solar and renewable


energy sector. On international aid, let me caution, the Budget is


supposedly protected, that is now to be raided for defence spending. In


defence, the Government has previously commissioned an aircraft


carrier, and have at least woken up to the fact that it needed aircraft


as well. The funding of the defence review is to come from ?11 billion


worth of cuts, with the inevitable loss of thousands of defence worker


jobs, whose specialist skills will be lost for ever. Alongside these


cuts, and many more, do help dig himself out of the financial hole he


has got himself into, the Chancellor is selling off whatever public


assets he can. This is no longer the family silver. . This is the


furniture, the fixtures and fittings. We know who is first in


line to buy. I never envisaged when it came to nationalising I would be


egged on by a Conservative Chancellor. The only difference


between us is that I would like to bring services like rail back into


the ownership of the British people, the Chancellor wants to sell them to


the People's Republic of China. Nationalisation is OK for him, as


long as it is by any other state but ours. To assist Conrad Osborn in his


dealings with new-found comrades, I have brought him along Mao's Little


Red Book. Let me quote, Mr Speaker. Order! I want to hear about the


contents of the book! I think you will find this invaluable. Order,


you are rather an excitable one! I thought this would help him, Mr


Speaker. Let's quote from Mao. The quote is this. Behave! We must learn


to do economic work from all who know how, no matter who they are. We


must esteem them as teachers, learning from them respectively and


conscientiously. But we must not pretend to know what we do not


know. I thought it would come in handy for him in his new


relationship. Mr Speaker, I am sure in this debate... I am sure, Mr


Speaker that Tory backbenchers will be under instruction to shoehorn


into their speeches at every opportunity references to the


mythical long-term economic plan. What we have been presented with


today is not an economic plan for a political fix, it is not a plan when


you ridiculously commit yourself to an achievable policies and leave


yourself no room to manoeuvre. It is not a plan when you sell off every


long-term asset you have for short-term gain. It is not a plan


when you leave important industry is going to the wall, as they have done


with steel. It is not a plan when you cut the support for those in


work and the working families, leaving them to rely on food banks.


It is not a plan when you force councils to close the very services


people depend upon. It is not a plan when you invest so little in schools


and infrastructure that you put our future at risk. Instead, what we


have seen today is the launch of a manifesto for the Conservative


leadership election. Our long-term economic security has been


sacrificed for the benefit of one man's career. But I say to the


honourable member for Maidenhead, and my neighbour, he is gone, the


honourable member for Uxbridge, don't worry, the economic reality


that is emerging in our economy will mean that this will be seen as the


apex of the Chancellor's career. The honourable member for Goddard


Inquiry will recognise in the Chancellor Icarus, the boy who flew


too close to the sun and burned and cracked. I fear for the Chancellor


it is all downhill from here. On this side of the House, we will do


all we can to ensure he does not take this economy and country down


with him. In the end, this debate is about what sort of society we want


to live in. In the end, this debate is about what sort of society we


want to live in. The Government is systematically dismantling all those


aspects of society that make our community with living in and


celebrating. The Chancellor is not community with living in and


eliminate the deficit, but we will do it fairly and effectively. We


will do it by ensuring that we end the tax cuts to the rich, we tackle


tax avoidance, we invest to grow. We will grow our economy and


investments in skills and infrastructure. We will become an


addition to the financial centre of Europe with a research in science


and technology. We will become the technology centre of Europe under a


Labour government. That means high skills, high investment, high wages.


That is what we are committed to on this side, this is what we will


secure when we and Autumn Statement continues


in the Chamber - if you want But let's take


a moment now to take you through The main headline today, clearly, is


Review and Autumn Statement. The main headline today, clearly, is


that tax credit cuts are The main headline today, clearly, is


have not been ameliorated, have not been changed, not been reformed, not


been delayed, they have been avoided been changed, not been reformed, not


altogether. They did been changed, not been reformed, not


year, even though he only announced them in July. He also announced that


education funding would be protected in real terms which takes it beyond


the earlier protection he gave it in the March budget. And the other


the earlier protection he gave it in headline that we got is there will


be no cuts to police budgets in England and Wales. Police


be no cuts to police budgets in devolved matter for Scotland, Wales


and Northern Ireland. The Chancellor has decided he will not cut the


police budget at all has decided he will not cut the


talk beforehand. And the NHS budget in England with consequent rises in


other parts of the UK will rise from its current ?101 billion a year to


?120 billion by the new parliament, 2020 - 21. Housing featured large in


the Chancellor's Autumn Statement as well. He has doubled the housing


budget. His aim is to provide 400,000 new homes. That was leaked


to the papers this morning. It is an extension of giving people a


discount to buy homes provided they are under a certain value, and the


share of home ownership as well. Not for rent. The apprenticeship levy is


set at 0.5% of an employer's wage bill. It is designed for large


employers. It is to encourage them to do their own apprenticeships,


because the more people they train and give skills, the less they will


have to pay this levy or they will get bits of it back. Capital


spending on transport is to increase by a substantial amount to ?61


billion. It is a 50% rise by 2019-20. Small business rate relief


will be extended for another year. The Chancellor had to give some new


economic forecasts. The first one is that public spending will rise to


?821 billion by 2019-20. In other words, by the end of the Parliament.


Despite what was quite a substantial rise in public spending between now


and the end of the decade, the Chancellor is still predicting that


as a percentage of our GDP, our national wealth, the country's


national debt will start to fall now. He aims to get us into a budget


surplus of just over ?10 billion by 2020. There had been a lot of


speculation that he might not be able to meet that figure given the


demands on extra spending, but he has added ?100 billion to show he


has done a little bit better. Growth forecast for 2016 and 2017 are


revised up, but only by a smidgen. Then they are down little bit


later. Essentially, the OBR thinks this economy is going to grow at


about 2.5% for the rest of the decade. So, what does all this mean


for borrowing? He has still got quite a lot to borrow. But he aims


to get it down, as he did promising in the first parliament in 2010.


This year he is expecting to borrow ?73.5 billion, a little bit up on


what was planned before. Next year, he hopes to get that down to ?50


billion. Then another big cut, he wants to get it down to 25 billion


and then he hopes to see an enormous cut down to 4 billion. By the final


year of this Parliament he produces his promised ?10 billion surplus.


Now, to do that, he has had to make a number of cuts but he also plans


to spend a lot of money in this budget. We will have to look at how


these figures work. There will be a lot of number crunching to test what


the Chancellor has been saying today. On the face of it, some of it


does not add up. The business department takes a cut of 17% by the


end of the decade. Environment is down by 15%, energy by 22%, and the


Cabinet Office by 26%. A number of departments have taken cuts, often


in the administration rather than their capital investment. In


transport, there is a big increase in capital investment but admin


costs are slashed. On welfare, the tax credit, the police cuts will no


longer go ahead. But there will be ?12 billion of welfare savings to be


delivered. As this Parliament goes on, other welfare cuts will have to


click into meat that 12 billion figure. The welfare cap, which the


Chancellor introduced himself as a result of him deciding not to


proceed with his tax credit cuts and reforms, he will breach that cap in


the first year of this Parliament. He said he will fall in the cap,


after that, we will see. New social housing tenants are to have their


housing benefit capped, to make up for the loss in savings from not


proceeding with the tax credit reforms. The NHS budget in England


will rise ?101 billion to ?120 billion by 2021. The Department of


health's Administration budget will see a 25% cut. They will expect the


department to get a lot more efficient. Loans will replace grants


for student nurses. That is something that will have to be


looked at carefully as well. And local authorities which have


suffered massive cuts from central funding and central government, yet


have not been allowed to increase their council tax, they will now be


able to raise their council tax by 2%, provided all the money they


raise for that is dedicated for social care, to caring the


community. And then another big government spending area, education.


