Andrew Sparrow 

George Osborne questioned by MPs about the autumn statement – as it happened

Andrew Sparrow’s rolling coverage of all the day’s political developments as they happen, including David Cameron and Ed Miliband at PMQs, and George Osborne being questioned by the Treasury committee about the autumn statement
  
  

George Osborne in Downing Street today.
George Osborne in Downing Street today. Photograph: REX

Afternoon summary

  • MPs on the Commons Treasury committee have cast doubt on George Osborne’s claim to have halved the £1.7bn budget bill that the EU demanded in October. Osborne told the committee that his claim was justified because initially it was not clear that the British budget rebate would apply to the £1.7bn sum. But Andrew Tyrie, the Conservative MP who chairs the committee, said, although Osborne did well to negotiate an interest-free delay before Britain had to pay up, the size of the bill “didn’t change a scrap” because the rebate was never in doubt. He told Osborne:

Actually getting a delay, an interest-free delay, is a considerable achievement, and worth something. But that strong message, I can’t help feeling, has been somewhat distorted by a claim that we got 50% back of this extra payment when it seems clear, as soon as you start looking at the rules, that money was coming anyway ... I’m not sure that the deal you said you brought back was quite as good as the one that in fact was achieved by those negotiations.

Other MPs on the committee were also sceptical of Osborne’s claims, and one Conservative, Steve Baker, suggested that Osborne’s claim could make people less likely to believe the government when it did secure a good deal from Brussels.

  • Osborne has said that, if Labour votes for the government’s charter for budget responsibility but refuses to accepts Osborne’s spending cuts, it will have to explain what taxes would have to go up to fund the £30bn savings the charter requires.
  • Osborne has defended his decision to aim for a £23bn surplus in 209-20.
  • A report has said he controversial system for assessing people for the personal independence payment (PIP) gives a “disjointed experience” for claimants, with many experiencing “very long delays”. As the Press Assocation reports, in his first independent review of the scheme, former senior civil servant Paul Gray said it was too early to draw conclusions about the scheme’s effectiveness but he called for improvements in communication with claimants and the way evidence is collected. The document was published as the latest quarterly figures showed 208,000 PIP claims were being paid at the end of October, a 95% increase on the figure for July, but charities said thousands of ill or disabled people were still awaiting assessment. The Gray report said:

The current PIP process gives a disjointed experience for claimants. Some short term improvements are needed, for example to communications including decision letters. In the longer term, there should be a more integrated, digitally enabled claims process under common branding that would improve claimant experience and effectiveness.

That’s all from me for today.

Thanks for the comments.

Alok Sharma goes next.

Q: These new figures include the black economy. How do you measure this?

Osborne says there are international standards that apply to this.

Tyrie says that’s it. He realises some of his questions on the rebate may have been “uncomfortable”, but he says it is important to get clarification on this.

I’ll post a summary shortly.

John Mann goes next.

Q: Could you provide us with all the written documents provided to you on this?

Tyrie says the committee will have to discuss this request.

Osborne says he will look into this.

Q: Will this affair undermine future government claims to have achieved a good deal in Britain?

No, says Osborne. He says the government has shown it can achieve good deals for the UK.

Steve Baker, a Conservative, goes next.

Q: Isn’t this illustrative of the highly unsatisfactory nature of our relationship with the EU?

Osborne says he and Baker both want to see changes to Britain’s relationship with the EU.

Earlier Andrew Tyrie and George Osborne were discussing a statement from an EU commissioner saying the rebate would apply. (See 5.01pm.)

Here is the text. It is from Jacek Dominik, the budget commissioner, and dated 27 October 2014.

And here is the key quote.

For example, in 2014, the UK rebate was revised upwards by EUR 567.3 million, which is financed by all other Member States. This adjustment was included in Amending Budget 4/2014. Similarly in 2013, the UK rebate was revised upwards by EUR 436 million; this was budgeted in Amending Budget 6/2013.

Q: When did you first hear about the extra payment?

Bowman says an official heard about this at the meeting on Friday 17 October. Senior Treasury officials were told on Tuesday 21 October. They then prepared a note for the chancellor, which he got on the Wednesday.

Osborne says he saw the advice on the Wednesday.

Labour’s Andy Love goes next.

Q: What happened in previous years when there were adjustments to the amount the UK owed?

Bowman says previous cases were completely different.

Q: So you just assumed it would be dealt with differently?

Bowman says the commission decided to deal with this differently.

Tyrie says he is “surprised” Bowman did not think it was clear that the rebate would apply. The rules show that it would apply, he says.

John Mann takes over again.

He says politicians always take credit for positive things.

But the principle of a rebate is not for negotiation, he says.

Mann says unless the UK decides it will change the rules ....

As it did under Tony Blair, Osborne says.

Mann goes back to his question.

Q: Did the Treasury not see that the law was clear?

Bowman says it was not clear when the request for £1.7bn came in that the rebate would apply.

Tyrie says the rules were clear. He says he can’t understand why the Treasury could not tell the chancellor immediately that the rebate would apply.

Bowman says it was unclear that the rebate would apply.

Q: What gave you the impression it was unclear?

Bowman says this was an uprecedented demand for money. It was a complex calculation.

The rebate is based on VAT receipts. The calculation of how much money Britain owed related to gross national income, he says.

Labour’s John Mann goes next. He addresses Mark Bowman, the Treasury’s international and EU director general.

