08/08/2013 Newsnight Scotland


08/08/2013

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

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Tonight on Newsnight Scotland. Economic growth up. Retail sales

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

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

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

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talking about independence? Britain is booming according to one

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

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

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

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was right all along? George Osborne has been having a

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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healthy recovery without driving up Government borrowing. But none of

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that satisfied George Osborne's political opponents who say the

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

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

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

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

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

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

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

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future still looks uncertain with key areas of industry still looking

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

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blown off course. I am joined by David Bell from

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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There is a consensus about infrastructure. Those plans were

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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doubt the Scottish Government will be saying they their slightly

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

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

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the extra money they pumped into capital projects for Scotland is

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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much indeed. Edinburgh's festivals are known for

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taking the cultural pulse. There are plenty prepared to tackle

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

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handful of shows deal with the issue of Scottish independence.

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Most of those have been created by non-Scots.

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Why? Are Scots too scared to speak up or

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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independence debate like this Finish company whose show Preen Back Yer

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

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surviving nation and the largest ethnic minority are the English seek

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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