There will be a ?10 million increase in total education funding during


this Parliament. The free 30 hours of childcare is to be limited to


parents who work more than 16 hours a week, part of the Government's


attempt to get part-time people to work more hours. Funding for further


education colleges will be protected in cash terms, not in real terms,


but when inflation is very low cash is close to real anyway. Sixth form


colleges will be allowed to become academies and as a result, they will


therefore no longer pay VAT and that will be quite a saving. This is a


massive Autumn Statement and Spending Review. A huge amount of


detail. The paperwork is only now coming into this studio. We are


getting some of it online. There is a lot to pore over. The devil will


be in the detail and things the Chancellor has put into the


paperwork but did not bother to tell us in his announcement. He would not


be the first Chancellor to do that. Now we've been joined


in the studio by a man who has variously been described


the "real Chancellor", "the most important man in government you've


never heard of", or even "one half of George


Osborne's brain". He's Rupert Harrison, and he used to


be George Osborne's chief of staff. He now works for


the massive fund managers Blackrock, and he's joined us for what I


believe is his first TV interview. It is. Come out from behind the


curtain! But first let's get some reaction


to the speech from our editors. George Osborne wants to see this as


after the rescue of the economy to the rebuilding of the economy. We


should not lose sight of something he said at the beginning of the


speech, by 2020 the state will make up nearly 30% of national income,


compared to 50% when he took office as Chancellor. That is a very


significant reshaping of the balancing of the economy. The huge


cheers from the Conservative benches today don't hide that there were big


climb downs in their, that were not about his political ideology and


rhetoric but reality. Most importantly on tax credits. Not


tinkering, not tweaking but dropping those cuts altogether. There will be


cuts to Universal Credit, the replacement. That is a big victory


for the House of Lords, the Labour Party, some Tory backbenchers


including Boris Johnson. The second big climb down was not cutting the


police budget at all. Many people believe in the last few days in


Westminster, after what happened in Paris, it was just not politically


possible to go ahead with the kind of cuts that had been expected.


Interestingly, two very big changes. Labour will claim them as


victories. Rather conveniently from George Osborne, that kills off


Labour's two strongest attacks on the Government at a time when they


have not been very effective of putting him under pressure. I want


to come to Robert Peston in a minute. Before I do, Kamal Ahmed,


what is the takeaway for business? How George Osborne can balance those


books is a huge movement of costs in pretty significant ways. Firstly,


there is the social care issue. A new tax-raising power will be given


to local authorities to pay for social care. Private care providers


who complain about the cost of social care will


who complain about the cost of raised from that will not


who complain about the cost of enough. There will still be a ?1


billion shortfall. enough. There will still be a ?1


billion to be raised on the enough. There will still be a ?1


million apprentices he says by 2020. Again, putting the duty on the


private sector to deliver on things like skills, so vital to our


economy, and of course on housing. Direct funding support for housing


businesses, building companies, to build houses themselves, again


saying private sector, it is up to you to solve the supply-side problem


in housing. As I said before, there are lots of questions about whether


the housing industry can deliver and actually want to deliver and has the


skills to deliver. actually want to deliver and has the


this will be a monotonous repetition over the next few weeks, the whole


issue of announcing big numbers on capital investment, on transport.


issue of announcing big numbers on They are only announcements, they


are not delivery. The Government has They are only announcements, they


big scheme is the Chancellor says we need to make sure our economy is


thriving in the future. I need to make sure our economy is


the Autumn Statement was delivered, is there was a big move from


responsibility on local is there was a big move from


devolved powers and the private sector to deliver. Robert,


the Budget, that he is not increasing any


the Budget, that he is not there are tax rises built


the Budget, that he is not he is spreading money around all


over the place, yet he still says he will reach the surplus. Is there


something going on here that we don't yet


something going on here that we out by the Office for Budget


Responsibility, the agency he created,


Responsibility, the agency he higher tax revenues than it was


expecting only in July, and a significant reduction in interest


payments on the significant reduction in interest


debt. And so just to be clear, that is not to do with new taxes imposed


today, that is just the OBR being more optimistic and it says the


reason it is more optimistic is because it has new data on the rate


at which taxes are because it has new data on the rate


which has allowed it to make what it thinks is a rational judgment. Let's


be clear, these are judgments. They are not unbelievably


be clear, these are judgments. They scientific forecasts. The OBR might


get it wrong. But George Osborne is banking that windfall. You can see


that in perhaps the most important statement in the OBR's enormous book


it publishes, when it says the direct effect of


it publishes, when it says the policy decisions, has been to push


borrowing higher between 2016-17 and 2019-20. What that means is the


things he has done today, reversing, for example, the cuts in tax


credits, for example, freezing the Budget for the police, and actually


limiting cuts in individual departments, cuts in departments are


significantly less than we expected or that he outlined. They will be 12


billion versus the 20 billion he was talking about only a few weeks ago.


So the direct effect of all of that is to push are being higher, but


borrowing actually comes down, because the OBR things that the


economy's ability to generate taxes is better than it was. Just to


reinforce the point that Kamal Ahmed makes, it is a big shift. It's


terribly important, in terms of shifting costs, from doing quite a


lot of the stuff that we expect the state to do, to the private sector.


Let me get to Rupert Harrison. How is it credible to suddenly produced


a ?27 billion underlying improvement in the nation's finances between


July and November? Well, it is an interesting pattern. If you think


about George Osborne's period being Chancellor, in a sense, the first


few years were a period where we saw downgrades to the growth forecast,


we had the eurozone crisis. The second half of the last Parliament


was the period when the economy looked to be picking up, but tax


receipts were not picky about the same rates. It looks like we are


possibly into a third phase where, finally, the tax receipts have


started to come through. Think the OBR are moving from what was quite a


cautious view on that, perhaps because the economy is growing, they


are a bit more confident about earnings. The OBR is saying during


this Parliament there will be ?47 billion in extra tax, without


putting tax up, because of tax buoyancy. Where is the evidence for


that? If you look at the October borrowing figures, the October


borrowing figures were the worst since October 2009 and that was


partly because tax receipts underperformed, in every major


category. Corporation tax, income tax, national insurance. How does it


suddenly produce an extra ?47 billion? There are for that, we


always told to not put too much onto one month's data. For the whole of


the financial year it is still bad. The OBR have seen those figures last


week, but they will not have had a chance to radically change their


forecast because of them, and probably nor should they. You should


always evaluate these big events by the hand the Chancellor was dealt


and how he chose to play at. He was dealt, by a growing economy and more


tax receipts, a better hand than he expected. Interestingly, he chose to


play that hand by essentially taking risks off the table. Instead of


snazzy, new tax cuts or giveaways, he has essentially taken the tax


credit issue of the table completely, he's taken police cuts


off the table. That is a sign that first of all we are early in the


Parliament, it is a phase where any money you have, you are about


reducing risks, and a reflection of the fact that we have a government


now that does not have a majority in the House of Lords and a very small


majority in House of Commons. But he is taking risks, he is spending the


tax buoyancy the are predicting. The OBR is assuming that the extra


growth is going to produce more tax receipts. But the increase in the


OBR forecasts are infinitesimal, 0.1 of a percentage. You were in the


Treasury. The OBR has no idea if the economy is going to go and grow by


2.2%, or 2.4%, but the Chancellor has banked it? They are not his


numbers, they are independent numbers he gets given. I think the


OBR has been at the gorgeous end of the spectrum. Their growth forecast


is still relatively cautious compared to other forecasters like


the anchoring them. Not for 18-19, 17-18. Well, if you look at


independent forecasters... Well, the city... Well, they have been at the


more cautious end. The main criticism from the Chancellor's


opponents has always been, you are cutting too much, there is no need


to run a surplus. The main accusation is that he is too


cautious and you don't need a ?10 billion surplus. So it's hard to


believe he's taking risks on that front. I want to ask you one


question, why did he make such a complete Horlicks of tax credits?


