:00:00. > :00:09.Tonight at 6, we're at Westminster where the Chancellor has abandoned
:00:10. > :00:12.his controversial plans to cut tax credits for millions
:00:13. > :00:20.George Osborne, delivering his spending review,
:00:21. > :00:23.says he's listened to concerns, and claims that improved public finances
:00:24. > :00:29.Because I've been able to announce today an improvement in the public
:00:30. > :00:33.finances, the simplest thing to do is not to phase these changes in,
:00:34. > :00:41.But Labour says the tax credits change is a fiasco, and warns
:00:42. > :00:44.that many families still face welfare cuts in the years ahead.
:00:45. > :00:53.I'm convinced this is sheer economic incompetence and poor judgment.
:00:54. > :00:58.And another surprise, this time on police spending
:00:59. > :01:01.in England and Wales, there will be no cuts before 2020 partly
:01:02. > :01:10.The downing of the Russian fighter jet
:01:11. > :01:14.by Turkey, the pilot who survived speaks anonymously to the media.
:01:15. > :01:26.TRANSLATION: There were no warnings, not on the radar, all visually.
:01:27. > :01:30.There was no contact. In the sport, a 29% increase in funding for UK
:01:31. > :01:33.sport in the Spending Review as the government says it is committed to
:01:34. > :01:51.building on the success of London 2012.
:01:52. > :01:56.We're at Westminster, where the Chancellor has taken everyone
:01:57. > :01:59.by surprise and abandoned his plans to cut tax credits
:02:00. > :02:08.He said he'd listened to concerns and claimed that he was able to
:02:09. > :02:09.scrap the plans because the public finances had
:02:10. > :02:13.Labour warned that people would still be affected by welfare cuts
:02:14. > :02:20.There were lots of measures today, but the reverse on tax credits was
:02:21. > :02:22.easily the most prominent announced by George Osborne today.
:02:23. > :02:25.There was also a surprise announcement on police
:02:26. > :02:28.spending in England and Wales, budgets will now be protected.
:02:29. > :02:31.Many forces had been expecting a cut.
:02:32. > :02:33.And on the bigger picture, the Chancellor's statement means
:02:34. > :02:36.that government borrowing will go up between 2016 and 2020,
:02:37. > :02:41.according to the independent Office for Budget Responsibility.
:02:42. > :02:43.Let's have more details from our deputy political editor
:02:44. > :02:56.In Downing Street they try and avoid U-turns. But today, one may have
:02:57. > :02:59.been useful, at least for the prime minister's Jaguar, which had a bit
:03:00. > :03:05.of a prank. No such mistake around the corner, the Chancellor was going
:03:06. > :03:09.to make one of the biggest U-turns of his career to try and repair his
:03:10. > :03:14.dented reputation. He had been expected to make massive cuts to
:03:15. > :03:18.government spending and softening controversial benefit reductions. A
:03:19. > :03:22.statement from the Chancellor. When Mr Osborne got to his feet no one
:03:23. > :03:29.expected this, his tax credit cuts that had been blocked in the Lords
:03:30. > :03:33.would not now happen. You can almost hear the tyres screeching. I have
:03:34. > :03:37.had representations that these changes to the tax credits should be
:03:38. > :03:41.phased in. I have listened to the concerns, I understand them and
:03:42. > :03:45.because I've been able to announce an improvement in the public
:03:46. > :03:51.finances the simplest thing to do is not to phase in the changes but to
:03:52. > :03:55.avoid them altogether. Tax credits... An extraordinary reverse
:03:56. > :04:00.that will lead the chance of breaking his own cap on welfare. If
:04:01. > :04:04.one U-turn wasn't enough he surprised MPs by backing away from
:04:05. > :04:06.his much predicted police cuts that many feared would let down
:04:07. > :04:14.Britain's guard after the Paris attacks. But now is not the time for
:04:15. > :04:19.further police cuts. Now is the time to back our police and give them the
:04:20. > :04:28.tools to do the job. I am today announcing there will be no cuts in
:04:29. > :04:37.the police budget at all. There will be a protection of police funding.
