:00:41. > :00:50.Iain Duncan Smith follows up his resignation with a blistering
:00:51. > :00:53.attack on George Osborne, saying some of the Chancellor's
:00:54. > :00:56.budget measures are deeply unfair and damaging to the country.
:00:57. > :01:00.It's being seen as a direct attack on Chancellor Osborne -
:01:01. > :01:03.are his leadership hopes now holed below the waterline?
:01:04. > :01:06.And with ministers now close to civil war over IDS's resignation,
:01:07. > :01:08.can David Cameron keep the warring factions of his government together?
:01:09. > :01:09.Coming up on Sunday Politics Scotland...
:01:10. > :01:11.Ruth Davidson says the Chancellor's plans to cut payments
:01:12. > :01:14.to the disabled showed "short termism".
:01:15. > :01:23.How will that row over IDS play out here?
:01:24. > :01:32.And with me, as always, the best and the brightest political
:01:33. > :01:36.panel in the business - Nick Watt, Isabel Oakeshott
:01:37. > :01:40.and Janan Ganesh, who'll be tweeting throughout the programme
:01:41. > :01:45.So, George Osborne unveiled a Budget which he hoped
:01:46. > :01:49.would satisfy the Tory faithful, generate a feel-good factor
:01:50. > :01:52.in the run up to the EU referendum and enhance his own leadership
:01:53. > :01:58.That strategy started to come off the rails within 24 hours
:01:59. > :02:01.as the Chancellor faced Tory revolts on four fronts.
:02:02. > :02:03.And was blown to smithereens on Friday night when welfare
:02:04. > :02:06.secretary Iain Duncan Smith resigned over savings to disability payments.
:02:07. > :02:09.This morning open warfare is breaking out
:02:10. > :02:20.We'll be devoting the next half hour to this story,
:02:21. > :02:23.with analysis and comment from Nick, Isabel and Janan and interviews
:02:24. > :02:27.with the shadow work and pensions secretary Owen Smith,
:02:28. > :02:30.the Conservative backbencher Heidi Allen, and the head
:02:31. > :02:32.of the Institute for Fiscal Studies Paul Johnson.
:02:33. > :02:36.First, Giles Dilnot reports on the very public falling out
:02:37. > :02:39.at the top of David Cameron's government.
:02:40. > :02:44.When the Chancellor gets badly hurt in an attack from his own side,
:02:45. > :02:47.we shouldn't be surprised where it came
:02:48. > :02:54.Iain Duncan Smith and George Osborne whenever was buddies
:02:55. > :02:58.and they are on the opposite sides of the EU
:02:59. > :03:06.But for nearly six years, they've worked together
:03:07. > :03:08.in government, delivering welfare reform and savings.
:03:09. > :03:10.Last July, when the Chancellor announced the living
:03:11. > :03:15.Those currently on the minimum wage will see that pay rise
:03:16. > :03:23.And whilst in polling, there was popular support
:03:24. > :03:30.for balancing the books and reforming welfare,
:03:31. > :03:33.there was also angry protest, especially from disabled people,
:03:34. > :03:35.who passionately believed they had been targeted
:03:36. > :03:39.The deepest wound a Work and Pensions
:03:40. > :03:42.Secretary could inflict on his own governments,
:03:43. > :03:51.On Wednesday we were touted a budget that would be dull,
:03:52. > :03:54.not much wriggle room or rabbits, sugared or otherwise.
:03:55. > :03:56.Nonetheless, the Chancellor and wannabe PM was
:03:57. > :04:01.The richest 1% pay 28% of all income tax revenue,
:04:02. > :04:09.a higher proportion than in any single year
:04:10. > :04:14.Proof that we are all in this together.
:04:15. > :04:17.But not so for many disabled people and enough Tory MPs,
:04:18. > :04:23.On welfare, last week my right honourable friend the Secretary
:04:24. > :04:28.of State for Work and Pensions, set out changes that will ensure
:04:29. > :04:31.that within the rising disability budget, support is better
:04:32. > :04:38.It was a confirmation of changes that just 48 hours later would see
:04:39. > :04:40.a resignation letter from the man the Chancellor was referring to,
:04:41. > :04:45.questioning if enough is being done to ensure
:04:46. > :04:51.These were changes to personal independence payments that have
:04:52. > :04:55.replaced disability living allowance, that would make it more
:04:56. > :04:58.likely large numbers of recipients got less money,
:04:59. > :05:09.and in some cases much less, in future.
:05:10. > :05:12.Something he regarded as a compromise too far.
:05:13. > :05:14.According to Mr Duncan Smith, the changes had demanded because too
:05:15. > :05:16.much emphasis on money-saving exercises and that his welfare
:05:17. > :05:17.to work reforms could not be repeatedly
:05:18. > :05:23.By this weekend, the government's unofficial paramedic
:05:24. > :05:24.was dispatched to patch up the internal wounds,
:05:25. > :05:38.Mr Duncan Smith's literary cuts had inflicted.
:05:39. > :05:43.by the whole Cabinet on Wednesday morning before the Chancellor
:05:44. > :05:47.And he was obviously part of that process.
:05:48. > :05:49.These proposals came from his department.
:05:50. > :05:55.And the PM's response to the letter stressed...
:05:56. > :05:57.In the hours after the budget, amid angry
:05:58. > :05:59.rumblings from the backbenches, suddenly the government
:06:00. > :06:01.where describing and announced policy
:06:02. > :06:06.Something that has been put forward, there has been a review,
:06:07. > :06:11.And the suggestion the next day from the PM
:06:12. > :06:16.We are going to discuss what we put forward
:06:17. > :06:19.with the disability charities and others, as the Chancellor said
:06:20. > :06:27.It is important this increase in money
:06:28. > :06:30.goes to the people who need it the most.
:06:31. > :06:32.The problem is, the internal party concerns were that it looked
:06:33. > :06:34.like money was going to those that didn't need it most.
:06:35. > :06:36.The headline rate of capital gains tax currently stands at 28%.
:06:37. > :06:41.I am cutting the capital gains tax paid by basic rate
:06:42. > :06:46.Iain Duncan Smith said the disability
:06:47. > :06:48.reforms couldn't be defended within a budget that benefits
:06:49. > :06:55.I'm told this was the most toxic aspect for a large number
:06:56. > :07:00.And that he was not the only conservative in government
:07:01. > :07:02.who'd considered resignation over this.
:07:03. > :07:04.But not everyone was sorry to see him go.
:07:05. > :07:11.The problems have been at the heart of the DWP.
:07:12. > :07:14.I do not see eye to eye with the Treasury,
:07:15. > :07:18.I'm not the Chancellor's biggest supporter,
:07:19. > :07:21.shall we say, but the reality is, in all the experiences I've had,
:07:22. > :07:23.the problems have been with an evangelical point of view,
:07:24. > :07:28.They have consistently failed disabled people
:07:29. > :07:33.As Stephen Crabb takes on work and pensions,
:07:34. > :07:41.But clearly the quiet man reflected if
:07:42. > :07:43.you're going to turn up the volume at all,
:07:44. > :07:45.best rattle the windows of Downing Street.
:07:46. > :07:49.A war of words has now broken out in Iain Duncan Smith's
:07:50. > :07:52.old department, with one junior minister accusing him
:07:53. > :07:54.of "shocking" behaviour, but three other ministers rounding
:07:55. > :07:59.Mr Duncan Smith gave his first post-resignation interview to Andrew
:08:00. > :08:05.Anybody who thinks this is a here today, gone tomorrow
:08:06. > :08:16.I am genuinely frustrated, I have no personal ambitions. If I never go
:08:17. > :08:21.back into government again, I will not cry about that, it is not my
:08:22. > :08:25.ambition. I came into this government, and let me be clear, I
:08:26. > :08:32.came into this government because I cared about welfare reform. I spent
:08:33. > :08:35.eight years in social justice trying to figure out why certain
:08:36. > :08:40.communities were so badly off and how could we get them back to work
:08:41. > :08:44.and solve that one. Everything I have done has been driven by my
:08:45. > :08:48.desire to improve the quality of life for the worst. We can debate my
:08:49. > :08:56.policies, but my motivation has always been a bad back. My motive
:08:57. > :09:02.now, I am concerned that I want to succeed and it cannot do the things
:09:03. > :09:04.it should because it is too focused on narrowly getting the deficit down
:09:05. > :09:19.without saying where it should for. Minutes later the energy
:09:20. > :09:21.secretary Amber Rudd, popped up to attack her former
:09:22. > :09:24.cabinet colleague - saying she resents Mr Duncan Smith's
:09:25. > :09:35."high moral tone". I do remain perplexed. It indicated
:09:36. > :09:39.he was making progress. He wrote a letter on Thursday night saying what
:09:40. > :09:46.he was doing and why we should support it. So I don't understand. I
:09:47. > :09:51.do remain perplexed about it, but I am disappointed. This is an man I
:09:52. > :09:56.sat a cabinet with for nearly a year. He was a cabinet minister for
:09:57. > :10:03.nearly six years. I do respect him, so to suddenly launch a bombshell on
:10:04. > :10:12.the rest of us in a way that is difficult for us all to understand,
:10:13. > :10:21.is disappointing. It is the Tory party now in open welfare and it is
:10:22. > :10:25.not easily quelled? If Amber Rudd is perplexed, it is a dereliction of
:10:26. > :10:30.duty on her part to understand what has been going on in her own
:10:31. > :10:33.Administration. In a way, there is nothing sudden about this for Iain
:10:34. > :10:39.Duncan Smith, it has been brewing for a long time. She has known that.
