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| Spending review 2015: George Osborne delivers autumn statement - live updates | Spending review 2015: George Osborne delivers autumn statement - live updates |
| (35 minutes later) | |
| 9.18am GMT09:18 | |
| Shares in Britain’s house builders are rallying this morning, on the back of reports that the chancellor will pledge an extra £7bn of fresh investment in housing. | |
| Trader have pushed Persimmon, Taylor Wimpey and Barratt to the top of the FTSE 100 leaderboard: | |
| 9.03am GMT09:03 | |
| The trick to successful trap-laying is to make damn sure that you lure your quarry, rather than falling into it. | |
| But Sky’s Faisal Islam believes that George Osborne may have snared himself with his decision to cap Britain’s welfare bill. He’s doesn’t appear to have left himself any margin to change course on tax credits, without pushing up the bill. | |
| Faisal explains: | |
| The problem arises because Mr Osborne, in addition to making sharp welfare cuts, chose to push down the welfare cap to the levels of welfare spending forecast in July by the Office for Budget Responsibility - £115bn in the 2016/17 financial year. | |
| This means there is no wriggle room for a significantly more generous phasing of tax credits in the coming year without busting the cap. | |
| The OBR assesses compliance with the welfare cap under the Charter for Budget Responsibility at every Autumn Statement. | |
| The policy was designed as a trap for Labour, but the Chancellor would appear to have been caught in it himself. | |
| “It’ll be breached ... he’s not going to get it for next year,” said one Westminster source. | |
| £115bn Welfare Cap breach expected, as Commons vote prepared: my story - https://t.co/LYR9v43cB3 | |
| Updated at 9.08am GMT | |
| 8.54am GMT08:54 | |
| Under Osborne’s original plans to cut tax credits by £4.4bn, the Resolution Foundation said that 3.3m families would lose on average £1,300 a year. | |
| According to the BBC’s Laura Kuenssberg, under the revised plans families earning around £20,000 a year could now lose “only” around £300 a year. | |
| Tory tax credit rebels expect big pulling back from cuts, MAYBE down to £8 a wk loss but details not at all clear or confirmed tonight | |
| The inverted commas around that “only” are important; the problem for Osborne is that the sums involved in the original cuts were so enormous that, even if he takes substantial steps to lessen their impact, they will probably still hammer the blue-collar, inwork “strivers” that the Tories claim to represent. | |
| 8.54am GMT08:54 | |
| You can also get up to speed on today’s events with our Q&A on the spending review, explaining which departments could be hit hardest: | |
| Related: What is George Osborne's spending review? | |
| 8.51am GMT08:51 | |
| Katie Allen has pulled together the most important charts to explain today’s autumn statement: | |
| Related: Autumn statement 2015: five key charts | |
| It shows how Britain has rarely achieved a budget surplus. The last one was back in 2001: | |
| 8.43am GMT08:43 | 8.43am GMT08:43 |
| IFS says hitting Osborne's budget surplus target will be 'close to impossible' to achieve if economy underperforms | IFS says hitting Osborne's budget surplus target will be 'close to impossible' to achieve if economy underperforms |
| The most influential commentator on the autumn statement, by a mile, is the director of the tax and spending thinktank, the Institute for Fiscal Studies. As all chancellors have discovered in recent years, if you can persuade the IFS that your numbers stack up, in the court of informed opinion you’ve won, regardless of what the opposition or anyone else has to say. But if the IFS is critical, you’re in trouble. | The most influential commentator on the autumn statement, by a mile, is the director of the tax and spending thinktank, the Institute for Fiscal Studies. As all chancellors have discovered in recent years, if you can persuade the IFS that your numbers stack up, in the court of informed opinion you’ve won, regardless of what the opposition or anyone else has to say. But if the IFS is critical, you’re in trouble. |
| The current head of the IFS is Paul Johnson and he was on the Today programme this morning. He made two key points. | The current head of the IFS is Paul Johnson and he was on the Today programme this morning. He made two key points. |
| [Osborne] set himself a really tough target to get to this surplus in 2019, and the problem with this target is it’s very much unlike the targets he set himself in the last parliament; it is fixed and inflexible. So if it turns out that the economy does even a little worse than he’s expecting over the next few years, I think it will be close to impossible to meet unless he’s going to put some tax increases in place. | [Osborne] set himself a really tough target to get to this surplus in 2019, and the problem with this target is it’s very much unlike the targets he set himself in the last parliament; it is fixed and inflexible. So if it turns out that the economy does even a little worse than he’s expecting over the next few years, I think it will be close to impossible to meet unless he’s going to put some tax increases in place. |
