As it happened: George Osborne's Spending Review

Key Points

  • Chancellor George Osborne outlines plans to cut £11.5bn in 2015/16 as he delivers his Spending Review to MPs
  • The communities and environment departments and the Treasury appear to have taken the biggest hits, with budget cuts of 10%
  • Public sector staff lose automatic annual pay increases, winter fuel payments will be subject to a "heat test" and welfare capped
  1.  
    1530:

    That concludes our live text coverage of the 2015-16 Spending Review. If you want to keep up with the latest debate, you can do so on the BBC News Channel, BBC Democracy Live and the BBC Parliament channel. Please join us again next Wednesday for live coverage of Prime Minister's Questions.

     
  2.  
    1525:

    Barnardo's chief executive Anne Marie Carrie says: "With average incomes set to be £1,250 per year lower in 2015 than they were in 2007, the government must apply extreme caution before further capping spending on those benefits that provide a crucial safety net for families facing financial crisis."

     
  3.  
    Jonathan Lodge, Slough

    emails: At last we might actually see some cuts. It is not just the cost of delivery of services that needs cutting. There is far too much duplication, over complicated and unnecessary work being done behind the scenes. Many commercial practices have been copied but have no relevance to an organisation that will never face business taxes.

     
  4.  
    Robert, Widnes

    emails: Weekly signings is not a problem but these job advisors have no idea what to say or do to help people as there's not enough work already in our area.

     
  5.  
    1517:

    Conservative co-chairman Grant Shapps says the world has not recovered in the same way as it did after every other recession since World War II. But he says he is confident the UK will continue to make progress in cutting the deficit.

     
  6.  
    Kevin Peachey, BBC Personal finance and consumers affairs reporter

    tweets: Winter Fuel Payment: Biggest bill for expats living in Europe - outside UK - is to those in Spain - £5.78m http://bbc.in/138kfAx

     
  7.  
    1513:

    Further debate on the temperature test for the Winter Fuel Allowance for pensioners living abroad. If the principle is extended to those in the UK, people in Bournemouth might not get it, while those in colder parts of the country would keep it, economist Ros Altman says.

     
  8.  
    1509:

    On the education budget for England, Russell Hobby, leader of the National Association of Head Teachers, said extra spending on free schools was an "inefficient use of a limited capital budget" when there was such a pressure to create more primary school places.

     
  9.  
    Matt Slater, BBC Sport journalist

    tweets: With UK transport budget facing 9% cut in spending review, can we afford not to spend more cycling? Currently spend £2 a head

     
  10.  
    1501:

    Mr Balls says he found the Spending Review "incredibly depressing" and a "missed opportunity".

     
  11.  
    Norman Smith, BBC News Channel chief political correspondent

    tweets: Welfare reforms in #sr2013 condemned by @gingerbread as "a massive step back" -7 day delay in benefit payments will be "crippling"

     
  12.  
    1456:

    Shadow chancellor Ed Balls tells Daily Politics there is a danger the credit crunch may continue, making it more important to have plans for growth.

     
  13.  
    Alan Palmer

    tweets: My parents live in spain, they have paid taxes and winters in spain can be cold....

     
  14.  
    1452:

    More on the changes to the Winter Fuel Allowance. The countries where recipients will be affected by the new "temperature test" are Portugal, Spain, Greece, France, Gibraltar and Cyprus, the BBC understands.

     
  15.  
    1450:

    Tony Dolphin, chief economist at the IPPR think tank, says: "The result is a somewhat arbitrary reallocation of resources - and not just between departments. Real spending on schools is protected while resources for early years and for FE are cut. Is there any evidence to show this is the best use of more limited resources for education? Not that I have seen."

     
  16.  
    1448:

    John Cridland, director general of the CBI business group, says the chancellor has "carefully walked a tightrope of protecting growth, while making sizeable savings to pay down the debt". He adds: "Infrastructure is rightly singled out as the most effective engine for growth, as we urged. While the government talks a good game on infrastructure, we've seen too little delivery on the ground so far." Mr Cridland says it is "critical" that the coalition announces a "real pipeline of projects" when it reveals its capital spending plans in a separate statement on Thursday.

     
  17.  
    Abdul, Birmingham

    emails: As an NHS employee, I feel we can make more cuts to the NHS budget by getting rid off pen-pushing managers and get nurse to be nurses, not unions reps, and doctors to take pay cuts as they are already overpaid.

     
  18.  
    Laura Kuenssberg, ITV News Business editor

    tweets: Treasury confirms no extra cash for infrastructure in 2015 and 300bn over the decade is same promise as made at Budget

     
  19.  
    Daryl, Downpatrick

    texts: I'm gutted by the museum cuts. I've spent many years promoting them, volunteering for Belfast Museum trying to increase visitor numbers and supporting their archaeology section. We ought to protect our collective history, but these cuts are destroying that legacy.

     
  20.  
    1443:

    Institute for Fiscal Studies director Paul Johnson tells Daily Politics says it was "interesting" the chancellor did not put a time limit on ending automatic pay grade rises for civil servants.

     
  21.  
    Sally, Halifax

    emails: I am a civil servant working in the DWP. My salary has increased by less than £900 in six years. I have been on the maximum of the pay scale for my grade since 1995. Those staff who were not on the maximum of the scale before 2000 have no chance of ever achieving the rate, as increments disappeared from our pay bands - not scales - many years ago.

