George Osborne's Autumn Statement - live blog

Instant coverage and analysis as the Chancellor outlines plans to boost the economy, amid gloomy for

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1.37: The shadow chancellor has now finished his response. I'll be ending this live-blog now, thanks for joining us.

1.35: Balls says that Osborne failed to tell the House that unemployment is predicted to rise higher in 2012 and higher again in 2013. Hitting a weak spot, he says: "If we're all in this together, why are women and children always worst hit?"

1.30: Balls asks what it will take for Osborne to listen to the IMF and the OBR. He says that this is a "cobbled together package of growth measures" that does not address the fundamental problem. This is the third emergency growth package in a year.

Paul Mason tweets: "OBR says Osborne was going to miss his target without 30bn extra cuts, 15bn of which come from lower public sector pay".

Jonathan Freedland tweets: "If Gordon Brown had delivered this speech, the old George Osborne would have mocked him mercilessly".

1.27: He's moved on to Osborne's blame game, saying that while the eurozone crisis will impact the UK, Britain's recovery was choked off a year ago. He also refers to the infamous "snow" excuse. The coalition benches point at him and shout "you". A very raucous house today.

1.24: Balls points out that Osborne is failing on his own terms -- he will not eliminate the structural deficit by 2015 as promised. This was a concrete pledge, not a rolling target. We have suffered "all of the pain with none of the gain", says Balls.

1.20: "The Chancellor likes to say that you can't borrow your way out of a crisis, but can he confirm that this is not what he is doing?" An effective line from Balls, who points out that Osborne had predicted growth of 2.3 per cent for 2011, a figure which has now been cut to 0.9 per cent. He asks Osborne to confirm he will now borrow £158bn more than expected.

1.19: Ed Balls is now responding to Osborne's speech. He's going in hard with those dire figures from the OBR. "Plan A has failed, and it has failed colosally".

1.18: "Leadership for tough times, that's what we offer." Osborne ends on a strange sales pitch.

1.16: Measures to delay fuel price increase and to limit rail fare hikes are announced.

1.14: Osborne says that 40 per cent of two-year-olds, 260,000 children from the most disadvantaged homes, will get 15 hours of free childcare per week. But this only scratches the surface of the problem of parents priced out of work, which my colleague Rafael Behr blogged on yesterday.

1.12: Now we're onto measures to tackle youth unemployment. He says that the problem is primarily a lack of jobs. He also blames the failing education system and stresses that this problem was on the rise under Labour, too. Young people out of work for more than three months will be guaranteed work experience placements. This measure was announced by Nick Clegg last week (and dismissed by Labour as a copy of the Future Jobs Fund -- which the coalition scrapped).

1.09: The debate on the limits of public sector pay (1 per cent rise for two years, following a two year freeze) has already kicked off some debate. Nick Robinson says: "Benefits will increase by much more than wages. Protecting the poor or punishing those in work?", while Tom Bradby tweets: "MASSIVE hit for public sector workers....They have had a TWO year pay freeze already. Now another TWO years of 1% cap."

1.07: Health and safety and unfair dismissal are getting it. Osborne raises the spectre of those controversial no fault dismissal proposals currently under consultation. I've blogged on this topic before -- see here for some background.

1.05: Osborne's voice seems to be suffering. He's coughing a lot as he defends his green credentials (establishing the green investment bank) but says that we won't save the planet by shutting down heavy industry -- all we'll do is export jobs. This is a controversial measure -- how will this square with targets on carbon emissions? So much for the "greenest government" ever.

1.00: We're onto the cornerstone of this speech: the extra £5bn for infrastructure projects. George Eaton's blog explains why this U-turn is not the silver bullet the Chancellor is seeking:

At the time of the Lib Dem conference when some ministers were agitating for an extra £5bn of capital spending the Treasury simply replied: "we have our spending plans and we are sticking to them". If it's not Plan B (Osborne has not and will not change course on the deficit), it's still some way from Plan A.

