Browse content similar to 29/11/2011. Check below for episodes and series from the same categories and more!
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It's a tax increase on public On Newsnight Scotland tonight: The | :00:11. | :00:17. | |
economic pain and gloom are not necessarily confined south of the | :00:17. | :00:21. | |
border I will ask the government government whether it believes the | :00:21. | :00:29. | |
assurances. We will ask who are the winners and losers. Good evening. | :00:30. | :00:31. | |
Shudderingly awful downward revisions for economic growth, | :00:31. | :00:36. | |
meaning additional years of pain. Though there will be some | :00:36. | :00:38. | |
sweeteners, including almost half a billion extra money for the | :00:38. | :00:40. | |
Scottish government over three years. Our business and economy | :00:40. | :00:49. | |
editor, Douglas Fraser watched it all unfold. Slower growth, more bow | :00:49. | :00:53. | |
oring a sluggish recovery the cuts go on for two years. Was there | :00:53. | :00:59. | |
anything to cheer us up about this autumn Statement? There is a growth | :00:59. | :01:02. | |
strategy now around infrastructure spend, business deleg regulation | :01:02. | :01:07. | |
and education reform, at least for England. Some of it reaches to | :01:07. | :01:12. | |
Edinburgh, one of ten super connected digital cities. Scottish | :01:12. | :01:20. | |
long distance drivers can applaud the postponed fuel tax increases. | :01:20. | :01:26. | |
The big ticket for Holyrood is �150 million extra capital budget. It | :01:26. | :01:33. | |
will oos ease the spending squeeze. We don't know if there is extra | :01:33. | :01:36. | |
revenue along with that capital. Whitehall is negotiating over the | :01:36. | :01:46. | |
pay bill. �50 million to renew the cross-border sleeper trains. Scott | :01:46. | :01:51. | |
Scottish ministers will decide how to spend the extra allocation. | :01:51. | :01:55. | |
There could be a new Glasgow college campus. They will have to | :01:55. | :02:03. | |
see how it fits their strategy, due for announcement next month for | :02:03. | :02:08. | |
Scotland's infrastructure and enterprise zone. Also whether to | :02:08. | :02:12. | |
implement the tight squeeze on public sector pay. They can see | :02:12. | :02:17. | |
that the prolonged, sluggish economic recovery threats their | :02:17. | :02:22. | |
political plans. Go had hoped to get the economy on the turn, | :02:22. | :02:28. | |
heading for growth when he next faces the electorate in May 2015. | :02:28. | :02:34. | |
That now looking less likely. The austerity will go on through that | :02:34. | :02:40. | |
campaign making re-election a tougher sale. It will go past the | :02:40. | :02:47. | |
Holyrood election in 2016. Before then there will be a referendum on | :02:48. | :02:51. | |
independence. Could it make Scots feel more downbeat and less | :02:51. | :02:55. | |
confident? Will it make the United Kingdom feel a less attractive | :02:55. | :03:05. | |
:03:05. | :03:07. | ||
prospect for Scotland's future? The Minister of State at the skaufs is | :03:07. | :03:11. | |
Conservative MP David Mundell. I asked him if the �433 million over | :03:11. | :03:16. | |
the three years, which is coming to Scotland byway of the Barnett | :03:16. | :03:20. | |
Formula is new money? This is money that the Scottish Government hadn't | :03:20. | :03:23. | |
anticipated or hadn't budgeted for. It's additional money for their | :03:23. | :03:27. | |
purposes. I would hope they would welcome it. At the moment, they | :03:27. | :03:31. | |
seem to be the only government in the world who, when they do get | :03:31. | :03:35. | |
additional money they haven't budgeted for they seem always to be | :03:35. | :03:39. | |
able to find something wrong with it. George Osborne made great play | :03:39. | :03:43. | |
of the fact that this money for spending onical capital projects | :03:43. | :03:47. | |
would be transferred from the current budget and, therefore, | :03:47. | :03:54. | |
would be neutral on its spending plans? It will be neutral over all. | :03:54. | :03:59. | |
In terms of the Barnett. Scottish government can expect a | :03:59. | :04:05. | |
cut in its current budget? certainly shouldn't expect a cut in | :04:05. | :04:09. | |