Bowman says only a junior Treasury official attended the meeting where the European Commission said Britain would have to pay an extra contribution.

Q: Under the rules, there was no possibility of the rebate not applying, was there?

Bowman says there was no clarity that the rebate would apply.

Q: Did anyone suggest the rebate would not apply?

Bowman says there was no confirmation of this.

Q: What made you think it would not apply?

Bowman says this was an unprecedented payment.

Osborne says the rebate is subject to negotiation with the commission.

Tyrie says Osborne brought back a good deal for Britain. But the deal was not as good as Osborne claimed, he says.

Osborne says he did not know in advance that he was going to get a €1bn rebate.

Tyrie says getting an interest-free delay was worth something. But that message was “somewhat distorted” by the claim that Britain got half its money back when there was no suggestion that it would not do so.

Osborne says he does not accept this.

Updated

Q: People have to decide whether this was a halving of a bill due to a hard-fought negotiation, or whether this was just a clarification of how the rules apply under existing law.

Osborne says there was a hard-fought negotiation.

Q: A European commissioner said in advance that the rebate would apply to any extra payments that would have to be made. [Tyrie quotes from a commissioner.]

Osborne says the commissioner was talking about another part of the budget.

And he was talking about Britain getting a rebate of €500m, not €1bn.

Q: Was there considerable doubt about whether the recalculation would trigger a change to the rebate?

Osborne says he hoped the rebate would apply.

Tyrie says the relevant commission document make it clear the rebate would apply.

Osborne says no one was predicting at the start of the process that a rebate of €1bn would apply.

Tyrie says it is set out in the European Council document. It is true that you might need maths training to understand it. But Osborne did not achieve a scrap of extra money.

Osborne says this would have been open to negotiation. There could have been a legal challenge.

Q: But it would have been open to negotiation, on the basis of extremely detailed guidelines laid down by the council.

Osborne says there were no precedents for this.

These were backward revisions going back over a decade, he says.

Osborne says it was only confirmed the night before the crucial Ecofin meeting that the rebate would be paid.

Q: Maybe the Treasury was not alert to this?

It was highly alert to this, Osborne says.

The Treasury question is resuming. The committee is now asking George Osborne about Britain’s extra payment to the EU budget.

Andrew Tyrie is opening the questioning.

Q: Did Britain save any money from the negotiations you conducted. Did you halve the bill?

Osborne says it was not clear the the normal British rebate would apply to the contribution Britain was being asked to make.

The commission was not clear about this, he says.

And Labour assumed that Britain would have to pay £1.7bn.

Labour lose vote on bedroom tax

About 10 minutes ago MPs voted on Labour’s bedroom tax motion, calling for its immediate abolition, and Labour lost by 298 votes to 266. My colleague Frances Perraudin was listening to the debate beforehand. She’s sent me this.

Today’s opposition day debate on the bedroom tax, referred to by the government as the spareroom subsidy, proceeded along predictable lines. Labour party members drew parallels with the poll tax and read out case studies of constituents suffering because of the measure, and Conservative party members insisting that the tax hadn’t hit as many people as the opposition suggests and that it is a necessary move to tackle the problem of overcrowding in social housing.

Shadow work and pensions secretary Rachel Reeves said that the Department for Work and Pensions had made it clear that no additional money would be available to local authorities over their allocation to help people they deem to have been unfairly hit by the charge.

She said that Leeds, which is where she is an MP, received £1.9m in discretionary housing payment in 2013/14 and spent £2.27m, with the government making up the shortfall. But in 2014/15, Leeds City Council had been given £2.05m and had been told they can’t apply for more.

“The point about discretionary housing payments is there is not enough money to cover all the cases and city councils across the country are having to use their own money to make up the shortfall from the government,” said Reeves.

“Of course, by its nature discretionary housing payment is just that - discretionary. You only find out on a year by year basis whether you receive the money. So people who are getting it have no certainty they are going to be able to stay in their house next year or the year after either.”

Welfare minister Mark Harper responded by saying that the debate was a way for Labour to avoid talking about the positive employment figures released today: “Labour have chosen their opposition day to have a debate that is contrived to scare people instead of welcoming the record employment figures.”

Liberal Democrat Andrew George said that his fundamental moral objection to the tax was because the poor are as just as entitled to a stable family homes as the better off.

He said: “The Conservatives do have form when it comes to spending public money on the under occupancy of residential property because after all the last time they were in government on their own they introduced a council tax discount for second homes, hundreds of millions of pounds of taxpayers’ money was spent every year subsidising the wealthy to have their second homes when there were thousands of local families who couldn’t afford their first and this defines the Conservatives’ approach.

But he also urged MPs to seek political consensus instead of “using the victims of this policy to score party political points”.

Q: Did you have a discussion with the OECD before you announced the diverted profits tax?

Osborne says the government is heavily involved with the OECD’s work on tax avoidance. The diverted profits tax goes with the grain of what it is proposing.

Q: The CBI says going it alone outside the OECD framework could cause a problem for business.

Osborne says businesses understand that corporation tax is low in the UK, but that it must be paid.

The committee is adjourning now. There will be two votes in the Commons shortly, and it will reconvene at about 4.25pm for a short session on the UK’s contribution to the EU budget.

Alok Sharma, a Conservative, goes next.

Q: How confident are you that you will raise the revenue from your tax avoidance measures that you expect?

