Taxpayer loses £1bn as Osborne sells 5.4% of RBS

The government has today begun the process of selling its shares in the Royal Bank of Scotland. It has sold 5.4 per cent of the bank, at a price of 330p per share. Which has raised £2.1bn but when Gordon Brown's government bailed out the bank they paid £1bn, at 500p a share, more than the current government is raising. If the current government sell all shares, the taxpayer own at, 330p then the taxpayer will lose £14bn. The Treasury say that the £2.1 billion raised from the sale will be used to pay down the national debt.

The Treasury also say that the Chancellor, George Osborne, received advice from UK Financial Investments yesterday that it would be appropriate to conduct the first sale of the government’s shareholding in the Royal Bank of Scotland. The Chancellor agreed with that advice and authorised the process to begin. The government say that today marks an important first step in returning the Royal Bank of Scotland to the private sector.

Commenting the Chancellor of the Exchequer, George Osborne, said: "I can confirm this morning that we have sold 5.4% of the Royal Bank of Scotland, raising £2.1 billion which will be used to pay down the national debt. This is an important first step in returning the bank to private ownership, which is the right thing to do for the taxpayer and for British businesses: it will promote financial stability, lead to a more competitive banking sector, and support the interests of the wider economy. Now is the time for RBS to rebuild itself as a commercial bank, no longer reliant on the state, but serving the working people of Britain."

Mr Osborne continued: "I wasn’t the Chancellor who bailed out RBS; but I am the Chancellor now responsible for doing the right thing for the British economy. So while the easiest thing to do would be to duck the difficult decisions and leave RBS in state hands; the right thing to do for the economy and for taxpayers is to start selling off our stake. So today that’s what we’re doing."

Branding the government's decision as a "fire sale" of RBS shares Shadow Chancellor, Chris Leslie, said: “RBS had to be bailed out urgently, but it doesn’t have to be sold off at the same speed. Labour has always supported the eventual return of RBS to the private sector but taxpayers who bailed out the bank will want their money back and will be suspicious of any fire sale. The Chancellor needs to justify his haste in selling off a chunk of RBS while the bank is still awaiting a US settlement for the mis-selling of sub-prime mortgages."

"Two years ago George Osborne said he would only countenance a sale of RBS when ‘the bank is fully able to support our economy and when we get good value’. Neither of these tests has yet been passed." Mr Leslie added.

Labour find £250m cuts to 'protect frontline policing'

The Labour party have this evening set out how, they claim, they it will make nearly £250 million of savings in the Home Office in order to better protect frontline policing. In the first interim report from the Zero-Based Review (ZBR), Chris Leslie, Shadow Chief Secretary to the Treasury, and Yvette Cooper, Shadow Home Secretary, outline how Labour will:

• Make savings of at least £172 million a year by reforming police procurement through mandatory joint purchasing of equipment by police forces.
• Scrap elected Police and Crime Commissioners - saving £50 million next year - in order to save the 1,100 police officers set to be axed according to Home Office plans for 2015/16.
• Implement full-cost recovery for gun licensing, raising £17.2 million a year, and levy increased fees for police driver offender retraining, raising £9 million a year.

Publication of the ZBR policing report comes one year after the conclusion of the Independent Police Commission, carried out for Labour and led by Lord Stevens, on how to deliver more with fewer resources. Today Chris Leslie and Yvette Cooper provide more details on how to cut waste from Home Office and policing structures, including how savings could be found through better purchasing and management of the procurement chain. The ZBR policing report has highlighted several instances of poor management in Home Office police spending. This includes deep disparities in the cost of equipment purchased by individual forces - for example the price paid for high-visibility jackets varying fivefold between £20 and up to £100.

Labour say they have also identified initial savings of £172 million a year through polices forces’ joint purchasing. Analysis of data produced by the National Audit Office shows it is possible to make procurement savings of 20 per cent across the Parliament, with the scope to increase the cash sum from the first year total of £172 million. Provisional estimates suggest our procurement plan could see savings increase to between £301 million and £430 million by 2017.

Labour say they will therefore introduce mandatory national procurement and use these additional savings to support police force budgets from 2015/16 onwards and minimise the loss of officers from the frontline in future years. We will also draw further savings from increasing collaboration between forces and bearing down on overtime in forces where performance is worse than that of the majority.

Commenting the Shadow Chief Secretary to the Treasury, Chris Leslie, said: "David Cameron and George Osborne are set to break their promise to balance the books by next year. The next Labour government will finish the job of balancing the books but we will do so in a fairer way by making different choices from the Tories. Labour’s Zero-Based Review has identified almost a quarter of a billion pounds of savings which we will make in the Home Office budget. With departmental spending set to be reduced in the next Parliament, these savings will help us to better protect frontline policing compared to Tory plans."