its current budget. Scotland's share of the UK cake is determined | :04:09. | :04:14. | |
by the Barnett Formula. That formula is based on how different | :04:14. | :04:23. | |
elements of funding is spent across Whitehall departments. Whether they | :04:23. | :04:27. | |
are reserved or devolved matters. It's pleatly wrong for the Scottish | :04:27. | :04:31. | |
government to jump to the conclusion that the current account | :04:31. | :04:34. | |
spending would be reduced. That will definitely not be the case. | :04:34. | :04:39. | |
George Osborne is going to finance this capital spending, by | :04:39. | :04:44. | |
transferring, by extra cuts in current spending, I'm not clear | :04:44. | :04:47. | |
exactly why Scotland should be earthquakes sefrpt from that? | :04:47. | :04:52. | |
Scotland's share of the cake, as I've said, is determined by the | :04:52. | :04:56. | |
Barnett Formula. That formula relates - Yes, I understand. We | :04:57. | :05:01. | |
understand that. The point is, if money is being transferred from | :05:01. | :05:05. | |
current budgets, to capital budgets, and, therefore, there will be more | :05:05. | :05:10. | |
public spending cuts on current budgets to finance this transfer to | :05:10. | :05:14. | |
capital spending, that will, presumably, hit most departments, | :05:14. | :05:18. | |
other than, for example, perhaps the NHS, where you have made | :05:18. | :05:23. | |
certain commitments. Are you saying there will be no Barnett | :05:23. | :05:26. | |
consequencals of cutting current spending by the same amount you | :05:26. | :05:32. | |
want to increase capital spending? Not for Scottish funds. It is | :05:32. | :05:38. | |
because of the way in which the Barnett Formula works across | :05:38. | :05:41. | |
departmental spending. Scotland benefits when the government | :05:41. | :05:45. | |
increases spending in England on the areas which are devolved. | :05:46. | :05:50. | |
That's what has happened in this case. There will be extra money for | :05:50. | :05:55. | |
Scotland in capital, �433 million, which I would like to think that | :05:55. | :05:59. | |
the Scottish government would welcome. It's an opportunity for | :05:59. | :06:05. | |
spending on economic growth, on jobs, on infrastructure. It should | :06:05. | :06:10. | |
be a positive thing - There will be no redctionduction in current | :06:11. | :06:16. | |
spending? There will not be a cut in current spending for the | :06:16. | :06:21. | |
Scottish government. When the Chancellor is able to confirm the | :06:21. | :06:25. | |
exact figures the Scottish government will see this. Instead, | :06:25. | :06:30. | |
they would prefer to leak to a -- leap to a negative conclusion so | :06:30. | :06:34. | |
that somehow they can pour cold water on what is a good settlement | :06:34. | :06:38. | |
for Scotland. This is a government that is determined, even when there | :06:38. | :06:43. | |
is good news, even when there is additional money, to talk it down. | :06:43. | :06:47. | |
So, I'm sure they will be delighted when you have explained that to him. | :06:47. | :06:53. | |
Can you explain to us, if you are still in office, there are to be an | :06:53. | :07:00. | |
extra �8 billion of cuts in current spending across the UK in 2015/16 | :07:00. | :07:07. | |
and �15 billion of extra cuts in public spending in 16/17. Will the | :07:07. | :07:11. | |
Scottish government also be exempt from that? They will. Pen when the | :07:11. | :07:16. | |
next spending review is determined, they will know what their budgetary | :07:16. | :07:21. | |
allocations are. They will then be able to work on the basis of those | :07:21. | :07:27. | |
allocations to determine how they best spend money within Scotland. | :07:27. | :07:32. | |
So, those are - It might be or it might not be? They are decisions to | :07:32. | :07:35. | |
be taken in the next spending review. The case in this spending | :07:35. | :07:38. | |
review is that the Scottish government will get more money than | :07:39. | :07:43. | |
they had anticipated. They will have an additional opportunity to | :07:43. | :07:46. | |
invest in infrastructure and in jobs. Do you expect the measures | :07:46. | :07:50. | |
