13/02/2014 Daily Politics


13/02/2014

Andrew Neil and Jo Coburn with the latest political news, interviews and debate.


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Afternoon, folks, welcome to the Daily Politics. George Osborne has

:00:33.:00:39.

gone to Edinburgh and he's playing hardball over Scottish independence.

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He says if Scotland votes to leave the UK it votes to leave the pound.

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It's the same message from Labour and the Lib Dems. The SNP says it's

:00:53.:00:56.

bullying. We'll speak to Scotland's deputy first minister, Nicola

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Sturgeon. The good news is the Bank of England says the economy's

:01:00.:01:02.

storming back to growth. The bad news is, it says it's not

:01:03.:01:05.

sustainable. We'll be reading the economic runes with two leading

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forecasters. Gordon Brown's back in the Commons today. It's not often we

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say that. So what's the former Prime Minister been up to since leaving

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Number Ten? My name is Sarah and I was born in October. My And are the

:01:27.:01:32.

odds stacked against children born in the summer? Name is Celia and I

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was born in August. IM Andrew and I was born in May. What does that say?

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All that in the next hour and with us for the whole show today is the

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deputy first minister of Scotland and deputy SNP leader Nicola

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Sturgeon. Nice to have you in London for a change, Nicola. It is nice to

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have you in London and not on a telephone line. And don't panic. For

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those of you who like a bit of balance on these issues, and we know

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there are many of you - the Scottish Secretary Alistair Carmichael will

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be our guest of the day on the show next month. Let's start with the

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weather. And what weather it's been. Tens of thousands of homes are

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without power this morning after hurricane-force winds battered the

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UK yesterday. Forecasters say the stormy weather will subside briefly

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today before more gales and rain arrive tomorrow. Western parts of

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Wales and the north west of England have been badly affected and severe

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flood warnings remain in place in the south and south west of England.

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The Transport Secretary told the Commons this morning that ?61

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million would be spent to repair damage to the transport

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infrastructure. The bad weather has prompted widespread debate about the

:03:00.:03:02.

role played by climate change. Later today, the Energy Secretary Ed Davey

:03:03.:03:06.

- he's a Liberal Democrat - will use a speech to attack some

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Conservatives who, he says, are undermining efforts to tackle

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climate change. Mr Davey will say that the political consensus on

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climate change "is in danger of breaking down". The Deputy Prime

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Minister Nick Clegg reinforced the message on his regular radio

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phone-in for LBC this morning: there are prominent conservatives, Lord

:03:29.:03:31.

Lawson and others, who do not accept it. They are entitled to that view

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and they can argue the case as they do, but given that we have had this

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recent international report from the largest number of scientists ever,

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and we have received advice as well, he came to the Cabinet and sat

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there in front of the cameras and said, "there is no doubt" . Nicola

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Sturgeon, do you think the extreme weather over the last few years, is

:04:05.:04:09.

it linked to climate change? Undoubtedly. I agree with Nick Clegg

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and people are entitled to their views but we need to spend our time

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deciding how to address climate change. What is happening in the

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south of England is grim and my heart goes out to people. We have

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got eight relatively lightly in Scotland but there is no doubt that

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we have to take climate change seriously. Nick Clegg mentioned Lord

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Lawson and he said again today that they are -- there is no evidence

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that climate change is causing flooding. He said that the

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government should stop littering the countryside with solar panels and

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wind turbines. Does he have a point? No, he does not. I think it is

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wrong. I think making sure we are investing in renewable energy is

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important, we are doing that in Scotland. We need a balanced energy

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policy. There are immediate policies that needs to be dealt with. Loading

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flood defences, I think that will be a big priority for the government in

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London as a result of what has happened is in the last few weeks.

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-- wielding flood defences. Should those views be dismissed out of

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hand? I do think, I absolutely do think that we should treat this with

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healthy scepticism and not be diverted into a debate about the

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rights and wrongs of climate change. People flooding in Somerset

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will get very little comfort from this debate and want to know what is

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being done here and now and how as a society we face up to things long

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term. Some of the scientific community do say it is not always

:06:14.:06:18.

man-made but sometimes it is down to human activity. I am not saying we

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should not have a debate but I think it is wasted energy having all of it

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spent on that debate rather than thinking how we address the issues

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of climate change. You talked about Scotland's leading the way in terms

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of renewables. Were you disappointed when they failed to reach their

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climate change targets? Marginally. But that must've been disappointing?

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I want to see us exceeding our targets. We are confident we will.

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We passed the climate change legislation and we are stretching

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ourselves, being ambitious. We fell marginally short but that is a us

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becoming... Letters leave it there. Now it's time for our daily quiz.

