25/11/2015 BBC News at Six

Tonight at 6, we're at Westminster where the Chancellor has abandoned

his controversial plans to cut tax credits for millions

George Osborne, delivering his spending review,

says he's listened to concerns, and claims that improved public finances

Because I've been able to announce today an improvement in the public

finances, the simplest thing to do is not to phase these changes in,

But Labour says the tax credits change is a fiasco, and warns

that many families still face welfare cuts in the years ahead.

I'm convinced this is sheer economic incompetence and poor judgment.

And another surprise, this time on police spending

in England and Wales, there will be no cuts before 2020 partly

The downing of the Russian fighter jet

by Turkey, the pilot who survived speaks anonymously to the media.

TRANSLATION: There were no warnings, not on the radar, all visually.

There was no contact. In the sport, a 29% increase in funding for UK

sport in the Spending Review as the government says it is committed to

building on the success of London 2012.

We're at Westminster, where the Chancellor has taken everyone

by surprise and abandoned his plans to cut tax credits

He said he'd listened to concerns and claimed that he was able to

scrap the plans because the public finances had

Labour warned that people would still be affected by welfare cuts

There were lots of measures today, but the reverse on tax credits was

easily the most prominent announced by George Osborne today.

There was also a surprise announcement on police

spending in England and Wales, budgets will now be protected.

Many forces had been expecting a cut.

And on the bigger picture, the Chancellor's statement means

that government borrowing will go up between 2016 and 2020,

according to the independent Office for Budget Responsibility.

Let's have more details from our deputy political editor

In Downing Street they try and avoid U-turns. But today, one may have

been useful, at least for the prime minister's Jaguar, which had a bit

of a prank. No such mistake around the corner, the Chancellor was going

to make one of the biggest U-turns of his career to try and repair his

dented reputation. He had been expected to make massive cuts to

government spending and softening controversial benefit reductions. A

statement from the Chancellor. When Mr Osborne got to his feet no one

expected this, his tax credit cuts that had been blocked in the Lords

would not now happen. You can almost hear the tyres screeching. I have

had representations that these changes to the tax credits should be

phased in. I have listened to the concerns, I understand them and

because I've been able to announce an improvement in the public

finances the simplest thing to do is not to phase in the changes but to

avoid them altogether. Tax credits... An extraordinary reverse

that will lead the chance of breaking his own cap on welfare. If

one U-turn wasn't enough he surprised MPs by backing away from

his much predicted police cuts that many feared would let down

Britain's guard after the Paris attacks. But now is not the time for

further police cuts. Now is the time to back our police and give them the

tools to do the job. I am today announcing there will be no cuts in

the police budget at all. There will be a protection of police funding.

