:00:00. > :00:00.is acceptable for these people being paid to live in a hotel. The Syrian
:00:00. > :00:14.people in the end should decide. Thank you very much indeed.
:00:15. > :00:18.Tonight on Newsnight Scotland, a record-breaking drop in
:00:19. > :00:22.unemployment. Do the figures really prove the economy is on the mend and
:00:23. > :00:25.austerity has worked? We will discuss.
:00:26. > :00:30.Also tonight, nobody seems very keen to host the 2022 Commonwealth Games.
:00:31. > :00:34.Is it now up to Glasgow to rescue the brand?
:00:35. > :00:39.Good evening. Unemployment in Scotland is down to 6.4%. That is a
:00:40. > :00:42.striking fall since last month's figures and compares with the UK
:00:43. > :00:46.average of 7.1%. Politicians of all shades are spinning the figures to
:00:47. > :00:50.reflect their own views. But can this really be anything other than a
:00:51. > :00:59.sign the economy is on the mend? Graham Stuart reports.
:01:00. > :01:03.The storm clouds of the economic downturn look like they are
:01:04. > :01:06.gradually clearing. Recent job numbers have been fairly consistent
:01:07. > :01:11.in looking brighter and the latest figures show the number of jobless
:01:12. > :01:16.in Scotland fell by 21,000 between September and November. There are
:01:17. > :01:22.now officially 176,000 people here unemployed. That means the
:01:23. > :01:28.unemployment rate is at its lowest level since the beginning of 2009.
:01:29. > :01:33.That compares even better when compared with the UK as a whole.
:01:34. > :01:39.10,000 people found employment over the three months to November but
:01:40. > :01:43.what stands out is the number of women in employment in Scotland,
:01:44. > :01:47.which has seen the largest annual increase on record. As far as people
:01:48. > :01:52.out of work are concerned, there are around 2000 fewer people claiming
:01:53. > :02:01.job-seeker's allowance between September and November, a fall of
:02:02. > :02:05.around 24,000 over the year. We have seen strong growth in recent months,
:02:06. > :02:13.transferring to good figures for unemployment. The number of people
:02:14. > :02:20.out of work -- in work are up to a level close to levels before 2008.
:02:21. > :02:29.Some of the things the government are doing are paying off. A small
:02:30. > :02:34.business like this needs to be lent to and it is really important
:02:35. > :02:39.getting folk back to work so it is encouraging to see that starting to
:02:40. > :02:42.pay off. A long way to go but unemployment is falling, youth
:02:43. > :02:47.unemployment is falling and it looks like we have better times ahead.
:02:48. > :02:53.Highly encouraging. Estimates released last week indicated that
:02:54. > :02:58.the Scottish economy grew by 0.7% in the third quarter of last year. With
:02:59. > :03:02.these latest job figures showing a faster than expected improvement it
:03:03. > :03:08.points to productivity as a continuing concern and without
:03:09. > :03:11.improved and activity there will be -- there will not be a sustained
:03:12. > :03:14.growth in spending and earning power.
:03:15. > :03:18.I am joined now by the economist Jo Armstrong of the Centre for Public
:03:19. > :03:21.Policy for Regions, and from London by Professor David Blanchflower,
:03:22. > :03:24.formerly a member of the Bank of England's Monetary Policy Committee.
:03:25. > :03:29.Jo Armstrong, on a point about these specific Scottish figures, there is
:03:30. > :03:32.something odd about them. It looks like the fall in unemployment is not
:03:33. > :03:39.matched by a rise in people in jobs. Is it that evil are reporting that
:03:40. > :03:46.they are no longer available for work? -- is it just that people are
:03:47. > :03:53.reporting. There is an increase in people reporting being self-employed
:03:54. > :03:59.so maybe they are choosing not to register for job-seeker's
:04:00. > :04:05.allowance. That caveat aside, it still gives you quite a strong
:04:06. > :04:08.recovery. These are good figures. The figures specifically for
:04:09. > :04:13.Scotland but also for the UK. And they reflect to some extent the
:04:14. > :04:33.operating in the figures from the IMF. -- the uprating. David, you
:04:34. > :04:41.presumably would agree with that. Jo is right, yes. Various organisations
:04:42. > :04:46.have been predicting that the economy would start to grow again.
