>> again, i want to emphasize this is the first time in american history with this level of unprecedented judicial engagement. we talked about the fact is not

judicial engagement. he was a force on the battlefield decisions. and habeas decisions, hundreds of cases now arising out of detention of guantanamo decisive rejection of the proposition that even individuals held in custody, american custody or joint custody overseas, outside of an on conclave of guantanamo have access to habeas. we have to take the answers from the courts whether we like the outcome or not. >> you're suggesting many of the questions are beyond judges i want to suggest to you is it your view, and this is consistent with the rule of law, that any detainee held at guantánamo could be circumvented in his right to habeas simply by shipping them to bagram and say maybe you got your freedom and habeas out of gitmo but in transport you have the right so we can contain them for ever they are irrespective what the court ruled?

>> that point was pressed home, bruce, as you probably recall in the were of argument that i vividly remember it. a panel of three judges in d.c. circuit. that you did not carry the day because again we have a very unique constitutional regime and talking about a gentle opposition as the constitution applies. globally with regard to u.s. citizens the constitution applies with regard to aliens only when they're on u.s. soil. post-9/11 we put guantanamo in a different basket but by and large actions by u.s. government, are not subject to the constitutional norms and are not enforceable. that's how things work. >> you know at guantanamo bay citizens are detained. >> okay. you can stay here because you got your two minutes. >> well, i would like to pose a question -- let's say to tony, my question basically is this. your logic that bring people to justice, can you conceive of any war where in all instances you would be able to go and arrest

without putting undue risk to the seal team or any other team obligation to bring somebody back but you can never use deadly force against even a person like bin laden? even your own logic about the scope of opposition, we cannot use deadly force against him? not as a matter of rules of engagement and what we see is him surrendering but you basically said we should have gotten him. did i get it wrong? >> correct. i think your colleagues have now given draftdodgers an excuse by the fact that if you use the standard of an individual able to resist, capable to resist if you are able to do that, apparently if they can do that you'll put yourself in danger pics i guess that means them from here on if you fear you're being deployed and you may be put in danger, you don't have to go. by your logic. so think about that. we have to understand the

capabilities of resistance and what you're asking me relating to the individual who was the target of a legitimate, he was a combatant. however, within the context of eight guys coming at you with guns and coming out of sleeping, the question becomes, is not a practical one. there was no, and time that i understand from the raid, and i think this will hold up in court, that any seal was ever felt that he was threatened in that event. so the idea that we should apply deadly force standards just like we would apply to any law enforcement officer on the streets of america, at the time of need in the first thing you do take them off the street can you do an evaluation of standards, whether standards were followed and was it a legitimate kill. i don't believe in any military settings within a legitimate kill. >> with respect are basically suggesting that a bunch of best soldiers just committed a war

crime. you believe it, their operational judgment, their situational awareness on the battlefield at that time, is that what you're suggesting? >> we are out of time. i'm told to hold the line you're rigidly. i thought you talk about the tenure promotion process into he said seal stuff. we're going to have to go, to your question so stay here. spent my question is for mr. rivkin. it has to do with the idea of black sites. and i'm going to put and frameworks so, you know, i'm coming from. rico statutes, you know, body, when he directed something to happen and something happened, he was still held accountable. in the context of black sites if we actually go about creating black sites in 40 countries we use use taxpayer dollars and the set up of the sites we use taxpayer dollars to have cia or special operations officers

capture someone, do you see a contracted aircraft. we get into a third country and you say here's the guy, go tortured and, then. >> the united states directed by third party, wha what you are dg of course is spinning the facts. there's nothing illegal about running black sites. there's nothing illegal by using taxpayer resources. there's nothing illegal about cooperative with the intelligence services are running joint operation to only in a situation where you order somebody or substantially direct somebody to engage in acts of torture that you may have a problem. not to be legalistic but rico as a statute does not apply to government the activity. of the statute may be involved the rico is irrelevant here. >> thirty seconds spent rico was an example of culpability concept indicates of them. understand we can't be held a couple for the mafia but the concept here is that we spend

congressionally appropriated money to conduct things which will be held at the international law as a legal and even if we don't direct it, we know what's going on. >> congress was briefed in this operation with full compliance. the gain of eight in the staff of both committees. to this is again an instance where the executive fully complied with the relevant statute. >> follow-up question real quick. was the executive and the true information to congress? >> i was not present during disney's but i believe there was a lively dispute about the scope and completeness of the briefing. >> thank you very much, david. and thank you, tony. will now turn to lee casey who gets his two minutes and he can take his victim. >> my question is for bruce. and i guess it sort of a two-part question. one, what level of violence do

you think is necessary for an active or? and second, do you think that congress cannot the rise use of military war short of a declaration? >> the second question, congress can authorize use of military force. military force doesn't inevitably indicate more. congress i believe authorized high rates of military use on 10 occasions. war, however, put you in a new legal architecture that, say, despite the verbal listens, the law is generally silent because courts don't do anything and the politics is against holding anyone accountable. what level of violence justifies war? i think there are these clues in the constitutional language with regard to spending habeas corpus in times of invasion or rebellion. that level of threat to sovereignty. and, of course, that was what was not met when the u.s. supreme court held habeas corpus had been a legally suspended. by the military commissions act and the actions of the executive

branch. this is not a question of you put in jumpy where you can specifically the number of soldiers or whatever. is going to be a matter of degree. but my judgment if you look at 9/11, certainly what we know now they be 50 al qaeda by her own counterterrorism task force in afghanistan, 50 alone. you can fit them in this auditorium and have lots of space left over. that is not a level of violence as indicated by the last 10 years that justifies throwing away all the customary due process, the precious liberty that's been raised on debt for the united states. and i think that's all the question we need to confront at present. >> twenty seconds. >> very quickly. what latte think applies to the tripoli war? to the laws of war apply to that operation? >> with regard to the tripoli war? >> right. >> international conflicts, yes. that's what was conducted by thomas jefferson spent even though not against a state?

>> the barbary states had their existence in north africa in the we didn't bounded boundaries as precise and we had they but to operate as state actors. >> the status of the barbary pirates. stay tuned for next month. i'm going to turn it over to my friend. >> thank you. i have 50 minutes to really audience questions, and i'd like to apologize in advance, there are more than 30 questions. they are all thoughtful and excellent comp and i don't think going to get to 30. but if you gentlemen will answer briefly will get to more than we would otherwise. the first question i think might be appropriate for you, bruce. does the fact that the justice department tell the president waterboarding is legal mean that the president can't be prosecuted for waterboarding? and related, does the united states have a right to define torture in ways that do not deport with international law? >> first question is whether not

if the president relies in good faith of legal advice of the justice department that immunizes any criminal prosecution. there is a good faith rule built into both now the statute as well as implied in the common law. it was applied in watergate with regard to one of the burglars. i think it was bernard barker. so if as long as it was in good faith interpretation of the law, the answer would be he would be ultimately shielded from the prosecution. but that oftentimes is very fact specific. adolf hitler relied on all sorts of advice he got. with regard to the defining torture, the united states can certainly define torture under, the president cannot redefine torture as specified in title 18 in u.s. code. that is quite specific with regard to international interpretations of torture, it's in the treaty. there's no indication that there was any effort to try to differentiate between the treaty definition of torture and the

statute of supposed implements i don't see there's anything we. it is true that one of the more blurry elements of torch as defined in the statute is whether or not what was done with calculated to create an imminent fear of death or to cause protracted or prolonged mental searing or trauma. and that at times can become a matter difficult in application but i believe the standard cannot be manipulated i the executive. >> thanks. the question i will direct to david. if the u.s. is free to take out by assassination anyone it feels is a so-called combatant anywhere, what is stopping other countries from assassinating their enemies on u.s. soil such as iran wanted to kill the saudi ambassador in d.c.? >> well, two answers to a. first of all, assassination is a term of art in international law. it's more than just a killing for that matter but a local deli but it only applies to international protected persons. persons.

