13/03/2018 Daily Politics


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13/03/2018

Jo Coburn is joined by Cabinet Office minister Oliver Dowden and shadow Treasury minister Anneliese Dodds for full coverage of the chancellor's spring statement.


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LineFromTo

Hello and welcome to

the Daily Politics.

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The Prime Minister points the finger

of blame at Russia for the nerve

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agent attack in Salisbury and gives

Moscow a deadline of midnight

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tonight to explain itself.

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President Putin, BBC News.

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Is Russia behind the poisoning

of Sergey Skripal?

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TRANSLATION:

We are busy

with agriculture here to create

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the conditions for people's lives.

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And you talk to me

about some tragedies.

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First work out what actually

happened there and then

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we will talk about it.

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Vladimir Putin brushes

off accusations of involvement.

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Meanwhile the British ambassador

in Moscow is summoned

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to the Russian Foreign Ministry

as the diplomatic row escalates.

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After nearly eight years of tax

rises and public spending

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squeezes, we test the public

mood about austerity.

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Has it been worth the effort?

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I think there's been far too many

cuts to public services, there's

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been cuts in this borough

specifically to local services such

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as closing parks in the evening and

things like that.

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Well, that debate forms the backdrop

to the Chancellor's first ever

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Spring Statement, when he'll update

us about the state of the economy.

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We'll have all the

action live at 12:30.

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All that in the next

hour and a half.

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Yes, a full 90 minutes today

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to allow us to cover

the Chancellor's statement live

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as well as all the reaction.

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And with me throughout

are the Shadow Treasury

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Minister Annaliese Dodds

and the Cabinet Office

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minister Oliver Dowden.

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Welcome to you both.

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First today, the British Government

has given Moscow until midnight

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tonight to explain why

a Russian-made nerve agent was used

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in the poison attack in Salisbury.

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The Prime Minister says

it is "highly likely" Russia

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was responsible for the attack

against the former Russian double

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agent Sergei Skripal

and his daughter, Yulia.

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A short while ago a meeting

of the Government's emergency

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committee Cobra began,

chaired by the Home Secretary

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to discuss the response.

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The Prime Minister made a statement

in the Commons yesterday

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and was followed by the Labour

leader, Jeremy Corbyn.

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It was an indiscriminate

and reckless act against

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the United Kingdom, putting

the lives of innocent

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civilians at risk.

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And we will not tolerate such

a brazen attempt to murder innocent

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civilians on our soil.

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The events in Salisbury on the 4th

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of March have appalled the country,

and need thorough investigation.

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The local community and public

services involved need reassurance

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and the resources necessary.

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The action the Government takes once

the facts are clear,

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needs to be both decisive

and proportionate and focussed

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on reducing conflicts and tensions

rather than increasing them.

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Since the Prime Minister's

statement, the diplomatic row

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between London and

Moscow has escalated.

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Our Diplomatic Correspondent James

Landale can bring us up to speed.

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What has the Russian response been

so far, bearing in mind the clock is

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ticking?

So far the Russians have

once again denied any involvement in

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events in Salisbury and specifically

the Russian Foreign Minister survey

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line -- Sergey Lavrov says they want

more information. They say the

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British government has not provided

them with any material, the alleged

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nerve agent used in the attack, they

also save the British government is

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not following the usual protocols

under what's called the office for

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the prevention of chemical weapons,

which is a convention we are and the

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Russians are signed up to. They say

there are certain procedures and

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timelines which the British are not

following. So a fairly predictable

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response so far.

In terms of the

response from our allies, there has

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been broad support for Theresa May,

particularly from Rex Tillerson in

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the United States, but what does

that mean in practice?

There have

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been warm words of support, yes from

Rex Tillerson and other world

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leaders, President Macron spoke to

the Prime Minister yesterday. I have

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to say, there is certainly a gap

between the views of Rex Tillerson,

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the State Department and the White

House. The White House is insisting

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that whilst they support the British

and condemn what happened in

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Salisbury, they have been more

reluctant to blame the Russians

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where is Rex Tillerson has accepted

the British analysis. The question

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is, is there anything practical that

the British can get in an

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international forum that in anyway

puts meaningful pressure on the

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Kremlin? At the moment we are

getting words of support. In the

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long run is there any hard-core

diplomacy across the piece, whether

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EU, Nato, anywhere, that the British

can get enough of an alliance

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together to put pressure on the

Kremlin?

That then begs the question

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of some debate about what we should

do with regard to the World Cup is

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being held in Russia. Tell us more

about some of the suggestions around

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that.

Boris Johnson has been

speaking this morning and refusing

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to go into the detail of what the

British government may or may not do

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tomorrow if they don't get a

satisfactory response from the

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Russians. My own view is the

government will be reluctant to

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organise any kind of formal,

official sporting boycott of the

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World Cup. I think we will get some

officials not going but they know

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that will be a hard ass to get other

countries in joining them in not

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sending footballers there. We are

more likely to seek domestic focused

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reaction, potentially the expulsion

of Russian diplomats and new

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measures to crack down on wealthy

Russians living in London, and more

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pressure on the international stage

as well.

Thank you.

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I'm joined now by Peter

Ricketts, the first

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National Security Adviser

during the coalition Government,

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and now a crossbench peer

in the House Of Lords.

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Welcome to the programme. Let's

return to what Theresa May said

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initially in her statement yesterday

to the house, she said it was highly

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likely Russia was responsible for

the poisoning of Sergei Skripal, and

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it was either a direct attack by the

Russian government or they had

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somehow lost control of this nerve

agent. Does that give the Russians

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get out?

Not really I don't think,

because this is military grade nerve

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agent. It should be kept in the

highest conditions of security so it

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is offering them a choice between

saying incompetence or deeply

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implicated in the attack.

What did

you make of the statement and the

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tone?

It was very good, serious,

clear and measured and gave the

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Russians an opportunity to come back

with any comments they wanted to

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make. The problem will be, assuming

the Russians don't come back with

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anything which is most likely,

producing a package of measures

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which lives up to the expectations

created by the gravity of the

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situation on her statement.

It is

extremely serious what's happened,

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using a chemical weapon on the

streets of Britain and Russia being

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likely to be responsible. What could

match that rhetoric in your mind?

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The sort of thing is James Landale

was talking about will be on the

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list, expulsions, security crowd in

the Russian Embassy, I would hope

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not the ambassador because we need

him to be passing messages to

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Moscow. Going after the money, the

idea of powers to seize money from

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people who have committed human

rights abuses, that would be

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powerful but not a game changer.

I've suggested there should be more

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activity with our Nato partners. A

chemical attack is something Nato

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should be interested in.

Not saying

an attack on one is an attack on us

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all.

But putting it on the agenda.

There is a summit coming up. We

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should be having made to think

differently about Russia, perhaps

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changing the dispositions of forces

in Eastern Europe. That is a longer

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term thing but quite a potent area

to be looking at.

But would any of

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those things? Because to some extent

we have done that in the past,

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sanctions, you could argue the

cupboard is bare in terms of what

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Britain alone can do. Will any of

that have an impact on Putin's

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thinking?

The only thing that will

have an impact is things that hurt

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the Russians' reputation or possibly

serious financial measures that

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really begin to bite. Realistically

we are not going to change Russian

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minds about a pattern of behaviour

that goes back over decades but we

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have to show them to do this with

impunity, that there will be costs

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and that's why we need to do this in

an international setting with as

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much solidarity as possible.

That

solidarity that James Landale was

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also talking about, what would that

mean in practical terms? What would

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our allies, you mentioned Nato, what

would they really be prepared to do

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to show that solidarity?

I rather

agree with James that we will set

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ourselves up for failure if we go

after a boycott of the World Cup

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because I don't think people will

want to withdraw their teams unless

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things get very much worse. I think

the financial side because there's a

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lot of Russian money in London

obviously, but also other European

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capitals, and the US have already

taken some Draconian measures. If

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there can be more practical

follow-up on seizure of assets of

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people we have serious doubts about,

that could be something. But it will

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be difficult. The Russian regime are

hard to influence but we have to do

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our best in as wide company as

possible.

Oliver Dowden, let's talk

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about those powers because Jeremy

Corbyn

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Corbyn criticised yesterday. Was it

a mistake to block the amendments?

A

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lot of the proposals in there have

already been implemented through the

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Proceeds of Crime Act, we brought

forward an amendment enabling us to

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seize proceeds when they are

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seize proceeds when they are related

to that. The Foreign Office has made

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it clear we will look at this. There

are issues over whether the

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amendment works but I don't think

there's a real division over it.

So

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what is the problem, Annaliese

Dodds?

I saw the government stopping

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the debate after 25 minutes because

they thought they might lose a vote

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over having these sanctions. They

are named after the person who was

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imprisoned and tortured in Russia

when he was acting for a US

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businessman. They are designed to

target those sanctions at abuses of

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human rights on a grand scale. We

tried to get that provision in

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through the bill. The government

shut down debate on it which meant

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we couldn't look at other

amendments.

Do you think, despite

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your reservations, that should be

something the government should

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support?