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The question for today is which of the following has our guest of the

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day Nicola Sturgeon admitted that she doesn't like? Is it... A) the

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sound of bagpipes b) being Alex Salmond's deputy c) historical

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fiction or d) cooking? Later on in the show Nicola will give us the

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correct answer. I will have to think what the right answer is! What are

:07:35.:07:40.

you suggesting, Andrew? Sorry! An independent Scotland wouldn't be

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able to keep the pound. That was the stark message from George Osborne

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this morning as he went to Edinburgh to tell Alex Salmond and the SNP he

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won't support their plans for a currency union between Scotland and

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the rest of the UK, if Scotland votes for independence on 18

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September. And George Osborne isn't alone on this one - over to Jo to

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explain more. Thanks, Andrew. Yes, George Osborne has told the SNP he

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won't entertain the idea of a currency union, saying the only way

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for Scotland to maintain its "economic security" and keep the

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pound is by staying in the UK. The Treasury's looked at the idea of a

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formal currency union, and says for it to work both governments would

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have to underwrite each other's banks - and even allow taxpayers on

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one side of the border to subsidise each other. The Chancellor says this

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won't work, and in a rare display of cross-party unity, Ed Balls agrees

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with him. The shadow Chancellor has also ruled out a currency union,

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saying it was time for the SNP to join "the real world", and chief

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secretary to the Treasury Danny Alexander says the Lib Dems are on

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the same page. This follows the visit to Edinburgh by Bank of

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England governor Mark Carney last month, when he said a currency union

:08:50.:08:53.

would only work if there was "some ceding of national sovereignty". The

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SNP has accused the three political parties at Westminster of ganging up

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to "bully" Scotland, and insist keeping the pound would be in the

:09:04.:09:07.

interests of Scotland and the rest of the UK. Here's what George

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Osborne had to say earlier. I could not, as Chancellor, recommends that

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we could share the pound with an independent Scotland. The evidence

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shows that it would not work, it would cost jobs, and cost money. It

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would not provide economic security for Scotland or the rest of the UK,

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I do not think any other Chancellor of the extent would come to a

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different view. The SNP says that if Scotland becomes independent there

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would be a currency union and Scotland would share the pound.

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People need to know that that is not going to happen. Sharing the pound

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is not in the interests of the people of Scotland or the rest of

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the UK. That was the Chancellor George Osborne. Nicola Sturgeon is

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with us. Many have said that if Scotland went independent you do not

:10:16.:10:18.

get a currency union with the rest of the UK. These are all politicians

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who want Scotland to vote no so it is in their interest to stir up fear

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and uncertainty. They have just said that if you leave Britain, you leave

:10:32.:10:37.

the pound so what is your plan? I will come onto that in a second the

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point of fact here, and this is what Mervyn King said, the in reality

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would be very different... You do not know that! Let's assume they do

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stick to their guns, we are talking about very important things here.

:10:58.:11:02.

What is the other plan? The fiscal commission which was asked by the

:11:03.:11:06.

government to look at the currency options has laid it all out. The

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currency of sterling within a currency union... What is in your

:11:13.:11:16.

plan? We want a currency union because it is in the best interest

:11:17.:11:22.

of Scotland and the UK. Forgave me, but if you do not get that and it is

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important that the people of Scotland and the UK know the answer,

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if they are true to their word, these three politicians from three

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different parties, what is the plan? Scotland cannot be prevented from

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using the pound... It could not be a currency union. I believe George

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Osborne is bluffing. Can you tell me... I would really like an answer

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to this question and it is simple. Assuming they are not bluffing, and

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there are many reasons to believe they are not, what would then be the

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position on the currency? Scotland cannot be prevented from using the

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currency but I am not going to be the lead out of a position that is

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in the best interest of Scotland and the UK. I know that is what George

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Osborne wants to try and do but I am not going to allow him to do that.

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Let me tell you why the currency union is in the best interest of the

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union. Having a separate currency in Scotland would cost English

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businesses hundreds of millions of pounds in transaction costs. If we

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do not have a currency union, the balance of payments loses ?30

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billion of oil and gas. The trade deficit for the UK goes through the

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roof and impacts on the value of sterling. These are common-sense

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reasons why... People should not be fooled by it. That may or may not be

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true but my purpose this morning is not to argue on the merits of the

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currency union, and I will try one more time. If they do not agree with

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you and think a currency union without a political union, which is

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what it will be, if they ring that is not right for the rest of the UK,

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what do you do? -- if they think. I have already said that the fiscal

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commission has set out the currency options for Scotland. With the

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greatest of respect, just because George Osborne tries to intimidate

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Scotland it does not mean we should forget Scotland. He is laying out a

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viable case for the rest of the UK to say that if you go independent,

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we do not want a currency union. It is perfectly respectable. He is

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entitled to argue that. I am entitled to argue the position that

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I believe passionately and strongly is the best one for Scotland. Is it

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true that you said that if they stick to their guns and you do not

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get a currency union, an independent Scotland would not take its share of

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national debt? Let me be clear, I want to see an independent

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Scotland... What about the UK debt? Assets and liabilities go

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hand-in-hand. You cannot have a position, which I think George

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Osborne is articulating, that Scotland should be left with a share

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of liabilities but no assets. I am pointing out the logical conclusion

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of his position. I want Scotland to take on a fair share of its service.

