18/04/2012 Newsnight Scotland

Tonight on Newsnight Scotland: As unemployment falls across the UK,

the governments in London and Edinburgh both claim the credit -

does either of them have a point? Meanwhile, Holyrood votes for the

Scotland Bill. If the Scottish Government had the new tax powers

in that, would it make the slightest bit of difference?

Good evening. The headline unemployment figures in Scotland

and the UK have taken a turn for the better - and Scotland once

again has a slightly lower unemployment rate than the UK

average. New figures today also showed the Scottish economy shrank

slightly less than the UK as a whole towards the end of last year.

So, has a corner finally been turned? And if it has, can the

governments in Edinburgh or London We have been getting used to hard

times, maybe a bit too used. But today, there were figures on the

economies, which forced everyone to look twice. Maybe not quite enough

to be dancing in the street, but there might just be some light at

the end of the tunnel. Unemployment north of the border is running at

8.1%, down 12,000. The Scottish employment rate is up on the

previous quarter. Figures on the overall economy show group was up

half a per cent, but last quarter, growth was down. Export growth flat

lined at 0%, although, over the year, exports rose 4%? This project

has got over the first stage. The First Minister has written to the

Prime Minister, pointing out he has �200 million worth of projects

ready to go. It the Prime Minister would just relief that -- release

that extra bit of cash. Unemployment is still too high.

There is a lot to like about these figures. A third of the drop in

unemployment is in Scotland. Inactivity rates are low. Scotland

is outperforming the rest of the UK. I am pleased to say unemployment is

coming down, and youth unemployment is coming down. No room for

complacency. We are continuing to work hard to contain the right

conditions for sustainable growth. So, has the pick up started? Is the

tide turning? Are we seeing the green shoots of recovery? Scotland

is doing better than many parts of the UK. In terms of the overall UK,

including London, the recovery has been we go here. We lost more jobs

in Scotland. Very close, however. Problems remain, though. The

eurozone still has to survive the difficulties, and large economies

like Spain, and the Bank of England has concerns about inflation coming

back. But in Glasgow, the Shopping City, Mary Portas is confident

enough to launch a new shop in the House of Fraser. The economy is in

a tough place. People are thinking about where they are spending their

money. When you look at some businesses, they are delivering

what customers feel this good value. I mean it value in terms of good

value. I think what we will see, coming at the other end of this

economy, is better at retailing. That will be driven by customers

not compromising. We have had years where it has been mediocre. I am

hoping all come out is that we will have less. But it will have better

retail. The Scottish Government is inviting this Parliament to consent

to the Scotland Bill. MSPs were debating the Scotland Bill, which

will give the Scotland government more fiscal powers. But that will

not happen until 2015, and before that, there is a small matter of an

independence referendum. I'm joined now in Glasgow by

Scottish Labour's finance spokesman, Ken Macintosh MSP, in London by

Malcolm Bruce, an MP who's also President of the Scottish Liberal

Democrats, and in Edinburgh, Mark Macdonald MSP, who's an SNP member

of Holyrood's Finance Committee. You would say this is not just good

news. But George Osborne's economic policies might be working? If only

that were the case! I don't think any one of us would be welcoming of

the fact that this is a small improvement in unemployment, but

that has been matched by a downturn in GDP. The mixed picture. It is

too early to say if this has turned a corner. I would be interested to

hear from the Westminster government, which of its policies

has caused its turnaround. Was at the cup on the housing budget? Or

the college budget? -- was that the cut. Does this show that brought --

George Osborne's economic policies are having effect? I do not think

you should determine at one set of figures as a turnaround. We have a

long way to go. The fundamentals are that we are bearing down on the

public sector deficit, and doing it in ways we are ensure that we have

low interest rates. Before the election, the UK Government was

paying high interest rates than Spain or Italy, but that is far

from the case now. That create space for the economy and the

confidence to growth. To with our trading partners flat lining, it is

extremely challenging. But we have to stick to policies to ensure we

keep interest rates down, and we get public finances back in order.

We need to target employment opportunities for young people in

particular, and by cutting corporation tax, gives incentives

for investment. Your counterparts in Edinburgh claim it is their

policies responsible for unemployment falling. Do you take

that seriously? I think we should work together. When things are good

in Scotland, it is the credit of the Scottish Government. When

things are bad, it is the fault of the Westminster government. I think

that is dysfunctional. We have to do things together. There our

policies -- and there are policies which we can turn around. Indeed,

the First Minister wants more money to borrowed. He had �300 million

only four months ago. I don't think a project he could have funded. The

Scottish Government should do what they have the power to do. Can you

answer the question, which is, which precise policies are

responsible for the claim the Scottish Government makes that it

can take some of the credit for this? It is good to hear Ken

Mackintosh welcoming these figures. I think what is clear is there if

you look at the youth employment figures, where Scotland is

outperforming the rest of the UK, where the Scottish Government is

investing in modern apprenticeships linked to jobs, and has implemented

a minister for youth employment, you can clearly see actions being

taken by the Scottish Government which a having an impact. When was

the minister for youth employment appointed? He has only been there a

job for a few weeks! The action she has taken it will complement modern

apprenticeships linked to jobs, which is about getting young people

into work. We get this from your party or the time, don't we? -- all

the time. A bald is, the SNP have cut the college budget. -- the

trouble is. They are not delivering on these policies. The SNP and

Labour would agree that the austerity programme for Westminster

is not good for the economy, and it is almost impossible to claim from

today's figures that austerity is creating growth. I said that by

tackling the deficit, we have given confidence to the markets. If we

pursued Labour's policy, interest rates would go up, the cost of

borrowing would go up, and the economy would go down. That may not

be easy to swallow, but we then have to target youth unemployment,

and I want to say to mark, the youth contract is delivering that.