killing ambassador can't even ambassador of in any country is an assassination. you're asking me, however, if a given country, if another country please there in a state of war with us and they are attacking on our soil, or someone else in the world, and american official who is within the chain of command, american military officer or secretary of defense, to the extent they believe that they are not committing delight under international law. it would be an act of war. but other hand, iran has been engaged in a low grade activity, engaging numerous operations against american soldiers including towers, the marine barracks but they have been engaged in acts of war. we chose if you will not to take them up on the invitation and engaged against us. to me with all due respect, the fact that we in good faith

believe that we are in a state of war objectively speaking we are, we carry out military operations against any attachment in the combats but the fact that someone could do to us does not diminish the legitimacy of what we are doing. >> the question that i will trek to tony, what do you propose is a next step in political realities and congressional reluctance to address these violations? >> which violation? >> i think all the violation that you think have occurred of any law. >> i think there's two primary violations just be clear on what's been violated. first, the scope and premise of the authority for military force has to be better defined. if you're a carpenter and you have a hammer, everything looks like a nail. therefore, if you leave it to the commanders to determine what their actions are regarding quote unquote combatants, they will set up an arbitrator which has no relevance to the original authority i don't believe that

that is a viable course for this country to continue because now we are targeting sheepherders who have never moved more than five miles from their village as a potential terrorist because they support, by we believe, some way al qaeda. so we have to standardize what exactly that authority really means because we can't kill 20 million pashtun. secondly, regarding detainee operations, detaining individuals. there's two factors i think went to clarify. first, habeas corpus. whenever so is captured even if they don't have geneva convention protections you have to figure out what you're going to do with them. indefinite detention is not viable. it does not represent us as a culture, period. so, therefore, we have to clarify. then what is torture? i say in my book, we talked about operational dark art, there may be a moment in time that i would do something like jack bauer. there may be a situation. colonel alan west did something. he took the gun and shot over

someone's head to get information which was tactically relevant, and it worked. so i'm not saying that you should intimidate but the question becomes should we systematically torture people or have a program which allows torture. that's what we have to define. >> thank you. a question i will direct to lee casey, question is what are the crunchy for determining a person to be a combatant, where does the burden of proof lie, and out of my own foot know, the d.c. circuit recently decided that there would be a resumption of regularity are all the government's evidence. isn't there some history that shows that all the government's evidence is often all the way and reliable? >> okay, in terms of the country, traditionally the criteria, are you associate with an enemy force, and what is the nature of that association? you don't need to carry a gun.

you can be a cook and still be a legitimate target. you can be an radio operator, all sorts of different jobs. with respect to this conflict, all of that i think applies, but it is also true the d.c. circuit has been in the process of enlightening us to some extent. and has concluded a number of cases that you have to look at it holistically and on a case-by-case basis. with respect to the presumption of regularly, keep in mind that what the presumption of regularity means is that the evidence that the government brings in is accepted as having been regularly gathered and put together. in other words, you'd have to prove that the agent who wrote the report actually did interview him three individuals

in afghanistan. there is a perceptive that it was regularly taken. but it's not a resumption of the truth of what those three people in afghanistan said. the court can still review that and consider them to be inherently incredible or whatever and, indeed, the detainee can also challenge it. >> thank you. bruce, if one accepts the arguments that the words are illegal or what are the obligations of u.s. citizens under nuremberg? >> the first obligation under nuremberg i'm in my judgment, is to petition congress for impeaching the president for high crimes and misdemeanors, subject to a trial. indeed, i drafted an article of impeachment against president obama for illegal war in libya. it's not gone very far but that's what we can do as citizens. as a matter of principle the the declaration of independence says that some point in time every act of the government is a

design to reduce us. we have a right to resort to arms alternately and to establish a new dispensation. i think we're not certainly there by a long shot, but i think what the founding fathers said was that the impeachment process was to be a surrogate for what was earlier coup d'état, like against -- that's what our obligation is to assist that members of congress stand up or we will not elect him anymore. just one observation. the position which we refer to is overwhelmingly redacted so how he can be so confident about what conclusion is industry to me because most of it is all classified. >> thank you. this is a question that the questioner directed to lead. socko out of sequence for a moment. question, proportionality, question mark, estimated that in iraq range from 150,000-1 million. to you except that this is acceptable amount of collateral

damage and civilian non-terrorist casualties? >> well, you need to look at it with respect to each separate operation. the concept of proportionality is one that is indeed applied, military act by military act. what you're really asking is whether the war itself was worth it, whether the amount of damage, the amount of damage that was done to the civilian population in iraq, the amount of injury and damage that was done to our people who fought the war was worth it. with respect to that, only time i think will tell. was it worth it to establish a democratic government in the middle east, and as weak as imperfect as it may be, and will in future that lead to positive change are, i don't know. >> thank you. i'll direct this to telling.

how does the united states defend against war against non-nations and our drone attacks ever lawful? >> latter question first. drone attacks are lawful. they are a tactic, as this night raids are a tactic. like any tactic, like any weapon, it's all about the legal application of that has the capability. so that is something we have within our arsenal. technology has developed to the point where that is a viable technique for taking out leaders in remote locations. with that said i think what has become an over reliance on the technology, as a metaphor for progress showing if we're telling people we must be making progress. and that goes to the second answer regarding targeting individuals in third countries. my answer is it should be the tactic of last resort, speaking both as an operator and having to come having lived within

legal constructs of our defense community for the past 25 years. the default position should always be and was trying to times that i've come up to the surface, capture rather than kill. cozza, the cia shooter who killed a knife to kill the cia officer, they captured him, captured, did just kind of -- they captured him. that's the position we should do. that should be our standard. only she would go to a third country and do something if we can do recently, in addition to bring up to justice. otherwise i think i'm out how you define combat, combat and, i don't feel we have sufficient understanding of what a combat is. if you're leaving it to commit to determine that they will go to whatever they can make up to get away with it. i don't think that transformation is being -- that information is being transferred upwards well. >> to david rivkin, the

questioner asks, and there there are three or four questions that are of the same nature. you cite 9/11 as the legal foundation for the wars of aggression in afghanistan and iraq. how would you argument change it is shown as is becoming increasingly obvious that both scientific challenges and the 9/11 commissioners themselves that 9/11 was not even that was described, the so-called conspiracy theorists are right? >> well, there would be conspiracy theories as long as mankind exist but i don't know if we can now or should pay much attention to it. 9/11 is like the kennedy assassination, extensively looked on. i believe, i'm not a forensic scientist, but all the theories about 9/11 not being an attack by al qaeda have been proven to be rather rubbish but it's not just a position of the united states government. it's the position of every normal government in the world

including many countries that don't wish us well, including russia and china. and by the way, is also the position of al qaeda. so if that is really a conspiracy, we have a super conspiracy actually unknown in human history where everybody is conspiring to bring us about. >> thank you. bruce, i'll interpret this question a little bit, and you may touched on it already. do citizens place on assassination list, citizens who are targeted, let's say, have the same right prior to the killing that they would prior to a child? if they were captured i suppose the question is with this sort of drone attack that was done to al-awlaki ever be legal? let's be suppose it was clear he be captured. >> i think that if you're examining the parallel in the criminal justice system, you we first expected there to be a warrant issued for the arrest of

mr. al-awlaki for a crime. and it was said he was a complicit in all sorts of crimes including the fort hood killings, and whatever, perhaps inciting crimes against americans. but the fact was he wasn't subject to any indictment, any charge whatsoever, unlike say osama bin laden was under indictment by a federal grand jury. so at least you would have by requiring a warrant some judicial check on simply having to present our return to identify input and/or including any of us, secret evidence, secret law, i locate and then afterwards we will decide whether congress wants to impeach me but i will blog anywhere by saying state secrets come you cannot be about what i did. so i would say you can end up with a system of warrants that authorized the kind of force once it was shown. in the warrant process that an attempt to catch would be futile. i want to amplify on this idea that's been in situated the other side that anytime we can avoid a risk to ourselves, we

can use lethal force to prevent that risk from occurring. that would suggest that if we are at war with iraq and we don't want to risk any danger to our soldiers, we just launched icbms with nuclear warheads into iraq and incinerate. right? well, you killed all the civilians, yet, but we can fight a war without risking the danger of the soldiers life. this would mean nagasaki become the stable of how we fight wars. >> thank you. and we are past the time for audience questions. i regret all the ones i wasn't able to ask. we are at the face of submissions, and david and lee have agreed that david will summarize for up to two minutes, and then after that, you can directly follow, bruce, two minutes. >> we are beyond -- i think on balance entire record in prosecuting those words -- wars

make me proud. we spent too much time in my opinion to deal the most difficult and john questions about and interrogation but not that they are not incorporate this is a small part of overall spectrum but i would submit to you that in no other war in human history has been this unprecedented level of illegal and legal attention to how to do things right. even regard to torture memos that was very unpopular, i don't know of any country that would bother to ask difficult questions and try to reconcile if there's a statecraft and dictates of law. serious debates from within the justice department, within the executive branch, between congress and executive, enormous level of judicial impeachment. debates during the campaigns. prosecutions of people who violated laws of war. numerous prosecution. or allowed crimes to occur. so we should look unprecedented

level of attention to minimizing collateral damage. numerous times not using force, then there was a concern, that this is the enemy that fights at a civilian areas, that pretends to be civilians. levels of collateral damage have been high-tech have mistakes that occurred? of course, fog of war, those difficult to find in which we always need to be right but there can be no other war i can think about what any civilized country has done better. make laws by pointing out the danger. once again this is a different debate. it's not debate about law. debate about nature, of military threat. we live in a world where a small group of people, very small, can, in fact, unprecedented levels of destruction and mayhem. unless we understand that, and by the way, the job of any military establishment is first and foremost to protect the american people. if we're not going to appreciate the proposition, if we're going to pretentious because we don't

have tanks driving or planes flying and thousands of troops marching in lockstep on the other side, that that is not the danger, we are forfeiting any basis upon which the government has came into being. so again, that is the threat we face. i think we approach it with care and dignity. and i am frankly very proud of everybody that's been involved in this war. i'm also very proud we continue to debate this issue because many democracies including some of our good friends tend not to debate them. thank you. >> well, i believe the wars have been unprecedented in the assault on the constitution of the united states, the very first casualty. and we have established a set of principles to borrow from justice robert jackson, the number of prosecutor, that will lie around like loaded weapons ready to be used when any caligula comes into the present day and decides to take the principle extended here at home.