announced today to help growth in the British economy? I very much | :07:50. | :07:57. | |
hope that they will help. Can you explain why, in that case, the | :07:57. | :08:02. | |
office of budget responsibility say they have not made any adjustment | :08:02. | :08:04. | |
to their economic forecast as a result of the measures announced | :08:04. | :08:11. | |
today? I welcome the fact that the office of budgetary responsibility | :08:11. | :08:16. | |
is cautious in their outlook. on. You announced a budget for | :08:16. | :08:20. | |
growth. Your own office of budget responsibility said says, as far as | :08:20. | :08:25. | |
they can see, it will have no effect on growth? I don't accept | :08:25. | :08:29. | |
the analysis it would have no effect on growth. It's not my | :08:29. | :08:33. | |
analysis. It's what they say. They say they have not made any | :08:33. | :08:38. | |
adjustment to the economic forecast as a result of today's measures? | :08:38. | :08:42. | |
don't want the office of budget responsibility of making outrageous | :08:42. | :08:48. | |
forecasts, as we saw the previous government doing. What we are doing | :08:48. | :08:52. | |
today is taking forward solid measures to help the economy. | :08:52. | :08:58. | |
Bringing forward measures to assist youth unemployment. Easing access | :08:58. | :09:01. | |
to credit it taking specific measures to help businesses all of | :09:01. | :09:05. | |
which we want to see delivering growth. If the office of budget | :09:05. | :09:13. | |
responsibility, which is supposed to analyse these things forecasts | :09:13. | :09:20. | |
that George Osborne's's project for growth you would explain that as | :09:20. | :09:27. | |
outrageous? I wouldn't - You just have done? I said I welcome the | :09:27. | :09:31. | |
cautious of the office of budget responsibility. Let's be judged on | :09:31. | :09:35. | |
the affect of our measures when they had a chance to take affect. | :09:35. | :09:41. | |
Clearly, a lot of the decisions following on from this statement | :09:41. | :09:44. | |
will land at the door of the Scottish Government. Earlier, I | :09:44. | :09:47. | |
spoke to Finance Secretary John Swinney and asked him if he | :09:47. | :09:50. | |
expected to lose any current money to compensate for the increase in | :09:50. | :09:55. | |
capital money he was getting from the Treasury. | :09:55. | :10:01. | |
I need to have clarity on that point and it is a very unusual | :10:01. | :10:05. | |
circumstance that I get autumn budget statement information from | :10:05. | :10:10. | |
the Treasury which has only got one side of the picture, the capital | :10:10. | :10:15. | |
allocation. I can only imagine that means we will have some form of | :10:15. | :10:22. | |
budget reduction in the resource aerial. I maybe able to bring you | :10:22. | :10:28. | |
good news. I had just interviewed David Mundell who appeared it to be | :10:28. | :10:32. | |
claiming there would be no cut in your current budget as a result of | :10:32. | :10:37. | |
this. That will be interesting and I look forward to receiving the | :10:37. | :10:43. | |
written confirmation. But I can say to you that I am in the very | :10:43. | :10:51. | |
unusual situation that the Treasury have been unable to tell me tonight | :10:51. | :10:55. | |
what the resource implications of the Autumn statement will be for | :10:55. | :11:00. | |
Scotland which I find quite extraordinary. David Mundell must | :11:00. | :11:04. | |
have the information before the Treasury. A as I say, I will be | :11:04. | :11:09. | |
delighted to receive that confirmation if it is the case. But | :11:09. | :11:12. | |
you will forgive me if I wait broader the letter from the | :11:12. | :11:21. | |
Treasury first. -- wait for the letter. George Osborne said that | :11:21. | :11:26. | |
public sector wages will be capped after 2013, is that a policy you | :11:27. | :11:35. | |
will follow? After the next year of pay restraint, we expected it to be | :11:35. | :11:40. | |
in a position where we could move to modest increases in pay. An | :11:40. | :11:45. | |
increase of 1% would fit the bill of being a modest pay increase. We | :11:45. | :11:49. | |
set our pay policy after consultation that the trade unions | :11:49. | :11:54. | |