:10:40. > :10:43.He has been rustling for a long time whether he can do better, staying
:10:44. > :10:48.where he is and operating within the difficult constraints the Treasury
:10:49. > :10:52.has imposed on him. Or whether he is better off out and saying what he
:10:53. > :10:57.really thinks. That is what tipped him over the edge. The Downing
:10:58. > :11:02.Street strategy is to paint Iain Duncan Smith as a kind of,
:11:03. > :11:06.head-banging Eurosceptic and try to pretend it is all about the EU
:11:07. > :11:09.referendum. I don't think anyone who watched Iain Duncan Smith this
:11:10. > :11:15.morning giving that powerful interview to Andrew Marr, could
:11:16. > :11:19.really doubt that what this is about is Iain Duncan Smith's real desire
:11:20. > :11:28.to do the right thing by the disadvantaged. The rest is just
:11:29. > :11:32.noises off. When you look at some of these clips come he comes out
:11:33. > :11:40.against the welfare cap, to arbitrate. If you are sitting in the
:11:41. > :11:44.Labour Party right now, you will be cutting up that interview and
:11:45. > :11:50.pouring it out at every opportunity. This story will go on and on? I
:11:51. > :11:56.interviewed Iain Duncan Smith about two months after the 2010 election.
:11:57. > :12:00.He said if George Osborne wants me to be a cheese parer and do
:12:01. > :12:05.arbitrate cuts, I will be out. Isabel says commie has been rustling
:12:06. > :12:11.for six years with this. He came into this after the visit to the
:12:12. > :12:15.Easterhouse estate in Glasgow. He had in Europe and championed the
:12:16. > :12:19.vulnerable. He came to it with a mission to try and increase
:12:20. > :12:25.incentives for the low paid to combat to work. To George Osborne,
:12:26. > :12:29.it is the bottom line. But it is not going to go away, you have the
:12:30. > :12:32.extraordinary spectacle of three ministers in his former department,
:12:33. > :12:38.pretty Patel included, putting out statements in support of the Iain
:12:39. > :12:41.Duncan Smith. And you have the pensions minister delivering a
:12:42. > :12:43.Downing Street script saying this is about Europe, even though there is
:12:44. > :12:49.not a word about Europe in Iain Duncan Smith's statement. Ross
:12:50. > :12:53.Altman, who was unhappy with Downing Street and the Treasury on the
:12:54. > :12:57.pension changes coming out and delivering what Downing Street one.
:12:58. > :13:01.It is a mess and it shows the normal discipline you would expect in
:13:02. > :13:08.government really is a challenge but the referendum. It is over the
:13:09. > :13:12.George Osborne? If wasn't on the budget. Tax credits last summer,
:13:13. > :13:18.reversal on pension reforms this year. And now this, you cannot
:13:19. > :13:20.deliver but on Wednesday which is just a proposition by Thursday
:13:21. > :13:23.evening and by Friday evening provokes a senior Cabinet colleagues
:13:24. > :13:38.resignation. It is bad for him. The government should be able to
:13:39. > :13:46.stun them month after a general election Monday, ... And start with
:13:47. > :13:50.them all going in different ways during the referendum, it could get
:13:51. > :13:55.worse. They need this referendum out of the way as quickly as possible.
:13:56. > :14:00.They need a comfortable victory by would suggest, with the remaining
:14:01. > :14:06.side, David Cameron's side to have any chance of putting a look on
:14:07. > :14:11.this. In four years' time, at a general election will determine
:14:12. > :14:15.George Osborne's leadership chances? Quite possibly. I don't know how the
:14:16. > :14:20.Chancellor will put this back together again if you EU referendum
:14:21. > :14:25.campaign. It might not just be a Osborne's future on the line, it
:14:26. > :14:28.could be the Prime Minister's the Chancellor's fate if tied to the
:14:29. > :14:32.Prime Minister. They are the project, they have worked together
:14:33. > :14:37.to make the Conservatives electable again. It George Osborne goes down,
:14:38. > :14:42.David Cameron's position is in doubt. I am not suggesting we care
:14:43. > :14:46.at this point, the it is destabilising.
:14:47. > :14:53.And don't forget Cameron has never been master of these events. As
:14:54. > :14:56.ever, he ain't controlling it. As we know, these things have a life of
:14:57. > :15:03.their own, so it should keep us busy.
:15:04. > :15:06.Iain Duncan Smith's resignation has been simmering for some time
:15:07. > :15:09.but it was triggered by plans to make cuts to disability benefits
:15:10. > :15:14.A few days before George Osborne's budget, the government previewed
:15:15. > :15:19.plans to change the way claimants were assessed for certain disability
:15:20. > :15:23.benefits, saving ?1.3 billion a year. The office of budgetary
:15:24. > :15:30.responsibility said the changes to the personal independence payments,
:15:31. > :15:36.or Pips, would adversely affect 370,000 people by 2020. The amount
:15:37. > :15:46.of Paire pick a person receives is decided by awarding points based on
:15:47. > :15:48.need -- the amount of PIP. Grab rails, personal toilet seats,
:15:49. > :15:53.arguing people would audit have these items. Iain Duncan Smith
:15:54. > :16:01.resigned, saying the changes were not responsible. Replying to the
:16:02. > :16:04.resignation, the Prime Minister said it had now been agreed not to
:16:05. > :16:09.proceed with the policies in their current form. But that wasn't the
:16:10. > :16:12.only major criticism levelled at George Osborne's budget. The
:16:13. > :16:16.Chancellor confirmed he will miss Fiorentina of his three fiscal
:16:17. > :16:22.rules. Next financial year, welfare bill cost almost ?120 billion, well
:16:23. > :16:27.over the cap of ?115 billion, which he introduced himself to restrict
:16:28. > :16:30.overall welfare spending. And he also broke his debt rule, which
:16:31. > :16:36.promised that national debt would decline every year as a proportion
:16:37. > :16:44.of national income. This financial year, total debt is expected to be
:16:45. > :16:47.83.7% of GDP, up from 83.3% in 2014-15.
:16:48. > :16:49.We did ask the Government for an interview about the disability
:16:50. > :16:52.But we were told no one was available.
:16:53. > :16:55.It's a familiar refrain these days, especially when the government
:16:56. > :16:59.I'm joined now by the head of the Institute for
:17:00. > :17:08.Welcome to the programme. It looks like the government is making a
:17:09. > :17:15.U-turn on these cuts to disability payments, how big a haul does that
:17:16. > :17:19.blow in the Chancellor's efforts to get a budget surplus by 2020? The
:17:20. > :17:23.truth is we are talking very small numbers in the context of ?800
:17:24. > :17:28.billion a year or so of spending. The Chancellor is aiming for nearly
:17:29. > :17:31.a billion pound surplus, he doesn't get this, it takes just down to
:17:32. > :17:38.under ten, so in that sense it doesn't matter all that much to his
:17:39. > :17:41.target the 2020. But he has already inked in 3.5 billion of unspecified
:17:42. > :17:45.cuts, we don't know what they would be to get this surplus, but there
:17:46. > :17:49.are about eight or 9 billion of watch some might call
:17:50. > :17:52.jiggery-pokery, cuts to public investment in the final year, and
:17:53. > :18:03.now this. It must make it more difficult for them. There are all
:18:04. > :18:07.sorts of things in the budget aimed at that particular year. Numbers are
:18:08. > :18:11.being moved around and there are some unspecified spending cuts. It
:18:12. > :18:16.is important to see this in the broader context. Unless something
:18:17. > :18:22.awful happens, we will get close to a budget balance in 2019-20, which
:18:23. > :18:26.given that we were over 150 billion in deficit in 2010, the biggest
:18:27. > :18:30.deficit in his time that we have had, to get from their too close to
:18:31. > :18:37.surplus will be quite an achievement. Economically and
:18:38. > :18:40.enormously, but economically, the enormously, but economically, the
:18:41. > :18:43.difference between a ?10 billion surplus and the deficit is almost
:18:44. > :18:52.hear the dash-mac when neither here nor there.