all of our liberties rests upon the benevolence of the president of the united states. kind of the principles that we have established and have been touted by the opponents here, or are dissidents, a president could go on television today and announced that he's got secret evidence suggesting there's going to be even worse devastation than 9/11 and less we the constitution, he's empowered to detain anyone in the united states the things -- and he's going to spend the entire constitution because he is first duty and only duty is to save us from danger. and that would be lawful authority according to the prevailing ethical principles that have been announced during that state of war. now, to me that is frightening. and we need to remember that what it says about us, irrespective of what it says

about the enemy or the adversary. as if abraham lincoln said as he would not be a slave, so he would not be a master. as we would not be colonized, so we would not be a colonizer. as we would not want to torture, we will never stoop to committing torture or flouting the rule of law. and that's basic of what this is about. if you want to stoop to the imitation of the enemy, just raising ourselves just a little notch, we are seeing major and they are de facto, no, we can do that but that's not what unites states was about. ..

live coverage from london. >> whichever is withholding the presidency so again, john crosser. >> thank you, mr. speaker. getting rid of all electric government under any circumstances is the note work facing the euro. i think it is important to of course for all governments across the euro remain fully democratically accountable so that parliament and their people, that is something that is continuing to take place. >> the autumn statement, chancellor of the exchequer. >> let me start by placing

squarely before the house of commons and the public the economic situation facing our country. much of europe now is heading into a recession caused by chronic lack of confidence in the ability of countries to deal with their debt. we will do whatever it takes to protect britain from this debt storm while doing all we can, all we can to build the foundation of future growth. today we set up how we will do that by demonstrating that this country has the will to live within its means and keep interest rates low. by acting to stimulate the supply of money and credit to make sure interest rates on the families and businesses. matching the determination on the deficit with an active enterprise policies for business and lasting investment in our infrastructure and education so

that britain can pay its way in the future and every opportunity helping families with the cost of living. the central forecast published today from the independent office of budget responsibility does not predict a recession here in britain. but they have not surprisingly resolves -- revise their short-term prospects for the country, for europe and the world. they expect gdp in britain to grow this year by 0.9% and by 0.7% next year. they than forecast 2.1% growth in 2013 -- [inaudible] -- 3% in 2015 and 3% again in 2016. this central forecast assumes in

their words that the euro area finds the way for the current crisis and policymakers find a solution to deliver sovereign debt. if they do not, there could be a much worse outcome for britain. we hope this can be averted. if the rest of europe heads into recession it may prove hard to avoid in the u.k.. we are now undertaking extensive contingency planning to deal with all potential outcomes of the euro crisis. so they cite the chilling effects of the current instability of one of this and for reasons for reduction in net growth forecast and i want to thank robert coates and his fellow committee members and their team for the rigorous work that they have done. i think there forecast today demonstrates beyond any doubt

that independence. if we expect their numbers it is an important point for the house. we must also pay heed to their analysis. addition to the euro zone crisis, it gives two further reasons for the weaker forecast. first, when they call the external inflation shot, result in their words of unexpected rises in energy prices and global agricultural commodity prices. they're analysis is this explains the slowdown in growth in britain over the last 18 months. second, the independent obi are -- >> statement by the chancellor should must be heard and he should not have to fight to be heard. >> second, mr. speaker. the 0 we are today shows new

evidence that an even bigger component of the growth that preceded the financial crisis on an unsustainable boom, the bust was deeper and had a greater impact on our economy than previously thought and the result of this analysis is the ob are have reduced their assumptions about the economy and trend rate of growth. this increases estimates of the proportion of the deficit that is structural. the path of the deficit that doesn't disappear even when the economy recovers. so our debt challenge is greater than we thought because the boom is bigger and the bust is deeper and the effects large even longer. britain has had the highest structural budget deficit of any major economy in the world and the highest deficit in the entire history of our country

outside of work. and the last government left it to this government to sort that mess out. mr. speaker, this bogey our analysis is directly through to boring numbers that are falling but not at the rate forecast. in 2009/10 less government was borrowing 1 fifty six billion pounds the year. during the first year of this government that all to 1 thirty-seven billion pounds. this year they expected to pull 1 twenty-seven billion. 1 twenty billion next year followed by 1 hundred billion in 2013 the from 14, seventy-nine billion in fourteen-15 and sixty-three billion in 2015-16, twenty-four billion a year by 2016-17. however i can report the cost of lower market interest rates we

secured for britain, dentist payments forecast to be twenty billion pounds less than predicted. the house might also like to know given the economic events described by the office of budget responsibility what would have happened to borrow win without the action this government has taken? borrowing by 2014-15 would have been running well over -- >> the chancellor is proceeding but the chancellor at statement must be heard. there are strong passions on the subject and plenty of time for people to come in on the back of the statement that the statement must be heard. the chancellor of the exchequer. >> by 2014-15 borrowing would be over 1 hundred billion pounds a year more and britain would bar 1 hundred billion pounds total over the period. if we pursue that half we would now be in the center of the

sovereign debt storm. the crisis we see unfolding in europe has not undermined the case of the difficult decisions we have taken has made the case stronger. we held the deficit reduction budget on our terms last year. not on the market turned this year as so many others have been forced to do. in that budget we set out a tough fiscal matters that we would eliminate the current structural deficit over the five year forecast horizon and supplemented the mandate with a fixed debt target that we would get national debt as a proportion of income by 2015-16. and set plans to beat these budget rules one year early. that head room has disappeared. i am clear that our rules must be adhered to and i am taking action to insure that they are. as a result the capital of central protection is we will meet both the fiscal mandate and

the debt target. current structural deficit is forecast to fall from 4.6% to gdp this year to a current structural substance of 0.5% in five years time and the debt to gdp ratio which is forecast to stand at 67 this year is now set to peak at 78% in 2014-15 and falling but the end so borrowing is falling and debt will come down. it is not happening as quickly as we reached -- which because of damage to the economy because of the ongoing financial crisis but we are set to meet our budget rules and we are going to see britain through the debt storm. mr. speaker, berri a suggestion from some in this house that if you spend more you will borrow less. this is something for nothing economics. the house should know what we would be running. last april the absence of

incredible deficit plan meant that credit rating was a negative outlook and our market interest rates were higher than italy's. 18 months later we are the only major western country that had its credit rating improved. italy's interest rates are 7.2% and less than 2-1/2%. we were even borrowing money more cheaply than germany. and those -- at risk by deliberately adding to our deficit must be explained. just a 1% rise in market interest rate would add ten billion pounds to mortgage bill every year. 1% would mean the average family with a mortgage would pay 1,000 pounds more. 1% increase cost of business by seven billion pounds. 1% would fall to taxpayers to find twenty-one billion pounds in debt in trust payments much of it going to our foreign

creditors. in other words 1%, extra government spending or tax cuts foreign debt by borrowing what is proposed today. that is the cost of about 1% rise. italy's rates have gone up 3% in the last year alone. we will not take this risk in the solvency of the british economy and security of the british family. mr. speaker, the current environment requires we take further action to ensure britain continues to live within its means. this is what we propose to do. there is no need to adjust the overall total set out in the spending review. taken altogether the measures i will set out to they require no extra borrowing and provide no extra statement across the spending period. second announcing significant savings in current spending to make a fiscal position more sustainable in the medium and long-term but in the short term

over the next three years we will use these savings to fund capital investment in infrastructure, regional growth and education as well as health for young people to find work. every pound spent in this way will be paid for by a pound saved permanently. this includes saving from for the restraint of public sector pay. some work forces the two year pay freeze will be coming to an end next spring and for most during 2013. in the current circumstances the country cannot afford the 2% rise from some government departments. instead we will set public sector to an average of 1% each of the two years after the pay freeze ends. many are helped by paper aggression. annual increase in salary grade even when pay is frozen, is one of the reasons public sector pay

