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Public borrowing will exceed previous forecasts by £5 billion this year, £19 billion next year and £30 billion in 2013-14, George Osborne, the Chancellor of the Exchequer, said in an Autumn Statement delivered under dark clouds. The ratio of debt to GDP would rise to a peak of 78 per cent in 2014-15. He noted that the Office for Budget Responsibility (OBR) had revised forecasts for growth this year to 0.9 per cent (from the 1.7 per cent predicted in March), and for next year to 0.7 per cent. There would be a 1 per cent cap on public sector pay rises, he said. The 3p rise in fuel duty due in January was cancelled, but a 3p rise would come in next August. With the OBR forecast for public sector job losses revised to 710,000 (from 400,000), Mr Osborne announced a ‘credit easing programme’ to underwrite £40 billion in loans to small and medium-sized firms. The levy on bank borrowing was to increase, in an attempt to raise the £2.6 billion a year intended. There would be £5 billion more for infrastructure over three years, including £1 billion for railways. A portrait of John Bercow, the Speaker, cost £22,000 of public money, with another £15,000 for a frame incorporating his coat of arms, which features a ladder.
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Thousands of schools were closed and hospitals disrupted as public sector workers struck for a day, including educational psychologists, chiropodists and immigration staff, although airports were not brought to a standstill as predicted. Thomas Cook, the travel company, found £200 million credit to continue in business. Katia Zatuliveter, who, MI5 had judged, was placed in the office of the Lib Dem MP Mike Hancock by Russian agents, won her appeal to the Special Immigration Appeals Commission against deportation.
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