:00:13. > :00:17.A challenging but fair deal for councils says the Finance Secretary,
:00:18. > :00:26.but will they accept it? The Finance Secretary tries
:00:27. > :00:35.to persuade squeezed councils Another day, another
:00:36. > :00:39.business behaving badly. Is it time for more
:00:40. > :00:42.ethical economics? And the archive rescued
:00:43. > :00:50.from the flames that's helping Glasgow School of Art
:00:51. > :01:03.rebuild its future. Leaders of Scotland's 32
:01:04. > :01:04.local authorities met the Finance Secretary today,
:01:05. > :01:07.as he sought to persuade them to accept what he called
:01:08. > :01:09."challenging but fair" cuts Cosla says councils face
:01:10. > :01:12.a catastrophic cut of ?350 million At least one council has already
:01:13. > :01:16.threatened to break the eight-year council tax freeze, imposed
:01:17. > :01:20.by the Scottish Government, Here now in the studio to explain
:01:21. > :01:25.what's going on is our local government correspondent
:01:26. > :01:35.Jamie McIvor. Good evening. What was the point of
:01:36. > :01:39.today's meeting? A lot of councils are often more information and
:01:40. > :01:44.clarity over Johnson's offer before they decide whether they can accept
:01:45. > :01:49.it. The original deadline was last Friday. That has been put back to
:01:50. > :01:56.next Tuesday. Councils were supposed to have told the government, but the
:01:57. > :02:01.deadline was put back. The government says if councils accept
:02:02. > :02:08.the deal, there will be advantages. It will protect the council tax free
:02:09. > :02:10.is. There will be investment in integrating health and social
:02:11. > :02:21.services and it will maintain the ratio of pupils to teachers in
:02:22. > :02:24.schools. Regarding health and social care, that is one of the things
:02:25. > :02:30.councils were after so let's see if John Swinney said enough to reassure
:02:31. > :02:35.them. There has been a council tax free is in place for eight years.
:02:36. > :02:40.Why is it becoming an issue now? It's not the council tax issue that
:02:41. > :02:44.has become a live issue. They has aways been a debate over whether it
:02:45. > :02:48.is a good thing, but most councils are saying whether the funding deal
:02:49. > :02:52.on offer has left them in a position to fight more cuts and savings in
:02:53. > :02:58.the coming year than they had originally anticipated. Councils
:02:59. > :03:02.have limited control over their own finances. They are heavily dependent
:03:03. > :03:06.on the money they get from the Scottish government and that means
:03:07. > :03:12.putting up the council tax by a modest amount, maybe in line with
:03:13. > :03:16.inflation, not realistic. To gain money overall, the rising council
:03:17. > :03:20.tax would need to be significant. We heard that Murray council threatened
:03:21. > :03:27.to break the council tax free is. Is it likely to hold? 18% is being
:03:28. > :03:32.seriously proposed by Murray council. Not certain if that will be
:03:33. > :03:36.passed by the council next month, but the race proposal. Quite a few
:03:37. > :03:41.other councils are examining the possibility of putting up the
:03:42. > :03:45.council tax. Five and Highland are amongst the administration is worth
:03:46. > :03:48.keeping an eye on. I still sent across Scotland as a hold the bulk
:03:49. > :03:53.of councils will maintain the freeze. We will see how this pans
:03:54. > :03:55.out in the coming days. Thanks, Jimmy.
:03:56. > :03:57.Hollywood's latest movie on greedy bankers and the global financial
:03:58. > :04:00.crisis, The Big Short, is tipped for an Oscar.
:04:01. > :04:02.Tesco is under investigation for alleged fraud, Google accused
:04:03. > :04:05.Hardly a day goes by without another tale of morally
:04:06. > :04:08.So has our financial system totally lost its way?
:04:09. > :04:10.As politicians hit the Holyrood election trail in earnest,
:04:11. > :04:25.should they be debating a more ethical economics?
:04:26. > :04:30.American people are getting screwed by the big banks. I am getting
:04:31. > :04:36.madder and madder. Then this guy walks into my office and says...