With the Proceeds of Crime

Act we had the powers to go after

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these gross human rights violations.

Further measures need to be taken.

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At report stage, which is when the

house will vote on this, we will be

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looking out seeing if it's necessary

to bring forward further measures.

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Let's look at the cyber options, a

cyber counterattack. Would it be

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effective?

I don't know exactly what

they have in mind. I'm sure the UK

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has some powerful assets in that

area. I am sceptical that an

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offensive cyber attack against the

Russians is going to work and might

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not produce an immediate and even

harder punch back. I wonder whether

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it would be more effective to do

more calling out of manipulative

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Russian efforts in our media, in our

politics. In France we saw during

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President macro's presidential

campaign the Russians tried this

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manipulative stuff in France and he

called them out -- President Macron.

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It is hard to do that kind of

manipulation in the full transparent

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glare of publicity so that will be

more effective in my mind.

We will

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talk about Russia today in a moment,

but this cyber counterattack, what

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would that involve?

There is a

process for this, which the Prime

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Minister set out yesterday. We have

these two potential scenarios, the

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Russians doing it directly or they

have lost control. We make a

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judgment on that tomorrow and then

the Prime Minister will bring

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forward a range of

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measures if it's the case Russia is

involved. I don't think it's helpful

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to start speculating in detail on

those but we have already discussed

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lots of things, for example going

after Russians linked to the Kremlin

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travelling.

Would you block wealthy

Russians coming to London who have

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strong links to Vladimir Putin?

Let's allow the Prime Minister to

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come up with the options tomorrow.

So that would be an option?

It's a

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decision for the Prime Minister but

nothing is off the table.

There was

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an issue about party politics

yesterday, Annaliese Dodds, Jeremy

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Corbyn raised the issue of donations

to the Conservative Party by

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citizens of Russian origin. Was it

the right moment to make that party

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political statement, just after the

Prime Minister had made and

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obviously set these serious words

about our national security?

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We need more transparency. We need

to know what is going on in terms of

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influence being applied across the

political system in our media and

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the financial issues. Having more

transparency is positive. It was

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right to mention it. People may not

like it but we must be more open

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about these issues.

Was that an appropriate moment when

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talking about national security,

rather than saying we stand

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shoulder-to-shoulder with our Prime

Minister?

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Jeremy Corbyn did express support

for the investigation, he said we

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should not move to a situation

quickly where we have an escalation,

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we need to be proportionate and

thoughtful. And I would agree we

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shouldn't jump to conclusions,

Jeremy said that.

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I would say, in terms of being

proportionate, of course, but this

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is a significant escalation, where a

nerve agent is used on the streets

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of a town in England and a police

officer has fallen victim. That

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necessitates a serious response.

Absolutely. I also think we need to

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be careful if we have measures, if

there is found to have been that

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kind of involvement, if we have

measures targeting a population,

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those can be offered a great way for

that population to end up hating our

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country. But proportionate targeted

measures like those sanctions,

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against money-laundering, financial

sanctions, we can be in a better

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place than something interpreted as

an attack on all of the Russian

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people.

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Now, if pre-statement

briefings are to be believed,

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today's economic figures will signal

the beginning of

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the end of austerity.

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The Chancellor, Philip Hammond,

says we're not out of the woods yet,

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but there's light at the end

of the tunnel.

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So, has austerity been worth it?

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Our reporter Greg Dawson has taken

the moodbox to Bexleyheath

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in South East London.

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Philip Hammond made it clear at the

weekend he does not think the era of

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austerity is over, he is worried

about debt levels. Even this most

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cautious of toddlers says he can see

the light. Our mood box question is,

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was austerity worth it?

From my

perspective, the Government is doing

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a good job. It has been working.

Definitely.

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I don't think any of it has worked.

The whole country is in meltdown.

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Between the boxes. I would say yes.

We don't have a between option.

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We don't have a between option.

No.

I just think they are always making

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mistakes and telling us we are going

to get over it and we haven't.

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They are saying... I'm on TV! We

seem to be better off now. But I

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don't know if it is true because the

pound is an worth as much as it used

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to be.

-- is not worth.

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You said people don't want to talk

about economic policy. Let's head

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off to the market.

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Definitely not. Far too many cuts to

public services, cuts in this

0:19:180:19:27

borough to local services such as

closing parks in the evenings.

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No, no. Because public service as

had been cut and everyone is feeling

0:19:340:19:41

the pinch. -- services have been

cut.

0:19:410:19:50

Will you stop -- swap some oranges

for a plastic ball, what think?

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Yes.

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For years the Government has been

selling the message all those tough

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the natural positions would

eventually be worth it to balance

0:20:100:20:13

the books but the people of Bexley

Heath are not buying it.

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It may be unscientific but the

message was clear from the people of

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Bexleyheath, there is real weariness

with austerity.

0:20:250:20:30

Of course there is weariness after

seven years but it has been worth

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it. Let us look at employment, 3

million jobs created giving

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security. Secondly, we are living

within our means, we have reduced

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the deficit. And debt is falling as

a proportion of GDP. How much?

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Continuing to fall for the first

time in many years. The economy is

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growing, over eight years. Our

balanced approach between reducing

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the deficit and investing in public

services has been worth it.

We will

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talk about debt but let us take

employment. You cannot say the

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employment figures haven't been

healthy for the last few years and

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there has been economic growth even

if it hasn't been as much as

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expected.

Particularly on growth we

have been falling behind many

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countries and in 2017 growth was at

its slowest since 2012. Slower

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growth than expected which has been

a problem. Employment, nobody will

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say having more people in enjoyment

is a bad thing. Worryingly,

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different to other countries, we

have much more people going into

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insecure employment. 1 billion

people on zero-hours contracts.

0:21:540:21:57

Large numbers who in theory are self

employed but it is disguised. A big

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problem. Record numbers are in work

but in poverty.

There is a myth

0:22:040:22:12

these 3 million jobs created are low

skilled, they are not, three

0:22:120:22:16

quarters are high skilled. A myth

that they are part-time, over 75% of

0:22:160:22:21

full-time. In terms of zero hours,

we have legislated to ban exclusive

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zero-hours contracts.

What you

cannot dispute is the fact more

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people who are in work are now

ending up in poverty. Record numbers

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of children in working families but

in poverty. A reflection of the

0:22:430:22:49

nature of the Plymouth market.

And

the squeeze on wages which

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continues.

-- the employment market.

The latest figures are more

0:22:520:23:00

promising with wage growth. First of

all, we have introduced a national

0:23:000:23:07

living wage worth £2000 a year to

the lowest paid, and cut taxes, some

0:23:070:23:13

working full-time on the minimum

wage will no longer pay tax at all.

0:23:130:23:20

We will return to the issue of debt.

0:23:200:23:22

Earlier this month,

you might have seen one

0:23:220:23:24

former Prime Minister,

David Cameron, and his former

0:23:240:23:26

Chancellor, George Osborne, hailing

the fact that the UK had finally

0:23:260:23:29

eliminated its deficit

on day-to-day spending.

0:23:290:23:31

Austerity, they tweeted,

was "the right thing to do".

0:23:310:23:33

But what about the debt?

0:23:330:23:35

Here's our Ellie, to explain

the state of the nation's finances.

0:23:350:23:41

The deficit is the difference

between the amount the Government

0:23:410:23:45

spends and how much it receives

in taxes and other income.

0:23:450:23:48

When the Government spends

more than it takes in,

0:23:480:23:50

it borrows and that borrowing

is added to the overall debt pile.

0:23:500:23:55

The UK's debt is estimated to be

just under £1.8 trillion at the end

0:23:550:23:59

of this financial year.

0:23:590:24:01

To give you some idea,

that's a lot of zeros on the end.

0:24:010:24:05

I mean, that could buy you nearly

a third of all the houses

0:24:050:24:08

in the whole of the UK,

around 4,000 da Vinci masterpieces,

0:24:080:24:13

or if football's your

thing, 8,955 Neymars.

0:24:130:24:15

It is something the Chancellor has

been thinking about, too.

0:24:150:24:18

Take it away, Phil.

0:24:180:24:19

We need to get our debt lower.

0:24:190:24:23

I think most people in this country

would be horrified to be reminded

0:24:230:24:27

that we have £65,000 worth of public

debt for every household

0:24:270:24:30

in this country.

0:24:300:24:31

We're agreed, it's a lot of money.

0:24:310:24:34

It doesn't mean much

until you measure it

0:24:340:24:36

against the country's GDP,

the size of the country's economy.

0:24:360:24:40

In the last normal year before

the financial crisis,

0:24:400:24:43

debt was 41.1% of our GDP.

0:24:430:24:48

That's ballooned since then

to what they think is a peak

0:24:480:24:51

this year of 86.5%.

0:24:510:24:55

Now that matters because the UK has

to pay interest on the debt,

0:24:550:24:58

currently about 2% of GDP,

so it's quite a lot of cash.

0:24:580:25:02

But the experts don't get worried

until that number reaches about 12%

0:25:020:25:06

at which point they say a government

is likely to default on its debt.

0:25:060:25:10

We're not quite there yet.

