0:00:08 > 0:00:11
0:00:11 > 0:00:14Lincoln yesterday to have a look. - Tonight on Newsnight Scotland: Is
0:00:14 > 0:00:19this the end for Rangers Football Club, at least in its current
0:00:19 > 0:00:23incarnation? As talks on wage cuts break down, for the first time, the
0:00:23 > 0:00:26administrators say the club may not be able to play on to the end of
0:00:26 > 0:00:28the season. Is there now any way out of this mess? And the other
0:00:28 > 0:00:31GERS, the Government Expenditure and Revenue for Scotland. Both
0:00:31 > 0:00:38sides in the referendum debate prove new figures back their case.
0:00:38 > 0:00:42We'll try to cast some light on who's right. Good evening. Well,
0:00:42 > 0:00:44we're used by now to days of drama at Rangers but this one stood out.
0:00:44 > 0:00:46Despite all the expressions of support from fans, politicians and
0:00:46 > 0:00:49indeed hopeful noises from the administrators themselves, today
0:00:50 > 0:00:55the officials running the club said it might not be able to continue
0:00:55 > 0:00:58playing football to the end of the season. Are they facing up to the
0:00:58 > 0:01:06brutal reality, or is this a final attempt to browbeat the players
0:01:06 > 0:01:12into accepting huge wage cuts? We'll discuss that in a moment.
0:01:12 > 0:01:16Today is blue skies of Ibrox did not last for long. The storm clouds
0:01:16 > 0:01:22returned and with them the real prospects that Rangers could go to
0:01:22 > 0:01:29the ball. Players arriving at Murray Park for another day's talks.
0:01:29 > 0:01:34They were told that liquidation was a real possibility. Duff and Phelps
0:01:35 > 0:01:44announced they were speeding up attempts to sell the club because
0:01:45 > 0:01:52
0:01:52 > 0:01:57diluting the playing squad would Rangers director Dave King, seen
0:01:57 > 0:02:07here emerging with the manager from talks with administrators at Ibrox,
0:02:07 > 0:02:14
0:02:14 > 0:02:17also gave a stark warning about his Today, the current owner countered,
0:02:18 > 0:02:22saying he believe that Rangers would come at of administration by
0:02:22 > 0:02:28way of a company voluntary agreement. It appears Mr King knows
0:02:28 > 0:02:34quite a lot about liquidation. This �10 million Whineray used to belong
0:02:34 > 0:02:38to him. He was forced to liquidate it to pay debts to the tax
0:02:38 > 0:02:45authorities. The decade-long dispute, in which the South African
0:02:45 > 0:02:50taxman is claiming �225 million, is over tax-free capital gains over
0:02:50 > 0:03:00taxable earned income. Judges are growing weary of dealing with Mr
0:03:00 > 0:03:04
0:03:04 > 0:03:10King. A year and a half ago he was Dave King is the second biggest
0:03:10 > 0:03:17shareholder at Ibrox. He revealed today in his statement that he is
0:03:17 > 0:03:22pursuing Sir David Murray, the former chairman. He said at the
0:03:22 > 0:03:32time he fell to properly disclose the true financial position of
0:03:32 > 0:03:42
0:03:42 > 0:03:48Rangers. David Murray had something Meanwhile, another former Rangers
0:03:48 > 0:03:55director, Paul Murray, said they were still many questions needing
0:03:55 > 0:03:59answered, not least about the tax cases with the Inland Revenue.
0:03:59 > 0:04:05Players headed off tonight after another day talking rather than
0:04:05 > 0:04:08training and no doubt wondering what the next few days would bring.
0:04:08 > 0:04:10With me here is sports journalist Graham Spiers and in Edinburgh is
0:04:10 > 0:04:18our resident expert on football finance, Stephen Morrow, from the
0:04:18 > 0:04:28University of Stirling. Just watching that, this public dispute,
0:04:28 > 0:04:30
0:04:30 > 0:04:33the words ferrets and sacks come to mind. What a suburb! This is quite
0:04:34 > 0:04:39astonishing. -- saga. It is astonishing that one of the
0:04:39 > 0:04:44saviours of Rangers might be Dave King. Inland Revenue is chasing the
0:04:44 > 0:04:48club and the South African Inland Revenue is chasing him. He has
0:04:48 > 0:04:55substantial wealth. Whether he gets hold of the club and whether
0:04:55 > 0:05:03Rangers are liquidated remains to be sinful stub I think they will be
0:05:03 > 0:05:10liquidated. -- remains to be seen. The administrators have been quite
0:05:10 > 0:05:16upbeat until today. Playing football to the end of the season
0:05:16 > 0:05:23might not happen. administrators had been optimistic
0:05:23 > 0:05:28about Rangers in previous statements. Some people wondered
0:05:28 > 0:05:34why. Rangers might win the case on back taxes with the Inland Revenue.
