0:00:37 > 0:00:41Hello and welcome to the Daily Politics.
0:00:41 > 0:00:44The Prime Minister points the finger of blame at Russia for the nerve
0:00:44 > 0:00:46agent attack in Salisbury and gives Moscow a deadline of midnight
0:00:46 > 0:00:54tonight to explain itself.
0:00:54 > 0:00:54President Putin, BBC News.
0:00:54 > 0:00:58Is Russia behind the poisoning of Sergey Skripal?
0:00:58 > 0:01:00TRANSLATION:We are busy with agriculture here to create
0:01:00 > 0:01:03the conditions for people's lives.
0:01:03 > 0:01:06And you talk to me about some tragedies.
0:01:06 > 0:01:10First work out what actually happened there and then
0:01:10 > 0:01:14we will talk about it.
0:01:14 > 0:01:15Vladimir Putin brushes off accusations of involvement.
0:01:15 > 0:01:17Meanwhile the British ambassador in Moscow is summoned
0:01:17 > 0:01:22to the Russian Foreign Ministry as the diplomatic row escalates.
0:01:22 > 0:01:24After nearly eight years of tax rises and public spending
0:01:24 > 0:01:26squeezes, we test the public mood about austerity.
0:01:26 > 0:01:32Has it been worth the effort?
0:01:33 > 0:01:37I think there's been far too many cuts to public services, there's
0:01:37 > 0:01:41been cuts in this borough specifically to local services such
0:01:41 > 0:01:44as closing parks in the evening and things like that.
0:01:44 > 0:01:47Well, that debate forms the backdrop to the Chancellor's first ever
0:01:47 > 0:01:50Spring Statement, when he'll update us about the state of the economy.
0:01:50 > 0:01:53We'll have all the action live at 12:30.
0:01:57 > 0:01:59All that in the next hour and a half.
0:01:59 > 0:02:02Yes, a full 90 minutes today
0:02:02 > 0:02:04to allow us to cover the Chancellor's statement live
0:02:04 > 0:02:06as well as all the reaction.
0:02:06 > 0:02:12And with me throughout are the Shadow Treasury
0:02:12 > 0:02:18Minister Annaliese Dodds and the Cabinet Office
0:02:18 > 0:02:19minister Oliver Dowden.
0:02:19 > 0:02:20Welcome to you both.
0:02:20 > 0:02:23First today, the British Government has given Moscow until midnight
0:02:23 > 0:02:25tonight to explain why a Russian-made nerve agent was used
0:02:25 > 0:02:26in the poison attack in Salisbury.
0:02:26 > 0:02:29The Prime Minister says it is "highly likely" Russia
0:02:29 > 0:02:32was responsible for the attack against the former Russian double
0:02:32 > 0:02:38agent Sergei Skripal and his daughter, Yulia.
0:02:38 > 0:02:40A short while ago a meeting of the Government's emergency
0:02:40 > 0:02:42committee Cobra began, chaired by the Home Secretary
0:02:42 > 0:02:43to discuss the response.
0:02:43 > 0:02:45The Prime Minister made a statement in the Commons yesterday
0:02:45 > 0:02:52and was followed by the Labour leader, Jeremy Corbyn.
0:02:52 > 0:02:54It was an indiscriminate and reckless act against
0:02:54 > 0:02:56the United Kingdom, putting the lives of innocent
0:02:56 > 0:03:00civilians at risk.
0:03:00 > 0:03:02And we will not tolerate such a brazen attempt to murder innocent
0:03:02 > 0:03:03civilians on our soil.
0:03:03 > 0:03:05The events in Salisbury on the 4th
0:03:05 > 0:03:08of March have appalled the country, and need thorough investigation.
0:03:08 > 0:03:10The local community and public services involved need reassurance
0:03:10 > 0:03:17and the resources necessary.
0:03:17 > 0:03:21The action the Government takes once the facts are clear,
0:03:21 > 0:03:24needs to be both decisive and proportionate and focussed
0:03:24 > 0:03:31on reducing conflicts and tensions rather than increasing them.
0:03:32 > 0:03:34Since the Prime Minister's statement, the diplomatic row
0:03:34 > 0:03:36between London and Moscow has escalated.
0:03:36 > 0:03:44Our Diplomatic Correspondent James Landale can bring us up to speed.
0:03:47 > 0:03:52What has the Russian response been so far, bearing in mind the clock is
0:03:52 > 0:03:56ticking?So far the Russians have once again denied any involvement in
0:03:56 > 0:04:03events in Salisbury and specifically the Russian Foreign Minister survey
0:04:03 > 0:04:10line -- Sergey Lavrov says they want more information. They say the
0:04:10 > 0:04:14British government has not provided them with any material, the alleged
0:04:14 > 0:04:18nerve agent used in the attack, they also save the British government is
0:04:18 > 0:04:22not following the usual protocols under what's called the office for
0:04:22 > 0:04:27the prevention of chemical weapons, which is a convention we are and the
0:04:27 > 0:04:32Russians are signed up to. They say there are certain procedures and
0:04:32 > 0:04:37timelines which the British are not following. So a fairly predictable
0:04:37 > 0:04:42response so far.In terms of the response from our allies, there has
0:04:42 > 0:04:46been broad support for Theresa May, particularly from Rex Tillerson in
0:04:46 > 0:04:51the United States, but what does that mean in practice?There have
0:04:51 > 0:04:56been warm words of support, yes from Rex Tillerson and other world
0:04:56 > 0:05:01leaders, President Macron spoke to the Prime Minister yesterday. I have
0:05:01 > 0:05:08to say, there is certainly a gap between the views of Rex Tillerson,
0:05:08 > 0:05:12the State Department and the White House. The White House is insisting
0:05:12 > 0:05:16that whilst they support the British and condemn what happened in
0:05:16 > 0:05:19Salisbury, they have been more reluctant to blame the Russians
0:05:19 > 0:05:24where is Rex Tillerson has accepted the British analysis. The question
0:05:24 > 0:05:30is, is there anything practical that the British can get in an
0:05:30 > 0:05:34international forum that in anyway puts meaningful pressure on the
0:05:34 > 0:05:38Kremlin? At the moment we are getting words of support. In the
0:05:38 > 0:05:44long run is there any hard-core diplomacy across the piece, whether
0:05:44 > 0:05:48EU, Nato, anywhere, that the British can get enough of an alliance
0:05:48 > 0:05:53together to put pressure on the Kremlin?That then begs the question
0:05:53 > 0:05:58of some debate about what we should do with regard to the World Cup is
0:05:58 > 0:06:03being held in Russia. Tell us more about some of the suggestions around
0:06:03 > 0:06:07that.Boris Johnson has been speaking this morning and refusing
0:06:07 > 0:06:11to go into the detail of what the British government may or may not do
0:06:11 > 0:06:14tomorrow if they don't get a satisfactory response from the
0:06:14 > 0:06:18Russians. My own view is the government will be reluctant to
0:06:18 > 0:06:22organise any kind of formal, official sporting boycott of the
0:06:22 > 0:06:27World Cup. I think we will get some officials not going but they know
0:06:27 > 0:06:32that will be a hard ass to get other countries in joining them in not
0:06:32 > 0:06:37sending footballers there. We are more likely to seek domestic focused
0:06:37 > 0:06:41reaction, potentially the expulsion of Russian diplomats and new
0:06:41 > 0:06:47measures to crack down on wealthy Russians living in London, and more
0:06:47 > 0:06:50pressure on the international stage as well.Thank you.
0:06:50 > 0:06:52I'm joined now by Peter Ricketts, the first
0:06:52 > 0:06:54National Security Adviser during the coalition Government,
0:06:54 > 0:06:58and now a crossbench peer in the House Of Lords.
0:06:58 > 0:07:02Welcome to the programme. Let's return to what Theresa May said
0:07:02 > 0:07:06initially in her statement yesterday to the house, she said it was highly
0:07:06 > 0:07:13likely Russia was responsible for the poisoning of Sergei Skripal, and
0:07:13 > 0:07:18it was either a direct attack by the Russian government or they had
0:07:18 > 0:07:23somehow lost control of this nerve agent. Does that give the Russians
0:07:23 > 0:07:28get out?Not really I don't think, because this is military grade nerve
0:07:28 > 0:07:35agent. It should be kept in the highest conditions of security so it
0:07:35 > 0:07:41is offering them a choice between saying incompetence or deeply
0:07:41 > 0:07:46implicated in the attack.What did you make of the statement and the
0:07:46 > 0:07:51tone?It was very good, serious, clear and measured and gave the
0:07:51 > 0:07:54Russians an opportunity to come back with any comments they wanted to
0:07:54 > 0:07:58make. The problem will be, assuming the Russians don't come back with
0:07:58 > 0:08:02anything which is most likely, producing a package of measures
0:08:02 > 0:08:07which lives up to the expectations created by the gravity of the
0:08:07 > 0:08:11situation on her statement.It is extremely serious what's happened,
0:08:11 > 0:08:16using a chemical weapon on the streets of Britain and Russia being
0:08:16 > 0:08:22likely to be responsible. What could match that rhetoric in your mind?