0:25:100:25:11

Now bear in mind, as long

as there is a deficit,

0:25:110:25:15

debt will continue to rise in cash

terms because the Government

0:25:150:25:18

will carry on needing to borrow.

0:25:180:25:19

Britain's current spending deficit

is believed to have been eliminated

0:25:190:25:23

which is why the Government thinks

debt is slowly coming

0:25:230:25:26

down as a share of GDP.

0:25:260:25:27

Phew.

0:25:270:25:28

Got that?

0:25:280:25:36

In a few moments we will cross to

the House Of Commons and Philip

0:25:360:25:41

Hammond with the Spring Statement.

We will cover it in full.

0:25:410:25:44

Well, I'm joined now by Paul

Johnson, director of the Institute

0:25:440:25:47

For Fiscal Studies,

0:25:470:25:48

and our political editor

Laura Kuenssberg.

0:25:480:25:53

David Cameron and George Osborne

were celebrating the fact they said

0:25:530:25:57

the day-to-day guest on current

spending had been eliminated. The

0:25:570:26:02

focus is on the debt, is it coming

down in any meaningful way?

0:26:020:26:07

We are not sure the day-to-day

deficit is eliminated, we will have

0:26:070:26:11

to see the numbers.

The debt is pretty steady, it has

0:26:110:26:17

stopped writing, around 85% of

national income which is pretty

0:26:170:26:21

high, not as high as some other G-7

countries but twice as high

0:26:210:26:28

pre-crisis. My guess is we will see

it coming to a plateau over three

0:26:280:26:32

years.

It has stopped going up.

In terms of

0:26:320:26:36

what Philip Hammond will say, what

do you think despite the fact he

0:26:360:26:40

doesn't want this to be a set piece,

will be the headline?

0:26:400:26:45

We will struggle with the headline

in terms of policy announcements.

0:26:450:26:49

Unless the Treasury have done the

most remarkable job at keeping their

0:26:490:26:53

cards close to their chest, there

won't be big policy announcements.

0:26:530:26:58

The headlines will be about the

forecasts. The borrowing will be

0:26:580:27:03

down relative to where we thought it

was in autumn, a long way down this

0:27:030:27:08

year relative to work the budget a

year ago was suggesting.

0:27:080:27:11

How much? Last budget, last March,

58 billion of borrowing, it might be

0:27:110:27:21

down to the low 40s. Where will it

be in three years? If I had to

0:27:210:27:26

guess, not much lower than we

thought.

With that head room and

0:27:260:27:34

perhaps higher tax receipts that

have been expected, how much

0:27:340:27:38

pressure is there on the Chancellor

to turn on the taps in terms of

0:27:380:27:42

spending?

A lot of pressure not just from the

0:27:420:27:46

opposition but his own bench, on the

health service, defence, on local

0:27:460:27:51

councils, people are queueing up in

the Conservative Party to say to

0:27:510:27:57

him, with the progress made,

frankly, we have been telling voters

0:27:570:28:03

for eight years this is worth it and

there will be at some point

0:28:030:28:08

something better, let us show them

the sunshine. But Philip Hammond is

0:28:080:28:15

one person in the Cabinet, and they

don't all think like this, who

0:28:150:28:19

thinks it would be wrong to do that,

although the day-to-day deficit is

0:28:190:28:24

pretty much gone, in his view, we

may have paid off the overdraft but

0:28:240:28:29

we have a hefty mortgage which had

to come first. People will be

0:28:290:28:33

looking for clues that when we get

to autumn, the next couple of years,

0:28:330:28:40

it is their any political space to

make any hint?

We will come on to

0:28:400:28:52

the long-term indications.

To come back to this extra cash he

0:28:520:28:57

might have, would it be wise to bank

that will spend it?

0:28:570:29:01

He won't spend it today it would be

surprising. It is difficult to think

0:29:010:29:06

about extra cash. Relative to a few

months ago, all relative to what

0:29:060:29:16

George Osbourne was thinking a

couple of years ago. There is still

0:29:160:29:19

the same set of constraints and

choices. What Philip Hammond will

0:29:190:29:26

believe is as these numbers go up

and down, that doesn't change

0:29:260:29:31

anything underlying. He believes

they shouldn't be spending that

0:29:310:29:37

extra money but the choice today is

essentially the same as six months

0:29:370:29:42

ago.

The politics for the

Conservatives, if you keep saying

0:29:420:29:47

there is light at the end of the

tunnel, voters may turn to the

0:29:470:29:53

Labour Party.

Light at the end of

the tunnel, there may be a change in

0:29:530:29:58

the other direction. You are right.

The political dynamics have changed.

0:29:580:30:05

Between 2010 and 2015, this was the

central message of the Conservative

0:30:050:30:08

Party, we are the only ones you can

trust to sort out this mess. We saw

0:30:080:30:14

in the general election, people

thought, we have had enough. There

0:30:140:30:22

are plenty inside the Conservative

Party who worry unless there is a

0:30:220:30:27

change of tone about what to do with

tax payers's money, at the next

0:30:270:30:34

election, it will be a lost cause.

There is a generational tension,

0:30:340:30:38

further down the ranks, ministers,

they are frustrated that number 11

0:30:380:30:53

has appeared to be immovable on

this. As we reported, there is an

0:30:530:30:59

acceptance around the Cabinet table

money at Italy for the NHS will have

0:30:590:31:03

to be found in greater amounts.

0:31:030:31:06

Should Philip Hammond send a strong

signal that looking forward your

0:31:100:31:15

party and government will commit

more money to the NHS?

We have

0:31:150:31:19

already committed more money.

But

I'm asking more money.

We have three

0:31:190:31:27

objectives. Firstly we must keep

debt falling. The reason is the

0:31:270:31:32

economy has been growing for eight

years. Are we seriously saying we

0:31:320:31:36

will allow debt to rise. But within

that we have scope for additional

0:31:360:31:43

spending and tax cuts. In April

there is a further increase in the

0:31:430:31:47

personal allowance, and more scope

for spending which is why we have

0:31:470:31:51

increased spending on the NHS, a

billion more year on defence and

0:31:510:31:56

more for education.

The National

Audit Office report has said funding

0:31:560:32:00

per person in terms of the NHS, once

adjusted for age, will fall by 0.3%

0:32:000:32:11

in 2019/20. Is that acceptable?

We

are spending more.

You have been

0:32:110:32:19

saved by Philip Hammond, we can

cross to the House of Commons where

0:32:190:32:23

the Chancellor will stand up and

make his spring statement.

The UK

0:32:230:32:29

was the only major economy to make

hundreds of tax and spending changes

0:32:290:32:35

twice a year and major international

organisations and UK professional

0:32:350:32:38

bodies alike have been pressing for

change. In 2016 I took the decision

0:32:380:32:44

to move to a single fiscal event in

the autumn giving greater certainty

0:32:440:32:48

to families and businesses ahead of

the new financial year and allowing

0:32:480:32:52

more time for stakeholder and

Parliamentary engagement on

0:32:520:32:57

potential fiscal changes. Today's

statement will update the house on

0:32:570:33:01

the economic and fiscal position,

report progress on announcement made

0:33:010:33:06

in the budget last year and launch

further consultations ahead of

0:33:060:33:10

budget 2080. I won't be producing a

red book today, Mr Speaker, but of

0:33:100:33:18

course I cannot speak for the right

honourable gentleman...

0:33:180:33:25

honourable gentleman... Mr Speaker,

I am pleased to report today on a UK

0:33:300:33:34

economy that has grown in every year

since 2010. An economy which on the

0:33:340:33:40

Conservative leadership now has a

manufacturing sector is enjoying its

0:33:400:33:47

longest unbroken run of growth for

50 years. An economy which has added

0:33:470:33:54

3 million jobs and seen every single

region of the UK with higher

0:33:540:34:00

unemployment and lower unemployment

than in 2010, seen the wages of the

0:34:000:34:05

lowest paid up by almost 7% above

inflation since April 2015, and

0:34:050:34:12

income inequality lower than at any

time under the last Labour

0:34:120:34:17

government. Solid progress towards

building an economy that works for

0:34:170:34:20

everyone. Mr Speaker, I reject the

party opposite's doom and gloom

0:34:200:34:27

about the state of the nation. Every

Wednesday, we have to listen to the

0:34:270:34:34

Leader of the Opposition

relentlessly talking Britain down,

0:34:340:34:37

and every year since 2010 we have

had to listen to the right

0:34:370:34:42

honourable member predict a

recession, mum of which have

0:34:420:34:47

actually happened. So Mr Speaker, if

there are any Eeyores in the

0:34:470:34:57

chamber, they are over there.

