14/07/2011 Newsnight Scotland


14/07/2011

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Tonight on Newsnight Scotland: There has been a raft of new

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economic data this week, capped today by a survey from the Scottish

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Chambers of Commerce. Could they show that George Osborne's approach

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to cutting the deficit is absolutely right?

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Also tonight: BBC Scotland's Audience Council says the

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corporation still doesn't really get the nations and regions. But

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will anything be done about it? Good evening. If there is one thing

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most Scottish politicians agree on, with the exception of Conservatives

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of course, it is that George Osborne's economic strategy is

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wrong. Both the SNP and Labour argue the Chancellor is cutting

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public spending too far and too fast and jeopardising economic

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growth. But could it be that a slew of recent data show that, actually,

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The Chancellor's plant is simple: British households have too much

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death -- debt, so cut public spending. And encouraged the old-

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fashioned virtues of spending within our means, and do that and

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the private sector will create jobs that will more than make up for

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jobs that are lost and the public sector. It is at least arguable

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that recent trends in the economy show that it is doing exactly what

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it says on the 10. Take the unemployment figures. New data

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showed unemployment in Scotland fell. But the number of jobs in the

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economy rose by 20,000. The number of jobs across the UK rose by

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50,000. Recent figures show that while public sector employment fell

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by 8,000, total employment rose by over 40,000. Yesterday's figures

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claimed employment rose by 50,000. Other figures also show the biggest

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rise in -- Scottish manufacturing exports. It is true that today's

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survey is a fall of agonising about the weak state of the economy. But

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look at the detail. It said that exports and tourism are doing well.

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The Warriors were in wholesale and retail, a confirmation of recent

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awful statistics about Britain's shopkeepers. Any fiscal

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consolidation was banned to affect If we were to steer the economy

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away from consumer debt, we would expect spending to fall as people

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pay off their credit card and struggle to cope with those

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mortgages. And having to do with pay rises which have been running

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behind inflation. George Osborne always said he wanted to rebalance

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the economy. He never claimed it would be a walk in the park. But,

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what about the cuts in public services? Won't that knock the job

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figures off? Maybe, but what if the government manages to cut public

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sector pay in the real term? It is not clear that the cataclysm in the

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public sector will ever happen. Here is what the finance secretary

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had to say on the matter. largest reduction in public

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expenditure that we have got to face, is the one for which I have

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set a budget. In that sense, I took exception. Back in February, I set

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a budget that to reduce public expenditure in Scotland by �1.3

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billion. The British economy grew by only 0.5% in the first quarter

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of the year, an economist had been a falling over themselves to cut

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back on their forecasts. Much of the growth and exports may be due

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to devaluing the pound, rather than making industry more efficient for

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the medium and long-term. Still, if it is putting it too strongly to

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say that George Osborne has been vindicated, can you not at Easter

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Monday benefit of the doubt? I'm joined now by John McLaren of

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the Centre for Public Policy for Regions, and in Edinburgh by Bill

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Jamieson of the Scotsman. Some of these figures do seem to

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show that George Osborne has a point. We are still in a limbo

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period. We are not sure when the economy will grow or dip again. The

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most positive thing that has happened is that... The performance

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of the Labour market. Given the depth of the cuts and the economy,

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usually unemployment rises much more. It has understand. It has

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gone up a lot in America, but not so much here. That is probably a

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combination of factors, like more people doing part-time jobs. Also,

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wage rises are less this time round than in previous recessions, which

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means you do not have to cut so many jobs. In previous recessions,

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wages had been rising too quickly. That is something that is positive,

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and we will have to keep that going. The big if is still what happens

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with GDP. Where will the growth come from? There are still a lot of

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issues about the output gap is smaller than expected. There is

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less of growth. This is the gap of the platform as the economy, and

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what it would be doing if it was growing normally. Yes. Then, if you

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are looking at exports, you have these huge uncertainties in the US

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about the level of its deficit and the housing market. I want to stick

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to Britain. Jim, I do not think that is a hip hip hooray from John.

