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Spending review 2015: George Osborne poised to breach welfare cap - live Spending review 2015: George Osborne poised to breach welfare cap - live
(35 minutes later)
11.38am GMT11:38
The Royal Institution of Chartered Surveyors is surprisingly sceptical about the plans that George Osborne is due to announce for 400,000 new homes. This is from Jeremy Blackburn, the RICS head of policy.
A push towards affordable home ownership should not come at the expense of affordable homes for rent. If cities such as London are to thrive, we need to ensure that housing can be provided for all of its workforce - home ownership can only go so far and even shared ownership may prove too expensive for some. We would like to see the chancellor incentivise affordable homes for rent in both public and private sectors.
George Osborne is essentially subsidising one sector of the housing market over all others, in an area that already benefits from significant Government funding. Although the announcement is on the face of it encouraging for certain sectors, the devil will be in the detail.
11.37am GMT11:37
Anyone got any spare metallic paint?
Downing Street Car Crash! Well ... a small prang between Prime Ministerial vehicles ahead of #PMQs pic.twitter.com/gQvhiEY4Y9
Has PM had a car crash? No10 reveals Cameron car "momentarily touched another car" but "no damage was done to either vehicle"
11.27am GMT11:27
George Osborne has just left the Treasury (no, not permanently), and hopped into his limo for the short journey to parliament:
Fingers crossed that we avoid a second prang.
Updated at 11.27am GMT
11.13am GMT11:13
Lord Porter, the Conservative chair of the Local Government Association, has told the Guardian in an interview that some councils could effectively go bust if the cuts in the spending review are as deep as expected.
11.09am GMT11:09
Britain’s barristers are worried that the justice system could be imperilled if the chancellor swings the axe in its direction today.
Chairman of the Bar Council, Alistair MacDonald QC says:
“It is because citizens have access to justice that big businesses pay their small firm suppliers in good time, that parents can get the right pay and leave from their employers, and that elderly people get the care to which they are entitled.
“The idea that people who need to use the courts are being subsidised by the tax-payer is completely wrong. When people use the courts and other legal avenues to enforce the law, it helps to ensure that we all play by the rules. Without access to justice, everyone will suffer because the rules will cease to matter.”
Updated at 11.10am GMT
11.08am GMT11:08
Martin Kettle
Our colleague Martin Kettle has written a piece this morning saying we would be better off just abolishing autumn statements and spending reviews. Here’s an extract.
There is a very strong case for saying that both rituals are largely unnecessary and that, in particular, they allow the Treasury and the chancellor to get far too tough a grip on the government’s strategy and approach. While accepting that today’s speech and announcements are indisputably important as framing exercises, it is also important to stress that they don’t need to be treated as respectfully as they are. In short, we might be better off without either of them.
But surely we have to have them? No we don’t. Unlike the annual budget, the autumn statement and the spending review are recent inventions: the autumn statement dates from 1976; the spending review only from 1998. Neither of them is an ordained or ancient part of the way UK government works. The autumn statement is a purely political confection. It has no economic purpose. It exists primarily to allow the chancellor to command a second big parliamentary event of the year (indeed this is the third of 2015, in which Osborne has already delivered two budgets, one of them only four months ago).
In essence the same applies to the spending review, which was invented by Gordon Brown ostensibly to give the appearance of having a sensible long-term economic strategy. It succeeded in that political aim, though the strategy didn’t turn out as cleverly as Brown claimed and most observers accepted at the time. In reality, the spending review was conjured up to enable Brown to bind all his rival departmental ministers into decisions from which they could not escape. The spending review is about the assertion of political power — the chancellor’s power — not economic strategy.
11.03am GMT11:0311.03am GMT11:03
Here is Patrick Wintour’s full story on how the government is planning to breach its welfare cap.Here is Patrick Wintour’s full story on how the government is planning to breach its welfare cap.
10.55am GMT10:5510.55am GMT10:55
There was a slight prang in Downing Street earlier. Bad omen?There was a slight prang in Downing Street earlier. Bad omen?