Osborne says the OBR estimates how much money will be raised. The OBR has done some interesting work on this this autumn. It found that the impact is symmetrical; losses are matched by gains. For example, the amount coming in from Swiss bank accounts is less than expected. But the amount raised from the crackdown on enveloped properties is much more than expected.

David Ruffley, a Conservative, goes next.

Q: I’m all for cutting taxes in the next parliament. People ask how we will do it. But can’t you point out that we’ve cut corporation tax, and revenues have gone up.

Osborne says he is in favour of a dynamic approach to measuring the impact of taxation, because tax cuts can increase yield.

If Labour would rather achieve this fiscal consolidation through higher taxes, it will have to say what those taxes are, says Osborne.

Q: Your choices will led to a smaller state. You think that’s a better state. Do you understand that services won’t be the same. The NHS will face difficulties.

Osborne says the government has decided to protect the NHS.

If Labour votes for the charter for responsibility, it will be committing itself to cutting borrowing by £30bn. If Labour does not accept the cuts, it will have to say how it will fund these savings.

Q: Robert Chote, the OBR chair, said that your plans would take spending as a proportion of GDP to its lowest level for 80 years.

Osborne says that he would find more savings from welfare, and from tackling tax avoidance, than the OBR expects.

Q: You are planning a £23bn surplus. Isn’t that irresponsible?

No, says Osborne. He says he wants to get the debt to GDP ratio down.

Labour’s Andy Love goes next.

Q: The OBR says that income tax revenues will fall short by £10bn by the end of the decade, and overall tax revenues by £21bn. Won’t there have to be tax rises?

Osborne says that is not his proposal.

Q: Can you confirm that the primary promise of the government, to balance the books by 2015, won’t be met?

Osborne says the primary promise of the government was to turn around the economy. That is happening. But there is still more to do.

Labour’s Mike Kane goes next.

Q: Are your planned spending cuts credible?

Osborne says the IFS itself said that Osborne has managed to achieve the cuts he set himself for this parliament.

If people want to cut borrowing, but do not support spending cuts, taxes would have to go up. And a government would have to raise the major taxes, like income tax or VAT, or raise the required revenue.

Q: Is there any country in the world that has a publicly-funded health service with state spending at 35% of GDP?

Britain, says Osborne. That is what applied in 1999.

Osborne says Gordon Brown was spending 35.9% of GDP in 1999. In 1998 it was 36%.

Q: The OBR says your plans would take it to 35%, to 1930s level. Do you accept that?

Osborne says he is just pointing out what happened under Labour.

He says Kenneth Clarke’s intervention during PMQs was very effective.

Q: Are your forecasts for cutting welfare spending realistic in the light of how it has gone up in some areas?

Osborne says spending more on pensions is not something he is embarrassed about.

Rushanara Ali, the Labour MP, goes next.

Osborne says he signed off the total management expenditure (TME) figures that the OBR used to produce its forecasts for future government spending.

Q: Did the Lib Dems sign off on these too?

Osborne says the Lib Dems are committed to reducing borrowing by the same amount. But they want to use different policies to get there.

Q: This committee recommended that there should be a consultation on the next charter for budget responsibility. Why did you ignore that recommendation?

Osborne says he has not done that. The charter has been published. People can debate it before MPs vote on it.

Labour’s position will become clearer over the coming weeks.

Q: Does the charter amount to more than a statement of firm policy intentions? These things can easily be ignored.

Osborne says it is helpful for the government to set out what it wants to do.

Osborne says he has achieved his fiscal target (balance the budget over the next five years). But he missed his debt reduction target by a year.

Anyone who votes for the charter for budget responsibility will be voting for cuts of £30bn, he says.

Teresa Pearce, a Labour MP, goes next.

Q: Are you worried that poor housing can have an effect on productivity?

Osborne says this is not just a social concern, but an economic home too. That is why the government has the biggest programme of social house building for a generation.

Q: Why did the charter for budget responsibility get published later than expected?

Osborne says it was not published late. There will be a chance to vote on it next year.

Q: You replaced the word “target” with “aim”. What is the difference?

Osborne said there isn’t one. They mean the same.

Q: So why did it change?

Osborne cannot offer a reason. He says it is not significant.

Sir John Thurso, a Lib Dem, goes next.

Q: How satisfied are you with the service that allows people to switch bank accounts easily?

Osborne says this has worked well for private customers. The Treasury would like to allow swithing in five days, not seven days.

But he says small businesses have not benefitted so much from this. He would like to do more in this area.

Q: If private consumption dips, will you allow more government consumption?

Osborne says he has set out his plans for coming years. Consistency is important.

Q: Would you be willing to change the composition of the deficit consolidation? It is moving towards 9:1 (ie, 90% of the money coming from spending cuts.)

Osborne says, as the OBR pointed out, the coalition parties have different approaches. He would raise more from welfare cuts and from a crackdown on tax avoidance.

The SNP’s Stewart Hosie goes next.

Q: The OBR told us that people are using up their savings. How long can this go on for?

Osborne says it is a feature of all recoveries that saving ratios go down.

The government is introducing policy measures to encourage saving, he says.

Q: What happens if spending from saving falls before wage growth picks up?

Osborne says he does not want the recovery to be wholly driven by consumption.

Business investment is up. That’s is very encouraging.

But the performance on exports is disappointing.

Q: Professor Nickell from the OBR said last week that immigration could be bad for people on low incomes. Has the Treasury done any analysis on this?

Osborne says government research has shown that there is an impact on low earners. Immigration needs to be controlled, he says.