:04:37. > :04:42.There is some shady stuff going on. The Big Short reminds us that even
:04:43. > :05:01.during the misery of some, others can profit. Now there is talk about
:05:02. > :05:10.the American mortgage industry. In the film, money is loan from the
:05:11. > :05:15.banks. The film-makers believed the lessons from that time of not been
:05:16. > :05:18.learned. Everyone try to act like the collapse was over with, we swept
:05:19. > :05:24.everything under the carpet, we did a little bit of reform, we are done.
:05:25. > :05:28.To me, it felt like a conversation that we are having always. It has
:05:29. > :05:34.been more than seven years since the real events depicted in the film and
:05:35. > :05:38.the crash were felt around the world, not least in the UK. After
:05:39. > :05:48.the failing banks were bailed out by the taxpayers, large sections of
:05:49. > :05:52.society turned against bankers. Bonuses came under fire, knighthoods
:05:53. > :05:57.were stripped and in 2012 there was further scandal. It emerged that
:05:58. > :06:02.some banks were manipulating the Libor rates. Some of the
:06:03. > :06:06.multi-million pound penalties were tax-deductible, meaning for the
:06:07. > :06:10.banks it was effectively the cost of doing business. Recently some have
:06:11. > :06:15.wondered whether it might not be a case of if there is another global
:06:16. > :06:18.crash, but when. Until we change the laws that underpinned these banks
:06:19. > :06:23.and corporate structures, nothing will change. Unfortunately the banks
:06:24. > :06:28.have a giant hold over a lot of governments over the world,
:06:29. > :06:32.especially in the US. Today the regulator tasked with keeping the
:06:33. > :06:38.finance sector in check has a new boss. Andrew Bailey will take up his
:06:39. > :06:43.job under immediate pressure to resurrect a recently dropped
:06:44. > :06:47.investigation into banking culture. But will it take more than that to
:06:48. > :06:50.bring around the more ethical banking system some say is needed to
:06:51. > :06:52.prevent a repeat of The Big Short. Joining me now from Dundee
:06:53. > :06:55.is the former First Minister Henry McLeish and from Edinburgh
:06:56. > :07:06.the financial journalist Good evening to both of you. Henry
:07:07. > :07:09.McLeish, will it take more than big fines and an investigation into
:07:10. > :07:15.banking culture to bring about some real ethical change to the banking
:07:16. > :07:21.system? Yes. I certainly think much more than that is required, but
:07:22. > :07:25.deeper issues are at work. I am very concerned about the fact we talk
:07:26. > :07:34.about a free market as if it was some gift from God. Free-market --
:07:35. > :07:40.free markets, any markets, they are created by people. Any weaknesses in
:07:41. > :07:44.the system are a product of governments around the world,
:07:45. > :07:47.including Scotland and the United Kingdom. I would like to look at it
:07:48. > :07:54.like this. People are concerned that the markets are providing inequality
:07:55. > :07:58.and insecurity. One thing people talk to me about is the lack of
:07:59. > :08:02.fairness. People don't want to be storming Edinburgh Castle. They
:08:03. > :08:08.don't want to be millionaires. What they would like to see is an link
:08:09. > :08:15.wannabe -- is an economy that functions in their interest.
:08:16. > :08:19.Practical measures in terms of banking, the living wage, utilities,
:08:20. > :08:22.might make it more attractive to the individual and to the citizen
:08:23. > :08:26.because at the present time I fear we live in a world where people's
:08:27. > :08:32.worth is measured in wealth. A lot of people think greed is good and we
:08:33. > :08:40.have a situation where money exploits people rather than the
:08:41. > :08:46.other way around. Merryn Somerset Webb, have we been beguiled by the
:08:47. > :08:51.free market? It is man-made. Can we do more to make it more socially
:08:52. > :08:57.just? Interfere more? This is a huge subject. The free market is not
:08:58. > :09:03.man-made. Is a natural human condition. We automatically trade,
:09:04. > :09:10.barter, by and sell. The free market is just there. It is what we have,
:09:11. > :09:16.markets. Governments exist to regulate these markets when they get
:09:17. > :09:19.out of control. So when you look at things that have gone wrong with
:09:20. > :09:24.markets, you have to look to government and regulations and see
:09:25. > :09:28.where they have gone wrong. A lot of markets are to a degree ruined by
:09:29. > :09:33.regulation. The banking industry for example. One of the main problems is
:09:34. > :09:37.there is simply too much build-up of debt in the financial system across
:09:38. > :09:42.the corporate sector and government. You may say why did that happen?
