Browse content similar to 26/06/2013. Check below for episodes and series from the same categories and more!
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being cut in education. Tonight on Newsnight Scotland: How | 0:00:07 | 0:00:10 | |
the spending review will affect life up here. And whether any of the | 0:00:10 | 0:00:13 | |
politicians can offer a plausible alternative. | 0:00:13 | 0:00:16 | |
Good evening. George Osborne is offering more austerity, even into | 0:00:16 | 0:00:19 | |
the first year of the next Westminster parliament, and beyond. | 0:00:19 | 0:00:22 | |
But he argues that it's all worthwhile, because it's working. | 0:00:22 | 0:00:25 | |
How much of this is economic realism, and how much political | 0:00:25 | 0:00:27 | |
positioning? We'll hear from the politicians shortly, but first | 0:00:27 | 0:00:35 | |
Andrew Black reports. Suites. Everybody loves them | 0:00:35 | 0:00:39 | |
especially politicians. They come in handy when trying to keep the voters | 0:00:39 | 0:00:45 | |
on site. That's why the Chancellor outlining his spending plans the | 0:00:45 | 0:00:52 | |
2015 and 2016 to make he gave something back. Amid all the doom | 0:00:52 | 0:00:57 | |
and gloom, yet more spending cuts. This coalition came into office with | 0:00:57 | 0:01:02 | |
a commitment to address with firmness and resolve one of the | 0:01:02 | 0:01:08 | |
biggest economic crises of the post-war era. The action we have | 0:01:08 | 0:01:11 | |
taken together with the British people as brought the deficit down | 0:01:12 | 0:01:17 | |
by a third, helped a record number of people into work and taken our | 0:01:17 | 0:01:22 | |
economy back from the brink of bankruptcy. That is the vision | 0:01:22 | 0:01:29 | |
anyway so what about Scotland? out today the block grants to the | 0:01:29 | 0:01:32 | |
devolved administrations. Because we have prioritised health and schools | 0:01:32 | 0:01:38 | |
in England this feed through the Barnett Formula to savings of around | 0:01:38 | 0:01:42 | |
2% in Scotland, Wales and Northern Ireland. The Scottish resource | 0:01:42 | 0:01:47 | |
budget will be set at �25.7 billion and Scotland will benefit from new | 0:01:47 | 0:01:53 | |
capital borrowing powers almost �300 million. Being part of the UK means | 0:01:53 | 0:01:57 | |
Scotland will see its capital spending power increased by almost | 0:01:57 | 0:02:03 | |
13% in real terms in 2015 and 2016. It is right for the Scottish | 0:02:03 | 0:02:07 | |
Parliament to decide how best to use it. That is devolution within a | 0:02:07 | 0:02:11 | |
United Kingdom delivering to Scotland. So what does all that | 0:02:11 | 0:02:16 | |
mean? Let's look at the suites first. The Chancellor says | 0:02:16 | 0:02:20 | |
Scotland's capital spending allocation to build schools and | 0:02:20 | 0:02:25 | |
hospitals will increase by almost 13% which is the government -- or | 0:02:25 | 0:02:29 | |
cover learnt of almost �300 million. But the resource budget, the money | 0:02:29 | 0:02:38 | |
used to keep Scotland ticking over in public services, will be at �25.7 | 0:02:38 | 0:02:42 | |
billion which is a decrease of 2% in real terms. The Scotland Office will | 0:02:42 | 0:02:48 | |
have to make savings of 10% in line with cuts to other UK government | 0:02:48 | 0:02:52 | |
departments. Overall, the Chancellor says his plans will cut the deficit | 0:02:52 | 0:02:55 | |
and help economic recovery. But the Scottish government does not see it | 0:02:55 | 0:03:00 | |
that way. The Spending Review has essentially resulted in the UK | 0:03:00 | 0:03:04 | |
government applying more cuts to the Scottish government's budget in | 0:03:04 | 0:03:10 | |
terms of the operating resources of the government and capital budgets. | 0:03:10 | 0:03:14 | |
It compounds the reductions we've had since 2010 with our capital | 0:03:14 | 0:03:22 | |
budget down by 26%. This has been about more cuts and not about | 0:03:22 | 0:03:32 | |
investment. And it's not just budgets which affect Scotland. | 0:03:32 | 0:03:42 | |
Changes in reserved areas also have an impact north of the border. | 0:03:42 | 0:03:45 | |