Shadow Home Secretary, Yvette Cooper commented: "Under the Tories’ policies and spending plans, another 1,100 police officers are due to be cut next year alone, with the police warning that many more officers and vital public duties are at risk. This first stage of Labour’s Zero-Based Review of the Home Office shows how Labour plans can make savings to help get the deficit down and prevent 1,100 officers being cut next year. The police are already struggling to cope with growing crimes such as violent crime, child sex exploitation, online child abuse and online fraud, and prosecutions are falling as they can’t get cases to trial."

Continuing Ms Cooper said: "That’s what makes this Zero-Based Review so important. When money is tight, we need to get the best out of every pound, challenge waste and find new savings. We are determined to find ways to protect the vital frontline work our police do, whilst making the savings we need to help get the deficit down. Policing needs to reform, as Lord Stevens independent review set out last year. But Theresa May is completely failing to work with the police to get basic savings on things like procurement. Instead she is fragmenting the police, making it harder to get efficiency savings in place, and wasting tens of millions on elections for Police and Crime Commissioners that no one wants. It is bad management, bad policy, and our communities can’t afford five more years of this."

"Labour will do things differently - abolishing Police and Crime Commissioners and requiring forces to work together to make the savings they need, so they can keep protecting communities too." Yvette Cooper added.

Labour say their Zero-Based Review of public spending is a root and branch review of every pound the government spends from the bottom up.  The ZBR was launched by Ed Miliband and Ed Balls last year and today marks the publication of its first interim report. The final phase of the ZBR will be completed in Labour’s first year in office.

Labour and the Lib Dems clash over price of petrol

Shadow Chief Secretary to the Treasury, Chris Leslie, attacked the Liberal Democrats today saying they had "broken their promise" not to raise VAT and because of that petrol is "3p a litre more" than it would have been under Labour's plans. The Liberal Democrats say that is untrue. Chris Leslie commented: "Of course it's right that drivers should benefit from falling oil prices with lower prices at the pumps. But since 2011 people have paid 3p more on every litre of petrol because the Lib Dems broke their promise and backed the Tories in raising VAT."

Following on from Labour's claims that people have paid 3p more on every litre of petrol because of a rise in VAT. the Liberal Democrats responded by releasing Treasury figures showing, they say, how much motorists would actually be paying if the Coalition did not take action to reverse Labour's fuel plans. It follows Danny Alexander's calls to for petrol and diesel distributors to cut prices further after recent declines in the cost of oil.

A Liberal Democrat source said: "If this is how Labour do maths it's no wonder they crashed the economy and forget to talk about the deficit. The truth is if we did not axe their plans to increase fuel taxes by inflation, scrap their fuel duty escalator and cut fuel duty ourselves, motorists would now be paying 20p a litre more at the pumps. Only Liberal Democrats are building a stronger economy and giving a fair deal for motorists."

Treasury figures

• At the 2013 Autumn Statement the Chancellor cancelled the fuel duty increase that was planned for 1 September 2014, freezing fuel duty the remainder of parliament.
• In 2011 the Chancellor abolished Labour's fuel duty escalator, which would have increased fuel duty by one penny per litre above inflation in each year of the parliament.
• By the end of parliament the Chancellor will have been frozen fuel duty for nearly four and a half years, the longest duty freeze in over 20 years.
• In total the Treasury have eased the burden on motorists by £22.5 billion over the parliament to 2015-16.
• Average pump prices are currently 16 pence per litre lower than under the previous government's plans, and will be nearly 20 pence per litre lower by the end of parliament.
• Furthermore, it currently costs £9 less for a typical motorist to fill their tank, and will cost £10 less by the end of the Parliament.
• In total by 2015-16, a typical motorist will have saved £680, a small business with a van £1,300 and haulier £21,000 as a result of the action this Government has taken.

Cameron criticised by IFS for underplaying cuts

The Institute of Fiscal Studies has criticised David Cameron for comments he has made on the UK government’s proposed spending cuts, and has warned the next government will have “the same amount of pain as this one.”

The Prime Minister wrote in the Times yesterday that the Coalition government “will have made £100bn of savings” during this parliament, with “£25bn in further savings planned” for the next parliament. However the thinktank’s director Paul Johnson said today that the two numbers were “measured in really quite different ways” and that “really, we’re about halfway through.”