Meanwhile I am at my positively most

0:34:570:35:07

Tigger-like as I contemplate a

country that faces a future with

0:35:070:35:10

unique strengths. Our language is

the global language of business, our

0:35:100:35:14

legal system is the jurisdiction of

choice for commerce. We host the

0:35:140:35:20

world's most global city. Our

companies are in the vanguard of the

0:35:200:35:27

technological revolution, while our

world-class universities are

0:35:270:35:31

delivering the breakthrough

discoveries and inventions that are

0:35:310:35:34

powering it. British culture and

talent reaches huge audiences across

0:35:340:35:39

the globe and our tech sector is

attracting skills and capital from

0:35:390:35:43

the four corners of the earth with a

new tech business being founded

0:35:430:35:48

somewhere in the UK every hour,

producing world-class products

0:35:480:35:53

including apps like transfer wise,

city mapper. Today the OBR delivers

0:35:530:36:09

its second report of the fiscal year

2017/18 and I thank Robert and his

0:36:090:36:15

team for their work. It forecasts

more jobs, rising real wages,

0:36:150:36:20

declining inflation, falling

deficit, and a shrinking debt. The

0:36:200:36:25

economy grew by 1.7% in 2017

compared to 1.5% forecast at the

0:36:250:36:33

budget and be OBR have revised up

their forecast for 2018 from 1.4% to

0:36:330:36:41

1.5%. Forecast growth is unchanged

at 1.3% in 2019 and 20 before

0:36:410:36:48

picking up to 1.4% in 21 and 1.5% in

22. That is the OBR's forecast, but

0:36:480:36:57

forecast are there to be beaten. As

a nation we did it in 2017 and we

0:36:570:37:01

should make it our business to do so

again. Our remarkable jobs story is

0:37:010:37:07

set to continue with the OBR

forecasting more jobs in every year

0:37:070:37:12

of this Parliament and over 500,000

more people enjoying the security of

0:37:120:37:17

a regular pay packet by 2022. The

OBR expects inflation, currently

0:37:170:37:26

above target at 3%, to fall back to

target over the next 12 months,

0:37:260:37:30

meaning real wage growth is expected

to be positive from the first

0:37:300:37:35

quarter of 2018/19 and to increase

steadily thereafter. I reported in

0:37:350:37:44

the autumn that borrowing was due to

fall in every year of the forecast

0:37:440:37:47

and debt to fall as a share of the

GD eight from 2018/ 19 -- as a share

0:37:470:37:59

of the GDP. Borrowing is now

forecast to be £45.2 billion this

0:37:590:38:05

year, 4.7 billion lower than

forecast in November. 108 billion

0:38:050:38:10

lower than in 2010, which

coincidentally is almost exactly the

0:38:100:38:16

total cost of the additional

spending pledges made by the party

0:38:160:38:21

opposite since the general election

in June last year. It has taken them

0:38:210:38:25

just nine months to work up a plan

to squander the fruits of eight

0:38:250:38:32

years' hard work of the British

people. As a percentage of GDP,

0:38:320:38:38

borrowing is forecast to be 2.2% in

17/18, falling to 1.8% in 18/ 1.6%

0:38:380:38:50

in 19/20, then 1.3%, 1.1%, finally

0.9% in 2022/23, which means we will

0:38:500:39:02

run a surplus borrowing only for

capital investment. We are forecast

0:39:020:39:08

to meet our secretary adjusted

borrowing target in 2021 with £15.4

0:39:080:39:14

billion of head room to spare,

broadly as forecast at the budget.

0:39:140:39:18

The more favourable outlook for

borrowing means the debt forecast is

0:39:180:39:23

nearly 1% lower than in November,

peaking at 85.6% of GDP in 17/18 and

0:39:230:39:32

then falling to 85.5% in 18/19, then

finally to 77.9% in 22/ 23. The

0:39:320:39:46

first sustained fall in debt in 17

years. A turning point in this

0:39:460:39:51

nation's recovery from the financial

crisis of a decade ago. Light at the

0:39:510:39:58

end of the tunnel. Another step on

the road to rebuilding the public

0:39:580:40:03

finances, decimated by the party

opposite.

0:40:030:40:10

opposite. Mr Speaker, one that they

would again placed at risk because

0:40:100:40:13

under the policies of the party

opposite, our debt would not fall

0:40:130:40:17

over the next five years, it would

rise by over £350 billion to more

0:40:170:40:25

than 100% of our GDP, undermining

our recovery, threatening investment

0:40:250:40:31

in British jobs, and wasting

billions of pounds more on debt

0:40:310:40:38

interest. There is indeed light at

the end of the tunnel, but we have

0:40:380:40:44

got to make absolutely sure that it

isn't the Shadow Chancellor's train

0:40:440:40:51

hurtling out of control in the other

direction towards Labour's next

0:40:510:40:55

economic train wreck. This to

Speaker, in autumn 2016, I changed

0:40:550:41:02

the fiscal rules to give us more

flexibility to adopt a balanced

0:41:020:41:06

approach to repairing the public

finances, reducing debt not for some

0:41:060:41:12

ideological reasons but to secure

our economy... But to secure our

0:41:120:41:19

economy against future shocks.

Because, Mr Speaker, we on this side

0:41:190:41:24

are not so naive to think we have

abolished the economic cycle.

0:41:240:41:27

Because we want to see taxpayers'

money funding our schools and

0:41:270:41:33

hospitals, not wasted on debt

interest and because we want to give

0:41:330:41:40

the next generation of fair chance.

But Mr Speaker, I do not agree with

0:41:400:41:48

those who argue that every available

penny must be used to reduce the

0:41:480:41:53

deficit, and nor do I agree with the

fiscal fantasists opposite who argue

0:41:530:41:58

every available penny should be

spent immediately. We will continue

0:41:580:42:02

to deliver a balanced approach,

balancing debt reduction against the

0:42:020:42:07

need for investment in Britain's

future, support a hard-working

0:42:070:42:11

families through lower taxes, and

our commitment to our public

0:42:110:42:16

services. Judge me by my record, Mr

Speaker. Judge me... Judge me by my

0:42:160:42:29

record. We will see, Mr Speaker, if

they have done their homework, they

0:42:290:42:33

might be surprised. Since Autumn

Statement 2016 I have committed...

0:42:330:42:43

Support for our public services.

With almost £9 billion extra for our

0:42:430:42:48

NHS and our social care system, £4

billion going into the NHS in

0:42:480:42:56

2018/19 alone. As I promised that

the autumn budget, more to come if,

0:42:560:43:02

as I hope, management and unions

reach an agreement on a pay

0:43:020:43:06

modernisation deal for our nation's

nurses, who have worked tirelessly

0:43:060:43:12

since the autumn in very challenging

circumstances to provide the NHS

0:43:120:43:17

care that we all value so highly.

£2.2 billion more on education and

0:43:170:43:25

skills, and £31 billion going to

fund infrastructure, RND and housing

0:43:250:43:30

through the National productivity

investment fund, taking public

0:43:300:43:35

investment in our schools, hospitals

and infrastructure in this

0:43:350:43:38

Parliament to its highest sustained

level in 40 years. And at the same

0:43:380:43:45

time, Mr Speaker, we have cut taxes

for 31 million working people by

0:43:450:43:50

raising the personal allowance again

in line with our manifesto

0:43:500:43:54

commitment, taking more than 4

million people out of tax altogether

0:43:540:44:00

since 2010. Freezing fuel duty for

an eighth successive year, taking

0:44:000:44:04

the saving for a typical car driver

to £850 compared to Labour's plans,

0:44:040:44:10

and raising the national living wage

to £7 83 from next month, giving the

0:44:100:44:16

lowest paid in our society a

well-deserved pay rise of over £2000

0:44:160:44:23

for a full-time worker since 2015.

Since becoming Chancellor, I have

0:44:230:44:31

provided an extra £11 billion of

funding for 2018/ 19th to help with

0:44:310:44:36

short-term public spending pressures

and to invest in Britain's future.

0:44:360:44:40

In the longer term, I can confirm

that at this year's budget, I will

0:44:400:44:46

set an overall pass for public

spending for 2020 and beyond with a

0:44:460:44:50

detailed spending review to take

place in 2019 to allocate funding

0:44:500:44:57

between departments. That is how

responsible people budget. First you

0:44:570:45:01

work out what you can afford, then

you decide what your priorities are,

0:45:010:45:06

then you allocate between them. And

if, in the autumn, the public

0:45:060:45:12

finances continue to reflect the

improvements that today's report is

0:45:120:45:16

hinting at, then with accordance

with our Ballon d'Or -- balanced

0:45:160:45:19

approach and using flexibility, I

would have capacity to enable

0:45:190:45:25

further increases in public spending

and investment in the years ahead.

0:45:250:45:30

While continuing to drive value for

money to ensure not a single penny

0:45:300:45:35

of precious taxpayers' money is

wasted. A balanced approach, getting

0:45:350:45:42

our debt down, supporting public

services, investing in our nation's

0:45:420:45:48

future, keeping taxes low, building

a Britain fit for the future and an

0:45:480:45:52

economy that works for everyone.

0:45:520:45:59

There is much still to do. Since

autumn 2016 we have set out our plan

0:46:000:46:15

to back the enterprise and ambition

of British business and the hard

0:46:150:46:18

work of the British people. A plan

to unleash our creators and

0:46:180:46:20

innovators, inventors and

discoverers.

0:46:200:46:31

We choose to champion those who

create the jobs and wealth on which

0:46:380:46:43

our prosperity and public services

both depend, not to demonise them.

