17/10/2012 Newsnight Scotland


17/10/2012

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choice for our family and for the Tonight on Newsnight Scotland, the

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former Rangers owner Craig Whyte, silent for months, speaks out on

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why the club collapsed, who was to blame and why they did not pay

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their taxes. And the grim economic figures. The economy is shrinking

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and the unemployment rate rises while the UK average falls. Why?

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Good evening. He bought the club for �1 and then they went into

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administration. Much of the downfall of the club has been

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levelled at Craig Whyte. He has given the BBC's version of events

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in a exclusive interview. Before we see Craig Whyte, I am sure a lot of

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viewers when they watch this, they will think that it looks rather odd

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like he had just seen a ghost. Is that just him rather than this

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interview? He is an interesting character. He is not comfortable

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talking to the media and to a television camera. We will see that

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in the interview. Probably it is an indication of how desperate he was

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to get his message across. He will come across like that and people

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will be surprised. Sometimes he looks surprised and even shifty. He

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is not comfortable talking to the media, or talking to television

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cameras. But it is an indication of perhaps how desperate he was, to

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say what he had to save. What do you think he was trying to achieve?

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I am not saying he achieved it but what do you think? I genuinely

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think that Craig Whyte thinks that he will go down in the history

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books as the bogeyman of Rangers. People will point to him as the man

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that brought them to their knees. He is keen to put the record

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straight. Will he be convincing? Has he done enough? We can take a

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Very exciting, yes. I am pleased with the match today. Craig Whyte

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marched down Edmondson drive to a hero's welcome after months of

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uncertainty and the troubled club had finally got a buyer. But the

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euphoria did not last long. It is now a better fight... In February,

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administration. What happened. Time for an explanation. We can start

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with the over funding. He had been assured that the cash was not

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coming from season ticket revenue. We were selling tickets... Is there

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not something morally wrong with selling on tickets that have not

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yet been bought in order to fund the takeover of the club when he

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will not willing to put your money in? That would be like me saying

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that I want to buy Rangers, would it not? You could have done that if

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you had been interested. But there is not any difference between an

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overdraft and loans. I am using a method, like Ticketus. But is that

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not morally wrong? You are using other people's money. But how do

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you service debt? It is like servicing an overdraft and a loan.

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It is money coming in from ticket sales and their is nothing wrong

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whatsoever. By its these tickets have not yet been sold. That was

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cash in the pockets of supporters that have not yet bought their

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season tickets. You are assuming that they were going to buy these

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tickets. You are using cash still in their pockets to buy the club.

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That is like a bank with a debt facility. The club and Craig Whyte

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succumbed to administration when he failed to pay PAYE and VAT. But

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why? What happened? In September, October, when the club were out of

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the European competitions, we had been banking on the Europa League

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for part of our income. In September and October we realised

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that we were going to run out of cash. And again if you go back to

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that time, look at the outcome at a roundabout October and November,

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which at the same time was up until January, it was impossible to put

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more money into the club and raise more money from any sources. Yes,

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fine but let's wait and see what the outcome of the case is but it

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was impossible to raise any more money. That was a factor?

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decision that I was facing in October was to raise money from

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somewhere and who is going to lend and a back-up company? That was the

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first choice and the tax was going up. The tax bill was going up. If

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you're not paying PAYE and VAT, how are you expecting to be an

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attractive prospect if that is going up? The club had no money.

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tax paid and a bigger tax bill, the big tax case, from the club's

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controversial tax avoidance scheme in the 1990s. The case was so big

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in fact that Craig Whyte said that those at the very top did their

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best to plead their case. Worst case scenario, they said, �50

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million and 10 years to pay it. Then at Rangers would not give in

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to administration. That was a conversation HMRC were not prepared

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to have and I tried everything to get them to do that. Even to the

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extent of getting prominent politicians involved to speak to

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them at the highest level. Which politicians? Alex Salmond tried to

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speak to HMRC early on and we spoke to the head guy at HMRC but they

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would not come to any arrangement. Alex Salmond was pleading the

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ranges case? As other people were. They said that he was duped? Was

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he? He was not. I am not quite sure what he thinks he was duped about.

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But the agreement mentioned season- ticket funding. It mentioned the

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use of third-party funding. It goes into great detail about insolvency

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events and starting a new company and everything that would happen

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when it was set up. I did not quite understand why he said that. And to

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the new guy, Charles Green's consortium is in charge, brought in

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by the administrators. Or were they? I went out and found the

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buyer. You did? I found be by myself and nobody was coming

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forward and we went out and used our contacts in the City to put it

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across. You got Charles Green to the table? Absolutely right, yes.