:18:53. > :18:58.The Treasury would expect that department to find ?1.3 billion
:18:59. > :19:04.elsewhere, is that right? Not necessarily, this is unlike the
:19:05. > :19:07.health budget or the education budget, it is determined by the
:19:08. > :19:15.demands on the budget. So I think if they don't put these changes in, the
:19:16. > :19:18.presumption will be at least that the spending will still be in the
:19:19. > :19:24.budget. The day after the budget, you said the Chancellor had only a
:19:25. > :19:30.50-50 chance of filling his surplus in 2020. Would you like to
:19:31. > :19:33.recalibrate these odds? It is a relatively small change in the
:19:34. > :19:39.context of where we are, still a 50-50 shot. The thing that will
:19:40. > :19:42.determine it is much less changes of this kind and parsley more what
:19:43. > :19:47.happens to the economy, whether the economy does better or worse than
:19:48. > :19:51.currently expected. In many ways, the most important thing we learned
:19:52. > :19:55.on Wednesday is that the O BR has much less optimistic about the
:19:56. > :20:01.economy, and therefore we will all be worse off than we thought we were
:20:02. > :20:07.going to be. The Treasury, as Iain Duncan Smith has been saying, has
:20:08. > :20:10.been clawing away at working age benefits the years, for him this was
:20:11. > :20:18.the final straw. But isn't that inevitable, if you have a government
:20:19. > :20:21.who ring fences pensions and the NHS, the only big travel figure
:20:22. > :20:25.spending line is welfare? If you are looking, like the government has
:20:26. > :20:30.been common to really dramatically reduce the deficit significantly,
:20:31. > :20:35.you are not going to avoid doing things on the welfare side. Much
:20:36. > :20:39.more than ?100 billion was spent on just working age welfare, covered by
:20:40. > :20:43.that welfare cap, which is far more than we spend on almost anything
:20:44. > :20:50.else, apart from health service and pensions. But the Chancellor has
:20:51. > :20:56.created this fiscal position. Even though it was weaker, he cut
:20:57. > :20:59.business rates, he cut corporation tax, capital gains tax, he raised
:21:00. > :21:04.the personal allowance, and he raised 40p income tax threshold. He
:21:05. > :21:08.didn't have to do any of that. Even if he had done only some of that, he
:21:09. > :21:12.would not have had to look for these cuts in disability for study has
:21:13. > :21:15.made that himself will stop you are right, she didn't have to make any
:21:16. > :21:19.of those changes, but it was very clearly in the Conservative
:21:20. > :21:24.manifesto to increase the personal allowance. So presuming that he
:21:25. > :21:27.would have kept the manifesto changes, he would have had to have
:21:28. > :21:31.done that, and has to do quite a lot more route. Cutting those taxes
:21:32. > :21:38.clearly means you have to do some other things to maintain his target.
:21:39. > :21:41.But he didn't have to do them. Also, perhaps his leadership tensions did
:21:42. > :21:45.play a part. There were two major areas where they could have raised a
:21:46. > :21:51.lot of money, pension reform, by taking away the top tax-free, which
:21:52. > :21:55.could have saved billions, and raising the fuel duty. If you don't
:21:56. > :21:59.visit now, when will you? Both could have raised billions and he chose
:22:00. > :22:03.not to do it. Those are two very different kinds of things. Yes, you
:22:04. > :22:08.are right, it is astonishing with petrol prices at their lowest level
:22:09. > :22:12.for a very long time, chatty on petrol at its lowest level since the
:22:13. > :22:16.mid-19 90s, the cost of driving a car at its lowest level for perhaps
:22:17. > :22:20.30 years. If you can't increase fuel duties even then, that is a
:22:21. > :22:24.long-term problem for the Treasury, because it brings in a lot of money,
:22:25. > :22:28.?30 billion a year, and if that goes it is a real problem. On pension tax
:22:29. > :22:33.will if it is a much more complex issue. There are good economic
:22:34. > :22:36.arguments, for maintaining it as we have at the moment, and had you got
:22:37. > :22:42.rid of that 40% relief, you would have hit the 5 million or so people
:22:43. > :22:46.who pay 40% tax, it would have been another slice of the population
:22:47. > :22:53.rather unhappy. The national debt, not the deficit, will be 1.7 4
:22:54. > :22:59.trillion by 20 20. If the government was then to run a surplus of say 10
:23:00. > :23:02.billion a year for ten years, which would be unprecedented in British
:23:03. > :23:10.government, after a decade, the debt would still, by my simple rhythmic
:23:11. > :23:16.calculation, the ?1.64 trillion. Is that what you mean by economically
:23:17. > :23:20.irrelevant in running a surplus? The key point about the size of the debt
:23:21. > :23:30.is it is size as a fraction of national income. More important than
:23:31. > :23:33.the absolute level. As the -- even running a surplus of 10 billion or
:23:34. > :23:39.so a year, you don't get too prerecession levels of debt until
:23:40. > :23:43.the mid 2030s. The argument the Chancellor would make the running a
:23:44. > :23:55.surplus year after year is that even if you just run a balanced budget,
:23:56. > :24:00.it takes quite a lot of time just to undo the damage that the crisis did.
:24:01. > :24:03.Joining me now from Glasgow is the Shadow Work and Pensions
:24:04. > :24:15.Owen Smith, in his resignation letter, Iain Duncan Smith says it is
:24:16. > :24:19.now time to look at ending the protection of pensions. Do you agree
:24:20. > :24:24.with that? I don't think that should be the first thing they look at at
:24:25. > :24:26.all, Andrew. I think the very clear message that Iain Duncan Smith
:24:27. > :24:30.himself has delivered is their word choices that could have been made in
:24:31. > :24:33.the budget, and the Chancellor made them and he made the wrong ones
:24:34. > :24:39.coming chose to cut the benefits from disabled people. As we have
:24:40. > :24:43.heard, the PIP cuts taking many thousands of pounds away from the
:24:44. > :24:49.370,000 people, and instead he chose that he was going to cut corporation
:24:50. > :24:53.tax, which he -- is going to benefit large countries in this country, and
:24:54. > :24:57.he chose to cut capital gains tax, which were largely benefit people
:24:58. > :24:59.who have got a bit of money. So I think there were different changes
:25:00. > :25:07.he could have made even within the terms of this budget that would have
:25:08. > :25:11.been much fairer. I understand that, but which are nevertheless have
:25:12. > :25:21.thinks it the benefits? -- ring fenced? We need to look at all these
:25:22. > :25:26.things long-term, but it would be for a Labour government when we get
:25:27. > :25:30.closer to the next election to the absolute specifics on all of those
:25:31. > :25:34.pension benefits, but by and large, let's be clear. The last Labour
:25:35. > :25:39.government worked incredibly hard to raise pensioners out of poverty. We
:25:40. > :25:42.were incredibly successful in that regard, a million pensioners lifted
:25:43. > :25:44.out of poverty under the last Labour government and I don't think they
:25:45. > :25:48.ought to be the target for cuts, just as I don't believe that
:25:49. > :25:52.disabled people ought to be. There are myriad other choices the
:25:53. > :25:56.government could have taken. Iain Duncan Smith today I think has been
:25:57. > :25:59.very honest in explaining how George Osborne could have taken different
:26:00. > :26:05.choices, should have done, and in his words he is dividing Britain,
:26:06. > :26:17.moving away from any notion of us all being in it together. But you
:26:18. > :26:22.are committed to balancing current spending, but if you have ring
:26:23. > :26:26.fenced pensions, as you have told us this morning, presumably you would
:26:27. > :26:30.ring fence the NHS, or even add to spending in the NHS, and you want to
:26:31. > :26:36.ring fence nearly all of welfare as well. Where do the cuts come from
:26:37. > :26:42.the balance current spending? I have just given you two, let's be very
:26:43. > :26:46.specific, Labour would be saying today if it were our budget, that we
:26:47. > :26:51.would not have done the cuts to corporation tax, that would have
:26:52. > :26:54.given us in year ?600 million, and we would not have done the cut to
:26:55. > :27:01.capital gains tax, that would give us another ?600 million. That nets
:27:02. > :27:06.off the PIP cuts annually, the ?1.2 billion, and there are other similar
:27:07. > :27:11.choices we could look at. We would not have taken corporation tax back
:27:12. > :27:14.to 19%. We would have been taking far more from large multinational
:27:15. > :27:18.companies than this government is. So far you have given me 1.2
:27:19. > :27:24.billion, but you have announced much more than that in spending plans. So
:27:25. > :27:28.I am not quite clear how it is you would balance current spending,
:27:29. > :27:34.because I think we can both agree an extra 1.2 billion went to do it,
:27:35. > :27:40.will it? No, but a corporation tax alone by 2020 would be giving us
:27:41. > :27:46.?2.5 billion, if we were to revert back to the April 2015 rate of 20%.