in advance of the financial year in question so be it will have those | :11:54. | :11:57. | |
discussions with the trade unions but we will be trying to deliver an | :11:57. | :12:02. | |
approach which it does deliver modest increases in public sector | :12:02. | :12:11. | |
pay at that stage. But 1% would be about right, because presumably it | :12:11. | :12:16. | |
would be difficult to pay anymore than the UK Government is proposing | :12:16. | :12:21. | |
to pay its employees? That is correct. The 1% figure seems to fit | :12:21. | :12:28. | |
into the category of being modest and given the fact that our work | :12:28. | :12:30. | |
funding situation follows very directly the decisions taken by the | :12:30. | :12:37. | |
delighted Kingdom government, it strikes me that it will be a in | :12:37. | :12:47. | |
:12:47. | :12:47. | ||
that margin. -- United Kingdom government. George Osborne has | :12:47. | :12:53. | |
asked whether pay increases or pay scales could be more reflective of | :12:53. | :13:00. | |
regional markets, would you welcome that? We will look at the analysis | :13:00. | :13:05. | |
that is identified as a consequence of that. I suspect we will not have | :13:05. | :13:10. | |
quite the regional disparity in the Scottish Labour market that the | :13:10. | :13:15. | |
United Kingdom government experiences around the market. | :13:15. | :13:19. | |
implication could be that pay scales would be law in Scotland | :13:19. | :13:25. | |
than they might be in other parts of the south-east of England. -- | :13:25. | :13:35. | |
:13:35. | :13:35. | ||
would be lower. We said many aspects of pay policy in Scotland. | :13:35. | :13:41. | |
We are mindful of their experience in Scotland. It does not strike me | :13:41. | :13:46. | |
as a particular problem for the situation in Scotland. Clearly, if | :13:46. | :13:51. | |
that was to have any affect on the funding arrangements that are | :13:51. | :13:56. | |
reflected, that essentially drive public expenditure in Scotland, I | :13:56. | :14:00. | |
would have a strong opinion about that. The Office of budget | :14:00. | :14:04. | |
responsibility has raised its estimate on the number of public | :14:04. | :14:10. | |
sector jobs that will be lost through red the UK -- throughout | :14:10. | :14:20. | |
:14:20. | :14:21. | ||
the United Kingdom up to 700,000. Given that, can you still have a | :14:21. | :14:26. | |
policy of no compulsory redundancies in Scotland? We have | :14:26. | :14:30. | |
taken that forward for next year and we will continue to sustain | :14:30. | :14:34. | |
that policy it. We think it is possible to do that in the | :14:34. | :14:44. | |
constraints within which we operate. We are trying to work | :14:44. | :14:46. | |
collaboratively to maintain public sector employment in Scotland | :14:46. | :14:51. | |
because it matters as an economic driver in Scotland. We believe it | :14:51. | :14:56. | |
is a significant contributor to delivering economic score -- | :14:56. | :15:03. | |
economic growth in Scotland. government to see it will put up | :15:03. | :15:08. | |
�50 million if you will match the sweeper improvement. We will try to | :15:08. | :15:13. | |
make that work. They will have to a talk with the United Kingdom | :15:13. | :15:19. | |
government to Take That forward. We will engage very constructively to | :15:19. | :15:23. | |
make that happen. The steeper service is very important to | :15:23. | :15:28. | |
Scotland. I'm joined now by John McLaren, | :15:28. | :15:33. | |
economist with the Centre for Public Policy for Regions. | :15:33. | :15:38. | |
You have the honour of being the only non politician on the | :15:38. | :15:46. | |
programme tonight. When it you saw this Office for Budget | :15:46. | :15:54. | |
Responsibility report and its forecast, how bad is this? It is | :15:54. | :16:02. | |
pretty bad, but I think most people could see it coming. The revisions | :16:02. | :16:07. | |
in the Bank of England's forecasts have been pushing this way. | :16:07. | :16:16. | |
Yesterday, with the OECD report coming out, it is almost | :16:16. | :16:21. | |
automatically that you move that on to what is happening in the | :16:21. | :16:28. | |
government's finance balance. If anything, what has not come out | :16:28. | :16:38. | |