0:08:22 > 0:08:28The sort of thing is James Landale was talking about will be on the
0:08:28 > 0:08:34list, expulsions, security crowd in the Russian Embassy, I would hope
0:08:34 > 0:08:38not the ambassador because we need him to be passing messages to
0:08:38 > 0:08:43Moscow. Going after the money, the idea of powers to seize money from
0:08:43 > 0:08:46people who have committed human rights abuses, that would be
0:08:46 > 0:08:50powerful but not a game changer. I've suggested there should be more
0:08:50 > 0:08:56activity with our Nato partners. A chemical attack is something Nato
0:08:56 > 0:09:03should be interested in.Not saying an attack on one is an attack on us
0:09:03 > 0:09:09all.But putting it on the agenda. There is a summit coming up. We
0:09:09 > 0:09:13should be having made to think differently about Russia, perhaps
0:09:13 > 0:09:16changing the dispositions of forces in Eastern Europe. That is a longer
0:09:16 > 0:09:22term thing but quite a potent area to be looking at.But would any of
0:09:22 > 0:09:26those things? Because to some extent we have done that in the past,
0:09:26 > 0:09:32sanctions, you could argue the cupboard is bare in terms of what
0:09:32 > 0:09:36Britain alone can do. Will any of that have an impact on Putin's
0:09:36 > 0:09:41thinking?The only thing that will have an impact is things that hurt
0:09:41 > 0:09:46the Russians' reputation or possibly serious financial measures that
0:09:46 > 0:09:51really begin to bite. Realistically we are not going to change Russian
0:09:51 > 0:09:54minds about a pattern of behaviour that goes back over decades but we
0:09:54 > 0:09:58have to show them to do this with impunity, that there will be costs
0:09:58 > 0:10:04and that's why we need to do this in an international setting with as
0:10:04 > 0:10:09much solidarity as possible.That solidarity that James Landale was
0:10:09 > 0:10:14also talking about, what would that mean in practical terms? What would
0:10:14 > 0:10:20our allies, you mentioned Nato, what would they really be prepared to do
0:10:20 > 0:10:24to show that solidarity?I rather agree with James that we will set
0:10:24 > 0:10:28ourselves up for failure if we go after a boycott of the World Cup
0:10:28 > 0:10:33because I don't think people will want to withdraw their teams unless
0:10:33 > 0:10:37things get very much worse. I think the financial side because there's a
0:10:37 > 0:10:42lot of Russian money in London obviously, but also other European
0:10:42 > 0:10:46capitals, and the US have already taken some Draconian measures. If
0:10:46 > 0:10:50there can be more practical follow-up on seizure of assets of
0:10:50 > 0:10:55people we have serious doubts about, that could be something. But it will
0:10:55 > 0:10:59be difficult. The Russian regime are hard to influence but we have to do
0:10:59 > 0:11:05our best in as wide company as possible.Oliver Dowden, let's talk
0:11:05 > 0:11:13about those powers because Jeremy Corbyn
0:11:16 > 0:11:22Corbyn criticised yesterday. Was it a mistake to block the amendments?A
0:11:22 > 0:11:26lot of the proposals in there have already been implemented through the
0:11:26 > 0:11:31Proceeds of Crime Act, we brought forward an amendment enabling us to
0:11:31 > 0:11:36seize proceeds when they are
0:11:37 > 0:11:38seize proceeds when they are related to that. The Foreign Office has made
0:11:38 > 0:11:42it clear we will look at this. There are issues over whether the
0:11:42 > 0:11:48amendment works but I don't think there's a real division over it.So
0:11:48 > 0:11:56what is the problem, Annaliese Dodds?I saw the government stopping
0:11:56 > 0:12:00the debate after 25 minutes because they thought they might lose a vote
0:12:00 > 0:12:06over having these sanctions. They are named after the person who was
0:12:06 > 0:12:10imprisoned and tortured in Russia when he was acting for a US
0:12:10 > 0:12:16businessman. They are designed to target those sanctions at abuses of
0:12:16 > 0:12:20human rights on a grand scale. We tried to get that provision in
0:12:20 > 0:12:24through the bill. The government shut down debate on it which meant
0:12:24 > 0:12:33we couldn't look at other amendments.Do you think, despite
0:12:33 > 0:12:41your reservations, that should be something the government should
0:12:41 > 0:12:45support?With the Proceeds of Crime Act we had the powers to go after
0:12:45 > 0:12:50these gross human rights violations. Further measures need to be taken.
0:12:50 > 0:12:55At report stage, which is when the house will vote on this, we will be
0:12:55 > 0:12:58looking out seeing if it's necessary to bring forward further measures.
0:12:58 > 0:13:04Let's look at the cyber options, a cyber counterattack. Would it be
0:13:04 > 0:13:14effective?I don't know exactly what they have in mind. I'm sure the UK
0:13:14 > 0:13:19has some powerful assets in that area. I am sceptical that an
0:13:19 > 0:13:23offensive cyber attack against the Russians is going to work and might
0:13:23 > 0:13:28not produce an immediate and even harder punch back. I wonder whether
0:13:28 > 0:13:32it would be more effective to do more calling out of manipulative
0:13:32 > 0:13:36Russian efforts in our media, in our politics. In France we saw during
0:13:36 > 0:13:43President macro's presidential campaign the Russians tried this
0:13:43 > 0:13:48manipulative stuff in France and he called them out -- President Macron.
0:13:48 > 0:13:52It is hard to do that kind of manipulation in the full transparent
0:13:52 > 0:13:57glare of publicity so that will be more effective in my mind.We will
0:13:57 > 0:14:03talk about Russia today in a moment, but this cyber counterattack, what
0:14:03 > 0:14:08would that involve?There is a process for this, which the Prime
0:14:08 > 0:14:12Minister set out yesterday. We have these two potential scenarios, the
0:14:12 > 0:14:17Russians doing it directly or they have lost control. We make a
0:14:17 > 0:14:20judgment on that tomorrow and then the Prime Minister will bring
0:14:20 > 0:14:26forward a range of
0:14:31 > 0:14:35measures if it's the case Russia is involved. I don't think it's helpful
0:14:35 > 0:14:36to start speculating in detail on those but we have already discussed
0:14:36 > 0:14:39lots of things, for example going after Russians linked to the Kremlin
0:14:39 > 0:14:41travelling.Would you block wealthy Russians coming to London who have
0:14:41 > 0:14:45strong links to Vladimir Putin? Let's allow the Prime Minister to
0:14:45 > 0:14:51come up with the options tomorrow. So that would be an option?It's a
0:14:51 > 0:14:56decision for the Prime Minister but nothing is off the table.There was
0:14:56 > 0:15:02an issue about party politics yesterday, Annaliese Dodds, Jeremy
0:15:02 > 0:15:06Corbyn raised the issue of donations to the Conservative Party by
0:15:06 > 0:15:10citizens of Russian origin. Was it the right moment to make that party
0:15:10 > 0:15:14political statement, just after the Prime Minister had made and
0:15:14 > 0:15:20obviously set these serious words about our national security?
0:15:20 > 0:15:28We need more transparency. We need to know what is going on in terms of
0:15:28 > 0:15:31influence being applied across the political system in our media and
0:15:31 > 0:15:38the financial issues. Having more transparency is positive. It was
0:15:38 > 0:15:43right to mention it. People may not like it but we must be more open
0:15:43 > 0:15:47about these issues. Was that an appropriate moment when
0:15:47 > 0:15:52talking about national security, rather than saying we stand
0:15:52 > 0:15:56shoulder-to-shoulder with our Prime Minister?
0:15:56 > 0:16:01Jeremy Corbyn did express support for the investigation, he said we
0:16:01 > 0:16:05should not move to a situation quickly where we have an escalation,
0:16:05 > 0:16:13we need to be proportionate and thoughtful. And I would agree we
0:16:13 > 0:16:16shouldn't jump to conclusions, Jeremy said that.
0:16:16 > 0:16:24I would say, in terms of being proportionate, of course, but this
0:16:24 > 0:16:28is a significant escalation, where a nerve agent is used on the streets
0:16:28 > 0:16:33of a town in England and a police officer has fallen victim. That
0:16:33 > 0:16:42necessitates a serious response. Absolutely. I also think we need to
0:16:42 > 0:16:49be careful if we have measures, if there is found to have been that
0:16:49 > 0:16:53kind of involvement, if we have measures targeting a population,
0:16:53 > 0:17:01those can be offered a great way for that population to end up hating our
0:17:01 > 0:17:05country. But proportionate targeted measures like those sanctions,
0:17:05 > 0:17:12against money-laundering, financial sanctions, we can be in a better
0:17:12 > 0:17:15place than something interpreted as an attack on all of the Russian
0:17:15 > 0:17:16people.
0:17:16 > 0:17:19Now, if pre-statement briefings are to be believed,
0:17:19 > 0:17:21today's economic figures will signal the beginning of
0:17:21 > 0:17:24the end of austerity.
0:17:24 > 0:17:26The Chancellor, Philip Hammond, says we're not out of the woods yet,
0:17:26 > 0:17:29but there's light at the end of the tunnel.
0:17:29 > 0:17:30So, has austerity been worth it?
0:17:30 > 0:17:32Our reporter Greg Dawson has taken the moodbox to Bexleyheath
0:17:32 > 0:17:37in South East London.
0:17:37 > 0:17:42Philip Hammond made it clear at the weekend he does not think the era of
0:17:42 > 0:17:47austerity is over, he is worried about debt levels. Even this most
0:17:47 > 0:17:53cautious of toddlers says he can see the light. Our mood box question is,
0:17:53 > 0:18:00was austerity worth it?From my perspective, the Government is doing
0:18:00 > 0:18:10a good job. It has been working. Definitely.
0:18:10 > 0:18:19I don't think any of it has worked. The whole country is in meltdown.
0:18:19 > 0:18:30Between the boxes. I would say yes. We don't have a between option.
0:18:30 > 0:18:34We don't have a between option.No. I just think they are always making
0:18:34 > 0:18:43mistakes and telling us we are going to get over it and we haven't.
0:18:43 > 0:18:50They are saying... I'm on TV! We seem to be better off now. But I
0:18:50 > 0:18:54don't know if it is true because the pound is an worth as much as it used
0:18:54 > 0:19:03to be. -- is not worth.
0:19:05 > 0:19:10You said people don't want to talk about economic policy. Let's head
0:19:10 > 0:19:18off to the market.
0:19:18 > 0:19:27Definitely not. Far too many cuts to public services, cuts in this
0:19:27 > 0:19:34borough to local services such as closing parks in the evenings.
0:19:34 > 0:19:41No, no. Because public service as had been cut and everyone is feeling
0:19:41 > 0:19:50the pinch. -- services have been cut.
0:19:50 > 0:19:56Will you stop -- swap some oranges for a plastic ball, what think?
0:19:56 > 0:19:59Yes.
0:20:06 > 0:20:10For years the Government has been selling the message all those tough
0:20:10 > 0:20:13the natural positions would eventually be worth it to balance
0:20:13 > 0:20:19the books but the people of Bexley Heath are not buying it.
0:20:19 > 0:20:25It may be unscientific but the message was clear from the people of
0:20:25 > 0:20:30Bexleyheath, there is real weariness with austerity.
0:20:30 > 0:20:34Of course there is weariness after seven years but it has been worth
0:20:34 > 0:20:40it. Let us look at employment, 3 million jobs created giving
0:20:40 > 0:20:46security. Secondly, we are living within our means, we have reduced
0:20:46 > 0:20:53the deficit. And debt is falling as a proportion of GDP. How much?
