23/11/2016 Scotland 2016

Growth takes a knock, borrowing's back big time,

The Chancellor forecasts that soon we'll be in it to the tune of nearly

an emergency statement to Parliament about the state of ScotRail.

Also an expert in one type of jams talks about the Chancellor's plans

Every few years a budget comes along to deliver

And today was one of those occasions.

Instead of Britain being in the black - as was expected

by the end of this Parliament - we'll actually be much more

The new Chancellor's ditched his predecessor's commitment

And the nation's debt will rise to a staggering ?2 trillion

First up tonight, let's look at the implications for Scotland.

An own infrastructure and investment in England will affect Scottish

government spending. This will represent a significant increase in

funding through the Barnett formula of over ?250 million for the

Northern Ireland executive, ?400 million to the Welsh Government and

?800 million to the Scottish Government. We recommit to date two

hour city deals with Swansea, Edinburgh, North Wales and key

cities and we are beginning negotiations on a city deal for

sterling. The SNP were not impressed, drawing attention to

Brexit. Their own assessment tells us tax yield can be done 66 billion

after 15 years and the GDP down by 9.5%, as a result of reduced trade

reducing productivity which amounts to ?6,500 per year per household so

we was the plan to ensure there was no hard Brexit? What about that

extra ?800 million for the Scottish Government capital budget? It will

be spread over a four years. 200 million a year, Scotland spends

about 3.5 billion each year on public investment so even from that

total public investment spending it is a relatively small proportion.

Much comment in the run-up to the statement about the JAMs, the

families who are just about managing, like parents that this

nursery in the Cromarty Firth. I work for -- full-time and my partner

works full-time. We get no help with tax cuts or credits or benefits. We

are pretty much just working to pay for our nursery for our son. You

work hard and pay your bills and hope you can start saving for the

future and for the mortgage where you can lay down roots and have

something for your children but you feel like you're not quite getting

there. Some scepticism about whether the Chancellor's changes will really

help. A freeze to benefits, the cuts to the universal Credit, the cut to

first child element of the Universal Credit, introduction of the two

child policy, all of these will slash the support available to low

income families who are already struggling at the moment to put food

on the table and pay bills and help their children participate in school

trips. The skill of the cuts they will say in the coming years will

completely dwarfs the few hundred pounds they were seen as a result of

the improvement in the Universal Credit. The reaction from small

businesses to the Chancellor's changes. All eyes will be on this

?800 million of capital spending. People have argued consistently

about the benefits of local infrastructure spending. It is not

very much, is it? Indeed, in the scheme of things, we need about ?2

million in terms of getting things up to scratch on the roads but it is

better than nothing. We will always support a market led approach.

Overall, the vote seems to be the Chancellor has not done very much

perhaps because he is leaving himself options when he sees how

Brexit works in practice which is just not clear right now.

A little earlier I spoke to Professor Graeme Roy,

the Director of the Fraser of Allander Institute

Brexit hangs over this report is like a black cloud. It essentially

says here's what you could have won if it wasn't Brexit. To what extent

can be pinned new device forecasts on Brexit? The key number is the

increase in borrowing Chancellor expects. That is about ?120 billion.

