08/08/2013 Newsnight Scotland

the fire. I shall not be wandering back to the fire. I shall make

Tonight on Newsnight Scotland. Economic growth up. Retail sales

up. Industry growing. It looks like the recovery might be here. Does

that mean George Osborne's economic policy was right all along?

And our Scottish performer is at the Edinburgh Festival shying away from

talking about independence? Britain is booming according to one

survey. GDP is up by 0.7%. It also seems we are starting to spend money

again and we are buying big-ticket items like cars. Have we really

turned the corner is to mark if we have does that mean George Osborne

was right all along? George Osborne has been having a

tough time of late. With the recession, spending reductions, and

job losses, his opponents have been less than gracious about his plan

for economic recovery. This is a budget for people who aspire to work

hard and get on. For three years the Chancellor has come to the chamber.

Every single time it is getting worse. He has applied a straitjacket

to the public finances of Scotland. You get the picture. That are there

are no signs that the Chancellor's strategy is being of? Recent figures

pointed to a 0.6% growth in the economy in the three months until

June. Output grew in construction. There was also a boost for

manufacturing and in the services sector. It led George Osborne to

declare this. The economy is on the mend but we have got a long way to

go as we move from rescue to recovery. How confident can we be

that the strategy is helping the UK's economy step at to plead

recession levels? Chancellors are brilliant when they do nothing. This

Chancellor has been very good at not succumbing to the calls for

Keynesian style reflation. What we have seen over the past year is a

healthy recovery without driving up Government borrowing. But none of

that satisfied George Osborne's political opponents who say the

failure of wage rises to keep up with face increases have let

families struggling. So how much success can the Chancellor clean?

People are struggling to make ends meet. They may now think they can do

a little more. He might think they can get away with it politically.

But in terms of having solved the problem in Parliament according to

the plan that was set out in 2000 and ten, it did not happen. -- in

2010. We are on our knees and trying to get vertical again. That's the

future still looks uncertain with key areas of industry still looking

to return to the levels of 2008. Experts warn things could yet be

blown off course. I am joined by David Bell from

Stirling University and David Maddox from The Scotsman. I know there are

questions about whether the recovery is sustainable. We does this leave

those who have been seeing for the last four years that George Osborne

is completely wrong-headed and is doing the opposite of what he should

be doing in a recession with zero interest rates? Where does that

leave them? It is still the case that the recovery is slow. We are

making quite a fuss about getting a growth rate up to 1.7%. In the last

decade we were at 2.5% average each year. We are still 3% below the

level of output that we had in 2007. We are one of the only industrial

countries that has not recovered to the level that we were at at the

start of the recession. You have two walk before you can run. The

recovery has to start somewhere. There is still a way to go before

you can say we are back to the growth rates that we experienced in

the last few decades. The argument would be that if you have done what

we wanted, that perhaps economic growth would have started earlier,

perhaps he could have done in one Parliament more than he has done?

There is a consensus about infrastructure. Those plans were

started and the Labour Party. Those plans have been to the long-term

detriment of the economy. Although he doesn't seem to have changed tack

on this. There has been inconsistency. That is an obstacle

also. I take the point about your, but a lot of fluid people who are

arguing for stimulus, have been saying that it would be nice if the

stimulus went into long-term investment, but that is not the

point of Keynesian stimulus. It is just to pump money into the economy.

It might as well be used in employing people to dig holes in the

ground and fill them in. That is true. The recovery that we have seen

in the last couple of quarters has been driven by a reduction in

savings. Consumers are saving less and spending more. That is the

old-style boost to the economy that we have experienced for many

decades. It is not the rebalancing of the economy towards exports,

towards more investment. Investment is down. It is 12% down. David

Maddox, the politics of this, it may be that those calling for a fiscal

stimulus can say it was all about timing. One suspects the electorate

will not see it that way. I do not think they will care. All people

care about is money in their pocket. There is a long way to go,

but in the run-up to the next election and this could be seen as a

turning point. The figures look good. The new governor of the Bank

of England has given a stamp of approval to the austerity measures,

saying that the recovery is now underway. There seems to be a few

abroad that Labour have been wrong-footed by this and that they

bet the House on the economy tanking. Is that the view down

there? Labour are in total disarray. A few weeks ago they bought into the

conservative view of what should happen with the economy. They bought

into the philosophy will stop that angered the union is a great deal.

They have got nowhere to go with an alternative message. Note the

figures are beginning to look as though George Osborne is right.