0:05:34 > 0:05:40Wire with the administrators be upbeat? -- why would the
0:05:40 > 0:05:43administrators? Don't you think an obvious ploy for them would be that
0:05:43 > 0:05:48they're doing this because they hope they can convince players and
0:05:48 > 0:05:54agents to take wage cuts? They are saying everything is to Kenya
0:05:54 > 0:06:00because of that. The administrators want to preserve the club as it is.
0:06:00 > 0:06:05They do not want the club to go into liquidation. If it does, of
0:06:05 > 0:06:11the new owners will face horrendous problems, not being -- not least
0:06:11 > 0:06:15being out of Europe for a few years. Some people think that Duff and
0:06:15 > 0:06:24Phelps have been eccentric about the way they have gone about it.
0:06:24 > 0:06:29They have gone the extra mile. It is other -- either a fast by a or
0:06:29 > 0:06:32brutal redundancies. One of the other mysteries of the various
0:06:32 > 0:06:37statements we heard today is the administrators want to accelerate
0:06:37 > 0:06:45the sale of the club. When you look at who might buy it, day King says
0:06:45 > 0:06:49he wants to be involved with the Paul Murray offer. -- Dave King.
0:06:49 > 0:06:59Paul Murray has said any offer would be trivial like sorting out
0:06:59 > 0:07:01
0:07:01 > 0:07:06the issue with HMRC and sorting out legal issues to do with Craig White.
0:07:06 > 0:07:10I think any conditional offer, as we had said previously, there are
0:07:10 > 0:07:15so many conditions. The conditions are so substantial that it is
0:07:15 > 0:07:19difficult to see how you would end up better off. If you are looking
0:07:19 > 0:07:26at trying to accelerate something, you have the ticket is with the
0:07:26 > 0:07:31potential legal case and the security over the assets. We also
0:07:31 > 0:07:37have a tax tribunal. I cannot see where there is an incentive to buy
0:07:37 > 0:07:43the club will try to arrange a takeover. The administrators are
0:07:43 > 0:07:47saying it is the only option. just wondered if the statement is
0:07:47 > 0:07:52code. It is confusing. If you are saying we cannot do a deal with the
0:07:52 > 0:07:57players to get the wage cuts we want, therefore we're going to have
0:07:57 > 0:08:01to lay-offs so many players that not only will it affect the club as
0:08:01 > 0:08:06a footballing team, it will make any sale difficult because the
0:08:06 > 0:08:11players are the assets of the club. If you are right, you cannot
0:08:11 > 0:08:20accelerate any cell before this stuff happens, isn't this all code
0:08:21 > 0:08:25for saying, it is bust and we're going into liquidation? Since the
0:08:25 > 0:08:31Sabir began, I think the most likely outcome was going to be
0:08:31 > 0:08:36liquidation. So many factors impact on the organisation. Liquidation
0:08:36 > 0:08:41begins to look like the only option that makes any real sense. There is
0:08:41 > 0:08:48so much noise around that you cannot chart a path through. You're
0:08:48 > 0:08:56not sure of the things that will be in euros. By Richard put in place a
0:08:56 > 0:09:03takeover? -- why would you put in place? What the administrators have
0:09:03 > 0:09:07said today actually does not make sense. I think they are between a
0:09:07 > 0:09:12rock and a hard place. They have a situation where they know the value
0:09:12 > 0:09:17of this organisation is dependent on the assets - the players. They
0:09:17 > 0:09:20need to retain those assets in order to get a value from the
0:09:20 > 0:09:26organisation. Those are the same things that actually cast a Mini to
0:09:26 > 0:09:31deal with that in order to survive in the short term. -- actually cost
0:09:31 > 0:09:36and they need to deal with that. They must need cash to come in from
0:09:36 > 0:09:41somewhere in order to keep the club going. That is why this attitude
0:09:41 > 0:09:48they have adopted is hard to understand from the outside. They
0:09:48 > 0:09:58have presumably crust the enormity of the situation when they went in.
