:00:13. > :00:16.Tonight on Newsnight Scotland: There has been a raft of new
:00:16. > :00:19.economic data this week, capped today by a survey from the Scottish
:00:19. > :00:22.Chambers of Commerce. Could they show that George Osborne's approach
:00:22. > :00:24.to cutting the deficit is absolutely right?
:00:24. > :00:27.Also tonight: BBC Scotland's Audience Council says the
:00:27. > :00:33.corporation still doesn't really get the nations and regions. But
:00:33. > :00:35.will anything be done about it? Good evening. If there is one thing
:00:35. > :00:38.most Scottish politicians agree on, with the exception of Conservatives
:00:38. > :00:41.of course, it is that George Osborne's economic strategy is
:00:41. > :00:43.wrong. Both the SNP and Labour argue the Chancellor is cutting
:00:43. > :00:47.public spending too far and too fast and jeopardising economic
:00:47. > :00:57.growth. But could it be that a slew of recent data show that, actually,
:00:57. > :01:01.
:01:01. > :01:11.The Chancellor's plant is simple: British households have too much
:01:11. > :01:16.
:01:16. > :01:23.death -- debt, so cut public spending. And encouraged the old-
:01:23. > :01:28.fashioned virtues of spending within our means, and do that and
:01:28. > :01:32.the private sector will create jobs that will more than make up for
:01:32. > :01:37.jobs that are lost and the public sector. It is at least arguable
:01:37. > :01:42.that recent trends in the economy show that it is doing exactly what
:01:43. > :01:48.it says on the 10. Take the unemployment figures. New data
:01:48. > :01:53.showed unemployment in Scotland fell. But the number of jobs in the
:01:53. > :01:57.economy rose by 20,000. The number of jobs across the UK rose by
:01:57. > :02:06.50,000. Recent figures show that while public sector employment fell
:02:06. > :02:12.by 8,000, total employment rose by over 40,000. Yesterday's figures
:02:12. > :02:22.claimed employment rose by 50,000. Other figures also show the biggest
:02:22. > :02:27.rise in -- Scottish manufacturing exports. It is true that today's
:02:27. > :02:35.survey is a fall of agonising about the weak state of the economy. But
:02:35. > :02:40.look at the detail. It said that exports and tourism are doing well.
:02:40. > :02:49.The Warriors were in wholesale and retail, a confirmation of recent
:02:49. > :02:59.awful statistics about Britain's shopkeepers. Any fiscal
:02:59. > :03:11.
:03:11. > :03:16.consolidation was banned to affect If we were to steer the economy
:03:16. > :03:18.away from consumer debt, we would expect spending to fall as people
:03:18. > :03:24.pay off their credit card and struggle to cope with those
:03:24. > :03:28.mortgages. And having to do with pay rises which have been running
:03:28. > :03:36.behind inflation. George Osborne always said he wanted to rebalance
:03:36. > :03:43.the economy. He never claimed it would be a walk in the park. But,
:03:43. > :03:52.what about the cuts in public services? Won't that knock the job
:03:52. > :03:59.figures off? Maybe, but what if the government manages to cut public
:03:59. > :04:05.sector pay in the real term? It is not clear that the cataclysm in the
:04:05. > :04:10.public sector will ever happen. Here is what the finance secretary
:04:10. > :04:16.had to say on the matter. largest reduction in public
:04:16. > :04:26.expenditure that we have got to face, is the one for which I have
:04:26. > :04:30.
:04:30. > :04:34.set a budget. In that sense, I took exception. Back in February, I set
:04:34. > :04:44.a budget that to reduce public expenditure in Scotland by �1.3
:04:44. > :04:44.
:04:44. > :04:48.billion. The British economy grew by only 0.5% in the first quarter
:04:48. > :04:54.of the year, an economist had been a falling over themselves to cut
:04:54. > :04:57.back on their forecasts. Much of the growth and exports may be due
:04:57. > :05:03.to devaluing the pound, rather than making industry more efficient for
:05:03. > :05:07.the medium and long-term. Still, if it is putting it too strongly to
:05:07. > :05:13.say that George Osborne has been vindicated, can you not at Easter
:05:13. > :05:16.Monday benefit of the doubt? I'm joined now by John McLaren of
:05:16. > :05:22.the Centre for Public Policy for Regions, and in Edinburgh by Bill
:05:22. > :05:31.Jamieson of the Scotsman. Some of these figures do seem to
:05:32. > :05:41.show that George Osborne has a point. We are still in a limbo
:05:42. > :05:42.