There is another problem. There was a constant message that Ed Miliband

was in the Treasury when things went wrong and they have never shaken

that off. A recovering economy could play either way. I have no sense at

all. Do you have any sense of which side would gain from a strong bout

of economic growth? It very much depends on who wins the battle of

the cred I believe for the -- credit for the economy recovering. I've no

doubt the Scottish Government will be saying they their slightly

alternative approach, given the limits to what they could do, was

the difference, no doubt that - in fact the coalition already saying

the extra money they pumped into capital projects for Scotland is

making the difference. I'm not - I'm not sure if it's going to make that

much of a difference. It didn't seem to really play that much in terms of

the kind of independence referendum ratings before, I'm not convinced it

will play too much after. An unfair question to you, it's not strictly

an economic question. The other things Labour hopes will depend on,

they are saying, well, look people's living standards are falling, which

of course they are. Now, there was - and there are some people who will

argue - that is much more important. There was a leader in the financial

times saying that is a problem for Labour because most people in

Britain accepted that, look, times were hard and living standards were

going to fall. That won't annoy them as much as they will like the fact

that things might be turning around. I wonder which side you think people

are actually on? That is a difficult one. Certainly, the message will be

out there that things are getting better, it's absolutely clear that

on the ground families have suffered more in this recession in the sense

of having lower living standards than has been the case for 100

years. Out of every recession that we have had in 80s, 90s whatever

people came out with rising wages, we haven't had that. Yeah and the

middle is being squeezed, isn't it? Absolutely. Killed workers

particularly? Absolutely. Four out of five of the new jobs that have

been created, since 2010, have been at wages of less than �7.95 an hour,

the bottom 25% is where the jobs growth is. There is no growth of

jobs in the middle of the income distribution. People are saying, we

don't care about this, there are horrendous cuts that George Osborne

is making, that is what is wrong with them. Analysis this week showed

the cuts might get worse when you look out to 2017/18 or so. On

current plans that is the case. I presume, if you are George Osborne

you are thinking - if I get strong economic growth that goes away?

Yeah. I mean, it makes complete difference to the public finances.

The extent of growth generates the tax revenue, you don't have to cut

the spending so much. By having that in an odd sense he could benefit

from having failed arguably and had to push it forward, had to bring in

more cuts, if he gets economic growth he can say, I might never

have to do that. He won't say it openingly? So long as the growth is

taking place in parts of the economy where he can generate tax, not on

companies who don't pay tax or people on very low incomes. Very

much indeed. Edinburgh's festivals are known for

taking the cultural pulse. There are plenty prepared to tackle

everything from corruption to the exploitation of women, but only a

handful of shows deal with the issue of Scottish independence.

Most of those have been created by non-Scots.

Why? Are Scots too scared to speak up or

question, a different performer and a different point of view each day.

All imagine the future of a baby found floating in a Moses basket on

the River Tweed on the night of the disillusion of the night of union.

After that, it's a question of singing about it. It's not a kind of

slogan earring yes or no kind of format here at all. It really is

people are coming from very, very kind of different perspectives.

There has been created a lovely space there to feel very free to

just throw some ideas out and then the night might take another angle

again. It feels like a lively, fun debate. I don't think anybody feels

they are being hit over the whaed any agenda or manifesto. It's - how

about this as an idea? How about this as an idea? It's a lot of fun.

A music is also key to this show, I'm With The Band, in which the

Scots guitarist of a rock band decides to quit and leave his

Englishman, an Irishman, a Welshman and a Scot band mates wondering what

to do next. Its creator isn't Scottish and doesn't have a say in

the referendum. He feels it's important to look at how it might

affect the whole of the UK. There is pressure on Scottish artists to

engage with this issue. I kind of understand the difficulty around

that because, if Wales was having a referendum, I'm not sure I would

know where to start, how to drama advertise that, you know. I would

probably just have one actor on stage with a plaque card saying,

independence debate like this Finish company whose show Preen Back Yer

Lugs! Imagines a post apocalyptc world where Scotland is the only

surviving nation and the largest ethnic minority are the English seek

seeking refuge North of the border. Cast members believe local companies

are weary of nailing their colours to the mast. People might be afraid

to give a strong message about it. It is a personal thing, there is a

lot of support for the "yes" campaign a lot of people are

undecided if you put your neck on the line you would be judged for

that. There are quite a few things going around the subject matter, I

think. I have not been able to see anything else. There is nothing

quite like this which leaves it open. So, I don't know the answer to

Scottish artists and performers will speak out loud and clear when they

want to. For the moment, they are simply raising the questions and

Stoking the debate on both sides of the border. When someone starts to

lecture or try and convince or persuade, that becomes very boring.

If you want to do that make a speech, write an article, theatre is

not a place to say - do this. It's a place to go - what about this?

may be a handful of shows overtly about independence, but you don't

have to look far to find artists and performers mulling over the subjects

of nationhood and identity, like this exhibition by Rachel Maclean.

One thing is sure, next year's Festival will be awash with shows on

the big question, by which time the referendum will be just weeks away.

referendum will be just weeks away. A look at tomorrow's front pages:

Scotland's population hits highest ever level. The Telegraph, Met Fraud

Squad to probe BBC payoffs. Payoffs, redundancy payments to senior