     
  22.  
    1437: Iain Watson Political correspondent, BBC News

    writes in his analysis: The battlefield for the next general election has become clearer. All the main parties accept the need for further cuts but they will argue over what to cut, and when.

     
  23.  
    1430:

    Matthew Sinclair, chief executive of the Taxpayers' Alliance, says: "The chancellor has announced some welcome savings which will ease the pressure on taxpayers now and in the future, including some sensible changes to the welfare system and an attempt to end the absurdity of pensioners on the Costa del Sol getting the Winter Fuel Payment. Tens of billions of pounds are still being wasted by bloated bureaucracies each year, so there is plenty of room for further cuts."

     
  24.  
    1430:

    Plaid Cymru MP Elfyn Llywd says it should be possible to save money in the public sector without sacking people, if ministers think "creatively". Getting rid of the Trident nuclear weapons system would save £100bn, he adds.

     
  25.  
    1428:

    SNP MP Stuart Hosie says austerity is hitting the poor hard. More direct capital investment is needed in Scotland, he adds. The Scottish government's capital spending allocation will rise by 12.9% in 2015-16, the equivalent of £296m, while the Scottish resource budget in 2015-16 would be £25.7bn, a 1.9% real terms cut.

     
  26.  
    1426:

    William Higham, UK director of the charity Save the Children, said: "Today's Spending Review comes at an incredibly tough time for British families. Staff in our programmes throughout the UK are all hearing the same stories: families close to financial breaking point, parents working longer hours for less and those with the least being forced to cut back on food."

     
  27.  
    1422:

    The government is "well ahead" of the cuts programme it set out in 2010, Mr Alexander says.

     
  28.  
    1419:

    The welfare cap covers about £100bn - or approximately half - of welfare spending, Danny Alexander tells Daily Politics.

     
  29.  
    Michael Peel, London

    emails: Most of these cuts are long overdue. Services from both central and local government badly need to be streamlined and made much more efficient.

     
  30.  
    1417:

    The richest in society are paying more to make up the gap in public spending than the poorest, Danny Alexander says.

     
  31.  
    Stephanie Flanders Economics editor

    tweets: Bottom fifth have lost more from cuts to tax credits/benefits since 2010 than top fifth, not just as share of net income but in cash terms.

     
  32.  
    1412:

    The government has prioritised capital spending, such as transport, as it helps growth more than other kinds, Danny Alexander says.

     
  33.  
    Norman Smith, BBC News Channel chief political correspondent

    tweets: Police budgets to be cut by 4.9 per cent #sr2013

     
  34.  
    1410:

    Mr Alexander says the coalition inherited plans for deep infrastructure spending cuts in 2010 and has put more in than Labour proposed.

     
  35.  
    Patrick, London

    emails: I am relatively happy with these cuts - they are necessary. Although I know that foreign aid is essential, I wish it was concentrated through UK charities that work abroad rather than given to governments, this would assist in job creation and also see the money actually do good.

     
  36.  
    Tim Reid, Political correspondent, BBC News

    tweets: Osborne: says cuts facing Scottish Govt are "not as difficult as some of the English departments" are facing. #sr2013#

     
  37.  
    1407:

    Chief secretary to the Treasury Danny Alexander tells the BBC that "we still have some of the lowest borrowing costs of anywhere in the world."

     
  38.  
    1404: Nick Robinson Political editor

    writes: This is a chancellor with his eye firmly set on 2015 - not just the year of the next set of spending cuts but of the next general election.

     
  39.  
    1402:

    Mr Osborne says Labour has "gone silent" on its economic policy. He accuses leader Ed Miliband and shadow chancellor Ed Balls of having different policies on public borrowing.

     
  40.  
    1357:

    Lib Dem Julian Huppert expresses his delight at reforms to schools funding reform, asking when it will take effect. Mr Osborne says it is the government's intention to introduce it in this parliament.

     
  41.  
    1356:

    Tory David Burrows asks if marriage will be recognised in the tax system. Mr Osborne promises he will bring forward proposals "in due course".

     
  42.  
    1356:

    For the British Chambers of Commerce, director general John Longworth, says businesses will be "encouraged" by the chancellor's plans, but adds: "For our economic future to be great, rather than just acceptable, Britain needs a more radical shift in public expenditure to underpin a truly enterprise-friendly environment."

     
  43.  
    1353:

    Labour's Michael Meacher says more public sector investment is needed to give the economy a kick-start.

     
  44.  
    1350:

    The UK would have been "in very, very serious trouble" had Labour leader Gordon Brown won the 2010 election, Mr Osborne tells MPs.

     
  45.  
    1349:

    Lib Dem Stephen Williams says the Labour government lived a "£40,000 lifestyle on a £30,000 income".

     
  46.  
    1348:

    A very brief question from Labour ex-minister Peter Hain: "Why does the chancellor think he's right and Keynes wrong?" The chancellor defends his own economic approach.

     
  47.  
    1348:

    To see which departments are facing which cuts, take a look at our key points.

     
  48.  
    1346:

    Tory John Redwood asks the chancellor to look at the idea that any non-UK citizen coming to the country should work for a period and pay taxes before being able to claim benefits. There may be opportunities within European law to bring in changes, Mr Osborne responds.

     
  49.  
    Richard Garner, Slough

    emails: Every year local government funding is cut and pay is frozen. How far can the government go before we reach a situation in which local government can't operate, and can't recruit the calibre of staff to administer quality services?