But is it too little, too late? Almost certainly yes. The decision to fund the project through savings elsewhere means that there will be no net increase in demand, little new stimulus. With unemployment at 2.62m and growth almost non-existent, Osborne needed something special. This isn't it.

12.57: He reiterates his opposition to a financial transaction tax, currently being touted in Europe, saying that the UK has a permanent banking levy instead. He says he is rising this by 0.088 per cent, and says that the government response to the Vickers' Commission on banking regulation is coming soon.

12.55: Osborne says that the right to buy was one of the "greatest" social policies of recent times and he will reinstate commitment to it. The government will fund mortgages for first-time buyers.

12.53: The Chancellor has moved on to support for small businesses, pleding a major programme of credit easing, and a national loan guarantee scheme that will provide loans to firms with a turnover under £50m. He says no govermnent has ever attempted such ambitious measures.

12.50: The child element of the working tax credit will be uprated in line with inflation, but other elements will not. The consensus appears to be that this will hit the "squeezed middle" rather than the poorest -- working age benefits will be uprated by 5.2 per cent, in line with inflation.

He's also announced that the pensions credit for poorest elderly people will be uprated by £5.35, while the pension age increase (to 67) will come in earlier than expected, in 2026. He says that this will save £59bn and will not affect anyone for 15 years.

12.48: Osborne has said that the government will stick to its promise on ringfencing international aid -- but says that it will be "adjusted" to consider lower growth. As Will Straw tweets: "Lower growth means 0.7% of GDP is smaller than projected at spending review so Osborne effectively announcing cut to DfID's budget."

12.45: He is now dealing with tomorrow's planned strike, asking why the unions want to "damage the economy at a time like this and put jobs at risk".

12.42: Osborne says there is no need to adjust the overall figures set out in the Spending Review, saying that all measures announced today are fully costed from savings elsewhere.

12.37: We're now onto borrowing costs, which Osborne says are falling, although not at the rate expected. There is some tricksiness going on with the figures here. See my colleague George Eaton's earlier blog on this for an explanation. He says that if he hadn't cut spending, Britian would be in the middle of the "debt storm". In a valiant attempt to highlight the positives, Osborne says that we are the only major western country who have had their credit rating upgraded in the last 18 months.

12.35: He is now dealing with those miserable OBR predictions, and making an attempt to see the positives -- they did not predict a recession, and have downgraded predictions for other countries as well. He says that if Europe goes into recession, it will be difficult to avoid in the UK.

Osborne -- stressing repeatedly that the OBR is "independent" -- lists external factors it identifies for the dire state of the economy, including worlf inflation, unforeseen hikes in energy prices, and the unsustainable nature of the boom. It is difficult to know how long he'll be able to continue blaming the last government.

12.31: Osborne is speaking. He's started by talking about the debt crisis in Europe, saying that his role is to protect Britain and prove that it can live within its means.

12.12pm: Hello and welcome to the live-blog. I'll be bringing you live updates and analysis from 12.30, as George Osborne delivers his Autumn Statement.

There have been many, many leaks ahead of this statement -- to the extent that the Speaker, John Bercow, is reportedly planning to rebuke Osborne. Here's a summary of what we're expecting:

- Bleak economic forecasts. The OBR is sharply downgrading its forecast for growth, while unemployment is soaring and borrowing is set to rise.

- Perhaps to offset this dire set of figures, the Treasury has already trailed a series of measures. These include (but are by no means limited to):

  • An extra £5bn for infrastructure investment. This will be a key part of the statement, but as my colleague George Eaton argues, it is too little, too late.
  • Credit easing that could be worth up to £40bn
  • A new bank levy, which will ensure that the financial sector continues to provide £2.5bn to the Treasury
  • A £300m package to help small businesses, including extending the holiday on business rates for a further year
  • £1bn to tackle youth unemployment, providing at least 410,000 work places for 18-24 year olds.

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

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I'm far from convinced by Cameron's plans for Syria

The Prime Minister has a plan for when the bombs drop. But what about after?