Criticising the Prime Minister, Labour's Shadow Chief Secretary said "David Cameron will be judged on his actions, not his words. He's raised taxes 24 times. While millionaires have been given a huge tax cut, ordinary working people are paying more because he raised VAT and cut tax credits. Independent figures from the IFS show that by next year families will be £974 a year worse off because of tax and benefit changes since 2010. And David Cameron still won't rule out raising VAT again on families and pensioners to pay for £7 billion of unfunded tax promises.

Turning to what Labour would do, Mr Leslie commented: "Labour's economic plan will introduce a lower 10p starting rate of tax for 24 million people on middle and low incomes and cut business rates for small firms. We will tackle tax avoidance and introduce a mansion tax to invest in our National Health Service. And to balance the books in a fairer way we'll reverse David Cameron's £3 billion tax cut for the top one per cent of earners.”

Also Commenting, SNP Treasury spokesperson Stewart Hosie MP said: “David Cameron is trying to wash over the figures when we can expect more of the same in cuts from the next Westminster government. The Prime Minister is repeating a claim he made at the Tory Party conference, but as the IFS has pointed out his numbers don’t add up."

Continuing Stewart Hosie said: "While it’s right to tackle the deficit, the austerity measures so far have simply made things worse. Tory policy has stifled growth, and as the IFS has made clear today, there is much more pain still to come. That's why we need substantial economic and financial powers in Scotland - as the Westminster parties promised us in their Vow - so that we can grow the economy and invest in public services."

Leslie writes to Osborne for clarification on how the Tories will fund their "unfunded tax cuts"

Chris Leslie MP, Labour’s Shadow Chief Secretary to the Treasury, has written to George Osborne to ask him to urgently clarify how the Prime Minister’s unfunded tax commitments will be paid for:

"Dear George

You will be aware of the confusion that has followed the Prime Minister’s promises of unfunded tax commitments after his speech to your conference on Wednesday. I am writing to ask that you urgently clarify how these promises will be funded and paid for.

On Thursday Grant Shapps was asked by Jo Coburn on the BBC Daily Politics “are you ruling out a rise in VAT?” and he replied “Well I have absolutely no intention of writing future Budgets on your programme”.

Yet in today’s Sunday Express newspaper when asked whether any tax promises would be funded by other tax rises Mr Shapps is quoted as saying: “We won’t do it. Ain’t gonna happen. Our income tax cuts will not, repeat not, be funded by hiking other taxes.”

Can you clarify what your position is on this? Are you also promising that there will be no changes to VAT or ‘other taxes’ in the next Parliament? I understand that you have accepted that the costing of the Prime Minister’s tax promises amounts to more than £7billion - so can you now set out where the money will come from to pay for these? Can you confirm that this is the equivalent of raising VAT to around 21.5%? Or do you intend to add this to your future borrowing plans?

The Prime Minister himself said before the last election, “you can’t talk about tax reduction unless you can show how it is paid for, the public aren’t stupid”. And you said yourself in November 2008 that “real tax cuts are funded, real tax cuts you show how you are going to pay for them. Where you have unfunded tax cuts they are tax con and that is the dividing line in British politics.”

What has changed? Five days on from the Prime Minister’s speech and not one Minister has been able to tell us where a single penny of the money to pay for these promises will come from.

In particular, can you categorically rule out raising VAT on families and pensioners again in the next Parliament? The Conservatives have a track-record of raising VAT after elections, despite claiming beforehand that you have no plans to do so.

You will therefore understand why, until you set out where the £7 billion is coming from, people will judge you on your track record of hitting working people while giving tax cuts to millionaires.

If it’s not VAT, where is the money going to come from - and which families and public services will pay the price?

I’m sure you will want to clarify this matter at the earliest opportunity and given the public interest in this matter I will be making this letter available to the media. I look forward to hearing from you shortly.


Yours sincerely


Chris Leslie"

Cameron accused of misleading public over debt

Labour's Shadow Chief Secretary to the Treasury, Chris Leslie, has accused the Prime Minister, David Cameron of misleading the public over the level of the national debt. The comments came following on from a letter from the Chair of the UK Statistics Authority, Sir Andrew Dilnot to Chris Leslie. 

Mr Leslie commenting said: "These repeated attempts to mislead people about the Government's failure to keep their promise that the national debt would be falling are unacceptable. For David Cameron to have been chastised once on this was bad enough. But to be reprimanded yet again shows this goes beyond error or mistake. We can only conclude that there is a deliberate attempt by David Cameron's Government to mislead the public about their true failures on the national debt.

Text of the letter from Andrew Dilnot to Chris Leslie

"Dear Mr Leslie

PUBLIC SECTOR FINANCES STATISTICS – DEBT AND DEFICIT

Thank you for your letter dated 1 October 2014 regarding the statement made by the Prime
Minister during his speech to the Conservative Party conference in Birmingham in which he
said that the country “is paying down its debts”.