     
  50.  
    1345:

    BBC Political Editor Nick Robinson says on Daily Politics that a lot of measures highlighted by the chancellor - such as new rules for job seekers - were designed to put the best possible political gloss on the cuts. While we know a number of departments face 10% cuts, we don't know yet what that means in terms of jobs lost, programmes cancelled, etc, he says.

     
  51.  
    1344:

    Former Labour chancellor Alistair Darling says the economy was growing when Labour left office in 2010.

     
  52.  
    Tim Reid, Political correspondent, BBC News

    tweets: Andrew Tyrie, ch of treasury comm. says welfare cap "will need very careful scrutiny"

     
  53.  
    1344:

    Tory MP Andrew Tyrie, chairman of the Treasury Select Committee, says the coalition has managed a "great achievement" in managing public expenditure over the last three years and finding more savings.

     
  54.  
    1343:

    In reaction to arts funding, the Tate museum group says: "In the context of overall reductions in public expenditure, the decision to limit cuts to the arts and museums to 5% and to give greater operational freedom to museums is most welcome."

     
  55.  
    1343:

    Mr Osborne, in response to a question to Mr Balls, says free entry to museums will be maintained.

     
  56.  
    1340:

    The skirmishes continue. Mr Osborne says every prediction by Mr Balls has been wrong. The shadow chancellor makes his usual hand gesture to indicate the economy is "flatlining".

     
  57.  
    1339:
    Ed Balls

    The shadow chancellor leans over the despatch box as he delivers Labour's response to the Spending Review.

     
  58.  
    1339:

    Speaker John Bercow tells Mr Osborne not to ask questions of the opposition. He adds that "others, at the highest level" should abide by this, meaning, presumably, David Cameron at Prime Minister's Questions.

     
  59.  
    1335:

    George Osborne accuses Mr Balls of lacking the "courage" to make his own economic arguments.

     
  60.  
    1335:

    The government has no plans or hope for the future, Mr Balls says, as he ends his speech.

     
  61.  
    1333:

    Mr Balls asks whether the Spending Review will mean further cuts to nurses and police in 2015-16.

     
  62.  
    Janice Pearce, Truro

    emails: I have read that Brits living abroad will no longer receive the winter fuel allowance. Why on earth are they receiving that from Britain if they no longer live here?

     
  63.  
    1331:

    Mr Balls urges the chancellor to offer a compulsory jobs guarantee to young people, funded by taxes on bank bonuses.

     
  64.  
    1331:

    The chancellor's speech was "more of the same", with no plan for growth, Mr Balls argues.

     
  65.  
    1328:

    The coalition should be building more affordable homes already, Mr Balls says.

     
  66.  
    1327:

    Mr Balls jokes that Mr Osborne is known as "Bungle", the name of a large bear who appeared in the ITV show Rainbow in the 1970s and 1980s.

     
  67.  
    1326:

    Living standards are falling annually, Mr Balls says, adding that the coalition has given a tax cut "to millionaires".

     
  68.  
    1325:

    Mr Balls says the coalition is asking for more cuts because it has not managed to reinstate economic growth.

     
  69.  
    1324:

    Labour's shadow chancellor Ed Balls begins his response to the Spending Review, saying the coalition has failed to turn the economy round.

     
  70.  
    1324:

    The Museums Association says the 10% cut to local government funding will impact negatively on services. Director Mark Taylor said: "Predictably, local government is low down the food chain and we know that local government museums or independent museums supported by them are way down the local government food chain. The result can only be less museums, opening less and providing less services."

     
  71.  
    Selina Lees, Portugal

    emails: Pensioners that retire abroad have paid the same amount of taxes and national insurance as those in the UK. Why should they lose out on the winter fuel allowance. It may be warmer here but you become accustomed to the heat and still feel the cold in the winter months.

     
  72.  
    1323:

    Mr Osborne says the Spending Review will contribute to "a Britain on the rise". He concludes his statement.

     
  73.  
    1323:

    There will be additional welfare savings in 2015-16 of £4bn, the chancellor says.

     
  74.  
    1322:

    From now on, if benefit claimants cannot speak English, they will be required to take lessons until they can or face cuts in payments.

     
  75.  
    1321:

    Jobseekers will be required to come to job centres every week, rather than every fortnight.

     
  76.  
    Nick Sutton, Editor of Radio 4's World at One, BBC

    tweets: Housing benefit, tax credits, disability benefits & pensioner benefits will all be included [in welfare cap] but the State Pension will not

     
  77.  
    1320:

    The Department for Work and Pensions will have to find savings of £9.5bn in its running costs in 2015-16.

     
  78.  
    1319:

    The chancellor says winter fuel payments to people living abroad will be changed in autumn 2015. They will be linked to a "temperature test", removing them from people living in hot countries.

     
  79.  
    1317:

    The state pension will not be included in the welfare cap, Mr Osborne adds.

     
  80.  
    1317:

    A welfare cap will be applied from April 2015, the chancellor says, and it will be set every year in the Budget.

     
  81.  
    1315:

    Mr Osborne says the NHS will provide a "proper, joined-up" service under reforms proposed by the coalition.

     
  82.  
    1312:

    The Department of Health will have a budget of £110bn by 2015-16. This department has been ring-fenced from cuts.

     
  83.  
    1311:

    The Department for International Development's budget will be £11.1bn in 2015-16.

     
  84.  
    1311:

    The HM Revenue and Customs budget will fall by 5% in 2015-16.