About ?60 billion of that is attributable to Brexit. The

remainder is down to a general weakness in the economy that was

happening before Brexit, for instance tax receipts have been

disappointing this year and we will expect that to continue over the

next few years. On top of that the Chancellor is adding to the

borrowing to try and add a stimulus to the economy to help with the

impact of Brexit. Nearly ?2 trillion debt by the end of the periods and

debt as a proportion of GDP set to rise to 90%, what kind of

consequences does that have? Looking in context, this is relatively high

debt in terms of normal peacetime. That has been higher than this in

the past, after the Second World War for instance. That is usually one

way you can grow yourself out of high levels of debt is to boost your

economy more so if it increases in terms of growth rate, that can

decrease the debt rate but the concerns of the Chancellor are

looking to the future with Brexit having an uncertain effect in the

short and long term, that ability to get debt down by growing the economy

quickly is a little more uncertain so years hedging his bets. He is

committing over the medium to long term to tackle that down with

additional years of austerity. What about the capital stimulus,

especially in Scotland, but I make much of a difference? To put it in

context, in total about ?800 million, relative to where we all

know that is a significant increase in capital investment at capital

investment to go significant hit and board a lot of the burden in the

consolidation period back in 2010. Quite a lot of the increase in

putting the money back into capital is only addressing some of the cuts

which have happened already so you're still looking at capital

investment being around about 8% lower than it was, six or seven

years ago. The Scottish government has levers to tackle that. If they

want to boost capital even more, they can add an extra 450 million on

top of that. That is actually quite a significant capital increase that

the UK Government have put into the economy and the Scottish governments

can add to. Is that the sense that the Chancellor is holding back in

terms of financial stimulus? I think so. Immediately after the referendum

there was concern that the economy could slow down quickly. Because it

was a shock. A lot of forecasters thought the economy would slow down

more quickly in 2016 but it proved more resilient. The Chancellor has

probably taken that as a point to hold off and seen what happens in

the next couple of years when their headwinds will really start to

emerge once article 50 is triggered. Investment is likely to go down and

inflation go up. He will then begin to look again at what he needs to do

if the economy takes a turn for the worse. You mentioned the Scottish

Government new powers over tax, obviously they can offset this

budget by increasing taxes but why the dangers of doing that? You are

correct, this is the first time the Autumn Statement has taken place

before the Scottish Government can set its own tax powers which are

quite significant. Does the Scottish Government want to replace some of

the money cut by increasing tax revenues itself? The challenge is if

the economy is fragile because of Brexit and we know the Scottish

economy has been lagging behind the rest of the UK, increasing the tax

rate in Scotland at that time may not be the best idea for the economy

and make build up problems for the future. Thank you very much indeed.

I'm joined now from Edinburgh by the Conservative's Dean Lockhart

and from Westminster by the SNP's Stewart Hosie

First of all, we have slower growth predicted, weaker tax revenues,

higher inflation, squeeze living standards and higher borrowing, with

the good news? I thought this statement today was positive because

looking at forecast, the UK forecast is the growing major economy this

year, off 2.4% with a forecast growth of jobs of 500,000 which is

in addition to the jobs in the economy over the last five years so

that is a lot of good news. The Chancellor has used the stronger

economic base to inject stimulus into the economy. He announced a ?23

billion productivity plan and the Barnett consequential that will

bring ?800 million to Scotland which will represent a significant boost

to capital spending in Scotland. Also, other benefits from export

support, support to add an tea and a number of other major things

announced by the Chancellor will boost things in the short term. This

is about putting things in the economy, and economic growth in the

short to medium term. The budget will increase... Let us look at the

bigger picture, when you came to power you promise to balance the

books and bring down debt, at the end of this period we will be

looking back at a decade when your party has made their main political

choices which have caused you to break your choice -- your promises

which is a failure? The Chancellor forecast today said the budget would

be below... The first time this decade the budget would be... I

think that would be a very ambitious and positive outcome. The key focus

is on economic growth and job creation and the stimulus that

brings to the economy. To be fair you have created a lot of these

economic challenging times, the Brexit vote did not need to happen

and use the government lost the vote and now we're paying for the

consequences. ?122 billion higher is the borrowing forecast over the next

few years and that is because of Brexit? That is not actually. That

is the stimulus to the economy, the extra spending announced today, the

stimulus of the bank of England quantitative easing programme is a

significant part of bad debt as well so this is not about Brexit. The EU

Referendum was a referendum after 40 years of being in the European

union... The forecast suggests it is to do with Brexit. It is partly to

do with Brexit but that is forecast Sincil fire the UK economy has been

very resilient. The only are dead revisions which are on the week up.

The forecast is what it is, hasn't the Chancellor done the best he has

-- he could with a poor hand? I'm glad is reversed some of them,

but I would not let him off quite as easily as that. The debt figure we

were promised for 2015 were 67% of GDP which will not be met at all in

this Parliament and possibly not for decades to come. This is not all the

fault of Brexit. This is default of six years of austerity with

successive UK governments. They have is he weakened recovery. He has

moved a little and change tack to some extent. As he conceded today,

the total amount of money he has made available in expenditure over

the entire forecast period is one and a half percent of spending. You

can do something about this. In the first Scottish budget, you will have

powers over tax. You can offset all of those negative consequences. No,

we cannot offset all of those negative consequences because these

Scottish economy continues to be run from London. Those are other issues.