George Osborne says under the circumstances he is offering | 0:03:45 | 0:03:49 | |
Scotland a bitter sweet deal. His opponents say it has left a bitter | 0:03:49 | 0:03:53 | |
taste. A little earlier, I spoke to the | 0:03:53 | 0:03:56 | |
Scotland Office Minister of State, Conservative MP David Mundell. I put | 0:03:56 | 0:03:59 | |
it to him that the Chancellor reckoned he was aiming to promote | 0:03:59 | 0:04:08 | |
economic growth through massive capital investment. I think for | 0:04:08 | 0:04:14 | |
Scotland it is certainly a positive statement in relation to capital | 0:04:14 | 0:04:24 | |
0:04:24 | 0:04:24 | ||
spending. The Scottish government have been calling for additional | 0:04:24 | 0:04:29 | |
capital spending. That is what they are going to get. They will have | 0:04:29 | 0:04:34 | |
�3.3 billion. 400 million of it will be extra. They will have additional | 0:04:34 | 0:04:39 | |
borrowing powers. These are the messages I've been getting every | 0:04:39 | 0:04:45 | |
time I've come on programmes like this. They say they have programmes | 0:04:45 | 0:04:48 | |
ready to go and if they had additional money they will be able | 0:04:48 | 0:04:56 | |
to take them forward and now they can. More generally, you get the | 0:04:56 | 0:05:00 | |
impression listening to George Osborne that this was his way of | 0:05:00 | 0:05:07 | |
prompting some sort of economic growth. We'll hear tomorrow from the | 0:05:07 | 0:05:10 | |
Chief Secretary to the Treasury about some detail on significant | 0:05:10 | 0:05:14 | |
infrastructure projects which the government are taking forward. Many | 0:05:14 | 0:05:21 | |
of which will have a positive knock-on effect in Scotland. The | 0:05:21 | 0:05:24 | |
Chancellor accepts that investment in infrastructure and capital | 0:05:24 | 0:05:30 | |
spending is the way to secure growth. If that is the case, can you | 0:05:30 | 0:05:33 | |
explain why according to the Spending Review document today | 0:05:33 | 0:05:40 | |
public sector growth capital formation will either be flat in | 0:05:40 | 0:05:50 | |
0:05:50 | 0:05:51 | ||
2015 and 2016 or decrease by 1.7%? It is still the case that they will | 0:05:51 | 0:05:57 | |
be additional funding for capital projects. That is what the | 0:05:57 | 0:06:07 | |
0:06:07 | 0:06:08 | ||
Chancellor has made clear. Specific projects which of the government | 0:06:08 | 0:06:15 | |
will bring forward will be set out tomorrow. There will be additional | 0:06:15 | 0:06:25 | |
0:06:25 | 0:06:26 | ||
funding for capital projects available. The only reason we have | 0:06:26 | 0:06:31 | |
to believe any of this and the only thing that is real is the numbers | 0:06:31 | 0:06:34 | |
which you filled in in the document produced today and on page of that | 0:06:34 | 0:06:42 | |
document you find that it public sector gross capital spending is | 0:06:42 | 0:06:49 | |
exactly the same according to the big figure in 2015 and 2016 as it is | 0:06:49 | 0:06:53 | |
in 2014 and 2015 although it is filled in as a decrease of almost | 0:06:53 | 0:06:58 | |
2%, which is the opposite of everything we are being told. So in | 0:06:58 | 0:07:02 | |
fact there is no extra capital spending pencilled in for 2015 and | 0:07:02 | 0:07:12 | |
2016. You might not even be in government. That will be for the | 0:07:12 | 0:07:15 | |
people to decide whether we have pursued the right policies in terms | 0:07:15 | 0:07:25 | |
of determining what we're doing or go down the Labour root of more debt | 0:07:25 | 0:07:30 | |
and more spending. There is a clear choice that has been created today | 0:07:30 | 0:07:34 | |
as to where people see future spending my government. Whether they | 0:07:34 | 0:07:43 | |
want the Labour model which was supposed to be announced by Edmonton | 0:07:43 | 0:07:53 | |
0:07:53 | 0:07:53 | ||
and. -- by Ed Miliband. You are not proposing any increased capital | 0:07:53 | 0:08:00 | |
spending at all in 2015 and 2016. The �50 billion figure which George | 0:08:00 | 0:08:05 | |
Osborne talked about today is exactly the same as the �50 billion | 0:08:05 | 0:08:10 | |
figure he talked about in his March budget. There is no extra capital | 0:08:10 | 0:08:18 | |