Well, we mustn't lose side of the party still making ?12 million of


savings... Why did he allow the Tory party to be branded as the workers


party, the next thing he does is smash the working poor? It's


difficult to save money. You've got to see this in the context of a


consolidation that is over ?100 billion. That has not been done in


this country in living memory. You're not going to get everything


right. In the last Parliament, probably lost in the midst of


political history now, we proposed after being on jobseeker's allowance


for a year it will be cut by 10%. It didn't go down well, we dropped it.


We dropped it. Would take child benefit away from higher rate


taxpayers, it didn't go down well, we changed the threshold from


42,000, to between 50,000 and 60,000. When you are making 100


billion plus savings, you're not go to get everything right. He's


decided, when you have a problem, fix it properly so you don't have to


come back to down the line. He has to Dennis -- listened to Dennis


Healey. But one of the things that wasn't answered is why it took the


Chancellor so long to recognise the size of the problem. For weeks and


weeks, the Treasury were digging themselves further in. They were


determined there would be no mitigation. When he finally


realised, or perhaps it was pointed out to him by Number 10, just how


bad this might have been around the time just before the Lords defeat,


in the end he saw he would have to change course. But what someone


described to me as that moment, when he really decided he wanted to be


Prime Minister, rather than a successful Chancellor, and that is


when he doubled down. I think that is a little unfair. The thing about


Government, the policy is the policy until the policy changes. You can't


go hinting you might be changing. After today, what people are going


to remember is that he ditched the tax credit cuts. They are not going


to remember that he spent months with people speculate on. We will!


You will, Andrew... I suspect you are not representative of most


voters. That's an outrageous suggestion to make! What people will


get is that he ditched it and listened. There are some


counterintuitive issues here, raised by the OBR. One is that you have


growth remaining pretty robust, in a global economy, which is quite a lot


weaker than we thought it was going to be a few months ago. You are also


increasing the costs that are being imposed on the private sector and


yet expecting the private sector to increase its investment, not to lay


people off. Just intuitively, one wonders whether actually this is


going to work out quite as the OBR and the Chancellor assumes. I think


you've got to put what are relatively small tweaks today in the


context of the big picture. He still public spending, as a share of GDP,


down towards 36%. That is merely historical lows in recent history. A


quick question from you? Rupert, has the housing supply issue, which has


been a big boots in 2010, how much has that been an issue around the


house-building companies simply not having the energy or the desire to


deliver on housing? If you speak to executives in the house-building


sector, their profits are already up 40%. They feel full stretch to, they


have a massive skills shortage and they don't seem to be convinced,


although they will make warm noises about the announcement is the


Chancellor made, how much of a problem was that for you and how can


it be solved? It's a good question, it is one of the biggest economic


issues we face as a country. House-building rates are beginning


to pick up. There are two big factors, one is the one you're


talking about. One is planning, and I think it is a bit better and


planning is easier to get. There was an issue that if we go back to the


boom years, when more houses were being built, about half of the


houses were being built by the big guys that people are talking about.


There was a whole other sector in the market, the small builder that


would build three or four, sell them, and move on and build another


one, a lot of them got wiped out or they are still in debt and the banks


won't lend to them. Skills shortage is a huge issue. It has been since I


was in short trousers. Do getting into politics after this?


I'm very happy doing what I am doing.


I'm very happy doing what I am learned not to answer questions, you


should try learned not to answer questions, you


doing. Thank you for being with us. Enough comment from Westminster,


let's go back to Birmingham and Jo Coburn.


So much to chew over and digest after the Autumn Statement on


Spending Review. The improved state of public finances has given George


Osborne a little more wriggle room, hence he announced he would not go


ahead with some big planned hence he announced he would not go


be known as the building Chancellor, not just the cutting


Chancellor. With that in mind, my guest here, the Conservative leader


of Solihull Council, Bobsleigh. guest here, the Conservative leader


now we have the Midlands Engine, is it as good as it sounds? The new


unlocks it as good as it sounds? The new


investment. He is devolving the skills Budget, and there are other


funds available for the future. It will transfer into real growth in


this region? ?36.5 million a will transfer into real growth in


utilise to create The big headline, the thing he faced


most opposition to was the cuts to tax credits. He says they are not


going to go ahead, but Labour have already said it is not a fool of


their reversal of the planned cuts. Is that how you see it as well? Many


working families would have struggled to cope with a cut to tax


credits, it is welcome news that is to be avoided. Working families will


be relieved to hear that. It is important that people prepare for


the future. We already see people struggling with debt, balancing


bells and childcare. If you have worries about your finances or


questions, come to court to citizens advice, get advice and we will help


you think things through. Was your first impression that these families


will now have more time for transition in the hope that they


will get higher wages? Absolutely, it is important that people have


time to prepare and come to citizens advice to help them do that. One of


the other big announcements is the councils councils will be allowed to


put on council tax, up to 2%, as long as it is hypothecated


specifically for social care. At higher council tax bills, what will


that mean for your customers? Council tax issues is one of the


biggest issues we help people with at citizens advice. It's so people


can have advice to manage those changes. For shoppers, just weeks


before Christmas, they will be thinking about the money in their


back pocket and how it is going to affect their personal finances. One


of the big announcements was also about the state pension. With us is


our personal finance expert, Danny Shaw. Pensions are going to go up?


We knew this, there wasn't a lot in the Autumn Statement, something we


didn't know, we had already worked out how much the state pension was


going to be, because of the triple lock. We knew, as soon as the


inflation and earning figures came out, how much that was going to be.


It is going up by ?3.35, up to ?119.30. That is what they call the


old state pension, the one before the April 2016 changes. The key


thing that is new, which we know because George Osborne announced it


for the first time, this new state pension, the flat rate pension, not


flat rate when you look at the nitty-gritty of it, it will be


?135.65. George Osborne has always said it would be above the level of


pension credit, under the old system. It is a measly 5p. He has


kept his promise, but not by a great deal. We will leave it there, keep


your questions coming in and we will try to get some of those the next


time we come on. Thanks, as they were saying in


Birmingham, the state pension is going up to over ?119. If you were


worried about losing tax credits as a result of the July Budget, that


will now not happen. You will not see a reduction in welfare until


Universal Credit comes in. If you are worried that the Government come


at a time of heightened security threat, was going to cut police


numbers further than the Chancellor said, he is not going to do so.


Those are some of the issues that affect everybody in the country,


rather than just a great number crunching. The number crunching is


important, because it tells us whether or not the Chancellor's


predictions are credible. We are puzzled by how the Chancellor,


determined to get a surplus by the end of the Parliament, has so much


money to do so many things. Is it credible? He has got a bit lucky


because he will be spending less on debt increase. He has increased


taxes reasonably significantly. There is a 3 billion impost on


business to pay for the new apprentice ship. Was it in the


Labour manifesto? I do know. I think it might have been! Carry on. It was


not in the figures in July. There are increases council tax as well.