0:20:53 > 0:21:00Continuing to fall for the first time in many years. The economy is
0:21:00 > 0:21:04growing, over eight years. Our balanced approach between reducing
0:21:04 > 0:21:10the deficit and investing in public services has been worth it.We will
0:21:10 > 0:21:17talk about debt but let us take employment. You cannot say the
0:21:17 > 0:21:20employment figures haven't been healthy for the last few years and
0:21:20 > 0:21:25there has been economic growth even if it hasn't been as much as
0:21:25 > 0:21:29expected.Particularly on growth we have been falling behind many
0:21:29 > 0:21:36countries and in 2017 growth was at its slowest since 2012. Slower
0:21:36 > 0:21:40growth than expected which has been a problem. Employment, nobody will
0:21:40 > 0:21:46say having more people in enjoyment is a bad thing. Worryingly,
0:21:46 > 0:21:54different to other countries, we have much more people going into
0:21:54 > 0:21:57insecure employment. 1 billion people on zero-hours contracts.
0:21:57 > 0:22:04Large numbers who in theory are self employed but it is disguised. A big
0:22:04 > 0:22:12problem. Record numbers are in work but in poverty.There is a myth
0:22:12 > 0:22:16these 3 million jobs created are low skilled, they are not, three
0:22:16 > 0:22:21quarters are high skilled. A myth that they are part-time, over 75% of
0:22:21 > 0:22:29full-time. In terms of zero hours, we have legislated to ban exclusive
0:22:29 > 0:22:36zero-hours contracts.What you cannot dispute is the fact more
0:22:36 > 0:22:43people who are in work are now ending up in poverty. Record numbers
0:22:43 > 0:22:49of children in working families but in poverty. A reflection of the
0:22:49 > 0:22:52nature of the Plymouth market.And the squeeze on wages which
0:22:52 > 0:23:00continues.-- the employment market. The latest figures are more
0:23:00 > 0:23:07promising with wage growth. First of all, we have introduced a national
0:23:07 > 0:23:13living wage worth £2000 a year to the lowest paid, and cut taxes, some
0:23:13 > 0:23:20working full-time on the minimum wage will no longer pay tax at all.
0:23:20 > 0:23:22We will return to the issue of debt.
0:23:22 > 0:23:24Earlier this month, you might have seen one
0:23:24 > 0:23:26former Prime Minister, David Cameron, and his former
0:23:26 > 0:23:29Chancellor, George Osborne, hailing the fact that the UK had finally
0:23:29 > 0:23:31eliminated its deficit on day-to-day spending.
0:23:31 > 0:23:33Austerity, they tweeted, was "the right thing to do".
0:23:33 > 0:23:35But what about the debt?
0:23:35 > 0:23:41Here's our Ellie, to explain the state of the nation's finances.
0:23:41 > 0:23:45The deficit is the difference between the amount the Government
0:23:45 > 0:23:48spends and how much it receives in taxes and other income.
0:23:48 > 0:23:50When the Government spends more than it takes in,
0:23:50 > 0:23:55it borrows and that borrowing is added to the overall debt pile.
0:23:55 > 0:23:59The UK's debt is estimated to be just under £1.8 trillion at the end
0:23:59 > 0:24:01of this financial year.
0:24:01 > 0:24:05To give you some idea, that's a lot of zeros on the end.
0:24:05 > 0:24:08I mean, that could buy you nearly a third of all the houses
0:24:08 > 0:24:13in the whole of the UK, around 4,000 da Vinci masterpieces,
0:24:13 > 0:24:15or if football's your thing, 8,955 Neymars.
0:24:15 > 0:24:18It is something the Chancellor has been thinking about, too.
0:24:18 > 0:24:19Take it away, Phil.
0:24:19 > 0:24:23We need to get our debt lower.
0:24:23 > 0:24:27I think most people in this country would be horrified to be reminded
0:24:27 > 0:24:30that we have £65,000 worth of public debt for every household
0:24:30 > 0:24:31in this country.
0:24:31 > 0:24:34We're agreed, it's a lot of money.
0:24:34 > 0:24:36It doesn't mean much until you measure it
0:24:36 > 0:24:40against the country's GDP, the size of the country's economy.
0:24:40 > 0:24:43In the last normal year before the financial crisis,
0:24:43 > 0:24:48debt was 41.1% of our GDP.
0:24:48 > 0:24:51That's ballooned since then to what they think is a peak
0:24:51 > 0:24:55this year of 86.5%.
0:24:55 > 0:24:58Now that matters because the UK has to pay interest on the debt,
0:24:58 > 0:25:02currently about 2% of GDP, so it's quite a lot of cash.
0:25:02 > 0:25:06But the experts don't get worried until that number reaches about 12%
0:25:06 > 0:25:10at which point they say a government is likely to default on its debt.
0:25:10 > 0:25:11We're not quite there yet.
0:25:11 > 0:25:15Now bear in mind, as long as there is a deficit,
0:25:15 > 0:25:18debt will continue to rise in cash terms because the Government
0:25:18 > 0:25:19will carry on needing to borrow.
0:25:19 > 0:25:23Britain's current spending deficit is believed to have been eliminated
0:25:23 > 0:25:26which is why the Government thinks debt is slowly coming
0:25:26 > 0:25:27down as a share of GDP.
0:25:27 > 0:25:28Phew.
0:25:28 > 0:25:36Got that?
0:25:36 > 0:25:41In a few moments we will cross to the House Of Commons and Philip
0:25:41 > 0:25:44Hammond with the Spring Statement. We will cover it in full.
0:25:44 > 0:25:47Well, I'm joined now by Paul Johnson, director of the Institute
0:25:47 > 0:25:48For Fiscal Studies,
0:25:48 > 0:25:53and our political editor Laura Kuenssberg.
0:25:53 > 0:25:57David Cameron and George Osborne were celebrating the fact they said
0:25:57 > 0:26:02the day-to-day guest on current spending had been eliminated. The
0:26:02 > 0:26:07focus is on the debt, is it coming down in any meaningful way?
0:26:07 > 0:26:11We are not sure the day-to-day deficit is eliminated, we will have
0:26:11 > 0:26:17to see the numbers. The debt is pretty steady, it has
0:26:17 > 0:26:21stopped writing, around 85% of national income which is pretty
0:26:21 > 0:26:28high, not as high as some other G-7 countries but twice as high
0:26:28 > 0:26:32pre-crisis. My guess is we will see it coming to a plateau over three
0:26:32 > 0:26:36years. It has stopped going up.In terms of
0:26:36 > 0:26:40what Philip Hammond will say, what do you think despite the fact he
0:26:40 > 0:26:45doesn't want this to be a set piece, will be the headline?
0:26:45 > 0:26:49We will struggle with the headline in terms of policy announcements.
0:26:49 > 0:26:53Unless the Treasury have done the most remarkable job at keeping their
0:26:53 > 0:26:58cards close to their chest, there won't be big policy announcements.
0:26:58 > 0:27:03The headlines will be about the forecasts. The borrowing will be
0:27:03 > 0:27:08down relative to where we thought it was in autumn, a long way down this
0:27:08 > 0:27:11year relative to work the budget a year ago was suggesting.
0:27:11 > 0:27:21How much? Last budget, last March, 58 billion of borrowing, it might be
0:27:21 > 0:27:26down to the low 40s. Where will it be in three years? If I had to
0:27:26 > 0:27:34guess, not much lower than we thought.With that head room and
0:27:34 > 0:27:38perhaps higher tax receipts that have been expected, how much
0:27:38 > 0:27:42pressure is there on the Chancellor to turn on the taps in terms of
0:27:42 > 0:27:46spending? A lot of pressure not just from the
0:27:46 > 0:27:51opposition but his own bench, on the health service, defence, on local
0:27:51 > 0:27:57councils, people are queueing up in the Conservative Party to say to
0:27:57 > 0:28:03him, with the progress made, frankly, we have been telling voters
0:28:03 > 0:28:08for eight years this is worth it and there will be at some point
0:28:08 > 0:28:15something better, let us show them the sunshine. But Philip Hammond is
0:28:15 > 0:28:19one person in the Cabinet, and they don't all think like this, who
0:28:19 > 0:28:24thinks it would be wrong to do that, although the day-to-day deficit is
0:28:24 > 0:28:29pretty much gone, in his view, we may have paid off the overdraft but
0:28:29 > 0:28:33we have a hefty mortgage which had to come first. People will be
0:28:33 > 0:28:40looking for clues that when we get to autumn, the next couple of years,
0:28:40 > 0:28:52it is their any political space to make any hint?We will come on to
0:28:52 > 0:28:57the long-term indications. To come back to this extra cash he
0:28:57 > 0:29:01might have, would it be wise to bank that will spend it?
0:29:01 > 0:29:06He won't spend it today it would be surprising. It is difficult to think
0:29:06 > 0:29:16about extra cash. Relative to a few months ago, all relative to what
0:29:16 > 0:29:19George Osbourne was thinking a couple of years ago. There is still
0:29:19 > 0:29:26the same set of constraints and choices. What Philip Hammond will
0:29:26 > 0:29:31believe is as these numbers go up and down, that doesn't change
0:29:31 > 0:29:37anything underlying. He believes they shouldn't be spending that
0:29:37 > 0:29:42extra money but the choice today is essentially the same as six months
0:29:42 > 0:29:47ago.The politics for the Conservatives, if you keep saying
0:29:47 > 0:29:53there is light at the end of the tunnel, voters may turn to the
0:29:53 > 0:29:58Labour Party.Light at the end of the tunnel, there may be a change in
0:29:58 > 0:30:05the other direction. You are right. The political dynamics have changed.
0:30:05 > 0:30:08Between 2010 and 2015, this was the central message of the Conservative
0:30:08 > 0:30:14Party, we are the only ones you can trust to sort out this mess. We saw
0:30:14 > 0:30:22in the general election, people thought, we have had enough. There
0:30:22 > 0:30:27are plenty inside the Conservative Party who worry unless there is a
0:30:27 > 0:30:34change of tone about what to do with tax payers's money, at the next
0:30:34 > 0:30:38election, it will be a lost cause. There is a generational tension,
0:30:38 > 0:30:53further down the ranks, ministers, they are frustrated that number 11
0:30:53 > 0:30:59has appeared to be immovable on this. As we reported, there is an
0:30:59 > 0:31:03acceptance around the Cabinet table money at Italy for the NHS will have
0:31:03 > 0:31:06to be found in greater amounts.