Augur for today? slight prang between two cars of the prime ministerial motorcade in Downing St a few moments agoAugur for today? slight prang between two cars of the prime ministerial motorcade in Downing St a few moments ago
10.53am GMT10:5310.53am GMT10:53
If George Osborne does breach the welfare cap it will be all the more remarkable because even Jeremy Corbyn said he accepted it; he said so in an interview to the New Statesman in September.If George Osborne does breach the welfare cap it will be all the more remarkable because even Jeremy Corbyn said he accepted it; he said so in an interview to the New Statesman in September.
10.49am GMT10:4910.49am GMT10:49
Here are some pictures of ministers arriving and leaving Number 10 for today’s autumn statement cabinet meeting.Here are some pictures of ministers arriving and leaving Number 10 for today’s autumn statement cabinet meeting.
Theresa May, the home secretary, is braced for cuts - and did not look overly cheerful.Theresa May, the home secretary, is braced for cuts - and did not look overly cheerful.
Health is getting more money, which may be why Jeremy Hunt looked more upbeat.Health is getting more money, which may be why Jeremy Hunt looked more upbeat.
The Department for Business is expecting cuts. Here’s Sajid Javid, the business secretary, and Priti Patel, the employment minister.The Department for Business is expecting cuts. Here’s Sajid Javid, the business secretary, and Priti Patel, the employment minister.
God knows what’s happening to the small business budget, but Anna Soubry, the small business minister, looks like she’s had a shock.God knows what’s happening to the small business budget, but Anna Soubry, the small business minister, looks like she’s had a shock.
Unlike David Cameron who looks, well, as smug as ever ...Unlike David Cameron who looks, well, as smug as ever ...
10.45am GMT10:4510.45am GMT10:45
Andrew Harrop, general secretary of the Fabians, has blogged about how breaching the welfare cap would ‘liberate’ the chancellor:Andrew Harrop, general secretary of the Fabians, has blogged about how breaching the welfare cap would ‘liberate’ the chancellor:
it was Osborne’s pre-election promise of £12 billion of cuts to welfare that really did the damage and led inexorably to the tax credit reforms. First Osborne made the welfare pledge, then he protected pensioners and the severely disabled, and finally he realised that a Tory-only Treasury could not impose cash cuts on the very worst off who are not in work. There was no choice left but to hit the working poor.it was Osborne’s pre-election promise of £12 billion of cuts to welfare that really did the damage and led inexorably to the tax credit reforms. First Osborne made the welfare pledge, then he protected pensioners and the severely disabled, and finally he realised that a Tory-only Treasury could not impose cash cuts on the very worst off who are not in work. There was no choice left but to hit the working poor.
It is sometimes said that George Osborne never expected to implement the £12bn promise. It was designed only as a negotiating position in advance of post-election coalition talks. Whatever the truth in that, now the chancellor must let it go and cancel the cuts planned for existing tax credit claimants. And that also means increasing the value of the ‘welfare cap’, Osborne’s self-imposed straightjacket which he tightened at the last Budget and he can now loosen again.It is sometimes said that George Osborne never expected to implement the £12bn promise. It was designed only as a negotiating position in advance of post-election coalition talks. Whatever the truth in that, now the chancellor must let it go and cancel the cuts planned for existing tax credit claimants. And that also means increasing the value of the ‘welfare cap’, Osborne’s self-imposed straightjacket which he tightened at the last Budget and he can now loosen again.
Ditching the welfare pledge would be liberating, because if Osborne scraps that one promise he will suddenly have lots of options before him.Ditching the welfare pledge would be liberating, because if Osborne scraps that one promise he will suddenly have lots of options before him.
More here:More here:
The welfare pledge: Osborne is a prisoner of his own imaginationThe welfare pledge: Osborne is a prisoner of his own imagination
Updated at 10.46am GMTUpdated at 10.46am GMT
10.38am GMT10:3810.38am GMT10:38
Does every u-turn have a silver lining? Nick Clegg’s former special advisor, Polly Mackenzie, reckons it might:Does every u-turn have a silver lining? Nick Clegg’s former special advisor, Polly Mackenzie, reckons it might:
Welfare cap only a political trick so breaching it works just as well as not. Vote on breach moves Osborne to the centre ground = victory.Welfare cap only a political trick so breaching it works just as well as not. Vote on breach moves Osborne to the centre ground = victory.