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Let me clarify this. It is not a threat to say you cannot hold the

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currency of the country you have left. If you do not get a currency

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union, the Scotland grenade on its share of national debt? Does it? As

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the Treasury said just a couple of weeks ago, the debt is legally the

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Treasurys. I think it would be right for Scotland to take a share of the

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national debt, but that goes hand-in-hand with the question of

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the share of assets. Watt I would say you haven't got a choice,

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whether you get the pound or not. You cannot get better than that. Who

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is going to lend to a country... Where its political leader has

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already said it's going to renege on a substantial proportion of the

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debt? Never mind the respect, and to the question. Scotland becomes a

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pariah if you don't take your share of the debt, correct? I want them to

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take their share of debt. I wasn't disparaging your degree. I was going

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to quote Sir James early full stop he was quoted by Mark Carney. He is

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in print in the Scotsman, your former newspaper, today saying

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exactly why he thinks a currency union is in the best interests of

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Scotland. That is not the issue I'm asking. I put it to you that if you

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renege, if you go independent and renege on your share of UK national

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debt, you will be an international pariah on the money markets. My

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position is we won't come as you put it, renege on a share of the debt.

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Once Scotland votes for independence, if that's what the

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people of Scotland decide, we will have a currency union

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underpinned... And if you don't? Scotland will have our share of

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servicing the national debt. You assert that but you cannot prove it

:17:12.:17:15.

and you take Scotland into the unknown by not answering a single

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question I've asked you date on Plan B. Why are you so in favour of the

:17:23.:17:28.

pound? The SNP called the pound a millstone round the neck of

:17:29.:17:34.

Scotland. We asked our commission, looking at the currency options.

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There are different options open. So you were wrong? We have looked at

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the position. Because of the trading relationship, because of our

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contribution to the balance of payments, because of the integrated

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financial services market, it makes sense for Scotland to remain within

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the union that way with sterling. In 2009 when Alex Salmond crowed that

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sterling was thinking like a stone in the plummeting of the pound

:18:03.:18:05.

Korean first the case for membership of the euro, he was wrong as well?

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You have to judge these things with the prevailing circumstances at the

:18:12.:18:16.

time. The Liberal Democrats fought the election name manifesto to go

:18:17.:18:19.

into the euro. I don't think Nick Clegg would argue that to date. You

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base this on proper information and advice. The position we are putting

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forward now is the one that, in our judgment, is the right one. There

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are good, hard-headed reasons why it is the right one for the rest of the

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UK as well. Control of its own currency is a country's most potent

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economic weapon, do you agree with that? I agree that Scotland should

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stay within a sterling union. When it was said, there are simply no

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other methods by which the economy can be finely tuned and geared to

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meet the ever changing and accelerating challenges of the

:18:59.:19:02.

information age. A country without its own currency is a country

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without a steering wheel, breaks or accelerator, he was wrong? I don't

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agree with that. Based on the advice of the Economist I've spoken of,

:19:12.:19:15.

based on what is in the interest of businesses north and south of the

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border, there was an opinion poll carried out at the turn of the year

:19:20.:19:23.

that asked people in England not whether they thought Scotland should

:19:24.:19:27.

be independent or not, but if Scotland was independent, should we

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share a currency? 71% of people in England said yes. You want a

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currency union which would involve the rest of the UK being your lender

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of last resort, having to bail out the Scottish banks if they get into

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another mess, as they did only a few years ago. And yet it is also your

:19:48.:19:52.

policy that a loan on the European students, English students would

:19:53.:19:56.

have to pay full fees at Scottish universities. You want that and you

:19:57.:20:00.

want us to agree a currency union as well. Why would the rest of the UK

:20:01.:20:03.

agreed to that when you want to discriminate against English

:20:04.:20:09.

students? I don't want anybody to pay tuition fees. But you would

:20:10.:20:13.

charge English students fees, wouldn't you? You won't be charging

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German, Irish, French or Italian. England has the highest tuition

:20:23.:20:26.

fees... You want us to be your lender of last resort and yet you

:20:27.:20:30.

want to charge alone among Europeans full fees to the English, why would

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anyone agree to that? I want a partnership agreement on lender of

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last resort. England has the highest tuition fees and the whole of

:20:41.:20:47.

Europe. Only 10% of students in England came to study in Scotland,

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that would take up 80% of places. I wish there weren't tuition fees in

:20:53.:20:58.

England. If the UK moved tuition fees in England, they wouldn't be

:20:59.:21:03.

charged in Scotland either. Let's stay with the subject of the

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referendum on Scottish independence. So far, attention has perhaps

:21:08.:21:10.

understandably been focused on what might happen to Scotland if it votes

:21:11.:21:14.

yes and decides to go it alone. But that wouldn't just affect people

:21:15.:21:17.

living north of the border, it would be the beginning of the end of a

:21:18.:21:21.

Union which began more than four centuries ago. Inevitably, that

:21:22.:21:24.

would change life for England, Wales and Northern Ireland. So what might

:21:25.:21:28.

the UK minus Scotland be like? Here's David Thompson. Ever wondered

:21:29.:21:37.

why so many pubs are called the red Lion? Apparently, when James the

:21:38.:21:41.

sixth of Scotland became James the first of England in 1603, he

:21:42.:21:46.

insisted his coat of arms, the red Lion, be displayed on all buildings

:21:47.:21:51.

of significance, including pubs. We may have the Union of the Crowns to

:21:52.:21:55.

thank for the red line and and impart the UK, but that was more

:21:56.:21:59.

than 400 years ago. In the future, what would the rest of the UK look

:22:00.:22:03.

like politically, economically and perhaps even socially if Scotland

:22:04.:22:07.

was no longer part of the picture? Well, the electoral map could look

:22:08.:22:13.

very different. Labour would be the biggest sufferer. They would lose

:22:14.:22:17.

the biggest bulk of the 59 seats which currently Scotland retains in

:22:18.:22:21.