He has increased taxes a bit and he is going to use most of that money


to damp down the cuts in spending. Because those cuts and spending were


on a relatively limited part of government, the effect of a bit of


extra money is to significantly reduce the overall level of cuts.


But we knew, everyone is assuming the economy will grow by roughly


2.5% a year until the end of the decade, that is the assumption the


projections are based on, we knew that interest rates were staying low


for another while yet and that would affect the debt interest, the


service on the national debt that he had to pay. We know that if an


economy is growing there is a certain buoyancy at some stage in


tax revenues. So if we knew all that, why does all this come as a


surprise? Therein lies the risk. The changes in the OBR's forecast are


pretty small. They are five years out in terms of tax revenue. They


are genuinely small changes. The Chancellor has used most of those


changes essentially to add a bit to the spending, to reduce the spending


cuts he otherwise would have done. The risk for him, if that turns a


little bit again as they may well do, he will either have to do more


in terms of tax increases or go back to those departments and cut them


further. Remember in the last Parliament, when things looked


worse, he did not increase spending cuts to meet his target. This time,


when things are looking a bit better, he is not using that to have


a bigger surplus or have tax cuts, he is using it to protect public


services. This is the Chancellor's third Budget this year. We had the


March budget, the July Budget and now the autumn Spending Review. If


it is a 27 billion difference in the underlying improvement in revenues


in July of this year and mid-November when this was put


together, he probably should have a Budget of every three months now if


the figures are so wrong! Please, don't wish for such a thing! 27


billion is one of the silly numbers. It has accumulated over three or


four years will stop it only comes up to four or 5 billion at the end,


plus the has about 6 billion of tax increases at the end. The reason it


makes such a big difference is that he is actually only playing with


quite a small bit of public spending. The whole of welfare is


separate. Health, MOD and so on. Why did you not see this coming? We


don't do anything unless you tell us. We have always said there is a


lot of risk around. There is gearing between the small amount of spending


and small changes on borrowing and interest rates which may result. If


you look at the numbers, there are still big cuts in departments. There


is a 15% cut for justice. There are big cuts day-to-day spending for


transport. There is 12 billion of cuts for the unprotected


departments, which is still a big number. It is a big and substantial


additional cut. It is not quite as big as it would have been on the


July budget numbers, because the Chancellor has decided to use the


extra money he has, not to cut taxes or to increase the surplus at the


end, but to protect public services. To that extent, in a way,


given the political strategy was to move the Conservatives on to the


centre ground, as they saw Labour moving to the left, and there were a


lot of things in the July budget which had been in the Labour


manifesto, this budget, including the U-turns on tax credits and


police numbers, is a kind of continuation of that strategy? It


certainly using the money not to do the very conservative things like


cut taxes and increased spending. He has used it to increase spending. On


the tax credit point, it is terribly important to be clear that he has


changed nothing in the long run. In the long run, the cuts to Universal


Credit that were announced in the July budget, which are of a similar


scale to the cuts in the tax credits will come in. In the long run, he is


saving just as much and politically, he has got through that and that is


through... It is a matter of time and phasing. To summarise, the kind


of cuts that were envisaged in the July tax credit statement, do


eventually come down in a different way by the time Universal Credit


comes in? People on tax credits should realise that? No one will


face the tax losses they will face. Even as you go on to Universal


Credit, you are protected relative to what you are on. In the long run,


every new claimant will get the new lower amount. Mr Osborne is


achieving what he wants to achieve on the welfare state which is in the


long run... He has postponed it. What point would you like to make,


Robert? I think if you look at all the managed government spending, it


is now flat in real terms adjusted for inflation throughout Parliament,


in other words, actually, this is not a government which is any longer


cutting. This is probably the moment when one can say austerity, in the


extreme form certainly, is over. Within that, because there are a


number of departments which get useful increases, so defence up 2.3%


adjusting for inflation, that is reasonable increase. Health, up a


little bit more 3.3% adjusting for inflation, because of these


protected departments, there are reasonably big cuts elsewhere. And


one should not underestimate it, this will be painful for those who


depend on the services provided by those departments, but this is not


the kind of Armageddon those departments, but this is not


were talking about before those departments, but this is not


shift. Laura, do we see this budget, now that Paul


shift. Laura, do we see this budget, cut taxes, to increase public


spending, not to cut the police, is it a continuation of the


Chancellor's strategy to put his tanks on the centre ground?


Chancellor's strategy to put his no question about it. Dick Lee after


George Osborne's speech at the conference, that was an attempt to


roll his tanks onto the lawn -- particularly after George Osborne's


speech. We four years away from a general election with the Labour


opposition who have not found a groove yet. I think that may well


all be part of the story today. We have so much to pack in, even in


four hours, I have to be ruthless. Paul Johnson, we look forward to


seeing you. The press conference tomorrow? Of course. Excellent. One


of the tomorrow? Of course. Excellent. One


announcement was he decided there would be no further cuts to police


budgets in England and Wales. There has been a meeting of chief


constables and an elected police and crime commission is taking place in


Manchester Town Hall today. This was a very unexpected


announcement. We were all expecting cuts of 2225% in England and Wales.


At the Chancellor would pull a rabbit out of the hat to soften the


blow. Instead, he said no cuts to policing until 2020. To join me,


first of all Kevin Hurley, the police and crime commission for


Surrey. You were in the hall watching the announcement. What was


the response? It was almost euphoria if your team had scored a goal. We


should remember we were already in the process of implementing cuts. So


all is not well in the world. We will see further reductions in


policing on the earlier cuts, but this is good news. Fair play on the


Chancellor. He has listened and we are happy with what has happened so


far. Can you explain why you have to make further cuts? Should it not


stop in 2016? No, because the budgets are decided upstream. Some


forces will be significant. In Surrey, it is not so bad. The good


news we are hearing is the Chancellor will also allow us to


take some extra money on the council tax precept for police, which means


some forces like mine in view wealthier south can be completely


cosseted from all of this. It will not be quite as good in the North.


Professor Steve Davis, what do you think has brought about this shift


in George Osborne's thinking? I think he has got better than


expected figures for the annual growth rates. He thinks the higher


tax receipts will save him the political pain of having to make


such large cuts. Just to add something to what Kevin said, there


was a 31% real increase in spending between 2001 and 2010, the cuts we


have now have taken us back to where we were in 2003 and 2004. I do not


remember there being a collapse in policing at that time. If the


expected cuts had taken place it would take us back to where wearing


2001. They will be changing a lot of plans but there are some things


which have already been put through. They should think about how they


might reorganise the way they work, provide policing perhaps in


different ways. Do we really need 43 police forces, for example? Why do


we have each police force buying its own equipment and own kit? It makes


a lot of sense to do that nationally. You should always be


thinking about that. Private-sector businesses typically look to reduce


their costs by 4% every year. There is no why people in the public


sector should not also look to spend money more effectively. A final word


for Kevin. News about extra funding for firearms capabilities? That is


good news. But I share the point, 43 police forces is a silly business


model. I would like to be the first police and crime commission to be


redundant. I don't patrol the beat, other people do. If George Osborne


and Theresa May are listening, I'm sure they will take note for the


next round of budget cuts and budget plans. That is the view from


Manchester. Thank you, Danny, that is the first


voluntary redundancy offer we have had! Let's go to Jane Hill.