:09:43. > :09:47.Possibly because you are able to write off debt interest against your
:09:48. > :09:52.taxes. So people are encouraged to build up the rather than equity. Is
:09:53. > :09:57.that the market's fault of the full of a system that is focused on the
:09:58. > :10:06.wrong thing? Henry McLeish, is it the regulation Apple? Look,
:10:07. > :10:11.Revelation is at fault, but I take issue about the free market. --
:10:12. > :10:16.regulation. I do want to replace it, I want is the taint. Markets working
:10:17. > :10:20.society is based on what governments, legislators lay down.
:10:21. > :10:25.We want to have a more constructive role in relation to markets and
:10:26. > :10:31.there is a great deal more we can do. The other point is yes, we are
:10:32. > :10:36.absolutely right to look at regulations in each of the sectors,
:10:37. > :10:40.but even the latest Tesco events, I mean two years of payments for onto
:10:41. > :10:47.struggling to pay their workers and to keep themselves in existence. It
:10:48. > :10:52.is not an isolated example, but it seems there is a genuine credibility
:10:53. > :10:57.gap between the excesses and lack of morality and the perceptions of
:10:58. > :11:04.ordinary people. Taken the Tesco example, Merryn Somerset Webb, if
:11:05. > :11:08.the watchdog did not have the power to impose a fine, now regulations
:11:09. > :11:13.have been strengthened, perhaps we will see less of that bad behaviour.
:11:14. > :11:20.In general, regulators and lawmakers do have powers to deal with illegal
:11:21. > :11:30.things. We had that there is a fraud investigation at Tesco that could
:11:31. > :11:35.lead to prosecution. It is very hard to say, we haven't talked about
:11:36. > :11:46.Google much, but we will talk about it and its failure to pay much in
:11:47. > :11:49.terms of taxes, but it has paid National Insurance, rates, VAT, so
:11:50. > :11:53.far we know it has done nothing illegal. The fact Google has not
:11:54. > :11:58.paid as much tax as people would like it too in the UK, it doesn't
:11:59. > :12:04.seem fair, but it is not wrong. That is the problem with regulation, the
:12:05. > :12:08.way we run our tax system. So perhaps this is something on which
:12:09. > :12:16.you both agree, Henry McLeish. Perhaps there should be -- perhaps
:12:17. > :12:21.they should be forced to pay more tax? Is it something that
:12:22. > :12:25.politicians shy away from? We need to talk about tax. We have a
:12:26. > :12:28.government that is dominated by neoliberal policies in Westminster
:12:29. > :12:33.and they don't want us to talk about tax, but they don't want us to talk
:12:34. > :12:38.about excessive regulation. I would like to think much of the regulation
:12:39. > :12:42.we have is to light. It's not one specific about Tesco or bank bonuses
:12:43. > :12:46.all what, it is essentially looking at a system that needs to be more in
:12:47. > :12:51.line with expectations of the ordinary citizen and I think that is
:12:52. > :12:56.important when you consider much of this debate around technicalities,
:12:57. > :12:59.financial issues, I really hard issues of politics and priorities.
:13:00. > :13:04.You are right. Politicians have stayed away from controversial
:13:05. > :13:09.issues, but what I accept is that the Conservatives have a powerful
:13:10. > :13:14.narrative and in the absence of an alternative narrative, we will
:13:15. > :13:18.continue to wait and see about the excesses of the market without doing
:13:19. > :13:22.something to confront it. Scottish Labour has talked about raising the
:13:23. > :13:27.top rate of income tax to 50p. What do you think the effect would be in
:13:28. > :13:30.Scotland if it was to happen? There would be a fall off in tax revenues
:13:31. > :13:38.which will be backed. We don't have many additional rate taxpayers. I
:13:39. > :13:44.think there are about 17,000 which makes up less than 1%. They are
:13:45. > :13:50.relatively mobile. The Scottish government has done a lot of work
:13:51. > :13:54.into what happens when you raise taxes on a group of very mobile
:13:55. > :13:59.people. They can leave, they can do less work, they can manipulate the
:14:00. > :14:08.income so they pay tax at a lower level. Raising the rate will be a
:14:09. > :14:17.bad idea. Raising the 40% rate is not a good idea either. It is a
:14:18. > :14:22.difficult thing to do in a small country like Scotland with the
:14:23. > :14:25.porous border. Henry McLeish, you would like to see a more
:14:26. > :14:32.Scandinavian model for a more socially just ethical economy? How
:14:33. > :14:34.would you go about building that and is anyone seriously in Scottish
:14:35. > :14:41.politics talking about that right now?