has risen at white race of public sector pay in the last four years. while i accept a 1% average rise is tough it is also fair to those who work to pay taxes. mr. speaker, i am also announcing that we are asking of the independent paper review body to consider how public sector pay could be made more responsive to local labor markets and we ask them to report back by july next year. this is a significant step towards a more balanced economy in the region of our country that does not squeeze out the private sector. mr. speaker, mr. speaker the budgets will be adjusted in line with a pay raise as i announced with the exception of the and h s and the school budget where

the money saved will be returned to protect those budgets in real terms. this policy will save 1 billion pounds in current spending by 2014-15. the deal we offer on public sector pensions is fair to pack the rest taxpayers and public service. the reforms are faced on the independent report of john hutton, former labor secretary who says that it is hard to imagine a sector deal like this. and i would once again ask the union why they are damaging our economy at a time like this and putting jobs at risk. call off the strike tomorrow. come back to the table. complete the negotiations and let's agree generous pensions that are affordable to the taxpayer. let me turn to other areas of

public spending starting with overseas. this government will stick by the commitment it has made. the poorest people in the world by increasing our international development budget and all whole house should be proud of the help our country is providing to eradicate disease, save lives and educate children but the spending plans of the department of international development meant that the u.k. was on forced to exceed 27% national income in 2013. that i don't think can be justified. we are adjusting those plans so we don't overshoot the target. turning to welfare payments the annual increase in basic state pension is protected by the 888-introduced to guarantee a rise in earnings, prices or

2-1/2%. whichever is greater. the basics than pension will make vaporize 55 found 30 to 110 pounds 45. the largest ever catch rise in the basic state pension and tormented -- commitment of fairness to those who worked hard all their lives. hy wanted to make sure the pensioners did not see a smaller rise in their incomes so i can confirm we will also upgrade the pension credit by 5 pound 35 and pay for this with an increase in the threshold of savings credit. also want to protect those who are not able to work because of disabilities and those who through no fault of their own have lost jobs and are trying to find work so icahn confirmed we will upgrade working age benefits in line with september cpi inflation number of 5.2%. this will be a significant boost to the incomes of the poorest especially when inflation is forecast considerably less than that by next april and we will

upgrade with prices the disability elements of tax credits and increase the element of the child tax credit by 135 pounds in line with inflation too but we will not operate other elements for working taxpayers this coming year and given the size of the upgrade this year we will no longer go ahead with the additional 110 pound rise in the charles a element over and above inflation that was planned. by april of 2012 the tax credit will have increased by 390 pounds since the coalition came into power. best way to support low-income working people is to take them out altogether and our increases in the income tax personal allowances this year and next will do that for 1 million people. let me turn to future public spending, mr. speaker. today i am setting expenditure totals for two years following the end of the spending review

period. 2015-16 and 2016-17. co-manage expenditure will fall during that period by zero.9%, same rate that set out existing period of the spending review with a baseline that excludes the additional investment in infrastructure also announced today. these are large savings and will work on different areas of government. i am also announcing a measure to control spending which is not today or next year or the next decade but directly addresses long-term challenge britain and so many other countries face with an aging population. our generation has been warned the cost of providing decent state pensions are going to become more affordable and -- unless we take further action. let's not leave it to our children to take emergency action to rescue the public. let's think and take

responsible, sensible debt now. so starting in 2026 we will increase the pension age from 66-67 so we can go on paying a decent pension to people who are living longer. australia, america and germany have taken similar steps. this will not affect anyone within 14 years of receiving their state pension and by saving sixty-nine billion pounds it will mean a long term future for the basic state pension. we are showing a world skeptical that democratic western governments can take up positions that britain will pay its way in the world. mr. speaker, that is the first thing the government can do in the current environment. keep interest rates lower and protect our country from the worst of the debt storm. but we need to make sure that low interest rates are available

to families and businesses. it is monetary and credit policy, principal and most powerful tool for stimulating demand. bank of england monetary policy committee decided to undertake -- authorized an increase in the ceiling on asset purchases to two seventy-five billion pounds. this will support demand across the economy but we must do more to help those small businesses who can't get access to credit at an affordable price. we already extended the last government enterprise finance guarantee scheme and expanded to include business with annual turnover of forty four million pounds and accrediting new things like metro bank. this scheme is not ambitious enough and never will be within the constraint of state rules. the government is launching a program of credit easing to help small business. we have set a feeling of forty billion pounds. at the same time i agree with

mervyn king that we will reduce by forty billion pounds the asset purchase ability of the previous government gave the bank to buy businessland. only a small proportion of that facility was ever used and i am publishing my exchange with the governor today. we are launching our national loan guarantee which will work on the simple principle that we use a hard one low interest-rate the government can borrow at to reduce the interest rate to small businesses. we're using credibility on international markets to help on domestic economy. new loans and overdraft business turnovers of less than fifty million pounds will be eligible to stay focused on smaller companies. we expect it will lead to reductions of 1% in the rate of interest in charging companies show business facing a 7% interest rate gets a five million pound loan.

we developed with the bank of england a mechanism to allocate funding for different banks based on how much they increase -- that is a clear audit trail to the shore banks comply. we will use the experience of european investment banks in the u.k. to ensure that it works. state approval so that the national loan guarantee scheme will be up and running in the next few months. initially twenty billion pounds of these guarantees will be available next few years. we are also watching the 1 billion pound finance concert ship in britain's midsize company. crucial part of the economy neglected too long and intensified by the director general and others as a future source. government will invest directly to these businesses in partnership with other investors like pension funds and insurance companies. it will give these mid cap companies a new source outside the traditional banks and the business finance partnership cakes of ice stand ready to

increase its size and we will develop further partnership ideas to the new bond issuance to help small and medium-sized companies. no government has attempted anything as ambitious as this before. we will not get every detail perfect the first time around but we don't want to make the best the enemy of the good which is a strain on the financial increase. the important thing is to get flowing credit to britain. mr. speaker, the government can use low interest rates to help young families too who want to buy a home but can't afford the large -- banks are now demanding. we will use mortgage indemnity to help 100,000 such families to buy newly built homes. we will help construction firms that can't get bank financing four hundred million pound some that will kick stop projects that have planning and we are going to reinvigorate the right to buy. this is one of the greatest

social policies of all time. homeownership within the reach of millions of aspiring families. it will slowly and still fully strangled by the last government as discount for cut and cut again. we will bring it back to life. families in social housing will buy their own homes at a discount of up to 50% and we will use the receipts to build every home purchase a new additional affordable home as well. so new homes for families that need them. new homeownership for families who aspire to a. new jobs in the construction industry, that is what the new right to buy will bring. mr. speaker, it is leading up to the crash. our economy became dangerously overdependent on the success of a poorly regulated london.

meanwhile, employment by business in a region like this fell during this period. by 2007 the previous government was relying on finance for one in every eight pounds raised in taxation. that left britain completely exposed when the banks failed and i confirm that the next we will publish a response to the report we commissioned from john dickens to protect taxpayers better. it is this government's policy to ensure we remain the home of global banks. london is the world's preeminent financial center. that is why we will not agree to the introduction of an e you financial transaction. it is not a tax for bankers but attacks on people's pension. instead we introduced a permanent bank levee to make sure the banks pay their fair share. i have always said we wish to

raise 2.5 billion pounds each and every year for this levy to insure we do that. i need to raise the rate of a levee to 0.088%. this will be effective from the first of january next year and we will also take action to stop large firms using complex asset backed for a pension fund there arrangements that claim double the tax relief that was intended. this will save the exchequer half a billion pounds a year. mr. speaker, financial services will always be an important industry to the u.k.. but we have to help the private sector and other parts of the country grow. that means and congested roads and railways for business to move products that cannot be reduced to a screen and a city trading floor. it means providing secure power sources at reasonable prices and breaking new superfast digital networks to companies across the

country. these do not exist today. see what countries like china or brazil are building and you will see why we risk falling behind the rest of the world. we are publishing the national infrastructure plan today. for the first time we are identifying over 500 infrastructure projects. we want to see built to the next decade and beyond. roads, railways, power stations, waste facilities, broadband networks and mobilizing finance meetings to deliver them too. the savings have announced in the current budget have enabled me to fund pound for pound, five billion pound of additional spending on infrastructure over the next three years. new spending guarantees by the government will bring a billion pounds forward. and we are committing a further five billion pounds to future product in the next period southern planning and start now.