:04:47. > :04:50.These are good figures but the question is, we start from a pretty
:04:51. > :04:55.low, output is much lower than before the recession started. The
:04:56. > :05:00.question is, is it sustainable, given what it is based on? A great
:05:01. > :05:06.start but are we going to see it continuing? Let's talk about
:05:07. > :05:14.sustainability in a moment but doesn't George Osborne get some of
:05:15. > :05:19.the credit? You forecast that if his policies were pursued unemployment
:05:20. > :05:22.would rise to 4 million. I did not say that, I said that if monetary
:05:23. > :05:28.and fiscal stimulus was removed unemployment could rise. It has not
:05:29. > :05:32.been removed. We should look at where we are now compared with where
:05:33. > :05:38.we should be. The reality is that we are 5% lower in output than we
:05:39. > :05:43.should have been if Osborne had not implemented his policy. I live in
:05:44. > :05:47.the US. Output there is 4% higher than it was at the start of the
:05:48. > :05:54.recession. In the UK today, even with the growth we have seen, it is
:05:55. > :05:59.still 2% below. We have seen terrible growth over the last few
:06:00. > :06:05.years and at long last we are seeing growth but the question is, what is
:06:06. > :06:09.driving it? It seems to be driven by people stopping doing precautionary
:06:10. > :06:18.saving, why or ring against a house price boom. -- by borrowing. There
:06:19. > :06:23.are things to be cautious about and we have not mentioned the fact that
:06:24. > :06:28.real earnings are still falling, they are 10% what they were at the
:06:29. > :06:32.start of the recession. Yes, America has recovered faster but what is
:06:33. > :06:37.happening here is pretty good campaign to most countries in
:06:38. > :06:41.Europe. Most countries did not face the same level of decline. We have
:06:42. > :06:47.come from a much, much lower base and what we are now seeing is what
:06:48. > :06:51.we might in the past have expected to be growth -- normal growth
:06:52. > :06:56.rates. At this stage we would have expected significant growth because
:06:57. > :07:02.of the depth of the recession we have experienced. Can I make a
:07:03. > :07:07.heretical suggestion, that perhaps one reason why you are more gloomy
:07:08. > :07:12.-- that you're more gloomy forecasts did not come to pass is that there
:07:13. > :07:17.has not been much austerity. When you look at the public spending
:07:18. > :07:26.figures, total expenditure, the gross figure, has actually gone up
:07:27. > :07:33.every year. According to the government the cut in real terms
:07:34. > :07:39.will be about 3%, which is trivial. We have had a big cut in capital
:07:40. > :07:43.expenditure, a massive monetary stimulus that has gone on and the
:07:44. > :07:50.evidence appears to be that output is lower because of the policy the
:07:51. > :07:55.George on to -- the policy that George Osborne implemented. It is
:07:56. > :08:01.about 1.5% lower because we have spent money on benefits and welfare.
:08:02. > :08:05.We have had jobs in tax revenues. Yes, you can say that there has not
:08:06. > :08:11.been any real austerity but that is not true. The output level here,
:08:12. > :08:16.let's put it in context, we have never seen in 100 years. We have
:08:17. > :08:21.never seen a recession of this kind and such slow recovery in 100 years.
:08:22. > :08:26.You can say some of those things but the reality is that we, from a
:08:27. > :08:32.collapse of the kind we have had, we should have seen a very rapid
:08:33. > :08:40.recovery and we have not. Does that really address the point? I accept
:08:41. > :08:45.that taxes went up, VAT. I access that perhaps some of the rise in
:08:46. > :08:51.what is called annually managed expenditure and benefits Justin Rose
:08:52. > :09:02.perhaps as a consequence of cutting public spending, but actually
:09:03. > :09:10.spending is not fallen. -- benefits rose. If we are talking about what
:09:11. > :09:15.kind of spending we might want for a longer term growth, spending on
:09:16. > :09:21.benefits has been necessary as one of these automatic stabilisers...
:09:22. > :09:26.You both seem to agree with John Swinney, that spending on capital
:09:27. > :09:44.projects was important and that was cut very dramatically. And spending
:09:45. > :09:58.on increasing human capacity. But it seems like the austerity is an
:09:59. > :10:03.optical illusion. Yes, we are still increasing our borrowing level, so
:10:04. > :10:07.part of the spending has gone on increasing borrowing costs, which
:10:08. > :10:17.looked like they are continuing to rise. Yes, spending overall has not
:10:18. > :10:26.fallen in real terms, but at some point the borrowing will have to
:10:27. > :10:32.stop. What is your worry about the balance of the recovery, and how it
:10:33. > :10:38.is based on debt? Surely it is better than no recovery at all? I
:10:39. > :10:43.agree with that, at all, of course. But George Osborne said he had a
:10:44. > :10:46.series of benchmarks, he said, keep the AAA credit rating, he said we
:10:47. > :10:51.would see a growth in savings, exports and investment, and we have
:10:52. > :10:58.seen none of those. The way we get balanced growth is, we are going to
:10:59. > :11:04.get investment and exports rising, consumption rising, all potentially
:11:05. > :11:08.from government. But consumption is rising not through real wage growth.