     
  85.  
    Nick Robinson Political editor

    tweets: New National Funding Formula for schools hailed as "historic reform" but its impact unclear. Anyone know more ?

     
  86.  
    1310:

    The top fifth of the population, in terms of income, will lose the most from this spending round, Mr Osborne.

     
  87.  
    1309:

    The government will provide funding for 180 new free schools in 2015-16.

     
  88.  
    Stephanie Flanders Economics editor

    tweets: £9.5bn capital budget for Transport in 2015-16 would be £2bn rise on 2014-15.

     
  89.  
    1307:

    Schools spending will be allocated "in a fairer way" across the country, Mr Osborne says.

     
  90.  
    1307:

    The Department for Education and Skills, whose spending on schools has been ring-fenced, will see its overall budget increase to £53bn in 2015-16.

     
  91.  
    Andrew Sinclair, Political correspondent, BBC East

    tweets: Chancellor says govt will spend more on roads than for half a century & rail building since victorian era

     
  92.  
    1304:

    The resource budget for science will be maintained and the capital budget increased, Mr Osborne says.

     
  93.  
    1303:

    The Department for Business, Innovation and Skills will face a budget cut of 6% in 2015-16.

     
  94.  
    1303:

    The Department for Energy and Climate Change will have its budget cut by 8% and the Department for the Environment, Food and Rural Affairs by 10%.

     
  95.  
    Robert Peston Business editor, BBC News

    tweets: Biggest increase in capital spending is for transport

     
  96.  
    David Shukman, Science editor, BBC

    tweets: British science world waiting to hear about #science #spending in Chancellor's statement - flat, down, up?

     
  97.  
    1300:

    The Department for Transport will have its day-to-day spending cut by 9% in 2015-16.

     
  98.  
    Robin Brant, Political correspondent, BBC News

    tweets: Huge laugh as Osborne takes about 20 secs to respond to Labour heckler who asks, after Hague praise, if May is 'best home secretary' in a generation.

     
  99.  
    1257:

    The Ministry of Justice will make savings of 10% in 2015-16.

     
  100.  
    1257:

    The Home Office will be asked to make cuts of 6%. The police budget will be reduced "by less than that", the chancellor says.

     
  101.  
    Stephanie Flanders Economics editor

    tweets: Cash freeze for defence resource budget means real cut of 2-3% in 2015-16 & would take cumulative cut to around 10% since 2010.

     
  102.  
    1256: Iain Watson Political correspondent, BBC News

    The chancellor confirms civilian job cuts at the MoD but doesn't spell out the scale. The army is already set to shrink from more than 100,000 to around 82,000 by 2020 before this statement. Good news though for veterans requiring ongoing medical assistance.

     
  103.  
    1255:
    George Osborne, David Cameron and Nick Clegg

    The prime minister and deputy PM enjoy Mr Osborne's Waterloo joke at Labour's expense.

     
  104.  
    1255:

    The Foreign and Commonwealth Office will make 8% savings in 2015-16.

     
  105.  
    1254:

    Veterans' families will be supported using fines raised from those found to have done wrong in the Libor banking scandal.

     
  106.  
    1253:

    The defence equipment budget will increase by 1% in 2015-16.

     
  107.  
    1253:

    As previously announced, civilian Ministry of Defence staff will be cut, but military capability will not, Mr Osborne says.

     
  108.  
    1252:

    On defence, the £38bn Ministry of Defence spending black hole has been filled, Mr Osborne says.

     
  109.  
    1252:

    The site of the Battle of Waterloo, in Belgium, will be restored for the 200th anniversary in 2015.

     
  110.  
    Julie, Sheffield

    texts: It needs to be highlighted that when Mr Osborne refers to thousands across Whitehall having their pay frozen, he isn't referring to the senior civil service. The cuts are directed at those who are already low paid civil servants across every area of the country.

     
  111.  
    1251:

    There will be 10% savings to the Scotland, Wales and Northern Ireland offices.

     
  112.  
    1250: Iain Watson Political correspondent, BBC News

    A challenge to Labour from the chancellor - as well as limiting public sector pay, would they also end automatic pay progression for many public sector workers?

     
  113.  
    1249:

    The devolved administrations in Scotland, Wales and Northern Ireland will be required to make savings of 2%.

     
  114.  
    Tim Reid, Political correspondent, BBC News

    tweets: Osborne paying councils to freeze council tax for next two years; will mean additional money for Scot Govt under Barnett I suspect

     
  115.  
    1249:
    Eric Pickles

    Eric Pickles - "the model of lean government" - also wins the chancellor's praise for his acceptance of budget cuts. Whether councils are as pleased is debatable.

     
  116.  
    Stephanie Flanders Economics editor

    tweets: Communities budget already cut by more than 50% in real terms since 2010 - Chancellor says there is now another 10% in 2015-16.

     
  117.  
    1248:

    People's satisfaction with council services has increased under the coalition, Mr Osborne says.

     
  118.  
    Matt Evans, Swansea

    emails: Is the pay progression cap legal? Civil service jobs are advertised at the top step and the pay progression is a part of the contract signed. If a job is advertised at a specific wage and no mention of performance barriers are mentioned in the advert then surely that successful applicant is entitled to that pay without additional barriers being put in place?