:14:42. > :14:49.Obviously, you can't transfer any national model to Scotland. But we
:14:50. > :14:53.can learn from them. Their social investment is sound. Their social
:14:54. > :14:57.democracy is sound and of course you have social partnership with the
:14:58. > :15:00.trade unions and business and employers. But they don't want to
:15:01. > :15:05.see the Pope reservation of the welfare state. They want to see
:15:06. > :15:09.welfare -- fairway gez and taxation being enough to pay for what is
:15:10. > :15:15.required without punishing those just the sake of punishing them in
:15:16. > :15:22.taxation terms. We have a lot to learn but Scotland is insulated from
:15:23. > :15:25.looking at parts of the world. The Conservative government looks to
:15:26. > :15:29.America where low wages and the poor president of the state is real. In
:15:30. > :15:32.Scotland, we have choices and we should be looking at other countries
:15:33. > :15:37.as well as having a more radical debate to confront a tax-raising
:15:38. > :15:41.that is failing Scots. Thanks very much.
:15:42. > :15:43.When Glasgow School of Art's Mackintosh building caught fire,
:15:44. > :15:46.some 20 months ago, there was a real sense of shock that
:15:47. > :15:48.such a precious building should have been so vulnerable.
:15:49. > :15:51.But it turns out that items rescued from the flames are proving crucial
:15:52. > :16:01.So from the end of the month it'll once more be open to researchers.
:16:02. > :16:18.23rd of May 20 14. The Mackintosh building at the Glasgow School of
:16:19. > :16:22.Art. In the hours and days that followed, art and artefacts are
:16:23. > :16:26.rescued from the wreckage. And as contractors stabilise and restore
:16:27. > :16:30.the structure, that archive is proving crucial to their work. We
:16:31. > :16:35.have a complete record of the building from its completion in 1909
:16:36. > :16:40.right through to the current day. And you can dip into any particular
:16:41. > :16:44.period and see how small changes were made to the front of the
:16:45. > :16:48.building or physical alterations were made and it is pretty much a
:16:49. > :16:53.complete record of the school's history. Some of the archive
:16:54. > :16:59.material today takes us right back to the birth of the building. We
:17:00. > :17:02.have a selection of receipts here. We have information about all the
:17:03. > :17:07.different parts that went into the building and all the different
:17:08. > :17:10.companies worked on it. These are remarkable, this is a shopping list
:17:11. > :17:16.for everything that went that building? Yes, from very small
:17:17. > :17:23.things, pieces of furniture, to bigger compartments and things like
:17:24. > :17:27.the heating and lighting. And we have examples in the collection of
:17:28. > :17:31.student work, finished things and their ideas and how they came up
:17:32. > :17:37.with them. We have sketchbook from textile students from the 1940s. We
:17:38. > :17:44.show the -- they show the printed patterns that she had been asked to
:17:45. > :17:49.design. They are stunning. And it is a period piece with the design that
:17:50. > :17:54.she has created here. It is her own work but she has also cut things out
:17:55. > :17:58.of magazines and made collages so that you can see where her
:17:59. > :18:05.inspiration came from. And this striking figure of a man. It is
:18:06. > :18:09.fantastic. We have a lot of life drawings in the collection. That is
:18:10. > :18:13.still taught in the school but this one is from 1910 and you can see the
:18:14. > :18:19.amount of details it has gone into and the person that did it spent
:18:20. > :18:23.days and days working on it. Never mind the students, the models spent
:18:24. > :18:29.days posing! Indeed and we have a few different drawings using this
:18:30. > :18:33.model so he was of us are used regularly. And we have cash books to
:18:34. > :18:40.show which models were paid so we know a few of the names as well.
:18:41. > :18:43.These are two examples from the Templeton carpet collection. They
:18:44. > :18:50.are famous for their factory on Glasgow Green. This is an amazing
:18:51. > :18:55.imperial Rome from China. It is from the late 19th century. These were
:18:56. > :19:09.all among the first things that had to come out of the building? -- and
:19:10. > :19:17.imperial robot from China. Yes, they were one of the first things that we
:19:18. > :19:23.got out. The textiles were dried out but now the archives' new temporary
:19:24. > :19:28.home makes it accessible to academics and members of the public.