spending whatsoever. They will be �400 million extra capital spending | 0:08:18 | 0:08:27 | |
available in Scotland. -- they will be. That is in addition to the 1.3 | 0:08:27 | 0:08:30 | |
billion extra funds they have had since the comprehensive spending | 0:08:30 | 0:08:36 | |
review. So for the Scot -- so the Scotland these are good arrangements | 0:08:36 | 0:08:39 | |
which blow the Scottish government to get on with the projects they | 0:08:39 | 0:08:49 | |
0:08:49 | 0:08:52 | ||
they have. That's -- which allow. It is time the Scottish government gets | 0:08:52 | 0:09:02 | |
0:09:02 | 0:09:09 | ||
shovelling. We will have to leave it there. Thank you very much. | 0:09:09 | 0:09:11 | |
Just before the programme, the Finance Secretary, John Swinney, | 0:09:11 | 0:09:15 | |
came into our Dundee studio and I put it to him that he was about to | 0:09:15 | 0:09:25 | |
0:09:25 | 0:09:26 | ||
get exactly what he's been demanding for years. Not exactly. We have seen | 0:09:26 | 0:09:34 | |
a reduction in our capital budget of 26.6% since 2010. But you have been | 0:09:34 | 0:09:37 | |
given extra powers the capital spending which no other government | 0:09:37 | 0:09:44 | |
department in Britain gets anywhere near. That was what the Scotland act | 0:09:44 | 0:09:48 | |
was designed to give to the Scottish Parliament and those powers will be | 0:09:48 | 0:09:52 | |
used from April 2015 onwards. The challenge in terms of economic | 0:09:53 | 0:09:56 | |
recovery is what we can do now to improve the economic conditions | 0:09:56 | 0:10:03 | |
within Scotland. You have said in the past it is terribly unfair and | 0:10:04 | 0:10:11 | |
the British Government should skew spending away from current spending | 0:10:11 | 0:10:16 | |
and they have given new �400 million or the ability to borrow that | 0:10:16 | 0:10:23 | |
amount. At least you've got something you want out of the | 0:10:23 | 0:10:27 | |
constitutional arrangements in Britain. We welcome the fact we're | 0:10:27 | 0:10:32 | |
getting borrowing powers. The point I am making is that the economic | 0:10:32 | 0:10:36 | |
challenge today is about getting investment into the economy and | 0:10:36 | 0:10:40 | |
build on the fact we're seeing some progress coming into economic | 0:10:40 | 0:10:50 | |
0:10:50 | 0:10:50 | ||
recovery. We have higher employment in Scotland -- higher unemployment. | 0:10:51 | 0:10:56 | |
I wanted the Chancellor to give us the immediate ability to invest more | 0:10:56 | 0:11:00 | |
money in projects that would create employment within Scotland. That has | 0:11:00 | 0:11:10 | |
0:11:10 | 0:11:12 | ||
not materialised. You would like more borrowing powers on -- and more | 0:11:12 | 0:11:20 | |
capital spending powers but intellectually you agree with the | 0:11:20 | 0:11:30 | |
0:11:30 | 0:11:37 | ||
Chancellor's strategy of deficit reduction, don't you? Since 2010 the | 0:11:37 | 0:11:46 | |
Chancellor has cut too far. I accept the debt has to be repaid and we | 0:11:46 | 0:11:52 | |
have to reduce the level of debt. If you look at the borrowing figures, | 0:11:52 | 0:11:58 | |
the UK Chancellor is going to borrow �275 billion more than the planned | 0:11:58 | 0:12:04 | |
in 2010. Not to invest in growth but to deal with the consequences of | 0:12:04 | 0:12:08 | |
failure. If the Chancellor had made different decisions in 2010 and had | 0:12:08 | 0:12:12 | |
invested more in capital investment we would have been able to invest | 0:12:12 | 0:12:22 | |
0:12:22 | 0:12:26 | ||
more in employment. That argument has now been vindicated by the IMF | 0:12:26 | 0:12:31 | |
and the Institute for fiscal studies. But you are not arguing | 0:12:31 | 0:12:39 | |
with a reduction in your current budget. It is undesirable and I | 0:12:40 | 0:12:47 | |
will... And unacceptable for budgets which are already set for this | 0:12:47 | 0:12:54 | |
current financial year to have new reductions applied. That is what the | 0:12:54 | 0:12:59 | |
Chancellor set out in the budget statement in March. Sometimes you | 0:12:59 | 0:13:06 | |
talk about the fact you are against any cuts in public spending. | 0:13:06 | 0:13:09 | |