0:46:430:46:50

The Shadow Chancellor is open about

his ideological desire to undermine

0:46:500:46:55

the market economy which has driven

and increase in our living standards

0:46:550:47:00

over 50 years. We on this side

reject his approach out right.

0:47:000:47:09

The market economy embraces talent

and creates opportunity, provides

0:47:090:47:14

jobs for millions, and tax revenues

that underpin our public services.

0:47:140:47:19

We will go on supporting British

businesses. We are reducing business

0:47:190:47:23

rates by over £10 billion, we

committed the autumn budget to move

0:47:230:47:32

to trial any evaluations from 2022.

I am pleased to announce we will

0:47:320:47:36

bring forward the next revaluation

and moved to triannual reviews from

0:47:360:47:42

that date. We will launch a call for

evidence to understand how best we

0:47:420:47:49

can help the least productive

businesses to learn from and catch

0:47:490:47:52

up with the most productive. And on

how we can eliminate the continuing

0:47:520:47:57

scourge of late payments. Because we

are the party of small business and

0:47:570:48:05

the champions of the entrepreneur.

Since the budget, we have made

0:48:050:48:12

substantial progress in negotiations

with the European Union to deliver a

0:48:120:48:18

Brexit that supports British jobs,

businesses and prosperity. And I

0:48:180:48:23

look forward, I don't know what the

honourable gentleman does, to

0:48:230:48:31

another important step forward at

the European Council next week.

0:48:310:48:36

But we will continue to prepare for

all eventualities and today the

0:48:360:48:42

Chief Secretary is publishing the

departmental allocations of over

0:48:420:48:47

£1.5 billion of Brexit preparation

funding the 20 18th which I

0:48:470:48:51

announced at the autumn budget.

Our modern industrial stretchy sets

0:48:510:48:56

out our plan to keep Britain at the

forefront of new technologies with

0:48:560:49:00

the biggest increase in public are

indeed spending the decades, much of

0:49:000:49:06

this new technology depends on

high-speed broadband and today I can

0:49:060:49:10

make the first allocations of the

£190 million local full fibre

0:49:100:49:15

challenge fund announced in autumn,

and confirm £25 million for the

0:49:150:49:20

first five G test-beds.

As our economy changes, we must

0:49:200:49:26

ensure people have the skills they

need to seize the opportunities

0:49:260:49:31

ahead so we have committed over £500

billion a year, to the most

0:49:310:49:38

ambitious post -- reforms in years

and £50 million will be available

0:49:380:49:42

from next month to help employees

prepare for the roll-out. Last week,

0:49:420:49:49

the Education Secretary and I

chaired the first meeting of the

0:49:490:49:53

National retraining partnership

between the Government, the TUC and

0:49:530:49:56

CBI. I can reassure you there was no

beer, no sandwiches, but there was a

0:49:560:50:06

clear and shared commitment to

training to prepare the British

0:50:060:50:09

people for a better future ahead.

Next month our £29 million

0:50:090:50:17

construction skills fund will open

for bids to find up to 20

0:50:170:50:21

construction skills villages around

the country.

0:50:210:50:24

We are committed as a Government to

delivering 3 million apprenticeship

0:50:240:50:30

starts by 2020 with the support of

business through the apprenticeship

0:50:300:50:33

levy but we recognise the challenges

the new system presents to some

0:50:330:50:38

small businesses looking to employ

an apprentice. So I can announce the

0:50:380:50:43

Education Secretary will release up

to £80 billion of funding to support

0:50:430:50:48

those small businesses in engaging

an apprentice.

0:50:480:50:51

We publish a consultation on

improving the way the tax system

0:50:510:50:57

supports self-funded training by

employees and self-employed. We

0:50:570:51:01

understand more about the economic

payback from investing in our

0:51:010:51:05

infrastructure than we do about

investing in our people, so I have

0:51:050:51:09

asked for the ONS to develop a more

sophisticated measure of human

0:51:090:51:15

capital so future investment can be

better targeted.

0:51:150:51:20

We are undertaking the largest

road-building programme since the

0:51:200:51:23

1970s. As Transport Secretary I gave

the green light to fund the new

0:51:230:51:29

bridge across the River Mersey in

2011 and I was delighted to see it

0:51:290:51:34

opened last year.

The largest infrastructure project

0:51:340:51:38

in Europe, Crossrail, is due to open

in nine months.

0:51:380:51:43

We are making progress on our plans

to deliver the Cambridge Milton

0:51:430:51:47

Keynes Oxford corridor, devolving

powers to elected mayors across the

0:51:470:51:54

northern powerhouse, in negotiations

for city deals with sterling,

0:51:540:52:01

borderlands, North Wales, mid Wales

and Belfast. Today, we invite

0:52:010:52:05

proposals from cities across England

for the £840 million fund I

0:52:050:52:11

announced to deliver on their local

transport priorities as part of our

0:52:110:52:15

plans to spread growth and

opportunity to all parts of this

0:52:150:52:21

United Kingdom.

At the heart of our plan for

0:52:210:52:27

building an economy that works for

everyone is our commitment to tackle

0:52:270:52:30

the challenges in our housing

market, with an investment programme

0:52:300:52:36

of £44 billion to raise housing

supply up to 300,000 a year by the

0:52:360:52:40

mid 20 20s.

We are working currently, the

0:52:400:52:47

Housing Minister is working with 44

authorities who have bid into the

0:52:470:52:54

£4.1 billion housing infrastructure

fund to unlock homes in areas of

0:52:540:52:56

high demand. We are considering

cutting deals with authorities who

0:52:560:53:01

have agreed to deliver above their

local need. I can announce we have

0:53:010:53:08

agreed a deal with the West Midlands

who have committed to deliver

0:53:080:53:13

250,000 homes by 2030 facilitated by

£100 million grant. My right

0:53:130:53:22

honourable friend the Housing

Minister will make further

0:53:220:53:26

announcements on the housing

infrastructure fund.

0:53:260:53:29

We will more than double the size of

the housing growth partnership with

0:53:290:53:34

Lloyds Banking Group up to £200

million providing additional finance

0:53:340:53:39

the small builders. London will

receive an additional £1.7 billion

0:53:390:53:46

to deliver a further 26,000

affordable homes including homes for

0:53:460:53:52

social rent, taking total affordable

housing delivery in London to over

0:53:520:53:57

116,000 by the end of 22 -- 2122.

The member for West Dorset has

0:53:570:54:06

outlined his initial findings on the

gap between planning permission is

0:54:060:54:10

granted and housing completions in a

letter which I have placed in the

0:54:100:54:15

library of the House and I look

forward to his full report.

0:54:150:54:19

I am delighted to inform the House

and estimated 60,000 first-time

0:54:190:54:27

buyers have already benefited from

the stamp duty relief that I

0:54:270:54:30

announced at the autumn budget.

I remind the House the party

0:54:300:54:37

opposite voted against it.

In the autumn, we published a paper

0:54:370:54:46

on taxing large digital businesses

in the global economy and today we

0:54:460:54:50

follow up with a publication that

explores potential solutions. I look

0:54:500:54:55

forward to discussing this with G20

finance ministers at the weekend.

0:54:550:54:59

We also published a call for

evidence on how online platforms can

0:54:590:55:05

help their users to pay the right

amount of tax and we will consult on

0:55:050:55:10

a new VAT collection mechanism for

online sales to ensure the VAT that

0:55:100:55:17

consumers pay actually reaches the

Treasury. We will call for evidence

0:55:170:55:20

on how to encourage cashless and

digital payments while ensuring cash

0:55:200:55:26

remains available to those who need

it.

0:55:260:55:29

This Government is determined our

generation should leave the natural

0:55:290:55:35

environment in a better state than

we found it and improve the quality

0:55:350:55:40

of the air that we breathe. So we

will publish a call for evidence on

0:55:400:55:45

whether the use of non-agricultural

red diesel tax relief contributes to

0:55:450:55:51

poor air quality in urban areas.

Following our successful

0:55:510:55:55

intervention to incentivise clean

taxes, we will help the great

0:55:550:56:00

British white van driver go green

with a consultation on reduced rates

0:56:000:56:05

for the keenest fans and follow up

on the vital issue of plastic

0:56:050:56:10

littering and the threat to our

oceans with a call for evidence to

0:56:100:56:15

support us in delivering on our vow

to tackle this context issue.

0:56:150:56:18

It will look at the whole supply

chain the single use plastics,

0:56:180:56:25

alternative materials, reusable

options and recycling opportunities,

0:56:250:56:29

at how the tax system can help drive

the technological progress and

0:56:290:56:34

behavioural change we need, not as a

way of raising revenue but to change

0:56:340:56:41

behaviour and encourage innovation.

We will commit to investing to

0:56:410:56:45

develop new greener products and

processes,

0:56:450:56:51

processes, funded from the revenues

that are raised. As a down payment,

0:56:520:56:57

we will award £20 million now from

existing departmental budgets to

0:56:570:57:03

businesses and universities to

stimulate new thinking and rapid

0:57:030:57:06

solutions in this area during the

call for evidence.