Thank you. Baroness Susan Kramer is with me and Douglas Carswell,


Ukip's MP. We were just listening to that interesting segment and you


made some strident point about what is going on here. On the face of it,


positive of course, no cuts to the police in England and Wales. George


has said no cuts to the police budget, but in the small print we


will see a massive increase in the police precept. The Government in


Whitehall will not get blamed for that but local Police and Crime


Commissioners will get it in the net. George has been clever in


shifting responsibility to find finance for the police. Clever


politics? It is good politics. I am not sure it is great for the


country. We need a Chancellor who understands what we need at this


time. This is the first year that the Home Office budget will be less


than the overseas aid budget. I do not think it is clever policy at


all. This will be really tough on deprived communities. There will be


a charge turning up to pay for the police, a charge turning up to pay


for old people, that is the social care budget, and it will fall


hardest on the deprived communities. At the same time, they


will get less money on their business rates if they are deprived


communities. If you are Kensington and Chelsea you can go home laughing


but if you are deprived community you got whacked today. There is more


pressure and responsibility put on local councils? I worry about the


bus network as well. We just heard the central Department for transport


will have its operational budget slashed. Does that mean paying for


buses outside the big cities, that that will all fall on councils as


well? I think there are a lot of issues we need to be worried about.


I think she is basically right. If I could sum it up, this is a Blairite


Budget. The Labour Party has lurched so to the extreme left, it has


created the space for a Blairite Budget. Like the Blairite budgets of


the past, it sounds a lot better than it turns out to be. There is a


lot in the small print I think we are going to find quite unpalatable.


Susan, do you understand how he has done it? Still talking about welfare


cuts, and yet a U-turn on tax credits, which I assume, as a


Liberal Democrat, makes you very happy? We still have ?12 billion in


welfare cuts, so it is coming. There has been some nudging about what is


going to come in in terms of tax receipts and borrowing to offset


some of the changes. We still have ?12 billion in cuts to welfare. I'm


delighted he stop the cuts to tax credits forwarding families. One of


the ironies is, had George Osborne been a House of Lords, he would have


voted for the Democrat motion to absolutely kill those cuts in tax


credits stone dead. He would not have voted with the Labour Party or


the Conservatives. Interesting. Susan Kramer and Douglas Carswell,


thank you for your reactions. It looks like the sun has come out


there. We are always kept in the dark, we never know what is


happening. We were grateful for that feature. A moment ago, we went


through a number of issues that came up in the Budget. Let's go through


them again. Here are the main measures announced in the Autumn


Statement and Spending Review. Tax credits, announced only in the July


post-election Budget, they have been cancelled in their entirety. There


will still be Universal Credit coming in which will embody some of


what the tax credit cuts had involved. We will talk about that in


a moment. There will be no cuts to the police Budget in England and


Wales. It was thought the Chancellor was under pressure to reduce the


cuts he was planning. The result is that there are no cuts at all. I


think the word Paris comes to mind when you look at that. NHS Budget in


England will rise, and the consequent rises for the help


budgets in Scotland, Wales and Northern Ireland as well. As local


authorities are squeezed, in one of their main roles in the community,


to provide social care, as that money gets squeezed there will be


allowed to increase council tax by 2% to pay for social care. And only


social care, too. We have a ?10 billion increase for education and


childcare. That is through the life of the Parliament, over a 4-5 year


period. There is an apprenticeship levy set at 0.5% of the employer's


wage bill. This is mainly designed for major employers, to encourage


them to do more to give people apprenticeship some skills. If they


do that, they get some of that levy back. It's not a new idea, it was


introduced by the Wilson government in the 1960s. There it is, round


again. 400,000 new homes, the story that was leaked overnight to the


broadcasters, 400,000 new homes. The Government getting into the property


development business. It seems to have a pot of money of about ?7


billion to be able to do it. Capital spending on transport is to rise by


50%, by the end of this decade, even as the administrative bill for the


transport Department is cut. We spoke a little while ago to the


former advisor for George Osborne, giving his first interview on


television. We are joined by another former adviser, Matt Hancock,


television. We are joined by another definitely not his first TV


interview and probably will not be his last


interview and probably will not be judge of that! A Minister


interview and probably will not be Department of honesty and admit that


if it hadn't been for the attacks in Paris, we would not be seeing a


freeze in any further cuts to the police Budget? The Spending Review


has been in the planning for several months, I don't know exactly when


the decision was taken. Crucially, the whole purpose of the Spending


the decision was taken. Crucially, Review is centred around national


the decision was taken. Crucially, goes back to the manifesto. We


the decision was taken. Crucially, out the manifesto, it was about


national and out the manifesto, it was about


National Security includes all of the defence items we outlined


earlier this week. It is the defence items we outlined


safety closer to home. Before the defence items we outlined


Paris, the Home Secretary was digging in his heels to try to avoid


cuts to police budgets. The Treasury was pushing them to come up with


more for the departmental cuts. Now there are to be no cuts. What


happened in between? It is Paris. It would seem crazy,


happened in between? It is Paris. It think, for a Conservative


government, or any government, to proceed with cuts to the police


Budget beyond what you have introduced? That is the truth of the


situation? I don't know exactly when the decision was taken. The question


is, what do you do over a four year Spending Review? How do you spend


the ?4 trillion worth of taxpayer money? As national security and


economic security are the bedrock of what we feel that we were elected


on, I think it is perfectly reasonable to make sure the police


are protected. At a time when this country faces the greatest terrorist


threat in its history, terrorist threat, not the greatest threat, the


Nazis beat that one, but the greatest terrorist threat, bigger


even than the 30 year terrorist threat from the IRA, in what way


does it make sense for the overseas aid Budget to be bigger than the


Home Office Budget, as Douglas Carswell just said? Well, hold on,


look at what we are going to be doing with the aid Budget. Of


course, you have to be working right around the world. We have a moral


obligation to the world's poor. We also redirecting the aid Budget to


support those on Europe's borders. It might work down the road, but you


have been following the news in Paris and Belgium, you will be aware


that a lot of bad guys are already here. Overseas aid is for future


years, they are here or heading here now, and yet you are spending more


on overseas aid and you are on the Home Office, does that make sense?


