05/12/2012 Newsnight Scotland


Similar Content

Browse content similar to 05/12/2012. Check below for episodes and series from the same categories and more!



point whatsoever. A message from the Liberal Democrats on


Tonight on Newsnight Scotland: How the Autumn Statement is playing out


here. John Swinney is given the money for so-called shovel ready


projects he has been demanding. And the rise in fuel duty has been


cancelled. I'll be asking Scotland's Finance Secretary how


getting what he wanted is supposed to advance his case for


independence. And have Labour or the Tories come out better from


today's statement? They will debate. Good evening. You will already have


seen that the Chancellor's Autumn Statement took his political


opponents by surprise, at least as far as the forecasts that public


borrowing isn't going to be as bad as Ed Balls expected. He is also


increasing public spending on capital projects in Scotland,


granting the SNP government what it has been demanding for years. So


has the Chancellor finally managed to make austerity look attractive?


There is still an icy chill about the economy which no amount of


festive cheer can disguise. public know there are no miracle


cures, just the hard work of dealing with the deficit and


ensuring Britain wins the global race. Still the UK government says


there is plenty of good news for Scotland in the Autumn Statement.


Even if nobody is quite pretending Santa has come early. 1 million


Scottish pensioners receive their state pension rise. -- will see.


21,000 low-pay it's God's will stop paying their income tax. -- low-


paid Scots. And the rise in fuel duty has been cancelled. I think


what people see are some very tough economic circumstances. A backdrop


that shows us that challenges facing us in the economy in


Scotland. What we are seeking to do is have targeted measures that will


help Scotland get on the road to recovery. Unionists are unconvinced.


The overall reaction to today is not only has the Chancellor missed


an opportunity but he has left many people in the difficult situations


they were in beforehand and as the festive season approaches, it will


be a feeble time for comfort and be a feeble time for comfort and


joy for many unemployed people in Scotland. The coalition argues


Scottish businesses should benefit, too, with the cut in corporation


tax and a rise in the annual investment allowance for small and


medium-sized businesses. The fact fuel duty will not be rising will


also be a boost to businesses, like this bakery. It is great for


business. We have stopped the costs from rising to suppliers and it


will give us an opportunity to possibly invest in other areas of


the business. Of course, while most of the measures announced by the


Chancellor today affect the whole of the UK, others do not affect


Scotland directly. Rather it is about the knock-on effect of the


Scottish government's own budget through the Barnet Formula. It is a


complex calculation but on balance, the Scottish government's budget


will be given an extra �331 million up to 2015. I welcome the fact that


the Chancellor has accepted the argument put forward by the


Scottish government that we need to invest in capital production to


boost the economy, but this evidence has been steering the


Chancellor in the face for two years and he should have been


taking this decision a great deal Sue Nye. Whether or not the UK


government has taken the right decision on tax and spending will


be a matter for discussion. What is fact is that austerity measures


will be extended until 28 team. believe most people in Scotland


want a more equal society, closing the gap between rich and poor. I


believe people in Scotland also want us to live within a political


means. The UK government seems implacably opposed to this agenda.


It will make poverty and inequality worse, it will make environmental


destruction worse, and it will not even achieve their own economic


targets. The economy north and south of the border is still


struggling, so has the Chancellor done enough of the right thing to


force a case of growth and with it a political pawn -- fortunes of its


government? The man responsible for spending


Scotland's block grant is Finance Secretary John Swinney. A short


while ago he came into our Edinburgh studio. I asked him if he


was happy he had got what he asked all. What we set out from the


Chancellor was the importance of investing in capital infrastructure


in Scotland. We support economic recovery. Now the Chancellor has


had to face the reality of reduced growth forecasts, increased


borrowing and a much longer period of austerity, he has eventually


come to realise that we were right all along and that what we need is


capital investment. You could be gracious about it. I am. I welcome


the fact that Chancellor has acknowledged the failure of his


economic strategy. My only regret is that a which she had realised


this considerably longer ago when we were telling him. -- I wish he


had realised this. You also got the abolition in fuel duty. That is


beneficial. Council tax freezing is providing respite to households the


length and breadth of the country event the certainty that at least


one bill people have got to face will not be increased. The freeze


on fuel duty is helpful to the Scottish economy. �330 million


extra that you are getting. That will all be spent on capital


spending? It has to be, yes. So you have no leeway on that. No, it has


to be spent on capital projects, yes. Of the shop already projects


that you have, which is the most shop already? -- shovel ready?