0:57:060:57:12

We are delivering on our plan with a

balanced approach, restoring the

0:57:120:57:18

public finances, investing in our

economy and public services, raising

0:57:180:57:23

productivity through our modern

industrial strategy, building the

0:57:230:57:26

home is our people need, tackling

the environmental challenges that

0:57:260:57:31

threaten our future, and breaking

technological change, seizing the

0:57:310:57:35

opportunities ahead, as we build our

vision of a country that works for

0:57:350:57:41

everyone. An economy where

prosperity and opportunity are in

0:57:410:57:45

breach of all, wherever they live,

whatever their gender, colour, creed

0:57:450:57:51

or background, where talent and hard

work alone determines success. A

0:57:510:57:57

beacon of enterprise and innovation.

An outward looking, free trading

0:57:570:58:04

nation.

One that is confident our best days

0:58:040:58:09

like ahead of us.

A force for good in the world.

0:58:090:58:16

A country we can all be proud to

pass on to our children and I

0:58:160:58:20

commend this statement to the House.

John McDonnell.

Let me first...

0:58:200:58:31

STUDIO:

The Chancellor.

We need to

break the strawberry news Donald

0:58:310:58:38

Trump has sacked his century of

state Rex Tillerson -- the

0:58:380:58:43

extraordinary news. Let us hear what

John McDonnell had to say.

0:58:430:58:52

Hasn't he listened to the doctors,

nurses, teachers, police officers,

0:58:520:58:57

carers and even his own councillors,

they are telling him they cannot

0:58:570:59:03

wait for the next budget, telling

him to act now. For eight years they

0:59:030:59:09

have been ignored by this Government

and today they have been ignored

0:59:090:59:13

again.

The Chancellor has proclaimed there

0:59:130:59:16

is light at the end of the tunnel.

This shows how cut off from the real

0:59:160:59:21

world he is.

Last year, growth in our economy was

0:59:210:59:25

among the lowest in the G7. The

slowest since 2012. The OBR

0:59:250:59:31

predicted we will scrape along the

bottom for future years. Wages are

0:59:310:59:37

lower now in real terms than they

were in 9010.

0:59:370:59:41

And they are still falling.

According to the Resolution

0:59:410:59:47

Foundation the changes to benefits

due to come in next month will leave

0:59:470:59:53

11 million families worse off. As

always, the harshest cuts fall on

0:59:530:59:59

disabled people.

The gap in productivity between this

0:59:591:00:04

country and the rest of the G7 is

almost the

1:00:041:00:12

Investment by this government in

real terms is nearly 18 billion

1:00:181:00:23

below its 2010 level. This is a

government that cut research and

1:00:231:00:28

development

1:00:281:00:32

development funding by 1 billion in

real terms. Business investment

1:00:331:00:36

stagnated in the last quarter of

2017 and despite all of the

1:00:361:00:40

promises, the government continues

to fail to address regional

1:00:401:00:47

imbalances in investment. London

will receive five times more

1:00:471:00:51

transport investment than the north.

This is a government that

1:00:511:01:01

single-handedly destroyed the solar

industry, 12,000 jobs lost as a

1:01:011:01:06

result of subsidy cuts. The

Chancellor talks about the fourth

1:01:061:01:13

industrial revolution but Britain

has the lowest... The Chancellor

1:01:131:01:19

talks about the fourth Industrial

Revolution but Britain has the

1:01:191:01:24

lowest rate of industrial robot use

in the OECD. The government has

1:01:241:01:32

bought 75 million into its

artificial intelligence programme,

1:01:321:01:34

less than a tenth of what the US is

spending. The Chancellor has made...

1:01:341:01:46

The Tory bully boys can shout all

they want.

1:01:461:01:54

There will be a full opportunity for

people to contribute but the right

1:02:001:02:05

honourable gentleman must be heard.

John McDonnell.

They can shout all

1:02:051:02:11

they want and make their snide

remarks. People out there know the

1:02:111:02:17

crisis in our community. The

Chancellor has made great play this

1:02:171:02:21

week of reaching a turning point in

reducing the deficit and the debt.

1:02:211:02:25

It's a bit rich coming from a party

that has bought 700 billion on the

1:02:251:02:30

national debt over the last eight

years. And it is worth remembering

1:02:301:02:39

this is a party that promised us

that the deficit would be eliminated

1:02:391:02:43

completely by 2015 /2016 and

bizarrely his predecessor, now

1:02:431:02:53

ensconced in the Evening Standard or

is it Blackrock, the number of jobs

1:02:531:03:02

he now has, his predecessor has been

tweeting about achieving three years

1:03:021:03:06

late deficit target that he

abandoned himself. The reality is

1:03:061:03:11

his Chancellor and his predecessor

have not tackled the deficit. What

1:03:111:03:16

they have done is shifted it onto

the public services and his

1:03:161:03:21

colleagues are responsible for. He

has shifted it onto the shoulders of

1:03:211:03:30

NHS managers, doctors and nurses

throughout the country. NHS Trust

1:03:301:03:34

will end this financial year 1

billion in deficit. Doctors and

1:03:341:03:39

nurses are struggling, being asked

to do more and more while there is

1:03:391:03:45

100,000 NHS posts going unfilled.

Does the Chancellor really believe

1:03:451:03:48

the NHS can wait another eight

months for the life-saving money it

1:03:481:03:54

needs? How many people have to die

waiting in an ambulance before he

1:03:541:03:59

acts? He has mentioned the pay offer

to the NHS -- we are expecting

1:03:591:04:04

shortly, that was forced upon him by

the Labour Party and trade unionists

1:04:041:04:10

campaigning against the pay cut.

Taking away a day's holiday from

1:04:101:04:17

those dedicated staff is

mean-spirited, and I ask him now,

1:04:171:04:23

will he dropped this miserly act?

The Chancellor has also shifted the

1:04:231:04:30

deficit the Secretary of State for

Education and headteachers, with the

1:04:301:04:36

first per capita cut in schools

funding since 1990s. Today, the

1:04:361:04:43

government is even trying to deprive

1 million children of a decent

1:04:431:04:48

school dinner. So I am asking the

Chancellor, and I am asking every

1:04:481:05:01

Conservative MP, if...

Order! The

House must calm down, there will be

1:05:011:05:10

plenty of opportunity for

questioning from members in all

1:05:101:05:12

parts of the House but the right

honourable gentleman must be heard.

1:05:121:05:17

John McDonnell.

So I am asking and

appealing to Tory MPs today. If they

1:05:171:05:26

are serious about ending austerity,

to vote with us this afternoon to

1:05:261:05:31

give those children the free school

meal they are entitled to. The

1:05:311:05:37

Chancellor has shifted the deficit

onto Home and Justice Secretary.

1:05:371:05:43

Crime is rising, yet he has cut the

number of police officers by 21,500,

1:05:431:05:49

the number of firefighters by 8500,

and our prisons and probation

1:05:491:05:55

service are in dangerous crisis. In

shifting the deficit onto the

1:05:551:05:59

shoulders of the Secretary of State

for Communities and Local

1:05:591:06:03

Government, in reality he is shifted

the burden onto local councillors.

1:06:031:06:07

Yes, Labour, Lib Dem and

Conservative councillors alike. I

1:06:071:06:12

raised again the stark reality of

what this means that the most

1:06:121:06:16

vulnerable children in our society.

There's been a 40% cut in early

1:06:161:06:21

intervention to support families,

the result is the highest number of

1:06:211:06:24

children taken into care since the

1980s. Children's charities are

1:06:241:06:31

saying this - this crisis could turn

into a catastrophe without further

1:06:311:06:38

funding. Also last year 400 women

seeking refuge were turned away

1:06:381:06:43

because there were no places

available for them in refuges. There

1:06:431:06:47

are now nearly 5000 of our fellow

citizens sleeping rough on our

1:06:471:06:55

streets, more than double what there

was in 2010. Tragically, one of our

1:06:551:07:03

homeless citizens died only feet

away from the entrance to

1:07:031:07:09

Parliament. He mentioned additional

housing funding, the announcement

1:07:091:07:18

for London today is not a new

announcement, it's already been

1:07:181:07:21

announced. Any new funding is

welcome, but it represents a cut in

1:07:211:07:26

London's budget compared to money

Labour allocated Intel

1:07:261:07:35

Labour allocated Intel -- in 2010.