:19:29. > :19:32.For nearly 18 months things have been an off-site storage with
:19:33. > :19:36.limited access. Now we are in new premises and we can make the vast
:19:37. > :19:40.majority of our holdings available for research. But before
:19:41. > :19:48.construction can get under way, what stage do we want to rebuild? As
:19:49. > :19:53.Mackintosh designed it all the way we remember it before the fire? The
:19:54. > :19:58.key question is how much of the building can we take back to what it
:19:59. > :20:02.was like originally in 1909 and 1910 and still make it fully functional
:20:03. > :20:07.for Glasgow School of Art in the 21st-century. Presumably, Mackintosh
:20:08. > :20:13.himself would want the building to be fit for purpose for students in
:20:14. > :20:17.the century? I think so. If he was here he would be thinking what can I
:20:18. > :20:22.do to make sure my intentions and designs from 100 years ago can still
:20:23. > :20:28.be used for the school in the 21st-century. The return of the Mac
:20:29. > :20:35.will be down to the love varies for this building and the curator's have
:20:36. > :20:37.it of keeping everything. -- the key rate or's habit.
:20:38. > :20:41.Here now to discuss some of the day's news
:20:42. > :20:46.and the journalist and broadcaster Liz Leonard.
:20:47. > :20:56.Back to our first story, the challenging but fair settlement,
:20:57. > :21:02.John Swinney's words. Will the councils have to accept it? I think
:21:03. > :21:06.they will have to. I think they may back from raising council tax but
:21:07. > :21:10.there's fundamental tension over how far they push it. Councils want to
:21:11. > :21:15.serve their local communities and it has become plainer to everyone that
:21:16. > :21:21.the cuts are impacting on the most vulnerable in society and so the
:21:22. > :21:26.line that the freeze protect the poorest is being exposed. They may
:21:27. > :21:33.eventually, some councils may feel that they have to put the tax up.
:21:34. > :21:39.There is a political consensus over the council tax freeze, none of the
:21:40. > :21:41.parties are saying they should put up council tax. Is there a
:21:42. > :21:45.disconnect between what people expect from their councils and how
:21:46. > :21:50.much they are willing to pay? I think there is although it depends
:21:51. > :21:58.on who you talk to. I have talked to a lot of people who are saying it
:21:59. > :22:03.has gone on too long. Just driving around, the potholes on the road. I
:22:04. > :22:11.was reminded of that the other day when I veered around a pothole the
:22:12. > :22:16.other day. There was not another car coming, but it is dangerous. And you
:22:17. > :22:20.are getting them more and more. So that is a very small example...
:22:21. > :22:26.Potholes and roads are not as important as people living with real
:22:27. > :22:30.inequality and social housing at all the rest. I have a lot of sympathy
:22:31. > :22:34.with the councils and I have a concern that the Scottish
:22:35. > :22:38.Government, it feels like whilst they are saying they are
:22:39. > :22:43.distributing funds evenly, I think councils have a real role to play
:22:44. > :22:49.here in identifying what their specific communities need and they
:22:50. > :22:54.need the money to fund that. So I am quite sympathetic to the councils.
:22:55. > :23:02.Are you surprised none of the parties have broken ranks and said,
:23:03. > :23:08.if you want public services, you might have to pay more. It has been
:23:09. > :23:12.a popular policy and none of the councils want to break ranks. And
:23:13. > :23:16.the problem is that if they choose to put it up, they will have to put
:23:17. > :23:21.it up by a lot because the Scottish Government will penalise councils
:23:22. > :23:24.don't abide by a freeze. And yet the people that feel the pain of those
:23:25. > :23:31.are the people who are dependent on those services, the people at the
:23:32. > :23:34.bottom end you are dependent on handyman services, gardening
:23:35. > :23:39.services, meals on wheels, social care. There is a big chunk of
:23:40. > :23:43.society which has not felt the pain of that, the better off. So all the
:23:44. > :23:49.parties have felt obliged to continue serving that. You say there
:23:50. > :23:53.is no view that can be done, but actually, there is. They could all
:23:54. > :23:57.agree. At the moment a council will be penalised if they spend more or
:23:58. > :24:04.try and raise more in taxes, but actually, maybe there is a
:24:05. > :24:07.fundamental discussion to be had about local government funding. That
:24:08. > :24:16.is what the head of Edinburgh Council has been saying. A wholesale
:24:17. > :24:22.rethink. Well, let's move on to another subject. Bad behaviour by
:24:23. > :24:27.businesses. Tesco has apologised after deliberately delaying paying
:24:28. > :24:30.suppliers to boost its profits and also paying them less than they were
:24:31. > :24:38.owed. Do you think shoppers will care about this? I think it is
:24:39. > :24:49.hugely damaging for Tesco. There is a substantial fine against them and
:24:50. > :24:53.it is robust but there's not a lot there -- and is a robust finding but
:24:54. > :25:00.not a lot there that we did not know. The public may well respond.