:04:38. > :04:45.Mr Speaker... Mr Speaker, the police protect us, and we are going to
:04:46. > :04:47.protect the police. All of which was remarkably generous from a chance
:04:48. > :04:53.that supposed to be wielding the axe. How has he done it? He has been
:04:54. > :04:58.lucky and got 20s of an billion pounds of unexpected tax revenue. He
:04:59. > :05:01.is cutting spending by ?8 billion less than promised, he is raising
:05:02. > :05:06.taxes on businesses including a ?3 billion apprenticeship levied and he
:05:07. > :05:10.is cutting other welfare such as Universal Credit, housing benefit
:05:11. > :05:14.and free childcare, saving him a lot of cash. That allowed him to protect
:05:15. > :05:18.the schools budget for England, raising the state pension above
:05:19. > :05:25.inflation, and give the NHS ?6 billion up front. As for housing,
:05:26. > :05:29.massive new subsidies to help pay for affordable homes and shared
:05:30. > :05:33.ownership schemes. The Spending Review delivers a doubling of the
:05:34. > :05:38.housing budget, 400,000 new homes with extra support for London, the
:05:39. > :05:44.right to buy will be rolled out, paid for by a tax on buy to let and
:05:45. > :05:46.second homes, delivered by a Conservative government committed to
:05:47. > :05:52.helping working people who want to buy their own home. We are the
:05:53. > :05:56.builders. There was still ?12 billion of cuts to be ground out of
:05:57. > :06:00.Whitehall, much of it coming from local government, transport and
:06:01. > :06:05.business. He left town halls raise council tax by 2% to pay for social
:06:06. > :06:11.care. We were elected as a 1 nation government. Today, we deliver the
:06:12. > :06:19.Spending Review of a 1 nation government. The guardians are
:06:20. > :06:24.economic security, the protectors of national security, the builders of
:06:25. > :06:28.the better future, this government, the representatives of the working
:06:29. > :06:33.people of Great Britain. The speech was aimed at the political centre
:06:34. > :06:39.ground, gambling on rosy financial forecasts and what the Conservatives
:06:40. > :06:44.see as a weak opposition. Today the Chancellor has been forced into a
:06:45. > :06:49.U-turn on his tax credits. And I want to congratulate the members of
:06:50. > :06:54.this house on also I who made this happen. I want to congratulate the
:06:55. > :07:00.members of the other house as well. I'm glad he has listened to Labour
:07:01. > :07:04.and seen sense. He teased Mr Osborne about his enthusiasm for China's
:07:05. > :07:08.coming this leaders. To assist comrades Osborne with his dealings
:07:09. > :07:14.with his new-found comrades, I brought with him Mao Tse-tung's
:07:15. > :07:21.Little Red Book. It was a decision that amazed Labour MPs and then use
:07:22. > :07:27.the Tories. Order, I want to hear about the contents of the book! I
:07:28. > :07:33.thought it would come in handy for him with his new relationship.
:07:34. > :07:38.Outside, others said that cuts meant cuts, however the chance spun it. He
:07:39. > :07:43.said he -- should have said that he had cut enough and that there should
:07:44. > :07:46.be investment in public services and household incomes. People have
:07:47. > :07:52.already been squeezed to the bone and I fear that most people won't be
:07:53. > :07:58.able to take much more. Quite bad, ongoing revenue cuts, the impact of
:07:59. > :08:03.welfare changes, he announced a cut for many people in Scotland and this
:08:04. > :08:08.will be no comfort at all. A day of surprises that will shape the
:08:09. > :08:15.nation's finances for years to come. Politics too.
:08:16. > :08:21.Let's talk more about the reversal on tax credits.
:08:22. > :08:25.of low paid workers will not have their benefits cut next April,
:08:26. > :08:30.The plans were thrown into doubt when the House of Lords
:08:31. > :08:33.voted to delay them and many MPs, including many Conservatives,
:08:34. > :08:37.Our political correspondent Vicki Young is in the constituency
:08:38. > :08:41.of Corby and she's been getting people's reaction there.
:08:42. > :08:45.It's a busy time of year for this logistics firm in Corby.
:08:46. > :08:48.In the run-up to Christmas they will be
:08:49. > :08:51.distributing hundreds of lorry-loads of goods from these warehouses.
:08:52. > :08:53.Workers here are paid more than the minimum wage,
:08:54. > :08:59.So today's U-turn by the Chancellor is welcome.
:09:00. > :09:04.Simon has three children and says the extra money has helped
:09:05. > :09:09.It means that my children can still benefit from the full tax
:09:10. > :09:16.And they can carry on doing their activities at school.
