:00:02. > :00:12.the fire. I shall not be wandering back to the fire. I shall make
:00:12. > :00:17.
:00:17. > :00:21.Tonight on Newsnight Scotland. Economic growth up. Retail sales
:00:21. > :00:31.up. Industry growing. It looks like the recovery might be here. Does
:00:31. > :00:33.
:00:33. > :00:35.that mean George Osborne's economic policy was right all along?
:00:35. > :00:41.And our Scottish performer is at the Edinburgh Festival shying away from
:00:41. > :00:51.talking about independence? Britain is booming according to one
:00:51. > :00:52.
:00:52. > :00:55.survey. GDP is up by 0.7%. It also seems we are starting to spend money
:00:55. > :00:59.again and we are buying big-ticket items like cars. Have we really
:00:59. > :01:05.turned the corner is to mark if we have does that mean George Osborne
:01:05. > :01:10.was right all along? George Osborne has been having a
:01:10. > :01:15.tough time of late. With the recession, spending reductions, and
:01:15. > :01:22.job losses, his opponents have been less than gracious about his plan
:01:22. > :01:27.for economic recovery. This is a budget for people who aspire to work
:01:27. > :01:33.hard and get on. For three years the Chancellor has come to the chamber.
:01:33. > :01:37.Every single time it is getting worse. He has applied a straitjacket
:01:37. > :01:45.to the public finances of Scotland. You get the picture. That are there
:01:45. > :01:51.are no signs that the Chancellor's strategy is being of? Recent figures
:01:51. > :01:56.pointed to a 0.6% growth in the economy in the three months until
:01:56. > :01:59.June. Output grew in construction. There was also a boost for
:01:59. > :02:06.manufacturing and in the services sector. It led George Osborne to
:02:06. > :02:13.declare this. The economy is on the mend but we have got a long way to
:02:13. > :02:17.go as we move from rescue to recovery. How confident can we be
:02:17. > :02:24.that the strategy is helping the UK's economy step at to plead
:02:24. > :02:30.recession levels? Chancellors are brilliant when they do nothing. This
:02:30. > :02:39.Chancellor has been very good at not succumbing to the calls for
:02:39. > :02:47.Keynesian style reflation. What we have seen over the past year is a
:02:47. > :02:52.healthy recovery without driving up Government borrowing. But none of
:02:52. > :02:55.that satisfied George Osborne's political opponents who say the
:02:55. > :03:02.failure of wage rises to keep up with face increases have let
:03:02. > :03:11.families struggling. So how much success can the Chancellor clean?
:03:11. > :03:16.People are struggling to make ends meet. They may now think they can do
:03:16. > :03:20.a little more. He might think they can get away with it politically.
:03:20. > :03:26.But in terms of having solved the problem in Parliament according to
:03:26. > :03:35.the plan that was set out in 2000 and ten, it did not happen. -- in
:03:35. > :03:40.2010. We are on our knees and trying to get vertical again. That's the
:03:40. > :03:47.future still looks uncertain with key areas of industry still looking
:03:47. > :03:49.to return to the levels of 2008. Experts warn things could yet be
:03:49. > :03:59.blown off course. I am joined by David Bell from
:03:59. > :03:59.
:03:59. > :04:08.Stirling University and David Maddox from The Scotsman. I know there are
:04:08. > :04:12.questions about whether the recovery is sustainable. We does this leave
:04:12. > :04:16.those who have been seeing for the last four years that George Osborne
:04:16. > :04:24.is completely wrong-headed and is doing the opposite of what he should
:04:24. > :04:33.be doing in a recession with zero interest rates? Where does that
:04:33. > :04:41.leave them? It is still the case that the recovery is slow. We are
:04:41. > :04:47.making quite a fuss about getting a growth rate up to 1.7%. In the last
:04:47. > :04:56.decade we were at 2.5% average each year. We are still 3% below the
:04:56. > :05:00.level of output that we had in 2007. We are one of the only industrial
:05:00. > :05:05.countries that has not recovered to the level that we were at at the
:05:05. > :05:09.start of the recession. You have two walk before you can run. The
:05:09. > :05:13.recovery has to start somewhere. There is still a way to go before
:05:13. > :05:19.you can say we are back to the growth rates that we experienced in
:05:19. > :05:27.the last few decades. The argument would be that if you have done what
:05:27. > :05:35.we wanted, that perhaps economic growth would have started earlier,
:05:35. > :05:40.perhaps he could have done in one Parliament more than he has done?
:05:40. > :05:48.There is a consensus about infrastructure. Those plans were
:05:49. > :05:55.started and the Labour Party. Those plans have been to the long-term
:05:55. > :06:02.detriment of the economy. Although he doesn't seem to have changed tack
:06:02. > :06:11.on this. There has been inconsistency. That is an obstacle
:06:11. > :06:15.also. I take the point about your, but a lot of fluid people who are
:06:15. > :06:19.arguing for stimulus, have been saying that it would be nice if the
:06:19. > :06:24.stimulus went into long-term investment, but that is not the
:06:24. > :06:29.point of Keynesian stimulus. It is just to pump money into the economy.