And yes, the Scottish apprentice scheme is as well. Let us work and

co-ordinate this together. We should not spend so much time

saying, our job is better than yours. Put the policies together

and deliver from the young people of Scotland. When you say you can

assure us if it were not for the scale of the austerity programme

that George Osborne is implementing, interest rates would be higher,

that is an article of faith on your part. You do not have any evidence

on that. We do, actually. The strategy being pursued is the right

one, and if we were to pursue a different strategy, the markets

would not support it. Interest rates would go up consequently.

That is the problem facing Spain and Italy because they are not

tackling their problem. The evidence is overwhelming, and we

have to be creative and find measures that will help target

investment and jobs, and we have to hope our trading partners do the

same thing. Do you by that I think that Malcolm Bruce should

look at the opinions that have stated but the policies of

austerity are not policy that would lead to economic recovery. The

Scottish government was asked to present a list of projects which

could be delivered with increased capital expenditure and we did

that... If you got the money so why don't you do it? I am also

interested in the. About these projects and your opinion. The

British Government have to borrow money and the argument Malcolm

Bruce is making is that borrowing money to finance that type of thing

would risk Britain's credit rating and make economic matters better -

a worse rather than better. I'm interested to know if you have any

fundamental disagreement with that view. We have already seen recent

argument stating that the UK Government's credit rating is

already being given a worries. I do not believe in just borrowing money

for borrowing money's stake. Ask me about sustainable economic growth.

One of the things that will lead to that is increased capital

expenditure. Ken and I do agree on this fact because it was one of the

five points in Labour's five-point plan for economic growth. I still

want to know what do you think of Malcolm Bruce's arguments which is

that this is very fine and we would love to throw money at things but

if we do that we risk Britain's credit rating which could end up

making the state of the economy worse rather than better. In all

you have said, you have not address that fundamental argument. It is a

straw man argument being used here. It is essentially saying that we

would like to do this but if we do this bad things will happen. In

case Malcolm and his colleagues have not looked around, things are

not exactly rosy. Labour did it before the last election and bad

things happened! That is precisely why we are in this mess. It helps

if you keep once at a time. Ken Macintosh is not getting a word in

edgeways. The program you put forward in the last election,

actually there was probably only about �3 billion worth of

difference in the terms of the cut by George Osborne has made so far

compared to what Alastair Darling has in his plan. Is that not right?

Our fundamental argument is that... Address that. First. Your programme

for government was to cut public spending. Is it not the case that

it was almost as much as has been cut by the Tories. No, that is not

the case. We would not have cut as hard as fast. Not any that...

interested in Malcolm Bruce's perspective. You would. You would

have had the health budget which we have increased and that would have

had consequences for Scotland. You have to recognise that it was

borrowing excessively that got us into the mess and it will not get

us out of it. Please to disappoint you were making. The Tories and

Liberals have borrowed �150 million more than they planned to. It is

the tax decisions they are making as well. It is not just the

austerity measures but they are implementing decisions, for example

they are giving tax breaks to the better of rather than cutting VAT

and putting money into people's pockets. It is the sense of

fairness and their priorities. Austerity does not create consumer

confidence. We are running out of time. I have got to change the

subject Malcolm Bruce. Instead of getting indignant about that,

answer this question. If the Scotland Bill witchy were keen on

was in place now and the Scottish government had all the tax power

was it is getting, would that make the slightest bit of difference to

its ability to do anything about the things we have been talking

about for the last few minutes. would change the dynamics of the

way it approaches things. If they pursue policies which created jobs

and income, it would raise their taxpayers. What they should do is

focus on things that would deliver more jobs and more income and

deliver more income tax so they can reinvest in the economy. They

should not focus on cutting taxes? I do not think in the presence

circumstance that cutting taxes on top of the tax cuts they have

already done is the way to start. If Holyrood had the new Scotland

deal -- Bill, your policy would be not to use it? I would use it on

focusing on creating jobs... You do not need this column milk to -- the

Scotland Bill to do that. In the present circumstances I would argue

that what you need to do is grow the Scottish economy so you have a

dynamic benefit from that income tax. That makes a difference with

the big you do not Controller Sumner gives you extra revenue.

This would have allowed us to see the Scottish government's plans for

tax. They talk about rescuing people from the welfare cuts of the

Tories and cutting corporation tax. Do you have any proposals to raise

or lower the tax bill that you would have? Not at the moment

because we do not have the power and we are in opposition. What we

would do, we would use the power was we have but the point is that

and there are so many powers at the moment that we have seen a Scottish

government give away the biggest procurement contract ever to China

and Spain. It is Scottish jobs and money and they have given it away.

That is a sign of a responsible government. Mark, do you think the

Scotland Bill that you have voted for would make the slightest

difference to what we have been talking about? We voted for the

Scotland Bill because the harmful effects that were in the original

Bill have been taken out and I think it is the constructive thing

to do to vote for it. I think it has been overwhelmingly overtaken

by events and most of the powers that will accrue to Scotland will

not accrue until after the referendum in 2014 and I fully

expect a yes vote in that referendum which will render much

of this null and void. It is pretty rich form a come to start talking

about the austerity policies... us stick to the point. Would you

have any proposals if you had the power was at the moment to raise or

lower income tax. A we have laid out a range of taxation policies.

One of the problems of the Scotland Bill is that you are only having a

small amount of influence over taxation policy in general. That is

one of the key arguments for independence, being able to control

all of the taxation rather than just some of it. And all of the

liabilities. OK, we have three of you voting in favour of the Bill

but none of the have proposals on The Herald claims that Strathclyde

Police Constable's are about to apologise. In Leeds on the story be

have been talking about. Scotland climbing out of economic doldrums.

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