:00:09. > :00:12.Tonight on Newsnight Scotland: As unemployment falls across the UK,
:00:12. > :00:17.the governments in London and Edinburgh both claim the credit -
:00:17. > :00:20.does either of them have a point? Meanwhile, Holyrood votes for the
:00:20. > :00:25.Scotland Bill. If the Scottish Government had the new tax powers
:00:25. > :00:28.in that, would it make the slightest bit of difference?
:00:28. > :00:31.Good evening. The headline unemployment figures in Scotland
:00:31. > :00:34.and the UK have taken a turn for the better - and Scotland once
:00:34. > :00:36.again has a slightly lower unemployment rate than the UK
:00:36. > :00:40.average. New figures today also showed the Scottish economy shrank
:00:40. > :00:43.slightly less than the UK as a whole towards the end of last year.
:00:43. > :00:53.So, has a corner finally been turned? And if it has, can the
:00:53. > :01:00.
:01:00. > :01:05.governments in Edinburgh or London We have been getting used to hard
:01:05. > :01:09.times, maybe a bit too used. But today, there were figures on the
:01:09. > :01:14.economies, which forced everyone to look twice. Maybe not quite enough
:01:14. > :01:24.to be dancing in the street, but there might just be some light at
:01:24. > :01:32.the end of the tunnel. Unemployment north of the border is running at
:01:32. > :01:37.8.1%, down 12,000. The Scottish employment rate is up on the
:01:37. > :01:44.previous quarter. Figures on the overall economy show group was up
:01:44. > :01:52.half a per cent, but last quarter, growth was down. Export growth flat
:01:52. > :01:59.lined at 0%, although, over the year, exports rose 4%? This project
:01:59. > :02:04.has got over the first stage. The First Minister has written to the
:02:04. > :02:09.Prime Minister, pointing out he has �200 million worth of projects
:02:09. > :02:15.ready to go. It the Prime Minister would just relief that -- release
:02:15. > :02:25.that extra bit of cash. Unemployment is still too high.
:02:25. > :02:26.
:02:26. > :02:34.There is a lot to like about these figures. A third of the drop in
:02:34. > :02:40.unemployment is in Scotland. Inactivity rates are low. Scotland
:02:40. > :02:46.is outperforming the rest of the UK. I am pleased to say unemployment is
:02:46. > :02:51.coming down, and youth unemployment is coming down. No room for
:02:51. > :02:58.complacency. We are continuing to work hard to contain the right
:02:58. > :03:03.conditions for sustainable growth. So, has the pick up started? Is the
:03:03. > :03:10.tide turning? Are we seeing the green shoots of recovery? Scotland
:03:10. > :03:15.is doing better than many parts of the UK. In terms of the overall UK,
:03:15. > :03:25.including London, the recovery has been we go here. We lost more jobs
:03:25. > :03:35.
:03:35. > :03:39.in Scotland. Very close, however. Problems remain, though. The
:03:39. > :03:43.eurozone still has to survive the difficulties, and large economies
:03:43. > :03:53.like Spain, and the Bank of England has concerns about inflation coming
:03:53. > :03:54.
:03:54. > :03:59.back. But in Glasgow, the Shopping City, Mary Portas is confident
:03:59. > :04:03.enough to launch a new shop in the House of Fraser. The economy is in
:04:03. > :04:08.a tough place. People are thinking about where they are spending their
:04:08. > :04:15.money. When you look at some businesses, they are delivering
:04:15. > :04:19.what customers feel this good value. I mean it value in terms of good
:04:19. > :04:25.value. I think what we will see, coming at the other end of this
:04:25. > :04:35.economy, is better at retailing. That will be driven by customers
:04:35. > :04:37.
:04:37. > :04:42.not compromising. We have had years where it has been mediocre. I am
:04:42. > :04:47.hoping all come out is that we will have less. But it will have better
:04:47. > :04:53.retail. The Scottish Government is inviting this Parliament to consent
:04:53. > :04:58.to the Scotland Bill. MSPs were debating the Scotland Bill, which
:04:58. > :05:04.will give the Scotland government more fiscal powers. But that will
:05:04. > :05:08.not happen until 2015, and before that, there is a small matter of an
:05:08. > :05:10.independence referendum. I'm joined now in Glasgow by
:05:10. > :05:13.Scottish Labour's finance spokesman, Ken Macintosh MSP, in London by
:05:13. > :05:16.Malcolm Bruce, an MP who's also President of the Scottish Liberal
:05:16. > :05:25.Democrats, and in Edinburgh, Mark Macdonald MSP, who's an SNP member
:05:25. > :05:33.of Holyrood's Finance Committee. You would say this is not just good
:05:33. > :05:38.news. But George Osborne's economic policies might be working? If only
:05:38. > :05:42.that were the case! I don't think any one of us would be welcoming of
:05:42. > :05:49.the fact that this is a small improvement in unemployment, but
:05:49. > :05:54.that has been matched by a downturn in GDP. The mixed picture. It is
:05:54. > :05:59.too early to say if this has turned a corner. I would be interested to
:05:59. > :06:04.hear from the Westminster government, which of its policies
:06:04. > :06:14.has caused its turnaround. Was at the cup on the housing budget? Or
:06:14. > :06:15.