The whole package makes sense. We are protecting the police budget,


increasingly counterterror element of the budget by 20%. We are


increasing conventional defence with the defence review. I'm talking


about the terrorist threat. Crucially, we are making sure when


we spend aid money we are spending it at source, try to stop the


terrorist threat that source. But my point is that these people, that


might stop them... My point is that might stop them coming in five


years' time, what a couple of hundred million will do in Somalia,


Sudan Syria is another matter, I'm talking about the ones that are


already here. We need to tackle both, you are absolutely right. We


had to support police domestic, we have to support counterterrorism


officers and agencies, but we also have to do everything we can to stop


failed states and to make sure that, in those refugee camps, people do


not come here with the risk attached, especially if foreign


fighters come, of bringing terrorism with them. I think an overall


package that includes protection at home and trying to support failed


states on Europe's borders makes sense. You have to look at the whole


thing as a package. What kind of government comes up with a major


change to tax credit in July and then abandons it in November? Well,


we've got an improved set of forecasts, these forecasts said


there was ?27 billion extra, and that allows us to bring the debt


down faster than we were planning to in the July Budget, and also to


spend more on capital infrastructure, which is important,


I think he would probably agree. Where you wrong to introduce them in


the first place? I thought they were sensible measures. Why are you not


proceeding with them? Obviously we lost in the House of Lords. You


could have gone back. The difference between then and now, in the new


forecasts, the OBR, who are independent, said they expect ?27


billion extra. I think it is a reasonable use of some of that money


to mitigate the impact of the change. The key point is this, on


benefits, we were elected on a Monday to find ?12 billion worth of


benefits savings. -- on a mandate. You never told us what they would


be. We didn't specifically say what they would be. We are going to meet


the 12 billion, but do it in a different way to how we set out at


the previous Budget. But we've got the money to do it. Can we stay in


the Department Of Honesty and be clear that although the tax credit


cuts are not going to get people now, when Universal Credit comes in,


elements of what you were planning to do in tax credits will be


introduced, you will limit the child element to two children from April


17, you will abolish the family element in tax credits with ?425 per


year. This is some pain for the poorest families postponed, not


eliminated? That's not quite right, we are still making the ?12 billion


worth of savings that we said we would in the manifesto. We are


meeting the ?10 billion surplus by the end of the Parliament we set out


in July. The difference is, when people move on to Universal Credit,


unless their circumstances change they are protected and so they do


not lose cash, in cash terms. That means that you can make this


transition in a far more sensible way, and make sure that we get the


savings, the benefits of the spending by the end of the


Parliament that are just as big as we planned. And, crucially, it is


delivering on what we promised in the manifesto. We are up against it,


not just in terms of time, but we have to deal parts of the great BBC


multifarious empire that we are broadcasting to. It's interesting


when you go to the detail, an accountancy firm has come up with


analysis of what it means, this is actually a tax-raising Autumn


Statement, the tax-raising on businesses. You have the


apprenticeship levy, you have the Stamp Duty increase that we have


spoken about. You also have a lot of transference of grants for research


and development support being changed into loans. But they are cut


in corporation tax? They are, but when you go to the detail, I'm


looking at the business department, the Government will reduce the


teaching grant by ?120 million. They are changing student maintenance


grants to loans. There are a lot of cuts that are small scale, there


will be overwhelmed by the amounts on tax credits, by the announcements


on security, but in here is a lot of tax-raising power that actually


means that this is not a giveaway Autumn Statement in the slightest,


but is raising large amounts of money, as well as all of the


issues. What other bits are hidden in the small print? Loads and loads


of changes, because we are reforming the way the stage works. You have


hidden loads of changes in the small print? No, the Chancellor set out


the big things in the statement, then we published the book. On the


business changes, the Chancellor said that there is a 17% saving in


the business Department. Of course there is. There do have to be


savings. They are not as big, about half as big as the last Parliament,


but there are savings. You spend most of the last Parliament


attacking Labour for being far too optimistic in forecasting rises in


tax revenues when it was in power and then spending on the back of


that. Some would say there is a shift, some would describe it as a


bit of hypocrisy that here we have a Chancellor that always said he is


conservative, banking on these huge forecasts in increases in tax


revenues, which may be illusory. The last figures, which were terrible


for that, were not included in the figures. This is the independent


Office for Budget Responsibility, I'm glad that politicians no longer


do it themselves and it is done independently by experts. Thank you,


Matthew Hancock, probably not your last interview. We are here on BBC


Two until 3:30pm. It is time to say goodbye to viewers on the BBC News


Channel. Now the Government has promised to


continue to protect the English NHS budget, but that doesn't mean there


aren't still tough times ahead Our health editor Hugh Pym


is outside UCLH in London. Yes, Andrew, we learned a lot about


the funding for the NHS in England yesterday, with quite a significant


increase for next year, and then going through to 2020. The


settlements for Scotland, Wales and Northern Ireland will become clearer


with the detail of the Spending Review documents. Today we have also


learned that there will be cuts in other areas of health. There will be


reductions in public health, other areas of health. There will be


local authorities, and student nurses and midwives will have to


start paying tuition fees and for their own maintenance, and borrow


money. That actually could result in more training places. I am joined


here at UCLH by Andrew Haldenby from the think-tank Reform, and Rob


Webster of the NHS Federation. What do you make the overall picture? I


think the Chancellor has taken a gamble. He will try and make the NHS


more productive to cope with tighter money later on. I am not confident


that the NHS will become more efficient and productive in order to


help in the later years of the parliament. Efficiency savings are


still needed and we have not heard a lot more detail on that at all, have


we? The Chancellor's big pitch today was more money. I think the NHS


needs more productivity and more reform. Our work indicates that the


progress on that is slow. Rob Webster, what do you make about the


specific issue of student nurses and midwives having to pay for their own


tuition? Will that deter people? The universities have been lobbying for


more time to open this up. universities have been lobbying for


workforce which is committed to the NHS as it goes through this change


is a fundamental issue for the future. We should welcome the


upfront investment to help us do that. It does not make the need for


that to go away though. Big change is coming over the next five years.


Do you think public health budgets being cut will make it harder for


the NHS? Both public health and social care remain a concern for us.


A good shiny NHS cog in a broken machine will not work for patients.


We need to focus on prevention will stop fundamentally, we need to


ensure that social care is stop fundamentally, we need to


because older people need joined up services, whether it is their care


needs or their health needs. Quick word on the social care issue. What


have we learned today? The Government is worried about social


care. It will let governments raise taxes to pay more for social care.


It is not changing the services. A bit of extra money is not a


long-term solution. There were no long-term solutions. Thank you both


at UCL eight in central London, thank you for joining us. Back to


you, Andrew -- UCLH. thank you for joining us. Back to


The health service will be going over all that Frey carefully. It is


a lot of money for the health service but it is still under huge


pressure. Social care we see as part of our overall health service. Local


authorities will have some tax leeway. I guess the problem is, the


places where social care is most needed to be provided by the state,


the inner cities, are probably the needed to be provided by the state,


places where a 2% rise on council tax does not get you very much. This


is the sort of thing which puts the fear of God into places like


Liverpool where I was recently. It is a very interesting line in here


which shows that the transfer from central government to local


authorities is shrinking to almost nothing. At the moment, it is more


than ?11 billion. It jinxed almost ?5 billion over the course of the


parliament, because one of the Chancellor's big ideas is to


transfer much more revenue raising to the local authorities themselves,


which is brilliant, if you are in a wealthy constituency, or in a


wealthy local authority, but it is a disaster if you have got not support


people. I think we are at the beginning of a fairly big debate on


this. There are lots of people across the political spectrum who


think devolution of powers is a good thing in principle, because you want


local people to connect much more closely with local politicians and


local services, but if it means a massively widening gap between


services available in a poor region compared to a rich region, then


there are going to be a lot of very unhappy people out there. It is a


very interesting big idea, but it could be very painful and parts of


the country and there may be parts of the country which the Tories are


just writing off as places that could ever win.


I have just been told we have to go to College Green. Let's go back to


College Green where it is not Jane Hill, it is me, I have to do


everything on this programme! Let's go to Leanne Wood, the head of Plaid


Cymru. Good to see you. The Welsh block ground is going to go up, the


Chancellor has introduced a new funding formula for Wales and you


will be able to have your own income tax if you want it, you must be over


the moon with this? No, I am not! There are some snippets of good news


in the announcement today but overall I think people are Wales


will feel worse off as a result. The impact potentially on local


government and all of those areas that are not health risks, in some


cases, some of our local services collapsing altogether, and of


course, household budgets are likely to take a squeeze, despite the


announcement on tax credits, because what we don't know is the impact on


other benefits like housing benefit and that will hit the same people.