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Yes, and did extend beyond the Labour market figures, which have

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been better than expected. The Scottish government have been very

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assiduous in filling up my e-mail in box over the past few days with

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this good news. Excellent news on employment, unemployment down by

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11,004 stop they look encouraging news about manufacturing exports. A

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very upbeat survey from the Bank of Scotland which came out earlier

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this week about private sector growth. The sixth consecutive month

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of growth and the private sector. You have to ask, what is the case

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for Plan B? It seems to me that here in Scotland, so far, plan is

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working. You are talking about this as Labour's argument. If you

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publicised it, it would spooked the market so badly it would be better

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off not having one. Absolutely. You do not have to look far to see the

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apprehension over deficits and debt. Let us stick to Britain, again.

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What is your answer to this basic point that some of these figures,

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honesty there are question marks. George Osborne cannot say, it is

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not certain yet, GDP growth is weak, but the figures we have seen to

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show I am right, he would save. so far. There is a lot of

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apprehension about how sustainable this is. If you look at some of the

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data coming in in recent weeks, it is not good. There is a slowdown in

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the manufacturing sector and the service sector. All of the

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forecasters are tumbling over themselves to cut growth forecast.

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There is an issue about how sustainable this is. But George

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Osborne's point was third it was not just a question of GDP growth.

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They had to be a rebalancing of where growth came from, and what

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I've tried to say there was the what we are seeing, you would

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expect to see. You would expect to see consumer spending falling,

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mortgage lending falling, in an economy where you are trying to

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rebalance from an excessive reliance on government and consumer

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debt, to end economy based more manufacturing and exports.

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absolutely correct. This is part of the solution, and not part of the

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problem. However, the trap that George Osborne is in here, you to

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bed down on the consumer sector. You are hitting two thirds of the

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UK economy, and it makes growth very difficult. A should be week --

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should we be refraining this argument? Critics of George Osborne

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said he would drive the economy into a double dip recession. That

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looked unlikely, even buy them. Isn't the real argument not that

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there will be a recession, but with different policies you could have

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faster growth, cut the deficit quicker, and people suffering by

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having their income is cut would not have their income is cut as

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fast, or even a tall? I do not been there is a huge distance between

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the two approaches. It is basically a matter of timing. Ed Balls wants

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to do more slowly, to make sure recovery is more in place. George

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Osborne is more concerned about getting the deficit down. I do not

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think they are that wildly far apart. One is an saying we should

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do it through tax increases rather than expenditure cuts. They both

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have the same concerns. What about those other argument, public sector

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cuts have not taken effect yet. When they do, people will lose

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their jobs. It is true that in that interview, shortly after the clip,

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there would be a problem and a couple of years' time when he could

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not cut public sector pay any further. The fact is, this was the

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most difficult year, and he has managed to drop the budget. Because

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public sector pay such a large proportion, if you freeze it, you

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do not need to do they not have these things. Part of the reason is

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that things like reducing capital spending in the Scottish water-0,

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that has to come back. That was a delaying tactic for a while. You

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have also got the wage freeze reverses non wage freeze. If that

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starts to rise, you have got to find that extra money. You have got

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other things like high education, where we know they will be a large

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gap. That has got to be found as well. This year, higher education

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or ready to go a very large hit. There hasn't been an uproar about

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that. There have been difficult things, but there is not a feeling

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like we saw in the '80s, partly because unemployment has not grown

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as much. What do you make about this point about public spending?

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Is and cutting public spending a bit like that? In reality, deep

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whole thing is a lot more fungible than was being made out. It isn't

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the case that we will have mass I would not really agree with you

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as regards landfill stop however, much more gradually. Not any big-

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bang way. I think there is very little net at recruitment going on

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in the public and private sector. This reference to natural wastage,

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where people leave jobs and retire, back to be put through without the

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draconian measures that people feared a year ago. The wall premise

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of George Osborne strategy was that if we do not do this, there will be

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a hit in the bond market and we could end up, if not quite like

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Greece, been heavily penalised. There was actually 0 evidence of

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bond rates spiking under Labour or under the Coalition. Do you think

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there was a very serious danger of Britain getting into trouble?