this is public money and by exploring guarantees and letting city mayors borrow against future tax we are looking at new ways to deploy it. we need to put to work for many billions of pounds the british people save in british funds and get those savings invested in british projects. you could call it british savings or british jobs, mr. speaker. the job and negotiated an agreement with two groups of british pension funds to unlock an additional twenty billion pounds with private investment in more than infrastructure. and it is a go ahead. around the country to 35 new roads and rail schemes to support economic development. in the northwest we will electrify the express so it will include link roads and on the murky side for the addition of the atlantic gateway into a reality. there will be new stations and new tram capacity and we will

hold them on the hamburg bridge. i want to pay tribute to my hon. friends and other mobile m ps his campaign to make this happen under this government and in the northeast we will bring forward investment on the metro and in the 845 and 843 and 8453 there are going to be improved and in the southwest, the brits road and a free 85 will go ahead. for families across the southwest facing of the highest water charges in britain the government will kick up the household bills of all southwest customers by 50 pounds a year. we are going to make immediate improvements to the a 14 and in the southeast we will build a new railway link between oxford and milton keen that is 12,000 new jobs.

we will start working on a newer crossing of the lower thames and explore all the options that make the hub status with the exception of a third runway at heathrow. right here in london we will work with the mayor of options on river crossings regarding silver towne and support the extension of the northern -- could bring 25,000 jobs to the area. for the administrations in stalin the bleeders and wales and northern ireland will get their share and working with the link between in the m 4 in south wales to north of the border. this all amounts to a huge commitment of overhauling the physical infrastructure of our nation. and we will match it by overhauling the digital infrastructure. the government is funding plans

to bring that to 90% of homes and businesses across the country and extend mobile phone capacity to 95% capacity to a great at economically vibrant countryside but our great cities are the heart of the regional economy and we will help bring world leading broadband and wi-fi connections to ten of them including the capital of all four nations. we will go with the 22 enterprise zones already announced with two thirds in the like a sure component and i can confirm the capstone allowance of 100% will be available to encourage manufacturing other industries in zones in liverpool, sheffield, hamburger and a black country. those will allow the northeastern enterprise zone and we will continue extending to create private-sector jobs there too.

mr. speaker, this government's new regional growth has allocated 1.4 billion pounds to 169 project around the country. for every one pound we're putting in we are tracking 6,000 private-sector money alongside it. i am putting in a further 1 billion pounds over this parliament and to the regional growth for england with support for the administration. if we don't get the private sector to take a greater share of economic activity in the region our economy will become more and more unbalanced as it did over the last ten years. government should not assume this will happen by itself. we must tell business to grow and succeed and do that at a national level too with our commitment for example to british science. at a time of difficult choices

we made last year when committed to excessive -- we are confirming half a billion pounds through a scientific project from supercomputing and satellite and government can encourage many more small firms to export overseas for the first time to doubling to 50,000 the sectors we are helping and extending support to british mid cap who lack the overseas german equivalents. we will make it easier for u.k.-based to compete for a government determined and make new applications out of government data and provide funds for smaller technology firms in britain to find it difficult to send innovations into commercial success and listen to the ideas from business groups about encouraging innovation in larger companies and introduce a new above the line are and the tax credit in 2013 that will

increase the generosity. and we will give particular help to our energy intensive industry. i have not shied away from sensible steps to reduce this country's dependence on a volatile oil prices and reduce our carbon emissions. the chancellor who founded the first investment bank and infuse the carbon price. our deal will help people insulate their homes and their heating bills but i am worried about the combined impact the green policies adopted not just in britain but by the european union on our every energy intensive industries. we are not going to save the planet by shutting down our steel mills and manufacturers. all we will be doing is exporting valuable jobs so we will help with the cost of the

e.u. trading scheme to increase climate change levee release and reduce the impact the reforms these businesses do. this amounts to a two fifty million pound package over the parliament. >> keep industry in britain. mr. speaker, it is a reminder that we should not price british business out of the world economy. if we burden them with endless social and environmental goals however worthy in their own right not only will we not achieve those goals and the businesses will fail, jobs will be lost. our planning reform strike a balance between protecting our country -- permitting economic development but we need to go further through lengthy delays and new responsibilities. we will make sure that the goal

facing eu rules on habitats are placing ridiculous costs on british business. planning laws need reform. >> the house needs to calm down. one hon. member probably shouted enough for one day. chancellor of the exchequer. >> mr. speaker. planning laws need reform. so too do employment rules. we know many firms are afraid to hire new staff because of their fear of the cost involved and it doesn't work out. we are doubling the period before an employee could bring an onside dismissal play and introducing fees. we will call for evidence on further reform to make it easier to hide including changing the

kewpie regulation, refusing delay and uncertainty in the redundancy process and introducing the idea of compensated no-fault dismissal for review of the attendant employees. we look at the burden of health and safety rules on small firms because we have a regard for the health and safety of the british economy too and this government has introduced flexible working practices. we are committed to their rights for employees but what about the right to get a job in the first place for the right to work all are running a small business and not be sued out of existence armacost of an employment? by the cost of an employment? no good comparing ourselves with other european countries. the entire european confidence is pricing itself out of the world economy. the same is true of taxes on business. we tax firms out of existence or out of the country there won't

be any tax revenue for anyone. we set the goal of giving this country the most competitive tax in the g 20. our corporate tax rate has fallen from $0.28 to 26% and i can confirmed it will again next april to 25%. we are undertaking major simplification for business and individuals including this consulting on ideas emerging the administration on income-tax and national insurance. we are publishing next week will on taxation of foreign profits to the multinational stop leaving bryn and again start coming here and we will end low value consignment release on the channel islands that his continued by large companies to undercut our high streets. we support enterprise by increasing generosity of the enterprise investments team and extending this scheme specifically to help new startup businesses get the investment they need even when they

struggle to get the finance and in the current credit positioned the struggle too often ends in failure. from april of 2012 anyone affecting 100,000 pounds in qualifying new start of business will be eligible for income tax relief of 50% regardless of the rates paid in tax and to get people investing in start up britain in 2012. we will also waive tax on capital gains invested through the new scheme. we can afford this with a freeze on the general capital gains tax for the next year. i want to help existing small-business who find current economic conditions tough. business radar at disproportionately large part of their fa fixed costs. are provided a holiday for october next year. i am today extending that holiday until april of 2013. over half a million small firms including one third of all shops

would have reduced work in the rate bills for the end of the year ended hole of the next financial year too. to help all business including larger ones with next year's rise in business rates i will all of them the first sixty% of the increase in their bills for the two following years. are will also want them to help any business -- want to help any business seeking to employ at a young person who is out of work. the o p r forecasts as unemployment rises 8% this year to 8.7% next year before falling to 6.2% an end forecast. and employment has been rising for seven year and is unacceptably high. it is little comfort that this problem is affecting all western nations today. the problem is primarily a lack of jobs but it is made worse by a lack of -- too many children. too many children are leaving

school after 11 years of compulsory education without the basics they need for the world. the new use contract addresses both problems. with the offer private sector experience every young person after five months will be weekly signing on. after nine month's pay for job efforts and apprenticeship in a private business. some 200,000 people will be helped in this way but as deputy prime minister said this is a contract. young people who don't engage with it will be considered mandatory work activity and those that drop out without good reason will lose their benefit. are going to tackle the economic performance of this country and attacked decade-long products we will transform the school system too so children leave school

prepared for the world of work. more right hon. friend the secretary of state for education is doing more to make that happen than anyone who has ever had this job before. the last government took six years. he has created 1,200 academies 18 months purported his education reform as a central plank of my economic policy. so today with the savings we may i am providing an extra 1.2 billion as part of the additional investment in infrastructure to spend on our schools. half of it will go to help local authorities with the great basic need for school placement. the other six hundred million will support my right hon. friend's reform and 100 additional free schools. these schools will include new

math skills for 16 to 18-year-olds and give our most talented mathematician the chance to flourish. .edu -- new university technical challenges these are what britain needs to match our competitors and produce more of the engineering and science graduates for long-term economic success. and to insure that children born into the poorest families have a real chance to become one of those graduates will take further steps to improve early education. last year it was this coalition government that not only expanded free nursery education for all 3 and 4-year-olds but gave children from the poorest families a new right to 15 hours of nursery care at the age of 2 years old. i can tell the house today we have the number of children receiving this -- 40% of 2-year-olds. original 260,000 children from

the most disadvantaged families to get this support in the early years. education. early years learning. this is how you change the life chances of our least well off and genuinely let children out of policy. that is how you build an economy ready to proceed in the world. it will take time. the damage we have to repair is great. people know how difficult things are. how little money there is. but where we help with the rising cost of living we will. i have already offered counsel to resources for another year's freeze in the council tax and that will help millions of families. but i want to do more. commuters often travel long distance to go to work and bring in come home. train fares are expensive and well above inflation to pay for the much-needed investment in the new rail and trains we need but it is too much. the government will fund a reduction in increased to 1% and

this will apply across national rail regulated affairs across london buses and will help millions of people in trains. so mr. speaker, millions more use their cars as a way to get to work and pick up their children from school. it is not a luxury for most people. it is a necessity. in the budget and cut fuel gp by 1 penny. the plan was it to be 3 pens higher in january and 5 by august next year. that would be problem for working families. despite the constraints that are upon us we will cancel a increase planned for january and with a view of each from august 3rd higher than it is now. taxes will be a full 10 pence lower than it would have been with our action in the budget.