:06:15. > :06:19.the college budget? -- was that the cut. Does this show that brought --
:06:19. > :06:25.George Osborne's economic policies are having effect? I do not think
:06:25. > :06:32.you should determine at one set of figures as a turnaround. We have a
:06:32. > :06:37.long way to go. The fundamentals are that we are bearing down on the
:06:37. > :06:41.public sector deficit, and doing it in ways we are ensure that we have
:06:41. > :06:45.low interest rates. Before the election, the UK Government was
:06:45. > :06:49.paying high interest rates than Spain or Italy, but that is far
:06:49. > :06:53.from the case now. That create space for the economy and the
:06:54. > :06:58.confidence to growth. To with our trading partners flat lining, it is
:06:58. > :07:03.extremely challenging. But we have to stick to policies to ensure we
:07:03. > :07:07.keep interest rates down, and we get public finances back in order.
:07:07. > :07:11.We need to target employment opportunities for young people in
:07:11. > :07:20.particular, and by cutting corporation tax, gives incentives
:07:20. > :07:24.for investment. Your counterparts in Edinburgh claim it is their
:07:24. > :07:29.policies responsible for unemployment falling. Do you take
:07:30. > :07:33.that seriously? I think we should work together. When things are good
:07:33. > :07:38.in Scotland, it is the credit of the Scottish Government. When
:07:38. > :07:46.things are bad, it is the fault of the Westminster government. I think
:07:46. > :07:53.that is dysfunctional. We have to do things together. There our
:07:53. > :07:58.policies -- and there are policies which we can turn around. Indeed,
:07:58. > :08:05.the First Minister wants more money to borrowed. He had �300 million
:08:05. > :08:15.only four months ago. I don't think a project he could have funded. The
:08:15. > :08:16.
:08:16. > :08:22.Scottish Government should do what they have the power to do. Can you
:08:22. > :08:26.answer the question, which is, which precise policies are
:08:26. > :08:31.responsible for the claim the Scottish Government makes that it
:08:31. > :08:36.can take some of the credit for this? It is good to hear Ken
:08:36. > :08:41.Mackintosh welcoming these figures. I think what is clear is there if
:08:41. > :08:46.you look at the youth employment figures, where Scotland is
:08:46. > :08:51.outperforming the rest of the UK, where the Scottish Government is
:08:51. > :08:53.investing in modern apprenticeships linked to jobs, and has implemented
:08:54. > :09:02.a minister for youth employment, you can clearly see actions being
:09:02. > :09:12.taken by the Scottish Government which a having an impact. When was
:09:12. > :09:13.
:09:13. > :09:20.the minister for youth employment appointed? He has only been there a
:09:20. > :09:23.job for a few weeks! The action she has taken it will complement modern
:09:23. > :09:33.apprenticeships linked to jobs, which is about getting young people
:09:33. > :09:35.
:09:35. > :09:45.into work. We get this from your party or the time, don't we? -- all
:09:45. > :09:47.
:09:47. > :09:53.the time. A bald is, the SNP have cut the college budget. -- the
:09:53. > :09:57.trouble is. They are not delivering on these policies. The SNP and
:09:57. > :10:02.Labour would agree that the austerity programme for Westminster
:10:02. > :10:09.is not good for the economy, and it is almost impossible to claim from
:10:09. > :10:14.today's figures that austerity is creating growth. I said that by
:10:14. > :10:19.tackling the deficit, we have given confidence to the markets. If we
:10:19. > :10:23.pursued Labour's policy, interest rates would go up, the cost of
:10:23. > :10:27.borrowing would go up, and the economy would go down. That may not
:10:27. > :10:33.be easy to swallow, but we then have to target youth unemployment,
:10:33. > :10:39.and I want to say to mark, the youth contract is delivering that.