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I think there was. It was very important that we had a Coalition

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and Broughton a national party to address a record level of debt. I

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would say it is very dangerous to assume that the markets will give

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you a freak pass. You only need to look at what is happening across

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Europe. Who would have thought a few weeks ago that Italy would be a

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target? But now it is. The we will have to leave it there. Thank you

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both very much. Now, as the roof has been falling

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in on the Murdoch empire, another area of the media has been under

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scrutiny here. The Audience Council, an independent group which advises

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the BBC Trust in Scotland, issued a report saying there is a continuing

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failure of the London-based network to reflect anything much wider than

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a South of England perspective. Can a national broadcaster ever truly

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cover such a diverse country? Derek Bateman reports. Is the BBC news

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centre Don England? Tonight at 10, or Rupert Murdoch is forced to drop

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his bid to get full control of BSkyB eat. Does it fail to cover

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the whole of the United Kingdom? is 6 o'clock. Good morning. His

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Radio 4 changes to England, but at the South of England? They are so

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weak, the Audience Council for Scotland, which advises the BBC

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Trust, says it feels there is a bias of the BBC towards the south

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:17:56.:18:07.

A I think we have been short- changed. What we look to do was

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just to have Scottish Ministers consulted. Right now, the BBC

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governors do not even need to speak to Scottish Ministers and I think

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we have to start a set-up of consultations and the need to be

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involved in that process. It is important the Scottish government

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is involved when critical decisions are being made about BBC

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programming. If that a surprise that the BBC coverage may be skewed

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:18:49.:18:53.

in one direction? It has to be said that there must be impossible for

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everywhere from Shell went down to the Lands End can be cover done

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every bulletin. It is speaking predominently to an English

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audience and I think the challenge is to get more Scottish related

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content which is relevant to people in England. But that is a very

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difficult thing to do. Is one answer that the BBC has BBC

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Scotland services? The answer from London may be, if you want local

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radio, tune into BBC Radio Scotland. Yes, I think there is some merit in

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that. A lot of people in England are completely unaware of stories

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which are going on in Scotland, but there are issues such as education

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and health and in the political sphere which need to resonate

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across the United Kingdom audience. There is more current affairs

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programming in Scotland and Scottish content, including his

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comedy and drama spreading across the UK. The pleasing audiences in

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every corner of a diverse nation may even be an order beyond the

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capabilities of Gary, tank commander.

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That is nearly all for this week. Before we look at the papers, I

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would like to apologise for an inadvertant mistake on last night's

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programme. In our report on the Chinook pilots,

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we used an image of service personnel who had died in a

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different air crash. Our sincere apologies for that. The correct,

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complete version of that report is on the BBC Scotland news website,

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as is the complete version of our other film last night, about

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relations between press and politicians.

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Now a quick look at tomorrow's newspaper front pages. In the

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Independent, Murdoch hit by eight f p and a hacking inquiry. In the

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Guardian, the former News of the World executive arrested work for

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Scotland Yard. The Financial Times warns of the bail-out in past. That

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is all we have time for this week. In the West, it is a much gloomier

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prospects for most of us. Across north-east England, a lot of places

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look and sunshine. A top temperature of 25 degrees Celsius

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around the London area. As you can see, these outbreaks of rain are

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pushing their way and across Devon and Cornwall and in to the west of

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Wales. For a bright day on Thursday, it is all change for Northern

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Ireland tomorrow. There will be heavy rain and drizzle on and off

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for most of the country during the day. Into the weekend, it is cooler

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and times wetter and windier. Heavy showers expected on Saturday. But

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