26/11/2015 Daily Politics


26/11/2015

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.

:00:38.:00:37.

Welcome. coverage of this debate. We're

:00:38.:01:59.

Now, first today, let's talk about migration.

:02:00.:02:00.

Figures out this morning show that net migration to the UK has hit

:02:01.:02:03.

The difference between the number of people coming to live in Britain

:02:04.:02:08.

and those emigrating was 336,000 in the 12 months to the end of June.

:02:09.:02:11.

The total is 82,000 higher than in the previous year.

:02:12.:02:14.

It means the government has slipped further from its target

:02:15.:02:16.

of getting net migration down to the "tens of thousands" by 2020.

:02:17.:02:35.

it was meant to be of course by 2015, and indeed the target is

:02:36.:02:44.

actually receding into the distance. Andrew Lansley, wouldn't the

:02:45.:02:47.

government just be better to give up on this target? It is not easy to

:02:48.:02:51.

see how it is going to be done, is it? Because when you set a target,

:02:52.:02:56.

in principle you should do is use targets for things that you can

:02:57.:02:59.

control, and to some extent this turns out to be something they don't

:03:00.:03:05.

appear to be able to control. I have only seen the numbers this morning,

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but unless I'm missing something, there was both a significant

:03:09.:03:12.

increase in the numbers coming here from elsewhere in the European

:03:13.:03:15.

Union, and that is principally for jobs. And as things stand, the

:03:16.:03:21.

renegotiation with the EU may reduce some of the incentives that he would

:03:22.:03:24.

come the jobs, but if they are coming hither jobs and get a

:03:25.:03:26.

national living wage in years to come, that is pretty attractive. We

:03:27.:03:32.

are doing well in job creation. But I think there was also a significant

:03:33.:03:36.

increase in the numbers coming here from outside the European Union.

:03:37.:03:40.

Which is that we are meant to be able to control. There are still way

:03:41.:03:49.

over 100,000, tens those well over 100,000 from outside the EU coming

:03:50.:03:55.

in. We do have to look inside this big number and say what is going on.

:03:56.:03:59.

If people are coming here in order to fill jobs where we don't have

:04:00.:04:02.

people domestic league table or unwilling to do those jobs, that is

:04:03.:04:08.

a good thing. You can see in the long-term economic forecasts what a

:04:09.:04:10.

benefit that could have, in terms of overall output. And the same, I

:04:11.:04:17.

think personally, it's pretty much true for those who are coming here

:04:18.:04:21.

and then going home for higher education purposes. But actually you

:04:22.:04:26.

can even take those numbers out and you have still got a significant

:04:27.:04:31.

increase. There is a sense where this all began six years ago of, how

:04:32.:04:39.

do we cope with population increases on this scale? Something of the

:04:40.:04:45.

order of 1% of increase in population a year. This is not

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really tenable in the long run. The government clearly came nowhere near

:04:50.:04:54.

that its target of 2015. We agree it is pretty unlikely from what we have

:04:55.:04:58.

seen so far it is not going to hit it in 2020. At the moment you are

:04:59.:05:02.

looking at it and saying what will be the difference between not the

:05:03.:05:05.

only thing in prospect at the moment is the change to migrant benefits

:05:06.:05:08.

and in work benefits for those coming from elsewhere. I think that

:05:09.:05:15.

will make all the difference? No, I don't.

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Now, let's talk about yesterday's Spending Review, or the

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Chancellor's Autumn Statement, whatever you prefer to call it.

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You might be forgiven for thinking Christmas had come early.

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Springing out of the Chancellor's Christmas stocking, an extra ?27

:05:26.:05:27.

billion, allowing the Chancellor to perform all sorts of magical tricks.

:05:28.:05:30.

Let's have a look at what he had to say, in detail.

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That windfall from the new OBR forecast allowed

:05:34.:05:35.

the Chancellor to reverse plans to introduce ?4.4 billion worth of tax

:05:36.:05:38.

credit cuts that were supposed to be introduced this year.

:05:39.:05:47.

