:00:12. > :00:15.will do. Thank you for joining us Tonight on Newsnight Scotland, deep
:00:15. > :00:21.water drilling for oil off the coast of Shetland is given the go-
:00:21. > :00:24.ahead. BP says that safety is its absolute priority, but given the
:00:24. > :00:27.company's involvement in the Deepwater Horizon disaster two
:00:27. > :00:32.years ago, should the rest of us take that seriously?
:00:32. > :00:36.There has been an outcry at changes to pensioner taxes in the Budget.
:00:36. > :00:40.Why shouldn't the elderly help to pay the costs of austerity?
:00:40. > :00:44.No sooner has the Chancellor announced billions to support new
:00:44. > :00:48.investment in oil extraction West of Shetland, then his Government
:00:48. > :00:53.gives the go-ahead for a massive new deep sea oil well West of
:00:53. > :01:02.Shetland. The energy minister has told BP that they can go ahead and
:01:03. > :01:06.drill in water that is 1300 metres deep, which is a similar depth to
:01:06. > :01:13.the well in the Gulf of Mexico. Media coverage of the oil industry
:01:13. > :01:16.over the years has tended to be negative, because apart from the
:01:16. > :01:22.danger of accidents on oil rigs, the fear of pollution has been a
:01:22. > :01:26.constant issue. In the 60s, this disaster of the South coast of
:01:26. > :01:36.England killed thousands of seabirds. The Epsom bar these oil
:01:36. > :01:37.
:01:37. > :01:42.spill Row and part of Alaska's coastline. -- ruined part of
:01:42. > :01:47.Alaska's coastline. An explosion in the Gulf of Mexico shattered BP's
:01:47. > :01:50.reputation in America two years ago. The Government was at pains to
:01:50. > :01:54.point out how carefully they had scrutinised their plans and
:01:54. > :01:57.proposals for dealing with an emergency. Friends of the Earth
:01:57. > :02:01.said that the proposal was extremely alarming and that any
:02:01. > :02:07.Government money should be going into renewable energy. I am joined
:02:07. > :02:11.by David Hunter from an energy group. Apart from the controversy,
:02:12. > :02:15.can you explain why they want to do deep sea oil drilling? There are
:02:15. > :02:20.oil fields already that have not use this technology. I think they
:02:20. > :02:24.are. They have been around for 20 years. It is about extending the
:02:24. > :02:29.life of the UK continental shelf in the North Sea and this is the last
:02:29. > :02:33.frontier, if you like, of new exploration. Many people will be
:02:33. > :02:36.worried about this because of what happened two years ago. Do you
:02:36. > :02:40.think people are right to be worried? I think people are
:02:40. > :02:45.absolutely right to be concerned about what happened. It was a human
:02:46. > :02:48.and environmental tragedy. People have to look at the balance of risk
:02:48. > :02:52.and the record in the UK continental shelf in the North Sea
:02:52. > :02:58.has been pretty good over the years, when you consider the amount of oil
:02:58. > :03:02.that has been extracted. BP as a company has learnt lots of lessons
:03:02. > :03:09.in particular. This has been analysed to the nth degree, so we
:03:09. > :03:13.can have a reasonable degree of confidence. Sure, but I am not an
:03:13. > :03:17.expert on conditions in the South of Mexico, but I would imagine that
:03:17. > :03:20.the sort of weather conditions that you get in the Atlantic off
:03:20. > :03:26.Shetland are considerably more severe, apart from hurricanes in
:03:26. > :03:30.the Gulf of Mexico obviously. It is not clear why we should be terribly
:03:30. > :03:36.relaxed about this, no matter what they have done. There is always
:03:36. > :03:45.going to be a risk. There is always going to be a risk. If you look at
:03:45. > :03:50.who is best placed to do it, the Scottish industries probably have
:03:50. > :03:53.the global expertise and the skills to do that. There are risks. It is
:03:53. > :03:59.about throwing the technology and understanding that it to mitigate
:03:59. > :04:03.the risks. Do you know what they will do now that they were not
:04:03. > :04:07.doing when this disaster happened a couple of years ago? It has been
:04:07. > :04:10.reviewed by BP and governments and the Treasury select committee. They
:04:10. > :04:14.looked at this at the start of last year and they felt that the
:04:14. > :04:18.existing regulatory arrangements that were in place were robust and
:04:18. > :04:22.lessons had to be learnt. For example, the real trigger for the
:04:23. > :04:32.disaster in the Gulf of Mexico alter that he was the blare out
:04:33. > :04:35.