0:31:10 > 0:31:15Should Philip Hammond send a strong signal that looking forward your
0:31:15 > 0:31:19party and government will commit more money to the NHS?We have
0:31:19 > 0:31:27already committed more money.But I'm asking more money.We have three
0:31:27 > 0:31:32objectives. Firstly we must keep debt falling. The reason is the
0:31:32 > 0:31:36economy has been growing for eight years. Are we seriously saying we
0:31:36 > 0:31:43will allow debt to rise. But within that we have scope for additional
0:31:43 > 0:31:47spending and tax cuts. In April there is a further increase in the
0:31:47 > 0:31:51personal allowance, and more scope for spending which is why we have
0:31:51 > 0:31:56increased spending on the NHS, a billion more year on defence and
0:31:56 > 0:32:00more for education.The National Audit Office report has said funding
0:32:00 > 0:32:11per person in terms of the NHS, once adjusted for age, will fall by 0.3%
0:32:11 > 0:32:19in 2019/20. Is that acceptable?We are spending more.You have been
0:32:19 > 0:32:23saved by Philip Hammond, we can cross to the House of Commons where
0:32:23 > 0:32:29the Chancellor will stand up and make his spring statement.The UK
0:32:29 > 0:32:35was the only major economy to make hundreds of tax and spending changes
0:32:35 > 0:32:38twice a year and major international organisations and UK professional
0:32:38 > 0:32:44bodies alike have been pressing for change. In 2016 I took the decision
0:32:44 > 0:32:48to move to a single fiscal event in the autumn giving greater certainty
0:32:48 > 0:32:52to families and businesses ahead of the new financial year and allowing
0:32:52 > 0:32:57more time for stakeholder and Parliamentary engagement on
0:32:57 > 0:33:01potential fiscal changes. Today's statement will update the house on
0:33:01 > 0:33:06the economic and fiscal position, report progress on announcement made
0:33:06 > 0:33:10in the budget last year and launch further consultations ahead of
0:33:10 > 0:33:18budget 2080. I won't be producing a red book today, Mr Speaker, but of
0:33:18 > 0:33:25course I cannot speak for the right honourable gentleman...
0:33:30 > 0:33:34honourable gentleman... Mr Speaker, I am pleased to report today on a UK
0:33:34 > 0:33:40economy that has grown in every year since 2010. An economy which on the
0:33:40 > 0:33:47Conservative leadership now has a manufacturing sector is enjoying its
0:33:47 > 0:33:54longest unbroken run of growth for 50 years. An economy which has added
0:33:54 > 0:34:003 million jobs and seen every single region of the UK with higher
0:34:00 > 0:34:05unemployment and lower unemployment than in 2010, seen the wages of the
0:34:05 > 0:34:12lowest paid up by almost 7% above inflation since April 2015, and
0:34:12 > 0:34:17income inequality lower than at any time under the last Labour
0:34:17 > 0:34:20government. Solid progress towards building an economy that works for
0:34:20 > 0:34:27everyone. Mr Speaker, I reject the party opposite's doom and gloom
0:34:27 > 0:34:34about the state of the nation. Every Wednesday, we have to listen to the
0:34:34 > 0:34:37Leader of the Opposition relentlessly talking Britain down,
0:34:37 > 0:34:42and every year since 2010 we have had to listen to the right
0:34:42 > 0:34:47honourable member predict a recession, mum of which have
0:34:47 > 0:34:57actually happened. So Mr Speaker, if there are any Eeyores in the
0:34:57 > 0:35:07chamber, they are over there. Meanwhile I am at my positively most
0:35:07 > 0:35:10Tigger-like as I contemplate a country that faces a future with
0:35:10 > 0:35:14unique strengths. Our language is the global language of business, our
0:35:14 > 0:35:20legal system is the jurisdiction of choice for commerce. We host the
0:35:20 > 0:35:27world's most global city. Our companies are in the vanguard of the
0:35:27 > 0:35:31technological revolution, while our world-class universities are
0:35:31 > 0:35:34delivering the breakthrough discoveries and inventions that are
0:35:34 > 0:35:39powering it. British culture and talent reaches huge audiences across
0:35:39 > 0:35:43the globe and our tech sector is attracting skills and capital from
0:35:43 > 0:35:48the four corners of the earth with a new tech business being founded
0:35:48 > 0:35:53somewhere in the UK every hour, producing world-class products
0:35:53 > 0:36:09including apps like transfer wise, city mapper. Today the OBR delivers
0:36:09 > 0:36:15its second report of the fiscal year 2017/18 and I thank Robert and his
0:36:15 > 0:36:20team for their work. It forecasts more jobs, rising real wages,
0:36:20 > 0:36:25declining inflation, falling deficit, and a shrinking debt. The
0:36:25 > 0:36:33economy grew by 1.7% in 2017 compared to 1.5% forecast at the
0:36:33 > 0:36:41budget and be OBR have revised up their forecast for 2018 from 1.4% to
0:36:41 > 0:36:481.5%. Forecast growth is unchanged at 1.3% in 2019 and 20 before
0:36:48 > 0:36:57picking up to 1.4% in 21 and 1.5% in 22. That is the OBR's forecast, but
0:36:57 > 0:37:01forecast are there to be beaten. As a nation we did it in 2017 and we
0:37:01 > 0:37:07should make it our business to do so again. Our remarkable jobs story is
0:37:07 > 0:37:12set to continue with the OBR forecasting more jobs in every year
0:37:12 > 0:37:17of this Parliament and over 500,000 more people enjoying the security of
0:37:17 > 0:37:26a regular pay packet by 2022. The OBR expects inflation, currently
0:37:26 > 0:37:30above target at 3%, to fall back to target over the next 12 months,
0:37:30 > 0:37:35meaning real wage growth is expected to be positive from the first
0:37:35 > 0:37:44quarter of 2018/19 and to increase steadily thereafter. I reported in
0:37:44 > 0:37:47the autumn that borrowing was due to fall in every year of the forecast
0:37:47 > 0:37:59and debt to fall as a share of the GD eight from 2018/ 19 -- as a share
0:37:59 > 0:38:05of the GDP. Borrowing is now forecast to be £45.2 billion this
0:38:05 > 0:38:10year, 4.7 billion lower than forecast in November. 108 billion
0:38:10 > 0:38:16lower than in 2010, which coincidentally is almost exactly the
0:38:16 > 0:38:21total cost of the additional spending pledges made by the party
0:38:21 > 0:38:25opposite since the general election in June last year. It has taken them
0:38:25 > 0:38:32just nine months to work up a plan to squander the fruits of eight
0:38:32 > 0:38:38years' hard work of the British people. As a percentage of GDP,
0:38:38 > 0:38:50borrowing is forecast to be 2.2% in 17/18, falling to 1.8% in 18/ 1.6%
0:38:50 > 0:39:02in 19/20, then 1.3%, 1.1%, finally 0.9% in 2022/23, which means we will
0:39:02 > 0:39:08run a surplus borrowing only for capital investment. We are forecast
0:39:08 > 0:39:14to meet our secretary adjusted borrowing target in 2021 with £15.4
0:39:14 > 0:39:18billion of head room to spare, broadly as forecast at the budget.
0:39:18 > 0:39:23The more favourable outlook for borrowing means the debt forecast is
0:39:23 > 0:39:32nearly 1% lower than in November, peaking at 85.6% of GDP in 17/18 and
0:39:32 > 0:39:46then falling to 85.5% in 18/19, then finally to 77.9% in 22/ 23. The
0:39:46 > 0:39:51first sustained fall in debt in 17 years. A turning point in this
0:39:51 > 0:39:58nation's recovery from the financial crisis of a decade ago. Light at the
0:39:58 > 0:40:03end of the tunnel. Another step on the road to rebuilding the public
0:40:03 > 0:40:10finances, decimated by the party opposite.
0:40:10 > 0:40:13opposite. Mr Speaker, one that they would again placed at risk because
0:40:13 > 0:40:17under the policies of the party opposite, our debt would not fall
0:40:17 > 0:40:25over the next five years, it would rise by over £350 billion to more
0:40:25 > 0:40:31than 100% of our GDP, undermining our recovery, threatening investment
0:40:31 > 0:40:38in British jobs, and wasting billions of pounds more on debt
0:40:38 > 0:40:44interest. There is indeed light at the end of the tunnel, but we have
0:40:44 > 0:40:51got to make absolutely sure that it isn't the Shadow Chancellor's train
0:40:51 > 0:40:55hurtling out of control in the other direction towards Labour's next
0:40:55 > 0:41:02economic train wreck. This to Speaker, in autumn 2016, I changed
0:41:02 > 0:41:06the fiscal rules to give us more flexibility to adopt a balanced
0:41:06 > 0:41:12approach to repairing the public finances, reducing debt not for some
0:41:12 > 0:41:19ideological reasons but to secure our economy... But to secure our
0:41:19 > 0:41:24economy against future shocks. Because, Mr Speaker, we on this side
0:41:24 > 0:41:27are not so naive to think we have abolished the economic cycle.
0:41:27 > 0:41:33Because we want to see taxpayers' money funding our schools and
0:41:33 > 0:41:40hospitals, not wasted on debt interest and because we want to give
0:41:40 > 0:41:48the next generation of fair chance. But Mr Speaker, I do not agree with
0:41:48 > 0:41:53those who argue that every available penny must be used to reduce the
0:41:53 > 0:41:58deficit, and nor do I agree with the fiscal fantasists opposite who argue
0:41:58 > 0:42:02every available penny should be spent immediately. We will continue
0:42:02 > 0:42:07to deliver a balanced approach, balancing debt reduction against the
0:42:07 > 0:42:11need for investment in Britain's future, support a hard-working
0:42:11 > 0:42:16families through lower taxes, and our commitment to our public
0:42:16 > 0:42:29services. Judge me by my record, Mr Speaker. Judge me... Judge me by my
0:42:29 > 0:42:33record. We will see, Mr Speaker, if they have done their homework, they
0:42:33 > 0:42:43might be surprised. Since Autumn Statement 2016 I have committed...