It means George Osborne will breach his own welfare cap

:05:48.:05:50.

in the early years of this parliament, before tax credits are

:05:51.:05:53.

phased out by 2018 and replaced by a Universal Credit payment.

:05:54.:06:04.

It wraps up six different welfare payments.

:06:05.:06:06.

The day-to-day expenditure of government departments will fall

:06:07.:06:16.

20 billion, on average, by 2020, but the burden isn't equally shared.

:06:17.:06:19.

The departments for transport, energy, business and the environment

:06:20.:06:21.

are the biggest losers, with their day-to-day budgets falling by

:06:22.:06:24.

The NHS, education, defence and foreign aid budgets were protected.

:06:25.:06:34.

The NHS will receive an up front cash injection of ?3.8

:06:35.:06:38.

billion above inflation next year, as part of the ?8 billion extra to

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A new apprenticeship levy of 0.5% on company payrolls

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from April 2017 will raise ?3 billion a year, and fund three

:06:53.:06:54.

From next April, the basic state pension will rise to ?119.30 a week.

:06:55.:07:06.

The Chancellor gladdened the hearts of police officers

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by promising there would be no real-terms cuts to police budgets

:07:09.:07:11.

in England and Wales, but forces will be expected to make efficiency

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And, despite difficult financial circumstances, George Osborne still

:07:15.:07:39.

plans to have eliminated the deficit, and be running a ?10.1

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First of all, the Spending Review takes the

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necessary decisions to make sure that Britain stops borrowing, runs

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And that involves difficult decisions on spending and tax

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and particularly on day-to-day spending, in order to

:08:05.:08:06.

invest in the long-term and invest in our NHS and our police.

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And my central judgment is that by taking those decisions, no more, no

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less, there is light at the end of the tunnel for Britain and we can

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Well, this morning, Shadow Chancellor John McDonnell

:08:18.:08:27.

said his party wasn't completely satisfied with George Osborne's

:08:28.:08:29.

We had three targets in terms of Labour's campaign - one was to

:08:30.:08:45.

Unfortunately, it is only a partial victory.

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It is a bit George Osborne-ish, as usual.

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He is going ahead with the Universal Credit cuts and that means

:08:59.:09:01.

families still losing out, as they get shifted on to Universal Credit.

:09:02.:09:04.

On average about ?1,000 but people with disabilities,

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for example, about ?2,500 and loan parents ?2,500.

:09:07.:09:08.

So partial victory on that but we'll keep on campaigning to try

:09:09.:09:11.

And with me now, the Shadow Treasury spokesman,

:09:12.:09:19.

Rebecca Long-Bailey, and Torsten Bell of the Resolution Foundation, a

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nonpartisan think tank, which works to improve the living standards

:09:23.:09:24.

Andrew Lansley is, of course, still with us.

:09:25.:09:33.

Let me come to you first, Thurston, the Chancellor will not be talking

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about taking away tax quotes between the now and the end of tax credits

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and universal credits comes in between now and 2018. What happens

:09:48.:09:51.

to those people that the Chancellor had targeted in July but is no

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longer targeting in universal credit? That is not quite right,

:09:57.:10:00.

Andrew. What the Chancellor did yesterday is a very welcome return

:10:01.:10:06.

to his plans. The tax credit cuts, that is welcome because it will

:10:07.:10:13.

offer reassurance... What happens when me get universal credit? In

:10:14.:10:17.

terms of using tax credits taking people away with more than two

:10:18.:10:22.

children, are going ahead. Then we turn to universal credit and what is

:10:23.:10:25.

that, and the Chancellor has maintained the cuts to universal

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credit that were set out in the summer budget, leave those place. As

:10:30.:10:33.

the Chancellor said in his statement, there are no changes to

:10:34.:10:39.

those cuts. So when it moves to universal credit, the cuts that

:10:40.:10:43.

would have affected people if the Chancellor had proceeded with his

:10:44.:10:47.

July statement, they will affect these people, come universal credit?

:10:48.:10:53.