As you note in your letter, this is a similar matter to that about which I replied to your
predecessor, Rachel Reeves MP, in February 2013.1 As I said in that letter, it is clearly
important for all parties to public debate in this area to understand the relevant statistical
definitions and to distinguish changes in the level of debt outstanding from changes in
borrowing per period, and to reflect these in their communication of the statistical trends
involved.

Public sector net debt is a measure of how much the UK public sector owes at a given time.
Public sector net borrowing is the difference between total accrued receipts and total accrued
(current and capital) expenditure over a specified period; the measure of net borrowing is
frequently used by commentators to summarise the extent of any public sector ‘deficit’.

The latest National Statistics on Public Sector Finances, published by the Office for National
Statistics on 30 September 2014, show that Public Sector Net Debt (excluding public sector
banks) as at the end of June 2010 was estimated to be £997.4 billion (equivalent to 64.0 per
cent of Gross Domestic Product) and £1,432.3 billion at the end of August 2014 (79.1 per
cent of GDP), an estimated increase of £434.9 billion over the period. Public Sector Net
Borrowing (excluding public sector banks) was estimated to be £133.9 billion in the 2010/11
financial year and £99.3 billion in 2013/14, an estimated fall of £34.7 billion. The charts
overleaf show the trends in more detail.

I hope that this letter sets out the Authority’s position clearly.

Yours sincerely,

Sir Andrew Dilnot CBE"

George Osborne: Choose the future

In his conference speech today, George Osborne set out the choice at the next election between David Cameron and the Conservatives who have answers to the big questions about Britain's future, or Ed Miliband and the Labour Party who would repeat the mistakes of the past.

George Osborne said: "I believe it is perfectly possible for Britain to be the most prosperous major country on earth. The most prosperous, the most dynamic, the most creative. But only if we, in our generation, provide the big answers to the big questions. Only if we choose the future not the past."

He also set out the next steps in the Conservatives' plan to eliminate the deficit and run a surplus in the next parliament:

• The Conservatives will freeze working age benefits from April 2016 for two years. This will save £3.2 billion a year by 2017/18. Disability, carer and pensioner benefits are excluded, as are several smaller benefits such as statutory maternity pay.

George Osborne said: "Working age benefits in Britain will have to be frozen for two years. This is the choice Britain needs to take to protect our economic stability and to secure a better future. The fairest way to reduce welfare bills is to make sure that benefits are not rising faster than the wages of the taxpayers who are paying for them. For we will provide a welfare system that is fair to those who need it, and fair to those who pay for it too."

• In the Autumn Statement the Treasury will end abuse by multinationals who divert profits offshore in order to avoid corporation tax. This will raise hundreds of millions of pounds as part of an anti-avoidance package raising billions of pounds over the next Parliament. This change will mainly affect multinationals using artificial arrangements to route profits to tax havens that would otherwise have been taxed in the UK. New anti-avoidance measures will dramatically reduce the benefits from complex arrangements such as the so-called "double Irish" used by some large multinationals, particularly in the technology sector. This measure comes after the progress made at the G20 and the OECD by the international "Base Erosion and Profit Shifting" (BEPS) project in which the UK has played a leading role.

George Osborne said: "While we offer some of the lowest business taxes in the world, we expect those taxes to be paid - not avoided. Some technology companies go to extraordinary lengths to pay little or no tax here. If you abuse our tax system, you abuse the trust of the British people. And my message to those companies is clear: we will put a stop to it. Low taxes, but low taxes that are paid. Part of our effort to reduce our deficit. For our choice is that we are all in this together."

The Chancellor also confirmed that:

• This Government will abolish the punitive 55 per cent tax on death that is charged when people pass on a pension pot. The measure will apply to all payments made from April 2015, and means that people who have worked hard and saved all their lives will be able to pass on their hard-earned pension pot tax-free.
• The Conservatives will abolish long term youth unemployment. We will deliver three million apprenticeships over the next Parliament. On top of that, if a young person has been unemployed for six months they will have to take an apprenticeship, training, or work for their benefits. Our plans will give hundreds of thousands of young people the opportunity of a better, more secure future. And we will pay for it by cutting the benefit cap and stopping most young people from claiming Housing Benefit.

