26/01/2016 Scotland 2016

A challenging but fair deal for councils says the Finance Secretary,

but will they accept it? The Finance Secretary tries

to persuade squeezed councils Another day, another

business behaving badly. Is it time for more

ethical economics? And the archive rescued

from the flames that's helping Glasgow School of Art

rebuild its future. Leaders of Scotland's 32

local authorities met the Finance Secretary today,

as he sought to persuade them to accept what he called

"challenging but fair" cuts Cosla says councils face

a catastrophic cut of ?350 million At least one council has already

threatened to break the eight-year council tax freeze, imposed

by the Scottish Government, Here now in the studio to explain

what's going on is our local government correspondent

Jamie McIvor. Good evening. What was the point of

today's meeting? A lot of councils are often more information and

clarity over Johnson's offer before they decide whether they can accept

it. The original deadline was last Friday. That has been put back to

next Tuesday. Councils were supposed to have told the government, but the

deadline was put back. The government says if councils accept

the deal, there will be advantages. It will protect the council tax free

is. There will be investment in integrating health and social

services and it will maintain the ratio of pupils to teachers in

schools. Regarding health and social care, that is one of the things

councils were after so let's see if John Swinney said enough to reassure

them. There has been a council tax free is in place for eight years.

Why is it becoming an issue now? It's not the council tax issue that

has become a live issue. They has aways been a debate over whether it

is a good thing, but most councils are saying whether the funding deal

on offer has left them in a position to fight more cuts and savings in

the coming year than they had originally anticipated. Councils

have limited control over their own finances. They are heavily dependent

on the money they get from the Scottish government and that means

putting up the council tax by a modest amount, maybe in line with

inflation, not realistic. To gain money overall, the rising council

tax would need to be significant. We heard that Murray council threatened

to break the council tax free is. Is it likely to hold? 18% is being

seriously proposed by Murray council. Not certain if that will be

passed by the council next month, but the race proposal. Quite a few

other councils are examining the possibility of putting up the

council tax. Five and Highland are amongst the administration is worth

keeping an eye on. I still sent across Scotland as a hold the bulk

of councils will maintain the freeze. We will see how this pans

out in the coming days. Thanks, Jimmy.

Hollywood's latest movie on greedy bankers and the global financial

crisis, The Big Short, is tipped for an Oscar.

Tesco is under investigation for alleged fraud, Google accused

Hardly a day goes by without another tale of morally

So has our financial system totally lost its way?

As politicians hit the Holyrood election trail in earnest,

should they be debating a more ethical economics?

American people are getting screwed by the big banks. I am getting

madder and madder. Then this guy walks into my office and says...

There is some shady stuff going on. The Big Short reminds us that even

during the misery of some, others can profit. Now there is talk about

the American mortgage industry. In the film, money is loan from the

banks. The film-makers believed the lessons from that time of not been

learned. Everyone try to act like the collapse was over with, we swept

everything under the carpet, we did a little bit of reform, we are done.

To me, it felt like a conversation that we are having always. It has

been more than seven years since the real events depicted in the film and

the crash were felt around the world, not least in the UK. After

the failing banks were bailed out by the taxpayers, large sections of

society turned against bankers. Bonuses came under fire, knighthoods

were stripped and in 2012 there was further scandal. It emerged that

some banks were manipulating the Libor rates. Some of the

multi-million pound penalties were tax-deductible, meaning for the

banks it was effectively the cost of doing business. Recently some have

wondered whether it might not be a case of if there is another global

crash, but when. Until we change the laws that underpinned these banks

and corporate structures, nothing will change. Unfortunately the banks

have a giant hold over a lot of governments over the world,

especially in the US. Today the regulator tasked with keeping the

finance sector in check has a new boss. Andrew Bailey will take up his

job under immediate pressure to resurrect a recently dropped

investigation into banking culture. But will it take more than that to

bring around the more ethical banking system some say is needed to

prevent a repeat of The Big Short. Joining me now from Dundee

is the former First Minister Henry McLeish and from Edinburgh

the financial journalist Good evening to both of you. Henry

McLeish, will it take more than big fines and an investigation into

banking culture to bring about some real ethical change to the banking

system? Yes. I certainly think much more than that is required, but

deeper issues are at work. I am very concerned about the fact we talk

about a free market as if it was some gift from God. Free-market --

free markets, any markets, they are created by people. Any weaknesses in

the system are a product of governments around the world,

including Scotland and the United Kingdom. I would like to look at it

like this. People are concerned that the markets are providing inequality

and insecurity. One thing people talk to me about is the lack of

fairness. People don't want to be storming Edinburgh Castle. They

don't want to be millionaires. What they would like to see is an link

wannabe -- is an economy that functions in their interest.