:09:17. > :09:19.I can still put the same amount of food on the table,
:09:20. > :09:22.and still have the heating on for exactly the same amount of time.
:09:23. > :09:27.So, yeah, that's brilliant news for me.
:09:28. > :09:29.And one of the company directors here says
:09:30. > :09:33.George Osborne's change of heart will be a boost for his workers.
:09:34. > :09:37.I'm very much in tune with what goes on on the shop floor.
:09:38. > :09:41.I get involved with the staff and talk to them all the time.
:09:42. > :09:44.It is something that has been a cloud hanging over them to
:09:45. > :09:47.So the Chancellor has now changed his mind on all of that.
:09:48. > :09:50.So, yeah, obviously of all the things that were mentioned today,
:09:51. > :09:59.Future claimants won't get the family element in tax credits, which
:10:00. > :10:08.George Osborne came under huge pressure, not just from Labour
:10:09. > :10:12.but from those in his own party over his plans to cut tax credits.
:10:13. > :10:14.In the end, he's decided to abandon the idea altogether,
:10:15. > :10:20.but he's still determined to cut billions from the welfare budget.
:10:21. > :10:23.The only question now is, who will be the losers?
:10:24. > :10:26.The way to look at it is that the old benefits system,
:10:27. > :10:31.tax credits, has had the cuts to it reversed, so people will not see
:10:32. > :10:33.their incomes fall if on tax credits.
:10:34. > :10:36.But as they move onto the new welfare system, Universal
:10:37. > :10:38.Credit, largely towards the end of this Parliament, they will be
:10:39. > :10:41.affected by these cuts, and they will see their incomes lower than
:10:42. > :10:45.In Corby today there were mixed views about whether
:10:46. > :10:48.I rely on it a lot, it gets my shopping,
:10:49. > :10:55.Obviously I need that to cover me, because if not then I would be
:10:56. > :11:01.I came here to work but some people came here just to
:11:02. > :11:08.And of course I think they need to cancel some benefits.
:11:09. > :11:12.George Osborne may have been in reverse gear today
:11:13. > :11:15.but he's still heading for lower welfare spending down the line.
:11:16. > :11:23.Tonight the independent public finance experts, the Institute
:11:24. > :11:26.for Fiscal Studies, have warned that the Chancellor might have to raise
:11:27. > :11:29.taxes if economic growth turns out to be slower than expected.
:11:30. > :11:32.But Mr Osborne is sticking to his target, to move the public
:11:33. > :11:37.Our economics correspondent Andrew Verity has been looking
:11:38. > :11:45.What we were expecting from the spending review was austerity,
:11:46. > :11:51.But what was surprising how un-austere it sounded, so where
:11:52. > :12:01.When you listened to the Chancellor this afternoon there was some
:12:02. > :12:04.Biggest was scrapping his key welfare reform, the tax credit
:12:05. > :12:13.The police but it won't be slashed but it will rise with inflation and
:12:14. > :12:18.the defence budget will rise by ?6 billion a year, just under one
:12:19. > :12:23.fifth. How can he do that? The Chancellor said there had been a ?27
:12:24. > :12:28.billion improvement in the public finances. But careful, that's spread
:12:29. > :12:35.over five years. Oh yeah it is just 5 billion, so where is that coming
:12:36. > :12:38.from? -- a year. He is expecting corporation tax to be paid and he
:12:39. > :12:42.isn't expecting to pay as much interest on the government's debt
:12:43. > :12:50.because interest rates and inflation are low. He is raising new taxes
:12:51. > :12:56.from making employers pay for a Princess -- apprentice tips and
:12:57. > :13:01.higher taxes for second homes. The job parliament has given us is to
:13:02. > :13:04.pay for a central forecast based on our best forecast and it is
:13:05. > :13:06.important that we don't decide whether to include things or not on
:13:07. > :13:11.the basis of whether they are helpful, or unhelpful to the
:13:12. > :13:13.politicians. We try and do a professional job. People may
:13:14. > :13:19.disagree with the conclusions but that is the basis on which we do
:13:20. > :13:24.them. The Chancellor is still planning to cut ?12 billion worth of
:13:25. > :13:27.welfare cuts. He was due to make his biggest saving, 3.4 billion, by
:13:28. > :13:31.slashing the amount you could earn before your money was clawed back
:13:32. > :13:36.but he has scrapped it but he's still going to get the money soon
:13:37. > :13:40.enough because tax credits are being replaced by Universal Credit, which
:13:41. > :13:46.is still being cut. People in future claiming that will be hit in much
:13:47. > :13:49.the same way. The fact that tax credits will not be cut next year
:13:50. > :13:51.means the fact that tax credits will not be cut next year Mr Chancellor
:13:52. > :13:54.will borrow more next year than he otherwise would have done. In the
:13:55. > :13:59.long run, the cancellation is not costing him much at all because the
:14:00. > :14:03.cuts to the Universal Credit, which will replace tax credits, are still
:14:04. > :14:06.in place so in the long run we are saving almost as much from the
:14:07. > :14:10.welfare bill as he wanted to do. There is no doubt that this is a
:14:11. > :14:13.tax-raising budget. With the cuts going through, that's where the
:14:14. > :14:16.money is coming from to get the Chancellor into surplus in five
:14:17. > :14:23.years but only if the forecasts are right and that is a big if.