:05:42. > :05:50.period. We are not sure when the economy will grow or dip again. The
:05:50. > :05:59.most positive thing that has happened is that... The performance
:05:59. > :06:04.of the Labour market. Given the depth of the cuts and the economy,
:06:05. > :06:10.usually unemployment rises much more. It has understand. It has
:06:10. > :06:16.gone up a lot in America, but not so much here. That is probably a
:06:16. > :06:22.combination of factors, like more people doing part-time jobs. Also,
:06:22. > :06:27.wage rises are less this time round than in previous recessions, which
:06:27. > :06:33.means you do not have to cut so many jobs. In previous recessions,
:06:33. > :06:41.wages had been rising too quickly. That is something that is positive,
:06:41. > :06:47.and we will have to keep that going. The big if is still what happens
:06:47. > :06:55.with GDP. Where will the growth come from? There are still a lot of
:06:55. > :07:01.issues about the output gap is smaller than expected. There is
:07:01. > :07:10.less of growth. This is the gap of the platform as the economy, and
:07:10. > :07:16.what it would be doing if it was growing normally. Yes. Then, if you
:07:16. > :07:23.are looking at exports, you have these huge uncertainties in the US
:07:23. > :07:31.about the level of its deficit and the housing market. I want to stick
:07:31. > :07:36.to Britain. Jim, I do not think that is a hip hip hooray from John.
:07:36. > :07:42.Yes, and did extend beyond the Labour market figures, which have
:07:43. > :07:46.been better than expected. The Scottish government have been very
:07:47. > :07:54.assiduous in filling up my e-mail in box over the past few days with
:07:54. > :08:01.this good news. Excellent news on employment, unemployment down by
:08:01. > :08:04.11,004 stop they look encouraging news about manufacturing exports. A
:08:04. > :08:10.very upbeat survey from the Bank of Scotland which came out earlier
:08:10. > :08:18.this week about private sector growth. The sixth consecutive month
:08:18. > :08:22.of growth and the private sector. You have to ask, what is the case
:08:22. > :08:32.for Plan B? It seems to me that here in Scotland, so far, plan is
:08:32. > :08:35.
:08:36. > :08:41.working. You are talking about this as Labour's argument. If you
:08:41. > :08:48.publicised it, it would spooked the market so badly it would be better
:08:48. > :08:55.off not having one. Absolutely. You do not have to look far to see the
:08:55. > :09:00.apprehension over deficits and debt. Let us stick to Britain, again.
:09:00. > :09:08.What is your answer to this basic point that some of these figures,
:09:08. > :09:14.honesty there are question marks. George Osborne cannot say, it is
:09:14. > :09:23.not certain yet, GDP growth is weak, but the figures we have seen to
:09:23. > :09:28.show I am right, he would save. so far. There is a lot of
:09:28. > :09:33.apprehension about how sustainable this is. If you look at some of the
:09:33. > :09:38.data coming in in recent weeks, it is not good. There is a slowdown in
:09:38. > :09:41.the manufacturing sector and the service sector. All of the
:09:41. > :09:47.forecasters are tumbling over themselves to cut growth forecast.
:09:47. > :09:52.There is an issue about how sustainable this is. But George
:09:52. > :09:58.Osborne's point was third it was not just a question of GDP growth.
:09:58. > :10:01.They had to be a rebalancing of where growth came from, and what
:10:01. > :10:07.I've tried to say there was the what we are seeing, you would
:10:07. > :10:12.expect to see. You would expect to see consumer spending falling,
:10:12. > :10:15.mortgage lending falling, in an economy where you are trying to
:10:15. > :10:21.rebalance from an excessive reliance on government and consumer
:10:21. > :10:27.debt, to end economy based more manufacturing and exports.
