This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.bbc.co.uk/news/uk-politics-23053693

The article has changed 15 times. There is an RSS feed of changes available.

Version 7 Version 8
Spending Review: Public sector staff to lose automatic pay rise Spending Review: Public sector staff to lose automatic pay rise
(about 1 hour later)
Millions of public sector workers will lose automatic annual pay increases as part of an £11.5bn cuts package unveiled by Chancellor George Osborne.Millions of public sector workers will lose automatic annual pay increases as part of an £11.5bn cuts package unveiled by Chancellor George Osborne.
He also announced a cap on total welfare spending and axed winter fuel payments for expatriate pensioners in hot countries from 2015.He also announced a cap on total welfare spending and axed winter fuel payments for expatriate pensioners in hot countries from 2015.
And unemployed people will have to visit the job centre every week instead of fortnightly. Most unemployed people will have to visit the job centre every week instead of fortnightly.
The cuts package will cover a single financial year - 2015/16.The cuts package will cover a single financial year - 2015/16.
It was forced on the chancellor by slower than expected economic growth and deficit reduction but he insisted the economy was on the right track, telling MPs: "Britain is moving out of intensive care and moving from rescue to recovery."It was forced on the chancellor by slower than expected economic growth and deficit reduction but he insisted the economy was on the right track, telling MPs: "Britain is moving out of intensive care and moving from rescue to recovery."
Tougher regime But shadow chancellor Ed Balls, for Labour, said the new round of cuts represented a "comprehensive failure" of Mr Osborne's economic strategy.
He said the cuts, which will kick in shortly before the next general election, would ensure Britain "lives within its means" but they would be guided by fairness, growth and reform. Other key announcements from the chancellor's statement include:
He announced that annual incremental pay increases in the civil service would be axed in 2015 and a fresh push to remove automatic pay rises for time served in NHS, prisons and police. The armed forces will be excluded from the changes. Mr Osborne said the cuts, which will kick in shortly before the next general election, would ensure Britain "lives within its means", but they would be guided by fairness, growth and reform.
He announced that annual incremental pay increases in the civil service would be axed in 2015 and a fresh push made to remove automatic pay rises for time served in NHS, prisons and police. The armed forces will be excluded from the changes.
He told MPs: "Progression pay can at best be described as antiquated; at worst, it's deeply unfair to other parts of the public sector who don't get it and to the private sector who have to pay for it."He told MPs: "Progression pay can at best be described as antiquated; at worst, it's deeply unfair to other parts of the public sector who don't get it and to the private sector who have to pay for it."
Mr Osborne also announced a cap on the total amount the government spends on welfare each year, including housing benefit, disability benefit, tax credits and pensioner benefits - but excluding the state pension. And he announced a tougher regime for job seekers, saying they will have to visit the JobCentre every week to spend more time with advisors. There will also be a seven day wait before people can initially claim benefits.
Governments breaching the cap would be censured by the Office for Budget Responsibility and have to explain their actions to Parliament.
He also axed winter fuel payments for expatriate pensioners living in warm countries, saying the benefit would be linked to a "temperature test" from 2015.
And he announced a tougher regime for job seekers, saying they will have to visit the JobCentre every week to spend more time with advisors. There will also be a seven day wait before people can claim benefits.
"Those first few days should be spent looking for work, not looking to sign on," said Mr Osborne."Those first few days should be spent looking for work, not looking to sign on," said Mr Osborne.
"We're doing these things because we know they help people stay off benefits and help those on benefits get back into work faster.""We're doing these things because we know they help people stay off benefits and help those on benefits get back into work faster."
In a further change, claimants who cannot speak English "will have to attend language courses until they do".In a further change, claimants who cannot speak English "will have to attend language courses until they do".
Biggest winners Frozen grants
He also warned of further job cuts in the public sector.
Mr Osborne confirmed that the health service, schools in England and foreign aid would continue to be protected from budget cuts.Mr Osborne confirmed that the health service, schools in England and foreign aid would continue to be protected from budget cuts.
