Andrew Neil analyses the government's Spending Review with former Conservative cabinet minister Andrew Lansley and Labour's shadow treasury minister Rebecca Long-Bailey.
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saying goodbye to viewers on BBC Two.
Welcome. coverage of this debate. We're
Now, first today, let's talk about migration.
Figures out this morning show that net migration to the UK has hit
The difference between the number of people coming to live in Britain
and those emigrating was 336,000 in the 12 months to the end of June.
The total is 82,000 higher than in the previous year.
It means the government has slipped further from its target
of getting net migration down to the "tens of thousands" by 2020.
it was meant to be of course by 2015, and indeed the target is
actually receding into the distance. Andrew Lansley, wouldn't the
government just be better to give up on this target? It is not easy to
see how it is going to be done, is it? Because when you set a target,
in principle you should do is use targets for things that you can
control, and to some extent this turns out to be something they don't
appear to be able to control. I have only seen the numbers this morning,
but unless I'm missing something, there was both a significant
increase in the numbers coming here from elsewhere in the European
Union, and that is principally for jobs. And as things stand, the
renegotiation with the EU may reduce some of the incentives that he would
come the jobs, but if they are coming hither jobs and get a
national living wage in years to come, that is pretty attractive. We
are doing well in job creation. But I think there was also a significant
increase in the numbers coming here from outside the European Union.
Which is that we are meant to be able to control. There are still way
over 100,000, tens those well over 100,000 from outside the EU coming
in. We do have to look inside this big number and say what is going on.
If people are coming here in order to fill jobs where we don't have
people domestic league table or unwilling to do those jobs, that is
a good thing. You can see in the long-term economic forecasts what a
benefit that could have, in terms of overall output. And the same, I
think personally, it's pretty much true for those who are coming here
and then going home for higher education purposes. But actually you
can even take those numbers out and you have still got a significant
increase. There is a sense where this all began six years ago of, how
do we cope with population increases on this scale? Something of the
order of 1% of increase in population a year. This is not
really tenable in the long run. The government clearly came nowhere near
that its target of 2015. We agree it is pretty unlikely from what we have
seen so far it is not going to hit it in 2020. At the moment you are
looking at it and saying what will be the difference between not the
only thing in prospect at the moment is the change to migrant benefits
and in work benefits for those coming from elsewhere. I think that
will make all the difference? No, I don't.
Now, let's talk about yesterday's Spending Review, or the
Chancellor's Autumn Statement, whatever you prefer to call it.
You might be forgiven for thinking Christmas had come early.
Springing out of the Chancellor's Christmas stocking, an extra ?27
billion, allowing the Chancellor to perform all sorts of magical tricks.
Let's have a look at what he had to say, in detail.
That windfall from the new OBR forecast allowed
the Chancellor to reverse plans to introduce ?4.4 billion worth of tax
credit cuts that were supposed to be introduced this year.
It means George Osborne will breach his own welfare cap
in the early years of this parliament, before tax credits are
phased out by 2018 and replaced by a Universal Credit payment.
It wraps up six different welfare payments.
The day-to-day expenditure of government departments will fall
20 billion, on average, by 2020, but the burden isn't equally shared.
The departments for transport, energy, business and the environment
are the biggest losers, with their day-to-day budgets falling by
The NHS, education, defence and foreign aid budgets were protected.
The NHS will receive an up front cash injection of ?3.8
billion above inflation next year, as part of the ?8 billion extra to
A new apprenticeship levy of 0.5% on company payrolls
from April 2017 will raise ?3 billion a year, and fund three
From next April, the basic state pension will rise to ?119.30 a week.
The Chancellor gladdened the hearts of police officers
by promising there would be no real-terms cuts to police budgets
in England and Wales, but forces will be expected to make efficiency
And, despite difficult financial circumstances, George Osborne still
plans to have eliminated the deficit, and be running a ?10.1
First of all, the Spending Review takes the
necessary decisions to make sure that Britain stops borrowing, runs
And that involves difficult decisions on spending and tax
and particularly on day-to-day spending, in order to
invest in the long-term and invest in our NHS and our police.