Parliament. The impact on the 2010 election would have been dramatic.

:22:22.:22:28.

Instead of being short of a majority in Westminster come without Scotland

:22:29.:22:31.

David Cameron would have had a majority of 21. But what might

:22:32.:22:35.

happen after the vote for independence? We don't know that

:22:36.:22:39.

without Scotland, whether that would have any effect on the internal

:22:40.:22:43.

politics of the rest of the UK that remained. With the dynamic stay the

:22:44.:22:47.

same or would it change somewhat? Certainly on paper it would make it

:22:48.:22:50.

a much more difficult task for Labour to think of winning an

:22:51.:22:53.

election in the future without Scotland. And what about the

:22:54.:23:09.

economic 's? With the debt burden, it would rise. I think that is

:23:10.:23:13.

likely to get the attention of credit rating agencies. That night

:23:14.:23:18.

not make a big impact for the man on the street, but for the government

:23:19.:23:21.

and Treasury finances, that would make a difference. Enough of the dry

:23:22.:23:25.

politics and economics, how would the rest of UK handle a Scottish

:23:26.:23:30.

departure? It's extremely important that we keep the UK as a whole. But

:23:31.:23:34.

if it were to happen we would accommodate it, because that is the

:23:35.:23:39.

way we are and always have been, but with deep regret. Could Scotland

:23:40.:23:44.

stay in, but with increased powers, devo max, actually be politically

:23:45.:23:50.

more traumatic than if it went? It would be completely intolerable to

:23:51.:23:53.

imagine that decisions that were taken in the UK parliament would be

:23:54.:23:58.

decided by Labour MPs in particular, let alone Scottish National 's, who

:23:59.:24:04.

were actually getting more and more devo max. I think we would get to a

:24:05.:24:09.

breaking point on that. Scotland's future will be a question for

:24:10.:24:14.

Scotland. But whatever the answer, the UK may well feel like a very

:24:15.:24:18.

different place afterwards. We're joined now by the chairman of the

:24:19.:24:21.

English Democrats, Robin Tilbrook, and by the Conservative MP, Iain

:24:22.:24:24.

Stewart, who was born and raised in Scotland. The Conservatives have the

:24:25.:24:29.

grand total of one MP in Scotland, Labour have 41. At the last

:24:30.:24:34.

election, David Cameron would have gained an overall majority if

:24:35.:24:38.

Scotland's votes had been excluded. What's not to like for Scottish

:24:39.:24:44.

independence for the Conservatives? My nationality is British. Even

:24:45.:24:47.

though there would be a short-term electoral gain for my party, I do

:24:48.:24:52.

not support the break-up of the United Kingdom, my country. That is

:24:53.:24:56.

far more important than the result of any one particular election. It

:24:57.:25:01.

could be, as some political pundits have predicted, that it could lead

:25:02.:25:05.

to one-party rule if there was Scotland independent and the rest of

:25:06.:25:10.

the UK remaining? I don't think you can extrapolate that. If you look at

:25:11.:25:15.

the majorities that Tony Blair had, he had a majority of the seats in

:25:16.:25:19.

England as well as the UK as a whole. It's very dangerous to

:25:20.:25:23.

extrapolate on one election result. But some of your conservative

:25:24.:25:27.

colleagues must feel that way, knowing they would be much more

:25:28.:25:32.

likely to have electoral victory, a significant majority without

:25:33.:25:36.

Scotland. We are the Conservative and Unionist party. That Unionist

:25:37.:25:41.

strand is very deep in what I and most of my colleagues believe. I

:25:42.:25:46.

would be distraught if my country was broken up. I'm British and I

:25:47.:25:51.

don't want that to happen. Do you think the Unionists are making

:25:52.:25:55.

enough of the emotional connection with Scotland, with the UK remaining

:25:56.:26:00.

as it is? We had a good debate in the Commons last Thursday. I made

:26:01.:26:06.

the point that initially Scotland and England coming together was like

:26:07.:26:10.

a marriage, two families coming together. But over the centuries, we

:26:11.:26:15.

actually built something that is different. You build a shared

:26:16.:26:19.

identity and heritage. That is what is so dear to me and many of my

:26:20.:26:23.

colleagues. That's a very emotional plea for the union to stay together.

:26:24.:26:30.

How do you argue against that? That is quite a minor authority opinion

:26:31.:26:35.

in England generally, I think. The English are becoming more self

:26:36.:26:39.

identifying as being English, as we see from the 2011 Census results.

:26:40.:26:43.

Over 60% of the population in England, more than 32 million

:26:44.:26:48.

people, said in the way they answered that that they were English

:26:49.:26:53.

only and not British. A further 10% said they were English and British.

:26:54.:26:58.

Probably only about another 5% of people who were English said that

:26:59.:27:04.

they were just British. Wouldn't it make England more parochial, a

:27:05.:27:09.

lesser country without Scotland? It's not so much that. The issue is,

:27:10.:27:14.

should nations govern themselves? As far as we are concerned, and as far

:27:15.:27:19.

as the SNP are concerned, nations should govern themselves. In your

:27:20.:27:25.

mind, does England prop up Scotland financially and economically?