Practical measures in terms of banking, the living wage, utilities,

might make it more attractive to the individual and to the citizen

because at the present time I fear we live in a world where people's

worth is measured in wealth. A lot of people think greed is good and we

have a situation where money exploits people rather than the

other way around. Merryn Somerset Webb, have we been beguiled by the

free market? It is man-made. Can we do more to make it more socially

just? Interfere more? This is a huge subject. The free market is not

man-made. Is a natural human condition. We automatically trade,

barter, by and sell. The free market is just there. It is what we have,

markets. Governments exist to regulate these markets when they get

out of control. So when you look at things that have gone wrong with

markets, you have to look to government and regulations and see

where they have gone wrong. A lot of markets are to a degree ruined by

regulation. The banking industry for example. One of the main problems is

there is simply too much build-up of debt in the financial system across

the corporate sector and government. You may say why did that happen?

Possibly because you are able to write off debt interest against your

taxes. So people are encouraged to build up the rather than equity. Is

that the market's fault of the full of a system that is focused on the

wrong thing? Henry McLeish, is it the regulation Apple? Look,

Revelation is at fault, but I take issue about the free market. --

regulation. I do want to replace it, I want is the taint. Markets working

society is based on what governments, legislators lay down.

We want to have a more constructive role in relation to markets and

there is a great deal more we can do. The other point is yes, we are

absolutely right to look at regulations in each of the sectors,

but even the latest Tesco events, I mean two years of payments for onto

struggling to pay their workers and to keep themselves in existence. It

is not an isolated example, but it seems there is a genuine credibility

gap between the excesses and lack of morality and the perceptions of

ordinary people. Taken the Tesco example, Merryn Somerset Webb, if

the watchdog did not have the power to impose a fine, now regulations

have been strengthened, perhaps we will see less of that bad behaviour.

In general, regulators and lawmakers do have powers to deal with illegal

things. We had that there is a fraud investigation at Tesco that could

lead to prosecution. It is very hard to say, we haven't talked about

Google much, but we will talk about it and its failure to pay much in

terms of taxes, but it has paid National Insurance, rates, VAT, so

far we know it has done nothing illegal. The fact Google has not

paid as much tax as people would like it too in the UK, it doesn't

seem fair, but it is not wrong. That is the problem with regulation, the

way we run our tax system. So perhaps this is something on which

you both agree, Henry McLeish. Perhaps there should be -- perhaps

they should be forced to pay more tax? Is it something that

politicians shy away from? We need to talk about tax. We have a

government that is dominated by neoliberal policies in Westminster

and they don't want us to talk about tax, but they don't want us to talk

about excessive regulation. I would like to think much of the regulation

we have is to light. It's not one specific about Tesco or bank bonuses

all what, it is essentially looking at a system that needs to be more in

line with expectations of the ordinary citizen and I think that is

important when you consider much of this debate around technicalities,

financial issues, I really hard issues of politics and priorities.

You are right. Politicians have stayed away from controversial

issues, but what I accept is that the Conservatives have a powerful

narrative and in the absence of an alternative narrative, we will

continue to wait and see about the excesses of the market without doing

something to confront it. Scottish Labour has talked about raising the

top rate of income tax to 50p. What do you think the effect would be in

Scotland if it was to happen? There would be a fall off in tax revenues

which will be backed. We don't have many additional rate taxpayers. I

think there are about 17,000 which makes up less than 1%. They are

relatively mobile. The Scottish government has done a lot of work

into what happens when you raise taxes on a group of very mobile

people. They can leave, they can do less work, they can manipulate the

income so they pay tax at a lower level. Raising the rate will be a

bad idea. Raising the 40% rate is not a good idea either. It is a

difficult thing to do in a small country like Scotland with the

porous border. Henry McLeish, you would like to see a more

Scandinavian model for a more socially just ethical economy? How

would you go about building that and is anyone seriously in Scottish

politics talking about that right now?