0:09:58 > 0:10:03-- craft. Do you think the fans, and indeed the politicians who have
0:10:03 > 0:10:10been making noises about how important it is to save Fein just
0:10:10 > 0:10:15as an institution, are really quite grasping what went on? A lot of the
0:10:16 > 0:10:19fans are confused. I've amaze sports writer. When I speak to
0:10:19 > 0:10:26business experts, they give conflicting evidence. Some said
0:10:26 > 0:10:31they can come out of administration at others say they will go into
0:10:31 > 0:10:38liquidation. Paul Murray is the most likely buyer of the club. The
0:10:38 > 0:10:44BBC inquiry said, why would Craig White buy it a club with an Inland
0:10:44 > 0:10:50Revenue taxes bill hanging over him? That is the situation that
0:10:50 > 0:10:56Paul Murray is in. Even if this is possible, it is not possible in the
0:10:56 > 0:11:03timescale, it would seem, that the administrators say they need to
0:11:03 > 0:11:08have. Exactly. The administrators have been patient about this.
0:11:08 > 0:11:13Rangers have hit the rocks. The current Rangers will die. The
0:11:13 > 0:11:20administrators used the word, disillusion. I am sure a Phoenix
0:11:20 > 0:11:27club will rise out of it. I cannot see another means of doing it. Why
0:11:27 > 0:11:34were poor married to it? Liquidation as well. -- Paul Murray.
0:11:34 > 0:11:38It is not as simple as it appears. If Craig White maintains he has
0:11:38 > 0:11:43security over the assets if the club goes into liquidation and that
0:11:43 > 0:11:51is disputed, possibly, by others including the administrators, but
0:11:51 > 0:11:55were not get sorted out overnight, or will it? -- that will not. It is
0:11:55 > 0:12:01not. You would be looking at legal cases to sort out the disputes. The
0:12:01 > 0:12:06assets would be left in limbo. How does the company continued to trade
0:12:06 > 0:12:09when it has no control all right to use some of the assets? We have the
0:12:09 > 0:12:18football issue of whether or not they get be accepted back into the
0:12:18 > 0:12:27SPL as the new company. Is there anything that the book for
0:12:27 > 0:12:32authority, I do not mean in terms of putting money in Dom -- the
0:12:32 > 0:12:36football of authority. Having Rangers disappear, albeit
0:12:36 > 0:12:41temporarily, would be disastrous for them - the Scottish football
0:12:41 > 0:12:48authorities - as for Rangers. would be bad. Rangers are loved and
0:12:48 > 0:12:56hated in equal measure. They are hated. Rail Madrid I hated in Spain.
0:12:56 > 0:13:02The big club is always detested. -- Real Madrid. Presuming the money
0:13:02 > 0:13:06side is sorted out, can anything be done? Even though people are
0:13:06 > 0:13:13detractors of Rangers, football authorities need them. Sky
0:13:13 > 0:13:18Television, the BBC, ITV, they are not interested in the Scottish game
0:13:18 > 0:13:23without Celtic and Rangers. It is the Old Firm may want. If Rangers
0:13:23 > 0:13:27are diminished in some way, it is diminishing right across the
0:13:27 > 0:13:32Scottish game and it will hurt us. It is not clear the authorities can
0:13:32 > 0:13:37do anything to stop that scenario coming into play. The guy who feels
0:13:37 > 0:13:42the heat is near Doncaster, the chief executive of the SPL. He
0:13:42 > 0:13:48needs to punish Rangers but he needs them. They have a crown jewel.
0:13:48 > 0:13:54What happens next? It is slightly confusing. The administrators have
0:13:55 > 0:14:00not done the deal on wage cuts. They have not made people redundant.
0:14:00 > 0:14:10They are also saying they cannot continue as they are. If there is
0:14:10 > 0:14:17
0:14:17 > 0:14:22not going to be a sell within 48 The seem to be talking to people
0:14:22 > 0:14:32that may be interested, investors, so they're not looking at
0:14:32 > 0:14:33
0:14:33 > 0:14:39redundancy yet. This cannot go on a much longer, because they are
0:14:39 > 0:14:42haemorrhaging cash. Thank you. We have to leave it there. Debt,
0:14:42 > 0:14:45income and the ability to live within one's means are themes that
0:14:45 > 0:14:48we'll stick with now. The question of whether Scotland could survive
0:14:48 > 0:14:50outside the union, or whether it would be better off going alone,
0:14:50 > 0:14:53has formed an important part of the independence debate. Today's
0:14:53 > 0:14:56government figures on spending and taxation could help to illuminate
0:14:56 > 0:14:57the issue. But, of course, it's not as simple as that. Our Business and
0:14:57 > 0:15:02Economy Editor Douglas Fraser explains.