:27:26.:27:30.

Certainly. The 2009 report from the House of Lords suggested that was

:27:31.:27:34.

the case. How do you argue against that? If you are looking at the

:27:35.:27:39.

amount of public spending per head, it's about ?1200 higher per head in

:27:40.:27:44.

Scotland, how do you argue that to someone in England who says, let

:27:45.:27:48.

Scotland go? A number of years ago I was a very dry book on this

:27:49.:27:52.

subject. No one knows the true financial relationship between the

:27:53.:27:56.

constituent parts of the UK because we've never allocated exactly tax

:27:57.:28:03.

receipts or spending. People can make assertions or assumptions, but

:28:04.:28:07.

no one actually knows the true relationship. That is something we

:28:08.:28:12.

would need to find out first. So you don't think the English taxpayer

:28:13.:28:18.

props up the Scottish... I'm saying there is no hard and fast evidence

:28:19.:28:21.

to prove the case one way or the other. How would you apportion

:28:22.:28:25.

receipts from the North Sea, for example? There are different schools

:28:26.:28:30.

of thought about how you could do that. Does England prop up Scotland

:28:31.:28:44.

or are you a net contributor? You can argue your case for or against

:28:45.:28:46.

independent, but Scotland is not subsidised. Public spending in

:28:47.:28:48.

Scotland is ?1200 per head higher than the rest of the UK. But tax

:28:49.:28:51.

generated in Scotland in ?1700 per head higher. We contribute more in

:28:52.:28:54.

terms of percentage terms than we get back on spending. Scotland is

:28:55.:29:00.

not subsidised. We pay our way. If Scotland was to be independent, our

:29:01.:29:04.

deficit would be a smaller share of our GDP than the rest of the UK.

:29:05.:29:09.

Absolutely it is not the case that Scotland is propped up in any way.

:29:10.:29:14.

To continue that line of argument, you accept that an independent

:29:15.:29:17.

Scotland would leave the rest of the UK worse off? We've just had a

:29:18.:29:22.

discussion about currency union. I think it's right that we cooperate

:29:23.:29:26.

in many respects, but I believe Scotland should access its own

:29:27.:29:30.

resources, stand on its own feet and take its own decisions. And it would

:29:31.:29:37.

leave the rest of the UK worse off. You are arguing that an independent

:29:38.:29:42.

Scotland would leave the rest of the UK worse off. England is perfectly

:29:43.:29:47.

capable of standing on its own two feet as an independent country. If I

:29:48.:29:51.

can go back to the social union, because some of the links your film

:29:52.:29:56.

talked about, the real bonds that exist between Scotland, England and

:29:57.:30:00.

other parts of the UK, these are strong, they will endure. I've got

:30:01.:30:04.

family in England. These are not things that depend on constitutions

:30:05.:30:08.

or how Scotland is governed, these are about people inhabiting the same

:30:09.:30:13.

island. Do you agree with that? I do think we would still be friends. I

:30:14.:30:17.

would take an issue with one point. The idea of the rest of the UK. It's

:30:18.:30:24.

my view, as a lawyer, that if Scotland goes you've got a repeal of

:30:25.:30:29.

the act of union, and that means you haven't got a continuing UK. There

:30:30.:30:33.

might be some shenanigans in Parliament... What about Wales and

:30:34.:30:38.

Northern Ireland? Wales is a slightly different case. The union

:30:39.:30:43.

with Northern Ireland depends on the union of 1801 originally. That was

:30:44.:30:48.

not with England, that was with the United Kingdom of Great Britain. A

:30:49.:30:51.

Great Britain would cease to exist with Scotland going. All Nicola

:30:52.:31:00.

Sturgeon said the bonds would still be there. Why would you be so

:31:01.:31:03.

distraught if those connections are still there? I do not want dual

:31:04.:31:10.

citizenship, I want my country to stay together. Why take this

:31:11.:31:18.

gamble? Why this one-way ticket? We have something that has insured and

:31:19.:31:22.

worked to stop together, I strongly believe that the strength is better

:31:23.:31:31.

than the individual strength. I do not think the Westminster system of

:31:32.:31:36.

government is working for Scotland. We have a Tory government that most

:31:37.:31:40.

people in Scotland do not one. But you want to keep the Crown? You want

:31:41.:31:50.

to retain so much of it. In all countries of the modern world you

:31:51.:31:55.

cooperate, that makes sense. Why should they implement policies like

:31:56.:31:58.

the Bedroom Tax that we do not agree with? It would be no difference to

:31:59.:32:06.

Canada or Australia. They have the Queen, why should we not have the

:32:07.:32:15.

Queen as well? Thank you. Mark Carney, he's the governor of the

:32:16.:32:17.

Bank of England, delivered the bank's latest inflation report

:32:18.:32:21.

yesterday. You might have missed it because of all the talk about the

:32:22.:32:24.

weather. It contained some pretty good news because the bank raised

:32:25.:32:28.

its estimate of growth this year to 3.4%. That's what's known as a

:32:29.:32:32.

bullish forecast, meaning it's more optimistic than most other

:32:33.:32:45.

economists. The bank is not always right. The bad news is, he says the

:32:46.:32:50.

recovery can't go on as it is. Here's what he had to say: the

:32:51.:32:57.

recovery has gained momentum. Output is growing at its fastest rate since

:32:58.:33:02.