0:42:43 > 0:42:48Support for our public services. With almost £9 billion extra for our
0:42:48 > 0:42:56NHS and our social care system, £4 billion going into the NHS in
0:42:56 > 0:43:022018/19 alone. As I promised that the autumn budget, more to come if,
0:43:02 > 0:43:06as I hope, management and unions reach an agreement on a pay
0:43:06 > 0:43:12modernisation deal for our nation's nurses, who have worked tirelessly
0:43:12 > 0:43:17since the autumn in very challenging circumstances to provide the NHS
0:43:17 > 0:43:25care that we all value so highly. £2.2 billion more on education and
0:43:25 > 0:43:30skills, and £31 billion going to fund infrastructure, RND and housing
0:43:30 > 0:43:35through the National productivity investment fund, taking public
0:43:35 > 0:43:38investment in our schools, hospitals and infrastructure in this
0:43:38 > 0:43:45Parliament to its highest sustained level in 40 years. And at the same
0:43:45 > 0:43:50time, Mr Speaker, we have cut taxes for 31 million working people by
0:43:50 > 0:43:54raising the personal allowance again in line with our manifesto
0:43:54 > 0:44:00commitment, taking more than 4 million people out of tax altogether
0:44:00 > 0:44:04since 2010. Freezing fuel duty for an eighth successive year, taking
0:44:04 > 0:44:10the saving for a typical car driver to £850 compared to Labour's plans,
0:44:10 > 0:44:16and raising the national living wage to £7 83 from next month, giving the
0:44:16 > 0:44:23lowest paid in our society a well-deserved pay rise of over £2000
0:44:23 > 0:44:31for a full-time worker since 2015. Since becoming Chancellor, I have
0:44:31 > 0:44:36provided an extra £11 billion of funding for 2018/ 19th to help with
0:44:36 > 0:44:40short-term public spending pressures and to invest in Britain's future.
0:44:40 > 0:44:46In the longer term, I can confirm that at this year's budget, I will
0:44:46 > 0:44:50set an overall pass for public spending for 2020 and beyond with a
0:44:50 > 0:44:57detailed spending review to take place in 2019 to allocate funding
0:44:57 > 0:45:01between departments. That is how responsible people budget. First you
0:45:01 > 0:45:06work out what you can afford, then you decide what your priorities are,
0:45:06 > 0:45:12then you allocate between them. And if, in the autumn, the public
0:45:12 > 0:45:16finances continue to reflect the improvements that today's report is
0:45:16 > 0:45:19hinting at, then with accordance with our Ballon d'Or -- balanced
0:45:19 > 0:45:25approach and using flexibility, I would have capacity to enable
0:45:25 > 0:45:30further increases in public spending and investment in the years ahead.
0:45:30 > 0:45:35While continuing to drive value for money to ensure not a single penny
0:45:35 > 0:45:42of precious taxpayers' money is wasted. A balanced approach, getting
0:45:42 > 0:45:48our debt down, supporting public services, investing in our nation's
0:45:48 > 0:45:52future, keeping taxes low, building a Britain fit for the future and an
0:45:52 > 0:45:59economy that works for everyone.
0:46:00 > 0:46:15There is much still to do. Since autumn 2016 we have set out our plan
0:46:15 > 0:46:18to back the enterprise and ambition of British business and the hard
0:46:18 > 0:46:20work of the British people. A plan to unleash our creators and
0:46:20 > 0:46:31innovators, inventors and discoverers.
0:46:38 > 0:46:43We choose to champion those who create the jobs and wealth on which
0:46:43 > 0:46:50our prosperity and public services both depend, not to demonise them.
0:46:50 > 0:46:55The Shadow Chancellor is open about his ideological desire to undermine
0:46:55 > 0:47:00the market economy which has driven and increase in our living standards
0:47:00 > 0:47:09over 50 years. We on this side reject his approach out right.
0:47:09 > 0:47:14The market economy embraces talent and creates opportunity, provides
0:47:14 > 0:47:19jobs for millions, and tax revenues that underpin our public services.
0:47:19 > 0:47:23We will go on supporting British businesses. We are reducing business
0:47:23 > 0:47:32rates by over £10 billion, we committed the autumn budget to move
0:47:32 > 0:47:36to trial any evaluations from 2022. I am pleased to announce we will
0:47:36 > 0:47:42bring forward the next revaluation and moved to triannual reviews from
0:47:42 > 0:47:49that date. We will launch a call for evidence to understand how best we
0:47:49 > 0:47:52can help the least productive businesses to learn from and catch
0:47:52 > 0:47:57up with the most productive. And on how we can eliminate the continuing
0:47:57 > 0:48:05scourge of late payments. Because we are the party of small business and
0:48:05 > 0:48:12the champions of the entrepreneur. Since the budget, we have made
0:48:12 > 0:48:18substantial progress in negotiations with the European Union to deliver a
0:48:18 > 0:48:23Brexit that supports British jobs, businesses and prosperity. And I
0:48:23 > 0:48:31look forward, I don't know what the honourable gentleman does, to
0:48:31 > 0:48:36another important step forward at the European Council next week.
0:48:36 > 0:48:42But we will continue to prepare for all eventualities and today the
0:48:42 > 0:48:47Chief Secretary is publishing the departmental allocations of over
0:48:47 > 0:48:51£1.5 billion of Brexit preparation funding the 20 18th which I
0:48:51 > 0:48:56announced at the autumn budget. Our modern industrial stretchy sets
0:48:56 > 0:49:00out our plan to keep Britain at the forefront of new technologies with
0:49:00 > 0:49:06the biggest increase in public are indeed spending the decades, much of
0:49:06 > 0:49:10this new technology depends on high-speed broadband and today I can
0:49:10 > 0:49:15make the first allocations of the £190 million local full fibre
0:49:15 > 0:49:20challenge fund announced in autumn, and confirm £25 million for the
0:49:20 > 0:49:26first five G test-beds. As our economy changes, we must
0:49:26 > 0:49:31ensure people have the skills they need to seize the opportunities
0:49:31 > 0:49:38ahead so we have committed over £500 billion a year, to the most
0:49:38 > 0:49:42ambitious post -- reforms in years and £50 million will be available
0:49:42 > 0:49:49from next month to help employees prepare for the roll-out. Last week,
0:49:49 > 0:49:53the Education Secretary and I chaired the first meeting of the
0:49:53 > 0:49:56National retraining partnership between the Government, the TUC and
0:49:56 > 0:50:06CBI. I can reassure you there was no beer, no sandwiches, but there was a
0:50:06 > 0:50:09clear and shared commitment to training to prepare the British
0:50:09 > 0:50:17people for a better future ahead. Next month our £29 million
0:50:17 > 0:50:21construction skills fund will open for bids to find up to 20
0:50:21 > 0:50:24construction skills villages around the country.
0:50:24 > 0:50:30We are committed as a Government to delivering 3 million apprenticeship
0:50:30 > 0:50:33starts by 2020 with the support of business through the apprenticeship
0:50:33 > 0:50:38levy but we recognise the challenges the new system presents to some
0:50:38 > 0:50:43small businesses looking to employ an apprentice. So I can announce the
0:50:43 > 0:50:48Education Secretary will release up to £80 billion of funding to support
0:50:48 > 0:50:51those small businesses in engaging an apprentice.
0:50:51 > 0:50:57We publish a consultation on improving the way the tax system
0:50:57 > 0:51:01supports self-funded training by employees and self-employed. We
0:51:01 > 0:51:05understand more about the economic payback from investing in our
0:51:05 > 0:51:09infrastructure than we do about investing in our people, so I have
0:51:09 > 0:51:15asked for the ONS to develop a more sophisticated measure of human
0:51:15 > 0:51:20capital so future investment can be better targeted.
0:51:20 > 0:51:23We are undertaking the largest road-building programme since the
0:51:23 > 0:51:291970s. As Transport Secretary I gave the green light to fund the new
0:51:29 > 0:51:34bridge across the River Mersey in 2011 and I was delighted to see it
0:51:34 > 0:51:38opened last year. The largest infrastructure project
0:51:38 > 0:51:43in Europe, Crossrail, is due to open in nine months.
0:51:43 > 0:51:47We are making progress on our plans to deliver the Cambridge Milton
0:51:47 > 0:51:54Keynes Oxford corridor, devolving powers to elected mayors across the
0:51:54 > 0:52:01northern powerhouse, in negotiations for city deals with sterling,
0:52:01 > 0:52:05borderlands, North Wales, mid Wales and Belfast. Today, we invite
0:52:05 > 0:52:11proposals from cities across England for the £840 million fund I
0:52:11 > 0:52:15announced to deliver on their local transport priorities as part of our
0:52:15 > 0:52:21plans to spread growth and opportunity to all parts of this
0:52:21 > 0:52:27United Kingdom. At the heart of our plan for
0:52:27 > 0:52:30building an economy that works for everyone is our commitment to tackle
0:52:30 > 0:52:36the challenges in our housing market, with an investment programme
0:52:36 > 0:52:40of £44 billion to raise housing supply up to 300,000 a year by the
0:52:40 > 0:52:47mid 20 20s. We are working currently, the
0:52:47 > 0:52:54Housing Minister is working with 44 authorities who have bid into the
0:52:54 > 0:52:56£4.1 billion housing infrastructure fund to unlock homes in areas of
0:52:56 > 0:53:01high demand. We are considering cutting deals with authorities who
0:53:01 > 0:53:08have agreed to deliver above their local need. I can announce we have
0:53:08 > 0:53:13agreed a deal with the West Midlands who have committed to deliver
0:53:13 > 0:53:22250,000 homes by 2030 facilitated by £100 million grant. My right
0:53:22 > 0:53:26honourable friend the Housing Minister will make further
0:53:26 > 0:53:29announcements on the housing infrastructure fund.
0:53:29 > 0:53:34We will more than double the size of the housing growth partnership with
0:53:34 > 0:53:39Lloyds Banking Group up to £200 million providing additional finance
0:53:39 > 0:53:46the small builders. London will receive an additional £1.7 billion
0:53:46 > 0:53:52to deliver a further 26,000 affordable homes including homes for
0:53:52 > 0:53:57social rent, taking total affordable housing delivery in London to over
0:53:57 > 0:54:06116,000 by the end of 22 -- 2122. The member for West Dorset has
0:54:06 > 0:54:10outlined his initial findings on the gap between planning permission is
0:54:10 > 0:54:15granted and housing completions in a letter which I have placed in the
0:54:15 > 0:54:19library of the House and I look forward to his full report.