Tyrie says the committee might ask the Treasury for more infomation on this.

Mark Garnier, a Conservative, goes next.

Q: Are you worried about the number of people entering the labour market on low wages?

Osborne says there has been a big fall in youth unemployment. Young people tend to enter work on low wages.

Andrew Tyrie goes next. He says the Treasury’s distributional analyses are very interesting. The Treasury committee tried for 10 years to get this information from Labour. And, when he was a Treasury adviser, the Treasury decided it would not go anywhere near this, he says, because it was thought the figures would be embarrassing.

Q: Originally borrowing was meant to be £37bn this year. How much is it now?

Osborne says Mann must know the figures.

Q: But what are the figures?

Osborne says it is £91bn this year. He reads out figures showing how it will fall.

Q: Do you accept responsibility for not meeting that target?

Osborne says he took a decision to allow the automatic stabilisers to apply when the economy stalled.

He says Mann normally asks him how much the price of petrol has gone up. It was 120p a litre when he became chancellor. Now it is 115p, he says.

Labour’s John Mann goes next.

Q: Are you and your family better off or worse off than at the election?

Osborne says the economy generally is growing. He personally had a pay rise when he became chancellor from shadow chancellor. But he took a pay cut, so he received less than his predecessor.

Q: What about the people who do your cleaning?

Osborne says the point about the economy growing applies to them. Wages are not rising faster than inflation. And low-earners have gained from the income tax threshold going up.

Q: How many more food banks are there?

Osborne says he does not have those figures. But there was a ten-fold increase under Labour, he says.

Mann says there were 54 food banks in 2010. Now there are more than 600. That’s a ten-fold increase.

Steve Baker, a Conservative, goes next.

Osborne says he and Baker disagree about the impact of low interest rates.

Q: Do you think the government understands the causes of low productivity?

Osborne says he thinks the governments understands most of the reason. The financial crash had a big impact, he says.

And here is a Treasury news release saying Osborne has announced the re-appointment of Martin Taylor and Donald Kohn as external members of the Bank of England’s financial policy pommittee (FPC). Osborne has also extended Professor David Miles’ second term as external member of the Bank’s monetary policy committee.

The Treasury has put out a news release with more details of the Lloyds bank share sale.

Here’s an extract.

The chancellor has today set out the next stage in the government’s plan to return Lloyds Banking Group to private ownership and get taxpayers’ money back, by announcing that the government will sell part of its remaining shareholding in the firm through a trading plan.

The government received advice from UK Financial Investments today that it would be appropriate to sell another part of the government’s shareholding in Lloyds through a trading plan. The government agrees with that advice and has authorised the plan to be put in place.

The government remains committed to restoring Lloyds to private ownership in a way which gets the best value for the taxpayer, building on the success of previous share sales which have so far raised £7.4 billion. Shares will only be sold where this objective is met.

Updated

Q: There are lots of marginal tax rates. In the tax system there are rates of 12%, 32%, 42%, 62%, and 47%. And, allowing for the withdrawal of tax credits, there are marginal rates of 53%, 73% and 83%. Do you want to simplify this?

Osborne says he does believe in tax simplification.

Andrew Tyrie, the committee chairman, goes first.

Q: In your autumn statement you welcomed the projections saying inflation would be below target. Why?

Osborne says low inflation is good for the economy.

Q: So there is such a thing as a good overshoot to the inflation target?

Osborne says the inflation target has a band. It is symmetrical (because there is a one point band either side of 2%).

Osborne is at the committee.

He says the Treasury has just announced plans to start selling shares in Lloyds. It will not sell shares below the price the last government paid for them.

And he announces the next budget will be on 18 March next year.

But there won’t be any unfunded giveaways, he says.

George Osborne questioned by the Commons Treasury committee

George Osborne will start his evidence to the Commons Treasury committee shortly.

He will be taking questions about the autumn statement, and about Britain’s contribution to the EU budget.

He will be accompanied by Mark Bowman, the Treasury’s international and EU director general, and James Bowler, the Treasury’s strategy, planning and budget director.

  • You can watch the hearing here.
  • Lunchtime summary

    You have lost two MPs to Ukip, you lost 26 too in Europe and you brought a whole new meaning to the phrase conviction politician when Andy Coulson went to jail. The truth is you have given up on compassionate conservatism. They have been exposed for who they really are. Your plan for the 2020s is to go back to the 1930s. It isn’t about balancing the books, it is about slashing the state and in just four months’ time that is the election choice.

    Cameron said that, under the government’s plans, public spending as a share of GDP would fall to “roughly the same” level it was in 1999. Describing Miliband as a “waste of space”, he said:

    I have to say I almost feel sorry for Labour MPs - they can’t talk about the deficit because it has fallen. They can’t talk about growth because it is rising, they can’t talk about jobs because we are increasing them, they can’t talk about immigration because they have been told not to talk about immigration. They can’t talk about their leader because he is a complete waste of space. No wonder for Labour MPs this year it’s a silent night.

    • Cameron has said that Russia can’t be part of the international financial system but not the international legal system. Speaking at PMQs, he said:

    We should stand up very firmly against the Russian aggression that has taken place. We led the way in Europe in making sure there were sanctions and what the combination of the lower oil price and the sanctions are showing that I think it isn’t possible for Russia to be part of the international financial system, but try and opt out of the rules based international legal system. That I think is what is being demonstrated and we should keep up the pressure.