:16:38. | :16:44. | ||
today has been a implied. This is an optimistic forecast. In America, | :16:44. | :16:54. | |
if they do not pass new fiscal rules, they will be tightening it a | :16:54. | :16:58. | |
lot more next year. If they eurozone and that happens to go | :16:58. | :17:03. | |
there, that could mean it two years of negative growth in the United | :17:03. | :17:13. | |
:17:13. | :17:15. | ||
Kingdom. It is much more likely that the bride's side it will | :17:15. | :17:25. | |
:17:25. | :17:26. | ||
happen -- the bad side will happen? Yes. The belief is that the | :17:26. | :17:35. | |
negative forecast is more likely. This central argument that the | :17:35. | :17:40. | |
coalition government has had is that unless they do this, the bond | :17:41. | :17:45. | |
markets will lose faith and Britain will have to pay higher interest on | :17:45. | :17:55. | |
:17:55. | :17:58. | ||
its debt. Is that still credible? This year, we will be borrowing | :17:58. | :18:02. | |
more money as a country than we would have been under Alistair | :18:02. | :18:12. | |
:18:12. | :18:13. | ||
Darling's plans. It is staying with its gamble, that it is less of | :18:13. | :18:21. | |
arrested to keep the market happy - - the that it is less of art risk | :18:21. | :18:31. | |
to keep the markets are happy. It is taking the risk that that is | :18:31. | :18:40. | |
going to have a better impact than doing some short term it stimulus, | :18:40. | :18:49. | |
fiscal stimulus. It might be positive, but if that led to a | :18:49. | :18:59. | |
:18:59. | :18:59. | ||
negative knock on effect... So the markets and economists would | :18:59. | :19:07. | |
disagree with Labour's argument that if you had start to their | :19:07. | :19:12. | |
plans, you would have growth in the economy, people are not convinced | :19:12. | :19:18. | |
of that? I think a number of economists say you should have more | :19:18. | :19:28. | |
:19:28. | :19:31. | ||
of a fiscal economist. -- fiscal stimulus. But most are fairly less | :19:31. | :19:35. | |
certain of that. They are fairly happy with the profile of the | :19:35. | :19:43. | |
current government's spending plans. The markets are happy to keep that | :19:43. | :19:47. | |
tightness there. It is a fine balance. The Government has decided | :19:47. | :19:51. | |
to go with more austerity rather than more stimulus because it | :19:51. | :19:59. | |
thinks the risks are better on that side. Thanks very much. | :19:59. | :20:01. | |
So with public sector pay restrictions and gloomy predictions | :20:01. | :20:05. | |
that our wages will no longer go as far as we'd like for several years | :20:05. | :20:08. | |
to come, will we spend less in the shops? And what will it mean for | :20:08. | :20:11. | |
trade in Scotland? Laura Bicker has been gauging reaction from across | :20:11. | :20:21. | |
:20:21. | :20:22. | ||
The Chancellor tried to grasp at the helm, to keep the economy on | :20:22. | :20:27. | |
course. But the burden of debt and the dark clouds gathering over the | :20:27. | :20:31. | |
eurozone mean we are now de navigating stormier waters and | :20:31. | :20:36. | |
wondering how long it will be before be beach stable economic | :20:36. | :20:42. | |
shores. As they predictions for the economy grow bleaker, there was | :20:42. | :20:46. | |
little him today's statement by the Chancellor to give cheered to | :20:46. | :20:55. | |
consumers. Average income for household has fallen by 2.3%. And | :20:55. | :21:01. | |
incomes will continue to fall for at least the next two years. All | :21:01. | :21:08. | |
this at a time when we are being encouraged to spend money. Workers | :21:08. | :21:16. | |
are aware there hard am to cash will not go as far -- hard earned | :21:16. | :21:25. | |
cash. Postop the most disturbing aspect of today's statement is the | :21:25. | :21:32. | |
reassessment of growth rate. That was a dramatic reduction. It drags | :21:33. | :21:40. | |
out the slow recovery for at least another year. But it is not all bad | :21:40. | :21:45. | |
news. Our traditional industries are coping with the crisis and | :21:45. | :21:53. | |
finding new markets. They euros re -- of the eurozone does not look | :21:53. | :21:58. | |
