Spending Review - official Treasury documents

1: 12:31

Chancellor of the Exchequer George Osborne rose to deliver his Comprehensive Spending Review to the House of Commons at 12.31pm.

2: 12:33

The Chancellor said he would set out a four-year plan to put public services and the welfare state on a sustainable footing for the long term.

3: 12:33

Britain has the largest structural budget deficit in Europe at £109 billion, he said.

4: 12:33

The UK is paying £43 billion a year in debt interest.

5: 12:37

Today's spending plans achieve a balanced structural current budget and falling national debt in the period to 2014/15, he said.

6: 12:37

Next year, current expenditure will be £651 billion, then £665 billion the year after, £679 billion the year after that, before reaching £693 billion in 2014/15, as set out in the Budget in June.

7: 12:38

Debt interest payments will be lower by £1 billion in 2012, £1.8 billion in 2013 and £3 billion in 2014, a total of £5 billion over the course of the spending review.

8: 12:39

Capital spending will be £51 billion next year, then £49 billion, then £46 billion and £47 billion in 2014/15, about £2 billion a year higher than set out in the Budget.

9: 12:39

Total public expenditure will be £702 billion next year, then £713 billion, £724 billion and £740 billion in 2014/15.

10: 12:40

The Chancellor said he applied three principles to spending choices - reform, fairness and growth.

11: 12:42

The Government will deliver £6 billion of Whitehall savings - double the £3 billion promised earlier, said the Chancellor.

12: 12:43

The best estimate of the reduction in total public sector jobs is the Office for Budget Responsibility forecast of 490,000 over the four years of the spending review period.

13: 12:44

There will be some redundancies in the public sector, which is unavoidable when the country has run out of money, said Mr Osborne.

14: 12:44

The core Cabinet Office budget will be reduced by £55 million by 2014/15.

15: 12:45

The Treasury will see its overall budget reduced by 33% and the department's building will be shared with part of the Cabinet Office.

16: 12:46

Total Royal Household spending will fall by 14% in 2012/13, while grants to the Household will be frozen in cash terms with a temporary additional facility of £1 million to support the costs of the Diamond Jubilee.

17: 12:47

After that, the Royal Household will receive a new sovereign support grant linked to a portion of the revenue of the Crown Estate.

18: 12:48

There will be overall savings in funding to local councils of 7.1%, but ring-fencing of all local government revenue grants will end from April next year, except for simplified schools grants and a public health grant.

19: 12:49

Local government grant funding for social care to increase by an additional £1 billion by the fourth year of the review and a further £1 billion for social care will come through the NHS to support joint working with councils.

20: 12:50

Terms for existing social housing tenants and their rent will be unchanged, with new tenants offered intermediate rents at around 80% of the market rent. The Chancellor forecast this would allow the building of up to 150,000 new affordable homes over the next four years.

21: 12:51

The Ministry of Defence budget will reach £33.5 billion in 2014/15, a saving of 8%, the Chancellor confirmed.

22: 12:52

The Foreign Office budget will see savings of 24% through a sharp reduction in the number of Whitehall-based diplomats and back office functions.

23: 12:53

The Department for International Development's budget will rise to £11.5 billion over the next four years, reaching 0.7% of national income in 2013.

24: 12:54

Police spending will fall by 4% each year of the spending settlement, with the aim of avoiding any reduction in the visibility and availability of police in our streets.

25: 12:55

The Home Office budget will find savings of an average of 6% a year, as will the Ministry of Justice's budget.

26: 12:55

The Law Officers Department will reduce its budget by a total of 24% over the review period, with the Crown Prosecution Service greatly reducing its cost base.

27: 12:56

Each Government department will next month publish a business plan setting out its reform plans for the next four years.

28: 12:57

Those on the highest incomes will contribute more towards the fiscal consolidation, not just in cash terms but also as a proportion of their income and consumption of public services combined.

29: 12:58

Legislation to introduce a permanent tax levy on banks will be published tomorrow.

30: 13:00

HM Revenue and Customs budget will be expected to find resource savings of 15% through the better use of new technology and greater efficiency, while spending £900 million more on targeting tax evasion and fraud to help collect a missing £7 billion in tax revenues.

31: 13:01

The state pension age for men and women will reach 66 by the year 2020, saving over £5 billion a year by the end of the next Parliament.