:14:24. > :14:28.We had been focusing on the U-turn to do with tax credits but there
:14:29. > :14:30.were lots of other measures announced. Let me take you through
:14:31. > :14:35.some of them. The state pension is to rise by
:14:36. > :14:38.?3.35 a week from April next year. The defence, health,
:14:39. > :14:40.overseas aid and schools budgets There will be cuts to
:14:41. > :14:44.the budgets for transport, business, The buyers
:14:45. > :14:47.of buy-to-let properties and second homes will have to pay more stamp
:14:48. > :14:51.duty, there'll be a 3% surcharge. On childcare,
:14:52. > :14:55.only those working more than 16 hours a week will be eligible
:14:56. > :15:01.for 30 hours of free provision. And the ?15 million raised
:15:02. > :15:03.from charging VAT on sanitary products will be given
:15:04. > :15:15.to women's health charities. Just a sense of the wide range of
:15:16. > :15:16.measures announced beyond the tax credit policy.
:15:17. > :15:19.Our political editor Laura Kuenssberg is with me.
:15:20. > :15:29.I have heard one or two people say oh, that's it, austerity, it has
:15:30. > :15:32.gone. Are they right? It is -- in its pure, full throttle version,
:15:33. > :15:38.yes, it is, but it is hanging around. The Chancellor has made two
:15:39. > :15:40.big climb-down is on tax credits and police cuts, both claimed as
:15:41. > :15:45.rectories for the Labour Party but we also have a Chancellor who has
:15:46. > :15:48.been lucky, he has had a healthier prediction of the country's future
:15:49. > :15:53.bank balance, allowing him to make those moves -- as Victor reads. He
:15:54. > :15:59.is still making them more slowly but he is still making very significant
:16:00. > :16:04.cuts. ?12 billion being cut from the welfare budget, still big cuts to
:16:05. > :16:10.the budgets for local councils who provide vital services, still big
:16:11. > :16:14.decisions that will have a big impact on millions of families
:16:15. > :16:18.around the country. The Chancellor believes that the decisions he has
:16:19. > :16:22.made are exactly what he was elected to do. The overall goal will be
:16:23. > :16:27.worth it but the pain he has inflicted today is not as great as
:16:28. > :16:31.some had predicted. Don't forget he has been lucky with these numbers
:16:32. > :16:34.today. Luck does not always last for ever.
:16:35. > :16:38.Thanks very much. We will talk later again tonight, Laura Kuenssberg, our
:16:39. > :16:40.political editor. There's lots more detail
:16:41. > :16:52.on the Chancellor's plans and how There are lots of links and blogs
:16:53. > :16:53.and material from Laura and other colleagues on that website page.
:16:54. > :16:55.I'll be back with more from Westminster later
:16:56. > :16:58.in the programme, but for now it's back to Reeta in the studio.
:16:59. > :17:09.The Chancellor's abandoned plans to cut tax credits,
:17:10. > :17:11.claiming improved public finances have allowed him to change course.
:17:12. > :17:14.And still to come, can new measures announced in the Spending Review
:17:15. > :17:20.And coming up on Reporting Scotland at 6:30pm:
:17:21. > :17:28.Is it time to downsize? The scheme to shrink wineglass sizes in pubs
:17:29. > :17:33.and bars for the good of our health. The latest from Belgium as Andy
:17:34. > :17:37.Murray and Britain's Davis Cup team prepare for the final.