..
10.35am GMT10:3510.35am GMT10:35
Rupert Harrison used to be George Osborne’s chief of staff. He is working in the City now, and using Twitter to advise people not to be taken in by Treasury “expectation management” ahead of the autumn statement.Rupert Harrison used to be George Osborne’s chief of staff. He is working in the City now, and using Twitter to advise people not to be taken in by Treasury “expectation management” ahead of the autumn statement.
Challenge on the morning of an SR or Budget is telling what is real and what is expectation management by HMT. Usually the latter...Challenge on the morning of an SR or Budget is telling what is real and what is expectation management by HMT. Usually the latter...
10.22am GMT10:2210.22am GMT10:22
Jonathan Portes also hopes that the welfare cap might be dropped altogether:Jonathan Portes also hopes that the welfare cap might be dropped altogether:
Welfare cap, like surplus target, never had any economic rationale. Would be best to abandon it permanently. https://t.co/iVG4djlQhQWelfare cap, like surplus target, never had any economic rationale. Would be best to abandon it permanently. https://t.co/iVG4djlQhQ
"meaningless gesture" - here's how I described "welfare cap" when it was announced. Glad George Osborne now agrees. https://t.co/W3vntX4Obp"meaningless gesture" - here's how I described "welfare cap" when it was announced. Glad George Osborne now agrees. https://t.co/W3vntX4Obp
10.15am GMT10:1510.15am GMT10:15
The Welfare Cap shows the dangers of ‘soundbite’ driven fiscal policy, argues economist Jonathan Portes, of the National Institute of Economic and Social Research:The Welfare Cap shows the dangers of ‘soundbite’ driven fiscal policy, argues economist Jonathan Portes, of the National Institute of Economic and Social Research:
Govt may breach own self-imposed, entirely unnecessary "welfare cap". Illustrates absurdity of soundbite budgeting https://t.co/eZ4Wwnk1tcGovt may breach own self-imposed, entirely unnecessary "welfare cap". Illustrates absurdity of soundbite budgeting https://t.co/eZ4Wwnk1tc
Updated at 10.17am GMTUpdated at 10.17am GMT
10.11am GMT10:1110.11am GMT10:11
Welfare cap analysis - How Osborne said breaching it would be 'a failure of public expenditure control'Welfare cap analysis - How Osborne said breaching it would be 'a failure of public expenditure control'
Andrew SparrowAndrew Sparrow
One of the criticisms of George Osborne as chancellor is that he can be too clever by half, that some of his political schemes are so devious that they can backfire. For anyone advancing this theory, the welfare cap now looks like an ideal example.One of the criticisms of George Osborne as chancellor is that he can be too clever by half, that some of his political schemes are so devious that they can backfire. For anyone advancing this theory, the welfare cap now looks like an ideal example.
Osborne announced a welfare cap, a cap on the overall amount the government can spend on certain welfare payments, in the budget of 2014. It is not the same as the benefits cap, the cap on the amount of benefits that an out-of-work family can receive (originally £26,000, but now being cut to £20,000 for families outside London.) The benefits cap proved remarkably popular with voters, and so Osborne decided to apply the same principle to overall welfare spending. At the time it was perceived primarily as a trap for Labour; Osborne was hoping that the opposition would vote against, thus allowing him to depict them as profligate with welfare spending. In the event this ploy failed, because Ed Miliband and Ed Balls decided their party should vote in favour of the welfare cap, and the issue quickly dropped out of the political headlines.Osborne announced a welfare cap, a cap on the overall amount the government can spend on certain welfare payments, in the budget of 2014. It is not the same as the benefits cap, the cap on the amount of benefits that an out-of-work family can receive (originally £26,000, but now being cut to £20,000 for families outside London.) The benefits cap proved remarkably popular with voters, and so Osborne decided to apply the same principle to overall welfare spending. At the time it was perceived primarily as a trap for Labour; Osborne was hoping that the opposition would vote against, thus allowing him to depict them as profligate with welfare spending. In the event this ploy failed, because Ed Miliband and Ed Balls decided their party should vote in favour of the welfare cap, and the issue quickly dropped out of the political headlines.