:27:47. > :27:50.We would still have a corporation tax in this country that was 10%
:27:51. > :27:54.lower than Germany, 15% lower than America, 10% lower than Australia.
:27:55. > :28:01.It would be an extremely competitive rate of tax. I just highlight that
:28:02. > :28:05.?1 billion example, ?3 billion example, how we would make different
:28:06. > :28:10.choices. Right, but as I say, in many of your spending plans you have
:28:11. > :28:14.already spent that sort of money. You also talk about fair taxes, you
:28:15. > :28:19.would not cut the corporation tax any further, what else to you mean
:28:20. > :28:26.by fair taxes? What would you raise by fair taxes? As I said a minute
:28:27. > :28:32.ago, we can't for years out from a budget before, a pre-election budget
:28:33. > :28:36.from Labour, tell you precisely what all of our spending plans will be, I
:28:37. > :28:38.don't think that is a reasonable thing to ask any opposition
:28:39. > :28:49.government to do but I think we are setting very clear indicators about
:28:50. > :28:57.what we think the benefits would be. Give us another example. It is
:28:58. > :28:59.reflective of our belief that those who have the largest amounts of
:29:00. > :29:08.money ought to bear the largest burden in our society. It is unclear
:29:09. > :29:13.whether that raises you very much. The government's own analysis showed
:29:14. > :29:16.there was ?3 billion forgone in cutting that top rate of tax. I now
:29:17. > :29:24.see they are trying to argue they have somehow applied a famous curve
:29:25. > :29:27.and ?8 billion they have made. I think corporation tax shows you very
:29:28. > :29:33.clearly, corporation tax receipts have been flat, they have managed to
:29:34. > :29:40.cut from 28% to 20% in the last six years, and the amount of receipts we
:29:41. > :29:41.are getting in has gone from 43 billion to 43 billion. Investment
:29:42. > :29:51.has decreased. What are used to call sickness
:29:52. > :29:56.benefit comes to over 50 billion pounds a year. You would leave it
:29:57. > :30:01.untouched? No, we want to reform the system. Take for example, Iain
:30:02. > :30:06.Duncan Smith made a lot about universal credit this morning. He
:30:07. > :30:13.has said George Osborne has stripped out the guts of universal credit. I
:30:14. > :30:15.was asking about disability? Some people who are disabled will be in
:30:16. > :30:22.receipt of universal credit. What would you do about the disability 50
:30:23. > :30:29.billion pounds annual budget? We wouldn't be making the changes the
:30:30. > :30:33.current government are proposing. They are lying to the British public
:30:34. > :30:42.about this, spending on the disabled is increasing. If you take all
:30:43. > :30:46.disability benefits, I am publishing figures today that say it has
:30:47. > :30:54.declined around 60% that the government have already cut disabled
:30:55. > :30:57.benefits. -- 6%. That will not be my target. Would you keep this increase
:30:58. > :31:03.in the threshold for people who enter the 40% tax bracket? Yes, we
:31:04. > :31:09.would keep that. It is fair to say the fiscal drag of people being
:31:10. > :31:14.pulled into the 40p rate has been increasing. I think we will need to
:31:15. > :31:18.reform taxation much more fundamentally. I still think the key
:31:19. > :31:23.thing today is we have got to understand George Osborne is the man
:31:24. > :31:27.in the dock. I am going to have to stop you there. We look forward to
:31:28. > :31:35.talking to you in the future about your plans for tax reform. Now let's
:31:36. > :31:42.go to the Conservative MP who has spearheaded the back bench
:31:43. > :31:49.opposition to George Osborne's tax cuts. Was a Iain Duncan Smith right
:31:50. > :31:54.to resign? He was coming he had reached a point where he had had
:31:55. > :31:58.enough of the purse strings being pulled so he couldn't deliver the
:31:59. > :32:05.welfare reform he wanted to. He had no option. Mr Cameron says he is
:32:06. > :32:08.puzzled by the resignation and the position of the government on these
:32:09. > :32:17.welfare reforms and cuts had been collectively agreed. I am learning,
:32:18. > :32:20.I am still a relatively new MP. You can keep your powder dry for so
:32:21. > :32:26.long, you are convinced by the whips that this is the right thing to do.
:32:27. > :32:30.Your conscience will kick in, it did for me last year over tax credits.
:32:31. > :32:33.The rumblings are more open this year than they were last year over
:32:34. > :32:38.The rumblings are more open this tax credits. Iain Duncan Smith
:32:39. > :32:41.looked around him and saw many MP is saying how unhappy they were and he
:32:42. > :32:45.couldn't proceed any longer. Would you have been one of the rebels if
:32:46. > :32:50.the government had proceeded with what was in the budget for the
:32:51. > :32:56.disability payments? Absolutely, I would have been. Iain Duncan Smith,
:32:57. > :33:03.perhaps under Treasury pressure over the years has presided over a number
:33:04. > :33:07.of cuts to welfare. Now he is resigning over a cut that isn't
:33:08. > :33:14.going to happen, as far as we can make out. What is the logic in that?
:33:15. > :33:18.The first thing to say, I cannot say the certain it wouldn't have
:33:19. > :33:20.happened. I have had no letter or e-mail coming from the Treasury
:33:21. > :33:28.saying we will be looking at it again. A lot of what has been cut
:33:29. > :33:36.from Iain Duncan Smith's point of view, so the tax credit taper rate,
:33:37. > :33:41.universal taper rate, PIP, it has been coming thick and fast. He has
:33:42. > :33:45.had to deliver what it was revolutionary welfare reforms. He
:33:46. > :33:51.wanted to do them the right way. Everything I talked about in my
:33:52. > :33:56.maiden speech about doing it gently and allowing the minimum wage to
:33:57. > :33:58.rise. The Treasury whole the purse strings and they stopped him
:33:59. > :34:04.delivering the policies the way he wanted to. Given what happened to
:34:05. > :34:09.tax credits, which was a move to take away some welfare benefits from
:34:10. > :34:15.the working poor, is it not puzzling the Chancellor then moved in to an
:34:16. > :34:20.even more difficult group to deal with, in terms of taking things
:34:21. > :34:27.away, into the disabled and seem to have learned nothing from the tax
:34:28. > :34:34.credit U turn? I guess we will see in the days and weeks to come. It is
:34:35. > :34:40.not just PIP, you will remember the extra payment given to claimants who
:34:41. > :34:44.had been ill for a long time and were returning to work. I voted
:34:45. > :34:47.against that also. I hope Stephen Crabb, the new Secretary of State
:34:48. > :34:50.will have a conversation with the Treasury and this will be brought to
:34:51. > :34:55.the table. We have made some poor decisions. Some of the areas of
:34:56. > :34:59.taxation we have opted for instead, are wrong. It doesn't send the right
:35:00. > :35:03.message that as a Conservative Party we can look after everybody in
:35:04. > :35:06.society. It is only the Conservatives who can, because we do
:35:07. > :35:14.need the strong economy to deliver any of this. But it has got to come
:35:15. > :35:18.back to the table and we have got to start again. Is it your view it
:35:19. > :35:20.wouldn't be enough just to tinker with what the government was
:35:21. > :35:24.planning to do with the personal mobility independent payments and do
:35:25. > :35:33.what it did with tax credits, which was to scrap what it was planning to
:35:34. > :35:39.do and start again? I have spoken to a lot of disability charities. I am
:35:40. > :35:45.putting myself through and Mark PIP assessment because I want to feel
:35:46. > :35:50.what it is like. It just doesn't work that so many groups of ill and
:35:51. > :35:53.disabled people. Tinkering with two tiny point isn't good enough. We
:35:54. > :35:59.need to look at the whole process and start from scratch and work with
:36:00. > :36:03.these charities, who understand the pressures put on these people so we
:36:04. > :36:08.have a system that works for them. Your party is in open warfare this
:36:09. > :36:13.morning, you have a resignation and people are referring to you as the
:36:14. > :36:18.nasty party. How big a crisis is this for the Conservatives? I have
:36:19. > :36:27.been thinking about this this morning. I am trying to keep my own
:36:28. > :36:32.wooden spoon in my kitchen drawer. I think, in a funny sort of way,
:36:33. > :36:37.because there has been so much focus on the EU, this might lead the sense
:36:38. > :36:41.check we need. All MPs are good people trying to do the best they
:36:42. > :36:46.can. This could be the slap to the face we all need that says hang on,
:36:47. > :36:49.get back together and sort ourselves out. We are the party that should be
:36:50. > :36:55.looking after people. In fact, I think it could bring us together. If
:36:56. > :37:00.you are to be brought together for a fresh start from tax credit to
:37:01. > :37:04.disability payments, is George Osborne still the right Chancellor
:37:05. > :37:16.to do it? It depends how he responds to the challenge. I am hoping so.