:17:38. > :17:40.A Russian fighter jet pilot shot down yesterday by the Turkish air
:17:41. > :17:45.force was presented to the media at a Russian air base in Syria today.
:17:46. > :17:52.Turkey has released a recording of what it says are warnings to the
:17:53. > :17:55.jet not to cross into its airspace, warnings it claims were ignored.
:17:56. > :18:02.Our Moscow correspondent Steve Rosenberg reports.
:18:03. > :18:06.In flames and out of control, a Russian bomber plummets to earth
:18:07. > :18:14.and crashes in Syria, shot down by a Turkish F-15 fighter jets.
:18:15. > :18:17.and crashes in Syria, shot down by a Turkish fighter jet.
:18:18. > :18:21.One was killed, but could Russia find the other
:18:22. > :18:26.After a 12-hour search, the Russian military released these images.
:18:27. > :18:27.Captain Konstantin Murahtin had been rescued.
:18:28. > :18:30.Hiding his face from the camera he spoke to journalists.
:18:31. > :18:37.I can't wait to get back to my duties, he told them.
:18:38. > :18:42.It's my duty to avenge the killing of my commander.
:18:43. > :18:45.Back in Russia, President Putin announced that Captain Murahtin
:18:46. > :18:47.would receive a state award for bravery.
:18:48. > :18:50.And there would be posthumous awards for the dead pilot and a Russian
:18:51. > :18:59.marine, killed in the rescue operation.
:19:00. > :19:05.Outside the Defence Ministry tonight, Russians came to pay their
:19:06. > :19:10.respects. These are the first confirmed deaths of Russian soldiers
:19:11. > :19:13.in combat in Syria. Today, Moscow made it clear it doesn't want to go
:19:14. > :19:17.to war with Turkey over what happened to its aircraft and to its
:19:18. > :19:25.soldiers. . It described the shooting down of the jet as a
:19:26. > :19:31.deliberate, planned act, an ambush. But Ankara insists this was
:19:32. > :19:34.Moscow's fault and that the Russian jet violated Turkish airspace.
:19:35. > :19:38.Today, Turkish President said his country did not want an escalation
:19:39. > :19:44.we're just defending security, he said. But Turkey is also defending
:19:45. > :19:50.these people, the Turkmen, they are Syrians of Turkish descent. Russia
:19:51. > :19:54.has been carrying out air strikes here, claiming there are terrorists
:19:55. > :20:01.in the area. Just a few days ago Turkey told Russia to stop the
:20:02. > :20:05.bombing here. Russians, though, are in no mood to listen. In Moscow this
:20:06. > :20:10.crowd attacked the Turkish embassy with eggs and rocks, furious that
:20:11. > :20:17.Turkey had shot down a Russian bomber. They are chanting: We won't
:20:18. > :20:18.forgive or forget. Steve Rosenberg, BBC News, Moscow.
:20:19. > :20:23.A brief look at some of the day's other news stories.
:20:24. > :20:25.Police investigating the death of Sheffield student Caroline
:20:26. > :20:27.Everest have arrested a 31-year-old man on suspicion of rape.
:20:28. > :20:31.The 18-year-old's body was found in a river yesterday.
:20:32. > :20:33.She'd been reported missing at the weekend, after leaving
:20:34. > :20:45.The Government has agreed to conciliation talks in the junior
:20:46. > :20:47.doctors' dispute, but the strikes have not been called off.
:20:48. > :20:50.Health Secretary Jeremy Hunt said the action should be cancelled to
:20:51. > :20:54.The first strike is due to be on Tuesday, starting at 8am
:20:55. > :21:01.There were almost 44,000 extra deaths last winter in England
:21:02. > :21:04.and Wales compared to the rest of the year, according to
:21:05. > :21:09.It's the highest number of so-called "excess winter deaths" for 15 years.
:21:10. > :21:17.Most of those who died were aged 75 or over.
:21:18. > :21:19.Schools and some metro lines have reopened in Brussels,
:21:20. > :21:23.as the city starts to return to normal after four days in lockdown.
:21:24. > :21:25.The Belgian capital remains on the highest state of alert,
:21:26. > :21:28.with armed police and soldiers patrolling the streets.
:21:29. > :21:31.The Belgian Interior Minister says the threat level was raised because
:21:32. > :21:41.intelligence had suggested an attack was planned for Sunday evening.