:04:35. > :04:38.prevent and the blind shear Ram on it. -- ultimately was. It is simple
:04:38. > :04:42.things like don't let the batteries run out. That could have stopped
:04:42. > :04:46.the tragedy from happening. having back-up parts, was an that
:04:46. > :04:51.one of the issues? They could not get something quickly enough to put
:04:51. > :05:00.in its place? When it had failed, there were significant difficulties.
:05:00. > :05:06.They need to double up and improve the fail-safe. Assuming this goes
:05:06. > :05:09.well, what effect could this have on UK oil reserves if deep sea
:05:09. > :05:14.drilling off the West of Shetland takes place? Perhaps it could
:05:14. > :05:23.happen elsewhere as well? Deep Sea drilling is also an area of
:05:23. > :05:27.expansion. There are concerns about the stability of the regime over
:05:27. > :05:30.decommissioning costs. Extracting more life out of existing oil
:05:30. > :05:33.fields will be important. Some people believe that in money terms
:05:33. > :05:37.there is slightly more to be extracted from the North Sea than
:05:37. > :05:43.we have up until now. Deep Sea drilling is an important part of
:05:43. > :05:50.that? It is, absolutely. Is it just to the West of Shetland? Are there
:05:50. > :05:54.other areas? Presumably the North Sea is too shallow. Could you do it
:05:54. > :05:58.elsewhere? In terms of the UK, the West of Shetland is the principal
:05:58. > :06:05.area. Other developments that we are likely to see is getting
:06:05. > :06:08.residual oil out of other existing fields. Presumably this technology
:06:08. > :06:15.is very expensive and it must depend on oil prices staying at
:06:15. > :06:19.roughly, well, what are they? $120 a barrel. Something like that. If
:06:19. > :06:23.that falls, do you not go ahead? These investment decisions are
:06:23. > :06:27.long-term decisions, so once they are in, I guess they are in, to an
:06:27. > :06:33.extent. That might stop new investments. Saudi Arabia balances
:06:33. > :06:41.its Budget on $90, so we can expect high prices for some time to come.
:06:41. > :06:44.Thank you for joining us. You cannae shove your granny aff a
:06:44. > :06:47.front page. There was universal media condemnation today for what
:06:47. > :06:50.the Chancellor probably thought was a neat sleight of hand when he both
:06:50. > :06:53.froze and withdrew tax allowances for the over 65s. After all he was
:06:53. > :06:56.putting up the state pension by over a fiver. Ever since, he's been
:06:56. > :06:59.harangued by Britain's elderly like a mugger chased by a handbag-
:06:59. > :07:09.wielding granny. But, as Derek Bateman reports, that doesn't make
:07:09. > :07:12.
:07:12. > :07:17.If you were born in the 1950s you were part of the post-war birth
:07:17. > :07:22.boom in the Western world. Improving health, burgeoning
:07:22. > :07:27.economies and optimism led to decades of feel-good living,
:07:27. > :07:31.including pensions. But now it is the age of austerity. They have to
:07:31. > :07:36.be supported by those still working and his own wealth is diminishing
:07:36. > :07:44.and whose pensions will be somewhere between poor and... What
:07:44. > :07:48.pension? The elderly already have many benefits. Often they are
:07:48. > :07:53.benefits that the over-sixties can afford to live without, like a bus
:07:53. > :07:59.pass. And here is mine. And there is a convention that the elderly
:07:59. > :08:07.deserve to be protected, but do they? Well, up to a point. In fact,
:08:07. > :08:11.they are a growing global menace. And at what price? That is the
:08:11. > :08:14.million dollar question. First you have to decide what to quality of
:08:14. > :08:18.living you want your older population to have and whether you
:08:18. > :08:23.can afford this. There is a big concern we cannot afford what we
:08:23. > :08:30.have now. We will have to encourage people to save more, work longer
:08:30. > :08:34.and we will have to become more selective on what -- on whom we
:08:34. > :08:40.give these benefits to. Westminster decision was echoing
:08:40. > :08:50.around Holyrood. It is the 330,000 current pensioners who will be
:08:50. > :08:55.affected. By 2016-17 the effect will be �220 more in income tax and
:08:55. > :08:59.the number of pensioners affected will have risen to 500,000. I say
:08:59. > :09:07.to the member, that is half a million pensioners backed his party
:09:07. > :09:12.has punished. -- and that his party has punished.
