:00:16. > :00:20.star well actually they were. But The First Minister has weighed in
:00:20. > :00:27.after the veto. He has demanded an explanation for his decision and
:00:27. > :00:32.has asked for a meeting. But is it his meeting -- business? We have
:00:32. > :00:36.been to these areas. The business leaders seem to be keen on the bid
:00:36. > :00:38.for control of corporation tax. Good evening. The Tory backbenchers
:00:39. > :00:41.are delighted, the Liberal Democrats are crumbling and the
:00:41. > :00:44.Scottish government are... Well, it is not that clear, actually. Alex
:00:45. > :00:47.Salmond has said the Prime Minister a letter asking about the impact on
:00:47. > :00:56.Scotland of his decision to veto the European Union treaty changes.
:00:56. > :01:02.But what does he actually want? Things were not looking good even
:01:02. > :01:05.before last week's meeting in Brussels. A kiss from Nicolas
:01:05. > :01:11.Sarkozy but look at the body language between the French
:01:11. > :01:14.President and David Cameron. For the cameras, it was easy to show
:01:14. > :01:20.the Prime Minister as isolated, with the rest of Europe ganging up
:01:20. > :01:24.about a new tax on the City of London. Today, he went to the House
:01:24. > :01:30.of Commons. He got support from his own party but tough questions from
:01:30. > :01:34.opposition Members are. Questions from north of the border as well.
:01:34. > :01:38.The First Minister has written about the use of the veto. He said
:01:38. > :01:41.it was an extraordinary state of a pairs and that he had blundered
:01:41. > :01:46.into changing the British relationship with the European
:01:46. > :01:49.Union. He said he had a number of Union. He said he had a number of
:01:49. > :01:59.crucial questions to answer. What risk assessment it any did the
:01:59. > :02:07.
:02:07. > :02:13.government and take about the Why has the Scottish government and
:02:14. > :02:17.other devolved administrations not been consulted? In the house, the
:02:17. > :02:20.MPs challenged the Prime Minister about his failure to consult
:02:20. > :02:27.Britain's parliaments and assemblies. That did not happen on
:02:27. > :02:31.this occasion. How will he explain to people in Belfast, Edinburgh and
:02:31. > :02:38.Cardiff, that this isolation and abrogating the leadership is
:02:38. > :02:42.anything other than damaging and dangerous? Obviously in the final
:02:42. > :02:47.analysis it is a reserved issue for the government and the relationship
:02:47. > :02:51.with the union. But this government has gone further than any previous
:02:51. > :02:56.government on the issues that really matter to people in Scotland,
:02:56. > :03:00.about the single market, Fisheries and decisions in the union to work
:03:00. > :03:04.constructively with other administrations. When he used his
:03:04. > :03:08.veto, he put the country on a different course, not just to
:03:08. > :03:12.France and Germany but all 26 members. Alex Salmond's
:03:12. > :03:19.intervention suggests the outcome of last week's meeting means that
:03:19. > :03:22.he faces new pressure from north of I'm joined from London by two Euro
:03:22. > :03:29.cheerleaders, the SNP's Treasury spokesman, Stewart Hosie and by the
:03:29. > :03:34.Liberal Democrat, Malcolm Bruce. What is the point of Alex Salmond's
:03:34. > :03:40.letter? Is he just annoyed David Cameron did not call him in the
:03:40. > :03:49.dead of night? It is not about being annoyed at not getting a
:03:49. > :03:55.telephone call. It is because of a specific situation about how policy
:03:55. > :04:00.is formulated. That requires the UK government to engage with devolved
:04:00. > :04:06.government in the formulation of policy. David Cameron needed Alex
:04:06. > :04:11.Salmond's permission? He did not but we have got a protocol and a
:04:11. > :04:15.place for these things to be discussed to insure not just the UK
:04:15. > :04:20.national interest, but the Scottish and Welsh national interests must
:04:21. > :04:25.be protected from stupid decisions like opting out and allowing the UK
:04:25. > :04:30.to be completely isolated, abandoning traditional allies. We
:04:30. > :04:35.have now got 26 members and the UK and that is potentially very
:04:36. > :04:44.damaging to Scotland. You would have gone along for a financial
:04:44. > :04:50.transaction tax? We would like that on a global basis. It is no good if
:04:50. > :04:56.it is just in one region. You do not disagree with David Cameron?