:37:17. > :37:23.The jury is still out? Yes. Are his chances to be Prime Minister below
:37:24. > :37:27.the water line? Sometimes the strength of a man is how he picks
:37:28. > :37:32.himself up from a fall. So let's see how he responds. If this is
:37:33. > :37:36.attempted to be brushed under the carpet, I think his chances are
:37:37. > :37:40.over. If he lets himself up and shows he is listening, making
:37:41. > :37:44.mistakes is OK, providing you correct them before they affect
:37:45. > :37:48.people. He did that with tax credits. Some ways it was a big
:37:49. > :37:55.thing because it would have affected millions and millions of people. But
:37:56. > :38:00.we need to wait and see what he is going to do with this. Your wooden
:38:01. > :38:08.spoon is always welcome on this programme.
:38:09. > :38:10.Good morning and welcome to Sunday Politics Scotland.
:38:11. > :38:15.Kezia Dugdale tells Labour conference delegates
:38:16. > :38:18.that the Holyrood poll is not a "foregone conclusion",
:38:19. > :38:25.as she faces her toughest ever electoral challenge.
:38:26. > :38:27.What difference will a city deal make to Inverness?
:38:28. > :38:29.The Chancellor is expected to make an announcement within days.
:38:30. > :38:32.MSPs back in 1999 - we'll talk to some of those
:38:33. > :38:41.who are standing down from the Scottish Parliament.
:38:42. > :38:43.Iain Duncan Smith, who was, until his resignation on
:38:44. > :38:45.Friday night, the Work and Pensions Secretary, has confronted criticism
:38:46. > :38:47.about his resignation, insisting it was a matter
:38:48. > :38:52.of principle based on his concerns about welfare reform.
:38:53. > :38:56.He told Andrew Marr this morning that his decision has nothing to do
:38:57. > :38:59.with Europe and everything to do with cuts to the welfare budget,
:39:00. > :39:03.while health and pensions are ring-fenced.
:39:04. > :39:05.Senior ministers insist Mr Duncan Smith had previously
:39:06. > :39:14.Yesterday the party's Scottish leader, Ruth Davidson,
:39:15. > :39:16.said there had been some "short-termism" in the Chancellor's
:39:17. > :39:21.plans to cut personal independence payments.
:39:22. > :39:27.I think the Conservative worked really hard over the years to
:39:28. > :39:33.try to reform welfare. It is a thorny issue. We have worked hard to
:39:34. > :39:37.get people back into work. More than 2 million people are in jobs than
:39:38. > :39:41.they were before. But we cannot let short-term cuts and do all of that
:39:42. > :39:45.good work. I am pleased the government is looking again at
:39:46. > :39:52.changes and I think the new secretary is exactly the amount take
:39:53. > :39:53.forward. -- the man to take that forward.
:39:54. > :39:55.Joining me now is the Scottish Political Editor
:39:56. > :39:57.at the Sunday Herald, Tom Gordon, and the writer and journalist
:39:58. > :39:59.David Torrance, who's in our London studio.
:40:00. > :40:07.We heard there that Tory backbenchers aren't exactly rushing
:40:08. > :40:11.out to support George Osborne. It is a completely open season. I never
:40:12. > :40:16.thought he had much of a chance of ever becoming the Conservative
:40:17. > :40:21.leader. He always seems too cold and rectally. Now he has a Syria record
:40:22. > :40:26.of failure behind him. There is no way the Conservative Party will put
:40:27. > :40:31.him at the helm. I also think that it is difficult for Ruth Davidson.
:40:32. > :40:35.She has set her party a very specific goal of becoming the
:40:36. > :40:39.official opposition, overtaking Labour. I think this argument about
:40:40. > :40:43.taking away from the disabled reminds a lot of swing voters why
:40:44. > :40:49.they do not vote Conservative. This is a party that is perceived as
:40:50. > :40:59.pampering the rich and punishing the poor. -- reptilian and cold. The
:41:00. > :41:04.important thing is that what the government wants to do about these
:41:05. > :41:12.cuts. It appears from David Cameron's letter to IDS that they
:41:13. > :41:19.may not go ahead. So you wonder what the point of all this was. Was it
:41:20. > :41:22.all meant to cause damage? And indirectly lead to resignations and
:41:23. > :41:26.generate bad headlines. All of this highlights that David Cameron has
:41:27. > :41:32.for a long time papered over the cracks within his party. And has
:41:33. > :41:39.exposed them as looking quite shambolic. And I think, more
:41:40. > :41:44.broadly, what you have is tension a more strategic, considered approach
:41:45. > :41:49.by Iain Duncan Smith, who is not ambitious. He has been leader of the
:41:50. > :42:00.party. He was not seeking greater advancement. And others have said he
:42:01. > :42:07.is a more -- has a more -- a more short-term approach from the
:42:08. > :42:10.Chancellor. If clever is screwing up several budget and not becoming
:42:11. > :42:22.leader, I think I would go with Iain Duncan Smith. Do you think that his
:42:23. > :42:26.chances of becoming Prime Minister have been shot? He had his
:42:27. > :42:32.omnishambles budget. He publicly have been shot? He had his
:42:33. > :42:38.floated pension reforms, which were not carried out. And now this. There
:42:39. > :42:45.is a pattern there. As Tom has said, and judging from today's quotes, it
:42:46. > :42:48.does seem extremely unlikely that Osborne will become the next leader.
:42:49. > :42:57.There are even suggestions that he won't even put his name forward. Who
:42:58. > :43:01.is your favourite? I think anyone who knows the Conservative Party
:43:02. > :43:05.history knows that whoever becomes leader is never expected. That was
:43:06. > :43:07.true of David Cameron, true Iain Duncan Smith and further back it was
:43:08. > :43:10.true of Margaret Thatcher. I think a Duncan Smith and further back it was
:43:11. > :43:13.figure will emerge that isn't Duncan Smith and further back it was
:43:14. > :43:17.necessarily being discussed at the moment. I don't think it will be
:43:18. > :43:22.Boris Johnson either. Tom Gordon, you were saying this could be bad
:43:23. > :43:26.for the Tories in Scotland with an election coming up. I think the
:43:27. > :43:31.other way you could play it is to say that this was short termism, as
:43:32. > :43:36.Ruth Davidson hinted. But we are not doing it. This shows that the
:43:37. > :43:43.Conservative Party, far from being the heartless, hated Tories,
:43:44. > :43:50.responds to people. MPs have said that, you know, our voters like
:43:51. > :43:55.cutting welfare, but not taking away from the disabled. How are they
:43:56. > :44:00.going to do it? I don't think that is what she was saying. She said
:44:01. > :44:08.sought termism was bad. Most people think that. The point about the PIP
:44:09. > :44:13.changes were that they were narrow. The money was going to go down and
:44:14. > :44:25.stay down. This was not a short-term cut. The point is that that can now
:44:26. > :44:29.be pinned on George Osborne. But from David Cameron's letter to Iain
:44:30. > :44:36.Duncan Smith, that is not the case. They may come back from it. They
:44:37. > :44:42.might find cuts from elsewhere in the budget. That doesn't necessarily
:44:43. > :44:46.mean the disabled and low paid will be safe. Or would see their money
:44:47. > :44:58.affected at all. George Osborne coming had his omnishambles budget.
