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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.