Conservative councils are going

1:07:361:07:38

bust, many will be forced to put up

council tax. Councils are running

1:07:381:07:43

out of reserve as the National Audit

Office explained. So I asked the

1:07:431:07:48

Chancellor, will will he listen to

Conservative council leaders? Like

1:07:481:07:55

his own in Surrey who said, "We are

facing the most difficult financial

1:07:551:07:59

crisis in our history. The

government cannot stand idly by

1:07:591:08:05

while Rome burns"

1:08:051:08:07

government cannot stand idly by

while Rome burns". I ask him, how

1:08:071:08:10

many more children have to come into

care? How many more councils have to

1:08:101:08:14

go bust and run out of reserves

before he wakes up to the crisis and

1:08:141:08:19

acts? The statement today could have

been a genuine turning point but it

1:08:191:08:24

is depressingly another missed

opportunity. People know now that

1:08:241:08:31

austerity was a political choice,

not an economic necessity. The

1:08:311:08:39

Conservatives chose to cut taxes for

the super rich, the corporations and

1:08:411:08:47

the bankers, and it was paid for by

the rest of us in society. They even

1:08:471:08:53

cut the levy on bankers. We were

never all in this together as they

1:08:531:09:00

claimed, never. They cut investment

at the very time we should have been

1:09:001:09:04

developing the skills and

infrastructure needed to raise

1:09:041:09:07

productivity, and grasp the

technological revolution with both

1:09:071:09:12

hands. And when they had a

responsibility to meet the challenge

1:09:121:09:17

of Brexit, we have a Chancellor who

this weekend admitted he hasn't even

1:09:171:09:22

modelled the government's options.

Today we have the indefensible

1:09:221:09:28

spectacle of a Chancellor

congratulating himself on marginally

1:09:281:09:33

improved economic forecasts, while

he refuses to lift a finger as

1:09:331:09:38

councils go bust, the NHS and social

care in crisis, school budgets cut,

1:09:381:09:44

homelessness doubles and wages

falling. This isn't a government

1:09:441:09:47

preparing our country for the

future, it is a government setting

1:09:471:09:54

us up to fail.

Chancellor of the

Exchequer.

1:09:541:10:01

Exchequer.

The Shadow Chancellor

John McDonnell ending his ten-minute

1:10:011:10:05

response, quite an emotional speech

in his response to Philip Hammond

1:10:051:10:08

but before we do the analysis on

that spring statement and Labour's

1:10:081:10:14

reply, if you remember in the middle

of it I brought you the fairly

1:10:141:10:18

extraordinary news is that President

Trump had sacked his Secretary of

1:10:181:10:23

State, Rex Tillerson. James Landale,

why is this critically important to

1:10:231:10:27

Britain?

This matters because Rex

Tillerson hard in the last 24 hours

1:10:271:10:32

offered his support for Britain's

position against Russia. There have

1:10:321:10:36

been concerns that the British were

not getting similar noises from the

1:10:361:10:41

White House itself but Rex Tillerson

had spoken to Boris Johnson and had

1:10:411:10:46

accepted Boris Johnson's analysis

that there was Russian involvement

1:10:461:10:49

in the Salisbury attack and that Rex

Tillerson had responded accordingly

1:10:491:10:55

with the statement he put out.

However he is now out of office,

1:10:551:10:58

he's been replaced by the former

head of the CIA. What is crucial is

1:10:581:11:06

the timing of the sacking. If Rex

Tillerson was sacked in the last 24

1:11:061:11:16

hours, there is the question was he

sacked in part because of the

1:11:161:11:20

strength of his criticism of Russia,

criticism the White House was not

1:11:201:11:24

prepared to make itself. However, if

Rex Tillerson was informed of his

1:11:241:11:29

dismissal last Friday, then actually

the suggestion is that he has been

1:11:291:11:36

dismissed for longer term

differences of opinion with

1:11:361:11:40

President Trump, namely particularly

I think the attitude the US has been

1:11:401:11:45

taking to North Korea but also the

long-standing personal differences,

1:11:451:11:49

the allegations Rex Tillerson has

always denied that he once called Mr

1:11:491:11:54

Trump a moron.

I'm going to come

back to you in a moment because we

1:11:541:11:57

might as well tell viewers about the

strength of the statement from Rex

1:11:571:12:02

Tillerson, the now former Secretary

of State, in terms of condemning

1:12:021:12:06

Russia last night. He said:

1:12:061:12:11

Taking your point about the timing

of his sacking, in terms of it might

1:12:251:12:29

have been around longer term

disagreements, that is still going

1:12:291:12:32

to be very important in terms of

what Britain can expect from its

1:12:321:12:37

allies if it takes retaliatory

action against Russia.

It is hugely

1:12:371:12:42

important that whatever action the

British Government takes, some of it

1:12:421:12:46

expected to be announced tomorrow,

that it has some kind of

1:12:461:12:49

international support. At the moment

Boris Johnson, the Prime Minister

1:12:491:12:55

and others are ringing around to get

as much support as they can but most

1:12:551:12:58

of that at the moment is supportive

noises, condemnation of the attack,

1:12:581:13:03

but one or two countries are being

cautious before blaming Russia

1:13:031:13:07

specifically. They are keeping their

powder dry on that. The United

1:13:071:13:13

States is supposed to be one of

Britain's closest allies. If there

1:13:131:13:18

is turbulence and uncertainty within

the White House or the State

1:13:181:13:23

Department, that is going to make it

harder for the British Government to

1:13:231:13:27

get that sort of international

solidarity.

Because there is a

1:13:271:13:31

difference and certainly was a

difference in tone in the way

1:13:311:13:34

President Trump and the White House

responded, of course they condemned

1:13:341:13:38

the attack but it will raise further

questions about Donald Trump and his

1:13:381:13:45

administration's relationship with

Russia.

Exactly, and that is the

1:13:451:13:48

question, why is the White House at

the moment being so cautious? They

1:13:481:13:52

will have the same intelligence

assessments the British Government

1:13:521:13:58

has over the Russian involvement in

the Salisbury events. They will have

1:13:581:14:02

that information, they will be able

to make their judgment, but as of

1:14:021:14:06

now the White House is still

refusing to formally criticise

1:14:061:14:09

Russia with the same strength the

British Government is.

Looking

1:14:091:14:14

ahead, what is going to happen? We

have the deadline of midnight

1:14:141:14:21

tonight and what we know will happen

in terms of choreography and the

1:14:211:14:25

British response?

Tomorrow there

will be another meeting of the

1:14:251:14:28

Security Council and if there is no

response from Russia, the Prime

1:14:281:14:32

Minister will update the House

tomorrow afternoon with a statement

1:14:321:14:35

setting out what she believes should

happen now. I understand the

1:14:351:14:40

reaction from the British Government

tomorrow will be more domestic

1:14:401:14:45

focused, in other words the

unilateral actions the British

1:14:451:14:47

Government can make by itself.

Potentially the expulsion of

1:14:471:14:52

diplomats, the crackdown on wealthy

Russians with property and money in

1:14:521:14:57

the UK, travel bans, financial

sanctions, things like that, maybe

1:14:571:15:00

even forcing them to take their

children out of British public

1:15:001:15:06

schools, and targeting of the

Russian media. Those kind of things.

1:15:061:15:11

All of the international stuff, any

action on sanctions will be much

1:15:111:15:16

longer term because those things

take a long time to get in place.

1:15:161:15:20

Also it will take a lot of

diplomacy. This diplomacy over the

1:15:201:15:25

next weeks and months will be the

big test of the government's slogan

1:15:251:15:29

for its foreign policy called Global

Britain.

1:15:291:15:36

Rex Tillerson a former secretary of

the outcome has been sacked will

1:15:391:15:48

stop let us speak to Johnny Mercer

outside the Houses of Parliament.

1:15:481:15:59

What is your reaction to the news

Rex Tillerson has gone?

1:15:591:16:03

Given his strong support of Britain

in his statement, it is concerning,

1:16:031:16:07

we need to make -- we need to work

out if he made that after he was

1:16:071:16:15

sacked.

He has long protracted this

1:16:151:16:20

narrative on national security,

talked about a special relationship

1:16:201:16:21

with written. His reaction to what

has happened and the Prime Minister,

1:16:211:16:30

is still being waited for. It will

be interesting to see what he does.

1:16:301:16:36

It is a very clear moment for him to

decide which side he is on.

1:16:361:16:40

And what about the test for Theresa

May and her leadership?

1:16:401:16:46

I have said things about her

leadership in the past, yesterday,

1:16:461:16:50

she was in her prime. The country

needs that resilience of a strong

1:16:501:16:57

leadership. The contrast between her

and Jeremy Corbyn was extraordinary.

1:16:571:17:01

We need to work out what we are

going to do. Actions speak louder

1:17:011:17:06

than words. The whole political

spectrum need to come together and

1:17:061:17:12

make it clear to Russia this is not

acceptable.

1:17:121:17:16

How do you do that? In our earlier

discussion, beyond asking Nato for

1:17:161:17:21

support which it has said, beyond

the rhetoric, what are you expecting

1:17:211:17:26

Nato to do, is this an attack on one

or all?

1:17:261:17:35

Those discussions will have to be

had at national security level.

1:17:351:17:38

There are various levers they can

pull around sanctions, there are

1:17:381:17:44

many options. I note the Prime

Minister will come forward with a

1:17:441:17:49

strong one and we need to support

her. People like Putin, Assad, the

1:17:491:17:56

only respect one thing when you

stand up for what you believe in and

1:17:561:18:00

I look forward to Theresa May doing

that.

1:18:001:18:03

Thank you very much. We are going to

talk about and analyse that Spring

1:18:031:18:10

Statement. This announcement from

the United States has overshadowed

1:18:101:18:17

the Spring Statement and response

from Labour.