:09:12. > :09:21.The Chancellor may have thought the elderly would not notice his tax-
:09:21. > :09:24.relief switch. It leaves are those 65 just after April 13th without a
:09:25. > :09:32.age-related tax allowance but there will still get a personal allowance
:09:32. > :09:41.of over �9,000. Someone turning to 65 just before April 30th will give
:09:41. > :09:51.a personal allowance 1,200 pounds higher. I feel we are being ignored.
:09:51. > :09:56.Not ripped off but just ignored. The problems were being ignored.
:09:56. > :10:06.looks as if the next generation is going to be the first one in living
:10:06. > :10:06.
:10:06. > :10:11.memory that will be worse off than before? Absolutely. I do not have
:10:11. > :10:16.an answer for that. What I am here to talk about just now it is I am
:10:16. > :10:21.very aware we have the highest level of child poverty in this
:10:21. > :10:27.country for about 20 years, which is absolutely shocking. But it is
:10:27. > :10:34.also shocking when we get pensioners without a decent income
:10:34. > :10:39.being rationalised might be a word. But I would say probably got act.
:10:39. > :10:44.And just, perhaps, but the evidence is all around us that everyone is
:10:44. > :10:48.not equal in society. It makes no sense to me that people who can
:10:48. > :10:52.live comfortably in their old age are paid the same pension as
:10:52. > :11:00.someone who does not have that luxury. We have to be more
:11:00. > :11:05.selective. The top end of the state pension does not have really impact.
:11:06. > :11:11.So if you have an occupational pension, you may be disbarred from
:11:11. > :11:16.also taking a state pension. Unless they raise the dawning of a new age,
:11:16. > :11:23.constant financial support for huge numbers of the retired will remain
:11:23. > :11:27.a baby boomers' psychedelic dream. I am a joint from Edinburgh by a
:11:27. > :11:32.Callum Chomczuk, senior policy officer for a Scotland, and by Alex
:11:32. > :11:36.Massie, who writes for the Spectator, and today published a
:11:36. > :11:42.title elegantly titled -- an article elegantly titled Soak The
:11:42. > :11:49.Old. The Institute for Fiscal Studies has been clinched today
:11:49. > :11:56.that actually pensioners are not that much affected. Individually,
:11:56. > :12:00.grannies are great. Collectively, they are an enormous problem. We
:12:00. > :12:07.spent �104 billion on pensions last year and that will increase. When
:12:07. > :12:12.we think of grannies living alone in a freezing it flats existing on
:12:12. > :12:16.cat food is a terrible image but the reality is that most pensioners
:12:16. > :12:21.do not live like that. This is the wealthy his generation of
:12:21. > :12:25.pensioners this country has ever known. It is likely to remain so.