2007, jobs are being created at the fastest pace since records began,

:33:03.:33:09.

and the inflation rate is back at 2%. The recovery is neither balanced

:33:10.:33:16.

or sustainable. A few quarters of growth are a good start but they are

:33:17.:33:21.

not sufficient for sustained momentum. Activity is still below

:33:22.:33:29.

precrisis level. The household saving rate is likely to fall

:33:30.:33:33.

further. The pick-up in business investment is still added earliest

:33:34.:33:38.

stages. The global outlook, although improved, contains downsides in

:33:39.:33:50.

emerging recovery. And we're joined now by two economists who got on so

:33:51.:33:54.

well last time they were on the show, one of them accused the other

:33:55.:33:58.

of trying to nail a blancmange to a wall. I think that means they didn't

:33:59.:34:01.

agree. It's the political economist Will Hutton and the Telegraph

:34:02.:34:08.

columnist Liam Halligan. You both think the recovery is unbalanced at

:34:09.:34:15.

the moment, right? Yes. Yes. Aren't most recovery is unbalanced in early

:34:16.:34:19.

days? The question of whether they are sustainable is if they do become

:34:20.:34:26.

balanced. It is true to say that most recoveries are consumer led. To

:34:27.:34:32.

begin with. The extent of the balance is completely marked in this

:34:33.:34:36.

case. The last GDP figures in the UK showed that the vast majority of

:34:37.:34:44.

growth was in business services and financial services. There is a

:34:45.:34:46.

bubble in that sector. Meanwhile, the construct than -- construction

:34:47.:34:55.

sector was contract thing. We have had a weaker sterling in the last

:34:56.:35:00.

three or four years and huge trade deficits. We are not making stuff,

:35:01.:35:06.

selling it to the rest of the world. We have always had a huge

:35:07.:35:11.

trade deficits. We have always had. If it is unbalanced, what needs to

:35:12.:35:19.

be done? First of all, I think that most institutions that support the

:35:20.:35:26.

kind of growth that is needed, you were sitting with Nicola Sturgeon

:35:27.:35:31.

and I am a supporter of creating a stakeholder capitalist society, we

:35:32.:35:38.

need banks that are more enterprise, we need an innovation system that is

:35:39.:35:41.

more supportive of companies that take risks at the frontier. This

:35:42.:35:51.

recovery will run out quickly! We had an evaluation of the pound that

:35:52.:35:55.

is the second-largest in the last 100 years with negligible uptake in

:35:56.:36:01.

our exports. The biggest market is on its back in Europe! In growing

:36:02.:36:07.

markets we are doing badly. We have an industrial structure, and that is

:36:08.:36:16.

one area which we are unbalanced within. Another area with low

:36:17.:36:26.

productivity, we have a public sector that is intensely squeezed.

:36:27.:36:30.

We have a desperately poor infrastructure. The week of flood

:36:31.:36:36.

defences are tiny part of that. All of that needs attention. What would

:36:37.:36:46.

you do? The consensus looms. I would focus on the banking sector, Andrew.

:36:47.:36:50.

I have been writing about this for many years and we are still in a

:36:51.:36:52.

situation where investment is still at its lowest since the early 1950s.

:36:53.:37:01.

That is largely because a lot of the businesses are worried about another

:37:02.:37:06.

collapse. That is what everybody is talking about. The bank says

:37:07.:37:10.

business investment is going to rise this year. It is at a desperately

:37:11.:37:16.

low level. Business investment is 8% lower than where it was precrisis.

:37:17.:37:24.

Yes, but that is a start. The banking sector is not capable of

:37:25.:37:26.

providing the capital to these businesses because they are massive

:37:27.:37:32.

liabilities. When did you tell us the British economy would you be

:37:33.:37:44.

growing by? Unemployment is hurtling below 17%. I was writing in 2012

:37:45.:37:50.

that we would get a recovery of two or 3% in 12 months' time. I have

:37:51.:37:54.

always said that unless the banking sector is cleaned up... RBS has

:37:55.:38:00.

provisioned another massive 8 billion. Barclays have given a big

:38:01.:38:07.

chunk away in bonuses. The banking sector is a drag on growth rather

:38:08.:38:11.

than an engine on growth. When did you tell us that the economy was

:38:12.:38:18.

going to do so well? I said that I thought growth was going to be 3% or

:38:19.:38:23.

more in 2013. I did! I have been saying that for some months. I have

:38:24.:38:31.

always said that the question is what happens after the snap back. My

:38:32.:38:39.

argument is was that we would get driven back by consumption to where

:38:40.:38:44.

we were, but over and above the points I raised earlier, I think

:38:45.:38:49.

inequality is a huge issue. Inequality between London and

:38:50.:38:53.

Scotland. Inequality between the top 1% and the rest. You cannot have it

:38:54.:39:02.

both ways. The gap between London and the rest of the country

:39:03.:39:05.

everywhere is huge. That is because London almost does not belong to

:39:06.:39:13.