Chris Leslie MP, Labour’s Shadow Chief Secretary to the Treasury, commenting on George Osborne’s speech to the Conservative Party Annual Conference, said: "Having failed to balance the books in this Parliament George Osborne has made his choice. He is choosing to give the richest one per cent a £3 billion-a-year tax cut and opposing a mansion tax while cutting tax credits which make work pay for millions of striving families. While working people have seen their wages fall by £1600 a year since 2010, the Tories have once again shown they are the party of a privileged few at the top."

Talking about Labour's plans, Mr Leslie commented: "Labour will balance the books as soon as possible in the next Parliament, but we will do so in a fairer way. We will reverse the Tory tax cut for millionaires, stop paying the winter fuel allowance to the richest five per cent of pensioners and cap child benefit rises at one per cent for two years."

Labour and the Tories clash over bank regulation

A row has erupted between Labour and the Tories following reports that the Royal Bank of Scotland (RBS) may ask the Government to approve a rise in the EU’s cap on bank bonuses. RBS can't just give bonuses to their staff without authorisation from the Chancellor as the bank is still eighty two percent owned by the taxpayer.

RBS say they haven't asked to do so but Labour say they want it blocked if they do saying it "cannot be right for George Osborne to approve the doubling of the bank bonus cap". Conservative MP Mark Garnier said bonuses were a "reward for enterprise" and he accused Labour of attempting to "destroy the one industry we have which is a net exporter of services". He accused Labour's Chris Leslie of "playing fast and loose with millions of people's jobs. You are playing fast and loose with the economy and it is just nonsense."

Shadow Chief Secretary to the Treasury, Chris Leslie, said: "It shouldn’t have taken the EU to act to rein in excessive bonuses, but there has been no action from the Chancellor here in Britain. As the majority shareholder, the government should reject any request from RBS to increase the cap."

This row come hours before the Labour party uses an opposition day motion in the Commons on banking. that criticises the Government and says "reforms have failed to deliver a competitive banking system which serves the interests of consumers or the needs of businesses and the British economy". 

It also says Labour is "concerned that customers have limited choice and low levels of trust and confidence in the banking market". And expresses Labour's "disappointed that recent legislation has fallen short of the recommendations of the Independent Commission on Banking which called for action to diversify the sector and ensure that major new banking service providers are created."

A spokesman for the Conservative party responded to Labour's criticism of their record of regulation by saying: "Labour's failure to regulate the financial system led to the worst banking crash in our history, causing the worst recession in a century. So this is another problem Ed Miliband is talking about that was created by the Labour government he was at the heart of. 

Continuing the Spokesman said: That's why part of David Cameron's long-term economic plan is about fixing our banking system - by increasing competition on the high street, ring fencing retail from investment banking so that no bank is too big to fail, and increasing lending to business. There is already greater choice on the high street now than there was under Labour. Our changes will mean a more secure banking system for businesses, hardworking people and their families."

Labour launches zero-based review of public spending

The Labour party is today launching the first phase of its Zero-Based Review of public spending – a root and branch review of every pound the government spends from the bottom up. In a foreword to the phase 1 discussion document being published today, Ed Miliband, Ed Balls and Chris Leslie say:

“Over three years into this Conservative-led government, Britain’s families are paying the price for the failure of the Chancellor’s economic policies.

“He has overseen the slowest recovery for over 100 years, and as a result families have seen prices rising faster than wages in 41 out of the 42 months that David Cameron has been Prime Minister. Crucially these failures on growth and living standards have meant failure on deficit reduction too.

"So the next Labour government must start planning now to meet the challenge we will face. We can now expect to inherit an economy with families under real financial pressure, businesses that have lost vital opportunities to invest, and public finances in poor shape, despite deep cuts to key public services.

“Where this government’s failure on growth over the last three years has led to their failure on the deficit, the next Labour government will rise to the challenge: action to deliver a strong recovery that is built to last, which works for working people and delivers rising living standards for all; and reform of our public services alongside a tough deficit reduction plan.

“Action now to deliver stronger growth is even more vital if we are to meet the challenge. And it remains the best way to mitigate the scale of the cuts the Government says it has to make to public services in 2015-16 and beyond.

“Even if growth comes in considerably higher than currently forecast, the situation we will inherit requires the next Labour government to govern in a very different way to those which have gone before. We can expect to inherit plans for further deep cuts to departmental budgets at a time when the deficit will still be large and the national debt rising.

“At the time of the 2010 Spending Review, the Office for Budget Responsibility forecast that the deficit would fall to £18bn in 2015-16. It is now forecast to be £79bn – over £60bn higher than planned – even with the further deep cuts in public spending which the Chancellor has programmed in for 2015-16.

“Delivering our Labour goals – supporting families and communities, tackling disadvantage, spreading educational opportunity, safeguarding our NHS, investing for the future – will be more difficult than at any time in our living memory, certainly since the post-war Labour government of 1945. But it can be done.