There is a range of projects that can go forward right away, for


example, project such as the expansion of health facility


maintenance, the trunk road maintenance projects. These can


swiftly precede if we decide they have the greatest degree of


priority. There are also a number of other projects that have


planning consent and they all need to go through that recruitment


process. And they will start by when? The money will start from


April 1st, 2013. They cannot start before that. Obviously we have to


put in place the necessary preparations to make sure the money


can be spent. We have been preparing for such a situation,


where we might get additional resources because we could see the


difficulties the economy was facing, and we will proceed to implement


that programme. This is great for you. It does not advance your


argument for independence very much, You have been saying how unfair it


is for people in Scotland and fuel duty will go up, and he decided not


to do that. It helps because it demonstrates economic damage has


been done to the Scottish economy by the Chancellor's refusal to


deliver an appropriate level of capital. There is no more damage


here than anywhere else and you have been given the two main things


you want. With independence, the people of Scotland would have a


political choice of what approach to take to capital investment.


notice that the Office for Budget Responsibility is forecasting oil


revenues will fall from what you referred to in the statement


earlier today as record levels last year of 11 billion to 4.5 billion


in 2016 and 2017. Should their forecast be correct, your claims


that Scotland's deficit would be less than the UK's if you have


independence go up in smoke. crucial point is the report by the


Institute for Fiscal Studies that says that Scotland pays its way


within the United Kingdom and Scotland can afford to be an


independent country. Do you say the forecast of the Office for Budget


Responsibility is wrong? I am saying... You said if them report


is correct. The Office for Budget Responsibility is using a lower


level of oil price envisaged by most international experts,


including the International Agency, who say the price of oil in 2016 is


likely to be $120 a barrel. Office for Budget Responsibility is using


$92. That is a significant difference in the estimation.


prices are difficult to forecast, and that is one of the problems


with relying on oil prices. The problem for year is that not only


are the people in Scotland being asked to believe your promises on


how much better things would be for the economy after independence,


they are supposed to believe the Office for Budget Responsibility is


wronged. You're asking people to believe a lot of things to take you


seriously. I said the Institute for Fiscal Studies who demonstrated in


a report a fair assessment of the public finances of Scotland,


demonstrating Scotland pays its way in the United -- United Kingdom.


There are 24 billion barrels of to be extracted still, it is said.


There is a huge economic resource to be used there. The amount of oil


in the North Sea is different from the Revenue can raise from it.


report from the University of Aberdeen is a significant


contribution to the debate about the long-term strength of the oil


and gas resource. The opportunity of independence is to use that for


the benefit of the people of Scotland. Banks. I am joined from


London by David Mundell and the Labour Shadow Secretary of State's


Margaret Curran. There is not much comfort for year in this. The


Office for Budget Responsibility, which everybody is leaning on these


days, concludes the main reason the Government got its forecast wrong


have more to do with the world economy, particularly the eurozone,


and government policy. I have to say I do not share the belief of


John Swinney that George Osborne has been converted. I heard the


Chancellor today, I think, recognise that the economy is


shrinking and that is bad news for Scotland. Use their feet that


comparison is with the eurozone make Britain look good, but growth


is higher in Germany and America than Britain. I said that the


Office for Budget Responsibility concluded the reason the Chancellor


missed his growth forecast had more to do with the world economy and


the eurozone than with his policies. I would argue strongly I think his


policies have a great deal to do with it. We have a lack in


confidence and suppressed demand. We spent approaching �14 billion of


benefits to keep people unemployed rather than getting them to work.