:04:56. > :05:00.The point is that if we agreed to discuss a Treaty, you discuss and
:05:00. > :05:06.you try to protect national interest. Even Sir John Major and
:05:06. > :05:14.Margaret Thatcher had reasonings but he has abandoned and leadership
:05:14. > :05:20.and walked away and it is buried damaging. A this episode another
:05:20. > :05:24.stunning endorsement for the Liberal Democrats in government?
:05:24. > :05:30.They are supporting a coalition tackling deep financial crisis with
:05:30. > :05:35.more credibility than the Eurozone of. But that is not a traditional
:05:35. > :05:41.position for the Liberal Democrats? We are in a difficult position
:05:41. > :05:46.across the world, more than before. We have got our own currency and
:05:46. > :05:51.policy for the financial crisis. The Eurozone has not got a policy
:05:51. > :05:54.and is in a state of confusion and panic. They did not response to
:05:54. > :05:58.reasonable demands in any way and under these circumstances it seemed
:05:59. > :06:03.the right thing to do was to say that we want you to solve your
:06:03. > :06:07.problems and you should and you must. We are tackling our problems,
:06:07. > :06:12.you tackle yours and we must do that on a parallel track and keep
:06:13. > :06:22.in touch and not diverge. But we must recognise different spaces.
:06:22. > :06:26.The position has been junked? fact is that our position about the
:06:26. > :06:32.European currency was that subject to conditions, we could and should
:06:32. > :06:35.have joined but these conditions were not met. But they have let
:06:35. > :06:40.members in that have not met the conditions and it has been torn up
:06:40. > :06:45.by Germany and they are in a mess. But your position was that he would
:06:45. > :06:49.have gone in but you have not got any in other words on the system
:06:49. > :06:59.governing the currency because of the decisions in the past few days.
:06:59. > :07:02.I do not accept that. But how will you? 26 countries have said they
:07:02. > :07:08.want to move forwards and they have not said how, where or when. They
:07:08. > :07:12.have not got a credible form of enforcing policies. The British
:07:12. > :07:18.position is to say, we want you to do that. We have our currency, you
:07:18. > :07:22.have yours and we should not run each other's and work together.
:07:22. > :07:28.Alex Salmond's position is ludicrous. He wants to leave the
:07:28. > :07:33.United Kingdom, surrender control to a bank. To suggest he should be
:07:33. > :07:37.consulted on a decision he wanted to opt out of any weight is absurd.
:07:37. > :07:45.He said we should have signed up and he could not have protected
:07:45. > :07:51.Scotland. At least David Cameron offered leadership. What red lines
:07:51. > :07:56.with Alex Salmond have had? We need to understand what was on the table.
:07:56. > :08:01.Financial transaction tax. Changes that would have seen members
:08:01. > :08:05.potentially adding to send their budgets to the European Commission
:08:05. > :08:13.before the national parliaments could scrutinised. Quite
:08:14. > :08:19.significant changes were agreed. There were things agreed in terms
:08:19. > :08:22.of the things being replaced by the financial stability fund. We have
:08:22. > :08:28.looked at the facility of bilateral aid with the International Monetary
:08:28. > :08:34.Fund. These things are to help the Eurozone. But we have inflated the
:08:34. > :08:40.issue was the fact that all 26 countries except the UK and the
:08:40. > :08:45.nine countries not in the currency have gone in a different directions.
:08:45. > :08:50.If you offering leadership, you do not sit back, threw toys out of the
:08:50. > :08:59.pram, you look at the best interests. Fabricating leadership
:08:59. > :09:06.and leaving the country isolated is not good at all or stop this is a -
:09:06. > :09:10.-.. The fact that it seems isolated as a result of what has happened,
:09:10. > :09:16.does that not mean the coalition is not the right arrangement for the
:09:16. > :09:20.Liberal Democrats? It is not about an arrangement for the Liberal
:09:20. > :09:26.Democrats. It is about the national interest. We are tackling a
:09:26. > :09:30.financial crisis. For now, frankly, I'd think it is right to
:09:30. > :09:39.concentrate on the plans to deal with the crisis here and then to
:09:39. > :09:49.look at that. We are in separate places. We have to leave if there.
:09:49. > :09:50.
:09:50. > :09:54.The Scottish Government would like the opportunity to do the same here.
:09:54. > :09:59.Is it a good idea? Ian Hamilton has been to our closest neighbours to
:09:59. > :10:03.get their views. I have been sent on a mission to
:10:03. > :10:09.find out how corporation tax has an impact on different parts of the UK.