And my central judgment is that by taking those decisions, no more, no
less, there is light at the end of the tunnel for Britain and we can
Well, this morning, Shadow Chancellor John McDonnell
said his party wasn't completely satisfied with George Osborne's
We had three targets in terms of Labour's campaign - one was to
Unfortunately, it is only a partial victory.
It is a bit George Osborne-ish, as usual.
He is going ahead with the Universal Credit cuts and that means
families still losing out, as they get shifted on to Universal Credit.
On average about ?1,000 but people with disabilities,
for example, about ?2,500 and loan parents ?2,500.
So partial victory on that but we'll keep on campaigning to try
And with me now, the Shadow Treasury spokesman,
Rebecca Long-Bailey, and Torsten Bell of the Resolution Foundation, a
nonpartisan think tank, which works to improve the living standards
Andrew Lansley is, of course, still with us.
Let me come to you first, Thurston, the Chancellor will not be talking
about taking away tax quotes between the now and the end of tax credits
and universal credits comes in between now and 2018. What happens
to those people that the Chancellor had targeted in July but is no
longer targeting in universal credit? That is not quite right,
Andrew. What the Chancellor did yesterday is a very welcome return
to his plans. The tax credit cuts, that is welcome because it will
offer reassurance... What happens when me get universal credit? In
terms of using tax credits taking people away with more than two
children, are going ahead. Then we turn to universal credit and what is
that, and the Chancellor has maintained the cuts to universal
credit that were set out in the summer budget, leave those place. As
the Chancellor said in his statement, there are no changes to
those cuts. So when it moves to universal credit, the cuts that
would have affected people if the Chancellor had proceeded with his
July statement, they will affect these people, come universal credit?
Most of those cuts will affect people in universal credit and they
will obviously happen in a slightly different way but in slippers
plastic terms can be yes. Most of those cuts will take place in
universal credit that the point that that system is full and up and
running. So pay and delay -- pain delayed? The Chancellor listened to
people who said the transition, that taking tax credits away next April
at a point where there has not been an increase in the income tax
personal allowance, where all the additional childcare is not in place
and particularly where people are not being paid at the national
living wage, that created a transitional problem. Of course what
he has dealt with is the transitional problem, by taking away
that additional reduction in people's income until such time as
there are these other compensating benefits. What do you say to that?
Let's look at the compensating benefits, the national living wage
is a farce, to say the least. The Institute for Fiscal Studies has
claimed it is arithmetically impossible to commentator these
families's losses. It is a farce. You say, it is going up to ?9. The
last Labour manifesto, ninth and 30, let me finish the question, the last
Labour Party manifesto in May of this year promised it would only go
up to ?8. Green it is certainly welcome. Is it a farce or is it
welcome? Can't be both. It is not possible to compensate them by
increasing the national minimum wage. That may well be true but that
is a different point. I am just trying to work out how a national
minimum wage of over nine quid could be a farce when the one you promise
to make at only eight quid is not a farce. The question was linked with
how it would deal with these families. They need more than an
increase in the national living wage quite frankly, they need a clear and
cob rancid industrial and economic strategy. That is just political
rhetoric, all politicians talk about that. By how much do you think the
national minimum wage should be by the end of this Parliament? We need
to look at other options available, and we should not just focus on the
national minimum wage. Forgive me, I am come I am asking you how much you
think, if ninth and 30 is not enough, and many people would say it
is not, how much do you think the national living wage, how much do
you think it should be by the end of this Parliament? A good Chancellor
would not simply focus on increasing living wage as a means to improve
people's living standards, they would look at all options in terms
of improving housing, assessing the levels of rent people are providing.