When people are struggling like hell, it does not make an awful lot

of sense to take money out of people's pockets. There is a

principal argument here. Why should Scottish people be ordered to pay

more tax in order to mitigate Tory cuts. So, are you saying no to cuts

then? I am saying that we will look at the revenue side in the capital

side and they will determine the balance of taxation and spending. I

am saying to you that it does not seem to make enough a lot of sense

to ask Scottish people to pay more tax to mitigate Tory cuts. They say

it will be in ?2 trillion in debt. Labour's policy is what? Borrow

more? Labour policy is to invest in the economy in 2010. That's exactly

what the Chancellor has done today. If we had done that when the deficit

was a hundred million pounds then we would not be where we are. Well we

are where we are. And Jeremy Corbyn is saying that you should borrow

more. You have to invest. Because of Brexit ?58 billion. Production of

growth. This is what Brexit is going to cost. Let me just contradict what

we heard from us first speaker. Making a lot of predictions on a

fairly conservative exit from the EU. It does not include financial

services having passed buzzing. I would be detrimental to the

Scottish... So, these are fundamentally difficult for the UK

economy. The Chancellor Willy comes back and makes another budget in the

spring, the figures will be worse. How would you advise colleagues in

the Scottish parliament in order to put pressure on the Scottish

Government to put pressure on the tax. We warranty said Rupert penny

on income tax. That is all about capital spending. We would spend

money on housing to help the housing crisis. Making sure all houses are

connected to broadband and forgery. That is good for the economy and

jobs. When borrowing is cheap, it is good to invest in the future in

terms of jobs. We would come to that to date 60s too late. You have long

stoked about the need for infrastructure development. You are

going to have this extra ?800 million over a five year period that

you did not have before. That is welcome news, surely? It is. I

welcomed it today. They barely touches the 10% revenue cut we have

seen in the city percent capital cup. It is good news. And confident

when the budget is announced in a couple of weeks that every penny of

that will be allocated to capital projects to get the biggest bang for

our backs in terms of regrowing the economy. What would the priorities

be? That is a matter for the Scottish Government. We have won

suggestions, I am sure. Roads, housing, schools, infrastructure.

The biggest bang for our buck. We need to make sure the capital

investment we make goes awful long way for productivity. Letters also

talk about those city deals. The Chancellor confirmed... What will

that mean for Stirling and also for Tayside in Edinburgh and all the

other cities? What difference will that make? I think double boost the

productivity foot in those regions. Google develop infrastructure. Also

there will be broadband. A large portion of the rope regions do not

have that. Part of the 800 million stimulus programme coming to

Scotland to be used to promote and develop our digital network. There

are so many businesses in the raw community that can benefit from

that. -- Laurel. I do have a structure ongoing or in the

pipeline. Can I just touch on a couple of points? We need to leave

it there. In the lead up to the Autumn Statement, politicians and

commentators have been talking a lot about jams. They won't

And they weren't talking about what Phillip won't Hammond spreads

Instead, it's an acronym for those who can 'just about manage'.

Well we spoke to one baker who knows a bit about both kinds of jam.

my name is Jim McPhie. I've been baking here for 44 years. We have

become established as part of the way of life for people roundabout

here. We noticed at the end of the month, the third week of the month,

things start to slow down. This is just people when they don't need to

have the treats earlier in the month. Money has become tighter. We

are waiting for the next salary cheque to come in. You will see a

huge amount of pound coins coming into the till. Clearly piggy banks

have been borrowed from her few days. That has not really changed in

the last ten or 15 years. If your monthly salary, I don't care what it

is you're earning, you will live to the limit of that. That is OK. That

is good for the economy. You're spending what you have got. But what

I'm gathering from the Autumn Statement is that these JAMs that

they're talking about. Whether tackling it with a living wage going

to help it, I'm not sure. That is going to be inflationary. That will

impact on prices. That is the only way a business like ours can

survive, is by passing on the pricing of pieces. On the other

hand, if the Chancellor is trying to get productivity up, then the way to

get productivity up is to invest in plants. Whether there will be small

shops, I'm not sure. There will be changes, but I'm up for that. I will

try and saliva. -- try and survive. Well to discuss that and the rest

of today's stories I'm joined by the former editor of the Times

in Scotland Magnus Linklater Dominic. There was not much cheer in

this budget. No. It was hard to find anything to be happy about. The

consensus seems to be that things are going to get much harder further

a great many people. We talked about JAMs there. People who are just

about getting by. That is not just your kind of media trope, working

mothers. You have young people. Some of whom are earning 35 or ?40,000 a

year. Still struggling to find housing. The coming years will be

very difficult. What do you make of this term JAMs? Aren't most people

just about managing? We all tend to spend up to the limit of our means.