:44:59. > :45:13.This was the instashambles budget. Ruth Davidson has to come out and
:45:14. > :45:18.realise this is a bad budget. Instashambles. What about the
:45:19. > :45:26.broader budget. Let's see David Cameron loses the EU referendum, it
:45:27. > :45:28.might become so. It would only need IDS to say he was wrong onto welfare
:45:29. > :45:32.and Europe, he is not fit to be IDS to say he was wrong onto welfare
:45:33. > :45:35.Prime Minister. It is not the same, IDS to say he was wrong onto welfare
:45:36. > :45:41.because David Cameron will not be Prime Minister in a year or so. Even
:45:42. > :45:46.if he wins the referendum, he says he will stand down and would contest
:45:47. > :45:50.the next election. If he loses, it won't take a critical comment from
:45:51. > :45:55.Iain Duncan Smith to push him out. He wore me is pretty quickly off his
:45:56. > :45:59.own accord. And it shows you that referendums are subject to the law
:46:00. > :46:06.of unintended consequences. Once you open this Pandora's box... I think
:46:07. > :46:10.the Prime Minister was perfectly right to do so. It is difficult to
:46:11. > :46:16.control the political dynamic afterwards. We have seen that. In
:46:17. > :46:23.terms of external and internal party politics and, as I suggested a long,
:46:24. > :46:28.long papered over cracks at every level. -- suggested earlier. Thank
:46:29. > :46:29.you. Kezia Dugdale was in a confident
:46:30. > :46:32.mood yesterday as she told delegates that Labour would end
:46:33. > :46:34.austerity in Scotland. She pledged to use the Scottish
:46:35. > :46:36.Parliament's new powers to raise taxes to mitigate billions of pounds
:46:37. > :46:39.of Tory cuts and threw down a challenge to the SNP
:46:40. > :46:42.to do the same. Her comments came as the latest poll
:46:43. > :46:44.indicated Labour could fall into third place behind the Tories
:46:45. > :46:47.in the May election. Our reporter Andrew Black
:46:48. > :47:01.was at the conference and sent us This summer, get ready for an epic
:47:02. > :47:07.clash of the Titans. As Labour prepares to take on the SNP in the
:47:08. > :47:13.ultimate battle for supremacy. Scottish Labour is facing one of its
:47:14. > :47:16.toughest challenges yet. At last year 's Westminster election, the
:47:17. > :47:21.party was all but wiped out. Now they are hoping that just a Frome
:47:22. > :47:25.months from the Scottish election, they can avoid history repeating
:47:26. > :47:31.itself. They beheld its spring conference this weekend in a cinema
:47:32. > :47:36.in Glasgow, were helped to -- hoped to rally as much support. Will it be
:47:37. > :47:40.a tale of triumph for the underdog, or will it turn out to be a disaster
:47:41. > :47:45.movie? After things got underway, the conference began its search for
:47:46. > :47:49.the big idea, although, with the election in May, there's not a huge
:47:50. > :47:53.amount of time left to come up with it. One delegate used the occasion
:47:54. > :48:00.to get into the spirit of his surroundings. I have another
:48:01. > :48:06.persona, which I intend to reveal here and now for the first time to
:48:07. > :48:25.conference, I am also... Labour cap conference, I am also... Labour cap
:48:26. > :48:34.-- Labour Man! Alan Johnson came to see why Britain should stay in the
:48:35. > :48:39.UK. Kos our future is brighter in the EU then it is in splendid
:48:40. > :48:54.isolation. That is why I need you to join me and Kent -- Kezia Dugdale.
:48:55. > :48:57.Not everyone wanted to stay in. If you are in favour of a Leave vote,
:48:58. > :49:03.that doesn't make you an extremist. It doesn't put you on the fringes of
:49:04. > :49:06.politics, you in the centre. That is that is what is being considered,
:49:07. > :49:09.politics, you in the centre. That is contemplative by ordinary voters.
:49:10. > :49:14.Even if the politicians think it is too extreme and too out there, that
:49:15. > :49:19.is not what is reflected in the population. They want to be
:49:20. > :49:24.convinced in both directions, at the moment, everything is to play for.
:49:25. > :49:32.And then it was time for the main feature presentation. Kezia Dugdale
:49:33. > :49:39.the movie. In full 3-D. She dismissed the idea that the S NP had
:49:40. > :49:50.already won. People say it is a foregone conclusion is no interest
:49:51. > :49:55.in this campaign. They couldn't be more wrong. She talked about
:49:56. > :50:04.building council houses and ending austerity.
:50:05. > :50:12.I have no intention of making it easy for the SNP macro. Join me and
:50:13. > :50:18.this party can do again what we have always done at our best. Challenge
:50:19. > :50:27.the establishment, overturned the status quo, deliver real change now.
:50:28. > :50:31.Thank you. So, will that be enough for ultimate big today? We will know
:50:32. > :50:35.in May. Joining me now is Labour MSP
:50:36. > :50:38.Jackie Baillie, Shadow Spokesperson on Public Services
:50:39. > :50:51.and Wealth Creation. Kezia Dugdale says she wants to end
:50:52. > :50:57.austerity. Are you saying the penny tax rise you propose plus returning
:50:58. > :51:03.the top rate to 50p is sufficient to do that? We have looked at all the
:51:04. > :51:07.public finances available to Scotland, the new powers coming to
:51:08. > :51:12.Scotland, and we made the pledge. Having looked at that we would not
:51:13. > :51:17.continue the conveyor belt of austerity represented by the Tory
:51:18. > :51:22.policies. Are the tax rises you propose sufficient to do that? Yes,
:51:23. > :51:26.we've look and we find the detail when you announced the policy during
:51:27. > :51:31.the course of the next few weeks, you will see quite clearly where
:51:32. > :51:34.that money comes from, a combination of tax rises, borrowing powers, all
:51:35. > :51:41.that and we will set it out in detail. It is a pledge to end Tory
:51:42. > :51:45.austerity, to use the powers the Parliament now has. Let me quote you
:51:46. > :51:50.something Kezia Dugdale said, the pledge to end austerity won't be
:51:51. > :51:55.respective about what is spent it will set out the path that must be
:51:56. > :52:02.followed in order to dispense with austerity, what does that mean? In
:52:03. > :52:04.normal circumstances we know what the Scottish Government spending
:52:05. > :52:10.plans are, the UK Government spending plans are, we have a stark
:52:11. > :52:14.calculations on those and set out quite clearly the additional tax
:52:15. > :52:19.measures we have it in place. What do you need to be prospective about
:52:20. > :52:24.spending? Say it is a deep recession we enter into, nobody wants that to
:52:25. > :52:28.happen. You need the flexibility to respond to that soak, Alistair
:52:29. > :52:33.Darling when he was last Chancellor made the cut to VAT and we want to
:52:34. > :52:39.ensure his Mrs and the economy can be responded to. Your are, in
:52:40. > :52:43.effect, saying to voters in Scotland we are going to put your taxes up in
:52:44. > :52:48.order to spend more money on the public spec but we are not that
:52:49. > :52:55.bothered about what the money is spent on. That is not the case at
:52:56. > :53:00.all. If you look at our proposal for having a 50p top rate, that is
:53:01. > :53:08.entirely going to go on to education for a fairer stark fund so there is
:53:09. > :53:12.?1000 going pear child... I am not saying you have not outlined things
:53:13. > :53:17.you want to do with the money but you have not even respect truth
:53:18. > :53:23.about the next government spend. You are telling people of Scotland that
:53:24. > :53:27.taxes are going up but what UK and about as the Labour Party is putting
:53:28. > :53:31.taxes up and spending more money in the public sector rather than what
:53:32. > :53:35.the money is spent on. We said we care about what the people of
:53:36. > :53:40.Scotland care about. We said we would protect health services and
:53:41. > :53:43.education. This in a sense protect all of our public services that
:53:44. > :53:49.people care about in real terms. That is just another way of saying
:53:50. > :53:52.we will put your taxes up to spend on the public sector but we do not
:53:53. > :53:58.care what we spend it on. That is not the case. A ?500 million cut
:53:59. > :54:03.that would predominantly fall in education, if you care about the
:54:04. > :54:08.economy, about education in the country going, you invest in
:54:09. > :54:11.education. That ?500 million cut would have limited our aspiration as
:54:12. > :54:17.a country and we did not want to make that choice. My point is, there
:54:18. > :54:25.is also a basic point about ending austerity. Absolutely. During the
:54:26. > :54:26.financial class in Economist thought about ending austerity. He meant
:54:27. > :54:30.financial class in Economist thought government should talk about
:54:31. > :54:36.borrowing money and pump it into the economy in order to raise the man.