| If the economy pans out as he currently expects, and tax revenues come in as he expects, it might be just about reachable but only at the cost of really big cuts in things like the Home Office, local government and other departments. | If the economy pans out as he currently expects, and tax revenues come in as he expects, it might be just about reachable but only at the cost of really big cuts in things like the Home Office, local government and other departments. |
| There is a reasonable case to be made for getting into surplus at some point because that increases the rate at which we pay down the debt we have, which is currently around 80% of national income which is quite a high level. But whether he meets that target in 2019 or 2020 or 2021 doesn’t matter terribly much from an economic point of view. | There is a reasonable case to be made for getting into surplus at some point because that increases the rate at which we pay down the debt we have, which is currently around 80% of national income which is quite a high level. But whether he meets that target in 2019 or 2020 or 2021 doesn’t matter terribly much from an economic point of view. |
| From an economic point of view, even if you want to get into surplus and stay there, the speed in which you do it doesn’t matter that much, as much as getting there within some period. | From an economic point of view, even if you want to get into surplus and stay there, the speed in which you do it doesn’t matter that much, as much as getting there within some period. |
| 8.36am GMT08:36 | 8.36am GMT08:36 |
| Autumn statement: Borrowing target in doubt | Autumn statement: Borrowing target in doubt |
| Graeme Wearden | Graeme Wearden |
| The latest borrowing forecasts are unlikely to bring much cheer. | The latest borrowing forecasts are unlikely to bring much cheer. |
| The Office for Budget Responsibility is expected to revise UP its forecast for the deficit this financial year, from £69.5bn to perhaps £74bn. That’s because last month’s public finance figures were alarmingly poor, with Britain borrowing more than at any time since 2009 to cover weak corporation tax revenues. | The Office for Budget Responsibility is expected to revise UP its forecast for the deficit this financial year, from £69.5bn to perhaps £74bn. That’s because last month’s public finance figures were alarmingly poor, with Britain borrowing more than at any time since 2009 to cover weak corporation tax revenues. |
| So while this year’s deficit (the black line above) will still be lower than last year (the blue line), it might be several billion pounds higher than we were promised in the budget. | So while this year’s deficit (the black line above) will still be lower than last year (the blue line), it might be several billion pounds higher than we were promised in the budget. |
| That’s a blow to a chancellor who has welded his reputation to the cause of deficit reduction. It also gives George Osborne less wriggle room to soften austerity, if he remains committed to balancing the books his parliament. | That’s a blow to a chancellor who has welded his reputation to the cause of deficit reduction. It also gives George Osborne less wriggle room to soften austerity, if he remains committed to balancing the books his parliament. |
| And crucially, the OBR (Britain’s fiscal watchdog) might conclude that borrowing will be higher in future years too. That would put Osborne’s goal of a £10bn surplus in 2019-20 in doubt. | And crucially, the OBR (Britain’s fiscal watchdog) might conclude that borrowing will be higher in future years too. That would put Osborne’s goal of a £10bn surplus in 2019-20 in doubt. |
| Although tax credits could dominate the headlines, economists are looking for some other measures to stimulate growth. | Although tax credits could dominate the headlines, economists are looking for some other measures to stimulate growth. |
| We already know that the chancellor is planning to boost housebuilding, to address Britain’s affordable housing crisis. | We already know that the chancellor is planning to boost housebuilding, to address Britain’s affordable housing crisis. |
| Businesses will be crossing their fingers that the government shakes up business rates; many are paying rates based on property values before the 2008 crash. | Businesses will be crossing their fingers that the government shakes up business rates; many are paying rates based on property values before the 2008 crash. |
| Infrastructure spending - a perennial favourite. The chancellor will surely bang the drum for the Northern Powerhouse, while Labour’s John McDonnell will rebut that the UK is still spending less than the 3.5% of GDP which the OECD recommends | Infrastructure spending - a perennial favourite. The chancellor will surely bang the drum for the Northern Powerhouse, while Labour’s John McDonnell will rebut that the UK is still spending less than the 3.5% of GDP which the OECD recommends |