Most of those cuts will affect people in universal credit and they

:10:54.:10:56.

will obviously happen in a slightly different way but in slippers

:10:57.:10:59.

plastic terms can be yes. Most of those cuts will take place in

:11:00.:11:04.

universal credit that the point that that system is full and up and

:11:05.:11:11.

running. So pay and delay -- pain delayed? The Chancellor listened to

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people who said the transition, that taking tax credits away next April

:11:18.:11:21.

at a point where there has not been an increase in the income tax

:11:22.:11:25.

personal allowance, where all the additional childcare is not in place

:11:26.:11:27.

and particularly where people are not being paid at the national

:11:28.:11:32.

living wage, that created a transitional problem. Of course what

:11:33.:11:35.

he has dealt with is the transitional problem, by taking away

:11:36.:11:38.

that additional reduction in people's income until such time as

:11:39.:11:41.

there are these other compensating benefits. What do you say to that?

:11:42.:11:47.

Let's look at the compensating benefits, the national living wage

:11:48.:11:52.

is a farce, to say the least. The Institute for Fiscal Studies has

:11:53.:11:55.

claimed it is arithmetically impossible to commentator these

:11:56.:12:00.

families's losses. It is a farce. You say, it is going up to ?9. The

:12:01.:12:07.

last Labour manifesto, ninth and 30, let me finish the question, the last

:12:08.:12:11.

Labour Party manifesto in May of this year promised it would only go

:12:12.:12:16.

up to ?8. Green it is certainly welcome. Is it a farce or is it

:12:17.:12:23.

welcome? Can't be both. It is not possible to compensate them by

:12:24.:12:26.

increasing the national minimum wage. That may well be true but that

:12:27.:12:30.

is a different point. I am just trying to work out how a national

:12:31.:12:34.

minimum wage of over nine quid could be a farce when the one you promise

:12:35.:12:39.

to make at only eight quid is not a farce. The question was linked with

:12:40.:12:41.

how it would deal with these families. They need more than an

:12:42.:12:46.

increase in the national living wage quite frankly, they need a clear and

:12:47.:12:49.

cob rancid industrial and economic strategy. That is just political

:12:50.:12:54.

rhetoric, all politicians talk about that. By how much do you think the

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national minimum wage should be by the end of this Parliament? We need

:12:59.:13:02.

to look at other options available, and we should not just focus on the

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national minimum wage. Forgive me, I am come I am asking you how much you

:13:08.:13:12.

think, if ninth and 30 is not enough, and many people would say it

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is not, how much do you think the national living wage, how much do

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you think it should be by the end of this Parliament? A good Chancellor

:13:24.:13:27.

would not simply focus on increasing living wage as a means to improve

:13:28.:13:30.

people's living standards, they would look at all options in terms

:13:31.:13:34.

of improving housing, assessing the levels of rent people are providing.

:13:35.:13:39.

We saw none of that in yesterday's statement. If you take Andrew

:13:40.:13:44.

Lansley's point, and then get the 2018-19, the threshold has been

:13:45.:13:53.

raised, and the move towards the ?9 30 minimum wage is underway. What

:13:54.:14:00.

difference does that make to the people moving on to universal credit

:14:01.:14:06.

who will then lose a bit? That is a good question, and I disagree with

:14:07.:14:10.

both Rebecca and Andrew, because the national living wage is a big deal,

:14:11.:14:13.

the increase is large and it will have a big difference to people who

:14:14.:14:19.

are on that. But it is also wrong to say that that and the personal

:14:20.:14:23.

allowance changes and any childcare changes will make a large difference

:14:24.:14:26.

to the losers from universal credit changes coming in this Parliament.

:14:27.:14:30.

That is for a number of reasons, people who are losing from universal

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credit on: The then wage. People who are losing from universal credit

:14:35.:14:38.

don't pay very large tax bills in general so don't get the same

:14:39.:14:43.

benefit from the changes to the personal allowance was not prior to

:14:44.:14:46.

the statement, our analysis said we were expecting those changes to

:14:47.:14:49.

possibly compensate within the region of ten, 15, 13% of the

:14:50.:14:54.

losses, we're not talking about eradicating them. The argument that

:14:55.:14:58.

this will allow these losses to be wiped out doesn't hold. So it is

:14:59.:15:04.