So I am not feeling joyful about this announcement today. I would


like to have seen a reverse of the cuts and investment in


infrastructure and investment in people. Caroline Lucas, I don't


think you will be over the moon about anything! That is quite


unfair! For me, I think it is a major missed opportunity. We are a


few days before the Paris climate talks and I would love to have seen


a massive investment in energy efficiency and home insulation, not


just because that will get our climate emissions down, but it will


tackle fuel poverty and people who cannot afford to keep their houses


warms and it would have created thousands of jobs as well. It is a


real wasted opportunity that he has not done it. Leanne Wood, you have


the Welsh Assembly elections coming up, the Greens could do well and


Plaid Cymru, if you had your own income tax powers in Wales, what


would you make of the basic interest rate and the top rate. I am not in a


point to give you that information at this point in time. We have not


got the power yet. You must have thought about it and dreamt of it.


And our priority would be to maximise the amount of money in the


Budget. Would you increased tax? There are different rates of tax. We


would look at what we want to do with each of those. Regardless of


even if we kept the tax rates as they are, the fact that you are


investing in job creation and then able to realise the benefits from


that is the purpose of having income tax powers. Would you like the Welsh


Assembly to increase tax, Caroline Lucas? Our Wales Green Party is


independent and it is up to them but the Green Party is not shy on saying


people on higher incomes should pay more tax. Meanwhile, talking about


this Autumn Statement right now, what we are concerned about is the


way that it is really falling on the way the vulnerable people are making


those cuts. In Brighton and there are more cuts to children's centres


and some of the real resources people depend on, and at the same


time, we are seeing a really dismissive attitude to nurses in the


NHS. On the one hand, George Osborne is trying to pretend this is


something positive about ensuring they can have loans, but actually,


they are cutting their bursaries. This is bad news for the NHS. Thank


you, we thank you for joining us on this BBC News special on the


Spending Review. Let's go now to Northern Ireland and


our political editor Mark Devenport. What is the view from Belfast on


what is happening? I think there is a general welcome on the


Chancellor's U-turn on the tax credits. Northern Ireland is one of


the places in the UK with the lowest incomes and the estimate that more


than 100,000 households would have been very seriously affected by the


original tax credit changes. The political deal we had last week at


Stormont including ?240 million that the local executive set aside for


mitigating the tax credit cuts. They have got a nice headache now. They


have to work out what they will spend the money on. Mark, we will


leave it there. Thank you. So, as we zoom around the


country from Belfast to Birmingham, we are only going to places


beginning with the. Let's go back to Jo Coburn


in Birmingham now. Did the Chancellor's figures add


up? It is all about the numbers driving forward a city like


Birmingham. He said he will be able to eliminate the deficit and still


have a ?10 billion surplus at the end of this Parliament. So, Jonathan


Isaby from the taxpayers Alliance, do the figures add up? The devil is


in the detail. We certainly welcome that commitment. It is the right


thing to do. But the OBR's economic forecast which was more positive


than expected, gave him far more room for manoeuvre but I feel it is


a missed opportunity, this Spending Review. Rather than expand deficit


reduction at a faster pace, he seems to have found more ways to spend


that money. Wouldn't it be better to spend that money on public services,


rather than pay down the deficit at this point in the parliamentary


cycle? There are things the state has to do. Reshaping and redefining


the whole role of the state. This is the very moment when he had a big


opportunity to do some big robust and radical things, when there is a


frankly weak opposition against him. So in your mind, a bit of a


missed opportunity. There will be those who will welcome his


announcement that he will not go ahead with the cuts to tax credits


or not yet. And there was more money going into health. We can speak to a


representative from the health union Unison. The Taxpayers' Alliance said


was a missed opportunity. The money that George Osborne has announced so


far is a drop in the ocean. When I speak to our members they say


they're worried and still worried about crisis in the winter. The 2%


that George Osborne announced is a small amount compared to what is


required. How small amount compared to what is


often hear about there being a winter crisis. It has not happened


in quite the way it has been predicted in recent years, thank


goodness, and we'll say here that more money has to be put in. It has


been chronically underfunded for a number of years. We will need


several billion pounds more going into social care. Social care, if we


don't have the right social care in place for older people, when they


are coming out of hospital, what happens is they stay in hospital


until the social care provision can be found and they are preventing


other people from using those hospital beds and then we will get a


crisis in A There will be an increase in trips and falls and I


think we will see a real problem in A George Osborne did not just


want to be known as the cutting Chancellor. Let's talk to a business


here in Birmingham, and interiors business run by Rob. Thank you for


coming onto the programme. The house-building programme George


Osborne was talking about will be good news for you? Fantastic news


for us and our clients building new homes across the country. Is it


enough in terms of providing the number of homes that are needed


after we have had a housing crisis? I think time will tell. I think it


is building the right homes in the right places for the right people.


What about Stamp Duty? It has had quite a big effect on our business


and our clients. They have significantly increased Stamp Duty


and I think they thought it would generate more tax. I think it has


done the opposite. People have stopped moving and stopped buying


over ?1 million. Thank you, back to you, Andrew. Thank you.


We are joined now by Stewart you, Andrew. Thank you.


the deputy leader of the SNP. The Chancellor has announced ?4 billion


for the health service, Scotland will get a consequent increase as


well, will the Scottish government spend that increase on health? Yes,


the Scottish government have been clear that the money will be spent


on the health service and that is good news for people in Scotland.


Why have you not kept pace with health spending in Scotland compared


to England over the last five years? There has been a real terms increase


over the last Parliament. I think the increase was ?450 million.


Without -- we are now spending more than ?12 billion a year on the NHS


in Scotland and it is the most successful part of the NHS in the


UK. Were doing the right thing in very straitened times and I think it


has been a very good result but the challenges the NHS has had to face.


You must be very grateful not having to sit in Edinburgh and thinking


about having to put together a Scottish budget, given that oil


revenues are 95% below what you were forecasting them to be by this


stage? Scotland isn't responsible for North


Sea oil. Unfortunately, that was one of the areas that was not devolved.


With one of the business taxes that we could craft real solutions for


Scotland, they have not been delivered. The package set by the UK


includes the softening and yield from the softening oil price. It is


not softening in yield, it is a collapse of 95%. In the second


quarter of this year, oil revenues were negative, the taxpayer


subsidise the industry. If you had voted for independence, you would


have had the power, and you would have had an ?8 billion black hole in


your fiscal plans. We heard the statement today, we see that the


national debt is still forecast to reach ?1.6 trillion. I think any


short-term or cyclical issue with taxi yield from one source or


another, however difficult it may be over short or medium term, is as


nothing compared to the UK black hole, approaching 90%... And


independent Scotland would have inherited 10% of that national debt.


That would have been your share. On top of that, you would have an ?8


billion shortfall in oil revenues. You would have been cutting


hospitals, you would have been closing schools, you would really


have been the party of austerity. The good news is that we are


actually building schools, opening hospitals. Sure, because you lost


the referendum. We are investing a record amount to the NHS. Because


you lost! The fact you are trying to reframe the referendum... Not at


all! It shows the obsession you have. We have just had a Spending


Review, where the Chancellor boasted he still plans to cut ?42 billion a


year out of the Budget, more than he needs to to run a balanced economy.


I think we should focus on the impact that will have for real


people, rather than the hypotheticals you want to keep


posting. Well, cutting hospitals and schools have an impact on people


beyond the Westminster bubble. But the Scottish Government will have


some substantial tax-raising powers, are you going to use them? We will


have modest powers, if the UK Government and Scottish Government


agree on a fiscal framework that works for the people of Scotland. I


am more than happy to say this again, we will use every power we


can to the very best of our ability. Let nobody be under any


illusion, this is not a substantial package of powers, it is a modest


group of powers. I am still not sure if you're going to use them or not,


but no doubt we will have an opportunity to return to that.


