George Osborne

Welcome to our rolling coverage of the Autumn Statement.

George Osborne has missed his fiscal targets and cut corporation tax.

We’ll bring you all the day’s developments live. By Tom Burgis and Ben Fenton.

15.45: We’re winding up the blog now, but you can follow events as they unfold through constantly updating stories on the front page of FT.com

15.31: A representation of the “flamethrower of uncertainty” can be found in the documentation of the OBR. It is also known as a “fan chart”. I doubt George Osborne is a fan of it, though.

15.24: Chote speaks of the “flamethrower of uncertainty”- a favourite phrase, unsettlingly enough, of the OBR, which is a chart showing forecasts in a wide range that makes the chart lines look like a firebreathing dragon.

15.18: Chote says that the variation in the possible range in the forecast of net debt figures for the UK is a large number, but is “dwarfed by the scale of uncertainties” on the issuance of debt. I think that’s the second time he has said that in his address.

15.12: The Spectator is running a rather scary chart showing the lost output of the current “seven-year slump” in the UK.

15.07: Robert Chote, director of the Office for Budget Responsibility, is live now, going through his department’s figures that underpinned the bad news Mr Osborne has just had to deliver.

15.05: Gavyn Davies has blogged for the FT with his view on the autumn statement while the FT’s Lucy Warwick-Ching has collated some very interesting instant reaction from personal finance experts.

14.49: Hannah Kuchler on the FT’s UK desk has been keeping an eye on business reaction to the autumn statement.

She says:

The CBI, the employer’s organisation, urged the government to stick to its guns on deficit reduction to retain international credibility, saying it was no surprise that austerity would last longer than expected.

John Cridland, director-general, welcomed investment in infrastructure and support for exports, but said the proof was in the delivery. He said:

“Businesses need to see the Chancellor’s words translated into building sites on the ground.”

But the British Chambers of Commerce was less positive, declaring the statement not good enough for a country meant to be in a state of “economic war”.
The government is just “tinkering around the edges”, John Longworth, the BCC’s director general said, adding: “The Budget next March must make truly radical and large-scale choices that support long-term growth and wealth creation. That means reconsidering the ‘sacred cows’ of the political class, including overseas aid and the gargantuan scale of the welfare state. Only a wholesale re-prioritisation of resources, to unlock private sector finance, investment and jobs, will be enough to win the ‘economic war’ we are facing. The danger is that our political class is sleepwalking with its eyes open.”

14.40: Lionel Barber, the FT’s editor, just passed by the live news desk so we asked him what he thought of the autumn statement.

The Chancellor is in a hole, but the good news is that he’s stopped digging. The FT supports the government’s fiscal stance, but is there more to be done on monetary policy to boost growth? That’s the question.

14.26 Who says the British don’t like doing things the French way? Might we surmise from this tweet from the BBC’s Robert Peston’s interview with Danny Alexander, Osborne’s Lib Dem No2, that the UK’s crediworthiness might be going to way of its Gallic cousins’?

[blackbirdpie url="https://twitter.com/Peston/statuses/276330461142327296"]

Others are more chipper:

[blackbirdpie url="https://twitter.com/MJJHunter/statuses/276330252601524225"]

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In a piece for tomorrow’s FT, I describe today’s two housing announcements – and their promise of 200,000 new homes and 400,000 new jobs – as “optimistic, verging on the far-fetched”.

But as one minister pointed out to me (as we trudged through the Manchester drizzle) the figures haven’t been given a timeline. He is right: no one has said that this will be achieved within a year or two, or even in the life of this parliament.

So what is the government doing?

  1. Firstly council house residents will be incentivised to use the existing “right-to-buy” scheme through bigger price discounts. This could generate funds to build new social housing on a one-for-one basis.The right-to-buy scheme is seen as a Thatcherite success but led to a fall in social housing stock: there is now a waiting list of about 5m individuals waiting to be housed. Right-to-buy deals have slowed to just a trickle (around 3,000 last year) partly because residents now typically pay around 90 per cent of the market price for their home. Bigger discounts should mean more more deals. Senior DCLG figures tell me that until the mid-90s the discount was around 30 per cent, which generated about 30,000 sales a year. Expect a return to that kind of

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Grant Shapps, the housing minister, announced on Thursday that social housing providers will build 170,000 new affordable homes over the next four years, 20,000 more than expected and a lot more than some doomsayers warned would be possible.

Unsurprisingly, the communities department hailed this as a great triumph, but there remain serious questions about whether there will be enough subsidised homes for everyone who needs one.

So what should we celebrate, and what is there to worry about in Thursday’s announcement? Read more

The National Housing Federation – which represents housing associations – will warn today that plans to build 270,000 affordable homes for low income families over the next decade could be axed as a result of the spending review.

The campaign group doesn’t know what’s in the CSR but is estimating that funding for new developments will be cut by up to 50 per cent; which is probably not far off the mark by my estimate. (The DCLG will slash spending on property grants; it’s also rumoured to be cutting its own staff by 40 per cent).

The National Housing Federation claims it has heard that housing is likely to be one of the biggest losers out Wednesday’s CSR – with the danger of building grinding almost to a halt. Read more

In the run-up to the general election George Osborne scored a big propaganda coup by enlisting the names of scores of business leaders in a letter criticising Gordon Brown’s planned rise in National Insurance.

(No matter that in Osborne’s subsequent Budget VAT went up by a similar amount to help plug the fiscal hole).