Obviously, you can't transfer any national model to Scotland. But we

can learn from them. Their social investment is sound. Their social

democracy is sound and of course you have social partnership with the

trade unions and business and employers. But they don't want to

see the Pope reservation of the welfare state. They want to see

welfare -- fairway gez and taxation being enough to pay for what is

required without punishing those just the sake of punishing them in

taxation terms. We have a lot to learn but Scotland is insulated from

looking at parts of the world. The Conservative government looks to

America where low wages and the poor president of the state is real. In

Scotland, we have choices and we should be looking at other countries

as well as having a more radical debate to confront a tax-raising

that is failing Scots. Thanks very much.

When Glasgow School of Art's Mackintosh building caught fire,

some 20 months ago, there was a real sense of shock that

such a precious building should have been so vulnerable.

But it turns out that items rescued from the flames are proving crucial

So from the end of the month it'll once more be open to researchers.

23rd of May 20 14. The Mackintosh building at the Glasgow School of

Art. In the hours and days that followed, art and artefacts are

rescued from the wreckage. And as contractors stabilise and restore

the structure, that archive is proving crucial to their work. We

have a complete record of the building from its completion in 1909

right through to the current day. And you can dip into any particular

period and see how small changes were made to the front of the

building or physical alterations were made and it is pretty much a

complete record of the school's history. Some of the archive

material today takes us right back to the birth of the building. We

have a selection of receipts here. We have information about all the

different parts that went into the building and all the different

companies worked on it. These are remarkable, this is a shopping list

for everything that went that building? Yes, from very small

things, pieces of furniture, to bigger compartments and things like

the heating and lighting. And we have examples in the collection of

student work, finished things and their ideas and how they came up

with them. We have sketchbook from textile students from the 1940s. We

show the -- they show the printed patterns that she had been asked to

design. They are stunning. And it is a period piece with the design that

she has created here. It is her own work but she has also cut things out

of magazines and made collages so that you can see where her

inspiration came from. And this striking figure of a man. It is

fantastic. We have a lot of life drawings in the collection. That is

still taught in the school but this one is from 1910 and you can see the

amount of details it has gone into and the person that did it spent

days and days working on it. Never mind the students, the models spent

days posing! Indeed and we have a few different drawings using this

model so he was of us are used regularly. And we have cash books to

show which models were paid so we know a few of the names as well.

These are two examples from the Templeton carpet collection. They

are famous for their factory on Glasgow Green. This is an amazing

imperial Rome from China. It is from the late 19th century. These were

all among the first things that had to come out of the building? -- and

imperial robot from China. Yes, they were one of the first things that we

got out. The textiles were dried out but now the archives' new temporary

home makes it accessible to academics and members of the public.

For nearly 18 months things have been an off-site storage with

limited access. Now we are in new premises and we can make the vast

majority of our holdings available for research. But before

construction can get under way, what stage do we want to rebuild? As

Mackintosh designed it all the way we remember it before the fire? The

key question is how much of the building can we take back to what it

was like originally in 1909 and 1910 and still make it fully functional

for Glasgow School of Art in the 21st-century. Presumably, Mackintosh

himself would want the building to be fit for purpose for students in

the century? I think so. If he was here he would be thinking what can I

do to make sure my intentions and designs from 100 years ago can still

be used for the school in the 21st-century. The return of the Mac

will be down to the love varies for this building and the curator's have

it of keeping everything. -- the key rate or's habit.

Here now to discuss some of the day's news

and the journalist and broadcaster Liz Leonard.

Back to our first story, the challenging but fair settlement,

John Swinney's words. Will the councils have to accept it? I think

they will have to. I think they may back from raising council tax but

there's fundamental tension over how far they push it. Councils want to

serve their local communities and it has become plainer to everyone that

the cuts are impacting on the most vulnerable in society and so the

line that the freeze protect the poorest is being exposed. They may

eventually, some councils may feel that they have to put the tax up.