     
  119.  
    Nick Robinson Political editor

    tweets: First big cut announced - govt ending automatic pay progression in civil service, schools, NHS, prisons and police. Pay squeeze continues

     
  120.  
    1247:

    Council tax will be frozen for two years from 2014, Mr Osborne says.

     
  121.  
    1246:

    The local government department will have to make savings of 10%, Mr Osborne says.

     
  122.  
    1246: Iain Watson Political correspondent, BBC News

    First (intended) joke of the statement: Eric Pickles is the model of "lean government", says the chancellor.

     
  123.  
    1245:
    George Osborne, David Cameron and Danny Alexander

    Chief Secretary to the Treasury Danny Alexander, on the right, looked rather pleased with his name-check from the chancellor.

     
  124.  
    1244:

    The Cabinet Office will see its resource budget cut by 10%, Mr Osborne says.

     
  125.  
    1244:

    Every job lost in the public sector over the last year has been offset by five gained in the private sector, the chancellor says.

     
  126.  
    1243:

    Some 144,000 fewer people will work in the public sector by 2015-16, Mr Osborne says.

     
  127.  
    1242:

    The chancellor announces that automatic annual rises up pay grades in the public sector will end. So-called "automatic progression pay" is "antiquated" and will go by 2015-16. The armed forces will be excluded from this reform.

     
  128.  
    Hugh Pym, BBC chief economics correspondent

    tweets: Osborne - Eurozone crisis - rising oil - banking crisis worse than feared - made things tougher

     
  129.  
    1242:

    The chancellor ties in his Lib Dem colleague Danny Alexander by praising his contribution in delivering cuts.

     
  130.  
    1241:

    The coalition has saved almost £5bn by negotiating harder and finding efficiencies, the chancellor says.

     
  131.  
    1240:

    An extra £11.5bn in savings is needed, the chancellor says, adding that this is "not easy".

     
  132.  
    1240:

    Total managed expenditure will be £745bn by 2015-16. This is £120bn lower than it would have been had spending continued as it had been under Labour, Mr Osborne says,

     
  133.  
    1239:

    The UK must continue to make savings, with the government spending £6bn a year less in interest payments on its debts than under Labour, Mr Osborne says.

     
  134.  
    Louise Stewart, BBC South East political editor

    tweets: Osborne focus: Reform: more from every £. Growth: education, enterprise & infrastructure. Fairness: broadest shoulders bear largest burden

     
  135.  
    1238:

    From £157bn of annual borrowing by 2010, this year's figure will fall to £108bn, the chancellor tells MPs.

     
  136.  
    1238:

    On overall spending, Labour was borrowing one pound in every four spent, Mr Osborne says, calling it a "calamitous" level.

     
  137.  
    1237:
    George Osborne

    The chancellor delivering his statement, as the prime minister sits behind him partially obscured.

     
  138.  
    1236: Iain Watson Political correspondent, BBC News

    The chancellor won't announce further welfare cuts in 2015-16 but he flags up early on that he intends to make welfare spending a dividing line with Labour.

     
  139.  
    1236:

    Mr Osborne accuses Labour of economic "incoherence".

     
  140.  
    1235:

    The chancellor says the unfairness of the "something-for-nothing culture" of welfare will end.

     
  141.  
    1235:

    Mr Osborne promises high-quality public services at an affordable price.

     
  142.  
    1234:

    Chancellor George Osborne says the coalition has taken the economy back from the brink of bankruptcy.

     
  143.  
    1234:

    Labour's Sheila Gilmore says the "bedroom tax" - her party's name for the government's change to housing benefit - is cutting available stock. Mr Cameron says Labour has no credibility on the issue. That ends PMQs. Now for the Spending Review statement.

     
  144.  
    1233:

    Mr Cameron says businesses should be encouraged to build on empty land already set aside for development.

     
  145.  
    1230:

    Mr Cameron reiterates that it is vital to get to the bottom of what happened in the police handling of the Stephen Lawrence murder case.

     
  146.  
    John Smith

    tweets: A #mansiontax to replace #incometax on the poorest is a good idea and should be in the Coalition policies #spendingreview #bbcdp #wato #fb

     
  147.  
    1229:

    Business Secretary Vince Cable, wearing a yellow tie, listens as Labour's Meg Munn asks the PM what the government has against the businesses of Sheffield.

    Vince Cable
     
  148.  
    1229:

    Labour's Stephen Pound asks when the results of the "cash-for-access" inquiry will be published. Mr Cameron says he is happy to do so. No date was given though.

     
  149.  
    1228:

    Lib Dem Sir Bob Russell asks for an assurance there will be no further cuts in Army bands. Mr Cameron says there will be no further reductions in the size of the Army, Royal Navy or Royal Air Force.

     
  150.  
    Mark Denton, Political correspondent, BBC News

    tweets: Redcar MP @iswales says free school meals for 16-18 year olds should be extended to 6th form colleges #pmqs

     
  151.  
    1226:

    Tory Daniel Kawczynski asks for efforts to ensure better transport links between Shropshire and London. Mr Cameron promises the government is looking at this.

     
  152.  
    Graeme Croucher, Wimbledon

    texts: The austerity approach was adopted in the 1930s in response to the Wall Street crash and proved to be a disaster. The eventual remedy was the Keynesian solution to spend our way out of trouble. When will our politicians learn the lessons of history? Spending is what saved the western world's economy.

     
  153.  
    1225:

    Tory ex-minister Crispin Blunt says the National Planning Policy Framework should be better directed to save the green belt. Mr Cameron says a balance can be struck between the environment and the need for more housing.