For Labour that stung; not least because some of the figures had sat at various times on its own advisory boards. David Miliband has since said, on several occasions, that he never wants Labour to enter a general election campaign with no business support. Read more

As I predicted this morning, the stamp duty holiday for first time buyers up to £250,000 has come with a major “sting” – an increase on the levy for people exchanging £1m-plus homes. Read more

When it comes to an Englishman’s home it seems there are certain things you can’t say. John Healey, housing minister, found this out to his cost yesterday when he explained that – for some people – repossession was not the worst option available to them.

Cue outrage in The Sun. And more outrage in The Express. Even the Mirror, which is rarely the first to attack the government, joined in with more than a hint of outrageRead more

I’m not officially working today (am at home, in recovery from gastric flu). But I’ve just been passed something so fascinating I couldn’t help passing it on.

You may not remember but something called the “Homeowner Mortgage Support Scheme” was one of the flagship ideas in Gordon Brown’s Queen’s Speech in 2008. (Even Alex and I were quite excited at the time.) The idea was to help people defer mortgage interest for up to two years if they were struggling with payments. The scheme took ages to set up and – even when it was finally announced this spring – only half of lenders fully signed up to it. Even so, the government presented it as a major victory against repossession. Read more

The Times has splashed this morning on criticism of the government over its imminent alteration to the housing benefit system (which was in the April Budget) which will save £140m a year.*

Frank Field and others are protesting about the change which will mean that people will no longer be able to keep any surplus housing benefit over and above the cost of their rent. Read more

There’s a section at the back of the Building Britain’s Future document where Labour spells out key “deliverables” for the next decade.

Some of these are indeed likely. Others less so. Alex and I have picked out some of the more controversial ones. Read more

We are about to see the full details of Labour’s new policy of giving priority on council housing waiting lists to local residents.

This is an obvious dog whistle to working class voters who might otherwise vote BNP. Read more

Labour love to talk about the environment and housing – and the ecotown project combines both in a single grandiose project.

Even now, with the property industry in meltdown, no minister will admit that Gordon Brown’s cherished idea is heading for the grave.

I wrote this morning that a report by the DCLG itself admits that several of the projects would need massive public subsidies (tens of millions of pounds) to go ahead. On others, the maths is uncertain. Only three of the last eight (from 57 proposals and a shortlist of 15) are deemed to be definitely viable.

A flak from DCLG rang this morning to point out that I’d ignored another three schemes which weren’t on the shortlist but have been added to the list. Apologies, the relevant sentence was cut from the story by a sub-editor.

In fact the reality could be even worse than the government believes. Read more

The prime minister won favourable coverage over the weekend for his claim that he would abolish 100 per cent mortgages. Read more

This blog asked yesterday morning whether Gordon Brown really meant what he said when he demanded that banks should quantify all of their toxic loans.

A research note put out on Friday by analysts – at RBS, ironically – points out that “the domestic UK banks are technically insolvent on a full marked-to-market basis” (although it adds that this is not unusual at this stage in the economic cycle). Is the prime minister sure that he wants them all to come clean? Read more

It’s taken months and years for anyone in Labour to admit that the government’s housing policy has been based on false assumptions. Time after time, ministers claimed that there was a desperate under-supply of housing in the UK; ignoring the role of speculation and cheap debt in the housing boom.*

But Ed Balls came close on this morning’s Today programme.

Here is what the education secretary said:

“There was a pretty strong view that we had a growing demand for housing in this country and a rising population, but we had much lower levels of house building than we’ve seen in previous generations in the private and the public sector.

“Therefore, there was a pretty strong view, which may still in part be true, that the real level of house prices had gone up, because there was more demand and less supply.”

In politician speak this is code for: we are distancing ourselves from the old line. Maybe 2009 will be year when the government drops its target of 3m new homes by 2020. Read more

The Council of Mortgage Lenders firmly denied reports from the BBC a fortnight ago that its 2009 forecast for repossessions would be 75,000. The CML’s spokeswoman said on the record that this was the wrong figure and the real number was likely to be significantly lower. This is what we said at the time.

Today, lo and behold, the CML has put out its forecast. It is of course 75k. Maybe we shouldn’t expect anything different from the group – which spectacularly failed to spot the crash coming. Read more

The Treasury has just put out details of how its new anti-repossession scheme will work. (The one in which, if you lose your job, the bank will defer part of your interest payments for up to two years.)

They still only have support “in principle” from eight lenders. That means no change from last week’s announcement in the Queen’s Speech. Read more

Still waiting for Margaret Beckett, housing minister, to drop the ludicrous target of 3m new homes by 2020. The policy was always based on false assumptions and is now impossible to achieve because of the credit crunch/housing crash. The number of new homes built this year will be far below 100,000 – compared to the annual target of 240,000.

DCLG insists that it will press ahead despite the setbacks. One Whitehall source tells me that - in doing so - the government is reminiscent of Hitler in the bunker in 1945, “still ordering the movement of battalions of tanks which no longer exist”.

The Council of Mortgage Lenders has just distanced itself from the 75k figure which has rapidly taken hold in the media. It is a totemic number, as it is almost exactly the peak of the last recession: in 1991.

It’s not an official estimate though, contrary to numerous reports. The CML is predicting 45,000 repossessions this year. As for next year, it tells me: “It is not our forecast, it is very unlikely to be our forecast, we are putting out the new figure next week.” Read more

Alistair Darling promised about £1.5bn today on “thousands of new and modernised social homes as well as regeneration projects.”

The money may soon be there. Spending it is easier said than done, however. Last week I reported on how the credit crunch has hit housing associations. Many are struggling with their finances and development is drying up.

The National Housing Federation  – which represents over a thousand registered social landlords – today warned that funding rules need to be changed as soon as possible.* Read more