1:18:171:18:18

Listening to that, since the

announcement regarding Rex

1:18:181:18:25

Tillerson, how much more difficult

will it be for Theresa May to match

1:18:251:18:29

action to her rhetoric?

More difficult even more. Rex

1:18:291:18:35

Tillerson was seen as a sensible

bridge for the Trump administration.

1:18:351:18:42

Number ten pointing to constructive

concessions he had with the Foreign

1:18:421:18:45

Secretary, his views on what had

happened, his identification of

1:18:451:18:51

Russia being the likely marauders in

this affair was a positive for the

1:18:511:18:59

Government. Whatever the Government

can do, whether it is expelling

1:18:591:19:05

diplomats, the natural movements in

and out of London, they know they

1:19:051:19:11

can't do anything dramatic that has

huge minute without international

1:19:111:19:17

cooperation and if there is in a

friend at the top of the American

1:19:171:19:20

Government willing to act in

concert, that makes that job much

1:19:201:19:27

more difficult, no question. Theresa

May's strengthened language has set

1:19:271:19:33

the bar high. She has set

expectation which will be difficult

1:19:331:19:39

to meet in the House.

This could be to do with longer term

1:19:391:19:47

disagreements between Rex Tillerson

and President Trump particularly

1:19:471:19:50

since we are hearing coming out of

Washington Donald Trump wanted to

1:19:501:19:54

change his team ahead of that

high-stakes meeting between himself

1:19:541:19:57

and Kim Jong-un.

Indeed. It is not

surprising in the big picture that

1:19:571:20:06

Tillerson is out.

There have been some tensions. There

1:20:061:20:09

were doubts about him when he was

appointed, did he have links to

1:20:091:20:15

Russia himself that gay people cause

for concern? -- that gave people.

1:20:151:20:24

The timing whether deliberate or not

if we are to believe early

1:20:241:20:27

suggestions, may have made things

difficult for the British Government

1:20:271:20:34

and has complicated what was already

a very tricky picture for the Prime

1:20:341:20:37

Minister.

We know there is a deadline of

1:20:371:20:41

midnight tonight for a Russian

response. A further Russian

1:20:411:20:48

response. Let us return to our

discussion with our guests about the

1:20:481:20:53

Spring Statement. Kemal Ahmed,

welcome. A slightly different Daily

1:20:531:21:00

Politics. On the Spring Statement,

thinking back to Philip Hammond,

1:21:001:21:04

that it would be a low-key affair,

no big measures announced. It was

1:21:041:21:10

longer in length but did it have any

more substance?

1:21:101:21:15

I thought it was very political,

attacking the Labour Party, saying

1:21:151:21:19

why they were the party that were

good for Britain. What was

1:21:191:21:25

interesting was the Office for

Budget Responsibility the official

1:21:251:21:29

economic watchdog, it's upgrade for

this year was very modest. It

1:21:291:21:35

downgraded its forecast for 2021.

The big signal from the Spring

1:21:351:21:43

Statement today is what a difficult

hand economic league Philip Hammond

1:21:431:21:46

says, the trend growth of the

economy is well below the 2% average

1:21:461:21:53

this country was used to. That

raises very big questions about the

1:21:531:21:59

funding of public services,

borrowing targets, can the

1:21:591:22:02

Government bring down the stock of

debt. Although Philip Hammond opened

1:22:021:22:08

the door a crack to possible

spending increases in the autumn

1:22:081:22:15

budget, what the OBR has revealed is

how difficult that is. One good news

1:22:151:22:23

was the OBR's strong signal it

believes in will fall down to 2% by

1:22:231:22:28

the end of the year. Philip Hammond

felt confident enough to say the

1:22:281:22:31

real income squeeze which is how

people experience the economy, would

1:22:311:22:36

reverse in the first quarter of next

year.

Because wages are rising at

1:22:361:22:42

2.6%.

1:22:421:22:47

2.6%.

Reversing the real income

squeeze people are suffering. That

1:22:471:22:52

would be an economic boost, consumer

spending is going down, the biggest

1:22:521:22:57

driver of economic growth.

Did he

really have any basis for being

1:22:571:23:00

Tigger like as he put it, when

growth is basically anaemic to Mark

1:23:001:23:08

and he can point to very small

adjustments. Doesn't that underline

1:23:081:23:12

the weakness in the argument

austerity has worked for everyone?

1:23:121:23:20

It has worked for everyone because

it has created jobs, given a

1:23:201:23:24

strongly growing economy. It is not.

You have to look across the entire

1:23:241:23:30

period, sixth 2010, our economy has

grown much longer than Italy,

1:23:301:23:38

France, Germany. These forecasts

change but the overall path is the

1:23:381:23:45

right one which is we have cut the

deficit, the debt is starting to

1:23:451:23:51

fall and we have scope for more

spending for public services, in

1:23:511:23:55

relation to the NHS and education.

But he has made announcements on

1:23:551:24:00

public services. He said he would

set an overall path. That is not the

1:24:001:24:07

same as announcing spending because

the economy is doing very well.

He

1:24:071:24:16

has set out a pathway, a balanced

approach which means we continue to

1:24:161:24:19

keep the debt falling because we

must prepare for a future shock, but

1:24:191:24:23

ensure we have money to spend, and

cut taxes. We are increasing the

1:24:231:24:31

personal allowance again. The

message I took was lordly we are on

1:24:311:24:36

the same track we set out in the

budget in autumn but have made

1:24:361:24:42

progress broadly.

On wages, the

announcement he believes inflation

1:24:421:24:48

will come back down to around 2%,

that would be good news because

1:24:481:24:54

wages would be at breaking

inflation.

It would be good to see a

1:24:541:25:00

change. We have had the longest

squeeze on wages since Napoleonic

1:25:001:25:07

chines -- times. But what we did not

hear him say is when you put our

1:25:071:25:13

country in perspective with other

nations, we are the only economy

1:25:131:25:16

that has been growing where wages

have not been growing as well. You

1:25:161:25:25

will not see that comparison from

the Government, comparing investment

1:25:251:25:30

levels either because they are

lower, or productivity levels

1:25:301:25:34

because they are lower. Those

fundamentals need to be sorted out

1:25:341:25:40

will stop we didn't talk about

productivity.

What is the picture?

1:25:401:25:45

It seemed to be improving a little.

From a very low base.

We have a huge

1:25:451:25:54

problem with the financial crisis

when it fell down to 0.2% increase

1:25:541:25:58

per quarter. There have been six

months of better numbers but the OBR

1:25:581:26:04

has looked at that. The amount of

productivity affects how much growth

1:26:041:26:10

we get, it is the way we produce

wealth. The OBR has said there may

1:26:101:26:15

be some good news but this is a

volatile figure. It looked through

1:26:151:26:22

that, the trend over a decade is

still very poor.

The politics, the

1:26:221:26:28

response was quite emotional from

John McDonnell, a crisis in our

1:26:281:26:34

communities, calling on Tory MPs who

are sceptical about the lack of

1:26:341:26:39

spending in public services, to join

Labour ranks.

The interesting thing

1:26:391:26:48

about that statement was how

marginal the actual economic changes

1:26:481:26:51

were. There was a dynamic light at

the end of the tunnel, but that is

1:26:511:26:58

not what the numbers that out. What

we know has changed is the political

1:26:581:27:03

dynamics. The Chancellor is not

willing to acknowledge that yet. He

1:27:031:27:09

did set -- send out a signal for the

longer term but it seems he is not

1:27:091:27:16

clear yet to pick a side in what

will be a battle inside the Tory

1:27:161:27:20

Party and whether or not they are

going to look and sound like a

1:27:201:27:26

different party with public spending

in the next big review. The battle

1:27:261:27:34

has now begun over that next big

spending review in 2019 setting the

1:27:341:27:38

context for the next general

election.

1:27:381:27:42

We haven't spoken about Brexit which

is still the backdrop. The

1:27:421:27:47

Chancellor talked about future

potential economic shocks which

1:27:471:27:51

might or might not include Brexit.

What was worth noting?

He said he

1:27:511:27:58

would outline how he would spend

half of the £3 billion they have put

1:27:581:28:04

aside to help different departments

prepare for Brexit. Stressing he was

1:28:041:28:09

going to allocate half of that

amount. The issue around our trend

1:28:091:28:17

growth, the OECD brought out figures

that puts UK growth at the bottom of

1:28:171:28:21

the G20. He knows he has an issue

that the gap between our growth and

1:28:211:28:28

the growth of other leading Western

economies is growing and is negative

1:28:281:28:33

for us.

We will have to end it

there. President Trump is due to

1:28:331:28:39

speak to Theresa May about the nerve

attack and the latest from

1:28:391:28:43

Washington is Rex Tillerson did not

know of the reason he was sacked.

1:28:431:28:48

Today was meant to be about the

Spring Statement. Thank you for

1:28:481:28:52

joining me in the studio.

1:28:521:28:53

That's all for today.

1:28:531:28:56

Bye-bye.

1:28:561:29:01

Jo Coburn is joined by Cabinet Office minister Oliver Dowden and shadow Treasury minister Anneliese Dodds for an extended programme, including full coverage of the chancellor's spring statement.