    • Cameron has defended the government’s record on excess winter death. Speaking at PMQs, he said:

    What I would say is every excess winter death is a tragedy and the 18,200 last year were too high. But I have to say that is actually half the level of the excess winter deaths in 2008/09 when [Ed Miliband] was the energy secretary.

    • The Home Office has announced that it is cutting police funding from central government by 4.9% next year. (See 1.38pm.)

    Home Office cutting police funding by 4.9%

    The Home Office has announced that police funding from central government will be cut by 4.9% in real terms in 2015/16. That amounts to a cut worth £299m.

    Mike Penning, the policing minister, announced this in a written ministerial statement (pdf). Here’s an excerpt.

    After careful consideration of all Home Office budgets and the impact of the chancellor’s 2013 autumn statement, I have decided to maintain the 4.9 per cent real terms headline reduction to overall central government funding to the police announced at spending round 2013. Taking account of the latest inflationary forecast from HM Treasury published alongside the chancellor’s 2014 autumn statement, this means a total cash reduction of £299m in the overall police funding envelope compared to 2014/15.

    PMQs - Verdict from the Twitter commentariat

    This is what political journalists are saying about PMQs on Twitter.

    Those saying Cameron did best

    Those saying Miliband did best

    General comments

    PMQs verdict

    PMQs verdict: Until now the Conservatives have assumed that the economy is their subject. “Every day not campaigning on the economy is a day wasted,” Jim Messina, the Conservatives’ American strategist, told the party last month. But, in the light of the autumn statement, and what it revealed about the Conservatives’ public spending plans over the next five years, that it starting to look less certain.

    Why? Because, even if you don’t think that George Osborne is planning to reduce Britain to a state of Wigan Pier destitution, it is now clear that the public does not want cuts on the scale envisaged by Osborne. This polling, from last week, illustrates this well, and other polls have produced similar findings.

    And that was how Ed Miliband achieved the relatively unusual feat of being able to prevail over David Cameron on the economy. It wasn’t a mega-win. Cameron’s point about public spending under Labour at one point coming near to the 35% of GDP benchmark deemed indicative of Orwellian horror was sound, as was his argument about the case for paying down debt, but Miliband’s claims about cuts, and about the Tories’ proposed unfunded tax cuts, were stronger.

    Updated

    This sums it up very well. It’s from the FT’s Jim Pickard.

    Cameron says Labour in Wales chose to cut the NHS, rather than invest in it. And, in Scotland, the SNP government has not passed on all the extra money it has received as a result of health spending going up in England.

    And that’s it. I’ll post a verdict shortly.

    Liz McInnes, the Labour MP, asks a closed question about helping old people protect themselves from the cold.

    Cameron says the government is helping people insulate themselves.

    McInnes mentions a constituency case.

    Cameron says the number of excess winter death is half the level it was in 2008-09, when Ed Miliband was energy secretary.

    Labour’s Sheila Gilmore says, despite the bedroom tax, spending on housing benefit has gone up. When will Cameron tackle the real causes of the problem, low wages.

    Cameron says Labour want to increase spending, by abolishing the bedroom tax. Their plans do not add up, he says.

    John Glen, a Conservative, mentions a constituent saving £4,500 from the stamp duty cut. He will be giving some of it to charity, he says.

    Cameron says the message of the autumn statement is that the government is on the side of people who want to own their own home.

    Cameron says the problem with Labour’s narrative is that it is not true. They talk about inequality, poverty and child poverty, but they are lower than under Labour.

    Kenneth Clarke, the Conservative former chancellor, says the coalition will take public spending back to the level it was under Gordon Brown. But it was only at that level because he stuck to plans drawn up by Clarke.

    Cameron says Labour is basing its entire economic policy on some throwaway remark on the BBC from some reporter (Norman Smith) at 6.10am in the morning.

    Sir Tony Baldry, a Conservative, quotes from Marx about Britain resisting Russian imperialism.

    Cameron says he has not spent as much time studying Marx as Baldry, or even perhaps Miliband - “I don’t know what goes on in Camden these days” - but that he agrees with the quote. We should keep up the pressure on Russia. It cannot be part of the world financial system, but not its legal system.

    Labour Tom Blenkinsop asks about health.

    Cameron says there are 3,000 more nurses, and 8,000 more doctors, in the NHS

    David Burrowes, a Conservative, asks about a hospital in his Enfield Southgate constituency.

    Cameron says opening hours at a hospital in Burrowes’ constituency are being extended.

    Labour’s Nia Griffith asks Cameron if he agrees with Owen Paterson that the Climate Change Act should be scrapped.

    Cameron says he thinks the legislation is delivering. More money is going into green energy.

    Stephen Metcalfe, a Conservative, says anyone who thinks you should not talk about immigration with voters is out of touch.

    Cameron says Labour MPs can’t talk about immigration, unemployment, the deficit or leadership issues.

    Labour’s Derek Twigg asks about a constituent who waited an hour and a half for an ambulance to attend.

    Cameron says there are more than 1,000 paramedics than when the government came to power. When an ambulance trust falls down, that is a matter of regret.

    Labour’s Nick Brown asks where the cuts in working-age welfare will fall.

    Cameron says Labour is voting this afternoon, on the bedroom tax, to add to £2bn to welfare. That would mean taking money from schools or health, he says.

    Mark Garnier, a Conservative, asks Cameron for an assurance that he will not build a recovery on a mountain of debt.