:10:39. > :10:43.And yes, the Scottish apprentice scheme is as well. Let us work and
:10:43. > :10:47.co-ordinate this together. We should not spend so much time
:10:47. > :10:52.saying, our job is better than yours. Put the policies together
:10:52. > :11:00.and deliver from the young people of Scotland. When you say you can
:11:00. > :11:04.assure us if it were not for the scale of the austerity programme
:11:04. > :11:09.that George Osborne is implementing, interest rates would be higher,
:11:09. > :11:19.that is an article of faith on your part. You do not have any evidence
:11:19. > :11:26.on that. We do, actually. The strategy being pursued is the right
:11:26. > :11:31.one, and if we were to pursue a different strategy, the markets
:11:31. > :11:34.would not support it. Interest rates would go up consequently.
:11:34. > :11:39.That is the problem facing Spain and Italy because they are not
:11:39. > :11:42.tackling their problem. The evidence is overwhelming, and we
:11:42. > :11:48.have to be creative and find measures that will help target
:11:48. > :11:58.investment and jobs, and we have to hope our trading partners do the
:11:58. > :12:01.
:12:01. > :12:05.same thing. Do you by that I think that Malcolm Bruce should
:12:05. > :12:10.look at the opinions that have stated but the policies of
:12:10. > :12:15.austerity are not policy that would lead to economic recovery. The
:12:15. > :12:19.Scottish government was asked to present a list of projects which
:12:19. > :12:25.could be delivered with increased capital expenditure and we did
:12:25. > :12:34.that... If you got the money so why don't you do it? I am also
:12:34. > :12:37.interested in the. About these projects and your opinion. The
:12:37. > :12:42.British Government have to borrow money and the argument Malcolm
:12:42. > :12:46.Bruce is making is that borrowing money to finance that type of thing
:12:46. > :12:51.would risk Britain's credit rating and make economic matters better -
:12:51. > :12:55.a worse rather than better. I'm interested to know if you have any
:12:55. > :12:58.fundamental disagreement with that view. We have already seen recent
:12:58. > :13:08.argument stating that the UK Government's credit rating is
:13:08. > :13:13.
:13:13. > :13:18.already being given a worries. I do not believe in just borrowing money
:13:18. > :13:23.for borrowing money's stake. Ask me about sustainable economic growth.
:13:23. > :13:27.One of the things that will lead to that is increased capital
:13:27. > :13:34.expenditure. Ken and I do agree on this fact because it was one of the
:13:34. > :13:39.five points in Labour's five-point plan for economic growth. I still
:13:39. > :13:42.want to know what do you think of Malcolm Bruce's arguments which is
:13:42. > :13:47.that this is very fine and we would love to throw money at things but
:13:47. > :13:50.if we do that we risk Britain's credit rating which could end up
:13:50. > :13:56.making the state of the economy worse rather than better. In all
:13:56. > :13:59.you have said, you have not address that fundamental argument. It is a
:13:59. > :14:04.straw man argument being used here. It is essentially saying that we
:14:04. > :14:07.would like to do this but if we do this bad things will happen. In
:14:07. > :14:12.case Malcolm and his colleagues have not looked around, things are
:14:12. > :14:18.not exactly rosy. Labour did it before the last election and bad
:14:18. > :14:24.things happened! That is precisely why we are in this mess. It helps
:14:24. > :14:29.if you keep once at a time. Ken Macintosh is not getting a word in
:14:29. > :14:33.edgeways. The program you put forward in the last election,
:14:33. > :14:37.actually there was probably only about �3 billion worth of
:14:38. > :14:42.difference in the terms of the cut by George Osborne has made so far
:14:42. > :14:50.compared to what Alastair Darling has in his plan. Is that not right?
:14:50. > :15:00.Our fundamental argument is that... Address that. First. Your programme
:15:00. > :15:04.for government was to cut public spending. Is it not the case that
:15:04. > :15:11.it was almost as much as has been cut by the Tories. No, that is not
:15:11. > :15:17.the case. We would not have cut as hard as fast. Not any that...