:11:09. > :11:14.And net trade is falling. The other thing we worry about is they
:11:15. > :11:17.promised we would see a rebalancing away from the housing and financial
:11:18. > :11:22.services. We have seen none of that rebalancing. Right now, what happens
:11:23. > :11:28.when the next shock comes along, perhaps a housing market shock, and
:11:29. > :11:35.we are in a situation, unlike in 2008, and we cannot cut interest
:11:36. > :11:38.rates any more? We have not really made the economy more resilient,
:11:39. > :11:43.which is what Osborne promised us. The worry is, we are not really
:11:44. > :11:48.ready for the next shock, and we are worse off. One thing which would
:11:49. > :11:52.follow from that, Jo Armstrong, is that there is a regional dimension
:11:53. > :11:58.to this recovery. Even if you look at the unemployment figures, 5.3% in
:11:59. > :12:01.the south-east of England, more than 10% in the north-east of England.
:12:02. > :12:08.Scotland is doing relatively well. And of course, the Bank of England,
:12:09. > :12:11.I know they are saying maybe not in the short-term, but if they consider
:12:12. > :12:19.putting up interest rates, it could be even more unbalanced across the
:12:20. > :12:22.regions? Yes, clearly, the Bank of England thought that because
:12:23. > :12:27.inflation was above its target, using something else to justify
:12:28. > :12:31.keeping interest rates down, so it chose the unemployment rate. But
:12:32. > :12:37.that has now reached the trigger point. But the minutes of the
:12:38. > :12:42.Monetary Policy Committee clearly signalled that inflation is expected
:12:43. > :12:48.to bob around 2%. They really do not want to put up interest rates. They
:12:49. > :12:52.have got to maintain low rates of interest as long as possible to
:12:53. > :12:57.allow some kind of rebalancing across the region 's. Thank you both
:12:58. > :13:00.very much indeed. Now, just about everyone is looking forward to the
:13:01. > :13:07.Commonwealth Games. You will recall the pride when Glasgow won the
:13:08. > :13:11.competition to become the home city. The next Games will go to Brisbane
:13:12. > :13:17.after a contest with a town in Sri Lanka. But it is looking as if there
:13:18. > :13:21.is not much interest for the 2022 Games. So, is it up to Glasgow to
:13:22. > :13:32.rescue the Commonwealth brand and doing this report from Huw Williams.
:13:33. > :13:36.I think there is a serious concern within the, Love Games Federation
:13:37. > :13:41.about exactly where the Games are going. But it seems that countries
:13:42. > :13:48.are not exactly queueing up to host the 2022 Games. More than 1 billion
:13:49. > :13:53.people are expect it to tune in for the opening ceremony in Celtic Park.
:13:54. > :13:58.That in itself is a massive boost for the city. One of the sponsorship
:13:59. > :14:02.deals, spectators, the tourism money, and of course, attracting
:14:03. > :14:07.some big names to your city. These can attract a city to read for a
:14:08. > :14:12.Commonwealth Games, but it seems at this stage, most cities around the
:14:13. > :14:16.17 nations and territories believe it is just a little bit too
:14:17. > :14:21.expensive. That appears to be what is putting them off. And we are
:14:22. > :14:24.talking serious money, perhaps ?1 billion if you are starting from
:14:25. > :14:29.scratch, building new stadiums and infrastructure. So, you would think
:14:30. > :14:34.that for Sheva now, you may be looking again at some of the more
:14:35. > :14:44.developed communities -- for Sheva now. -- for 2022. Maybe even
:14:45. > :14:49.Singapore or Kuala Lumpur. I know that the federation is very keen on
:14:50. > :14:55.2022 and future games taking place in South Africa. There have already
:14:56. > :15:03.been attempts to them into taking them on, but at this stage there
:15:04. > :15:06.seems to be no silly as interest -- no serious interest. This is the
:15:07. > :15:10.leaked letter which expresses concern about the way the executive
:15:11. > :15:17.board behaved at a meeting in Glasgow. It accepts that the Games
:15:18. > :15:21.needs to be modernised, and says there is concern that there are few
:15:22. > :15:30.candidates to host the Games in 2022. In his reply, the president of
:15:31. > :15:35.the Federation accuses Sir Andrew of spreading inaccuracies. Also, of
:15:36. > :15:42.being discourteous and disingenuous. He does not comment on whether Games
:15:43. > :15:48.could be held in eight years' time. But there is still interest in the
:15:49. > :15:52.Games, not least from Wales. -- on where the Games. They came to
:15:53. > :15:55.Glasgow to assess the costs and benefits of being a host city.