:12:25. > :12:31.They have a better standard of living, more comfortable, that is
:12:31. > :12:35.likely to be faced by young people today. Asking pensioners to give up
:12:35. > :12:40.a little bit of their benefits at a time when everybody is being
:12:40. > :12:45.hammered by the Chancellor does not strike me as being a wholly
:12:45. > :12:50.unreasonable thing. Why shouldn't - - why should pensioners receive
:12:50. > :12:54.more generous allowances than on pensioners? It is not just general
:12:54. > :12:58.allowances, is it? The Financial Times did some research where they
:12:58. > :13:01.found that for the first time people in their 60s and seventies
:13:01. > :13:06.were earning more, have more disposable income than people in
:13:06. > :13:10.their twenties and thirties. It is absolutely true, there was a large
:13:10. > :13:13.number of pensioners with a great deal of wealth but there is huge
:13:13. > :13:17.inequality among the pensioner population and some really are
:13:17. > :13:21.living on the poverty line. Yesterday's announcement from the
:13:21. > :13:26.Chancellor will really exacerbate that for many of them. Hang on,
:13:26. > :13:32.let's be clear. It went because the any pensioners who will be affected
:13:32. > :13:39.by the changes in the tax thresholds are the relatively well
:13:39. > :13:45.off pensioners. Now, if you have an income of just over �10,000, you
:13:45. > :13:50.are -- you expected income could drop by �5 per week and if the
:13:50. > :13:56.Chancellor was to announce a �5 per week drop in the state pension
:13:56. > :14:00.there would be riots on the streets. Of course, the better of pensioners,
:14:00. > :14:04.he has just announced a rise in the state pension by making the whole
:14:04. > :14:09.thing a flat rate, so it is no longer means tested. We still have
:14:09. > :14:15.to wait for more details. We have heard it for quite some time about
:14:15. > :14:18.plans to bring in a flat-rate pension but the detail behind at...
:14:18. > :14:22.Yes, but... You would accept Alex Massie's general principle, there
:14:22. > :14:32.was no reason that the elderly should not share... You argument
:14:32. > :14:32.
:14:32. > :14:41.would be if you are going to help - - target the elderly, targeted at
:14:41. > :14:45.poor pensioners. We will see as a piece to discuss, young people are
:14:45. > :14:48.suffering through the economic climate and older people are quite
:14:48. > :14:54.comfortable but this is a really short-sighted point that the
:14:54. > :14:58.Chancellor has pursued here. The principle of having a tea at tax
:14:58. > :15:03.limit for older people is they do not have the potential to increase
:15:03. > :15:08.their income which the working population do. That does not exist
:15:09. > :15:14.for older people. Also the Chancellor really undermined the
:15:14. > :15:19.point of savings. Alex Massie, what are you are doing, that there
:15:19. > :15:24.should be some change? It has been quite striking that a lot of the
:15:24. > :15:31.protest today, you have heard of are to people with pensions saying
:15:31. > :15:38.they should not be paying any tax at all. A pensioner on �20,000 a
:15:38. > :15:44.year pays approximately 200 -- �2,300 of tax. A working person
:15:44. > :15:48.pays approximately �3,800 in tax. Quite a difference. Pensioners are
:15:48. > :15:52.already exempt from National Insurance which most people do not
:15:52. > :15:55.our problem with. But the basic state pension is also due to a rise
:15:55. > :15:59.-- a rise by approximately 40% during the course of this
:15:59. > :16:08.Parliament. There is nobody in the private or public sector who will
:16:08. > :16:14.enjoy a pay increases of that sort of magnitude. But it gets very
:16:14. > :16:17.moralistic... And economic problem is what it is. Its there is and
:16:17. > :16:22.demo Gromit problem you can solve it by things like, for example,
:16:22. > :16:26.immigration. Yes, we will need more immigrants in the next 30 or 40
:16:26. > :16:31.years to deal with some of the consequences of a rapidly ageing
:16:31. > :16:36.population. But this is not about hammering the poorest pensioners.
:16:36. > :16:39.The poorest pensioners are not affected by this. But fundamentally,
:16:39. > :16:43.at some point we will also have to look at whether we maintain a
:16:43. > :16:50.system of universal benefits. you, both.
:16:50. > :16:56.The front pages for tomorrow. The Scotsman. 1.3 million forced to pay
:16:56. > :17:02.higher income tax. This is people being brought into the higher tax
:17:02. > :17:06.band by the Budgets yesterday. It claims the... For the Financial
:17:06. > :17:09.Times, Osbourne bites back in row over granny tax, it says. And the