     
  154.  
    1224:
    Andy Burnham

    Former health secretary Andy Burnham shakes his head as the PM says that there was a culture of secrecy in the NHS under Labour.

     
  155.  
    Hamza, Brighton

    texts: As an unemployed law graduate with a strong 2:1, I feel like if I want a future I have to leave the UK. I don't want to be part of a forgotten generation, which is how history will look back at us.

     
  156.  
    1223:

    Labour's Barry Sheerman asks about youth unemployment and how it can be tackled. The PM agrees it's a "scourge" and that the UK needs to make sure it has a flexible labour market to help prevent it.

     
  157.  
    1222:

    On the Spending Review cuts, the PM says the coalition is cleaning up Labour's "mess".

     
  158.  
    1221: Iain Watson Political correspondent, BBC News

    The PM accuses unions of "fixing" Labour parliamentary selections. In Falkirk Labour's national party officials have stepped in to the selection process following allegations of fixing, which the Unite trade union denies. But the PM's comments suggest the Conservatives might widen this line of attack before the next election.

     
  159.  
    1221:

    On the recent NHS scandals, Mr Cameron says there was a bad "culture" under Labour.

     
  160.  
    1220:

    Labour's William Bain asks about the coalition's promise to "balance the books". The PM says Labour's policy is to raise borrowing. A little hint, there, of the skirmishes to come after the chancellor's Spending Review statement, one expects.

     
  161.  
    PMQs picture

    Deputy prime minister Nick Clegg leans behind the prime minister to have a quiet chat with George Osborne.

     
  162.  
    1218:

    A Labour MP asks if the PM has ever had a conversation about alcohol pricing with his adviser Lynton Crosby. He answers that the true scandal in UK politics is union influence over the Labour Party.

     
  163.  
    1217:

    Lib Dem Sir Robert Smith asks for reassurance that the government will help protect women in Afghanistan when troops leave. Mr Cameron says aid to the country will help ensure this.

     
  164.  
    Louise Stewart, BBC South East political editor

    tweets: PM keeps saying this government takes infrastructure seriously - clearly setting up George Osborne ahead of Spending Review #pmqs

     
  165.  
    1216:

    The DUP's Gregory Campbell says the G8 summit showed Northern Ireland is a good place to do business and urges the PM to push for more investment. Mr Cameron replies that he will do so.

     
  166.  
    1215:
    David Winnick

    David Winnick asks a question on his birthday - he's actually 80, not 81 as his colleagues suggested.

     
  167.  
    1214:

    Tory MP Ben Gummer praises the coalition for building schools in his home city of Ipswich. Mr Cameron concurs.

     
  168.  
    1214:

    Labour's John Mann says there has been "zero delivery" of projects in his Bassetlaw constituency under the coalition. Mr Cameron says capital spending plans are higher than those put forward by Labour.

     
  169.  
    1214: Iain Watson Political correspondent, BBC News

    The reason Ed Miliband went so strongly on infrastructure spending is because the government intends to make funding for new projects the 'good news' from a Spending Review otherwise defined by cuts.

     
  170.  
    1213:

    The PM agrees with a Tory MP who says the government is boosting infrastructure.

     
  171.  
    Nick Robinson Political editor

    tweets: Ed Miliband seeks to undermine Spending Review before delivered by showing that claims of increased capital spending haven't been delivered

     
  172.  
    1212:

    Labour's David Winnick asks whether the home secretary will apologise for the treatment handed out to the family of murdered teenager Stephen Lawrence in the 1990s. Mr Cameron says the allegations made in the last few weeks have been appalling and the government is determined to get to the bottom of what happened.

     
  173.  
    1212:

    "81 today, 81 today" are the chants that greet Labour MP David Winnick, who rises to ask a question on his birthday.

     
  174.  
    Lee, Bradford

    emails: Why don't they do away with the government's Work Programme? It has had very poor performance in getting the unemployed into work.

     
  175.  
    1211:

    In the final salvos in the exchanges between the two party leaders. Ed Miliband says the country is "paying the price" for David Cameron's failure while the PM says the country will "never trust" Labour again on the economy.

     
  176.  
    Iain Watson Political correspondent, BBC News

    As predicted, Labour are trying to portray the chancellor's need for a new Spending Review as a 'failure' as the government hasn't eliminated the structural deficit.

     
  177.  
    1210:

    David Cameron refers to a recent survey in which prominent politicians were mistaken for celebrities, and Ed Miliband was compared with Bert from the Muppets, saying he is more likely to be "in Sesame Street than Downing Street".

     
  178.  
    Stefan Berry, London

    emails: Why is foreign aid exempt from cuts? Education and health I can understand, but at the risk of being unpopular, what benefit does foreign aid give to the British public?

     
  179.  
    1208: Iain Watson Political correspondent, BBC News

    Another familiar exchange: the PM says Labour would borrow more, Ed Miliband says the government is borrowing more than it intended.

     
  180.  
    1208:

    Ed Miliband says, at the current rate of progress, the government will only meet its house building targets by 2058. The PM says that 84,000 new affordable homes have been built and £11bn invested in total.

     
  181.  
    1207:

    Ed Balls appears to gesture to David Cameron to calm down, as the PM shouts back a response across a noisy Commons chamber.

     
  182.  
    1207:

    The PM says Labour only electrified nine miles of railway track during its 13 years in power. The Labour leader counters by saying how many schools, hospitals and new homes were built during that time.