    Cameron agrees. And he says Labour should recognise that, when you have had a period of growth, you should pay down debt.

    Labour’s Tessa Jowell asks Cameron to join her in calling on firms to cut transfer charges paid by people how pay remittances to relatives in developing countries.

    Cameron says remittances are hugely important for developing countries. He is looking at what can be done to keep charges down.

    Snap PMQs verdict

    Snap PMQs Verdict: Reasonably strong performances from both Cameron and Miliband, but Miliband’s points about the 1930s, and the Tory unfunded tax promises, outgunned Cameron’s Labour Treasury reference, and his attempt to switch the subject back to unemployment. Even more significantly, Miliband chalked up a win on the economy - which is normally Tory territory.

    Updated

    Miliband says the economy is fixed for people on Cameron’s Christmas card list, but not for other people. Will Cameron rule out raising VAT?

    Cameron says he does not need to raise taxes because he can raise the money from efficiencies. He says it is Christmas, and he has had his Christmas present early. He brandishes Labour’s document about how to campaign against Ukip. It says the Tories have a 17-point lead on the economy.

    Miliband says Cameron should reflect on his year. He has lost two MPs, and given a new meaning to conviction politics, with Andy Coulson. And his plan for the future is to take us back to the 1930s.

    Cameron says he feels sorry for Labour MPs. They can’t talk about deficit, or immigration. And they can’t talk about their leader because he’s useless. No wonder for Labour it’s a Silent Night.

    Updated

    Miliband says in a few months’ time Cameron can ask the questions. The mask slipped during the autumn statement. Under the Tories there would be cuts of £50bn. Does he really think services won’t suffer?

    Cameron says the pretence that Miliband cared about the economy lasted about a week. Under Labour there would be more tax and more borrowing.

    Miliband says the government is borrowing £207bn more than it expected. Cameron once said you can’t promise unfunded tax cuts. So how will Cameron fund his £7bn tax cuts. Cuts in services, or an increase in VAT?

    Cameron says Miliband does not want to talk about unemployment.

    Updated

    Ed Miliband also starts by condemning the “appalling” massacre in Pakistan, and the “sickening” terrorist attack in Sydney. And he pays tribute to members of the armed forces.

    The OBR says government plans will take public spending to its lowest level for 80 years. Why does Cameron think the OBR has joined the BBC in a conspiracy against the Tories?

    Cameron says we remember the days of fiddled figures under Labour. He quotes the OBR saying public spending would fall to the level of 2002/03. That was when Miliband was in the Treasury. He’s not going to say it was a time of appalling poverty, will he?

    Miliband reads the OBR quote about public spending at its lowest level for 80 years again.

    Cameron says public spending will fall to roughly the level it was under Labour. Does Miliband think the government should never run a surplus?

    Oliver Colvile, a Conservative, welcomes the unemployment figures, and says Plymouth needs a faster rail line.

    Cameron says he received a presentation on the rail issue.

    On the unemployment figures generally, he says unemployment is down, employment is up and the claimant count is down for the 25th successive month.

    David Cameron starts by condemning the attacks in Australia and Pakistan. What happened in Pakistan was utterly heartbreaking, he says. The whole world stands with Pakistan.

    He also sends his Christmas wishes to members of the armed forces.

    Cameron and Miliband at PMQs

    PMQs starts soon.

    I’ve just been checking out the last PMQs from 2013. Here’s how it started.

    Miliband: Today’s economic figures show a welcome fall in unemployment, and for every person who gets back into work it benefits not just them but their family as well. Does the prime minister agree, however, that it is a major challenge for Britain that at the end of this year there are more people than ever before in today’s figures working part time because they cannot get the hours they need?

    Cameron: It is worth looking at these unemployment figures in some detail, because I think they do paint an encouraging picture. Unemployment is down by 99,000 and the number of people claiming unemployment benefit has actually fallen by 36,000 in this month alone. There are 250,000 more people in work. Youth unemployment is down. Long-term unemployment is down. Unemployment among women is down. We have talked before about 1 million more people in work under this Government; there are now 1.2 million more in work. There should not be one ounce of complacency, because we have still got work to do to get our country back to work. Having everyone back in work means greater stability for them, a greater ability to plan for their future, and greater help for their families. But the plan is working; let us stick at it and get unemployment down even further.

    Today, if Cameron and Miliband have to discuss the unemployment figures, the exchanges may sound very similar. But I think Miliband is much more likely to go on health.

    If you haven’t already read out the Guardian’s inside account of the Scottish independence referendum campaign, you should. It’s excellent. Today’s instalment reveals that senior figures in Whitehall and Downing Street became so fearful that the Scottish independence referendum could lead to the breakup of the United Kingdom that the Queen was asked to make a rare public intervention in the final days of the campaign.

    They have been reading it at Republic, the group campaigning for the abolition of the monarchy. It is urging parliament to censure the Queen for her behaviour. This is from Republic’s chief executive, Graham Smith.

    The Guardian makes clear that the Queen was prepared to take deliberate steps to encourage people to vote No in the referendum. Regardless of how people feel about Scottish independence we should all be alarmed at such a political intervention by a hereditary monarch.

    We would normally expect a head of state to take an active interest in such a momentous referendum, but the deal with the monarchy is that the monarch stays quiet and keeps out of these debates.”

    The real problem is the system. But that doesn’t excuse the Queen making her views known in such an underhand way while having her press office insist she is impartial.”