As a restraint on government the welfare cap was always relatively ineffective because, under Osborne’s proposal, any government could break i and spend more if it wanted to. But it would have to go to the Commons to win approval in a vote. Osborne argued that this would prove embarrassing, and that the unappetising prospect of having to ask MPs to vote for extra welfare spending would act as a deterrent.As a restraint on government the welfare cap was always relatively ineffective because, under Osborne’s proposal, any government could break i and spend more if it wanted to. But it would have to go to the Commons to win approval in a vote. Osborne argued that this would prove embarrassing, and that the unappetising prospect of having to ask MPs to vote for extra welfare spending would act as a deterrent.
In the debate on the welfare cap in March 2014 he said that breaching the welfare cap would be “a failure of public expenditure control”. Any chancellor taking this step would have to admit that what they really want is “higher welfare bills”, he said.In the debate on the welfare cap in March 2014 he said that breaching the welfare cap would be “a failure of public expenditure control”. Any chancellor taking this step would have to admit that what they really want is “higher welfare bills”, he said.
The charter makes clear what will happen if the welfare cap is breached. The chancellor must come to parliament, account for the failure of public expenditure control, and set out the action that will be taken to address the breach ...The charter makes clear what will happen if the welfare cap is breached. The chancellor must come to parliament, account for the failure of public expenditure control, and set out the action that will be taken to address the breach ...
The welfare cap brings responsibility, accountability and fairness. Those who want to undo our welfare reforms will now have to tell us about the other cuts that they will make, or else come clean and admit to the public that what they really want are higher welfare bills ..The welfare cap brings responsibility, accountability and fairness. Those who want to undo our welfare reforms will now have to tell us about the other cuts that they will make, or else come clean and admit to the public that what they really want are higher welfare bills ..
From now on, any government who want to spend more on welfare will have to be honest with the public—honest about the costs—and secure the approval of parliament in order to breach the cap.From now on, any government who want to spend more on welfare will have to be honest with the public—honest about the costs—and secure the approval of parliament in order to breach the cap.
Expect those words to be flung back at Osborne this afternoon. Now it seems that he is going to have to go to parliament himself and admit that he’s the one asking for “higher welfare bills” because he’s failed to meet his own spending targets.Expect those words to be flung back at Osborne this afternoon. Now it seems that he is going to have to go to parliament himself and admit that he’s the one asking for “higher welfare bills” because he’s failed to meet his own spending targets.
Updated at 10.15am GMTUpdated at 10.15am GMT
10.04am GMT10:0410.04am GMT10:04
The news that George Osborne is planning to breach his own welfare cap is causing a stir on Twitter:The news that George Osborne is planning to breach his own welfare cap is causing a stir on Twitter:
Breaching own #welfare cap is incredibly embarrassing for @George_Osborne. Surely cutting more would be a better option? #spendingreviewBreaching own #welfare cap is incredibly embarrassing for @George_Osborne. Surely cutting more would be a better option? #spendingreview
If Chancellor is going to breach his own welfare cap, he'll need to pull a very big rabbit out of the hat to stop that being main story.If Chancellor is going to breach his own welfare cap, he'll need to pull a very big rabbit out of the hat to stop that being main story.
@patrickwintour Tarnishes the whole exercise. Many Tory MPs will have difficulty explaining the whole point of the welfare cap to public@patrickwintour Tarnishes the whole exercise. Many Tory MPs will have difficulty explaining the whole point of the welfare cap to public
Financial Times political correspondent John McDermott says Osborne still has a little ‘wiggle room’, though:Financial Times political correspondent John McDermott says Osborne still has a little ‘wiggle room’, though:
Not sure why I put +/- there ... it's a cap so only applies to 2 per cent above that level. Means Osborne has about £2bn in wiggle room.Not sure why I put +/- there ... it's a cap so only applies to 2 per cent above that level. Means Osborne has about £2bn in wiggle room.
Updated at 10.07am GMTUpdated at 10.07am GMT
9.43am GMT09:439.43am GMT09:43
Tom Blenkinsop, Labour MPs for Middlesbrough South and East Cleveland, predicts two u-turns from the chancellor, on the welfare cap and on the 2020 budget surplus.Tom Blenkinsop, Labour MPs for Middlesbrough South and East Cleveland, predicts two u-turns from the chancellor, on the welfare cap and on the 2020 budget surplus.