:21:42. > :21:43.The United Nation's World Meteorological Organisation says
:21:44. > :21:46.that 2015 is likely to be the hottest year on record.
:21:47. > :21:48.It says the cause is a combination of greenhouse gas
:21:49. > :21:55.emissions, and climatic changes due to the El Nino weather event.
:21:56. > :22:02.More now on the Chancellor's Spending Review.
:22:03. > :22:04.Let's go back to Huw at Westminster - Huw.
:22:05. > :22:07.One of the biggest areas of policy
:22:08. > :22:13.Mr Osborne announced plans to give billions of pounds to
:22:14. > :22:16.private developers to build 400,000 new homes in England.
:22:17. > :22:20.But critics say that a failure to invest more in social
:22:21. > :22:22.housing is a major weakness in the Government's approach.
:22:23. > :22:25.There will also be a new 3% surcharge on stamp duty
:22:26. > :22:27.for buy-to-let properties and second homes, from April 2016.
:22:28. > :22:30.Our home editor Mark Easton looks at the housing element
:22:31. > :22:40.In Knutsford in the heart of the Chancellor's Cheshire constituency
:22:41. > :22:45.they are busy building homes for sale. And this is what George
:22:46. > :22:49.Osborne wants much more of. After years cutting government cash for
:22:50. > :22:55.new houses today the Chancellor announced ?6.9 billion to help build
:22:56. > :22:59.hundreds of thousands of subsidised homes, most aimed at first-time
:23:00. > :23:03.buyers. At the hairdresser in the high street I met some of Mr
:23:04. > :23:09.Osborne's generation rent constituents. What did they think of
:23:10. > :23:12.the state giving people like them a leg up on the property ladder
:23:13. > :23:19.through shared ownership or discounted starter homes? I think
:23:20. > :23:21.the Help To Buy schemes are encouraging for the younger
:23:22. > :23:26.generations. Would you take advantage? I'd be one of the first
:23:27. > :23:30.people knocking on the door. It is essential to help people out and get
:23:31. > :23:34.people on the ladder. Perhaps the biggest surprise in the housing
:23:35. > :23:38.sector was the Chancellor's 3% additional stamp duty charge on
:23:39. > :23:46.people purchasing any buy-to-let, or second home. For every pound over
:23:47. > :23:53.125,000 they will pay 5%, beyond 675,008 is 8%, over 925,000 it is
:23:54. > :23:58.13% the proportion of a price over 1.5 million will be charged at 15%.
:23:59. > :24:01.The Chancellor thinks it will raise over ?1 billion. In Knutsford estate
:24:02. > :24:05.agents say it will kill the buy-to-let sector. It will have a
:24:06. > :24:09.hugely devastating effect on the market in terms of buy-to-let
:24:10. > :24:12.investors coming in, because they were seriously question where they
:24:13. > :24:15.put their money now. It will have a negative effect in that regard but a
:24:16. > :24:19.positive effect for first-time buyers and the lower end of the
:24:20. > :24:23.market looking to coming who would normally be competing with
:24:24. > :24:26.buy-to-let investors. The Chancellor doesn't talk about the housing
:24:27. > :24:29.crisis, for him it is a crisis of homeownership. His focus is on
:24:30. > :24:34.helping people onto the housing ladder, on homes for sale. But his
:24:35. > :24:39.critics will say, it's all right for these people, but where are the poor
:24:40. > :24:43.going to live? The government has no ambition to expand social housing.
:24:44. > :24:48.In fact, supply is likely to dwindle as developers focus on starter homes
:24:49. > :24:51.for first-time buyers. There are some people for whom homeownership
:24:52. > :24:56.will just not be an option. Those people might look at today's review
:24:57. > :24:58.and think what is in it for me? Housing associations help those
:24:59. > :25:01.people and they want to in the future and we have to find a way to
:25:02. > :25:05.do that. The plan to build more homes has been announced before but
:25:06. > :25:08.what is new today is the Chancellor putting in the money to back the
:25:09. > :25:12.ambition. Mark Easton, BBC News, Knutsford.
:25:13. > :25:15.A wide range of figures and statistics offered by the Chancellor
:25:16. > :25:18.today. We suggested at the start of the programme that borrowing for the
:25:19. > :25:20.next few years would go up but that's not true, I apologise for
:25:21. > :25:24.that. Our economics editor Robert Peston
:25:25. > :25:32.is with me here. Please clarify the situation.