accept we have to repay the public finances but the Chancellor cut far | 0:13:09 | 0:13:17 | |
too fast and far too deeply and as a consequence he has brought on rising | 0:13:17 | 0:13:25 | |
debt. Let's say people vote for independence next year. Buy you | 0:13:25 | 0:13:30 | |
saying that from day one of independence they would be no | 0:13:30 | 0:13:35 | |
structural deficit in the Scottish budget? If you look at the most | 0:13:35 | 0:13:45 | |
0:13:45 | 0:13:46 | ||
recent financial information, Scotland words... Scotland would | 0:13:46 | 0:13:52 | |
have been in a stronger financial position compared to the rest of the | 0:13:52 | 0:13:57 | |
UK. That will give us choices about whether we want to reduce debt | 0:13:57 | 0:14:05 | |
faster whether we want to put money aside for an oil fund. I am asking | 0:14:05 | 0:14:10 | |
whether Scotland would have a structural deficit from day one of | 0:14:10 | 0:14:16 | |
independence? There's going to be an overhang of debt that we will | 0:14:16 | 0:14:26 | |
0:14:26 | 0:14:28 | ||
inherit from the rest of the UK. am asking you whether you would be | 0:14:28 | 0:14:38 | |
0:14:38 | 0:14:39 | ||
in that camp? If you look at the data it shows that Scotland | 0:14:39 | 0:14:44 | |
contributed 9.9% of UK revenue and we got back 9.3% of UK expenditure. | 0:14:44 | 0:14:48 | |
What that demonstrates is that we are in a stronger financial position | 0:14:48 | 0:14:53 | |
and able to invest in our economy. If you deliver more growth, he | 0:14:53 | 0:14:59 | |
deliver more tax revenue and it allows you to run sustainable and | 0:14:59 | 0:15:09 | |
0:15:09 | 0:15:21 | ||
effective public finances. If we don't have a structural deficit, | 0:15:21 | 0:15:25 | |
with one bound we are free from all of this austerity, we can just spend | 0:15:25 | 0:15:30 | |
any money we like. That is the choice that faces people in | 0:15:30 | 0:15:36 | |
Scotland. The Chancellor confirmed to me that for the foreseeable | 0:15:36 | 0:15:41 | |
future and Ed balls has confirmed this is that UK administrations will | 0:15:41 | 0:15:45 | |
be undertaking an austerity agenda. We believe we should be investing in | 0:15:46 | 0:15:55 | |
0:15:56 | 0:15:56 | ||
growth, in expanding the economy... What you appear to be saying... | 0:15:56 | 0:15:58 | |
consequence people in Scotland can see investment in their public | 0:15:58 | 0:16:06 | |
services. This idea you can just sidestep austerity altogether by | 0:16:06 | 0:16:11 | |
voting for independence, your critics would say you are living in | 0:16:11 | 0:16:16 | |
a fantasy. You appear to be saying that Scotland would not have a | 0:16:16 | 0:16:22 | |
structural deficit, we can forget about cuts in capital spending but | 0:16:22 | 0:16:30 | |
also day-to-day spending in order to answer the books. We are in a | 0:16:30 | 0:16:33 | |
stronger position than the rest of the UK which allows us to design our | 0:16:33 | 0:16:43 | |
0:16:43 | 0:16:44 | ||
public colour sees in aid different fashion. -- public policies in a | 0:16:44 | 0:16:54 | |
0:16:54 | 0:16:55 | ||
different fashion. You will presumably have to do something | 0:16:55 | 0:17:05 | |
similar to the pay policy. The pay policy has to be available... | 0:17:05 | 0:17:11 | |
you going to follow George Osborne's lead? We will decide that | 0:17:11 | 0:17:21 | |
0:17:21 | 0:17:23 | ||
in September. Will due be favourable in principle? -- would you be. | 0:17:23 | 0:17:26 | |
are going through a process of public service reform, we have to | 0:17:26 | 0:17:33 | |
make sure we can take public servants with us. John Swinney, | 0:17:33 | 0:17:37 | |
thank you very much. I am joined from London by Labour's Shadow | 0:17:37 | 0:17:44 | |
secretary, Margaret Curran. How joyful are you about your party's | 0:17:44 | 0:17:48 | |
new policy of signing up to the coalition government's public | 0:17:48 | 0:17:57 | |
spending limits? I think we have seen from John Swinney's interviews | 0:17:57 | 0:18:03 | |
exactly what the differences between us and the other parties. There is a | 0:18:03 | 0:18:09 | |
big contradiction between what he is saying and what he is being honest | 0:18:09 | 0:18:15 | |