But that means all other departments will have to take a bigger hit, with average budget cuts for 2015/16 of between 8% and 10%.But that means all other departments will have to take a bigger hit, with average budget cuts for 2015/16 of between 8% and 10%.
The Department for Communities and Local Government, the Treasury and the Department for the Environment and Rural Affairs appear to have taken the biggest hits, with budget cuts for 2015/16 of 10%. The Department for Work and Pensions will have to save 9.5% in its running costs. Vince Cable's business department - the last to reach a deal with Mr Osborne after tough negotiations - got off relatively lightly with cuts of 6% and a commitment to keep money for more apprenticeships, but student grants will be frozen.
Theresa May's Home Office escaped with cuts of 6% and a commitment to protect anti-terror policing. The Ministry of Defence will face further cuts to its civilian workforce as its budget was maintained in cash terms at £24bn - representing a real terms cut.
Vince Cable's business department - the last to reach a deal with Mr Osborne after tough negotiations - also got off relatively lightly with cuts of 6% and a commitment to keep money for more apprenticeships, but student grants will be frozen. The transport department will be forced to make savings of 9% in day-to-day spending, but will get the largest boost of any department in its capital spending, which rises to £9.5bn in 2015/16.
The culture department also escaped the worst of the cuts, with a reduction of 7%, while the Foreign Office will be cut by 8%. Mr Osborne also said the government would spend £2m to "look at the case for" a £12bn Crossrail 2 project in London, which is backed by London Mayor Boris Johnson, and announced £3bn more for affordable housing in 2015. Further details of new capital spending are expected on Thursday.
The security services were the biggest winners, with a 3.4% boost to funding, with Mr Osborne praising their "heroic" efforts to "protect us and our way of life". He announced that the council tax freeze, due to come to an end next April, would be extended for the next two years. He said that would mean nearly £100 off the average council tax bill for families.
The chancellor also announced long-term plans to invest more in Britain's infrastructure in building roads, railways and housing, with full details to follow on Thursday. But he warned of further large scale public sector job cuts and said local councils would have to make "the kind of sacrifices central government is making".
The next general election is scheduled for May 2015 and the Conservative-Liberal Democrat coalition has to set out its budgetary plans for the final few weeks of its time in office, irrespective of the outcome of the poll. Sir Merrick Cockell, chairman of the Local Government Association, said further cuts would "stretch essential services to breaking point in many areas".
Labour has said that it would match the coalition's current spending totals for the full one-year period. 'Out of touch'
The chancellor had initially hoped to eliminate the structural deficit - the portion of borrowing that is not affected by changes in the economic cycle - entirely by 2014-15. Labour has said it will not reverse the spending cuts announced for 2015/16 although it will borrow money to invest in building more houses.
But the timeframe for this has slipped to 2017-18 and Mr Osborne will have to borrow £275bn more than he expected in this parliament than at the time of his first Budget in 2010. But Mr Balls launched a fierce attack on the "out of touch chancellor" who, he said, has "failed on living standards, growth and the deficit and families and businesses are paying the price for his failure".
The government says it has cut overall borrowing by a quarter since coming to power and by a third as a share of GDP. "If the chancellor continues with his failing economic plan, then it will fall to the next Labour government to turn the economy round and to take the tough decisions to get the deficit down in a fair way," added Mr Balls.
Revised official figures released on Friday showed that borrowing rose slightly to £118.8bn in 2012-13 from £118.5bn the year before. Trade unions reacted angrily to the public sector pay squeeze, with Brian Strutton, of the GMB, saying: "This is just another unpleasant dig at public sector workers who have already been made scapegoats for problems they had nothing to do with."
Labour leader Ed Miliband said the coalition had broken its promise to clear the deficit and the British people were paying the price for its failure. But business lobby group the CBI said the squeeze was "tough but necessary" at a time of tight public finances and it was also "encouraging to see that government will have greater control of the welfare budget through the new cap".
Speaking ahead of the chancellor's statement, he said: "They tell us the economy is healing in government but actually things are getting worse for ordinary families. What we actually need is a fairer plan to get growth moving, living standards rising and the deficit down."