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As you would expect, the administrators have hit back. They

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said the allegations are false, malicious and without foundation.

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Charles Green has released a statement saying that it had no

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previous association with Craig Whyte and it was misleading to

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suggest that he brought us in. Glasgow Rangers, founded in 1872

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and taken to the brink in 2012. The most troubling period in the club's

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history. Who is to blame? You have got to look at where the problems

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started. What caused this chain of events. The cause of this was the

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ruinous scheme which was in operation for 10 years. If it had

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not been all that, then the club would not have been sold for �1.

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The club would have been able to get proper funding. Even looking

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back to the previous board before I was involved, they could have

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battened down the hatches. They could have got rid of the debt

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themselves. They could have built up a surplus of cash to deal with

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the tax issues and beaches not to do that and buried their heads in

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the sand and did not deal with them. You think that is to blame? And the

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previous board. What part did he play in his downfall? I did not

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think I... I was, if you like driving the train when it crashed

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but I was not the one that set it on its path. But he made mistakes?

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Foreshore. You like? Might would not say that I lied. I certainly

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made mistakes. I would not necessarily say that I lied. I

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should have been more open about the funding arrangements and how

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dire things work. I deeply regret not being more open about that.

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am joined by the associate editor of the Daily Record, Jim Traynor.

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Does that improve your opinion of Craig Whyte? If you while on a

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train make sure he is not driving it, I think. I have no idea why he

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has broken cover and put himself back in the spotlight. Because

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people were not exactly forgetting about him. But now he is back in

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the headlines and the papers will be full of things after this

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programme. I do not understand. You have to ask what his agenda is. Why

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is he coming back into prominence at this time? I find it astonishing.

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Some of the things he said, the ABT era comes down to David Murray. But

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it was not that and the use of that scheme that closed Rangers. It was

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because Craig Whyte had a fraudulent -- flawed business plan.

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That is why they had to be put into administration. The argument was

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that actually David Murray and his mates set the train in motion. If

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they had not known something was wrong it would not have been sold

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to him for �1. The bank will tonight and David Murray will do

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night but I did not think that there was much doubt that there was

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pressure to sell but he did not have to sell. David Murray is

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culpable if the tax case was against Rangers. It would not

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matter in the end anyway because that company does not exist and the

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Inland Revenue will not get any money anyway because that company

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has closed. The ranges debt was down for about �18 million at the

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time it was given to Craig Whyte. - - Rangers Football Club debt. They

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were comfortable with that debt. Craig Whyte immediately, the debt

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started to go back up and David Murray of course is comfortable

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with ABT. -- culpable. There has been a lot of speculation about the

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tendencies... I think that has been... By but he did get an easy

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ride. David Murray was criticised. I think that there is a myth

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suggesting he was never criticise. He went through a period where he

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would not speak to people and in my case for four years when I was

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previously at the Herald because I had written something he did not

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like. At not get an easy ride. Quite a lot of fans are quite happy

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to say that nobody bothered Rangers football club. It is actually a

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myth. David Murray was criticised. You could criticise him as well for

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12 years for running out of debt. That was ridiculous. �12 million

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for one player. Absolute scandal. But that debt was reduced to �80

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Lying and misleading people? It's strange, I asked Craig several

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times about the ticket deal. Denied it. I asked him several times about

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not paying PAYE, denied. It everything was fine. So, I mean,

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Craig would probably deny I asked him these questions. I'm sure I

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wasn't the only one. I just find it... It's difficult to, you know,

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you listen to Craig, you talk to him, he is plausible. He always has

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an answer. But, you know, you think - why on earth would you buy a club

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that no-one else is touching because of the potential tax

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liability. Why would you buy it and not have enough money to run it.

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want your view on the other claim by Craig Whyte that he introduced

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Mr Greene to the club, Mr Greene is telling everyone that it is not

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true. It certainly isn't a fair representation of what happened?

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is saying that, Charles Greene is saying his capital came to him and

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Ahmad came to him and said, would you get the deal through, run the

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club and get it stable again. He says that. Craig Whyte is saying,

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no, he introduced him to Duff and Phelps. Where he is slightly

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correct. He probably introduced to one of the joint administrators. By

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then Charles Greene was already in place. We will have to leave it

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there. Thank you very much. Today has seen dismal news on the economy.