Today #0sborne will announce that he'll break his own welfare cap, and slash his assumed budget surplus, all only 6 months after #GE2015Today #0sborne will announce that he'll break his own welfare cap, and slash his assumed budget surplus, all only 6 months after #GE2015
9.34am GMT09:349.34am GMT09:34
Osborne planning to breach his own welfare capOsborne planning to breach his own welfare cap
Patrick WintourPatrick Wintour
George Osborne has set in train plans to breach the Treasury’s welfare cap after deciding it cannot find enough welfare savings to compensate for the decision to slow the pace of cuts to tax credits.George Osborne has set in train plans to breach the Treasury’s welfare cap after deciding it cannot find enough welfare savings to compensate for the decision to slow the pace of cuts to tax credits.
The chancellor has held discussions with the Department of Work and Pensions to arrange a Commons vote that would give the government permission to breach the cap.The chancellor has held discussions with the Department of Work and Pensions to arrange a Commons vote that would give the government permission to breach the cap.
The vote will be passed by MPs but the decision is likely to be seen as a political embarrassment for Osborne since he largely invented the self imposed cap in the last parliament as a trap to show Labour is lax on welfare spending. In the end the shadow chancellor Ed Balls embraced the cap.The vote will be passed by MPs but the decision is likely to be seen as a political embarrassment for Osborne since he largely invented the self imposed cap in the last parliament as a trap to show Labour is lax on welfare spending. In the end the shadow chancellor Ed Balls embraced the cap.
The request to the DWP suggests that cuts to housing benefit likely to be found in Wednesday’s Autumn Statement will fall short of the £4.4 bn that would have been saved by changing the threshold of tax credit payments.The request to the DWP suggests that cuts to housing benefit likely to be found in Wednesday’s Autumn Statement will fall short of the £4.4 bn that would have been saved by changing the threshold of tax credit payments.
Osborne has many options to mitigate the impact of the tax credits and some would not require him to bust his plan to have the budget in overall annual surplus by the end of the parliament, probably the single biggest target he has set himself.Osborne has many options to mitigate the impact of the tax credits and some would not require him to bust his plan to have the budget in overall annual surplus by the end of the parliament, probably the single biggest target he has set himself.
Osborne, speaking on BBC1’s Andrew Marr programme on Sunday referred to the need to go back to parliament if we was to breach the welfare cap, but he was not pressed on whether he intended to do so.Osborne, speaking on BBC1’s Andrew Marr programme on Sunday referred to the need to go back to parliament if we was to breach the welfare cap, but he was not pressed on whether he intended to do so.
Updated at 9.37am GMTUpdated at 9.37am GMT
9.33am GMT09:339.33am GMT09:33
Overnight it emerged that housing will be a big focus in the autumn statement. As the Guardian splash reveals, George Osborne will commit himself to “the biggest affordable housebuilding programme since the 1970s – with over 400,000 new homes built across England”.Overnight it emerged that housing will be a big focus in the autumn statement. As the Guardian splash reveals, George Osborne will commit himself to “the biggest affordable housebuilding programme since the 1970s – with over 400,000 new homes built across England”.
Labour has dismissed this as hot air. This is from John Healey, the shadow housing minister.Labour has dismissed this as hot air. This is from John Healey, the shadow housing minister.
If hot air built homes, then Conservative ministers would have our housing crisis sorted. A matter of weeks ago the housing minister promised a million more homes, now George Osborne is saying they’ll build 400,000 more.If hot air built homes, then Conservative ministers would have our housing crisis sorted. A matter of weeks ago the housing minister promised a million more homes, now George Osborne is saying they’ll build 400,000 more.
George Osborne’s first act as chancellor in 2010 was to slash housing investment by 60%, and his plans today could still mean 40% less to build the homes we need compared to the investment programme he inherited from Labour.George Osborne’s first act as chancellor in 2010 was to slash housing investment by 60%, and his plans today could still mean 40% less to build the homes we need compared to the investment programme he inherited from Labour.