Mr Speaker... Mr Speaker, the police protect us, and we are going to

protect the police. All of which was remarkably generous from a chance

that supposed to be wielding the axe. How has he done it? He has been

lucky and got 20s of an billion pounds of unexpected tax revenue. He

is cutting spending by ?8 billion less than promised, he is raising

taxes on businesses including a ?3 billion apprenticeship levied and he

is cutting other welfare such as Universal Credit, housing benefit

and free childcare, saving him a lot of cash. That allowed him to protect

the schools budget for England, raising the state pension above

inflation, and give the NHS ?6 billion up front. As for housing,

massive new subsidies to help pay for affordable homes and shared

ownership schemes. The Spending Review delivers a doubling of the

housing budget, 400,000 new homes with extra support for London, the

right to buy will be rolled out, paid for by a tax on buy to let and

second homes, delivered by a Conservative government committed to

helping working people who want to buy their own home. We are the

builders. There was still ?12 billion of cuts to be ground out of

Whitehall, much of it coming from local government, transport and

business. He left town halls raise council tax by 2% to pay for social

care. We were elected as a 1 nation government. Today, we deliver the

Spending Review of a 1 nation government. The guardians are

economic security, the protectors of national security, the builders of

the better future, this government, the representatives of the working

people of Great Britain. The speech was aimed at the political centre

ground, gambling on rosy financial forecasts and what the Conservatives

see as a weak opposition. Today the Chancellor has been forced into a

U-turn on his tax credits. And I want to congratulate the members of

this house on also I who made this happen. I want to congratulate the

members of the other house as well. I'm glad he has listened to Labour

and seen sense. He teased Mr Osborne about his enthusiasm for China's

coming this leaders. To assist comrades Osborne with his dealings

with his new-found comrades, I brought with him Mao Tse-tung's

Little Red Book. It was a decision that amazed Labour MPs and then use

the Tories. Order, I want to hear about the contents of the book! I

thought it would come in handy for him with his new relationship.

Outside, others said that cuts meant cuts, however the chance spun it. He

said he -- should have said that he had cut enough and that there should

be investment in public services and household incomes. People have

already been squeezed to the bone and I fear that most people won't be

able to take much more. Quite bad, ongoing revenue cuts, the impact of

welfare changes, he announced a cut for many people in Scotland and this

will be no comfort at all. A day of surprises that will shape the

nation's finances for years to come. Politics too.

Let's talk more about the reversal on tax credits.

of low paid workers will not have their benefits cut next April,

The plans were thrown into doubt when the House of Lords

voted to delay them and many MPs, including many Conservatives,

Our political correspondent Vicki Young is in the constituency

of Corby and she's been getting people's reaction there.

It's a busy time of year for this logistics firm in Corby.

In the run-up to Christmas they will be

distributing hundreds of lorry-loads of goods from these warehouses.

Workers here are paid more than the minimum wage,

So today's U-turn by the Chancellor is welcome.

Simon has three children and says the extra money has helped

It means that my children can still benefit from the full tax

And they can carry on doing their activities at school.

I can still put the same amount of food on the table,

and still have the heating on for exactly the same amount of time.

So, yeah, that's brilliant news for me.

And one of the company directors here says

George Osborne's change of heart will be a boost for his workers.

I'm very much in tune with what goes on on the shop floor.

I get involved with the staff and talk to them all the time.

It is something that has been a cloud hanging over them to

So the Chancellor has now changed his mind on all of that.

So, yeah, obviously of all the things that were mentioned today,

Future claimants won't get the family element in tax credits, which

George Osborne came under huge pressure, not just from Labour

but from those in his own party over his plans to cut tax credits.

In the end, he's decided to abandon the idea altogether,

but he's still determined to cut billions from the welfare budget.

The only question now is, who will be the losers?

The way to look at it is that the old benefits system,

tax credits, has had the cuts to it reversed, so people will not see

their incomes fall if on tax credits.

But as they move onto the new welfare system, Universal

Credit, largely towards the end of this Parliament, they will be

affected by these cuts, and they will see their incomes lower than

In Corby today there were mixed views about whether

I rely on it a lot, it gets my shopping,

Obviously I need that to cover me, because if not then I would be

I came here to work but some people came here just to

And of course I think they need to cancel some benefits.

George Osborne may have been in reverse gear today

but he's still heading for lower welfare spending down the line.

Tonight the independent public finance experts, the Institute

for Fiscal Studies, have warned that the Chancellor might have to raise

taxes if economic growth turns out to be slower than expected.