families will save 144,000 for filling the average family car by next year. in this tough time we are helping where we can. mr. speaker, all we are doing today, speaking to our deficit plan peak interest rates as low as possible. increasing the supply of credit to pass those low rates on families -- rebalancing our economy with an active enterprise quality and new infrastructure. held with cost-of-living, fuel and rail. all this takes britain in the right direction. it cannot -- [shouting] -- it cannot transform our economic situation overnight. people in this country understand the broad problems britain faces. they can watch the news and the night of the week and see for themselves the crisis in the euro zone and the scale of the debt burden we carry. and people no, people know that

the promises of quick fixes and more spending this country can't afford at times like this are like the promises of a quack doctor selling miller quote york--miracle cure. we are saying the government that has a plan to deal with carnation to keep interest rates low. a government determined to support business and jobs. a government committed to take britain faithfully through the storm. leadership for tough times. that is what we offer. >> order! [shouting] >> mr. speaker. let me start by thanking -- order! order! to resumed his seat. i said very clearly that people

shouldn't shopped and yell at the chancellor. he should be heard in respectful quiet as the public would hope. the same goes for the reaction to the shadow chancellor. let's try to operate at the level of events. >> thank you, mr. speaker. let me start by thanking the chancellor of the exchequer ford fans notice of his statement and the office of budget responsibility to assure the chancellor is setting out for this house the truth about the state of the british economy and the truly colossal failure of the chancellor's plan. mr. speaker, let us be clear what the obr told us today. the chancellor couldn't bring himself to say himself. growth flat wind down this year, next year and a year after. unemployment growing. well over 1 hundred billion

pounds more bar wing than the chancellor planned a year ago. more borrowing under a plan that chancellor inherited at the last general election, mr. speaker. as a result his economic and fiscal strategy is in tatters. after 18 months in office the verdict is in. plan a has failed and it has failed colossally. with unemployment soaring, family pensions and businesses already know that it is hurting and with a billion bellmore in borrowing to pay for rising unemployment today we find out the truth. it is just not working. mr. speaker, the prime minister likes to say you can't borrow your way out of a crisis. can the chancellor confirmed

that is exactly what he has been taught to do to pay for the crisis in jobs in britain, higher unemployment and higher benefit bill that his failing plan has delivered? mr. speaker, the chancellor is out of touch and complacent hoovers of a year ago now seems such a distant memory. the prime minister boasted britain is out of the danger zone. the chancellor claim the u.k. will face safe haven but we know the truth. we know the truth. cutting too far and too fast has backfired and every one of the chancellor's claims of a year ago have completely unraveled. mr. speaker, not as if they were not borne by their coalition colleagues. before the election, we said like every country after the global financial crisis we have

to get down. that made tough decisions on tax and spending cuts. the question is not if you do it but how are you do it. which is why we on this side of the house warned if you try to cut spending and raise taxes too far too fast you risk joking on recovery pushing up unemployment. we said the chancellor would be cautious. it was reckless. we said he was ripping out the foundations of the house leaving our economy not safe but badly, deeply exposed to the growing global storm. let me remind the chancellor was the managing director of the international monetary fund warned this summer. she said slam on the brakes too quickly will hurt the recovery and worse and job prospects. mr. speaker, what has happened? consumer and business trumped in the last year. recovery of over a year ago,

since last year slower growth than any other g-7 country and they had an earthquake. unemployment and a 17 year high. over 1 million young people out of work and today the news that growth this year will not be the 2.3% that the chancellor so confidently predicted in the june budget this year but just 4.9%. and growth lower next year than this year and lower than forecast the year after. the fourth time the ob are downgraded the growth forecast just 18 months. mr. speaker, and out today, we learn that even judged by the one objective this chancellor set himself to get the deficit down he has failed. because with slower growth and rising unemployment, pushing up the cost of failure can the

chancellor confirmed that compared to his statement year-ago borrowing is known not set to be vote forty-six billion pounds more than he said it would be in march can he confirm compared to his plan the year ago he is now going to borrow a staggering 1 hundred sixty eight billion pounds more? higher borrowings and he promised a year ago. 1 fifty-eight billion pounds more in borrowing. can he also confirm despite the pain of the forty billion pounds of extra spending cuts that chancellor boasted about year-ago, can he confirm that compared to the plan he inherited from the previous government in the last election the cost of recovery is choked off and unemployment is higher. can he confirm he will be borrowing more at the end of

this parliament than the plan he inherited from the labor government? does the fact that a year ago the prime minister told the cbi in five years time we will have balanced the books. not some kind of dodgy rolling target but a clear commitment to eliminate the deficit by 2015. can the chancellor told a house will he meet his fiscal mandate to eliminate the structural deficit by 2015? with unemployment up and borrowing of going further and faster, utterly counterproductive and self-defeating. we have had all of the pain and none of the gain, mr. speaker. i have to say these forecasts of the obr show the entire economic

and fiscal strategy is in complete disarray -- disarray. all we get our excuses blaming anyone and anything. the labor government must know the rule -- earthquakes and hyperinflation, the euro zone, low paid -- anybody but himself, mr. speaker. it is the chancellor that is to blame. it is him failing first pushing up unemployment and pushing up -- it is his reckless gamble that has made things worse in britain, not better. mr. speaker, of course, if euro zone countries continue to fail to sort out their problems it will have an impact here but britain's economic recovery would choke off a year ago before the u.s. crisis.

look at the obr forecast. they downgraded growth in britain this year and upgraded growth in the euro this year, mr. speaker. out of 27 countries in the european union only greece, portugal and cyprus have grown more thoroughly than britain. i have to say it is not only not too late for the chancellor to change course but the euro crisis makes it more important. but instead he is clinging to the fantasy that any change will make things worse and he still complains to the electorate fantasy that low long-term interest rates in britain are a sign of credibility and not as they were in japan in the 90s or america today a sign of stagnant growth in our economy. >> the head of the imf warned

the chancellor -- the situation is very simple. the chancellor will be heard. >> thank you, mr. speaker. they don't like it but this is the truth, mr. speaker. they set up the obr. maybe they should listen to their forecasts, mr. speaker. this summer the head of the imf warned the chancellor growth is necessary for fiscal credibility. the chancellor said it change in his plan would lead to a loss in credibility even if he is forced to confirm his growth and borrow talk is off track, mr. speaker. last month the imf advise the government, quote, this activity were to undershirt the issues current expectation than risk a period of stagflation or contracting. countries that face historically low yields for example germany and the u.k. should also consider delaying some of their

planned consolidation. mr. speaker, with a the world opening and today's news that in britain we are set to see stagnant growth much of this year and next let me ask the chancellor isn't it now time for him to listen to the imf? how much worse does it have to get? how many more young people have to lose their jobs? how many businesses have to go bankrupt? how many times the have to come and that great growth forecasts and upgrade soaring costs? how many billions more in borrowing do we need to pay for failure before the chancellor -- [shouting] >> mr. speaker, these would be difficult times for any chancellor. but our fear is that once again the chancellor is making a catastrophic error of judgment. in his statement today. he is refusing to learn the

lessons of history or economics. he is refusing to shift to a more balanced plan. he got it wrong 18 months ago. he is getting it wrong again today, mr. speaker. repeating mistakes he made last year will only make things worse. isn't it time to listen to the imf and cut taxes and have a slower pace of spending reduction? is it time for him to change course before it is too late? a cobbled together package of growth measures which he must know and which the obr forecast confirmed to not address the fundamental problem for the reckless deflationary plan is pushing a borrowing. we have seen it before. this is the third emergency growth package in a year. the last thing the economy needs is to get another fantasy growth package. hon. members have to take my

word. let's look at the obr's forecast. does the obr think the chancellor's plan will freeze growth and refine growth down next year to 2.5% and in the following year revised growth down 2.9% to 2.1%? does the obr sink the plan will increase employment or cut unemployment? let me tell the house two things from the edolphus towns test which the chancellor showed not to tell the house. ..