32: 13:04

Government to consult on changes to contribution discount rates to public pensions, with the aim of saving £1.8 billion per year in the cost of public service pensions by 2014/15.

33: 13:05

Proposals will be set out to replace all working-age benefits and tax credits with a single, simple Universal Credit.

34: 13:08

Local authorities to get greater flexibility to manage Council Tax and direct control over Council Tax Benefit within an overall budget that will be reduced by 10% from April 2013.

35: 13:08

Government will freeze the maximum savings credit award in Pension Credit for four years and further control the cost of tax credits by freezing the basic and 30-hour elements for three years and change the Working Tax Credit rules so couples with children must work 24 hours per week between them.

36: 13:09

A benefits cap together with all other welfare measures will save £7 billion a year.

37: 13:10

The child element of the Child Tax Credit will be increased by £30 in 2011/12 and £50 in 2012/13 above indexation, meaning annual increases of £180 and then £110 above the level promised by Labour.

38: 13:11

Child Benefit to be removed from families with a higher-rate taxpayer, saving £2.5 billion a year. Child Benefit will continue to be paid until a child leaves full-time education at the age of 18 or even 19.

39: 13:11

Universal benefits for pensioners will be retained exactly as budgeted for by the previous government and the temporary increase in the Cold Weather Payment will be made permanent.

40: 13:12

Total health spending to rise each year over and above inflation from £104 billion this year to £114 billion by the end of the next four years.

41: 13:15

Scotland, Wales and Northern Ireland will see cash rises in their devolved budgets, although below the rate of inflation. Scotland's budget will rise to £25.4 billion in 2014/15, Wales to £13.5 billion and Northern Ireland to £9.5 billion.

42: 13:16

Equitable Life policy-holders will receive a total payout in the region of £1.5 billion. The scheme will start making payments next year.

43: 13:17

Administration in the Department for Business, Innovation and Skills will be cut by £400 million, 24 quangos will be cut and low-priority programmes like Train to Gain will be abolished.

44: 13:18

Investment in adult apprenticeships will help 75,000 new apprentices a year by the end of the spending review period.

45: 13:19

Average annual savings of 7.1% will be found from the Department for Business budget but the science budget will be protected with no cash cut, leaving it at £4.6 billion a year.

46: 13:20

The Green Investment Bank will go ahead with £1 billion of funding in the spending review.

47: 13:21

Settlement for the Department for Energy and Climate Change will fall by an average 5% a year. Defra will deliver resource savings of an average 8% a year.

48: 13:22

Department of Culture, Media and Sport budget will come down to £1.1 billion by 2014/15, with administrative costs reduced by 41%. Free entry to museums and galleries will remain.

49: 13:24

BBC to fund BBC World Service and BBC Monitor as well as part-funding S4C, saving the Treasury £340 million a year, with the licence fee frozen for the next six years - equivalent to a 16% saving in the BBC budget over the period.

50: 13:25

£30 billion to be invested in transport projects over the next four years, including £14 billion to fund maintenance and investment in railways.

51: 13:25

The cap on regulated rail fares will rise to RPI plus 3% for the three years from 2012, to help pay for new rolling stock and improve passenger conditions.

52: 13:27

The Regional Growth Fund will receive close to half a billion pounds extra in the third year of the review period.

53: 13:28

There will be a real increase in money for schools for each of the next four years. The schools budget will rise from £35 billion to £39 billion.

54: 13:29

A new £2.5 billion pupil premium to support the education of disadvantaged children will be introduced.

55: 13:30

Sure Start services will be protected in cash terms and 15 free hours of early education and care for all disadvantaged two-year-olds will be introduced.

56: 13:13

Government aims to save up to £20 billion a year in the health service through better value for money, the cash to be reinvested in health care.

57: 13:31

The Department for Education will be required to find resource savings of only 1% a year, central administration will be cut by a third and five quangos will go.

58: 13:33

Average saving in departmental budgets will be lower than the previous government implied, with cuts of 19% over four years instead of 20%, said Mr Osborne.

59: 13:33

The Chancellor concluded his statement and sat down at 1.33pm.

60: 13:36

Shadow chancellor of the exchequer Alan Johnson said that making the deepest cuts to public spending in living memory was what many Conservative MPs "came into politics for".