0:54:19 > 0:54:27I am delighted to inform the House and estimated 60,000 first-time
0:54:27 > 0:54:30buyers have already benefited from the stamp duty relief that I
0:54:30 > 0:54:37announced at the autumn budget. I remind the House the party
0:54:37 > 0:54:46opposite voted against it. In the autumn, we published a paper
0:54:46 > 0:54:50on taxing large digital businesses in the global economy and today we
0:54:50 > 0:54:55follow up with a publication that explores potential solutions. I look
0:54:55 > 0:54:59forward to discussing this with G20 finance ministers at the weekend.
0:54:59 > 0:55:05We also published a call for evidence on how online platforms can
0:55:05 > 0:55:10help their users to pay the right amount of tax and we will consult on
0:55:10 > 0:55:17a new VAT collection mechanism for online sales to ensure the VAT that
0:55:17 > 0:55:20consumers pay actually reaches the Treasury. We will call for evidence
0:55:20 > 0:55:26on how to encourage cashless and digital payments while ensuring cash
0:55:26 > 0:55:29remains available to those who need it.
0:55:29 > 0:55:35This Government is determined our generation should leave the natural
0:55:35 > 0:55:40environment in a better state than we found it and improve the quality
0:55:40 > 0:55:45of the air that we breathe. So we will publish a call for evidence on
0:55:45 > 0:55:51whether the use of non-agricultural red diesel tax relief contributes to
0:55:51 > 0:55:55poor air quality in urban areas. Following our successful
0:55:55 > 0:56:00intervention to incentivise clean taxes, we will help the great
0:56:00 > 0:56:05British white van driver go green with a consultation on reduced rates
0:56:05 > 0:56:10for the keenest fans and follow up on the vital issue of plastic
0:56:10 > 0:56:15littering and the threat to our oceans with a call for evidence to
0:56:15 > 0:56:18support us in delivering on our vow to tackle this context issue.
0:56:18 > 0:56:25It will look at the whole supply chain the single use plastics,
0:56:25 > 0:56:29alternative materials, reusable options and recycling opportunities,
0:56:29 > 0:56:34at how the tax system can help drive the technological progress and
0:56:34 > 0:56:41behavioural change we need, not as a way of raising revenue but to change
0:56:41 > 0:56:45behaviour and encourage innovation. We will commit to investing to
0:56:45 > 0:56:51develop new greener products and processes,
0:56:52 > 0:56:57processes, funded from the revenues that are raised. As a down payment,
0:56:57 > 0:57:03we will award £20 million now from existing departmental budgets to
0:57:03 > 0:57:06businesses and universities to stimulate new thinking and rapid
0:57:06 > 0:57:12solutions in this area during the call for evidence.
0:57:12 > 0:57:18We are delivering on our plan with a balanced approach, restoring the
0:57:18 > 0:57:23public finances, investing in our economy and public services, raising
0:57:23 > 0:57:26productivity through our modern industrial strategy, building the
0:57:26 > 0:57:31home is our people need, tackling the environmental challenges that
0:57:31 > 0:57:35threaten our future, and breaking technological change, seizing the
0:57:35 > 0:57:41opportunities ahead, as we build our vision of a country that works for
0:57:41 > 0:57:45everyone. An economy where prosperity and opportunity are in
0:57:45 > 0:57:51breach of all, wherever they live, whatever their gender, colour, creed
0:57:51 > 0:57:57or background, where talent and hard work alone determines success. A
0:57:57 > 0:58:04beacon of enterprise and innovation. An outward looking, free trading
0:58:04 > 0:58:09nation. One that is confident our best days
0:58:09 > 0:58:16like ahead of us. A force for good in the world.
0:58:16 > 0:58:20A country we can all be proud to pass on to our children and I
0:58:20 > 0:58:31commend this statement to the House. John McDonnell.Let me first...
0:58:31 > 0:58:38STUDIO:The Chancellor.We need to break the strawberry news Donald
0:58:38 > 0:58:43Trump has sacked his century of state Rex Tillerson -- the
0:58:43 > 0:58:52extraordinary news. Let us hear what John McDonnell had to say.
0:58:52 > 0:58:57Hasn't he listened to the doctors, nurses, teachers, police officers,
0:58:57 > 0:59:03carers and even his own councillors, they are telling him they cannot
0:59:03 > 0:59:09wait for the next budget, telling him to act now. For eight years they
0:59:09 > 0:59:13have been ignored by this Government and today they have been ignored
0:59:13 > 0:59:16again. The Chancellor has proclaimed there
0:59:16 > 0:59:21is light at the end of the tunnel. This shows how cut off from the real
0:59:21 > 0:59:25world he is. Last year, growth in our economy was
0:59:25 > 0:59:31among the lowest in the G7. The slowest since 2012. The OBR
0:59:31 > 0:59:37predicted we will scrape along the bottom for future years. Wages are
0:59:37 > 0:59:41lower now in real terms than they were in 9010.
0:59:41 > 0:59:47And they are still falling. According to the Resolution
0:59:47 > 0:59:53Foundation the changes to benefits due to come in next month will leave
0:59:53 > 0:59:5911 million families worse off. As always, the harshest cuts fall on
0:59:59 > 1:00:04disabled people. The gap in productivity between this
1:00:04 > 1:00:12country and the rest of the G7 is almost the
1:00:18 > 1:00:23Investment by this government in real terms is nearly 18 billion
1:00:23 > 1:00:28below its 2010 level. This is a government that cut research and
1:00:28 > 1:00:32development
1:00:33 > 1:00:36development funding by 1 billion in real terms. Business investment
1:00:36 > 1:00:40stagnated in the last quarter of 2017 and despite all of the
1:00:40 > 1:00:47promises, the government continues to fail to address regional
1:00:47 > 1:00:51imbalances in investment. London will receive five times more
1:00:51 > 1:01:01transport investment than the north. This is a government that
1:01:01 > 1:01:06single-handedly destroyed the solar industry, 12,000 jobs lost as a
1:01:06 > 1:01:13result of subsidy cuts. The Chancellor talks about the fourth
1:01:13 > 1:01:19industrial revolution but Britain has the lowest... The Chancellor
1:01:19 > 1:01:24talks about the fourth Industrial Revolution but Britain has the
1:01:24 > 1:01:32lowest rate of industrial robot use in the OECD. The government has
1:01:32 > 1:01:34bought 75 million into its artificial intelligence programme,
1:01:34 > 1:01:46less than a tenth of what the US is spending. The Chancellor has made...
1:01:46 > 1:01:54The Tory bully boys can shout all they want.
1:02:00 > 1:02:05There will be a full opportunity for people to contribute but the right
1:02:05 > 1:02:11honourable gentleman must be heard. John McDonnell.They can shout all
1:02:11 > 1:02:17they want and make their snide remarks. People out there know the
1:02:17 > 1:02:21crisis in our community. The Chancellor has made great play this
1:02:21 > 1:02:25week of reaching a turning point in reducing the deficit and the debt.
1:02:25 > 1:02:30It's a bit rich coming from a party that has bought 700 billion on the
1:02:30 > 1:02:39national debt over the last eight years. And it is worth remembering
1:02:39 > 1:02:43this is a party that promised us that the deficit would be eliminated
1:02:43 > 1:02:53completely by 2015 /2016 and bizarrely his predecessor, now
1:02:53 > 1:03:02ensconced in the Evening Standard or is it Blackrock, the number of jobs
1:03:02 > 1:03:06he now has, his predecessor has been tweeting about achieving three years
1:03:06 > 1:03:11late deficit target that he abandoned himself. The reality is
1:03:11 > 1:03:16his Chancellor and his predecessor have not tackled the deficit. What
1:03:16 > 1:03:21they have done is shifted it onto the public services and his
1:03:21 > 1:03:30colleagues are responsible for. He has shifted it onto the shoulders of
1:03:30 > 1:03:34NHS managers, doctors and nurses throughout the country. NHS Trust
1:03:34 > 1:03:39will end this financial year 1 billion in deficit. Doctors and
1:03:39 > 1:03:45nurses are struggling, being asked to do more and more while there is
1:03:45 > 1:03:48100,000 NHS posts going unfilled. Does the Chancellor really believe
1:03:48 > 1:03:54the NHS can wait another eight months for the life-saving money it
1:03:54 > 1:03:59needs? How many people have to die waiting in an ambulance before he
1:03:59 > 1:04:04acts? He has mentioned the pay offer to the NHS -- we are expecting
1:04:04 > 1:04:10shortly, that was forced upon him by the Labour Party and trade unionists
1:04:10 > 1:04:17campaigning against the pay cut. Taking away a day's holiday from
1:04:17 > 1:04:23those dedicated staff is mean-spirited, and I ask him now,
1:04:23 > 1:04:30will he dropped this miserly act? The Chancellor has also shifted the
1:04:30 > 1:04:36deficit the Secretary of State for Education and headteachers, with the
1:04:36 > 1:04:43first per capita cut in schools funding since 1990s. Today, the
1:04:43 > 1:04:48government is even trying to deprive 1 million children of a decent
1:04:48 > 1:05:01school dinner. So I am asking the Chancellor, and I am asking every
1:05:01 > 1:05:10Conservative MP, if...Order! The House must calm down, there will be
1:05:10 > 1:05:12plenty of opportunity for questioning from members in all
1:05:12 > 1:05:17parts of the House but the right honourable gentleman must be heard.
1:05:17 > 1:05:26John McDonnell.So I am asking and appealing to Tory MPs today. If they
1:05:26 > 1:05:31are serious about ending austerity, to vote with us this afternoon to
1:05:31 > 1:05:37give those children the free school meal they are entitled to. The
1:05:37 > 1:05:43Chancellor has shifted the deficit onto Home and Justice Secretary.
1:05:43 > 1:05:49Crime is rising, yet he has cut the number of police officers by 21,500,
1:05:49 > 1:05:55the number of firefighters by 8500, and our prisons and probation
1:05:55 > 1:05:59service are in dangerous crisis. In shifting the deficit onto the
1:05:59 > 1:06:03shoulders of the Secretary of State for Communities and Local
1:06:03 > 1:06:07Government, in reality he is shifted the burden onto local councillors.