    We’re calling on MPs to censure the Queen for her intervention in the referendum campaign. Of course the Queen is damned if she does and damned if she doesn’t - but the bottom line is that the rules are there and the Queen can’t pick and choose when to follow them.”

    This is why our head of state needs to be elected - so if they get it wrong like this they can be held to account.

    Updated

    The Polling Observatory, one of the academic teams that uses polling data and election trends to try to forecast what the result will be at the general election, has produced its latest assessment. It says we’re heading for a dead heat.

    This month we can also bring you an update on our national polling forecast figure. We didn’t publish a forecast last month, so the changes reported are on the figures from two months ago. Labour’s decline in the polls over that period also is reflected in our forecast, though we do anticipate some recovery from the current level. We forecast a share of 33.4% for Labour next May, representing a fall of 2.8 points over the past two months. The Conservatives’ forecast share has not risen, however – we have them winning 33.8%, up just 0.1% from October’s forecast. The Liberal Democrats are also expected to recover somewhat based on historical trends in the polls. Our current forecast is for 9.2%, up 0.5% on the previous estimate.

    Home Office rules against allowing intercept evidence to be used in court

    And the Home Office has published a review of the case for allowing intercept evidence to be used in court. It concludes that this would be a mistake.

    Here’s the report (pdf).

    And here’s an extract.

    Under British law defendants must receive a fair trial under conditions that do not place them at a disadvantage compared to the prosecution. In practice this means the defence should have access to all material on which the prosecution relies, as well as any material which is capable of undermining the prosecution case or assisting the defence. The prohibition on using intercept as evidence is consistent with the right to a fair trial because neither the defence nor the prosecution can rely on intercept material.

    For the use of intercept material as evidence to be consistent with a fair trial, all relevant material collected by an intercepting agency in the course of a given investigation would need to be retained to an evidential standard and made available to the defence ...

    The review did identify a legally compliant model for intercept as evidence. This model would not be consistent with the agency operational requirements identified in 2008. The review considered the costs and benefits of this model. The cost would be between £4.25bn and £9.25bn over 20 years depending on assumptions about developing communications technology and usage, and technology costs. On some assumptions the model could lead to an increase in convictions; but on others the model could lead to fewer convictions than at present, due mainly to the compromise of sensitive techniques and the inability to prosecute cases where these techniques had been used ...

    The government has concluded that although it is feasible to design a legally compliant intercept as evidence regime it would not be consistent with previous operational requirements, would incur significant costs and risks, and that the benefits would be uncertain.

    John Vine, the inspector of borders and immigration, has revealed that the government has not cut the number of foreign nationals remaining in the UK without permission to stay. This is from the Press Association.

    The number of foreign nationals who have overstayed their permission to remain in the UK has remained static as the government fails to control the problem, an inspector has said.

    Inspector of borders and immigration John Vine said the overall size of the so-called migration refusal pool - the number of foreign nationals refused leave to stay in the UK after 2008 - was 173,562 in the three months to June this year, compared to 174,057 in the same period two years earlier.

    Vine was informed at the start of his inspection of the existence of a further 223,600 records, pre-dating December 2008, which had not previously been included within the pool. By January this year, the pre-2008 records had been reduced to 168,300.

    He said: “Any failure to take action against foreign nationals who overstay their permission to be in the UK has the potential to undermine public confidence in immigration control.”

    Here is some more reaction to the unemployment figures. (See 9.35am.)

    From Rachel Reeves, the shadow work and pensions secretary

    Today’s fall in overall unemployment is welcome, but after four years when prices have risen faster than wages, working people are over £1,600 a year worse off since 2010. There is a huge amount of lost ground to catch up. And while falling global oil prices have led to the rate of inflation going down, wages remain sluggish.

    Over the course of this parliament working people are set to see the biggest fall in wages of any Parliament since 1874-1880. The government’s failure to tackle low pay is making it harder to get the deficit down. According to the OBR income tax receipts alone are £70bn lower than forecast in 2010.

    From Frances O’Grady, the TUC general secretary

    Today’s figures show some long overdue improvements, but at this rate it will take over a decade to recover the real value of people’s earnings. And there is a very long way to go to deal with the problem of so many jobs being insecure, short hours, or on zero hour contracts.

    We need to make sure that nobody is left behind in the recovery, so today’s increase in long-term unemployment for young people is a growing concern.

    From Professor Geraint Johnes, director of Lancaster University’s Work Foundation

    There is almost uniformly good news. Employment levels continued to rise, by 115000, in the latest quarter. Meanwhile unemployment fell by 63000, with the headline rate of unemployment remaining at 6.0%.

    The more detailed statistics suggest a continuing trend towards restoration of normality in the labour market. The number of employees in employment increased by 165,000, with a reduction of 29,000 in self-employment. Amongst those who are self-employed, the number working part-time fell by 34,000 while the number working full-time rose slightly. Meanwhile the total number of people working full-time increased by 166,000, and there was a reduction of 51,000 in the number working part-time. This is all reassuring news. We have expressed concern in recent months about the high levels of insecurity that remain in the labour market. While this is still a concern, the latest figures indicate that we are clearly moving in the right direction.

    Arguably the most significant development this month has been the rise in the rate of growth of weekly earnings – up 1.8% on a year ago. This increase is now well above the rate of price inflation. The increase has been particularly marked in finance and business services (3.0%), with earnings in the construction industry also rising quickly (2.7%). The recovery in finance comes on the back of a steady increase over the last three months. In manufacturing, however, the rate of growth of earnings has moderated somewhat, reflecting muted growth in the production sector.