:10:27. > :10:33.absolutely correct. This is part of the solution, and not part of the
:10:33. > :10:39.problem. However, the trap that George Osborne is in here, you to
:10:39. > :10:45.bed down on the consumer sector. You are hitting two thirds of the
:10:45. > :10:50.UK economy, and it makes growth very difficult. A should be week --
:10:50. > :10:56.should we be refraining this argument? Critics of George Osborne
:10:56. > :11:03.said he would drive the economy into a double dip recession. That
:11:03. > :11:08.looked unlikely, even buy them. Isn't the real argument not that
:11:09. > :11:14.there will be a recession, but with different policies you could have
:11:14. > :11:18.faster growth, cut the deficit quicker, and people suffering by
:11:18. > :11:27.having their income is cut would not have their income is cut as
:11:27. > :11:34.fast, or even a tall? I do not been there is a huge distance between
:11:34. > :11:39.the two approaches. It is basically a matter of timing. Ed Balls wants
:11:40. > :11:45.to do more slowly, to make sure recovery is more in place. George
:11:45. > :11:50.Osborne is more concerned about getting the deficit down. I do not
:11:50. > :11:57.think they are that wildly far apart. One is an saying we should
:11:57. > :12:07.do it through tax increases rather than expenditure cuts. They both
:12:07. > :12:07.
:12:07. > :12:11.have the same concerns. What about those other argument, public sector
:12:11. > :12:20.cuts have not taken effect yet. When they do, people will lose
:12:20. > :12:24.their jobs. It is true that in that interview, shortly after the clip,
:12:24. > :12:32.there would be a problem and a couple of years' time when he could
:12:32. > :12:38.not cut public sector pay any further. The fact is, this was the
:12:38. > :12:42.most difficult year, and he has managed to drop the budget. Because
:12:42. > :12:52.public sector pay such a large proportion, if you freeze it, you
:12:52. > :12:54.
:12:54. > :13:01.do not need to do they not have these things. Part of the reason is
:13:01. > :13:08.that things like reducing capital spending in the Scottish water-0,
:13:08. > :13:17.that has to come back. That was a delaying tactic for a while. You
:13:17. > :13:21.have also got the wage freeze reverses non wage freeze. If that
:13:21. > :13:25.starts to rise, you have got to find that extra money. You have got
:13:25. > :13:35.other things like high education, where we know they will be a large
:13:35. > :13:36.
:13:36. > :13:42.gap. That has got to be found as well. This year, higher education
:13:42. > :13:49.or ready to go a very large hit. There hasn't been an uproar about
:13:49. > :13:54.that. There have been difficult things, but there is not a feeling
:13:54. > :14:03.like we saw in the '80s, partly because unemployment has not grown
:14:03. > :14:10.as much. What do you make about this point about public spending?
:14:10. > :14:16.Is and cutting public spending a bit like that? In reality, deep
:14:16. > :14:26.whole thing is a lot more fungible than was being made out. It isn't
:14:26. > :14:30.
:14:30. > :14:40.the case that we will have mass I would not really agree with you
:14:40. > :14:42.
:14:42. > :14:52.as regards landfill stop however, much more gradually. Not any big-
:14:52. > :14:52.
:14:52. > :14:59.bang way. I think there is very little net at recruitment going on
:14:59. > :15:06.in the public and private sector. This reference to natural wastage,
:15:06. > :15:15.where people leave jobs and retire, back to be put through without the
:15:15. > :15:20.draconian measures that people feared a year ago. The wall premise
:15:20. > :15:24.of George Osborne strategy was that if we do not do this, there will be
:15:24. > :15:34.a hit in the bond market and we could end up, if not quite like
:15:34. > :15:40.Greece, been heavily penalised. There was actually 0 evidence of
:15:40. > :15:47.bond rates spiking under Labour or under the Coalition. Do you think
:15:47. > :15:56.there was a very serious danger of Britain getting into trouble?
:15:56. > :16:06.I think there was. It was very important that we had a Coalition
:16:06. > :16:06.
:16:06. > :16:12.and Broughton a national party to address a record level of debt. I
:16:12. > :16:17.would say it is very dangerous to assume that the markets will give
:16:17. > :16:23.you a freak pass. You only need to look at what is happening across
:16:23. > :16:30.Europe. Who would have thought a few weeks ago that Italy would be a
:16:30. > :16:33.target? But now it is. The we will have to leave it there. Thank you
:16:33. > :16:37.both very much. Now, as the roof has been falling
:16:37. > :16:39.in on the Murdoch empire, another area of the media has been under
:16:39. > :16:42.scrutiny here. The Audience Council, an independent group which advises
:16:42. > :16:45.the BBC Trust in Scotland, issued a report saying there is a continuing
:16:45. > :16:48.failure of the London-based network to reflect anything much wider than
:16:48. > :16:58.a South of England perspective. Can a national broadcaster ever truly
:16:58. > :17:02.