We saw none of that in yesterday's statement. If you take Andrew
Lansley's point, and then get the 2018-19, the threshold has been
raised, and the move towards the ?9 30 minimum wage is underway. What
difference does that make to the people moving on to universal credit
who will then lose a bit? That is a good question, and I disagree with
both Rebecca and Andrew, because the national living wage is a big deal,
the increase is large and it will have a big difference to people who
are on that. But it is also wrong to say that that and the personal
allowance changes and any childcare changes will make a large difference
to the losers from universal credit changes coming in this Parliament.
That is for a number of reasons, people who are losing from universal
credit on: The then wage. People who are losing from universal credit
don't pay very large tax bills in general so don't get the same
benefit from the changes to the personal allowance was not prior to
the statement, our analysis said we were expecting those changes to
possibly compensate within the region of ten, 15, 13% of the
losses, we're not talking about eradicating them. The argument that
this will allow these losses to be wiped out doesn't hold. So it is
still pain delayed? It is moving from a situation where we have
relatively large, something like six out of ten people on tax credits, to
a position where under universal credit it will still be something
like five out of ten? Torsten will probably know. There is a reduction
in the number of people who are dependent on the income being set by
the Chancellor of the Exchequer. I think this is a very positive move,
moving to a place where people know that work is their work, their
income, left in their pockets is actually the basis upon which their
household income is established. Andrew is getting to the core
argument that people should be making for these universal credit
changes take in place, that is a principled view that people in work
should be receiving less support from the state over time. We don't
agree with that but that is an argument, but that is not an
argument being made by many. The Chancellor this morning on the Today
programme said nine out of ten people who were on tax credits in
2010, he thought that was wrong. The Chancellor took away in the last
parliament from the higher earners. The system that is left is
supporting work incentives and child poverty for the core working
population on learning comes in our country and that is why we are
seeing these changes now having a real effect. Does Labour still I
support the working tax credit We are assessing the pilot. There are a
number of alarm bells ringing. I understand that. Do you think you
will come out against it? I think we need to take a strategic overvu.
There are elements that could be taken as positive steps forward but
in terms of the ongoing management that families face in terms of
finances, I think many people struggle. Would you make any changes
to tax credits? We would reverse the Government's current proposals to
cut tax credits. They have done that themselves. They have already done
that. The proposals they put forward were a partial step and we welcome
that. As John has outlined. What I asked you, was not what the
Government is doing, would you make any changes to tax credits? We would
reverse the Government's proposals in full on tax credits, but that has
to be done hand-in-hand with a long-term economic strategy that
would require invest in industry. At the moment we are seeing, in temples
devolution, the creation of a Wild West industry where regions will be
competing against each other. There will be a race to the bottom in
business rates. The social care precept announceside worrying, local
authorities will be left in a position where they will be left to
float on their own and bring in their own income. We'll leave it
there. Well, what did the papers make of it
all? And joining me now from College
Green, two of Fleet Street's finest, Sam Coates from the Times and Nick
Watt from the Guardian. Sam Coates, the Chancellor got a
pretty decent press this morning but it is usually on Day 2 that we find
out things that he didn't want us to know. How is that going? One of the
reasons George Osborne had a pretedy good day yesterday is that he had
?27 billion of funny money to play with, money that he didn't know he
had in July. Two-thirds of which has magiced into his account because of
modelling changes by the Office for Budget Responsibility, presumably an
error by the Office for Budget Responsibility in judgment of he is
placing an awful lot on those changed forecasts in order to be
able to fulfil a wish list that seems to have kept most of his
backbenchers happy. The money to pay for tax credit U-turns, the money to
stop the police cuts have all come from this. The important point is he
made a big decision. In the
Andrew Neil with all the latest news from Westminster, including analysis of the government's Spending Review with former Conservative cabinet minister Andrew Lansley and Labour's shadow treasury minister Rebecca Long-Bailey. Also includes coverage of the prime minister's statement to the House of Commons on air strikes against so-called Islamic State in Syria.