particularly strong, but in other parts of the world, there are | :21:58. | :22:03. | |
trading opportunities which remain robust. The engineering sector and | :22:03. | :22:09. | |
the whisky sector have markets that can be exploited. There are still | :22:09. | :22:17. | |
opportunities to go out into world markets and make a mint. As the | :22:18. | :22:21. | |
Federation of Small businesses met in Inverness today, they welcomed | :22:21. | :22:27. | |
the Chancellor's plans to cancel fuel duty rises and Investment Bin | :22:27. | :22:31. | |
road and rail. We are highly dependent on people travelling and | :22:31. | :22:36. | |
coming out in cars and vehicles. We have notice that people are | :22:36. | :22:46. | |
starting to assess their mileage. It is great the government is | :22:46. | :22:53. | |
looking at it and trying to help small businesses. The amount of | :22:53. | :22:56. | |
hurdles that are put in place, it is a bit discouraging as an | :22:56. | :23:04. | |
employer. You want to look after the people you have got. But public | :23:04. | :23:08. | |
sector workers will feel the pinch. The Chancellor announced that wage | :23:08. | :23:17. | |
rises will be capped at 1%. public sector workforce are very | :23:17. | :23:22. | |
determined. We will see a huge show of determination and solidarity | :23:22. | :23:29. | |
tomorrow. What this Government is doing is affecting every worker in | :23:29. | :23:33. | |
this country, public and private sector. Workers are taking a | :23:33. | :23:38. | |
hammering from this Government. The Government has to realise that. | :23:38. | :23:48. | |
:23:48. | :23:48. | ||
Today, the good ship collision it set a new course in an attempt to | :23:49. | :23:58. | |
:23:59. | :24:03. | ||
the dust to shelter. Where we will I'm joined now from our London | :24:03. | :24:06. | |
studios by Labour Treasury Shadow, Cathy Jamieson and by Edinburgh | :24:06. | :24:08. | |
Liberal Democrat, Mike Crockart and by the SNP's Mike Weir. Cathy | :24:08. | :24:15. | |
Jamieson I want to pick up on one of the things, the risk that if the | :24:15. | :24:19. | |
British Government changed course and did what you want to do, that | :24:19. | :24:23. | |
it really could jeopardise Britain's credit rating. That once | :24:23. | :24:28. | |
this's done, it's almost impossible to claw back from there? Well, I've | :24:28. | :24:32. | |
heard those arguments put in Parliament today. On the other side | :24:32. | :24:36. | |
of this, many people have been predicting how bad things were | :24:36. | :24:41. | |
going to be, as John McLaren outlined. We have been saying for | :24:41. | :24:44. | |
18 months now that the government needed to change course. That the | :24:44. | :24:48. | |
cuts were too fast. They were going too deep. They were causing more | :24:48. | :24:54. | |
problems than they were solving. We have seen some moves today which | :24:54. | :24:58. | |
may, if we get more information, will be of help in Scotland. The | :24:58. | :25:01. | |
people hit Hart hardest in all of this are ordinary working families. | :25:02. | :25:05. | |
There won't be that stimulus to get money back into the economy if the | :25:06. | :25:10. | |
squeeze continues on those working people. Yes. That doesn't quite | :25:10. | :25:15. | |
answer the point, that the coalition make, which, is if they | :25:15. | :25:19. | |
jep advertise diezed the rating on UK government debt, in the way that, | :25:19. | :25:24. | |
for example, Italy has, the consequences for all these ordinary | :25:24. | :25:29. | |
people you are talking about, of having to finance the current | :25:29. | :25:33. | |
levels of British debt at higher interest rates would be | :25:33. | :25:36. | |
catastrophic? When people are raising these issues, it's | :25:36. | :25:40. | |
important to point out that some of the problems emerged in the | :25:41. | :25:44. | |
eurozone crisis, our economy was back sliding, was flat lining | :25:44. | :25:49. | |
before all of this came into the public domain in the way that it | :25:49. | :25:52. | |
has recently. We have been saying consistently that the way to deal | :25:52. | :25:56. | |
with this was to have a plan for growth. Labour put forward a five- | :25:56. | :26:00. | |