     
  183.  
    1206:

    The PM had a prepared answer on infrastructure but didn't sound up to speed on school building. The parties are now trading projects - rail improvements v schools.

     
  184.  
    1205:

    Pressed on how many infrastructure projects have been completed, David Cameron says that "you cannot build a nuclear power station overnight".

     
  185.  
    1204:

    Commons Speaker John Bercow intervenes for the first time as the noise levels rise.

     
  186.  
    1204: Iain Watson Political correspondent, BBC News

    Ed Miliband rehearses one of his party's attacks on the Spending Review - suggesting there hasn't been enough infrastructure spending, for example on schools.

     
  187.  
    1204:

    Of the 261 new schools planned, only one has been started, Ed Miliband claims.

     
  188.  
    1203:

    Mr Cameron says the government is spending £4.5bn on building new schools but the past Labour government left an "enormous mess" in its plans for new projects.

     
  189.  
    1202:

    Ed Miliband is on his feet. He quotes Education Secretary Michael Gove saying that 261 new school building projects will be built.

     
  190.  
    1202:

    Gordon Henderson congratulates the PM on delivering "historically low" interest rates on their mortgages. Mr Cameron says he backs a sound fiscal policy and attacks Labour for wanting to borrow more.

     
  191.  
    1201:

    Tory Gordon Henderson is asking the first question.

     
  192.  
    1200:

    PMQs have begun.

     
  193.  
    1200:

    The Commons Chamber is filling up. Scottish Office questions are drawing to a close.

     
  194.  
    Iain Watson Political correspondent, BBC News

    As well as issuing a political challenge to Labour, the chancellor is also locking the Lib Dems into cuts which will be pencilled in beyond the election. They had refused to sign up to any more than one further year of specific reductions. By having the Spending Review so far ahead of 2015, there may be less pressure on the junior coalition party's MPs from their own activists over the cuts than there would have been if the Spending Review had been undertaken closer to the election.

     
  195.  
    1158:

    Lib Dem MP Stephen Williams says the coalition partners have had to "park" discussions about further welfare cuts because they could not reach agreement, and existing changes need time to "bed down".

     
  196.  
    Zac Van Hoffman, Glasgow

    emails: One way to save money is to stop paying out for criminal compensation. If people want to pursue a claim for money let them claim in a private prosecution instead of using public funds.

     
  197.  
    1157:

    Labour's Cathy Jamieson tells the BBC that as a "responsible" opposition, the party has chosen to match the coalition's spending plans in 2015-16. But she says her party would make "different choices" later if they regain power.

     
  198.  
    1156:

    Phil Thompson, from the Federation of Small Businesses, says companies in the north-west of England want more support from the chancellor for rural broadband and improvements to roads and rail services.

     
  199.  
    1155:

    Prime Minister's Questions, starting shortly, look set to be dominated by the economy, with David Cameron and Ed Miliband trading blows over their rival spending plans and prescriptions for growth.

     
  200.  
    Joe Beattie, Dunfermline

    emails: I was made redundant in 2008, was lucky enough to find a new job but my salary was reduced by 33%. However, I still think that the deficit must be reduced. I agree people will be hurt. Overseas aid should be cut - we need our money to remain in the UK.

     
  201.  
    1153:

    As PM's Questions draws near, Chief Secretary to the Treasury Danny Alexander is in his seat on the front bench.

     
  202.  
    1152:

    A tasty snippet from financial journalist Paul Lewis - apparently the Whitehall biscuit spend is £3m a year. No word yet on whether that budget will be affected by today's announcement.

     
  203.  
    1149:

    One important thing to watch out for is what George Osborne says about welfare. There will not be any more benefit cuts announced but the chancellor is expected to set out how he plans to cap other elements of welfare spending.

     
  204.  
    1148:

    In the Commons, MPs are listening to Scotland Office Minister David Mundell take MPs' questions ahead of PMQs. Former chancellor Alistair Darling, a veteran of spending reviews, is among those in his seat on the Labour benches.

     
  205.  
    Thomas Maher, Bournemouth

    emails: We need to forget about Syria, leave the Middle East, and make massive cuts to the defence budget. We should use the money saved to put back into pensions and training the youth.

     
  206.  
    1146:

    The Daily Telegraph says the intelligence agencies will be the big winners from the Spending Review, with MI5, MI6, and GCHQ getting an above-inflation rise in their £1.9bn budget - equivalent to an extra £100m a year.

     
  207.  
    1145:

    What have the newspapers been saying will be in the Spending Review? The Guardian believes local government will be the biggest loser, with more job cuts and an end to automatic pay progression for local authority workers.

     
  208.  
    Tom, Wetherby

    emails: I fail to understand why vital institutions are facing cuts when issues such as tax avoidance and evasion are yet to be resolved. Additionally, why is the government not looking towards a greener economy? By investing in this, jobs would be created in manufacturing for solar panels, wind turbines, better insulation, wave power and transport. It would also encourage trade.

     
  209.  
    1141: Iain Watson Political correspondent, BBC News

    Labour will denounce the need for a spending review for 2015-16 as a "failure" as the chancellor had originally announced he could fill the underlying hole in the nation's finances before the general election. But they will also accept the coalition's limits on day-to-day spending.

     
  210.  
    1140:

    The BBC's political editor Nick Robinson says George Osborne never intended to have to announce further cuts on this scale but the weaker-than-expected performance of the economy means the "age of austerity" has had to be extended by two years.

