15/02/2012 Newsnight Scotland

other lad beer, -- labia, and the Tonight: Calls for the financial

regulated to investigate what went wrong at Rangers. Could the

Financial Services Authority help shed light on where the cash has

gone at Ibrox? Youth unemployment in Scotland pass

is the 100,000 barrier. What more can be done to get young people

back into work? Good evening. The message from the administrators

this afternoon was one of reassurance that Rangers would

continue as a football club. Duff & Phelps, the administrators, have

spent the day trying to unravel the club's financial difficulties. But

the former Chair of the Treasury Select Committee believes the

Financial Services Authority should investigate the club's financing

under Craig Whyte. We'll be speaking to Lord McFall in a moment,

24 hours into administration, it is becoming clear just how far and

wide the implications of Rangers'' troubles go. The taxman is at least

�9 million down and could be many millions more and many are asking,

where is all the money gone? Since Craig Whyte took over last May,

Rangers should have received an income of around �26 million. On

top, there was at �24 million loan for the sale of season tickets.

Then there was the transfer of Jelavic, worth 5 million. The

total: 55 million. Craig Whyte suggested the club costs 3.7 �5

million a month to run. That is 34 million for his nine months in

charge. That still leaves 21 million outstanding. But those

operating costs assumed Rangers were paying those taxes during that

time but the Revenue says they were not, so that gives us around �30

million spare. The administrators should be getting a clear idea of

the club's recent finances. Duff & Phelps also helped advise on Craig

Whyte's takeover of Ibrox. They say there is no conflict of interest

and it is standard for companies to appoint their own administrators.

It is 5:15pm, it is the rush-hour, people are heading home and we had

just had a statement from the administrators of Rangers. They say

Saturday's game against Kilmarnock will definitely go ahead. But the

Hall of fame dinner set for Glasgow's Hilton Hotel on Sunday

has been cancelled. As the detail on the really big questions of the

club, the statement gave special few. What they are saying and what

they are this -- what responses they are getting from the taxman,

we aren't told. But we do know that Rangers are in serious trouble,

with many people wondering how on earth they will get out of this

mess. Craig Whyte is the only secured creditor. That puts him in

favourable positions for negotiations. The problem with this

strategy is that there would be no other money left in the hot food

distribution to HMRC and other creditors. Commercial partners are

refusing to comment on Rangers' troubles, citing commercial

confidentiality. One person talking is the first minister. The priority

is to identify how much is reasonably boat, to have that

determined, and then to have a sensible agreement about how that

can be paid over a period of time. That would be to everybody's

benefit, it would be the right thing for the taxpayer, from

Rangers and the Scottish football. Labour have also written to the

HMRC asking them to be reasonable when it comes to Rangers.

Administrators are hoping for a voluntary agreement but what could

tempt the taxman to accept such a deal? It would not surprise me,

perhaps I am jumping the gun, if we assume that Craig Whyte is the most

likely buyer, for him to put a deal on the table that says, HMRC, if

you vote for the voluntary agreement, we will undertake to put

a certain percentage of the European football income, for

example, into a pot for you and the other creditors over the next three

years. The alternative been, if you vote against the voluntary

agreement, that will not be there and less money will be available

for HMRC and the other creditors. Rangers fans want answers. They are

not alone. Will this club emerge from administration or slump into

liquidation and to stands to benefit most from the turmoil? Is

only the football in the park was so unpredictable.

Joining me from London is the former chair of the Treasury Select

Committee, Lord McFall. You a calling for the Financial Services

Authority to get involved. What would you like them to investigate?

It reminds me of that time when Northern Rock got into problems and

there was no resolution and recovery regime there, and the FSA

got called in. You have seen in your programme of fans asking what

answers to questions and there are none available because there is a

veil covering Ibrox at the moment. I think the fans, actually the

country, is that the utmost transparency so that we can move

forward and the FSA should be looking at the events in the past,

particularly the past year, where your programme had illustrated that

there is �30 million outstanding from what the owner of Rangers said

he would do at the beginning to what the situation is now. So I

think that transparency is essential. We need good corporate

governance. The FSA, as a result of legislation going through

Parliament, has been given a concept known of judgmental

discretion. This arose from the Northern Rock situation, where we

forced the FSA to look at the conduct of businesses, the business

model that was being examined, and I think if you look at the business

model, that can go a long way to understanding how we got the

problem and how we can get ourselves out of it. Under these

new powers, what can they do? They can look at the business model of

Rangers and say what? This is fine, this is improper? They can come to

a judgment, as they did in a case of the Royal Bank of Scotland and

HBOS. They are looking at it in detail, then coming to a judgment,

and looking at the directors of the company and how the company is run,

that is really important. I don't accept that what has been said

today... That Rangers will still be in existence in a few months' time.