:54:37. > :54:39.He did not mean put taxes up to dispense more on the public sector,
:54:40. > :54:45.that has nothing to do with ending austerity. The choice we face in the
:54:46. > :54:50.Scottish Parliament is to use the new powers we have got or not. There
:54:51. > :54:54.is a basic point here, putting people's taxes up is adding to
:54:55. > :55:00.austerity, not taking away from it. I do not believe it is adding to
:55:01. > :55:04.austerity and here's why. Our investment would actually be in
:55:05. > :55:08.education and if you want to grow the economy and create additional
:55:09. > :55:12.wealth one of the key things you do is invest in our people, the
:55:13. > :55:17.education and everything else. I understand that but it want to have
:55:18. > :55:22.an argument and say money spent on education in the long-term pumping
:55:23. > :55:27.demand into the economy is more, raising taxes has less of an effect,
:55:28. > :55:30.I will concede the point to you but you're not borrowing money to pump
:55:31. > :55:37.into the economy, your extra spending is offset right putting
:55:38. > :55:40.people's taxes up and in terms of ending austerity, that is not an end
:55:41. > :55:46.to austerity it is merely shuffling it about. We are not shuffling it
:55:47. > :55:50.about, let me assure you. By investing in education you start to
:55:51. > :55:57.create the conditions for growing the economy. We have funds to build
:55:58. > :56:00.60,000 affordable homes, that is investment in construction that
:56:01. > :56:04.contributes to growing GDP and growing the economy. That might be
:56:05. > :56:08.fantastic but does not get you down the basic point that putting
:56:09. > :56:12.fantastic but does not get you down people's taxes up is by definition
:56:13. > :56:15.sucking demand out of the economy. It may be that all your investment
:56:16. > :56:20.demands are just wonderful but you cannot they macro it has anything to
:56:21. > :56:25.do with ending austerity. But they do because we will take the choices
:56:26. > :56:29.that makes cuts that the SNP and Tories are currently doing. We would
:56:30. > :56:33.invest in the country and invest in the country in the future. That is
:56:34. > :56:37.the choice facing people at this election, do they want to invest in
:56:38. > :56:41.the future or do they want a conveyor belt of cuts coming to the
:56:42. > :56:47.Scottish Parliament? You say a conveyor belt of cuts but according
:56:48. > :56:50.to the latest figures Labour made a song and dance about, according to
:56:51. > :56:55.those figures in Scotland we already spend 12 Wi-Fi has sent more of
:56:56. > :57:00.public money for every person who lives here and as a proportion of
:57:01. > :57:07.GDP, if you exclude oil revenues which I am sure you would be more
:57:08. > :57:11.than happy to do, we spent 8% of Scottish GDP more as the UK spends
:57:12. > :57:15.as a percentage of UK GDP on public services yet you are telling people
:57:16. > :57:19.in Scotland despite the fact we already spend all that extra money,
:57:20. > :57:23.our taxes have to go up to spend even more on the public sector
:57:24. > :57:30.without people in England's taxes do not have to go up. Devolution allows
:57:31. > :57:35.us to make different choices. We have our to do things differently in
:57:36. > :57:41.Scotland. The cuts that have even visited on us by the SNP and the
:57:42. > :57:45.Tories have 10% in the past in education, 16% in the future, will
:57:46. > :57:53.substantially damage this country and our economy. We are choosing to
:57:54. > :57:56.do things differently. It is widely recognised, I think, that the
:57:57. > :58:00.education system in England has done rather well over the last decade or
:58:01. > :58:04.so. It caught up hats with Scotland and perhaps in some areas has
:58:05. > :58:10.overtaken it. Nicola Sturgeon is talking about copying the London
:58:11. > :58:16.challenge which had such a dramatic effect on education the. We spend 12
:58:17. > :58:20.sent more per capita and you are saying we have to spend even more in
:58:21. > :58:23.order to help the education system. These changes in England were not
:58:24. > :58:26.order to help the education system. achieved high throwing money at the
:58:27. > :58:32.problem. It is all about spending money better and I agree with that
:58:33. > :58:38.point out what we have seen the SNP preside over is 14,000 teachers in
:58:39. > :58:41.our classrooms, 152,000 fewer places at colleges, that is not about
:58:42. > :58:46.investing in the country and young people in future so we need to make
:58:47. > :58:51.sure we do that. England did it while they were cutting budgets. I
:58:52. > :58:55.want to make sure we have the best possible education system, health
:58:56. > :58:59.service in this country. You do not achieve that by cutting budgets.
:59:00. > :59:04.service in this country. You do not lot of people watching this will say
:59:05. > :59:08.it is the same old Labour Party, the party of tax and spend, they want to
:59:09. > :59:12.spend more money on public services because it protects the people who
:59:13. > :59:17.vote for them and for ordinary people in Scotland, why do I have to
:59:18. > :59:21.pay more tax, they will say, when England does not? If you are
:59:22. > :59:26.ambitious and aspirational for this country then actually unique to
:59:27. > :59:31.invest in the right things. We do not think cutting education is the
:59:32. > :59:35.right thing to do. We are rejecting Tory austerity because we think it
:59:36. > :59:38.damages the country. There is a choice that affects people in
:59:39. > :59:45.Scotland, do you want to invest in the future or do you want more cuts
:59:46. > :59:48.from the Tories and the SNP? Thank you very much indeed.
:59:49. > :59:50.Among the less controversial announcements of the
:59:51. > :59:52.Chancellor's Budget was the latest tranche of city deals.
:59:53. > :59:54.These are intended as a funding mechanism to promote growth
:59:55. > :59:56.and improve infrastructure, with funds provided by Westminster
:59:57. > :59:58.and Holyrood, and which unlock wider access to finance
:59:59. > :00:01.George Osborne didn't mention Inverness in his speech,
:00:02. > :00:04.but it's believed that the deal will be announced this week.
:00:05. > :00:06.Our reporter Craig Anderson explains what it will mean
:00:07. > :00:21.It is imposing red sandstone walls that completely dominate the
:00:22. > :00:25.Inveresk skyline. It attracts thousands of duty is to list every
:00:26. > :00:31.year but the only way they are getting through these doors is by
:00:32. > :00:38.breaking the law. Inverness Castle is home to the city's Sheriff Court.
:00:39. > :00:41.The castle complex was all around the time Queen Victoria came to the
:00:42. > :00:46.throne but a major redevelopment into a top-flight tourist attraction
:00:47. > :00:52.is now on the cards and the City Deal could provide the millions of
:00:53. > :00:56.pounds needed for the beaver. The evening culture, cafe culture,
:00:57. > :00:59.restaurant culture is superb but during the day there is nothing to
:01:00. > :01:04.do. The leather is underdeveloped, everything is underdeveloped in
:01:05. > :01:07.terms of attracting visitors to Inverness. Something needs to be
:01:08. > :01:12.done and the City Deal is our opportunity. With contributions from
:01:13. > :01:18.Westminster and Holyrood government and from the Highland Council the
:01:19. > :01:23.catch pot could extend to ?300 million. As well as the castle
:01:24. > :01:27.conversion is to be an international standard sports and leisure hub
:01:28. > :01:32.containing a velodrome and conference centre. Other ideas
:01:33. > :01:35.include tarting up Inverness city centre and relieving traffic
:01:36. > :01:43.congestion with the transport infrastructure. In terms of the
:01:44. > :01:46.Pinch point we have got with infrastructure we are a victim of
:01:47. > :01:50.our own success. Things that have been talked about for decades now we
:01:51. > :01:54.really need to see them coming through. I believe the funding
:01:55. > :01:59.through the City Deal will help bring those projects to fruition.
:02:00. > :02:04.Earlier this year the Prime Minister announced the details of the ?250
:02:05. > :02:07.million city region deal for Aberdeen which will fund the
:02:08. > :02:10.creation of an oil and gas technology Centre to help the alias
:02:11. > :02:15.transition from an operations based to a hub for the trolley research
:02:16. > :02:20.and development. The cash will also support emerging industries and key
:02:21. > :02:26.transport infrastructure and, it is hoped, reeling billions in private
:02:27. > :02:33.investment. The City Deal can lead to other money which might total ?2
:02:34. > :02:36.billion from other public sector sources in the private sector. I
:02:37. > :02:41.believe it is going to make a real difference. The Inverness City Deal
:02:42. > :02:48.had been trailed heavily last week by the Scottish Secretary. It is
:02:49. > :02:52.no-show in the Chancellor 's budget deal on Wednesday has led some to
:02:53. > :02:55.believe it might not happen on will emerge substantially watered down.
:02:56. > :02:58.In the current climate I do not think they are likely to find
:02:59. > :03:02.funding for many of these projects if the City Deal does not cover them
:03:03. > :03:07.because capital spending is constrained as well as a two-day
:03:08. > :03:12.revenue spending by all the austerity we have at the moment. For
:03:13. > :03:16.these kind of projects if the City Deal doesn't come along and it is
:03:17. > :03:20.highly unlikely they will ever happen. The Westminster government
:03:21. > :03:24.dismisses any conspiracy theories and insists an announcement is
:03:25. > :03:29.imminent at it will have two B before Thursday because that's when
:03:30. > :03:31.the period again is an advance of the Scottish Parliament elections.