:06:29. > :06:34.It might as well be used in employing people to dig holes in the
:06:34. > :06:36.ground and fill them in. That is true. The recovery that we have seen
:06:37. > :06:42.in the last couple of quarters has been driven by a reduction in
:06:42. > :06:47.savings. Consumers are saving less and spending more. That is the
:06:47. > :06:51.old-style boost to the economy that we have experienced for many
:06:51. > :07:01.decades. It is not the rebalancing of the economy towards exports,
:07:01. > :07:02.
:07:02. > :07:08.towards more investment. Investment is down. It is 12% down. David
:07:08. > :07:14.Maddox, the politics of this, it may be that those calling for a fiscal
:07:14. > :07:18.stimulus can say it was all about timing. One suspects the electorate
:07:18. > :07:28.will not see it that way. I do not think they will care. All people
:07:28. > :07:30.
:07:30. > :07:34.care about is money in their pocket. There is a long way to go,
:07:34. > :07:42.but in the run-up to the next election and this could be seen as a
:07:42. > :07:49.turning point. The figures look good. The new governor of the Bank
:07:49. > :07:56.of England has given a stamp of approval to the austerity measures,
:07:56. > :08:03.saying that the recovery is now underway. There seems to be a few
:08:03. > :08:06.abroad that Labour have been wrong-footed by this and that they
:08:06. > :08:16.bet the House on the economy tanking. Is that the view down
:08:16. > :08:24.
:08:24. > :08:33.there? Labour are in total disarray. A few weeks ago they bought into the
:08:33. > :08:37.conservative view of what should happen with the economy. They bought
:08:37. > :08:44.into the philosophy will stop that angered the union is a great deal.
:08:44. > :08:52.They have got nowhere to go with an alternative message. Note the
:08:52. > :09:02.figures are beginning to look as though George Osborne is right.
:09:02. > :09:02.
:09:03. > :09:05.There is another problem. There was a constant message that Ed Miliband
:09:05. > :09:13.was in the Treasury when things went wrong and they have never shaken
:09:13. > :09:18.that off. A recovering economy could play either way. I have no sense at
:09:18. > :09:23.all. Do you have any sense of which side would gain from a strong bout
:09:23. > :09:28.of economic growth? It very much depends on who wins the battle of
:09:28. > :09:32.the cred I believe for the -- credit for the economy recovering. I've no
:09:32. > :09:36.doubt the Scottish Government will be saying they their slightly
:09:36. > :09:41.alternative approach, given the limits to what they could do, was
:09:41. > :09:45.the difference, no doubt that - in fact the coalition already saying
:09:45. > :09:50.the extra money they pumped into capital projects for Scotland is
:09:50. > :09:55.making the difference. I'm not - I'm not sure if it's going to make that
:09:55. > :10:01.much of a difference. It didn't seem to really play that much in terms of
:10:01. > :10:07.the kind of independence referendum ratings before, I'm not convinced it
:10:07. > :10:11.will play too much after. An unfair question to you, it's not strictly
:10:11. > :10:14.an economic question. The other things Labour hopes will depend on,
:10:14. > :10:19.they are saying, well, look people's living standards are falling, which
:10:19. > :10:25.of course they are. Now, there was - and there are some people who will
:10:25. > :10:29.argue - that is much more important. There was a leader in the financial
:10:29. > :10:32.times saying that is a problem for Labour because most people in
:10:32. > :10:36.Britain accepted that, look, times were hard and living standards were
:10:36. > :10:40.going to fall. That won't annoy them as much as they will like the fact
:10:40. > :10:44.that things might be turning around. I wonder which side you think people
:10:44. > :10:48.are actually on? That is a difficult one. Certainly, the message will be
:10:48. > :10:53.out there that things are getting better, it's absolutely clear that
:10:53. > :10:57.on the ground families have suffered more in this recession in the sense
:10:57. > :11:04.of having lower living standards than has been the case for 100
:11:04. > :11:08.years. Out of every recession that we have had in 80s, 90s whatever
:11:08. > :11:13.people came out with rising wages, we haven't had that. Yeah and the
:11:13. > :11:17.middle is being squeezed, isn't it? Absolutely. Killed workers
:11:17. > :11:23.particularly? Absolutely. Four out of five of the new jobs that have
:11:23. > :11:28.been created, since 2010, have been at wages of less than �7.95 an hour,
:11:28. > :11:33.the bottom 25% is where the jobs growth is. There is no growth of
:11:33. > :11:37.jobs in the middle of the income distribution. People are saying, we
:11:37. > :11:41.don't care about this, there are horrendous cuts that George Osborne
:11:41. > :11:46.is making, that is what is wrong with them. Analysis this week showed
:11:46. > :11:51.the cuts might get worse when you look out to 2017/18 or so. On
:11:52. > :11:55.current plans that is the case. I presume, if you are George Osborne
:11:55. > :12:02.you are thinking - if I get strong economic growth that goes away?