The Tories’ housing record speaks for itself. The lowest peacetime level of housebuilding since David Lloyd George was prime minister in the 1920s, home ownership fallen year-on-year to the lowest level in a generation, and alongside the lowest number of genuinely affordable homes built in two decades, the number of affordable homes to buy halved since 2010.The Tories’ housing record speaks for itself. The lowest peacetime level of housebuilding since David Lloyd George was prime minister in the 1920s, home ownership fallen year-on-year to the lowest level in a generation, and alongside the lowest number of genuinely affordable homes built in two decades, the number of affordable homes to buy halved since 2010.
9.31am GMT09:319.31am GMT09:31
CEBR: £30bn black hole loomingCEBR: £30bn black hole looming
The Centre for Economics and Business Research believes George Osborne could be facing a £30bn ‘black hole’ in his budget forecasts.The Centre for Economics and Business Research believes George Osborne could be facing a £30bn ‘black hole’ in his budget forecasts.
Like many economists, the CEBR believes this year’s deficit will be higher than the £69.5bn forecast. But it also reckons that economic growth will be weaker than expected - leaving the UK with a deficit of almost £20bn in 2020, not the £10bn surplus currently pencilled in.Like many economists, the CEBR believes this year’s deficit will be higher than the £69.5bn forecast. But it also reckons that economic growth will be weaker than expected - leaving the UK with a deficit of almost £20bn in 2020, not the £10bn surplus currently pencilled in.
The Cebr explains:The Cebr explains:
“Because the Chancellor’s forecasts rely on an implausibly high rate of growth we think that the Government’s fiscal position is much less favourable than was set out in the July Budget.“Because the Chancellor’s forecasts rely on an implausibly high rate of growth we think that the Government’s fiscal position is much less favourable than was set out in the July Budget.
“The deficit will not be eliminated in the current Parliament.”“The deficit will not be eliminated in the current Parliament.”
That chimes with the IFS’s warning early this morning, although it doesn’t expect major revisions to growth forecasts today.That chimes with the IFS’s warning early this morning, although it doesn’t expect major revisions to growth forecasts today.
Updated at 9.57am GMTUpdated at 9.57am GMT
9.18am GMT09:189.18am 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.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:Trader have pushed Persimmon, Taylor Wimpey and Barratt to the top of the FTSE 100 leaderboard:
Osborne is expected to promise 400,000 new homes, to “turn generation rent into generation buy”.Osborne is expected to promise 400,000 new homes, to “turn generation rent into generation buy”.
Updated at 9.20am GMTUpdated at 9.20am GMT
9.03am GMT09:039.03am GMT09:03
The trick to successful trap-laying is to make damn sure that you lure your quarry, rather than falling into it.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.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: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.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.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 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.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.“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£115bn Welfare Cap breach expected, as Commons vote prepared: my story - https://t.co/LYR9v43cB3
Updated at 9.08am GMTUpdated at 9.08am GMT
8.54am GMT08:548.54am 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.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.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 tonightTory 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.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 GMT08:548.54am 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: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?Related: What is George Osborne's spending review?
8.51am GMT08:518.51am GMT08:51
Katie Allen has pulled together the most important charts to explain today’s autumn statement:Katie Allen has pulled together the most important charts to explain today’s autumn statement:
Related: Autumn statement 2015: five key chartsRelated: Autumn statement 2015: five key charts
It shows how Britain has rarely achieved a budget surplus. The last one was back in 2001:It shows how Britain has rarely achieved a budget surplus. The last one was back in 2001:
8.43am GMT08:438.43am GMT08:43
IFS says hitting Osborne's budget surplus target will be 'close to impossible' to achieve if economy underperformsIFS 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 GMT08:368.36am GMT08:36
Autumn statement: Borrowing target in doubtAutumn statement: Borrowing target in doubt
Graeme WeardenGraeme 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 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 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 recommendsInfrastructure 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 9.52am GMTUpdated at 9.52am GMT
8.26am GMT08:268.26am GMT08:26
Spending review - Political challengeSpending review - Political challenge
Andrew SparrowAndrew 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 GMTUpdated at 8.29am GMT