>> he's announced a new jobs fund. but let me ask you, why did he abolish the future jobs fund in the first place? they aboll you shoulded it, they abolished it in their first month in office, it won't be up and running until the middle of next year, mr. speaker. he claims to have increased the bank levy, so why is he cutting banks from this year to last year? down to 2.5 billion this year. he's announced a sensible halt to -- [inaudible] but can he confirm, can he confirm as a result of last january's bat rights -- [inaudible] he's belatedly announced a plan on labour's enterprise guarantee under the relabeling credit

easing, but why did he wait so long, and why did he put his faith in the merlin deal which has pay tently pail -- patently failed and has seen bank lending to small businesses fall over the last year? and after his equally belated decision to set up a new infrastructure fund, this from the same chancellor who abolished the futures program. let me ask him, how much of it has been preannounced, how much will happen this year and next year? how much of it is actually preannounced funding for the next spending review after the next general election, mr. speaker? and can he confirm that this new off-budget infrastructure fund will be subject to a national order of -- [inaudible] to insure the projects are not more expensive to the taxpayer than direct government borrowing, mr. speaker?

he's also announced a rebate for energy-intensive -- [inaudible] he's reinstated just 10% of his plan to cut in housing. but even in the last few minutes as we've studied this -- [inaudible] mr. speaker, despite all the bluster of the new measures, because the chancellor is so determined not to break from his failing plan, he is once again giving with one hand and taking with the other. how are these new, great measures being paid for by hitting -- [inaudible] and savers, mr. speaker? let me ask the chancellor, how much will his cut in tax credits cost a working family on average income? and with inflation so much higher, is the chancellor still meeting the prime minister's pledge to deliver real term rises in nhs spending in this parliament? and as a result and taking into account preannounced measures in

his budget and spending reviews, is the government still hitting women harder than men? are they still increasing child poverty and not reducing it? given he's already cut childcare support by over 1.5 billion pounds s he helping women who want to work, or is he making it harder, mr. speaker? mr. speaker, if we are all in this together, why would this government -- why with this government is it always families, women and children who pay the price? mr. speaker, it is clear the chancellor's plan is not working. the obr knows it, the markets know it, the imf knows it, we know it. so, increasingly, do the chancellor's coalition colleagues. his archrival, the mayor of london, certainly knows it, mr. speaker. but we will know why the chancellor cannot change course. we know why he can't accept the

imf's advice. [laughter] we all know why even as the euro crisis deepenningses, even as he is borrowing 158 billion pounds more than he planned this, oh, so political chancellor won't budge because to change course now would be to admit he's got the key economic judgments of this parliament absolutely, catastrophically wrong. mr. speaker, if after just 18 months his plan is leading to falling growth, rising unemployment and 158 billion pounds more in borrowing, the country either needs a new chancellor or a new plan. a balanced and credible plan on jobs growth and the deficit. we need real tax cuts, real investment, a real plan for job growth and deficit reduction. labour's five-point plan for job growth and deficit reduction.

i have to say, mr. speaker, protecting our economy, businesses, jobs and family finances is more important than trying to protect a failed economic plan for his sake, for his party's sake and in the national interest. the chancellor needs to change course, and he needs to do so now. >> [inaudible] the exchequer. >> well, mr. speaker, the complaint that we are borrowing too much and then proposes that we borrow even more. [laughter] it is completely unconvincing. and it is a reminder to this side of the house why we are so pleased that he is in the job he is doing. for he is a constant reminder of everything that went wrong with labour's economic policy, a

permanent advertisement for why we should never trust labour with our money again. let me answer, first of all, his specific questions. he welcomes the fact we've got open and honest figures from the obr. when did we ever get them when he was at -- he complains about the bank levy. he was the city minister. why didn't he introduce a bank levy? it will raise 2.5 billion pounds a year. on the labour policy document on the bonus tax which he is proposing, they cost two billion pounds a year. it is a tax cut for banks, can i put it like that? he complains about off balance sheet borrowing. this is from mr. pfi. he says we should have kept the

future job fund. 50% of people who left that fund were unemployed in 12 weeks which is why we've got an unemployment problem and, yes, we are committed to real increases in the health budget, and, yes, the obr confirms we will meet our fiscal mandate and our debt target. and as for terms set out by me in the emergency budget, and he mentions here he said to the house this extraordinary thing that the obr forecast the growth in the u.k. would be less than the euro area. that, i'm afraid, is simply not true. i'm not going to use unparliamentary language, but it is here in black and white. 2012, 2013, '14, '15, every single year growth, unfortunately, is slow in the euro zone and slower than in the u.k. that is one of the problems, of course, we are facing. let me respond to, basically, the three arguments he advanced in his reply. first, he said that we should

try and borrow our way out of a debt crisis. he talked about extra borrowing. his plans, the plans of the previous government, would have led to an additional 100 billion on top of it borrowing over the parliament. those are the facts, and there is not a single credible political party in the entirety of europe that is proposing more spending at the moment apart from -- and they are not credible -- the labour party opposite. now, this is what tony blair said this morning on the radio. go on. boo him. have a go at booing him. this is what tony blair said on the radio this morning. frankly, whatever government is in power is going to be pursuing a pretty tough program at the moment. that's what tony blair said. blair --

[inaudible] i think the british public made their mind up on labour politicians years ago. the second argument he deployed just now, he said that low interest rates in britain were a sign of failure. so presumably, that means he wants the interest rates to be higher in britain. do they want the interest rates -- [inaudible] presumably, the fact that italian rates is over 7% is a sign of success. the fact that greek interest rates are 30% is an economic miracle. [laughter] his policy for higher interest rates would put the mortgage bills of families up, would increase their interest charges for taxpayers, increase loans on small businesses and put people out of work. now people know you vote labour, you get higher interest rates. and the third and final argument, mr. speaker, that he

advances is that the events happening in europe will have, have almost no impact on anyone in the british economy. he mentioned it once in passing. and that flies in the face of what the bank of england says, the oecd yesterday. he quotes the imf. the imf supports our deficit reduction plan. they explicitly asked themselves the question, should britain change course, and they say, no. and, of course, he quotes the independent office for budget responsibility numbers, but he refuses to accept their analysis. anyone who turns on the television, anyone who listens to the news knows his argument is completely absurd. and we have to ask ourselves the question, why does he advance it? why does he alone advance this argument that britain is not affected by what's been going on

in the world, by external oil shocks, by the size of the financial crisis in the euro zone. there is, mr. speaker, a very simple reason. because if he admits that we're in a debt crisis, then he has to admit we borrowed too much when he was in office, that the crash was deeper than anywhere else, that the effects were more longer lasting. it would be an admission of his personal failure. he is the city minister who let the city explode. he is the author of the golden rules that failed. he doesn't have the excuse of the leader of the opposition that he was only photocopying orders. he gave the orders. [laughter] the orders came from him. and labour's economic credibility will never recover while he remains the shadow chancellor. [cheers and applause] >> order. mr. andrew tyree. the whole country, i think, will welcome the supply-side measures

announced today. britain's recovery depends on thousands of small businesses in our constituencies who need both the confidence and the cash to invest and grow which is why the credit easing package that's been announced today is so welcome. >> here, here. >> does he agree the recovery can only be secured in the long term, though, when we have banks that are operating normally, when we have a return to lending conditions and doesn't that reinforce the need for him to work extremely closely with both the regulators and the banks to do this? >> i agree with the chair of the treasury-elect committee that the impact of the financial crisis and the deleveraging in the british financial system and other financial systems is having a huge impact on t not just our recovery, but recoveries around the world. and i completely agree with him that we need to try and clear the impaired balance sheets of the system, we need to try to get new lenders onto high street

which is why we took the decision we did on northern rock, and i will have more to say on the banking system next month when i respond to the vick cars report and to the very good report from the treasury committee. >> mrs. margaret hodge. >> i welcome the announcement of more investment in infrastructure, but the more i hear about the proposal, the more it sounds like psi by any other name. pension funds will only invest in public projects if it's a good deal for them, and as with psi any sweetener that the chancellor offers to the private sector will be at the expense of the taxpayer both in the short term today and for future generations. so what precisely is he offering and proposing to attract pension fund investment and how is he going to insure that his scheme represents value for money for the taxpayer?