I don't want it to be in existence in a few months' time under the

present circumstances, the secrecy. I want to ensure that Rangers is

there as a big club in Scotland along with others for the benefit

of football and the community. That is why it barely today I suggested

that there should be an independent commission here. I think it is a

role for government and Alex Salmond. I mention recovery and

resolution mechanisms. I think there is a case for the Scottish

government taking that on board, along the lines that has been

mentioned with Northern Rock and other banks, and then releasing it,

because Rangers are a global brand and there is no doubt there is

money there. If you look at Barcelona and Real Madrid and the

Bundesliga, you will see the not- for-profit mutual wobbles, and they

prosper much more than the companies and the clubs in a United

Kingdom. I am not quite sure what you are suggesting the Scottish

government could do? I will tell you. During this time where we have

Rangers going into administration, they could ensure that when Rangers

come out of this that there is a good model that is there for the

benefit of the fans. The Scottish government should sponsor some

takeover of the fans? Is that what you are saying? I am saying they

should look at the situation and maybe hold the hands of the club

for the next few months to ensure that we get a model of mutuality

that benefits ranges and benefits the Scottish community because it

ain't any use going back to the old model where the club is out

spending the money that it has got, in fact it is using HMRC as a

private bank, and it is not doing the fans or the community any

Are you suggesting the Scottish government should put money into

this to help it tied over? I am hoping with Rangers, they won't be

any need, but if they hold their hand up and show a good model, that

could ensure a better business model for Scottish football. I

think it is important that we do that, because if the government

does that, it should visit Spain and Germany and other countries

where the neutral model is in place, to see how we could take Scottish

football forward. It is obvious that the SFA's should not be

charged with this responsibility, because they have not got us into

this mess today. The latest unemployment statistics in Scotland

make for grim reading, with the number of people looking for work

increasing by 16,000. It is youth unemployment that has been one of

the big political battlegrounds. It is passed the 100,000 mark. It is

not all bad news. The number of people in jobseeker's --

jobseeker's Allowance has dipped for the 5th month in a row. The

number of people out of work in Scotland is edging towards a

quarter of a million. 16,000 more people are looking for work, and of

the 231,000 out of work, more than 2000 are 16th-24-year-olds. It

could be iffy, because of the small sample size. But there is a warning

about the Scottish youngsters who might find it difficult to find a

job even when the economy recovers. The politicians are blaming each

other. The government is creating - - says it is creating a jobs, but

the opposition says it is failing. The government has appointed a

dedicated youth unemployment Minister. It has pledged to create

20,000 Modern apprenticeships in this Parliament. The Tories have

questioned the Scottish government's decision to cut the

budget. With the number of young people out of work ridding satyrs -

- steadily upwards, and the squeeze on public spending continuing, what

can the government realistically do The basic point here is that when

it comes to the big issues about creating jobs, you two basically

agreed with each other. You want to create jobs in the economy. On the

big issue, both of you would agree that the British government ought

to spend more to create jobs. You say cut VAT, you presumably would

in -- agree with tax cuts as well. On the big issues, you agree with

each other. I think we would have to take issue with that. It is

about the opportunities created for the young people in Scotland by the

Scottish government. You do agree with each other? I am pleased to

say that the draftees unemployment strategy has been broadly welcomed

by all. It was debated last week in Parliament, and the youth

employment strategy is all about working with people who can make a

difference to ensure that we can get a -- get an all Scotland, all

government solution. I'm I'm getting very confused. Both are due

fundamentally agreed that the macro-economic policy being pursued

by Westminster is wrong. Art and not talking about the Scottish

government on the margins, but it is marginal compared to the big

issue of not cutting spending so much, cutting taxes and getting

growth in the economy. Both of you would have to agree on that?

key issue is that the UK economy is stagnant, and that is a huge

problem, both sides of the border. While I will do everything that I

can do which is available to me, I think that there is a lot but we

have been doing, there is a lot more we can do, but... You would

say you are being hampered by the policies by the British government?

And you would agree with that? voted for the same package last

week. A third of the jobs lost in the United Kingdom was in Scotland.

I think Alex Salmond am is responsible for that. He should be

talking about the economy. While it - but why is it Alex Salmon's

If that was ridiculous, by the same token, what you are saying is

ridiculous. It is about responsibility and honesty. We have

a First Minister in this country that claims of responsibility for

200 jobs created one day and then denies responsibility for 200 jobs

lost the next. I think that is this ingenious. We are going to deliver

under beleaguered -- under devolution a ground breaking

guarantee on creating a training place for every 16-19-year-old but

once it. -- that once it up. That is fine it isn't it? What, to have

full control over the economy? Giving every youngster who wants an

opportunity at Johnston-trained. But it is about funding to deliver

that. I don't think it is the best we can do by a young people.

youth employment strategy articulate the need to arrange

interventions for young people. It is not all young people. For those

first away of the -- from the labour market, it may well be

combined with some life skills work, training for work, and four other

young people, they need a different kind. I am trying to put this in

context. But this is the sort of thing even if the economy was

growing really nicely, that's fine. In an economy that is a flat lining,

it is marginal stuff. Part of the youth employment strategy is to