Stewart Hosie, thanks for being with us. What are you thinking now? How


is this going to develop? Kamal is going through the detail. There is a


lot of detail, when you add the small numbers up, there is plenty to


keep the papers and the broadcaster is busy between now and the weekend?


There are cuts in here. George Osborne has made the political


choice to try to stick to the centre and slow them down, using that


sunnier outlook of the economy. But there are cuts in here. What we


often find with big set piece statements like today, it is the


cuts that might seem like rounding errors, or a margin on a Treasury


spreadsheet here or there that do blow up into real political


embarrassments. Don't forget, back in 2012, this Government got


themselves into trouble over pasties and sausage rolls. And caravans!


Don't forget caravans. Things that seem small end up being problems.


There will be areas that will be very significant for members of the


public. There are further changes to housing benefit that will be


difficult for some people. There are changes to the Employment and


Support Allowance, sick pay, as most people would call it. There are


changes in Universal Credit that will replace tax credit. Frank


Field, a prominent opponent of tax credit changes, is already saying


this afternoon, and a Universal Credit, families with two children


will still stand to lose ?2500 a year. Some of the problems are still


there? Yes, and while I think George Osborne will be pretty content with


the overall political picture, does that mean that today he is somehow


away scot-free from everything in this statement? Not a bit of it.


Give us just a quick taste? I would suggest to anybody that can be


bothered to go through these documents, and Efficiency And


Reform, I think that will be the key to start swapping some of the


numbers. I have gone through the business department, I'd love that


transport, picking a couple. Reduce the teaching grant by ?120 million


in cash terms. What they call ?360 million of efficiency and savings


from the adult skills budget, a massive issue for people trying to


retrain. In transport, we have a cut to the transport for London budget,


which will mean a grand reduction of ?700 million by 2020. A big impact


on transport on the city that we are in today. The little speckles of


cuts, and also the big issue, always a bit slippery, digitisation. Big


government computer schemes will save loads of money. That has always


been the case in the past(!) How often have we heard that will be the


case, for these systems to blow up in the Government's face and cost


more money than expected. Just like the better economic schemes and tax


receipts, they have banked some of the money early. They have said that


the Department for Transport digitisation will save ?94 million.


Well, they haven't done it yet, so let's watch those numbers. Given the


BBC record of computerisation, we might just move on from that issue.


Here is the political rub, I would suggest, if the rosy scenario should


turn out to be a false goddess, it will start to blow just about the


time, say 2018, when the Chancellor will be measuring the curtains, he


would hope, for Number 10 Downing Street? That is what is slightly odd


about the decisions he has made today. As I said, given that


actually he is less popular than he was, I would have thought the would


want to get the bad news out early in this Parliament, and then build


from there, instead of which, he has tried, with his U-turn on tax


credits, he is trying to do a U-turn in terms of opinion about him. He's


trying to make himself loved again. There is a risk that the OBR is too


optimistic on tax revenues. If it turns out that way, he will have a


bit of egg on his face. May be a whole omelette! As you have heard


from Laura, apart from his personal ambition, a huge political judgment


here. George Osborne wants the Tories to win from the centre, not


the right. This is his big strategic shift, to move the Tory party into


ground that was Tony Blair's ground. He was a huge admirer of Tony Blair.


He has seen Labour moved to the left and he wants Tony Blair's space. On


the Labour response, I would guess from the early commentator


responds, that Mr McDonnell's reaction is not going to be too


kindly treated, even in the centre-left papers tomorrow? I don't


think standing up and waving around a copy of the Little Red Book and


quoting Chairman Mao will go down as being a wise decision for a


politician whose great criticism has been made of over the fact of how


left-wing he is. Many people in the Labour Party will look at that. We


had hoped we would be able to speak to the Shadow Chancellor, John


McDonnell, this point. He has been detained in the Conference chamber,


we are told. The Shadow Chief Secretary to the Treasury can join


us. What has happened to Mr McDonnell? Why can't we speak to


him? We are delighted to have you, of course, why can't we speak to


him? I understand he is still in the chamber and has other commitments.


As you know, it is a pretty busy afternoon. Ed Balls always found


time. Never mind, we are delighted to have you. Mr McDonnell criticised


the Chancellor for racking up too much debt, ?1.6 trillion, for the


deficit being too high. I thought was his position, your position,


your party's position, that the original plans to cut the deficit


were too Draconian? Surely, in the end, the Chancellor did roughly what


he wanted him to do? What John was saying is that we have a Chancellor


that has failed on his own terms. He has set his own targets and he has,


step-by-step, failed them. He has come back to the House of Commons


with four fiscal charters. So, what we said is that you have to be


accountable, also, for what you have said in Parliament. Aren't you glad


he has failed? Isn't it a good thing, from


he has failed? Isn't it a good the fiscal consolidation is only 50%


of what he said? It is a failure on his own terms. He has failed in


investing in the country for the future. He has failed on


productivity, which is flat-lining. He has failed to really invest in


infrastructure, were only 9% of his projects have actually started.


infrastructure, were only 9% of his have seen house-building


infrastructure, were only 9% of his slow under him, while


Chancellor. The Chancellor, even now,


Chancellor. The Chancellor, even surplus, in the figures he outlined


today, the Chancellor will still borrow another ?155 billion, which


will be added to the national borrow another ?155 billion, which


before he hits the surplus. Is that too much, too little? Or about


right? Well, we have to look at the detail of what he's doing, which


will come through when we managed to study the documents. Should he


borrow more than not? What is going to happen as a


result of this spending statement not? What is going to happen as a


today, what is it that we not? What is going to happen as a


to see in terms of the impact on our public services, people's family


income, we know that he has said that he has reversed the tax credits


cuts that he proposed, but there is still ?1 billion that is unaccounted


for, which looks like it will come still ?1 billion that is unaccounted


from Universal Credit. So, you will still have families that are working


very hard to still have families that are working


be hit by that. This is a smoke still have families that are working


mirrors a statement. What you see is not necessarily what you are going


to get. I understand, let me not necessarily what you are going


back to my question. Is the fiscal stance of this Government, in your


view, or about right? Should they be borrowing more or less? We have said


that what we have seen in George Osborne's decisions is that he makes


the wrong choices. I'm not asking you that, with respect, I'm asking


if his fiscal stance is right, should he borrow more or less? We


would support borrowing for investment. Investment where you


would see growth coming out from that investment where you would say


savings coming out from that, housing being one example. You won't


cut the housing benefit bill sustainably unless you build houses


and we have seen that what he has promised before has not been


delivered. Given what Mr McDonnell did today, are you a regular reader


of the thoughts of Chairman Mao, again? Of the Chancellor was


doing... I'm asking what you read! Why did you last read the thoughts


of Chairman Mao? He was holding George Osborne to account... With


Chairman Mao? He was making a statement that George Osborne should


not be selling of his assets to foreign countries when he will not


invest in his own. That is it on BBC Two, after four hours of public


service coverage at its finest, I'm sure you will agree, of the Spending


Review and Autumn Statement. Debate continues on BBC Parliament and the


news channel will have more. The Daily Politics will be back tomorrow


at noon. How could you miss that? Goodbye, Robert! Goodbye everybody.


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