Britain any more. The inequality between London and the rest of the

:39:14.:39:18.

country is one of the highest. No other countries have a London. There

:39:19.:39:24.

is a Berlin, there is a Milan. London is a problem. But it is a

:39:25.:39:33.

success! It is a problem and the strength! It is realistic to assume

:39:34.:39:39.

that we can never rebalance the economy on the successes we have

:39:40.:39:44.

had? We cannot do it with banking or consumption. The trouble is that

:39:45.:39:54.

having an economy that is so unbalanced represents a systemic

:39:55.:39:59.

threat to the system. That is what Mark Carney things as well.

:40:00.:40:08.

Actually, there was a lot of sleight of hand. Viewers want to know about

:40:09.:40:15.

interest rates. For Mark Carney to go from an unemployment target to

:40:16.:40:21.

spare capacity target... That is a really sticky subject. No one can

:40:22.:40:28.

look at the assumptions on this. Mark Carney said that in the future

:40:29.:40:33.

interest rates are going to be materially lower than the 5% that we

:40:34.:40:40.

had before. No central banker can decide this. The Bank of England's

:40:41.:40:47.

base rate is 0.5%. That is not what they are paying on their mortgage.

:40:48.:40:54.

OK, we are running out of time. We have no more time for lectures! Do

:40:55.:41:06.

you fancy these two as economic advisers? Absolutely! I would take

:41:07.:41:12.

both of them! You would? ! After you have heard them? Why would you do

:41:13.:41:19.

that? ! The point about inequality is important. Bank lending and

:41:20.:41:25.

investment are important. We have a strong economy in Scotland but we

:41:26.:41:30.

will discuss terms later on. I have enjoyed listening to them. I am on a

:41:31.:41:36.

commission here! We have run out of time, sadly. Now. I was born in

:41:37.:41:47.

November which explains why I've climbed the greasy pole to the top

:41:48.:41:57.

of the Daily Politics. What year? ! Thank you! Well, nearly to the top.

:41:58.:42:07.

But for children born in the summer there's strong evidence to show

:42:08.:42:10.

they'll perform less well than their classmates. And the gap persists all

:42:11.:42:13.

the way through to university and beyond. The Liberal Democrat MP

:42:14.:42:16.

Annette Brooke has been highlighting the problem, here's her film. Hello,

:42:17.:42:30.

I was born in September. Hello, I was born in October. My name is

:42:31.:42:44.

Celia and I was born in August. These children are getting a good

:42:45.:42:47.

start to their education at nursery school, but when should a child

:42:48.:42:53.

begin their primary education? Well, local authorities provide a

:42:54.:43:00.

full-time place for all four-year-olds in September after

:43:01.:43:05.

their birthday. A child born on the 31st of August 2013 will start in

:43:06.:43:15.

the same year as one born on the 1st of September a year later. Some are

:43:16.:43:23.

born child may not be as ready as its older counterparts to start

:43:24.:43:28.

school at such an early age. This can result in long-term damage to

:43:29.:43:33.

educational achievement. The statutory school starting age is

:43:34.:43:38.

five years old and a parent can choose not to send their child to

:43:39.:43:42.

school until the term in which their child is five. Local authorities are

:43:43.:43:49.

not choosing to start children in reception. A recent study shows that

:43:50.:43:56.

compared to children born in September, a child born in August is

:43:57.:44:03.

6.4% less likely to achieve five GCSEs at grades a to C. It is

:44:04.:44:14.

staggering just how long-term the Fx seem to be. I welcome the recent

:44:15.:44:24.

report published by the Department for Education. In particular, there

:44:25.:44:32.

is no statutory barrier for children being admitted outside their year

:44:33.:44:35.

group and flexibilities exist for parents to start four-year-old

:44:36.:44:40.

children later in the year. Whilst then may not be a statutory barrier

:44:41.:44:46.

for a child being admitted to school in a particularly year group, it is

:44:47.:44:53.

not a statutory right. The Department for Education has got to

:44:54.:45:01.

think again on this issue. How would you change school admissions to take

:45:02.:45:06.

account of this? All we need is flexibility. We were pleased with

:45:07.:45:11.

the advice that the Department for Education published in July, which

:45:12.:45:18.

clearly indicates there is no barrier to a child starting in a

:45:19.:45:22.

different year group. What we are really talking about is a summer

:45:23.:45:26.

born child, rather than starting in reception just after they are four,

:45:27.:45:31.

that they would actually be allowed to start in reception just after

:45:32.:45:36.

they are five. At the moment, if parents exercise their choice not to

:45:37.:45:41.

start their child until the compulsory school starting age,

:45:42.:45:44.

which is the term in which they are five, they actually are almost being

:45:45.:45:48.

forced to go into year one. If you've chosen, do you hold your

:45:49.:45:54.

child back because you think they are not quite ready for school, and

:45:55.:45:59.

that's a perfectly logical thing to do, then parents argue, why should

:46:00.:46:03.

they miss out on reception year? There has to be a cut-off between

:46:04.:46:09.

years. How would that pity really change? There will always be

:46:10.:46:13.

children, whichever way you decide to do it, who will fall close to the

:46:14.:46:18.

cut-off and could be disadvantaged in that sense. Absolutely. Our

:46:19.:46:22.

school starting age was effectively changed when all local authorities

:46:23.:46:30.

were required to provide a place for all four-year-olds in the September

:46:31.:46:35.

from the birthday. That was useful because it addressed one of the

:46:36.:46:40.

issues, that you were even in up the length of schooling. But you have

:46:41.:46:44.

got some children who are not ready to start at that age. If you take

:46:45.:46:48.

the example of a premature baby, a seven-month baby born on the 31st of

:46:49.:46:54.