In the House of Commons today, the Prime Minister set out a powerful case for Britain to join air strikes against Isil in Syria.  Isil, he argued, poses a direct threat to Britain and its people, and Britain should not be in the business of “outsourcing our security to our allies”. And while he conceded that further airstrikes alone would not be sufficient to beat Isil, he made the case for an “Isil first” strategy – attacking Isil now, while continuing to do what we can diplomatically to help secure a lasting settlement for Syria in which Assad (eventually) plays no part.

I agreed with much of David Cameron’s analysis. And no-one should doubt either the murderous barbarism of Isil in the region, or the barbarism they foment and inspire in others across the world.  But at the end of his lengthy Q&A session with MPs, I remained unconvinced that UK involvement in airstrikes in Syria was the right option. Because the case for action has to be a case for action that has a chance of succeeding.  And David Cameron’s case contained neither a plan for winning the war, nor a plan for winning the peace.

The Prime Minister, along with military experts and analysts across the world, concedes that air strikes alone will not defeat Isil, and that (as in Iraq) ground forces are essential if we want to rid Syria of Isil. But what is the plan to assemble these ground forces so necessary for a successful mission?  David Cameron’s answer today was more a hope than a plan. He referred to “70,000 Syrian opposition fighters - principally the Free Syrian Army (FSA) – with whom we can co-ordinate attacks on Isil”.

But it is an illusion to think that these fighters can provide the ground forces needed to complement aerial bombardment of Isil.  Many commentators have begun to doubt whether the FSA continues to exist as a coherent operational entity over the past few months. Coralling the myriad rebel groups into a disciplined force capable of fighting and occupying Isil territory is a heroic ambition, not a plan. And previous efforts to mobilize the rebels against Isil have been utter failures. Last month the Americans abandoned a $500m programme to train and turn 5,400 rebel fighters into a disciplined force to fight Isil. They succeeded in training just 60 fighters. And there have been incidents of American-trained fighters giving some of their US-provided equipment to the Nusra Front, an affiliate of Al Qaeda.

Why has it proven so hard to co-opt rebel forces in the fight against Isil? Because most of the various rebel groups are fighting a war against Assad, not against Isil.  Syria’s civil war is gruesome and complex, but it is fundamentally a Civil War between Assad’s forces and a variety of opponents of Assad’s regime. It would be a mistake for Britain to base a case for military action against Isil on the hope that thousands of disparate rebel forces can be persuaded to change their enemy – especially when the evidence so far is that they won’t.

This is a plan for military action that, at present, looks highly unlikely to succeed.  But what of the plan for peace? David Cameron today argued for the separation of the immediate task at hand - to strike against Isil in Syria – from the longer-term ambition of achieving a settlement in Syria and removing Assad.  But for Isil to be beaten, the two cannot be separated. Because it is only by making progress in developing a credible and internationally-backed plan for a post-Assad Syria that we will persuade Syrian Sunnis that fighting Isil will not end up helping Assad win the Civil War.  If we want not only to rely on rebel Sunnis to provide ground troops against Isil, but also provide stable governance in Isil-occupied areas when the bombing stops, progress on a settlement to Syria’s Civil War is more not less urgent.  Without it, the reluctance of Syrian Sunnis to think that our fight is their fight will undermine the chances of military efforts to beat Isil and bring basic order to the regions they control. 

This points us towards doubling down on the progress that has already been made in Vienna: working with the USA, France, Syria’s neighbours and the Gulf states, as well as Russia and Iran. We need not just a combined approach to ending the conflict, but the prospect of a post-war Syria that offers a place for those whose cooperation we seek to defeat Isil. No doubt this will strike some as insufficient in the face of the horrors perpetrated by Isil. But I fear that if we want not just to take action against Isil but to defeat them and prevent their return, it offers a better chance of succeeding than David Cameron’s proposal today. 

Stewart Wood is a former Shadow Cabinet minister and adviser to Ed Miliband. He tweets as @StewartWood.