| Drivers have benefitted from a freeze on fuel duty. But prices at the pump are lower, now oil is trading below $50 per barrel, so Osborne might decide that the nation’s wallets and purses can handle a higher fuel levy. | Drivers have benefitted from a freeze on fuel duty. But prices at the pump are lower, now oil is trading below $50 per barrel, so Osborne might decide that the nation’s wallets and purses can handle a higher fuel levy. |
| Updated at 8.44am GMT | Updated at 8.44am GMT |
| 8.26am GMT08:26 | 8.26am GMT08:26 |
| Spending review - Political challenge | Spending review - Political challenge |
| Andrew Sparrow | Andrew Sparrow |
| Today’s autumn statement from George Osborne was supposed to be the big political event of last quarter of the year. In the event, because of the Paris attacks, it does not quite feel like that, but nonetheless this is one of the landmark political moments of the year - and of the parliament too. This is what we’re getting. | Today’s autumn statement from George Osborne was supposed to be the big political event of last quarter of the year. In the event, because of the Paris attacks, it does not quite feel like that, but nonetheless this is one of the landmark political moments of the year - and of the parliament too. This is what we’re getting. |
| 1) An autumn statement - a mini budget in itself. | 1) An autumn statement - a mini budget in itself. |
| 2) A spending review, covering government spending until 2019-20. Osborne wants to eliminate the deficit by the end of the decade and so his spending review is going to involve very, very deep cuts to departments that are not protected. It will change the shape of the state, and alter long-term what it does. | 2) A spending review, covering government spending until 2019-20. Osborne wants to eliminate the deficit by the end of the decade and so his spending review is going to involve very, very deep cuts to departments that are not protected. It will change the shape of the state, and alter long-term what it does. |
| 3) A solution to the tax credits crisis. The House of Lords rejected Osborne’s plan to save £4.4bn by cutting tax credits, and today Osborne will offer an alternative approach. In some respects this will amount to a U-turn. But will the new welfare-saving measures he proposes as an alternative prove just as unpopular? Gordon Brown faced a similar problem when his abolition of the 10p starting rate of tax backfired, and that episode damaged his reputation almost beyond repair. | 3) A solution to the tax credits crisis. The House of Lords rejected Osborne’s plan to save £4.4bn by cutting tax credits, and today Osborne will offer an alternative approach. In some respects this will amount to a U-turn. But will the new welfare-saving measures he proposes as an alternative prove just as unpopular? Gordon Brown faced a similar problem when his abolition of the 10p starting rate of tax backfired, and that episode damaged his reputation almost beyond repair. |
| 4) A settlement for the police. The Home Office is an unprotected department, and the police have been braced for significant cuts. But, since Paris, this has become much more problematic and even Tory MPs have been lobbying Osborne to protect police forces. Today we will find out to what extend he has been listening. | 4) A settlement for the police. The Home Office is an unprotected department, and the police have been braced for significant cuts. But, since Paris, this has become much more problematic and even Tory MPs have been lobbying Osborne to protect police forces. Today we will find out to what extend he has been listening. |
| I’m Andrew Sparrow and I will be covering the statement with my colleague Graeme Wearden, bringing you all the best reaction and analysis. We will particularly be focusing on “small print alerts” - the detail in the statement that Osborne might prefer you did not notice. | I’m Andrew Sparrow and I will be covering the statement with my colleague Graeme Wearden, bringing you all the best reaction and analysis. We will particularly be focusing on “small print alerts” - the detail in the statement that Osborne might prefer you did not notice. |
| The key timings are: | The key timings are: |
| 12pm: PMQs. (We will cover David Cameron’s exchanges with Jeremy Corbyn, and anything autumn statement-related. | 12pm: PMQs. (We will cover David Cameron’s exchanges with Jeremy Corbyn, and anything autumn statement-related. |
| 12.30pm: Osborne delivers the autumn statement. | 12.30pm: Osborne delivers the autumn statement. |
| If you want to follow us on Twitter, I’m on @AndrewSparrow and Graeme is on @graemewearden. | If you want to follow us on Twitter, I’m on @AndrewSparrow and Graeme is on @graemewearden. |
| Updated at 8.29am GMT | Updated at 8.29am GMT |