But Mr Osborne is sticking to his target, to move the public

Our economics correspondent Andrew Verity has been looking

What we were expecting from the spending review was austerity,

But what was surprising how un-austere it sounded, so where

When you listened to the Chancellor this afternoon there was some

Biggest was scrapping his key welfare reform, the tax credit

The police but it won't be slashed but it will rise with inflation and

the defence budget will rise by ?6 billion a year, just under one

fifth. How can he do that? The Chancellor said there had been a ?27

billion improvement in the public finances. But careful, that's spread

over five years. Oh yeah it is just 5 billion, so where is that coming

from? -- a year. He is expecting corporation tax to be paid and he

isn't expecting to pay as much interest on the government's debt

because interest rates and inflation are low. He is raising new taxes

from making employers pay for a Princess -- apprentice tips and

higher taxes for second homes. The job parliament has given us is to

pay for a central forecast based on our best forecast and it is

important that we don't decide whether to include things or not on

the basis of whether they are helpful, or unhelpful to the

politicians. We try and do a professional job. People may

disagree with the conclusions but that is the basis on which we do

them. The Chancellor is still planning to cut ?12 billion worth of

welfare cuts. He was due to make his biggest saving, 3.4 billion, by

slashing the amount you could earn before your money was clawed back

but he has scrapped it but he's still going to get the money soon

enough because tax credits are being replaced by Universal Credit, which

is still being cut. People in future claiming that will be hit in much

the same way. The fact that tax credits will not be cut next year

means the fact that tax credits will not be cut next year Mr Chancellor

will borrow more next year than he otherwise would have done. In the

long run, the cancellation is not costing him much at all because the

cuts to the Universal Credit, which will replace tax credits, are still

in place so in the long run we are saving almost as much from the

welfare bill as he wanted to do. There is no doubt that this is a

tax-raising budget. With the cuts going through, that's where the

money is coming from to get the Chancellor into surplus in five

years but only if the forecasts are right and that is a big if.

We had been focusing on the U-turn to do with tax credits but there

were lots of other measures announced. Let me take you through

some of them. The state pension is to rise by

?3.35 a week from April next year. The defence, health,

overseas aid and schools budgets There will be cuts to

the budgets for transport, business, The buyers

of buy-to-let properties and second homes will have to pay more stamp

duty, there'll be a 3% surcharge. On childcare,

only those working more than 16 hours a week will be eligible

for 30 hours of free provision. And the ?15 million raised

from charging VAT on sanitary products will be given

to women's health charities. Just a sense of the wide range of

measures announced beyond the tax credit policy.

Our political editor Laura Kuenssberg is with me.

I have heard one or two people say oh, that's it, austerity, it has

gone. Are they right? It is -- in its pure, full throttle version,

yes, it is, but it is hanging around. The Chancellor has made two

big climb-down is on tax credits and police cuts, both claimed as

rectories for the Labour Party but we also have a Chancellor who has

been lucky, he has had a healthier prediction of the country's future

bank balance, allowing him to make those moves -- as Victor reads. He

is still making them more slowly but he is still making very significant

cuts. ?12 billion being cut from the welfare budget, still big cuts to

the budgets for local councils who provide vital services, still big

decisions that will have a big impact on millions of families

around the country. The Chancellor believes that the decisions he has

made are exactly what he was elected to do. The overall goal will be

worth it but the pain he has inflicted today is not as great as

some had predicted. Don't forget he has been lucky with these numbers

today. Luck does not always last for ever.

Thanks very much. We will talk later again tonight, Laura Kuenssberg, our

political editor. There's lots more detail

on the Chancellor's plans and how There are lots of links and blogs

and material from Laura and other colleagues on that website page.

I'll be back with more from Westminster later

in the programme, but for now it's back to Reeta in the studio.

The Chancellor's abandoned plans to cut tax credits,

claiming improved public finances have allowed him to change course.

And still to come, can new measures announced in the Spending Review

And coming up on Reporting Scotland at 6:30pm:

Is it time to downsize? The scheme to shrink wineglass sizes in pubs

and bars for the good of our health. The latest from Belgium as Andy

Murray and Britain's Davis Cup team prepare for the final.

A Russian fighter jet pilot shot down yesterday by the Turkish air

force was presented to the media at a Russian air base in Syria today.

Turkey has released a recording of what it says are warnings to the

jet not to cross into its airspace, warnings it claims were ignored.

Our Moscow correspondent Steve Rosenberg reports.

In flames and out of control, a Russian bomber plummets to earth

and crashes in Syria, shot down by a Turkish F-15 fighter jets.

and crashes in Syria, shot down by a Turkish fighter jet.

One was killed, but could Russia find the other

After a 12-hour search, the Russian military released these images.

Captain Konstantin Murahtin had been rescued.

Hiding his face from the camera he spoke to journalists.