>> excheck kerr. >> well, let me say to her that what we're seeking to do is get the investment funds invest anything british infrastructure. we're not proposing to provide, in this respect, guarantees for this project. there are some guarantees set out like the waste tunnel. but what i'm talking about here with the pension funds is not guaranteed projects, this is just trying to get private sector money invested -- let me explain briefly. we have canadian and australian pension funds investing in britain, but not british pension funds of a sufficient scale. we're going to try to bring them together into vehicles where they can cooperate and then invest in infrastructure. this is not the government underwriting those investments, it's trying to get the industry together to make private sector investments. >> [inaudible]

>> -- statement today, and i think it's a great shame that the shadow chancellor seems to be live anything a parallel universe to those on this side of the aisle. since my right honorable friend agrees that in view of his -- [inaudible] a better economy for the future that it would be a good idea to look again at the prospect of account affordability in the banking system to create a truly free consumer choice for the future in terms of personal current accounts and small business lending? >> chancellor. >> i agree with my friend that that is a very important part of making sure customers get the best possible deal. it was the part of the vick around's report that got the least coverage, but we are determined to allow people to very easily switch their current accounts, and we hope to have them in place before the end of the parliament. >> mr. david miliband. >> thank you, mr. speaker. the chance chancellor has

recognized that 260,000 young people have been employed, he has rejected the argument for a job guarantee and instead engages subsidies. for the sake of those young people, would he look at the same scheme which his right honorable friend announced in 1995, the same scheme promised 130,000 jobs then, 2,300 applications came forward. will he look at that experience to make sure we don't have a repetition of the very low take-up of wage subsidy schemes? >> well, we have worked with the business groups and businesses to make sure that the youth contract is going to be effective. and i respect the fact that he told us some days ago that the problem of youth unemployment was not invented by this government. i respect his honesty in that. this is a problem that all western countries are facing at the moment and, frankly, youth unemployment's been picking up

for the last seven years. the private sector is part of the answer. the work experience places are already working well, and we're adding to those. and, of course, there is some conditionality to all of this. >> mr. steven williams. >> speaker, i welcome what the chancellor said to protect our economy from the external pressures that we face and also to rebalance it and strengthen it for the future. will he confirm that despite those difficult circumstances, this government is acting to raise the income tax threshold so the -- [inaudible] in society don't pay income tax? it's fully increasing benefits by 5.2% and is increasing the pension -- [inaudible] doesn't that demonstrate in this coalition government is determined to protect society despite the very difficult circumstances in which we operate? >> mr. exchequer. >> my right honorable friend is right. we are raising the state pension, and our coalition government is committed to the triple lock, and people can see

the benefits of that today. so he's absolutely right about those things, and he is also right that we are committed to real increases in the personal tax allowance, income tax allowance. we've already had two of those. but the agreement in the coalition, for the coalition is absolutely clear. i certainly support it, we want to lift more people out of tax altogether. >> michael -- [inaudible] >> what is the right honorable gentleman's precise estimate of overall growth, if any, arising from today's package given that there is no increase in demand, no net increase in demand? and isn't his core five billion pound infrastructure package just -- [inaudible] merely tinkering at the edges and completely incapable of pulling britain out of deepening slump? >> well, as i said in my statement, i believe particularly in a debt crisis the monetary policy is the most

powerful tool for supporting demand. the bank of england has undertaken the qe program and, of course, the previous government also thought that was the right policy in the sense that it authorized the nbc request at the time. but i also think we can do a lot to try and improve the credit conditions for small businesses which do a huge amount to employ people in our country which is why we've also taken the action on credit easing. i think he has to balance what i said about what the cost of a 1% rise in interest would do for bills. with only an extra billion pounds of borrowing he is proposing on top of the borrowing we are already doing and what that might also do the credibility of this country in international markets. >> mr. brandon lewis. >> thank you, mr. speaker. would my right honorable friend join me in well coming the opportunity -- [inaudible] unlocking the growth that can come from that infrastructure, in particular some areas --

[inaudible] as well as other parts of the country will give a good return for those pension funds? >> well, my honorable friend is absolutely right, and that is why we've made a particular commitment to two roads in east angola, and the a14 is a real challenge, as he knows, because it's such a vital artery for our entire national economy. we're announcing commitments today to improve the a14, and we also want to work with local councils, local communities to make even greater, lasting improvements in the future. >> helen goodman. >> thank you, mr. speaker. the chancellor of the exchequer ended his speech by talking about quack doctors, and, of course, in the book george's marvelous medicine, george makes a medicine for his grandmother to shrink her. can't the chancellor understand that he will not grow the british economy by cutting tax credits which will make it uneconomic for many women to go out to work?

>> well, as i say, we're not cutting past credits, we're updating the -- [inaudible] and she should have listen today what i had to say. >> claire perry. [laughter] >> i am confused, mr. speaker. on page 82 it says the obr has cut its forecast for european -- [inaudible] on another page it says it has cut british forecast to .7%. the chancellor's economic theory, interest rates should be higher in britain than in the neurozone. they're not. can he explain why? >> because we have credibility. he was earned credibility for the assumption. that's what this government has done. it has not been an easy thing to do, but it has brought our foreign costs down. when this government came to office, the interest rates in

italy were lower than the interest rates in britain. they've completely gone up, and they've come down in britain. of course, we now have the new policy of the labour party which is they want to see higher interest rates. i'm not sure the bank benches have realized what a completely stupid policy that is. >> thank you very much, mr. speaker. with regard to the capital infrastructure investments, would the chancellor confirm that the whole figure of to 30 billion will be proportionately spent in wales and the other nations? in wales' case this amounts to 1.5 billion pounds. >> we absolutely will apply the bonding formula to the infrastructure spend anything england. i can confirm that, and we specifically want to work with the administration on the m4 corridor in south wales and as well and a possible deal we can do with the bridge and the tolls in the future on that. so we're holding over the

opportunity of a discussion on that as well. >> mr. andrew percy. >> the chancellor for his announcement on the -- [inaudible] and for the work of the transport sec secretary. does he agree with me that this will benefit low-paid workers, especially in the -- [inaudible] who have suffered even over the times of growth with we saw private sector jobs actually reduce? >> well, i pay tribute, again, to my honorable friend and other mps in the area including the member from beverly who first raised this issue to me some years ago. and i'll pay tribute to everyone. absolutely. all, i will happily pay tribute to all mps who have campaigned for the reduction in the tolls. this was an injustice. the bridge was built many, many years ago, the debt was paid off, the tolls were still at a very high level. i'm glad we've been able to help, and i think with our

enterprise also in -- [inaudible] and the commitment to energy renewal and industry in the area, this is really going to help the economy. >> mr. barry sheerman. >> mr. speaker, can i say to the chancellor that his budget, his statement today reminded me of the budgets of not the last chancellor of the exchequer because he was so much including the kitchen sink. to change the mood in the country, most of the country is now deeply in recession. were we expecting today some imaginative, bold policies to end youth unemployment? >> well, i would suggest to the honorable gentleman that a fairly stark difference between myself and the honorable member. i'm trying to make the books add up. he did not. and we're all paying the price ever since. >> john baron. >> i know the chancellor will ignore the pleas of the party opposite given that they more

than doubled the national debt when in power, but would he revisit the massive e.u. increases, our net increases coming through over the next seven years, something like 20 billion pounds which would fund small business corporation packages? >> well, we've negotiated the first real freeze in the e.u. budget and, of course, there are very important negotiations coming on the future financial perspective. so i'm absolutely clear, as indeed now are some other member states, that the e.u. has to live within its means as well. >> caroline lucas. >> thank you. can the chancellor explain why he's taking 250 million pounds from hard-pressed families and giving it to some of the country's biggest polluters -- [inaudible] >> as i say, we have introduced the green investment bank, funded that. we are supporting the green deal, and she didn't mention there are 200 million pounds of incentives here to make the green deal work for people in

their homes, the bills come down, and we also reduce our carbon emissions. but i have to say to her, i don't see how we save the climate of our country and of the world by pricing ourselves out of steel making, chemical factories, smelting and is -- so on. if anything, it's more likely those industries are going to continue in other countries and be more polluting in other countries because they don't have the same regimes. so i actually think it supports our efforts to reduce carbon emissions around the world that we keep those industries in britain. >> mr. david -- [inaudible] >> thank you, mr. speaker. can i welcome my right honorable friend's statement and particularly respect the rail fares and the fuel duty. would he agree with me that his policy in this area and others shows that the government is helping hard working people with the cost of living wherever it can? >> well, i absolutely agree with my honorable friend. we have been able to take action

on fuel duties, ten pence lore than they would otherwise have been. we've taken the action to reduce the increase in rail fares and, of course, we've also helped small businesses that employ people by extending that business rate freeze as well. >> mr. denny skinner. >> if we're all in it together, why is it that these announced further restrictions on pay for working people and their families while the bankers who caused the recession are taking home salaries of up to four and a half million pounds? is it because the people there are millionaires and looking after their friends in the banking system while kicking the workers in the teeth? >> well, i think the honorable gentleman will find the answer in the last labour cabinet. [laughter] if he's so passionate about this issue, why didn't he press the government he supported for 13