still pain delayed? It is moving from a situation where we have

:15:05.:15:07.

relatively large, something like six out of ten people on tax credits, to

:15:08.:15:12.

a position where under universal credit it will still be something

:15:13.:15:15.

like five out of ten? Torsten will probably know. There is a reduction

:15:16.:15:22.

in the number of people who are dependent on the income being set by

:15:23.:15:25.

the Chancellor of the Exchequer. I think this is a very positive move,

:15:26.:15:28.

moving to a place where people know that work is their work, their

:15:29.:15:31.

income, left in their pockets is actually the basis upon which their

:15:32.:15:37.

household income is established. Andrew is getting to the core

:15:38.:15:40.

argument that people should be making for these universal credit

:15:41.:15:43.

changes take in place, that is a principled view that people in work

:15:44.:15:46.

should be receiving less support from the state over time. We don't

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agree with that but that is an argument, but that is not an

:15:51.:15:54.

argument being made by many. The Chancellor this morning on the Today

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programme said nine out of ten people who were on tax credits in

:15:59.:16:05.

2010, he thought that was wrong. The Chancellor took away in the last

:16:06.:16:08.

parliament from the higher earners. The system that is left is

:16:09.:16:12.

supporting work incentives and child poverty for the core working

:16:13.:16:14.

population on learning comes in our country and that is why we are

:16:15.:16:17.

seeing these changes now having a real effect. Does Labour still I

:16:18.:16:30.

support the working tax credit We are assessing the pilot. There are a

:16:31.:16:34.

number of alarm bells ringing. I understand that. Do you think you

:16:35.:16:38.

will come out against it? I think we need to take a strategic overvu.

:16:39.:16:42.

There are elements that could be taken as positive steps forward but

:16:43.:16:46.

in terms of the ongoing management that families face in terms of

:16:47.:16:50.

finances, I think many people struggle. Would you make any changes

:16:51.:16:55.

to tax credits? We would reverse the Government's current proposals to

:16:56.:16:58.

cut tax credits. They have done that themselves. They have already done

:16:59.:17:02.

that. The proposals they put forward were a partial step and we welcome

:17:03.:17:07.

that. As John has outlined. What I asked you, was not what the

:17:08.:17:10.

Government is doing, would you make any changes to tax credits? We would

:17:11.:17:13.

reverse the Government's proposals in full on tax credits, but that has

:17:14.:17:20.

to be done hand-in-hand with a long-term economic strategy that

:17:21.:17:22.

would require invest in industry. At the moment we are seeing, in temples

:17:23.:17:27.

devolution, the creation of a Wild West industry where regions will be

:17:28.:17:30.

competing against each other. There will be a race to the bottom in

:17:31.:17:37.

business rates. The social care precept announceside worrying, local

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authorities will be left in a position where they will be left to

:17:41.:17:44.

float on their own and bring in their own income. We'll leave it

:17:45.:17:46.

there. Well, what did the papers make of it

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all? And joining me now from College

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Green, two of Fleet Street's finest, Sam Coates from the Times and Nick

:17:51.:17:53.

Watt from the Guardian. Sam Coates, the Chancellor got a

:17:54.:18:01.

pretty decent press this morning but it is usually on Day 2 that we find

:18:02.:18:06.

out things that he didn't want us to know. How is that going? One of the

:18:07.:18:10.

reasons George Osborne had a pretedy good day yesterday is that he had

:18:11.:18:15.

?27 billion of funny money to play with, money that he didn't know he

:18:16.:18:19.

had in July. Two-thirds of which has magiced into his account because of

:18:20.:18:25.

modelling changes by the Office for Budget Responsibility, presumably an

:18:26.:18:28.

error by the Office for Budget Responsibility in judgment of he is

:18:29.:18:32.

placing an awful lot on those changed forecasts in order to be

:18:33.:18:35.

able to fulfil a wish list that seems to have kept most of his

:18:36.:18:39.

backbenchers happy. The money to pay for tax credit U-turns, the money to

:18:40.:18:43.

stop the police cuts have all come from this. The important point is he

:18:44.:18:44.

made a big decision. In the

:18:45.0:11:50

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.


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