“And it will make our economic task – to raise living standards, increase growth and wealth creation by building a reformed One Nation economy where we use, and invest in, the talents and industry of all and not just some – even more vital.

“These are issues which we are addressing in our Zero-Based Review – a root and branch review of every pound the government spends from the bottom up – which Labour has begun in opposition and will complete in our first year in office. We will ruthlessly prioritise public spending and deliver service reform and improvements rather than just salami slicing budgets and watching services deteriorate.

“As we have said before, the last Labour government did not spend every pound of public money well. And neither is this government doing so. Indeed many of its short-term cuts will end up costing more in the long term

“We in the Labour Party value the huge contribution that public services - and public service – make to the strength of our economy and the fairness and stability of our society.

“We celebrate the excellence of our teachers and school support staff, the service of our police officers and non-police staff; and the quality of care that our doctors, nurses and health workers deliver – and the universal service that our publicly funded NHS delivers.

“But it is the duty of government to continually look to improve services, to make difficult choices about priorities and to get maximum value for every pound of taxpayer money it spends. That duty will be all the more central for the next Labour government, in an era when there is less money around.

“Labour’s Zero-Based Review will enable us to meet the challenge we face.”

A copy of the Labour party's Zero-Based Review Document is available here

Responding for the Conservatives the Financial Secretary to the Treasury Sajid Javid said. "This is a panicked attempt to distract attention from the fact that Labour's policy for more spending, more borrowing and more taxes - exactly what got us into a mess in the first place - is the biggest risk to the economic recovery. Ed Balls and Ed Miliband carried out similar reviews when they were in government, but that did not stop them failing to fix the roof while the sun was shining and entering the crisis with the biggest structural deficit in the G7. This is just the same old Labour. Short-term gimmicks like these are no substitute for the Conservatives' long-term economic plan that will secure a better future for Britain, for hardworking people and for our children and grandchildren."

Labour launches “cost of living bombshell” poster

Ahead of the Autumn Statement today, which the Chancellor of the Exchequer will deliver at around 11:15, the Labour party have launched a poster that claims that the cost of living has got worse in the three and a half years of the Coalition Government. They claim that the annual cost for the average household has risen by £1,600. since the general election and put the blame for this at the feet of David Cameron and George Osborne. Labour do not say how they have arrived at this figure, but the poster lorry is currently touring Westminster. The poster evokes memories of the 1992 Tory election poster of "Labour's tax bombshell" although some commentators are saying this will resonate with voters, others suggest that Labour are simply admitting defeat on the economy.

Picture courtesy of the Labour party

When launching the the Shadow Chief Secretary to the Treasury, Chris Leslie, said: "David Cameron's cost-of-living bombshell has left working people on average £1600 a year worse off since the last election. After three damaging years of flatlining, prices are still rising faster than wages, which is why for millions of people there is still no recovery at all. But David Cameron and George Osborne are so out of touch they have chosen to give people earning over £150,000 a huge tax cut."

Chris Leslie added: "What we need from the Autumn Statement is a long-term plan to tackle the cost-of-living crisis and earn our way to higher living standards for all, not just a few at the top. We need action to get more homes built, boost apprenticeships and cut business rates for small firms. We should make work pay by expanding free childcare for working parents and introduce a compulsory jobs guarantee for young people and the long-term unemployed. And we need to freeze gas and electricity bills while we make long-term changes to the energy market to stop customers being ripped off. A policy that means bills still rise this winter and lets the energy companies off the hook shows this Government doesn't understand the cost-of-living crisis ordinary working people are facing."

Danny Alexander unveils National Infrastructure Plan

The Coalition government has published a new National Infrastructure Plan (NIP) containing a pipeline of over £375 billion of planned public and private sector energy, transport, flood defence, waste, water and communications infrastructure up to 2030 and beyond.It comes on the day that six major insurers announced plans to collectively invest £25 billion in UK infrastructure over the next five years. Much of this investment could go into the pipeline projects published today. The decision follows the successful negotiation last week by UK government of the key European directive Solvency II. The UK negotiations ensured those capital rules incentivised life insurers to invest in a wider range of assets including infrastructure projects which can deliver the consistent long term returns these businesses seek.