:15:17. > :15:21.interested in Malcolm Bruce's perspective. You would. You would
:15:21. > :15:25.have had the health budget which we have increased and that would have
:15:25. > :15:28.had consequences for Scotland. You have to recognise that it was
:15:28. > :15:33.borrowing excessively that got us into the mess and it will not get
:15:33. > :15:37.us out of it. Please to disappoint you were making. The Tories and
:15:37. > :15:40.Liberals have borrowed �150 million more than they planned to. It is
:15:40. > :15:45.the tax decisions they are making as well. It is not just the
:15:45. > :15:48.austerity measures but they are implementing decisions, for example
:15:48. > :15:52.they are giving tax breaks to the better of rather than cutting VAT
:15:52. > :15:59.and putting money into people's pockets. It is the sense of
:15:59. > :16:03.fairness and their priorities. Austerity does not create consumer
:16:03. > :16:07.confidence. We are running out of time. I have got to change the
:16:07. > :16:11.subject Malcolm Bruce. Instead of getting indignant about that,
:16:11. > :16:14.answer this question. If the Scotland Bill witchy were keen on
:16:14. > :16:18.was in place now and the Scottish government had all the tax power
:16:18. > :16:20.was it is getting, would that make the slightest bit of difference to
:16:20. > :16:24.its ability to do anything about the things we have been talking
:16:25. > :16:28.about for the last few minutes. would change the dynamics of the
:16:28. > :16:32.way it approaches things. If they pursue policies which created jobs
:16:33. > :16:37.and income, it would raise their taxpayers. What they should do is
:16:37. > :16:41.focus on things that would deliver more jobs and more income and
:16:41. > :16:47.deliver more income tax so they can reinvest in the economy. They
:16:47. > :16:50.should not focus on cutting taxes? I do not think in the presence
:16:50. > :16:54.circumstance that cutting taxes on top of the tax cuts they have
:16:54. > :16:59.already done is the way to start. If Holyrood had the new Scotland
:16:59. > :17:06.deal -- Bill, your policy would be not to use it? I would use it on
:17:06. > :17:10.focusing on creating jobs... You do not need this column milk to -- the
:17:10. > :17:14.Scotland Bill to do that. In the present circumstances I would argue
:17:14. > :17:20.that what you need to do is grow the Scottish economy so you have a
:17:20. > :17:28.dynamic benefit from that income tax. That makes a difference with
:17:28. > :17:32.the big you do not Controller Sumner gives you extra revenue.
:17:32. > :17:37.This would have allowed us to see the Scottish government's plans for
:17:37. > :17:42.tax. They talk about rescuing people from the welfare cuts of the
:17:42. > :17:46.Tories and cutting corporation tax. Do you have any proposals to raise
:17:46. > :17:50.or lower the tax bill that you would have? Not at the moment
:17:50. > :17:58.because we do not have the power and we are in opposition. What we
:17:58. > :18:02.would do, we would use the power was we have but the point is that
:18:02. > :18:05.and there are so many powers at the moment that we have seen a Scottish
:18:05. > :18:09.government give away the biggest procurement contract ever to China
:18:09. > :18:15.and Spain. It is Scottish jobs and money and they have given it away.
:18:15. > :18:17.That is a sign of a responsible government. Mark, do you think the
:18:17. > :18:21.Scotland Bill that you have voted for would make the slightest
:18:21. > :18:25.difference to what we have been talking about? We voted for the
:18:25. > :18:29.Scotland Bill because the harmful effects that were in the original
:18:29. > :18:32.Bill have been taken out and I think it is the constructive thing
:18:32. > :18:36.to do to vote for it. I think it has been overwhelmingly overtaken
:18:36. > :18:41.by events and most of the powers that will accrue to Scotland will
:18:41. > :18:45.not accrue until after the referendum in 2014 and I fully
:18:45. > :18:50.expect a yes vote in that referendum which will render much
:18:50. > :18:56.of this null and void. It is pretty rich form a come to start talking
:18:56. > :19:01.about the austerity policies... us stick to the point. Would you
:19:01. > :19:06.have any proposals if you had the power was at the moment to raise or
:19:06. > :19:11.lower income tax. A we have laid out a range of taxation policies.
:19:11. > :19:15.One of the problems of the Scotland Bill is that you are only having a
:19:15. > :19:20.small amount of influence over taxation policy in general. That is
:19:20. > :19:26.one of the key arguments for independence, being able to control
:19:26. > :19:29.all of the taxation rather than just some of it. And all of the
:19:29. > :19:39.liabilities. OK, we have three of you voting in favour of the Bill
:19:39. > :19:46.
:19:46. > :19:51.but none of the have proposals on The Herald claims that Strathclyde
:19:51. > :19:58.Police Constable's are about to apologise. In Leeds on the story be
:19:58. > :20:03.have been talking about. Scotland climbing out of economic doldrums.
:20:03. > :20:09.In the Independent we have a story about Abu Qatada or and the Home