:10:09. > :10:12.The idea is to go from Newcastle in the north-east to Newcastle here,
:10:12. > :10:22.in Northern Ireland. There are some basic things that you need for a
:10:22. > :10:39.
:10:40. > :10:44.road trip. A camera and a really cool car. Rubbish.
:10:44. > :10:47.In Scotland, the Government want to have control over corporation tax
:10:47. > :10:52.so that they can attract more business. If you see it every day
:10:52. > :10:54.when companies are thinking about coming to the UK. They look at a
:10:54. > :10:59.number of different countries and one of the first things they look
:10:59. > :11:02.at is the headline rate of corporation tax. The British tax
:11:02. > :11:09.system has evolved over many decades and is highly complex and
:11:09. > :11:15.sophisticated. There are currently roundabout 40 consultations going
:11:15. > :11:17.on in the UK. At one of the concerns that companies have is the
:11:17. > :11:23.additional administration compliance that they face if they
:11:23. > :11:29.have to deal with a UK tax system and also a Scottish system. This is
:11:29. > :11:39.going to be great for accountants, isn't it? Haven't to strip that out,
:11:39. > :11:48.
:11:48. > :11:58.it would be great. Cut, cut! I head south, to find landmarks,
:11:58. > :12:00.
:12:00. > :12:07.concerned politicians. And cold weather. I have battled my way to
:12:07. > :12:11.North Tyneside council to meet their Mayor, -- meet their mayor.
:12:11. > :12:17.You are mentioned in the Scottish Parliament, how do you feel about
:12:18. > :12:25.that? I was quite surprised. mentioned the senior Conservative
:12:25. > :12:29.in the north-east of England. And she has been engaging in a range of
:12:29. > :12:34.activities which a well-documented including going to the Conservative
:12:34. > :12:40.conference in Manchester to lobby the Chancellor about the success
:12:40. > :12:44.and firepower of Scotland in attracting thousands of jobs.
:12:44. > :12:53.doing the same thing that Alex Salmond would do, but in the
:12:53. > :12:57.argument forward. -- putting up the argument forward to ministers about
:12:57. > :13:02.the north-east, and I'm sure that Alex Salmond and others would do
:13:02. > :13:05.exactly the same. This political argument is about the threat of
:13:05. > :13:13.jobs and investments draining away from the north-east and into
:13:13. > :13:21.Scotland. Scotland and ourselves are looking at the same piece of
:13:21. > :13:24.work. Because of the offshore wind, Scotland were offering a reduction
:13:24. > :13:32.in corporation tax, if that happened it would be a concern for
:13:32. > :13:36.us. This factory is all about the future. They make electric vehicles.
:13:36. > :13:41.When companies relocate or invest in new areas, they have to consider
:13:41. > :13:47.more than just taxation. We have a specialised engineering team
:13:47. > :13:51.looking after the mechanical side. It is very difficult in this area
:13:51. > :13:54.to procurer those skills. For us to move, we would need to check for
:13:54. > :14:03.local Labour market to make sure those skills were available before
:14:03. > :14:08.relocating. We need every job we can get. We desperately want the
:14:08. > :14:13.same baseline with which to work with. This is what London does not
:14:13. > :14:17.appreciate, the rest of England is not as involved with the Scottish
:14:17. > :14:23.market. The north-east market is quite small and we are much more
:14:23. > :14:29.mingled with the Scottish market. We could just redraw the border.
:14:29. > :14:33.am told that if you look just north of all Turner, there is a small
:14:33. > :14:43.area where the border is still dotted and it says "To be agreed."
:14:43. > :14:46.
:14:46. > :14:52.So maybe we could just have a big loop down. I'm moving on, to catch
:14:52. > :15:02.a ferry to Northern Ireland. Southerly winds across the country
:15:02. > :15:16.
:15:16. > :15:21.are reaching gale force across In Northern Ireland, on the side
:15:21. > :15:26.the border they are paying 26% corporation tax. Over my shoulder,
:15:26. > :15:29.they are paying 12.5%. Northern Ireland and the Republic of Ireland
:15:29. > :15:34.have similarities in terms of similarities and the fact that they
:15:34. > :15:38.are in the right time-zone, part of the EU. If you look at the
:15:38. > :15:43.differences, currency is one of those but you can always hedge your
:15:43. > :15:47.currency exposures. Then it comes to taxation. If a company is going
:15:47. > :15:53.to make �1 million of profit a year, is to locate in the south of
:15:53. > :15:57.Ireland, they will save over �130,000 of tax each year.