0:15:02 > 0:15:11We're talking a big black hole again, but this has nothing to do
0:15:11 > 0:15:15with Ibrox. This is the cover new expenditure and revenue Scotland. -
0:15:15 > 0:15:18- government expenditure. This will explain how dependent Scotland is
0:15:18 > 0:15:26on the rest of the UK, but it does not demonstrate this now. It adds
0:15:26 > 0:15:31up how much Scots pay in tax, �53 billion. More than 10 billion comes
0:15:31 > 0:15:35from income tax, more than 8 billion in value-added tax. No
0:15:35 > 0:15:41surprise that Scots pay less in inheritance tax and stamp duty than
0:15:41 > 0:15:47the average in Britain, but we give more per head for tobacco, alcohol
0:15:47 > 0:15:53and gambling tax. On the other side of the balance sheet, what gets
0:15:53 > 0:15:58spent on or off for Scotland? Of nearly �64 billion, the biggest
0:15:58 > 0:16:02item covers state pensions and welfare come up last year to �21
0:16:02 > 0:16:09billion. The �11 billion goes on the health service, but we spend
0:16:09 > 0:16:14much more than we have raised. A gap of �10.7 billion, representing
0:16:14 > 0:16:207.4 % of GDP, more than twice the safe level of borrowings. If that
0:16:20 > 0:16:25looks bad, look at the UK picture, even worse. Their deficit was
0:16:25 > 0:16:30running at 9.2 % of GDP, so Scotland is in a relatively good
0:16:30 > 0:16:34position, or, less bad anyway. All of this in a shocker of a year for
0:16:34 > 0:16:40the public finances anyway, not want to be repeated, that is why
0:16:40 > 0:16:44death as a deduction is such a priority. These figures assume that
0:16:44 > 0:16:50we get their share of Scottish oil and gas revenues from under the sea
0:16:50 > 0:16:56bed, and without this, the deficit would be 16 % of GDP. That Revenue
0:16:56 > 0:17:00has been highly volatile. With this strong Scottish position hold? The
0:17:00 > 0:17:04Centre for Public Policy and the regions at Glasgow University has
0:17:04 > 0:17:08crunched new numbers saying that Scotland's better position is
0:17:08 > 0:17:12eroding and it will be in a worse position than the UK after three
0:17:12 > 0:17:15years. That depends on the oil prices and the rate of falling
0:17:15 > 0:17:17production. Here with me is Ken MacIntosh,
0:17:17 > 0:17:22Labour's Finance Spokesperson and in Edinburgh is the SNP's Mark
0:17:22 > 0:17:29McDonald, who is a member of Holyrood's Finance Committee.
0:17:29 > 0:17:34Mahmoud Donald, there is a report from economists, can you explain to
0:17:34 > 0:17:39us or why any of the rest of us should be interested? These figures
0:17:39 > 0:17:44clearly demonstrates that Scotland is, and continues to be in a better
0:17:44 > 0:17:48position than the UK. That means in simple terms for the people of
0:17:48 > 0:17:55Scotland that on the basis of these figures, every man, woman and child
0:17:55 > 0:17:59in Scotland would be �510 better off if Scotland are independent.
0:17:59 > 0:18:07Given that everyone is in deficit, do you mean that we would be in
0:18:07 > 0:18:12debt, but �510 less in deft? Not be would be better off. Better off in
0:18:12 > 0:18:18the sense you would be less in debt? You're assuming that deficits
0:18:18 > 0:18:22are unnatural or are not normal. Just a straight factual questions.
0:18:22 > 0:18:25The question on deficit is not if you have one, it is this the one
0:18:25 > 0:18:29that should carry his manager but, as the figures demonstrate that
0:18:29 > 0:18:36Scotland would have a deficit that would be manageable and sustainable
0:18:36 > 0:18:42as an independent nation. There you go, terrific, fabulous. He put your
0:18:42 > 0:18:47finger on it there, the idea that you can say we have at 11 billion
0:18:48 > 0:18:56deficit and are better off is ridiculous. We are all drowning in
0:18:56 > 0:19:01a sea of debt. He might argue that he is talking nonsense. Scotland
0:19:01 > 0:19:06would be fine as an independent country, they show that as well.