    Al-Sweady inquiry reports

    Here’s the start of the Press Association story about the findings of the al-Sweady inquiry.

    British troops mistreated nine Iraqi detainees following a fierce battle a decade ago, but false allegations of murder and torture were the product of “deliberate lies, reckless speculation and ingrained hostility”, a judge-led inquiry has found.

    The long-running al-Sweady inquiry, which has cost the taxpayer almost £25m, concluded in its final report that the conduct of some soldiers towards detainees breached the Geneva convention.

    But it was highly critical of the claims it was initially set up to investigate - that Iraqi detainees had been murdered, mutilated and tortured following the Battle of Danny Boy on May 14 2004 near Al Amarah in southern Iraq.

    It found that British forces responded to a deadly ambush by insurgents with “exemplary courage, resolution and professionalism”.

    And it suggested that some of the detainees - all described as members or supporters of the Mahdi Army insurgent group - consciously lied about the most serious allegations to discredit the British armed forces.

    Carol Mills appointment as Commons clerk terminated

    Remember Carol Mills, the Australian parliamentary official that John Bercow wanted to hire as the new clerk of the Commons? The move caused a huge row, because MPs thought she was not properly qualified, and Bercow eventually announced that her appointment, which was on the verge of being confirmed, was being put on hold to allow time for an inquiry into whether the job of Commons clerk should be changed.

    The committee that conducted that inquiry, chaired by Jack Straw, has now reported. It is recommending various technical changes to the way the House of Commons manages itself, but the key point is that it marks a victory for Commons traditionalists. They’ve won, and Bercow (a moderniser) has lost. For two reasons:

    • Carol Mills appointment as Commons clerk is set to be terminated. The committee recommends that the “paused” recruitment process should be terminated, and that a new appointment process should begin. Presumably Mills will be free to apply again, but the committee includes a draft of the job description, and the first sentence of this says the clerk acts as “the chief adviser to the House of Commons on the procedure and practice of Parliament, including parliamentary privilege”. This is an area where Mills was seen as less qualified than other candidates, and so it is hard to see how she would end up being appointed.
    • The clerk will remain as the most important figure in the Commons. The Mills row triggered a debate about whether the job should be split in two, with a clerk advising MPs on procedure and a new chief executive running the House of Commons. The report recommends keeping the post of clerk, and creating a new post of director general of the Commons. The director general would perform the role it was envisaged a chief executive would play, running Commons services. But he or she will report to the clerk. So the old power structure effectively remains.

    Here’s George Osborne on the unemployment figures.

    And here is some early Twitter comment on the unemployment figures.

    From Newsnight’s Duncan Weldon

    From the BBC’s Norman Smith

    From Reuters’ Jamie McGeever

    From the BBC’s Emma Simpson

    From the economics blogger Chris Dillow

    And this is from Danny Alexander, the Lib Dem chief secretary to the Treasury.

    Once again, we have a new record for the number of people in work, which is great news in the run up to Christmas. But more than that, today’s earnings figures show that the positive effects of our economic recovery are beginning to show in people’s wage packets.

    David Cameron has been tweeting about the unemployment figures.

    Unemployment down by 63,000

    Here are the headline unemployment figures.

    • Unemployment fell by 63,000 between August and October, to 1.96m (6%).
    • The number of people claiming jobseeker’s allowance last month fell by 26,900
      to 900,100.
    • Average earnings increased by 1.4% in the year to October, 0.4% up on the
      previous month.

    Here is the Office for National Statistics news summary. And here is the statistical bulletin with the full details (pdf).

    For the record, here are today’s YouGov GB polling figures.

    Labour: 34% (no change from YouGov yesterday)

    Conservatives: 33% (up 1)

    Ukip: 16% (up 2)

    Lib Dems: 6% (no change)

    Greens: 6% (down 2)

    Labour lead: 1 point (down 1)

    Government approval: -24 (no change)

    According to Electoral Calculus, this would give Labour a majority of 6.

    It’s the last PMQs of 2014 but don’t expect much indication that we’re in the season of goodwill. I’ll be covering that in detail, as usual, and then, this afternoon, I’ll be focusing on George Osborne at the Treasury committee.

    Here’s the agenda for the day.

    9.30am: Unemployment figures are released.

    10am: A Commons committee publishes a report on the proposal to change the role of Commons clerk, and appoint a chief executive. The inquiry was set up after MPs objected to John Bercow’s attempt to appoint an Australian official as the new clerk.

    11am: The al-Sweady report into allegations that British soldiers killed unarmed civilians in Iraq is published.

    12pm: David Cameron faces Ed Miliband at PMQs.

    12.30pm: Michael Fallon, the defence secretary, is expected to make a statement about the al-Sweady inquiry report.

    Around 2pm: MPs begin a debate on a Labour motion calling for the immediate abolition of the bedroom tax.

    2.05pm: Officials from National Air Traffic Services give evidence to the Commons transport committee about last week’s disruption.

    2.45pm: George Osborne, the chancellor, gives evidence to the Commons Treasury committee about the autumn statement and about the UK’s contribution to the EU budget.

    As usual, I will be also covering all the breaking political news from Westminster, as well as bringing you the most interesting political comment and analysis from the web and from Twitter. I will post a summary at lunchtime and another in the afternoon.

    If you want to follow me on Twitter, I’m on @AndrewSparrow.

     

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