:17:02. > :17:09.cover such a diverse country? Derek Bateman reports. Is the BBC news
:17:09. > :17:16.centre Don England? Tonight at 10, or Rupert Murdoch is forced to drop
:17:16. > :17:26.his bid to get full control of BSkyB eat. Does it fail to cover
:17:26. > :17:28.
:17:28. > :17:36.the whole of the United Kingdom? is 6 o'clock. Good morning. His
:17:36. > :17:40.Radio 4 changes to England, but at the South of England? They are so
:17:40. > :17:46.weak, the Audience Council for Scotland, which advises the BBC
:17:46. > :17:56.Trust, says it feels there is a bias of the BBC towards the south
:17:56. > :18:07.
:18:07. > :18:13.A I think we have been short- changed. What we look to do was
:18:13. > :18:16.just to have Scottish Ministers consulted. Right now, the BBC
:18:16. > :18:21.governors do not even need to speak to Scottish Ministers and I think
:18:21. > :18:29.we have to start a set-up of consultations and the need to be
:18:29. > :18:32.involved in that process. It is important the Scottish government
:18:32. > :18:39.is involved when critical decisions are being made about BBC
:18:39. > :18:49.programming. If that a surprise that the BBC coverage may be skewed
:18:49. > :18:53.
:18:53. > :18:58.in one direction? It has to be said that there must be impossible for
:18:58. > :19:06.everywhere from Shell went down to the Lands End can be cover done
:19:06. > :19:10.every bulletin. It is speaking predominently to an English
:19:10. > :19:16.audience and I think the challenge is to get more Scottish related
:19:16. > :19:25.content which is relevant to people in England. But that is a very
:19:25. > :19:31.difficult thing to do. Is one answer that the BBC has BBC
:19:31. > :19:40.Scotland services? The answer from London may be, if you want local
:19:40. > :19:46.radio, tune into BBC Radio Scotland. Yes, I think there is some merit in
:19:46. > :19:52.that. A lot of people in England are completely unaware of stories
:19:52. > :19:56.which are going on in Scotland, but there are issues such as education
:19:56. > :20:06.and health and in the political sphere which need to resonate
:20:06. > :20:11.
:20:11. > :20:15.across the United Kingdom audience. There is more current affairs
:20:15. > :20:22.programming in Scotland and Scottish content, including his
:20:22. > :20:28.comedy and drama spreading across the UK. The pleasing audiences in
:20:28. > :20:32.every corner of a diverse nation may even be an order beyond the
:20:32. > :20:36.capabilities of Gary, tank commander.
:20:36. > :20:39.That is nearly all for this week. Before we look at the papers, I
:20:39. > :20:41.would like to apologise for an inadvertant mistake on last night's
:20:41. > :20:44.programme. In our report on the Chinook pilots,
:20:44. > :20:48.we used an image of service personnel who had died in a
:20:48. > :20:51.different air crash. Our sincere apologies for that. The correct,
:20:51. > :20:54.complete version of that report is on the BBC Scotland news website,
:20:54. > :20:55.as is the complete version of our other film last night, about
:20:55. > :21:03.relations between press and politicians.
:21:03. > :21:08.Now a quick look at tomorrow's newspaper front pages. In the
:21:08. > :21:15.Independent, Murdoch hit by eight f p and a hacking inquiry. In the
:21:15. > :21:25.Guardian, the former News of the World executive arrested work for
:21:25. > :21:35.Scotland Yard. The Financial Times warns of the bail-out in past. That
:21:35. > :21:51.
:21:51. > :22:00.is all we have time for this week. In the West, it is a much gloomier
:22:00. > :22:08.prospects for most of us. Across north-east England, a lot of places
:22:08. > :22:12.look and sunshine. A top temperature of 25 degrees Celsius
:22:12. > :22:20.around the London area. As you can see, these outbreaks of rain are
:22:20. > :22:26.pushing their way and across Devon and Cornwall and in to the west of
:22:26. > :22:31.Wales. For a bright day on Thursday, it is all change for Northern
:22:31. > :22:39.Ireland tomorrow. There will be heavy rain and drizzle on and off
:22:39. > :22:48.for most of the country during the day. Into the weekend, it is cooler
:22:48. > :22:53.and times wetter and windier. Heavy showers expected on Saturday. But