I can't wait to get back to my duties, he told them.

It's my duty to avenge the killing of my commander.

Back in Russia, President Putin announced that Captain Murahtin

would receive a state award for bravery.

And there would be posthumous awards for the dead pilot and a Russian

marine, killed in the rescue operation.

Outside the Defence Ministry tonight, Russians came to pay their

respects. These are the first confirmed deaths of Russian soldiers

in combat in Syria. Today, Moscow made it clear it doesn't want to go

to war with Turkey over what happened to its aircraft and to its

soldiers. . It described the shooting down of the jet as a

deliberate, planned act, an ambush. But Ankara insists this was

Moscow's fault and that the Russian jet violated Turkish airspace.

Today, Turkish President said his country did not want an escalation

we're just defending security, he said. But Turkey is also defending

these people, the Turkmen, they are Syrians of Turkish descent. Russia

has been carrying out air strikes here, claiming there are terrorists

in the area. Just a few days ago Turkey told Russia to stop the

bombing here. Russians, though, are in no mood to listen. In Moscow this

crowd attacked the Turkish embassy with eggs and rocks, furious that

Turkey had shot down a Russian bomber. They are chanting: We won't

forgive or forget. Steve Rosenberg, BBC News, Moscow.

A brief look at some of the day's other news stories.

Police investigating the death of Sheffield student Caroline

Everest have arrested a 31-year-old man on suspicion of rape.

The 18-year-old's body was found in a river yesterday.

She'd been reported missing at the weekend, after leaving

The Government has agreed to conciliation talks in the junior

doctors' dispute, but the strikes have not been called off.

Health Secretary Jeremy Hunt said the action should be cancelled to

The first strike is due to be on Tuesday, starting at 8am

There were almost 44,000 extra deaths last winter in England

and Wales compared to the rest of the year, according to

It's the highest number of so-called "excess winter deaths" for 15 years.

Most of those who died were aged 75 or over.

Schools and some metro lines have reopened in Brussels,

as the city starts to return to normal after four days in lockdown.

The Belgian capital remains on the highest state of alert,

with armed police and soldiers patrolling the streets.

The Belgian Interior Minister says the threat level was raised because

intelligence had suggested an attack was planned for Sunday evening.

The United Nation's World Meteorological Organisation says

that 2015 is likely to be the hottest year on record.

It says the cause is a combination of greenhouse gas

emissions, and climatic changes due to the El Nino weather event.

More now on the Chancellor's Spending Review.

Let's go back to Huw at Westminster - Huw.

One of the biggest areas of policy

Mr Osborne announced plans to give billions of pounds to

private developers to build 400,000 new homes in England.

But critics say that a failure to invest more in social

housing is a major weakness in the Government's approach.

There will also be a new 3% surcharge on stamp duty

for buy-to-let properties and second homes, from April 2016.

Our home editor Mark Easton looks at the housing element

In Knutsford in the heart of the Chancellor's Cheshire constituency

they are busy building homes for sale. And this is what George

Osborne wants much more of. After years cutting government cash for

new houses today the Chancellor announced ?6.9 billion to help build

hundreds of thousands of subsidised homes, most aimed at first-time

buyers. At the hairdresser in the high street I met some of Mr

Osborne's generation rent constituents. What did they think of

the state giving people like them a leg up on the property ladder

through shared ownership or discounted starter homes? I think

the Help To Buy schemes are encouraging for the younger

generations. Would you take advantage? I'd be one of the first

people knocking on the door. It is essential to help people out and get

people on the ladder. Perhaps the biggest surprise in the housing

sector was the Chancellor's 3% additional stamp duty charge on

people purchasing any buy-to-let, or second home. For every pound over

125,000 they will pay 5%, beyond 675,008 is 8%, over 925,000 it is

13% the proportion of a price over 1.5 million will be charged at 15%.