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There has been a slew of bag figures, unemployment is up,

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employment is down, Scotland is still in reetion. Scottish

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unemployment has been running close to the same levels as the rest of

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the UK. But over the summer the number of Scots seeking work rose

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by 7,000 over the three months to the end of August. That is 8.2%.

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The rest of the UK has faired better. 50,000 fewer people are

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looking for work. That is a rate of 7.9%. Scotland's economic woes have

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largely matched those of the wider UK. In the first quarter of this

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year, GDP fell 0.2%. While new figures from April to June show it

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fell by 0.4%. So in the four quarters from the middle of last

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year to now Scotland's economy stood still. I'm joined now by the

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economist Professor David Bell of Stirling University. Something is

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happening here, isn't it? Frankly, none of it looks good? Doesn't look

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that good. I hope it's temporary. It may be something to do with

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something likelet Olympics. That the rest of the UK seems to have

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moved ahead a little bit over the summer because we are comparing -

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When you look at the regional figures, what struck me, actually

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the biggest falls in unemployment were in places like the north-west

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of England, Yorkshire, it wasn't London? Yes. It isn't London. The

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start of the recession since 2008 Scotland did relatively well for

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three years. It's starting to look as though it's dragging its... Many

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of the indicators are looking that little bit worse than the rest of

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the UK. That was my next question. In one of tomorrow's newspapers you

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argue that the unemployment rate in Scotland and the UK is starting to

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diverge. I wonder if we have enough data to say that for sure? I mean

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unemployment now has been high here for a couple of months, it was

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lower here for four or five months and above before that. Have we got

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enough data to say it's a trend? I think this is a tentative

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conclusion at the moment. For six months, or just the last few months,

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isn't enough to establish whether this is the way we are going. It

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doesn't look particularly good because, as I say, early on in the

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recession, Scotland did establish quite a margin of lower

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unemployment rate than the UK as a whole. Right. I also... I'm curious,

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I always do rather question this idea, comparing Scotland to the UK

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average, it seems to me, is it the argument more informative to look,

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without saying Scotland isn't a nation, look at it compared with

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other regions of the UK? If you do that, you find that the rate of

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unemployment here is actually still lower than many other areas,

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including London? Yes. Central London has a high unemployment rate.

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Scotland is on many indicators around the middle. About bang on

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the average, isn't it? It is. That is correct. It has been for some

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time. Right. The other worrying thing though, I wonder if the GDP

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figures tend to get to that as well, if there is a trend being

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established here, it's might be that Scotland is recovering less

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quickly? Yes. Yeah. What seems to be happening, in terms of output,

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is that Scotland hasn't been hit as hard since the start of the

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recession in production, in construction, but has been hit

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particularly hard in the service sector and the finance services.

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Scotland seems to have done relatively badly in terms of its

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"government" output, which has hardly changed since the beginning

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of the recession, but in the UK, as a whole, apparently it's grown by

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around 5%. Which I find just difficult to believe. Right. There

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is no obvious statistical thing like bfrts are included in the

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figures for the UK, but not in Scotland? What they are trying to

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measure is the output of the government sector and looking at

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things like through put in the health service, the quality and

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quantity of qualifications coming through schools. It's not

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absolutely clear to me that England has established a huge advantage

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relative to Scotland. You think there might be something wrong than

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the figures? I'm a little concerned that might be part of the

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explanation why apparently Scotland's output has fallen more

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than the rest of the UK. Why should there be this particular problem?

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We should stress here that, in the manufacturing industry production

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has fallen, your argue tuplet has fallen by about the same across the

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UK? Yes. Not particular about here, what is particular about here is

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this business of services. Is there an explanation about that? In the

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first instance the financial services sector, particularly

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banking, was hit harder here and has recovered in London, in

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particular, quite strongly since. That clearly is one driver of

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better performance in the service sector than the rest of the UK.

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There is this anomaly, I think, with government, which constitutes

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22% of total output. It's very important. Thank you very much. A

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important. Thank you very much. A look at tomorrow's front pages: the

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Scotsman. Call for SNP to put off divisive NATO vote at its

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conference. Leading MSP wants a party referendum on it, it says.

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The Scottish Daily Mail. 100 Scots dumped on jobs junkpile every day,

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that is its take on the unemployment figures. The Daily

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