1:06:07 > 1:06:12Yes, Labour, Lib Dem and Conservative councillors alike. I
1:06:12 > 1:06:16raised again the stark reality of what this means that the most
1:06:16 > 1:06:21vulnerable children in our society. There's been a 40% cut in early
1:06:21 > 1:06:24intervention to support families, the result is the highest number of
1:06:24 > 1:06:31children taken into care since the 1980s. Children's charities are
1:06:31 > 1:06:38saying this - this crisis could turn into a catastrophe without further
1:06:38 > 1:06:43funding. Also last year 400 women seeking refuge were turned away
1:06:43 > 1:06:47because there were no places available for them in refuges. There
1:06:47 > 1:06:55are now nearly 5000 of our fellow citizens sleeping rough on our
1:06:55 > 1:07:03streets, more than double what there was in 2010. Tragically, one of our
1:07:03 > 1:07:09homeless citizens died only feet away from the entrance to
1:07:09 > 1:07:18Parliament. He mentioned additional housing funding, the announcement
1:07:18 > 1:07:21for London today is not a new announcement, it's already been
1:07:21 > 1:07:26announced. Any new funding is welcome, but it represents a cut in
1:07:26 > 1:07:35London's budget compared to money Labour allocated Intel
1:07:36 > 1:07:38Labour allocated Intel -- in 2010. Conservative councils are going
1:07:38 > 1:07:43bust, many will be forced to put up council tax. Councils are running
1:07:43 > 1:07:48out of reserve as the National Audit Office explained. So I asked the
1:07:48 > 1:07:55Chancellor, will will he listen to Conservative council leaders? Like
1:07:55 > 1:07:59his own in Surrey who said, "We are facing the most difficult financial
1:07:59 > 1:08:05crisis in our history. The government cannot stand idly by
1:08:05 > 1:08:07while Rome burns"
1:08:07 > 1:08:10government cannot stand idly by while Rome burns". I ask him, how
1:08:10 > 1:08:14many more children have to come into care? How many more councils have to
1:08:14 > 1:08:19go bust and run out of reserves before he wakes up to the crisis and
1:08:19 > 1:08:24acts? The statement today could have been a genuine turning point but it
1:08:24 > 1:08:31is depressingly another missed opportunity. People know now that
1:08:31 > 1:08:39austerity was a political choice, not an economic necessity. The
1:08:41 > 1:08:47Conservatives chose to cut taxes for the super rich, the corporations and
1:08:47 > 1:08:53the bankers, and it was paid for by the rest of us in society. They even
1:08:53 > 1:09:00cut the levy on bankers. We were never all in this together as they
1:09:00 > 1:09:04claimed, never. They cut investment at the very time we should have been
1:09:04 > 1:09:07developing the skills and infrastructure needed to raise
1:09:07 > 1:09:12productivity, and grasp the technological revolution with both
1:09:12 > 1:09:17hands. And when they had a responsibility to meet the challenge
1:09:17 > 1:09:22of Brexit, we have a Chancellor who this weekend admitted he hasn't even
1:09:22 > 1:09:28modelled the government's options. Today we have the indefensible
1:09:28 > 1:09:33spectacle of a Chancellor congratulating himself on marginally
1:09:33 > 1:09:38improved economic forecasts, while he refuses to lift a finger as
1:09:38 > 1:09:44councils go bust, the NHS and social care in crisis, school budgets cut,
1:09:44 > 1:09:47homelessness doubles and wages falling. This isn't a government
1:09:47 > 1:09:54preparing our country for the future, it is a government setting
1:09:54 > 1:10:01us up to fail.Chancellor of the Exchequer.
1:10:01 > 1:10:05Exchequer.The Shadow Chancellor John McDonnell ending his ten-minute
1:10:05 > 1:10:08response, quite an emotional speech in his response to Philip Hammond
1:10:08 > 1:10:14but before we do the analysis on that spring statement and Labour's
1:10:14 > 1:10:18reply, if you remember in the middle of it I brought you the fairly
1:10:18 > 1:10:23extraordinary news is that President Trump had sacked his Secretary of
1:10:23 > 1:10:27State, Rex Tillerson. James Landale, why is this critically important to
1:10:27 > 1:10:32Britain?This matters because Rex Tillerson hard in the last 24 hours
1:10:32 > 1:10:36offered his support for Britain's position against Russia. There have
1:10:36 > 1:10:41been concerns that the British were not getting similar noises from the
1:10:41 > 1:10:46White House itself but Rex Tillerson had spoken to Boris Johnson and had
1:10:46 > 1:10:49accepted Boris Johnson's analysis that there was Russian involvement
1:10:49 > 1:10:55in the Salisbury attack and that Rex Tillerson had responded accordingly
1:10:55 > 1:10:58with the statement he put out. However he is now out of office,
1:10:58 > 1:11:06he's been replaced by the former head of the CIA. What is crucial is
1:11:06 > 1:11:16the timing of the sacking. If Rex Tillerson was sacked in the last 24
1:11:16 > 1:11:20hours, there is the question was he sacked in part because of the
1:11:20 > 1:11:24strength of his criticism of Russia, criticism the White House was not
1:11:24 > 1:11:29prepared to make itself. However, if Rex Tillerson was informed of his
1:11:29 > 1:11:36dismissal last Friday, then actually the suggestion is that he has been
1:11:36 > 1:11:40dismissed for longer term differences of opinion with
1:11:40 > 1:11:45President Trump, namely particularly I think the attitude the US has been
1:11:45 > 1:11:49taking to North Korea but also the long-standing personal differences,
1:11:49 > 1:11:54the allegations Rex Tillerson has always denied that he once called Mr
1:11:54 > 1:11:57Trump a moron.I'm going to come back to you in a moment because we
1:11:57 > 1:12:02might as well tell viewers about the strength of the statement from Rex
1:12:02 > 1:12:06Tillerson, the now former Secretary of State, in terms of condemning
1:12:06 > 1:12:11Russia last night. He said:
1:12:25 > 1:12:29Taking your point about the timing of his sacking, in terms of it might
1:12:29 > 1:12:32have been around longer term disagreements, that is still going
1:12:32 > 1:12:37to be very important in terms of what Britain can expect from its
1:12:37 > 1:12:42allies if it takes retaliatory action against Russia.It is hugely
1:12:42 > 1:12:46important that whatever action the British Government takes, some of it
1:12:46 > 1:12:49expected to be announced tomorrow, that it has some kind of
1:12:49 > 1:12:55international support. At the moment Boris Johnson, the Prime Minister
1:12:55 > 1:12:58and others are ringing around to get as much support as they can but most
1:12:58 > 1:13:03of that at the moment is supportive noises, condemnation of the attack,
1:13:03 > 1:13:07but one or two countries are being cautious before blaming Russia
1:13:07 > 1:13:13specifically. They are keeping their powder dry on that. The United
1:13:13 > 1:13:18States is supposed to be one of Britain's closest allies. If there
1:13:18 > 1:13:23is turbulence and uncertainty within the White House or the State
1:13:23 > 1:13:27Department, that is going to make it harder for the British Government to
1:13:27 > 1:13:31get that sort of international solidarity.Because there is a
1:13:31 > 1:13:34difference and certainly was a difference in tone in the way
1:13:34 > 1:13:38President Trump and the White House responded, of course they condemned
1:13:38 > 1:13:45the attack but it will raise further questions about Donald Trump and his
1:13:45 > 1:13:48administration's relationship with Russia.Exactly, and that is the
1:13:48 > 1:13:52question, why is the White House at the moment being so cautious? They
1:13:52 > 1:13:58will have the same intelligence assessments the British Government
1:13:58 > 1:14:02has over the Russian involvement in the Salisbury events. They will have
1:14:02 > 1:14:06that information, they will be able to make their judgment, but as of
1:14:06 > 1:14:09now the White House is still refusing to formally criticise
1:14:09 > 1:14:14Russia with the same strength the British Government is.Looking
1:14:14 > 1:14:21ahead, what is going to happen? We have the deadline of midnight
1:14:21 > 1:14:25tonight and what we know will happen in terms of choreography and the
1:14:25 > 1:14:28British response?Tomorrow there will be another meeting of the
1:14:28 > 1:14:32Security Council and if there is no response from Russia, the Prime
1:14:32 > 1:14:35Minister will update the House tomorrow afternoon with a statement
1:14:35 > 1:14:40setting out what she believes should happen now. I understand the
1:14:40 > 1:14:45reaction from the British Government tomorrow will be more domestic
1:14:45 > 1:14:47focused, in other words the unilateral actions the British
1:14:47 > 1:14:52Government can make by itself. Potentially the expulsion of
1:14:52 > 1:14:57diplomats, the crackdown on wealthy Russians with property and money in
1:14:57 > 1:15:00the UK, travel bans, financial sanctions, things like that, maybe
1:15:00 > 1:15:06even forcing them to take their children out of British public
1:15:06 > 1:15:11schools, and targeting of the Russian media. Those kind of things.
1:15:11 > 1:15:16All of the international stuff, any action on sanctions will be much
1:15:16 > 1:15:20longer term because those things take a long time to get in place.
1:15:20 > 1:15:25Also it will take a lot of diplomacy. This diplomacy over the
1:15:25 > 1:15:29next weeks and months will be the big test of the government's slogan
1:15:29 > 1:15:36for its foreign policy called Global Britain.
1:15:39 > 1:15:48Rex Tillerson a former secretary of the outcome has been sacked will
1:15:48 > 1:15:59stop let us speak to Johnny Mercer outside the Houses of Parliament.
1:15:59 > 1:16:03What is your reaction to the news Rex Tillerson has gone?
1:16:03 > 1:16:07Given his strong support of Britain in his statement, it is concerning,
1:16:07 > 1:16:15we need to make -- we need to work out if he made that after he was
1:16:15 > 1:16:20sacked. He has long protracted this
1:16:20 > 1:16:21narrative on national security, talked about a special relationship
1:16:21 > 1:16:30with written. His reaction to what has happened and the Prime Minister,
1:16:30 > 1:16:36is still being waited for. It will be interesting to see what he does.
1:16:36 > 1:16:40It is a very clear moment for him to decide which side he is on.
1:16:40 > 1:16:46And what about the test for Theresa May and her leadership?
1:16:46 > 1:16:50I have said things about her leadership in the past, yesterday,
1:16:50 > 1:16:57she was in her prime. The country needs that resilience of a strong
1:16:57 > 1:17:01leadership. The contrast between her and Jeremy Corbyn was extraordinary.
1:17:01 > 1:17:06We need to work out what we are going to do. Actions speak louder
1:17:06 > 1:17:12than words. The whole political spectrum need to come together and
1:17:12 > 1:17:16make it clear to Russia this is not acceptable.