:15:56. > :15:58.Glasgow to assess the costs and benefits of There will be an
:15:59. > :16:02.economic impact study done to give an idea of the legacy and the
:16:03. > :16:07.impact. After that the Welsh government will take a long, hard
:16:08. > :16:11.look at it. Hosting a multisport Games is a fantastic way of
:16:12. > :16:17.advertising a country in the world. After Glasgow, we would like to see
:16:18. > :16:24.what the full benefits were for Glasgow and for Scotland hosting
:16:25. > :16:28.these Games. The organisers of Glasgow 2014 said they were not the
:16:29. > :16:31.right people to talk to, and we should ask the city council, but
:16:32. > :16:35.they were not able to make anybody available for interview. The
:16:36. > :16:40.Commonwealth Games Federation said kids to host the 2022 Commonwealth
:16:41. > :16:46.Games remained open until March next year, and the Games would not be
:16:47. > :16:59.awarded until next autumn. And we should not think that the future of
:17:00. > :17:02.the Games is in any doubt. They will carry on, there is absolutely no
:17:03. > :17:08.doubt about that. Just what they might look like in the future might
:17:09. > :17:12.be up for discussion. There are some who feel that for too long, they
:17:13. > :17:17.have tried to hang on to the coat-tails of the Olympics, so we
:17:18. > :17:21.may well see a new, streamlined Commonwealth Games, at some point in
:17:22. > :17:26.the future. But will they carry on? I think they probably will. I am
:17:27. > :17:29.joined from the mirth by Doug Gillon, who has covered just about
:17:30. > :17:41.every Commonwealth Games there has ever been. -- from the earth. Is
:17:42. > :17:46.there a crisis? -- from Plymouth. I certainly think there is a crisis.
:17:47. > :17:51.You had three people in the race for Glasgow, one of whom dropped out. It
:17:52. > :17:55.was then a two horse race. It was a two horse race the time before that,
:17:56. > :18:01.for Delhi, but the two Games before that, Melbourne and Manchester won
:18:02. > :18:07.them by default, there was no other candidate. So, we have just been
:18:08. > :18:12.hearing about shoots of economic recovery, but not enough to tempt
:18:13. > :18:14.countries to invest in the Commonwealth Games. They have got 13
:18:15. > :18:20.months to put their bid on the table, so there is still plenty of
:18:21. > :18:24.time. But if nobody comes forward, are we saying the Games will
:18:25. > :18:29.continue? Maybe not, if there is no candidate to host them. How are they
:18:30. > :18:39.seen by athletes, but if two other events? Well, they are seen as,
:18:40. > :18:43.obviously, inferior to the Olympics and, in some cases, also inferior to
:18:44. > :18:51.the European Championships. In many events, many sports, the European
:18:52. > :18:58.Championship 's rate very, very highly. It is very hard to win a
:18:59. > :19:04.sprint title in the Commonwealth, with Jamaica. It is very hard to win
:19:05. > :19:09.endurance titles, with the likes of Kenya. But for Scots, it is really
:19:10. > :19:15.important, it is one of the rare occasions in which most Scottish
:19:16. > :19:19.sports get the chance to be on the world stage. It is a very rare
:19:20. > :19:31.occasion. 's represent their country. Given this crisis you are
:19:32. > :19:34.talking about -- occasion for Scots -- does this mean the whole future
:19:35. > :19:41.and status of the Games is at stake? I wrote in the Herald not
:19:42. > :19:46.long after I returned from Delhi at rescuing the Commonwealth Games
:19:47. > :19:53.brand economically was really what they had to do. Let's be fair, 94%,
:19:54. > :19:59.more than that, of tickets, were sold. That is more than any other
:20:00. > :20:02.Commonwealth Games in history. It is more than the Sydney Olympics, and I
:20:03. > :20:07.believe it may even be more than London, in terms of a percentage of
:20:08. > :20:12.advance sales. That is a too horrific bonus. It does not help
:20:13. > :20:15.that there was a huge number of defections from the Delhi games.
:20:16. > :20:25.Chris Hoy did not go, Jessica Ennis did not go. We had world medallists
:20:26. > :20:29.and European medallists in gymnastics who did not go. There
:20:30. > :20:33.were a lot of Scots who did not front up and go there. People never
:20:34. > :20:39.really remember who do not go. They remember the winners. I think it is
:20:40. > :20:45.unfortunate to go talking about who might not turn up. No Chris Hoy and
:20:46. > :20:48.no Jessica Ennis-Hill in Glasgow, but the tickets for these two sports
:20:49. > :20:53.are completely sold out. Thank you very much for joining us. A very
:20:54. > :21:12.quick look at tomorrow's front pages. Starting with the Scotsman...
:21:13. > :21:18.And that very dramatic picture of the riot outside the parliament
:21:19. > :21:36.building in Kiev. That is all for tonight. I will be back tomorrow.
:21:37. > :21:47.Showers will be rattling across the country first thing in the morning.
:21:48. > :21:52.But they will soon clear through. It will be feeling cold, and there will
:21:53. > :22:05.be some snow down to quite low levels. Further south, fewer
:22:06. > :22:07.showers. Most of us will have a dry