The Chancellor thinks it will raise over ?1 billion. In Knutsford estate

agents say it will kill the buy-to-let sector. It will have a

hugely devastating effect on the market in terms of buy-to-let

investors coming in, because they were seriously question where they

put their money now. It will have a negative effect in that regard but a

positive effect for first-time buyers and the lower end of the

market looking to coming who would normally be competing with

buy-to-let investors. The Chancellor doesn't talk about the housing

crisis, for him it is a crisis of homeownership. His focus is on

helping people onto the housing ladder, on homes for sale. But his

critics will say, it's all right for these people, but where are the poor

going to live? The government has no ambition to expand social housing.

In fact, supply is likely to dwindle as developers focus on starter homes

for first-time buyers. There are some people for whom homeownership

will just not be an option. Those people might look at today's review

and think what is in it for me? Housing associations help those

people and they want to in the future and we have to find a way to

do that. The plan to build more homes has been announced before but

what is new today is the Chancellor putting in the money to back the

ambition. Mark Easton, BBC News, Knutsford.

A wide range of figures and statistics offered by the Chancellor

today. We suggested at the start of the programme that borrowing for the

next few years would go up but that's not true, I apologise for

that. Our economics editor Robert Peston

is with me here. Please clarify the situation.

The deficit is forecast to be a bit over 70 billion this year, the

Office for Budget Responsibility, Government's forecasting operation,

expects that to turn into a surplus by 2020, of about ?10 billion. Now,

the OBR also said that the policy decisions taken by the Chancellor,

that's his U-turn on tax credits, that's making lesser cuts to public

services than he originally indicated he would do. But the

effect of those policy decisions would have been to push up

borrowing. But he has a windfall. The OBR has in effect found ?23

billion down the back of the sofa. Quite a lot of money. Where has the

?23 billion come from? From the fact that the OBR thinks that tax

revenues from existing taxes will be higher than it thought only back in

July and it thinks that the interest of the Government will have to shell

out on the enormous ?1.5 trillion of debt will be a bit less. George

Osborne would say he's being prudent in the sense that although he has

missed ?23 billion win for by 2020 it will be ?27 billion, the number

you have heard today, by 2021, he's only spending 19 billion, or only

using ?19 billion of the ?23 billion windfall. He would say he's been

prudent. However, forecasts, as you and I know, don't always turn into

reality. We saw some not very nice borrowing figures only a few days

ago. If the OBR is wrong, then actually that money won't be there.

But, today, George Osborne was looking very chipper because he's

been able to appease his critics who said he was cutting too much by

doing nothing in terms of additional taxes, or nothing very significant

for people. He is imposing additional taxes as we have heard in

this programme, or additional costs on business. Robert Peston, thank

you, our economics editor. It is a little cold outside

Time for a look at the weather. Here's Jay Wynne.

Parliament, it is pretty quiet in the Atlantic. This area of high

pressure will not last much longer. By the end of the week low pressure

will take over and it will turn wet and windy. A bit of rain out of the

cloud across the north and west of the UK and that will fizzle out

overnight as the cloud drifts from west to East. Not a solid blanket of

cloud but by the end of the night most of us will be in single

figures. Where there are breaks in the cloud the lower end of single

figures, maybe a touch of frost. Some rain in the North West early

on, quite grey in many western areas, low cloud. The next batch of

rain will be heavy of Northern Ireland and western Scotland. The

western side of England and Wales a low cloud, light rain, may be heavy

rain later. Central and eastern areas do well with sunshine in the

afternoon across East Anglia and south-east. Relatively mild, double

figures for many. Changing picture on Thursday night into Friday, low

pressure develops in the Atlantic the weather front heading our way,

lots of isobars on the chart, it will be windy and cloudy with light

rain and drizzle across England and Wales but the band of rain in the

north-west, squally band of rain, gusty winds working in from the

Northwest to the south-east. There it goes, clearing from the

south-east on Friday night. Behind its temperatures drop away quickly.

Friday night into Saturday morning snow showers in the north of the UK

and the next weather system heads our way turning increasingly wet and

windy on Saturday. Very strong gusts of wind. Back to you, Huw.

Many thanks come about is all