The National Infrastructure Plan published today provides the visibility and improved certainty industry has been looking for to commit to big investments. The Infrastructure Pipeline published alongside the plan is the most comprehensive overview of planned and potential UK infrastructure investment ever produced. The future looking pipeline enhances visibility and certainty for investors and the supply chain, and allows government to work more effectively to ensure that the UK's infrastructure needs are met. It also acts as a prospectus for investors, identifying key UK private and public sector infrastructure opportunities up to 2030 and beyond. Building on the announcement at the Spending Round 2013 of £100 billion of capital investment in specific infrastructure projects, the government will also announce tomorrow that it will:

• Sign an agreement with Hitachi and Horizon to support the financing of the development of a new nuclear power station at Wylfa in North Wales through a UK guarantee, subject to final due diligence and ministerial approval
• Provide a further £50 million for a full redevelopment of the railway station at Gatwick Airport
• Confirm strike prices for renewable energy, so that energy providers know how much they will receive for electricity generated in the future
• Take forward steps to convert public sector car fleets to electric vehicles investing £5 million in a pilot during 2014-15
• Fund improvements to the A50 around Uttoxeter starting no later than 2015/16
• Confirm that there will be no tolling on the planned A14 scheme between Cambridge and Huntingdon, construction of which is planned to start in 2016
• Confirm that a UK guarantee has now been agreed for the £1 billion Northern Line extension to Battersea, unlocking a development the size of the Olympics in the Nine Elms area
• Announce a £8.8 million guarantee for new energy efficient lighting systems across NCP car parks in the UK
• Create a new court for infrastructure to avoid unnecessary delays in the planning process for major projects
• Open a £10 million competitive fund in early 2014 to test innovative solutions to deliver superfast broadband services to the most difficult to reach areas of the UK. Options may include enhanced mobile services, new fixed technologies and alternative approaches to structuring financial support, working closely with the communications industry
• Build on the Spending Round commitment of £2.3 billion capital investment for flood defences by developing a new long-term plan, including naming key projects by Autumn Statement 2014
• The target for the sale of corporate and financial assets will be doubled from £10 billion to £20 billion between 2014 and 2020, including the Government's shareholding in Eurostar
• The government will also look at options to bring private capital into the Green Investment Bank to enable it to operate more freely in delivering its objectives

Chief Secretary to the Treasury Danny Alexander commenting said: "The Liberal Democrats are building a stronger economy in a fairer society, enabling everyone to get on in life. Our economy is growing because of the hard work of people and businesses throughout Britain. But the Coalition's economic plan is the rock on which our recovery is being built - it wouldn't be happening without the Liberal Democrats." 

Continuing Mr Alexander said: "The announcement today that six major insurers will invest £25bn over the next five years is a massive vote of confidence in the UK economy. It supports the wider £100bn public investment to rebuild Britain over the next seven years that I announced at the Spending Round 2013. Underground, overground, on shore, offshore, wired or wireless, tarmac or train track. You name it, we're building it right now.

Concluding Danny Alexander commented: "This is great news for the people of the UK because after years of neglect, the UK's energy, road, rail, flood defence, communications and water infrastructure needs renewal. It will boost the UK economy creating jobs and making it easier to do business. It will also make the UK a better place to live for everyone who calls it their home."

Shadow Chief Secretary to the Treasury, Chris Leslie, responding to the announcement said: "With the country facing a cost-of-living crisis we need to invest in infrastructure to create jobs, boost living standards, and strengthen our economy for the long-term. But for the last three-and-a-half years the Government’s record on infrastructure has been one of complete failure. The ONS says that infrastructure work is down 3.7 per cent in the last year and fell by 10 per cent in 2012. And in the spending review the Government set out plans to cut capital investment even further in real terms in 2015/16.

Mr Leslie concluding commented: Scheme after scheme has been announced to great fanfare but then little actually delivered. Yet another announcement from Ministers about possible future investment will do little to reassure business that warm words will finally translate into diggers in the ground.”

The CBI have also responded to the announcement by government on the launch of the Fourth National Infrastructure Plan. Katja Hall, CBI Chief Policy Director, said: "We’ve been calling for a more focused approach on infrastructure projects and look forward to seeing the Fourth National Infrastructure Plan. As ever the devil will be in the detail on timelines and delivery.”

Commenting on insurance industry investment, Ms Hall said: "With the majority of national infrastructure projects earmarked to be delivered by the private sector, the insurance industry’s £25 billion investment is good news.”

On the A14, she said: "After so much uncertainty, the news that a decision has been finally made on funding for the A14 means this essential upgrade will get off the ground sooner.This will come as nothing short of a relief for businesses given the importance of this trade route to link the port of Felixstowe to the rest of the country.”

On the redevelopment of Gatwick railway station, she said: "With some estimates suggesting that the south east’s airports could be full by 2025, this upgrade will help us make the most of our existing capacity, while the Davies Commission decides on where future runways should be built."