     
  211.  
    1138:

    George Osborne has said seven departments - including the Foreign Office, energy, justice and the Treasury itself - have accepted cuts of between 8% and 10%. The spending squeeze in other areas is expected to be broadly similar but there could be a few surprises.

     
  212.  
    Neil Maver, Preston

    emails: The government should keep on with its cuts until there is a significant shift towards private sector growth and a meaningful rebalancing of the economy. Councils and public sector institutions are riddled with waste and they could sustain much bigger cuts.

     
  213.  
    1136:

    The chancellor and his Lib Dem deputy Danny Alexander have just got into a 4x4 on their way to the Commons.

     
  214.  
    1134: Iain Watson Political correspondent, BBC News

    Ironically the government will face a revolt later in the Commons over one infrastructure project - the high-speed rail scheme, HS2, which will cut a swathe through some Conservative constituencies.

     
  215.  
    1133:

    Labour leader Ed Miliband was quizzed about the Spending Review earlier. He accused George Osborne of breaking a promise - that he would not have to come back for more cuts. Mr Osborne's aim of clearing the structural deficit by 2014-2015 has now slipped to 2017-18. Mr Miliband said: "He's breaking that promise because he's failed, because he said he'd clear the deficit. The deficit rose last year and the British people are paying the price."

     
  216.  
    1131:

    Ministers say their economic strategy is working, but borrowing actually rose last year and Labour says the cuts have stunted growth, in turn making it harder to reduce the deficit. That is likely to be shadow chancellor Ed Balls' argument when he responds to the chancellor.

     
  217.  
    Joe Wilson, Cardiff

    emails: The spending cuts are needed but why are welfare and the NHS protected so much? Whilst these cuts are necessary why is the government not doing more to help the economy grow?

     
  218.  
    1129:

    We are expecting George Osborne and his deputy Danny Alexander to pose for photographs shortly outside the Treasury before they make their way to the House of Commons.

     
  219.  
    1129:

    We also know the military equipment budget will rise in real terms to fulfil a government pledge - but there will be cuts elsewhere in the Ministry of Defence's budget, with civilian posts to be targeted.

     
  220.  
    1128:

    What do we already know ahead of George Osborne's speech? For starters, several budgets won't be cut at all. International aid, the NHS in England, and schools in England have all been protected from cuts since 2010 and that "ring-fencing" will continue.

     
  221.  
    1126: Iain Watson Political correspondent, BBC News

    One Spending Review statement from the two-party coalition clearly isn't enough. While the chancellor will tell us where the axe will fall on departmental spending in little over an hour, his Lib Dem colleague Danny Alexander will be able to deliver some of the better news on Thursday in his own statement which will give details of infrastructure projects - roads, rail, housing - over a longer timescale.

     
  222.  
    1124:

    Public spending is already scheduled to be cut by £83bn between 2011 and 2015. Ministers want to go further and are aiming to eliminate the structural deficit - one measure of borrowing - entirely by 2017-18.

     
  223.  
    Andi Ye, North Yorkshire

    emails: To be honest, I'd go for deeper cuts. The cuts only address a small amount of the overspend this year.

     
  224.  
    1121:

    The backdrop to this Spending Review is the government's continuing desire to cut the deficit, the annual amount it borrows to cover the shortfall between its income and its expenditure. Ministers say it was way too high under Labour and must be brought down.

     
  225.  
    1118:

    This is George Osborne's second Spending Review as chancellor. His first was in 2010.

     
  226.  
    1117:

    Spending negotiations in Whitehall are notoriously tough, with ministers defending their own patch and the Treasury looking for savings. But the fragile state of the economy and the size of the government's deficit make this Spending Review particularly fascinating.

     
  227.  
    1114:

    Wednesday's statement is the culmination of weeks of negotiations between the Treasury and individual departments. Business Secretary Vince Cable was the last minister to reach agreement on his budget on Sunday.

     
  228.  
    1112:

    As BBC deputy political editor James Landale explains, George Osborne could have left the announcement till next year but has decided to bring it forward, partly to try to outflank his opponents. Labour have said they will accept the general spending limits if they regain power in 2015 but will attack the government's handling of the economy.

     
  229.  
    1110:
    George Osborne eating burger and chips - tweeted by the chancellor on Tuesday night

    This picture, tweeted by George Osborne last night, has been attracting plenty of comment. Ed Balls took delight in asking: "George, what are you eating? That's not marathon fuel". The shadow chancellor, who has completed two London marathons, has invited his rival to go running with him. A few newspapers have picked up on the wider "online backlash".

     
  230.  
    1108:

    George Osborne's plans will cover the period immediately before the expected date of the next general election - 7 May, 2015 - and the 11 months afterwards.

     
  231.  
    1105:

    When he gets up to speak at 12:30 BST, the chancellor is expected to say he will cut a further £11.5bn from Whitehall budgets and tell us how the pain will be shared out among the departments.

     
  232.  
    1103:

    This is a significant day in the political calendar because not only do we have the weekly clash between Prime Minister David Cameron and Labour leader Ed Miliband but, after that, Mr Osborne will unveil the government's spending plans for 2015-16.

     
  233.  
    1100:

    Hello and welcome to our live coverage of Prime Minister's Questions and Chancellor George Osborne's statement to Parliament about the 2015-16 Spending Review.

     

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