0:19:06 > 0:19:11think the figures reveal, yet again, is that finances and economies are
0:19:11 > 0:19:15interdependent. The Scottish and UK economy is one, if we do not have a
0:19:15 > 0:19:20separate economy. It is a strength to be part of the UK financial
0:19:21 > 0:19:25system which gives us security and share risk and rewards. We are part
0:19:25 > 0:19:34of the biggest manufacturing countries in the world, not just to
0:19:34 > 0:19:38annoy based commodity. Their arguments about using North Sea oil
0:19:38 > 0:19:46to pay in the economy, but given that other countries do, it would
0:19:46 > 0:19:55not be a problem. The �500, which, by the way, bears a remarkable
0:19:55 > 0:19:59similarity to the tune an opinion poll saying that that they would
0:19:59 > 0:20:03vote for independence if we were better off, but the idea that we
0:20:03 > 0:20:09should base Scotland's future on a finite commodity like North Sea or
0:20:10 > 0:20:16while! Given that you accept that the �500 is less debt rather than
0:20:16 > 0:20:23their areas a profit in that sense, where will the money for the North
0:20:23 > 0:20:31Sea while funds come from? This fund has something to pursue win
0:20:31 > 0:20:37the fiscal situation is correct. But today, on a released figures,
0:20:37 > 0:20:42the rough projection is that this relatively less bad deficit
0:20:42 > 0:20:50continues for about three or four years in Scotland and gets, a
0:20:51 > 0:20:55Scotland pre-independence, worse, because of declining oil revenues.
0:20:55 > 0:20:59In terms of the oil and gas revenues, the Prime Minister has
0:21:00 > 0:21:03confessed that there is at least 40-50 years' worth of oil and gas
0:21:03 > 0:21:09still to be extracted, up to a trillion pounds, possibly more, to
0:21:09 > 0:21:15be extracted from the North Sea. The main determinant in this is the
0:21:15 > 0:21:19price of oil and gas. Absolutely. The majority of the figures are
0:21:19 > 0:21:23based, not on what an independent Scotland would do necessarily, they
0:21:23 > 0:21:27are based on the assumption that you do what the UK government is
0:21:27 > 0:21:31doing now, and we have said we do not believe the economic policies
0:21:31 > 0:21:37being pursued by the UK government are necessarily the best for
0:21:37 > 0:21:40Scotland. Scotland is in a relatively better position, but an
0:21:40 > 0:21:44independent Scotland pursuing independent policies could be in a
0:21:44 > 0:21:49much better position, but to use the extrapolation of these figures
0:21:49 > 0:21:53and saying that Scotland would be in a worse situation as it was
0:21:53 > 0:21:59independent, misrepresents that an independent Scotland would pursue
0:21:59 > 0:22:04its own economic agenda. Scotland has had a fiscal deficit for 25
0:22:05 > 0:22:09years now, nothing to be proud of, have quarter of a century, so we
0:22:09 > 0:22:15have repeatedly be in a position to rely on the UK for spending
0:22:15 > 0:22:18commitments. -- been in a position. The rescue of the banks have few
0:22:18 > 0:22:23years back, that could not happen in an independent Scotland, we are
0:22:23 > 0:22:28not big enough to find that money to rescue the two biggest companies,
0:22:28 > 0:22:33so we would end up in a situation like Greece, Portugal or Orrell and
0:22:33 > 0:22:39very are vulnerable and pensions would be at risk in that situation.
0:22:39 > 0:22:47-- board to go or the Republic of Ireland, where they are vulnerable.
0:22:47 > 0:22:52You can get round the stages, but only by cutting public spending or
0:22:52 > 0:22:55raising taxes, I cannot see any other way round its. He would say
0:22:55 > 0:22:58the fact that we're independent would mean that there is hugely
0:22:58 > 0:23:03greater economic growth are something, but the cold reality of
0:23:03 > 0:23:09it is, you have to put up taxes or cut public spending. You grow the
0:23:09 > 0:23:12economy, Gordon, and that is what we would seek to do. Even the UK
0:23:13 > 0:23:19government's Business Secretary is saying that the UK government's
0:23:19 > 0:23:24policies are not good for growth. We would grow the economy in an end
0:23:24 > 0:23:28independent Scotland and seek policies to enhance growth and
0:23:28 > 0:23:32rather than the policies of austerity that are pursued at the
0:23:32 > 0:23:36moment. We all want to grow the economy, but I do not want to lose