Yes, a lot of people do think exactly that. I think looking at the

broader picture, it is not just a rather grim Autumn Statement, I

think that the Chancellor was indicating it is probably worse to

come. The growth figures are pretty gloomy. The borrowing as we have

heard is just out of this world. There is nothing coming along over

the horizon with Brexit a looming that suggests that things are going

to improve. It is very hard to see how things are going to be better

for that level of society. Unless of course we do is very hard to see how

things are going to be better for that level of society. Unless of

course we do some favourable trade deals. I use adjusting we might? I

do not know where they are going to come from. China? America? Donald

Trump, a new alliance. Quite possibly. But that takes a lot of

imagining. Another big part of the budget for Scotland was the

announcement of the city deals. How much of a difference do you think

that will make? A small difference. When you look at overall spending,

these are small packages. And actually wear this money goes, it is

always debatable. Glasgow has been given money of the last few years

and that money has largely disappeared into quite ambiguous

projects are not really been seen by people living in Glasgow. You have

to take these things as a pinch of salt. I'm very involved in Perth at

the moment. I disagree. City deals are important as a stimulant and

they do invest a lot in the infrastructure. I wouldn't quite

downgraded as Dominic has done. Certainly for the smaller towns.

Some of the smaller settlements in the high street is not doing well

and could probably do with an investment. It is just the kind of

investment that they need. Investment in Perth's case and

Dundee, cultural infrastructure as well. What about the trains. In

Holyrood the transport manager offered an apology for all the

issues recently. Let me apologise for all passengers who have had

problems on the train. The Government is committed to making a

good service for you to receive. How do you think he is handling this? I

think he is actually struggling that with the legacy that has been left

with him with his predecessors. Rail spending has been reduced a lot. He

is having to spend plates and keep people happy. He's been made a

scapegoat. It is people like Eric Mackay who need tough questions

asked of them. Can you blame the transport Minister for an individual

train breaking down all the signals going wrong? Is that fair? Not

really. What is the alternative? What if the Dutch company who are

involved, what is the alternative? Is it feasible to stake Scotland's

train services into public ownership? Go back to renationalise

rail service? I don't think so. That is the problem. It comes down to the

contracts between the Scottish governments and a belly -- the

company. You can look at some of the problems endemic in the system. A

lack of stock. They could have seen this coming and invested earlier.

Likewise with other contracts. A previously unseen video shows this

nation drifting away from the rest of the UK after Brexit. Wide of the

campaigners choose not to broadcast the other? Have a look and make your

own mind up. Our pensioners, our countries. Our

children's schools are world-class art protected by... We have got a

space that protects us from the world. They were wise to run

another? I think so. If it everybody knows the better together campaign

has significant problems. That somebody thought that was a good

idea as distressing. It played into everything that has been said about

them. Project fear. The people were trying to scare Scots into

submission. I think had that been road cars, a lot of people had voted

differently. It is worth bearing in mind that project fear as a result

was likely successful. That was not project fear for stock that was

project horror. At the last minute, that would have really scared a lot

of people. Towards the end of the campaign, they were beginning to

realise that actually they have perhaps got it wrong and they had

overplayed the project fear and they should have come out with a much

more positive message. As Gordon Brown and finally, finally David

Cameron managed to do towards the end of the campaign. That would have

taken them in entirely the wrong direction. If there is a second

independence referendum, do you think fear will be part of it? I

think both sides will say things that aren't true and will have self

belief in and correctness. That always the way with these things. If

you like it will always be a part of it. Thank you for joining us.

I'm back again tomorrow night, usual time.

So do please join me then, bye-bye.

Why is everybody so worried about your brother?

MUSIC: Way Down We Go by Kaleo

Are there other people from the secret service

There are people that deserve to answer for what they've done.