There is a political consensus over the council tax freeze, none of the

parties are saying they should put up council tax. Is there a

disconnect between what people expect from their councils and how

much they are willing to pay? I think there is although it depends

on who you talk to. I have talked to a lot of people who are saying it

has gone on too long. Just driving around, the potholes on the road. I

was reminded of that the other day when I veered around a pothole the

other day. There was not another car coming, but it is dangerous. And you

are getting them more and more. So that is a very small example...

Potholes and roads are not as important as people living with real

inequality and social housing at all the rest. I have a lot of sympathy

with the councils and I have a concern that the Scottish

Government, it feels like whilst they are saying they are

distributing funds evenly, I think councils have a real role to play

here in identifying what their specific communities need and they

need the money to fund that. So I am quite sympathetic to the councils.

Are you surprised none of the parties have broken ranks and said,

if you want public services, you might have to pay more. It has been

a popular policy and none of the councils want to break ranks. And

the problem is that if they choose to put it up, they will have to put

it up by a lot because the Scottish Government will penalise councils

don't abide by a freeze. And yet the people that feel the pain of those

are the people who are dependent on those services, the people at the

bottom end you are dependent on handyman services, gardening

services, meals on wheels, social care. There is a big chunk of

society which has not felt the pain of that, the better off. So all the

parties have felt obliged to continue serving that. You say there

is no view that can be done, but actually, there is. They could all

agree. At the moment a council will be penalised if they spend more or

try and raise more in taxes, but actually, maybe there is a

fundamental discussion to be had about local government funding. That

is what the head of Edinburgh Council has been saying. A wholesale

rethink. Well, let's move on to another subject. Bad behaviour by

businesses. Tesco has apologised after deliberately delaying paying

suppliers to boost its profits and also paying them less than they were

owed. Do you think shoppers will care about this? I think it is

hugely damaging for Tesco. There is a substantial fine against them and

it is robust but there's not a lot there -- and is a robust finding but

not a lot there that we did not know. The public may well respond.

They have fallen behind, Tesco. Their stores are unattractive

compared with their competitors. They are seen to be less attractive

and when they are not they are more expensive. So people have fallen out

of favour with them. And they admitted that it was pressured to

meet profit targets that intensified as the group started to lose

customers that led to them doing this sort of thing. So do you think

more regulation is needed here? I think it will be a marker. Often

with regulators, there is a dismay that they haven't got enough bite. I

know she is restricted because by law, our powers came in after the

event, but I think Stephen is right, the damage to Tesco's repeat Asian

is huge. And they used to be trusted by the customers. -- reputation is

huge. They used to be trusted by their customers. And the other

aspect of this is where is Tesco's corporate social responsibility in

all this. They have to think about their brand, which is about meeting

their consumers' needs and wants. And by failing their suppliers,

those suppliers are part of that community. And if you are a small

business and you are owed ten grand for six months... I was hearing

about a chocolate manufacturer who has had to lay off staff because of

that ten grand. That is peanuts to Tesco but it is a lot of money to a

small business. OK finally tonight, the new figures suggest that the

amount of time some spent by young people online is now three hours

competitive .5 hours watching television. One media expert thinks

it's not all bad news. -- compared to 2.5 hours.

Television will never die out. But if television makers can embrace

what the new audience wants and use that interactivity to their

advantage, then TV will thrive as it has never done before. Is he right,

Stephen? I think he is. There is a tendency to have a moral panic. Kids

are not watching TV the way we used to. Neither are we! I am busy

watching The Wire from seven years ago and a few days ago I watched the

Dr Who Christmas ballot -- Christmas special. No view like they did

before in a linear way. They watch Netflix but so do adults. What about

parents keeping an eye on their children if they are all watching

different devices? I think that is a concern. I am on Ofcom's advisory

committee for Scotland and that is a huge area of concern. You have a

child in a bedroom and a parent is not sure about the technology, does

not know how to put parental controls on, and there is a danger

they would be sucked into things they did not mean to be sucked into.

Until then we leave you with scenes from tonight's Up Helly Aa.

Let your New Year start with a bang and visit an explosive new China.

Celebrate a country 4,000 years in the making.

Getting out into the streets and seeing what it's all about.

And see this little-known nation in a brand-new light.