:25:01. > :25:03.They have fallen behind, Tesco. Their stores are unattractive
:25:04. > :25:08.compared with their competitors. They are seen to be less attractive
:25:09. > :25:14.and when they are not they are more expensive. So people have fallen out
:25:15. > :25:18.of favour with them. And they admitted that it was pressured to
:25:19. > :25:21.meet profit targets that intensified as the group started to lose
:25:22. > :25:26.customers that led to them doing this sort of thing. So do you think
:25:27. > :25:31.more regulation is needed here? I think it will be a marker. Often
:25:32. > :25:36.with regulators, there is a dismay that they haven't got enough bite. I
:25:37. > :25:41.know she is restricted because by law, our powers came in after the
:25:42. > :25:46.event, but I think Stephen is right, the damage to Tesco's repeat Asian
:25:47. > :25:56.is huge. And they used to be trusted by the customers. -- reputation is
:25:57. > :26:04.huge. They used to be trusted by their customers. And the other
:26:05. > :26:07.aspect of this is where is Tesco's corporate social responsibility in
:26:08. > :26:14.all this. They have to think about their brand, which is about meeting
:26:15. > :26:18.their consumers' needs and wants. And by failing their suppliers,
:26:19. > :26:23.those suppliers are part of that community. And if you are a small
:26:24. > :26:26.business and you are owed ten grand for six months... I was hearing
:26:27. > :26:31.about a chocolate manufacturer who has had to lay off staff because of
:26:32. > :26:40.that ten grand. That is peanuts to Tesco but it is a lot of money to a
:26:41. > :26:43.small business. OK finally tonight, the new figures suggest that the
:26:44. > :26:50.amount of time some spent by young people online is now three hours
:26:51. > :26:55.competitive .5 hours watching television. One media expert thinks
:26:56. > :27:00.it's not all bad news. -- compared to 2.5 hours.
:27:01. > :27:07.Television will never die out. But if television makers can embrace
:27:08. > :27:10.what the new audience wants and use that interactivity to their
:27:11. > :27:19.advantage, then TV will thrive as it has never done before. Is he right,
:27:20. > :27:26.Stephen? I think he is. There is a tendency to have a moral panic. Kids
:27:27. > :27:32.are not watching TV the way we used to. Neither are we! I am busy
:27:33. > :27:37.watching The Wire from seven years ago and a few days ago I watched the
:27:38. > :27:46.Dr Who Christmas ballot -- Christmas special. No view like they did
:27:47. > :27:52.before in a linear way. They watch Netflix but so do adults. What about
:27:53. > :27:57.parents keeping an eye on their children if they are all watching
:27:58. > :28:02.different devices? I think that is a concern. I am on Ofcom's advisory
:28:03. > :28:08.committee for Scotland and that is a huge area of concern. You have a
:28:09. > :28:11.child in a bedroom and a parent is not sure about the technology, does
:28:12. > :28:15.not know how to put parental controls on, and there is a danger
:28:16. > :28:18.they would be sucked into things they did not mean to be sucked into.
:28:19. > :28:24.Until then we leave you with scenes from tonight's Up Helly Aa.
:28:25. > :29:04.Let your New Year start with a bang and visit an explosive new China.
:29:05. > :29:10.Celebrate a country 4,000 years in the making.
:29:11. > :29:16.Getting out into the streets and seeing what it's all about.
:29:17. > :29:20.And see this little-known nation in a brand-new light.