1:17:16 > 1:17:21How do you do that? In our earlier discussion, beyond asking Nato for
1:17:21 > 1:17:26support which it has said, beyond the rhetoric, what are you expecting
1:17:26 > 1:17:35Nato to do, is this an attack on one or all?
1:17:35 > 1:17:38Those discussions will have to be had at national security level.
1:17:38 > 1:17:44There are various levers they can pull around sanctions, there are
1:17:44 > 1:17:49many options. I note the Prime Minister will come forward with a
1:17:49 > 1:17:56strong one and we need to support her. People like Putin, Assad, the
1:17:56 > 1:18:00only respect one thing when you stand up for what you believe in and
1:18:00 > 1:18:03I look forward to Theresa May doing that.
1:18:03 > 1:18:10Thank you very much. We are going to talk about and analyse that Spring
1:18:10 > 1:18:17Statement. This announcement from the United States has overshadowed
1:18:17 > 1:18:18the Spring Statement and response from Labour.
1:18:18 > 1:18:25Listening to that, since the announcement regarding Rex
1:18:25 > 1:18:29Tillerson, how much more difficult will it be for Theresa May to match
1:18:29 > 1:18:35action to her rhetoric? More difficult even more. Rex
1:18:35 > 1:18:42Tillerson was seen as a sensible bridge for the Trump administration.
1:18:42 > 1:18:45Number ten pointing to constructive concessions he had with the Foreign
1:18:45 > 1:18:51Secretary, his views on what had happened, his identification of
1:18:51 > 1:18:59Russia being the likely marauders in this affair was a positive for the
1:18:59 > 1:19:05Government. Whatever the Government can do, whether it is expelling
1:19:05 > 1:19:11diplomats, the natural movements in and out of London, they know they
1:19:11 > 1:19:17can't do anything dramatic that has huge minute without international
1:19:17 > 1:19:20cooperation and if there is in a friend at the top of the American
1:19:20 > 1:19:27Government willing to act in concert, that makes that job much
1:19:27 > 1:19:33more difficult, no question. Theresa May's strengthened language has set
1:19:33 > 1:19:39the bar high. She has set expectation which will be difficult
1:19:39 > 1:19:47to meet in the House. This could be to do with longer term
1:19:47 > 1:19:50disagreements between Rex Tillerson and President Trump particularly
1:19:50 > 1:19:54since we are hearing coming out of Washington Donald Trump wanted to
1:19:54 > 1:19:57change his team ahead of that high-stakes meeting between himself
1:19:57 > 1:20:06and Kim Jong-un.Indeed. It is not surprising in the big picture that
1:20:06 > 1:20:09Tillerson is out. There have been some tensions. There
1:20:09 > 1:20:15were doubts about him when he was appointed, did he have links to
1:20:15 > 1:20:24Russia himself that gay people cause for concern? -- that gave people.
1:20:24 > 1:20:27The timing whether deliberate or not if we are to believe early
1:20:27 > 1:20:34suggestions, may have made things difficult for the British Government
1:20:34 > 1:20:37and has complicated what was already a very tricky picture for the Prime
1:20:37 > 1:20:41Minister. We know there is a deadline of
1:20:41 > 1:20:48midnight tonight for a Russian response. A further Russian
1:20:48 > 1:20:53response. Let us return to our discussion with our guests about the
1:20:53 > 1:21:00Spring Statement. Kemal Ahmed, welcome. A slightly different Daily
1:21:00 > 1:21:04Politics. On the Spring Statement, thinking back to Philip Hammond,
1:21:04 > 1:21:10that it would be a low-key affair, no big measures announced. It was
1:21:10 > 1:21:15longer in length but did it have any more substance?
1:21:15 > 1:21:19I thought it was very political, attacking the Labour Party, saying
1:21:19 > 1:21:25why they were the party that were good for Britain. What was
1:21:25 > 1:21:29interesting was the Office for Budget Responsibility the official
1:21:29 > 1:21:35economic watchdog, it's upgrade for this year was very modest. It
1:21:35 > 1:21:43downgraded its forecast for 2021. The big signal from the Spring
1:21:43 > 1:21:46Statement today is what a difficult hand economic league Philip Hammond
1:21:46 > 1:21:53says, the trend growth of the economy is well below the 2% average
1:21:53 > 1:21:59this country was used to. That raises very big questions about the
1:21:59 > 1:22:02funding of public services, borrowing targets, can the
1:22:02 > 1:22:08Government bring down the stock of debt. Although Philip Hammond opened
1:22:08 > 1:22:15the door a crack to possible spending increases in the autumn
1:22:15 > 1:22:23budget, what the OBR has revealed is how difficult that is. One good news
1:22:23 > 1:22:28was the OBR's strong signal it believes in will fall down to 2% by
1:22:28 > 1:22:31the end of the year. Philip Hammond felt confident enough to say the
1:22:31 > 1:22:36real income squeeze which is how people experience the economy, would
1:22:36 > 1:22:42reverse in the first quarter of next year.Because wages are rising at
1:22:42 > 1:22:472.6%.
1:22:47 > 1:22:522.6%.Reversing the real income squeeze people are suffering. That
1:22:52 > 1:22:57would be an economic boost, consumer spending is going down, the biggest
1:22:57 > 1:23:00driver of economic growth.Did he really have any basis for being
1:23:00 > 1:23:08Tigger like as he put it, when growth is basically anaemic to Mark
1:23:08 > 1:23:12and he can point to very small adjustments. Doesn't that underline
1:23:12 > 1:23:20the weakness in the argument austerity has worked for everyone?
1:23:20 > 1:23:24It has worked for everyone because it has created jobs, given a
1:23:24 > 1:23:30strongly growing economy. It is not. You have to look across the entire
1:23:30 > 1:23:38period, sixth 2010, our economy has grown much longer than Italy,
1:23:38 > 1:23:45France, Germany. These forecasts change but the overall path is the
1:23:45 > 1:23:51right one which is we have cut the deficit, the debt is starting to
1:23:51 > 1:23:55fall and we have scope for more spending for public services, in
1:23:55 > 1:24:00relation to the NHS and education. But he has made announcements on
1:24:00 > 1:24:07public services. He said he would set an overall path. That is not the
1:24:07 > 1:24:16same as announcing spending because the economy is doing very well.He
1:24:16 > 1:24:19has set out a pathway, a balanced approach which means we continue to
1:24:19 > 1:24:23keep the debt falling because we must prepare for a future shock, but
1:24:23 > 1:24:31ensure we have money to spend, and cut taxes. We are increasing the
1:24:31 > 1:24:36personal allowance again. The message I took was lordly we are on
1:24:36 > 1:24:42the same track we set out in the budget in autumn but have made
1:24:42 > 1:24:48progress broadly.On wages, the announcement he believes inflation
1:24:48 > 1:24:54will come back down to around 2%, that would be good news because
1:24:54 > 1:25:00wages would be at breaking inflation.It would be good to see a
1:25:00 > 1:25:07change. We have had the longest squeeze on wages since Napoleonic
1:25:07 > 1:25:13chines -- times. But what we did not hear him say is when you put our
1:25:13 > 1:25:16country in perspective with other nations, we are the only economy
1:25:16 > 1:25:25that has been growing where wages have not been growing as well. You
1:25:25 > 1:25:30will not see that comparison from the Government, comparing investment
1:25:30 > 1:25:34levels either because they are lower, or productivity levels
1:25:34 > 1:25:40because they are lower. Those fundamentals need to be sorted out
1:25:40 > 1:25:45will stop we didn't talk about productivity.What is the picture?
1:25:45 > 1:25:54It seemed to be improving a little. From a very low base.We have a huge
1:25:54 > 1:25:58problem with the financial crisis when it fell down to 0.2% increase
1:25:58 > 1:26:04per quarter. There have been six months of better numbers but the OBR
1:26:04 > 1:26:10has looked at that. The amount of productivity affects how much growth
1:26:10 > 1:26:15we get, it is the way we produce wealth. The OBR has said there may
1:26:15 > 1:26:22be some good news but this is a volatile figure. It looked through
1:26:22 > 1:26:28that, the trend over a decade is still very poor.The politics, the
1:26:28 > 1:26:34response was quite emotional from John McDonnell, a crisis in our
1:26:34 > 1:26:39communities, calling on Tory MPs who are sceptical about the lack of
1:26:39 > 1:26:48spending in public services, to join Labour ranks.The interesting thing
1:26:48 > 1:26:51about that statement was how marginal the actual economic changes
1:26:51 > 1:26:58were. There was a dynamic light at the end of the tunnel, but that is
1:26:58 > 1:27:03not what the numbers that out. What we know has changed is the political
1:27:03 > 1:27:09dynamics. The Chancellor is not willing to acknowledge that yet. He
1:27:09 > 1:27:16did set -- send out a signal for the longer term but it seems he is not
1:27:16 > 1:27:20clear yet to pick a side in what will be a battle inside the Tory
1:27:20 > 1:27:26Party and whether or not they are going to look and sound like a
1:27:26 > 1:27:34different party with public spending in the next big review. The battle
1:27:34 > 1:27:38has now begun over that next big spending review in 2019 setting the
1:27:38 > 1:27:42context for the next general election.
1:27:42 > 1:27:47We haven't spoken about Brexit which is still the backdrop. The
1:27:47 > 1:27:51Chancellor talked about future potential economic shocks which
1:27:51 > 1:27:58might or might not include Brexit. What was worth noting?He said he
1:27:58 > 1:28:04would outline how he would spend half of the £3 billion they have put
1:28:04 > 1:28:09aside to help different departments prepare for Brexit. Stressing he was
1:28:09 > 1:28:17going to allocate half of that amount. The issue around our trend
1:28:17 > 1:28:21growth, the OECD brought out figures that puts UK growth at the bottom of
1:28:21 > 1:28:28the G20. He knows he has an issue that the gap between our growth and
1:28:28 > 1:28:33the growth of other leading Western economies is growing and is negative
1:28:33 > 1:28:39for us.We will have to end it there. President Trump is due to
1:28:39 > 1:28:43speak to Theresa May about the nerve attack and the latest from
1:28:43 > 1:28:48Washington is Rex Tillerson did not know of the reason he was sacked.
1:28:48 > 1:28:52Today was meant to be about the Spring Statement. Thank you for
1:28:52 > 1:28:53joining me in the studio.
1:28:53 > 1:28:56That's all for today.
1:28:56 > 1:29:01Bye-bye.