point plan for growth. The problem has been that the government has | :26:00. | :26:04. | |
simply cut. They cut the public sector. Cut spending. They haven't | :26:04. | :26:08. | |
actually put the stimulus in place for growth. That is what we have | :26:08. | :26:14. | |
been arguing about. It remains to be seen, in terms of Scotland, | :26:14. | :26:17. | |
unanswered questions about how I want to see the money coming into | :26:17. | :26:21. | |
infrastructure. I hope it will be additional money. I hope the | :26:21. | :26:28. | |
Scottish government will get people back to work using those resources. | :26:28. | :26:31. | |
Mike Crockart the obvious count to that, the justify case made for the | :26:32. | :26:37. | |
austerity programme that you brought in was that, if we fold the | :26:37. | :26:40. | |
plans of the previous Labour government that would have led to a | :26:40. | :26:45. | |
level of debt that would have been catastrophic and Britain like Italy | :26:45. | :26:51. | |
would have had its credit rating jeopardised. You are proposing to | :26:51. | :26:54. | |
borrow more than Alastair Darling was proposing to borrow. He would | :26:54. | :26:59. | |
not have had the levels of public spending cuts that you have had? | :26:59. | :27:03. | |
Well, the figures that Alastair Darling had are now 18 months to | :27:03. | :27:10. | |
two years old. They don't reflect the circumstances that have ensued | :27:10. | :27:13. | |
over the last 18 months. I think we can take it for granted those | :27:13. | :27:18. | |
figures would have changed a great deal if he had been phased with the | :27:18. | :27:23. | |
collapse of the eurozone, where 60% of our trade goes. If you had been | :27:23. | :27:29. | |
faced with 40% rise in fuel costs over the last 18 months. It simply | :27:29. | :27:34. | |
isn't fair to compare those two figures. It's not comparing like- | :27:34. | :27:41. | |
for-like in time. What we are - Hang on. Where it is fair, even if | :27:41. | :27:46. | |
you forget Alastair Darling agencies's figures you are not | :27:46. | :27:49. | |
reducing borrowing at anything like the rate you were proposing to do | :27:49. | :27:54. | |
under the original austerity plan. By your own logic, the rating | :27:54. | :27:58. | |
agency should be considering withdrawing Britain's triple-A | :27:58. | :28:01. | |
rating. Despite mutterings tonight there isn't any indication this | :28:01. | :28:09. | |
they are doing that? They, alooning with the OECD and the IMF I agree | :28:09. | :28:12. | |
that the cooling government's plan is a good one. It's a strong one. | :28:12. | :28:18. | |
That is why our borrowing rates are so low. Our rates right now are | :28:18. | :28:21. | |
lower than Germany. It's purely because of those sorts of figures | :28:21. | :28:26. | |
that we are able to do the types of things that George Osborne was able | :28:26. | :28:31. | |
to announce today. The fact - our credit easing. We are able to do | :28:31. | :28:35. | |
that because the rates the government is able it get from | :28:35. | :28:39. | |
borrow something lower than the market. We are able to pass those | :28:39. | :28:44. | |
rates on and ensure that many small and medium enterprises across the | :28:44. | :28:49. | |
country are guaranteed the sort of credit that they need to be able to | :28:49. | :28:54. | |
grow the economy. Mike Weir, which side of the fence is the SNP? | :28:54. | :28:59. | |
Scottish government has been pushing capital projects to - keep | :28:59. | :29:03. | |
Scotland's economy going. We continue to do that. The main thing | :29:03. | :29:12. | |
to come out of the report today was, 2012 growth slipped from 2.5% to | :29:12. | :29:16. | |
0.7%. Most of the money for these capital projects is not coming in | :29:16. | :29:21. | |
until well after 2012. There is a real question as to how he will | :29:21. | :29:25. | |
feed into helping growth in Scotland and indeed the UK. | :29:25. | :29:30. | |
interested in which side of the fence you are on. Do you agree with | :29:31. | :29:34. | |
Cathy Jamieson that spending has been cut too far and too fast and | :29:34. | :29:40. | |
there should be a complete change of course to pump stimulus into the | :29:40. | :29:44. | |