We do not get tax and business and of people working and so we are in


a vicious cycle. That is the problem the economy is facing and I


do not believe John Swinney and George Osborne thing that the


prospects are good. We need to get people back to work. David Mundell,


what are we gaining from this? We have had Cup's -- cuts and the


deficit has dropped by half a per cent of GDP. What is the point of


this? At the start of this process when Labour left office we had a


deficit the equivalent of that of Greece or Spain. People see what is


happening in these countries. It is chaos. We did not have a deficit


like that and arguably part of the damage to the British economy has


been caused by George Osborne saying we did have an economy like


Greece. That is not correct. By the measures we have taken, we have


international financial confidence in our economy. Rainey? We have low


interest rates that affect mortgages -- really? We have


managed despite the level of the deficit to bring stability to the


economy. And what we have been able to do is to keep the deficit going


down, which is good news. It will be a long road. It will be -- there


will be painful decisions. serious do you think it would be if


the UK lost its triple A credit rating? In it would be serious to


have a credit change. More would it undermine the strategy of Judge --


George Osborne? It would be worse if we would not take credible


measures and we were returning to more spending, borrowing and debt,


which has the answer of laboured to the situation we find ourselves in.


-- the Labour Party. If you told us Labour won the next election, it


was re impose the top rate of tax, which you are complaining that


George Osborne has scrapped. I do not think that is true, I do not


think it goes to the centre of a credibility. We will make our tax


plans when the next of manifest error is due. That is standard


practice for parties. You look at the economic conditions at that


time. It is disgraceful to cut benefits while top rates taxes are


being cut, says the Labour Party, but Labour will not say they will


impose a top rate of tax on the richest. Giving �3 billion to the


wealthiest is the wrong thing to do in principle and it is rank


millionaires get �107,000 benefit when you are cutting tax rack --


credits. That is not attacking people shirking work. We think the


balance is wrong. What you need to do is to get a better balance


between getting people back to work, getting the economy moving and


getting demand going. That is how you get recovery. David is wrong,


when Labour left government, we were beginning to see recovery and


growth was back. It is the measures of this government that has sent us


in the wrong direction. Every time George Osborne comes to the chamber,


he has to revise his forecast. He had to drastically revise his


forecast for growth and the economy is in serious trouble. The


Government is telling us how good they are, rather than getting the


economy moving again. We have just had the entertaining sight of Danny


Alexander and Rachel Reeves telling us why they came into politics. Did


you come into politics to cut benefit for the poorest people in


society while simultaneously abolishing a 50 pence rate of tax


on the rich? We just heard the ridiculous position Margaret Curran


is advocating in terms of criticising the cut in a higher


rate of tax and not saying what Labour would do about it. I came


into politics to deal with the situation as we found it. It means


taking hard decisions. Sir you did come into politics to cut the top


rate while cutting benefits? I came into politics to ensure we had an


economy that was stable and we had worked for people in my


constituency and across Scotland and that Britain was a country that


was competitive around the world. That is what the measures that the


Government have taken have achieved. Our business and economy editor is


Douglas Fraser. We have heard the bluster, what is your take on this?


It is how it plays into politics and the fairness agenda, the fact


that the bottom half of the pile in terms of income is taking a bigger


hit from today's announcement, going into next year. The top 10%


is because. But the bottom half takes the biggest. Yes, there is a


lot of oil and gas left under UK waters, which could be Scottish


waters in independent Scotland, but it will take tax incentives for


these companies to drill and extract. We have differences of


opinion on oil prices. In it is very hard to guess where they will


go. Another interesting issue, corporation tax, heading down again.


Five years ago it was at 30% and is now 24%. In a couple of years, it


will be 21%. It blunts the argument of the SNP it was making in 2007


that it could push to Irish levels, and create a Celtic tiger in


Scotland with competitive levels. That gap is closing. The Irish


level is looking unsustainable if not economically, them politically.


There is a blunting of the attack and the ability of Scotland to set


itself apart and be competitive on business rates. We will hear more


from people like John Swinney on targeted tax cuts. The headline tax


cut and how much they think they could bring it down is a harder


argument to make. On oil and gas, I hate to mention the Government and


expenditure revenues assist it. If you accept the figures the Office


for Budget Responsibility are producing into that, you get a


different forecast. A with higher oil prices and high production, the


figures have not looked good and the deficit for Scotland has been


smaller than for the UK. If you have a sharp cuts in production,


and these projections coming through from the Office for Budget


Responsibility, the ones being used by the Treasury, the notion of what


deficit and -- an independent Scotland will face, that deficit


gets much bigger. Thanks. On the gets much bigger. Thanks. On the


front pages, this story on Brussels. The paper is claiming a letter has


been sent to a House of Lords committee about existing treaties


Download Subtitles