:25:33. > :25:36.The deficit is forecast to be a bit over 70 billion this year, the
:25:37. > :25:40.Office for Budget Responsibility, Government's forecasting operation,
:25:41. > :25:50.expects that to turn into a surplus by 2020, of about ?10 billion. Now,
:25:51. > :25:56.the OBR also said that the policy decisions taken by the Chancellor,
:25:57. > :26:00.that's his U-turn on tax credits, that's making lesser cuts to public
:26:01. > :26:05.services than he originally indicated he would do. But the
:26:06. > :26:11.effect of those policy decisions would have been to push up
:26:12. > :26:17.borrowing. But he has a windfall. The OBR has in effect found ?23
:26:18. > :26:23.billion down the back of the sofa. Quite a lot of money. Where has the
:26:24. > :26:27.?23 billion come from? From the fact that the OBR thinks that tax
:26:28. > :26:31.revenues from existing taxes will be higher than it thought only back in
:26:32. > :26:35.July and it thinks that the interest of the Government will have to shell
:26:36. > :26:41.out on the enormous ?1.5 trillion of debt will be a bit less. George
:26:42. > :26:46.Osborne would say he's being prudent in the sense that although he has
:26:47. > :26:53.missed ?23 billion win for by 2020 it will be ?27 billion, the number
:26:54. > :26:59.you have heard today, by 2021, he's only spending 19 billion, or only
:27:00. > :27:04.using ?19 billion of the ?23 billion windfall. He would say he's been
:27:05. > :27:08.prudent. However, forecasts, as you and I know, don't always turn into
:27:09. > :27:13.reality. We saw some not very nice borrowing figures only a few days
:27:14. > :27:17.ago. If the OBR is wrong, then actually that money won't be there.
:27:18. > :27:21.But, today, George Osborne was looking very chipper because he's
:27:22. > :27:28.been able to appease his critics who said he was cutting too much by
:27:29. > :27:31.doing nothing in terms of additional taxes, or nothing very significant
:27:32. > :27:34.for people. He is imposing additional taxes as we have heard in
:27:35. > :27:41.this programme, or additional costs on business. Robert Peston, thank
:27:42. > :27:44.you, our economics editor. It is a little cold outside
:27:45. > :27:47.Time for a look at the weather. Here's Jay Wynne.
:27:48. > :27:58.Parliament, it is pretty quiet in the Atlantic. This area of high
:27:59. > :28:01.pressure will not last much longer. By the end of the week low pressure
:28:02. > :28:04.will take over and it will turn wet and windy. A bit of rain out of the
:28:05. > :28:07.cloud across the north and west of the UK and that will fizzle out
:28:08. > :28:10.overnight as the cloud drifts from west to East. Not a solid blanket of
:28:11. > :28:12.cloud but by the end of the night most of us will be in single
:28:13. > :28:15.figures. Where there are breaks in the cloud the lower end of single
:28:16. > :28:19.figures, maybe a touch of frost. Some rain in the North West early
:28:20. > :28:23.on, quite grey in many western areas, low cloud. The next batch of
:28:24. > :28:27.rain will be heavy of Northern Ireland and western Scotland. The
:28:28. > :28:30.western side of England and Wales a low cloud, light rain, may be heavy
:28:31. > :28:33.rain later. Central and eastern areas do well with sunshine in the
:28:34. > :28:39.afternoon across East Anglia and south-east. Relatively mild, double
:28:40. > :28:42.figures for many. Changing picture on Thursday night into Friday, low
:28:43. > :28:46.pressure develops in the Atlantic the weather front heading our way,
:28:47. > :28:49.lots of isobars on the chart, it will be windy and cloudy with light
:28:50. > :28:53.rain and drizzle across England and Wales but the band of rain in the
:28:54. > :28:56.north-west, squally band of rain, gusty winds working in from the
:28:57. > :29:00.Northwest to the south-east. There it goes, clearing from the
:29:01. > :29:04.south-east on Friday night. Behind its temperatures drop away quickly.
:29:05. > :29:07.Friday night into Saturday morning snow showers in the north of the UK
:29:08. > :29:11.and the next weather system heads our way turning increasingly wet and
:29:12. > :29:17.windy on Saturday. Very strong gusts of wind. Back to you, Huw.
:29:18. > :29:18.Many thanks come about is all