August, then it's pretty clear they are not ready to start school the

:46:55.:46:57.

September after their fourth birthday. Then maybe parents who

:46:58.:47:01.

find it difficult to start their child at school to terms after

:47:02.:47:05.

everybody else and still be in that same year, and whether that would

:47:06.:47:08.

iron out the disadvantage in subsequent years, we don't know

:47:09.:47:12.

that. But what about the children already in the system? If the

:47:13.:47:16.

figures are showing they are at a disadvantage, what can you do to

:47:17.:47:23.

help them improve during their school years? With some of the

:47:24.:47:25.

excellent teachers we've got, I would hope you've got the right

:47:26.:47:28.

approach in our reception year. But there are examples across the

:47:29.:47:32.

country where a summer born child might be classified as having

:47:33.:47:34.

special educational needs when they are not. In a good reception class

:47:35.:47:42.

you will have teachers looking at each individual child was level of

:47:43.:47:46.

development and making sure that the activities are appropriate. A summer

:47:47.:47:49.

born may be more developed than an older child. It is really important

:47:50.:47:56.

to have a child centred approach. That is why the parents, and there

:47:57.:48:00.

are not large numbers of them because it's a big decision to hold

:48:01.:48:04.

your child back for a year, they are doing it because they don't want

:48:05.:48:09.

their child damaged and failed at school age four. What is the

:48:10.:48:15.

situation in Scotland? Reception year doesn't really apply in

:48:16.:48:20.

Scotland. You have a primary one in Scotland in the August after their

:48:21.:48:23.

fifth birthday. But if they turn fight between August and February,

:48:24.:48:27.

there is the option of starting in August while they are still four,

:48:28.:48:31.

but it's not compulsory. Parents can choose to wait until the following

:48:32.:48:37.

August. Has that worked better? I'm really interested in this research.

:48:38.:48:42.

There is no plans to change that system in Scotland at the moment

:48:43.:48:44.

because we think that flexibility works well. There's a general issue

:48:45.:48:51.

we are focused on, in trying to make sure we are raising attainment and

:48:52.:48:54.

closing the attainment gap between the best and worst performing. We

:48:55.:48:58.

would all be well advised to pay attention to research that. Gordon

:48:59.:49:03.

Brown is speaking in the Commons today. It's not often we say that

:49:04.:49:08.

any more. He's going to be making a short speech arguing for more

:49:09.:49:11.

support for the schooling of Syrian refugees. Since losing the election

:49:12.:49:14.

in 2010, he's remained an MP but he's been criticised for being

:49:15.:49:17.

almost invisible at Westminster. So what's he been up to? The former

:49:18.:49:20.

Prime Minister has taken part in 127 votes out of 980 since he left

:49:21.:49:24.

Number Ten, that's 13%, well below the average amongst MPs. He's spoken

:49:25.:49:30.

in seven debates, raising the proposed closure of Remploy

:49:31.:49:33.

factories in his constituency and Rupert Murdoch's bid to take full

:49:34.:49:41.

control of BskyB. So what's he been doing instead? Well, he's the UN's

:49:42.:49:48.

special envoy for global education, a role that involved a fair bit of

:49:49.:49:52.

globetrotting. He earns money for his speaking engagements. Latest

:49:53.:49:55.

figures show he declared payments totalling ?1.37 million. His office

:49:56.:50:01.

said that all of the money went directly to charity or to fund

:50:02.:50:10.

charitable work. We are not quite sure what then happens to the money

:50:11.:50:13.

after that and what salaries are paid. And of course he's paid a

:50:14.:50:18.

salary as an MP of just over ?65,000. We're joined now by a brace

:50:19.:50:24.

of bloggers. Mark Ferguson, from Labour List, and Harry Cole, from

:50:25.:50:32.

Guido Fawkes. Does it matter how often he speaks in the house? As

:50:33.:50:36.

Prime Minister, he wasn't really in many votes in the house either. Is

:50:37.:50:41.

it really a proper way of judging his contribution? I think the people

:50:42.:50:46.

of Kirkaldy deserves some reputable station. -- representation. He has

:50:47.:50:53.

become the noble cause of Syrian refugees, but it hammers home the

:50:54.:50:57.

point there are 60,000 people in Scotland who don't have an MP. He is

:50:58.:51:03.

on a smattering of written answers and teapots in occasionally. He is

:51:04.:51:06.

collecting his salary, we are paying him to be an MP. Since 2010, he's

:51:07.:51:16.

earned 3.6 million. Only ?900,000 of that has gone to charity, he's

:51:17.:51:21.

declared that on his website. The rest has gone to this mythical thing

:51:22.:51:23.

called the

:51:24.0:44:29

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