:12:02. > :12:06.Yeah. I mean, it makes complete difference to the public finances.
:12:06. > :12:12.The extent of growth generates the tax revenue, you don't have to cut
:12:12. > :12:16.the spending so much. By having that in an odd sense he could benefit
:12:16. > :12:20.from having failed arguably and had to push it forward, had to bring in
:12:20. > :12:25.more cuts, if he gets economic growth he can say, I might never
:12:25. > :12:31.have to do that. He won't say it openingly? So long as the growth is
:12:31. > :12:35.taking place in parts of the economy where he can generate tax, not on
:12:35. > :12:39.companies who don't pay tax or people on very low incomes. Very
:12:39. > :12:42.much indeed. Edinburgh's festivals are known for
:12:42. > :12:45.taking the cultural pulse. There are plenty prepared to tackle
:12:45. > :12:47.everything from corruption to the exploitation of women, but only a
:12:47. > :12:49.handful of shows deal with the issue of Scottish independence.
:12:49. > :12:52.Most of those have been created by non-Scots.
:12:52. > :13:02.Why? Are Scots too scared to speak up or
:13:02. > :13:21.
:13:21. > :13:26.question, a different performer and a different point of view each day.
:13:26. > :13:30.All imagine the future of a baby found floating in a Moses basket on
:13:30. > :13:36.the River Tweed on the night of the disillusion of the night of union.
:13:36. > :13:39.After that, it's a question of singing about it. It's not a kind of
:13:39. > :13:45.slogan earring yes or no kind of format here at all. It really is
:13:45. > :13:49.people are coming from very, very kind of different perspectives.
:13:49. > :13:54.There has been created a lovely space there to feel very free to
:13:54. > :14:00.just throw some ideas out and then the night might take another angle
:14:00. > :14:04.again. It feels like a lively, fun debate. I don't think anybody feels
:14:04. > :14:14.they are being hit over the whaed any agenda or manifesto. It's - how
:14:14. > :14:15.
:14:15. > :14:20.about this as an idea? How about this as an idea? It's a lot of fun.
:14:20. > :14:27.A music is also key to this show, I'm With The Band, in which the
:14:27. > :14:29.Scots guitarist of a rock band decides to quit and leave his
:14:29. > :14:33.Englishman, an Irishman, a Welshman and a Scot band mates wondering what
:14:33. > :14:36.to do next. Its creator isn't Scottish and doesn't have a say in
:14:36. > :14:40.the referendum. He feels it's important to look at how it might
:14:40. > :14:47.affect the whole of the UK. There is pressure on Scottish artists to
:14:47. > :14:52.engage with this issue. I kind of understand the difficulty around
:14:52. > :14:57.that because, if Wales was having a referendum, I'm not sure I would
:14:57. > :15:02.know where to start, how to drama advertise that, you know. I would
:15:02. > :15:12.probably just have one actor on stage with a plaque card saying,
:15:12. > :15:25.
:15:25. > :15:31.independence debate like this Finish company whose show Preen Back Yer
:15:31. > :15:37.Lugs! Imagines a post apocalyptc world where Scotland is the only
:15:37. > :15:41.surviving nation and the largest ethnic minority are the English seek
:15:41. > :15:47.seeking refuge North of the border. Cast members believe local companies
:15:47. > :15:52.are weary of nailing their colours to the mast. People might be afraid
:15:52. > :15:57.to give a strong message about it. It is a personal thing, there is a
:15:57. > :16:00.lot of support for the "yes" campaign a lot of people are
:16:00. > :16:04.undecided if you put your neck on the line you would be judged for
:16:04. > :16:08.that. There are quite a few things going around the subject matter, I
:16:08. > :16:12.think. I have not been able to see anything else. There is nothing
:16:12. > :16:22.quite like this which leaves it open. So, I don't know the answer to
:16:22. > :16:24.
:16:25. > :16:29.Scottish artists and performers will speak out loud and clear when they
:16:29. > :16:35.want to. For the moment, they are simply raising the questions and
:16:35. > :16:40.Stoking the debate on both sides of the border. When someone starts to
:16:40. > :16:44.lecture or try and convince or persuade, that becomes very boring.
:16:44. > :16:49.If you want to do that make a speech, write an article, theatre is
:16:49. > :16:53.not a place to say - do this. It's a place to go - what about this?
:16:53. > :16:57.may be a handful of shows overtly about independence, but you don't
:16:57. > :17:03.have to look far to find artists and performers mulling over the subjects
:17:03. > :17:08.of nationhood and identity, like this exhibition by Rachel Maclean.
:17:08. > :17:14.One thing is sure, next year's Festival will be awash with shows on
:17:14. > :17:19.the big question, by which time the referendum will be just weeks away.
:17:19. > :17:26.referendum will be just weeks away. A look at tomorrow's front pages:
:17:26. > :17:31.Scotland's population hits highest ever level. The Telegraph, Met Fraud
:17:31. > :17:38.Squad to probe BBC payoffs. Payoffs, redundancy payments to senior