economy? Do you agree with Mike Crockart that doing that would | :29:44. | :29:48. | |
jeopardise Britain's credit rating and actually could end up | :29:48. | :29:52. | |
impoverishing all of us? Scottish government are already | :29:52. | :29:57. | |
taking action within the powers that they have to put money into | :29:57. | :30:00. | |
infrastructure. To make sure that Scotland keeps working. To keep | :30:00. | :30:04. | |
people in jobs. That is the proper way forward. We have been calling | :30:04. | :30:08. | |
for a Plan B for a long time now. George Osborne has come a little | :30:08. | :30:12. | |
way along the road with that today. There is a lot to do. There is real | :30:12. | :30:16. | |
questions about how this money, how soon this money will come into the | :30:16. | :30:22. | |
economy and how it will be put into infrastructure projects. Looking at | :30:22. | :30:25. | |
a situation where we could have sharply rising unemployment over | :30:25. | :30:30. | |
the next year. The money for capital infrastructure is not | :30:30. | :30:36. | |
coming in to play until after that. If you look at the old BR report, | :30:36. | :30:41. | |
down to 0.7% in 2012, there is assumption of growth there after. | :30:41. | :30:46. | |
You do have to worry as to whether that is relistic. Cathy Jamieson, | :30:46. | :30:50. | |
do you think kick starting a few infrastructure projects is enough? | :30:50. | :30:53. | |
The implication of what you have been saying, or what Labour have | :30:53. | :30:58. | |
been saying, is you actually want an all out boost to demand? For | :30:58. | :31:03. | |
example, cut VAT, cut taxs to put money in people's pox pockets to | :31:03. | :31:06. | |
get them spending now? We recognise people are feeling the squeeze at | :31:06. | :31:10. | |
the moment. Ordinary families are feeling it on rising fuel prices, | :31:10. | :31:13. | |
on energy prices. The food that they are buying in the shops. A | :31:13. | :31:17. | |
whole range of things. We do believe that one of the ways to | :31:17. | :31:22. | |
deal with this would be to reverse the VAT rise, for example, to look | :31:22. | :31:26. | |
at how we can boost spending on home improvements. Also | :31:26. | :31:31. | |
infrastructure is important. There are pretty shocking figures today. | :31:31. | :31:37. | |
The notion there will be another 700,000 public sector jobs lost in | :31:37. | :31:40. | |
the coming years is quite frightening. Who will carry out the | :31:40. | :31:45. | |
necessary work that we need? These are the jobs we all rely on. It's | :31:45. | :31:50. | |
not good enough to at every turn take the money out of the money of | :31:50. | :31:53. | |
pockets of familiar familiar families. We have seen further | :31:53. | :31:58. | |
examples today in terms of tax credits. Another obvious point is, | :31:58. | :32:03. | |
you said when you introduced the austerity programme you wanted to | :32:03. | :32:07. | |
eliminate the structural deficit by 2015. You didn't want to make | :32:08. | :32:10. | |
commitments into another parliamentary term where you might | :32:10. | :32:14. | |
not be the government because the markets could only believe you if | :32:14. | :32:17. | |
you told them what you had an ability to do. Now, you turnaround | :32:17. | :32:22. | |
and tell us you will not do that at all? Absolutely. These are tough | :32:22. | :32:29. | |
times. There are things we would like to do. And, that's one of them. | :32:29. | :32:31. | |
Unfortunately, the economic circumstances haven't turned out | :32:31. | :32:37. | |
the way - You said the credibility of your strategy depended on that? | :32:37. | :32:43. | |
That is what we wanted to do. If you are inflexible then that is | :32:43. | :32:47. | |
worse than not having a plan to begin with. OK. What we have done, | :32:47. | :32:52. | |
not just about kicking off a few infrastructure projects, by the way, | :32:52. | :32:56. | |
it's about trying to get the confidence back into business to | :32:56. | :32:59. | |
remove - I feel a list coming out. We are out of time much we will cut | :33:00. | :33:03. | |
you off there. Thank you for joining us. A quick look at | :33:03. | :33:06. | |
joining us. A quick look at tomorrow's front pages: The autumn | :33:06. | :33:12. |