Labour say Osborne's economic plan has "failed"

Ahead of the Comprehensive Spending Review (CSR) the Labour party have accused the Coalition of having an "economic plan [that] has failed. The Chancellor did say in 2010 that he wanted to see the deficit eliminated by the 2015 general election. The deficit in the last three year has fallen from £159bn to £118bn, figures which the Chancellor told the House of Commons yesterday. 

Mr Osborne along with other Conservatives, have claimed that the deficit has been cut by a third. Now a percentage of GDP they're right it has. However as Mr Osborne's figures yesterday show that in monetary terms the deficit hasn't fallen by a third as to of done that it would of had to of fallen by £53bn but as the Chancellor confirmed yesterday the deficit has fallen by £41bn which is just over a quarter.

Commenting on the spending review and the government's economic policy the Shadow Chief Secretary Chris Leslie said: "This spending review is happening because David Cameron and George Osborne’s economic plan has failed. Three years of falling living standards and a flatlining economy has led to billions more borrowing to pay for economic failure. Far from balancing the books by 2015, as the government promised, the Chancellor is being forced to make even more cuts.

Continuing Mr Leslie said: "Instead of simply planning more cuts two years ahead, this spending review should heed the IMF’s advice and act to boost jobs, growth and living standards this year and next. More growth now would bring in more tax revenues and mean our public services would not face such deep cuts in 2015. But if David Cameron and George Osborne carry on with the same failing policies, Labour will have to deal with a difficult situation after the next election. We will need to root out waste and have an iron discipline on public spending, but we will make different choices so that we can turn our economy around and get the deficit down in a fairer way."

Office for National Statistics say Q1 growth was 0.3%

The UK economy grew by 0.3 percent in the first quarter of the year, official data showed on today, confirming the initial estimate and the nation's success in avoiding a third recession since the 2008 global financial crisis .The technical definition of recession is two quarters running of contracting economic activity. British gross domestic product grew after GDP had fallen by 0.3 percent in the final three months of 2012. The Office for National Statistics (ONS) said in a statement. "UK gross domestic product in volume terms was estimated to have increased by 0.3 percent between the fourth quarter of 2012 and the first quarter of 2013, unrevised from the previous publication." 

Shadow financial secretary to the Treasury, Chris Leslie, responding to the second estimate of GDP for the first quarter of 2013, said: "These unrevised figures confirm that our flatlining economy is simply back to where it was six months ago. This is now the slowest recovery for over 100 years with just 1.1 per cent growth since the 2010 spending review compared to the 6 per cent forecast at the time." 

Turning his fire on Coalition economic policy and the Chancellor of the Exchequer, George Osborne, Mr Leslie said: On jobs, growth, living standards and the deficit this government's economic policies have badly failed. "As the IMF warned this week we are a long way from the strong and sustained recovery Britain needs, which is why they are telling George Osborne to act now to boost growth and jobs. Alongside sensible spending cuts and tax rises it's the only way to get the deficit down and prevent any more long-term damage being done."

Labour publish motion on the Mansion Tax and challenge the Lib Dems to back it

This afternoon the Labour party have published their motion for Tuesday's opposition day debate in the House of Commons and subsequent vote on the Mansion Tax and challenge the Lib Dems to back it. The Lib Dems proposed a Mansion Tax at the last general election on properties worth over two million pounds which Labour at the time opposed.

Shadow Financial Secretary to the Treasury, Chris Leslie, said: "If Nick Clegg and Vince Cable really believe in a fairer tax system they should back our motion in support of a mansion tax on properties over £2 million to pay for tax cuts for millions on middle and low incomes. After going along with a Tory tax cut for millionaires, a failing economic plan, a VAT rise and a trebling of tuition fees this is a chance for the Liberal Democrats to finally vote for something that was in their manifesto."

The full text of the motion is as follows:

“That this House believes that a mansion tax on properties worth over £2million, to fund a tax cut for millions of people on middle and low incomes, should be part of a fair tax system and calls on the Government to bring forward proposals at the earliest opportunity”.

Chief Secretary to the Treasury, Lib Dem, Danny Alexander said, when Labour announced their support for a Mansion Tax, said: "The best way to cut taxes for those on low incomes is take them out of tax altogether. That is why Liberal Democrats in Government are raising the Personal Allowance. From April, nearly 25m people will get a further Income Tax cut so they will be £600 a year better off than under Labour. Labour had 13 years in Government to make property taxes fairer by introducing the Liberal Democrat policy of a Mansion Tax. With the Liberal Democrats in Government the wealthy are paying more in each year of this Parliament compared to any under Labour."