:15:57. > :16:00.Northern Irish say that they have an economic argument for taking
:16:00. > :16:05.control of their corporation tax. But with Scotland's demanding the
:16:05. > :16:10.same powers, it could delay the UK Treasury from making any firm
:16:10. > :16:16.decisions. There is a concern that the process is taking longer, and
:16:16. > :16:22.we are certainly not feeling that we have the tax opportunity in the
:16:22. > :16:29.back. There is more effort to be made to ensure that. We have to
:16:29. > :16:37.make sure that the decision-makers at the Treasury are convinced of
:16:37. > :16:46.the arguments. Do you almost wish that they kept it out a bit longer.
:16:46. > :16:51.We are a frankly, yes. -- quite frankly, yes. In Newcastle in
:16:52. > :16:56.Northern Ireland, it is off-season. Money and jobs are short. Northern
:16:56. > :17:01.Ireland will have to find �200 million a year to pay for a cut in
:17:02. > :17:06.corporation tax. The Northern Irish tell me that this is not just about
:17:06. > :17:10.cutting tax. It is also about creating 90,000 jobs. This would
:17:10. > :17:15.give the region a bright future. That is if they have got their sums
:17:15. > :17:19.right. We did some studies 18 months ago to work out what the
:17:19. > :17:25.course return would be. If you're looking at the time it would take
:17:25. > :17:29.to recover corporation tax, a so there would be more corporation tax
:17:29. > :17:33.lifted because of foreign investment, that could take 15 or
:17:33. > :17:38.20 years. The key is to look at all the other taxes as well, that would
:17:38. > :17:43.be generated, such as National Insurance and VAT. When you look at
:17:44. > :17:50.that, the break-even position comes within 5p -- five or six years.
:17:50. > :17:56.Thereafter, there is a surplus, with more taxation. To see similar
:17:56. > :18:00.cuts in Scotland, it could cost us �2 billion a year. As a UK
:18:01. > :18:04.government -- as the UK Government is planning on cutting the high
:18:04. > :18:08.rate of corporation tax in the next two years, some question whether we
:18:08. > :18:14.could make cuts big enough to make it advantageous for companies to
:18:14. > :18:20.come to Scotland. On this road trip, I have been car sick, seasick, cold
:18:20. > :18:30.and hungry. The next time and set on our road trip, let us hope it is
:18:30. > :18:32.
:18:32. > :18:36.the Bahamas and not Belfast. -- sent on a road trip.
:18:36. > :18:39.A quick look at tomorrow's papers. The Scotsman has a picture of a
:18:39. > :18:44.The Scotsman has a picture of a panda and the story is "RDS warned
:18:44. > :18:48.about good win eight years ago. The latest report said that he had an
:18:48. > :18:58.assertive management style. The Guardian: Recriminations mount over
:18:58. > :19:01.
:19:01. > :19:04.EU summit. The picture is about to the deer shot last year, whose head
:19:04. > :19:14.has now reappeared. Join us has now reappeared. Join us
:19:14. > :19:22.
:19:22. > :19:26.It will be a blustery day on Tuesday with strong wind making it
:19:26. > :19:33.feel cold. Showers turning increasingly wintry across northern
:19:33. > :19:41.went -- northern Britain. Not too many showers getting into
:19:42. > :19:48.Lincolnshire and East Anglia. Sunny, by and large. There may be sleet
:19:48. > :19:55.mixed in with those. Over the hills and mountains of Wales, there will
:19:55. > :19:59.be snow, and even at low levels and cross parts of North Wales. --
:19:59. > :20:04.across parts of North Wales. By the end of the afternoon, there could
:20:04. > :20:08.be a covering in some places in Northern Ireland. Western Scotland,
:20:08. > :20:12.the snow showers continue to feed in across the Highlands. As we go
:20:12. > :20:18.through Wednesday, it is looking showery and chilly, but maybe not
:20:18. > :20:22.so many showers. Further south, there will be more sunshine and not
:20:22. > :20:25.so many shared around. It will still feel chilly even though the
:20:25. > :20:30.wind will be lighter. There will still be snow on Wednesday, over
:20:30. > :20:34.the hills of western Scotland and Northern Ireland. Also, the hills
:20:34. > :20:37.of England and Wales could see further snow. Temperatures in