about. We are being honest and we think the government should change | 0:18:15 | 0:18:19 | |
course immediately, we should stimulate the economy with different | 0:18:19 | 0:18:21 | |
approaches and we could avoid perhaps some of the challenges of | 0:18:21 | 0:18:28 | |
the future. We need to look at trying to single out the economy, | 0:18:28 | 0:18:31 | |
increased tax revenues, get growth back into the economy, that would be | 0:18:31 | 0:18:37 | |
much better but we have said to people honestly, if the government | 0:18:37 | 0:18:42 | |
continues as it is we will inherit a very stringent financial situation | 0:18:42 | 0:18:48 | |
and that needs be addressed. Rather than hiding things like John Swinney | 0:18:48 | 0:18:52 | |
has, when he denies what the realities are, we don't want to do | 0:18:52 | 0:18:56 | |
that, we want an honest conversation and we want to be realistic but say | 0:18:56 | 0:19:02 | |
there is an alternative and we can offer hope. I am even more confused | 0:19:02 | 0:19:06 | |
now. You sign up to these constraints for a year or you don't. | 0:19:06 | 0:19:10 | |
You don't have to do that. The coalition government had a budget | 0:19:10 | 0:19:16 | |
and it threw out most of what Alistair Darling had planned, it is | 0:19:16 | 0:19:21 | |
possible for you to see the same. We think the coalition government is so | 0:19:21 | 0:19:26 | |
wrongheaded that if we win the next general election we will have an | 0:19:26 | 0:19:31 | |
emergency budget, get rid of the austerity nonsense and have an Ed | 0:19:31 | 0:19:40 | |
Miliband/ Ed balls programme for the future. The government said they | 0:19:40 | 0:19:45 | |
would get growth going and it's stalled. They said they would get | 0:19:45 | 0:19:51 | |
spending under control but it has gone up. -- borrowing under control. | 0:19:51 | 0:19:55 | |
We have to recognise the government are not solving the economic | 0:19:55 | 0:19:59 | |
programmes, the overhang from the financial crisis, and we have to | 0:19:59 | 0:20:03 | |
face that fact. We have to look into the future about how we are going to | 0:20:03 | 0:20:07 | |
sort out the finances, we have to make public finances work more | 0:20:07 | 0:20:11 | |
effectively and get the balance right. That is a more credible | 0:20:11 | 0:20:16 | |
approach and I think it is the approach the modern times to get the | 0:20:16 | 0:20:19 | |
economy growing and offer opportunities for families and young | 0:20:19 | 0:20:26 | |
people going forward. Everything you have said is vacuous. You haven't | 0:20:26 | 0:20:28 | |
told us a single thing that Labour would do that the coalition | 0:20:28 | 0:20:35 | |
government is not doing. Ed Miliband made a speech the other week about | 0:20:35 | 0:20:40 | |
spending into the future and I think all credible economists will say | 0:20:40 | 0:20:44 | |
that if you project public expenditures into the next years you | 0:20:44 | 0:20:48 | |
need to take a serious look at welfare spending. Anybody who denies | 0:20:48 | 0:20:54 | |
that is not living in the real world. You support a welfare cap? | 0:20:54 | 0:21:01 | |
Would you include pensioners? very long-term yes, that has to be | 0:21:01 | 0:21:06 | |
done. In the first few years we don't think it does. In the longer | 0:21:06 | 0:21:11 | |
term, as a country we have to come to terms with the balance of public | 0:21:11 | 0:21:14 | |
finance. What we are seeing from this government, who are not | 0:21:14 | 0:21:19 | |
concerned about the future, just about a political debate about | 0:21:19 | 0:21:29 | |
0:21:29 | 0:21:29 | ||
spending in the future... We could stimulate the economy. George | 0:21:29 | 0:21:33 | |
Osborne's point is that you can't have a situation where you need to | 0:21:33 | 0:21:36 | |
start cutting the old-age pension because more people are claiming | 0:21:36 | 0:21:44 | |
benefits. I don't think that is the framework that is right. We are | 0:21:44 | 0:21:49 | |
saying in the longer term we need to look at the exponential rise because | 0:21:49 | 0:21:55 | |
people are living longer, thankfully, and the balance is even | 0:21:55 | 0:22:03 |