:03:32. > :03:35.As the say, watch this space. In 2014, the UK and Scottish
:03:36. > :03:38.governments agreed a City Deal with the eight local authorities
:03:39. > :03:41.covering Glasgow and Clyde Valley. I'm joined by the former leader
:03:42. > :03:43.of Glasgow City Council, Gordon Matheson, who's
:03:44. > :03:45.about to become visiting professor at Strathclyde University's
:03:46. > :03:57.Institute for Future Cities. The Glasgow one, leaders mode
:03:58. > :04:05.experience of that than anywhere else in Scotland, by and large, has
:04:06. > :04:09.it worked? Yes, it has. We kind of rogue the mould really. We're
:04:10. > :04:13.Glasgow has led its great to see other cities in Scotland are
:04:14. > :04:17.following. It is about achieving economic growth. The Glasgow City
:04:18. > :04:25.Deal will grow the economy by 4% which will add 4.2 billion to
:04:26. > :04:27.Glasgow 's economy and critically create 15,000 construction jobs plus
:04:28. > :04:31.29,000 permanent new jobs. create 15,000 construction jobs plus
:04:32. > :04:37.all this talk and it is all Georgian, of leveraging that you put
:04:38. > :04:41.up some public money and get the equivalent or more, has that
:04:42. > :04:46.happened in Glasgow? Yes, it is happening. The City Deal is a 20
:04:47. > :04:50.year programme and in Glasgow 's case it will be done over ten years
:04:51. > :04:54.but to give you an example of how this is done, this might not sound
:04:55. > :04:57.particularly sexy but it makes an impact. It is a major investment
:04:58. > :05:03.going on in terms of Renee age across Glasgow which will create
:05:04. > :05:12.land that can be a lot on which will be built 20,000 new jobs. Are these
:05:13. > :05:19.Langfield sites? Yes, the amount of investment needed to the Kameni land
:05:20. > :05:23.across the Clyde waterfront means it would be prohibitive for private
:05:24. > :05:32.sector is to come in and invest. Is that public money or a mixture?
:05:33. > :05:40.We want to boost the tourism trade from the ships that come in and also
:05:41. > :05:44.to service offshore wind farms, right through Glasgow and North
:05:45. > :05:55.Lanarkshire. That is being funded by the public sector. But there is a
:05:56. > :06:02.times three leverage on that. The critical point... And the private
:06:03. > :06:06.sector would do what? Build houses? Yes. Also, in the case of
:06:07. > :06:11.Inverclyde, what they will do service offshore. It will enhance
:06:12. > :06:15.the tourism trade. What we are looking to do is to create the
:06:16. > :06:22.circumstances which allow for investment. That requires public
:06:23. > :06:27.sector investment for it to happen. Do you think it is important...? In
:06:28. > :06:33.Aberdeen, there is a focus, we will build a centre which will help
:06:34. > :06:37.change Aberdeen's history as North Sea oil into a future of oil and gas
:06:38. > :06:43.technology expertise. Is there something in Glasgow like that, that
:06:44. > :06:48.is a permanent change to the nature of the Glasgow economy? I think that
:06:49. > :06:55.our two. One is the change in terms of growth. To add ?2 million every
:06:56. > :07:02.year is a step change. It will also increase tax, taken by the
:07:03. > :07:08.government. It will create 29,000 new jobs. Another example is part of
:07:09. > :07:14.the city jail in Glasgow being supporting new business growth. In
:07:15. > :07:22.particular, years two and three. A lot of companies get support
:07:23. > :07:27.initially. What year are you in now? The first funding started in 2015.
:07:28. > :07:37.All the works in Glasgow will be over a 10-year period. There is
:07:38. > :07:39.another very good example, being employed by colleagues at Glasgow
:07:40. > :07:45.University. That involves bioscience, because there is a lot
:07:46. > :07:49.of insights into how precise medicine can become. Glasgow is
:07:50. > :07:53.leading the world on that. That's another example where, by investing
:07:54. > :07:58.publicly, you can create the circumstances that allow for future
:07:59. > :08:03.growth. I am going into dangerous territory here in asking a man from
:08:04. > :08:09.Glasgow to advise what should happen in Edinburgh. What you think should
:08:10. > :08:12.happen? I am delighted that what is happening in Glasgow is being
:08:13. > :08:18.emulated by other cities. I am delighted that Edinburgh is pursuing
:08:19. > :08:30.a City Deal. Also Dundee and Inverness. Some places already have
:08:31. > :08:35.city deals in place. You can also get the transfer of significant
:08:36. > :08:44.powers. It will not come of age if it simply transfers powers to
:08:45. > :08:53.powers. It will not come of age if Holyrood. Am I talking to be future
:08:54. > :09:00.mayor of Glasgow? I don't... But do you see the future of mayors? I see
:09:01. > :09:06.a future in governments, so the extra power that cities are required
:09:07. > :09:10.to build the economy is properly available. When Tony Blair was in
:09:11. > :09:17.power, there was talk of devolving things like social welfare,. That
:09:18. > :09:24.never really happened. Do you think there is a case for that? I think
:09:25. > :09:33.the definition of both functioning powers, in terms of different
:09:34. > :09:41.policy, because that is how the grow the economy and tackle inequalities.
:09:42. > :09:47.So subsidiarity is the word we all like to use. I like to talk about
:09:48. > :09:53.growth. And the way to do that is to get controlling powers out of
:09:54. > :09:56.Parliament is into city regions. All right. Thank you for joining
:09:57. > :09:58.Everything has to come to an end, sometime.
:09:59. > :10:01.That's as true of political careers as it is of everything else.
:10:02. > :10:03.Some will be ended in May by the voters.
:10:04. > :10:05.But there is a group of MSPs who are exiting
:10:06. > :10:07.retiring, gracefully, from public life,
:10:08. > :10:10.including some who were at Holyrood at the very beginning.
:10:11. > :10:24.Among the so-called 99 as, posing for posterity, Fiona McLeod from the
:10:25. > :10:32.SNP. I do solemnly and sincerely declare... But she is standing down,
:10:33. > :10:36.not contesting. That brings on a bout of the reminiscences. It kind
:10:37. > :10:41.of worries me that every memory I have thought has been about me
:10:42. > :10:46.crying in Parliament. And I am not a big baby, but it was things like
:10:47. > :10:49.when we introduced the vote for 16 and 17-year-olds for the referendum.
:10:50. > :10:55.When we passed the equal marriage bill. When we elected Nicola
:10:56. > :11:00.Sturgeon as the First Minister. And I thought, why did it make me cry?
:11:01. > :11:06.And it was because they were joyous occasions, things I had campaigned
:11:07. > :11:14.for all my life. Mary Scanlon was there, too. Now she has made her
:11:15. > :11:20.last speech in the chamber. She is also retiring. I left school at 13,
:11:21. > :11:25.my father was a farm labourer and I left school with no qualifications.
:11:26. > :11:29.I went to university as a single parent and by sheer hard work and my
:11:30. > :11:33.circumstances, like a husband walking out on children, and they
:11:34. > :11:39.were both under three, for some reason I have managed to get here.
:11:40. > :11:50.So I wanted my last speech to say, if I can do this, you can do it. M S
:11:51. > :11:58.So I wanted my last speech to say, P's tent one macro has -- MSPs have
:11:59. > :12:03.time for reflection. Of course I could have done more, but I have
:12:04. > :12:06.done my best and the people are always on about the Highlands and
:12:07. > :12:13.Islands, but they do not have the strongest voice and they do need
:12:14. > :12:19.champions. He was there for Labour. Now he too is ticking of the things
:12:20. > :12:24.he's doing for the last time as a MSP and looking back on his time as
:12:25. > :12:28.a health minister. Clearly it wasn't a time without controversy. Health
:12:29. > :12:37.always isn't. I still think we made progress on the Labour -- under
:12:38. > :12:41.Labour. There have not been major breaks in health policy in England.
:12:42. > :12:47.We have a permanent revolution. There has been a lot of continuity.
:12:48. > :12:54.The reality is that if you look at them both, between 99 and now, there
:12:55. > :13:03.have been improvements. Now he is looking at what the future might
:13:04. > :13:07.hold. I want to see more employment and social security powers. I hope
:13:08. > :13:13.it will be about how we use those powers. The debate about the extent
:13:14. > :13:19.of the powers will never go away. Back at the marina, some advice for
:13:20. > :13:23.those about to throw themselves into Holyrood politics. Enjoy the
:13:24. > :13:28.privilege you have been given, work hard, but understand that you will
:13:29. > :13:33.have to work hard. This is not a nine to five, five day a week job.
:13:34. > :13:39.It takes over your life, that in a way that is just such an enormous
:13:40. > :13:51.privilege. The cliche is that all political careers end in failure.
:13:52. > :13:53.Perhaps what our cohort of retiring M S P' is that in the end we will
:13:54. > :13:54.judge them kindly. On Wednesday, you can watch the last
:13:55. > :13:59.First Minister's Questions before the Scottish Parliament
:14:00. > :14:00.is dissolved. We'll be back after
:14:01. > :14:08.Easter, on 10th April, It all comes down
:14:09. > :14:34.to this one chance.