Spending Review: George Osborne vows 'economic and national security'

http://www.bbc.co.uk/news/uk-politics-34915218

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George Osborne says "economic and national security" are at the heart of his plans for the next four years, as he sets out his Spending Review.

Health, schools and defence spending will go up - but police, local councils and other areas face big cuts.

The chancellor must also find extra cash after his plans to cut £4.4bn from tax credits were blocked.

He earlier announced plans to hand billions to private developers to build 400,000 new homes in England.

Mr Osborne is using his Autumn Statement and Spending Review to detail £20bn in budget cuts affecting a string of government departments - and £12bn in welfare cuts.

He hopes to raise £5bn in a fresh crackdown on tax avoidance as part of his efforts to balance the nation's books by the next election in 2020.

He told MPs the Spending Review was designed to make Britain "the most prosperous and secure of all the major nations of the world".

Mr Osborne revised up slightly the UK's economic growth forecasts for next year to 2.4%.

Speculation is rife about how he will find the cash to phase in tax credit cuts, after the House of Lords rejected his plans to slash the benefit payments to low paid workers from April.

Analysis

By BBC political editor Laura Kuenssberg

This won't be a Spending Review, ministers say, that displays an attitude of cutting a little bit here and there, moving money around the balance sheet to try to smooth out the pain.

Instead they see it as a programme of strategic cuts that, while difficult, add up to something: a country where work is rewarded, where anyone who wants to get on is helped to do so, and where the state has a careful approach to spending taxpayers' money, using it judiciously where it helps and not being afraid to scrape it back where it does not.

Read more from Laura

All eyes were on his economic forecasts, with some economists predicting he will miss his target to run a budget surplus by 2020, after worse than expected borrowing figures.

But Mr Osborne told MPs his four-year public spending plans were forecast to deliver a surplus as well as falling debt in every year that follows.

In his statement, the chancellor will tell MPs his economic plan for the next four years is about choosing priorities - and insist tackling the "crisis" in home ownership is crucial.

In a shift away from free market solutions, Mr Osborne will announce plans to hand £2.3bn directly to developers to build "starter homes" for first-time buyers, in a fresh attempt to reverse the long-term decline in house building.

He will also pump £4bn into shared ownership schemes to provide more properties for households earning less than £80,000 (or £90,000 in London) who want to get on the housing ladder.

The Treasury is calling it "the biggest affordable house-building programme since the 1970s" but Labour dismissed it as more rhetoric, saying: "If hot air built homes, then Conservative ministers would have our housing crisis sorted."

The Treasury has already announced that front-line NHS services in England will get a £3.8bn, above-inflation, cash injection next year, as part of an £8bn real terms increase over the course of the Parliament.

Defence spending is to be increased, as set out in Monday's Strategic Defence and Security Review. Schools and international aid will also escape cuts.

Presented by Chancellor George Osborne, the Spending Review sets out what government spending will be over the next four years, while the Autumn Statement is an annual update of government plans for the economy.

Explained: Which government departments will be affected?

Analysis: Latest from BBC political editor Laura Kuenssberg

Special report: Full in-depth coverage of the Spending Review and Autumn Statement

Watch: The BBC's TV coverage begins on BBC Two and the BBC News Channel at 11:30 GMT, with BBC Radio 5 Live coverage from 11:55 GMT

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