20/03/2016 Sunday Politics Scotland


20/03/2016

With Gordon Brewer. Andrew Neil talks to Owen Smith, Heidi Allen and Paul Johnson. On the political panel are Janan Ganesh, Isabel Oakeshott and Nick Watt.


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Transcript


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Iain Duncan Smith follows up his resignation with a blistering

:00:41.:00:50.

attack on George Osborne, saying some of the Chancellor's

:00:51.:00:53.

budget measures are deeply unfair and damaging to the country.

:00:54.:00:56.

It's being seen as a direct attack on Chancellor Osborne -

:00:57.:01:00.

are his leadership hopes now holed below the waterline?

:01:01.:01:03.

And with ministers now close to civil war over IDS's resignation,

:01:04.:01:06.

can David Cameron keep the warring factions of his government together?

:01:07.:01:08.

Coming up on Sunday Politics Scotland...

:01:09.:01:09.

Ruth Davidson says the Chancellor's plans to cut payments

:01:10.:01:11.

to the disabled showed "short termism".

:01:12.:01:14.

How will that row over IDS play out here?

:01:15.:01:23.

And with me, as always, the best and the brightest political

:01:24.:01:32.

panel in the business - Nick Watt, Isabel Oakeshott

:01:33.:01:36.

and Janan Ganesh, who'll be tweeting throughout the programme

:01:37.:01:40.

So, George Osborne unveiled a Budget which he hoped

:01:41.:01:45.

would satisfy the Tory faithful, generate a feel-good factor

:01:46.:01:49.

in the run up to the EU referendum and enhance his own leadership

:01:50.:01:52.

That strategy started to come off the rails within 24 hours

:01:53.:01:58.

as the Chancellor faced Tory revolts on four fronts.

:01:59.:02:01.

And was blown to smithereens on Friday night when welfare

:02:02.:02:03.

secretary Iain Duncan Smith resigned over savings to disability payments.

:02:04.:02:06.

This morning open warfare is breaking out

:02:07.:02:09.

We'll be devoting the next half hour to this story,

:02:10.:02:20.

with analysis and comment from Nick, Isabel and Janan and interviews

:02:21.:02:23.

with the shadow work and pensions secretary Owen Smith,

:02:24.:02:27.

the Conservative backbencher Heidi Allen, and the head

:02:28.:02:30.

of the Institute for Fiscal Studies Paul Johnson.

:02:31.:02:32.

First, Giles Dilnot reports on the very public falling out

:02:33.:02:36.

at the top of David Cameron's government.

:02:37.:02:39.

When the Chancellor gets badly hurt in an attack from his own side,

:02:40.:02:44.

we shouldn't be surprised where it came

:02:45.:02:47.

Iain Duncan Smith and George Osborne whenever was buddies

:02:48.:02:54.

and they are on the opposite sides of the EU

:02:55.:02:58.

But for nearly six years, they've worked together

:02:59.:03:06.

in government, delivering welfare reform and savings.

:03:07.:03:08.

Last July, when the Chancellor announced the living

:03:09.:03:10.

Those currently on the minimum wage will see that pay rise

:03:11.:03:15.

And whilst in polling, there was popular support

:03:16.:03:23.

for balancing the books and reforming welfare,

:03:24.:03:30.

there was also angry protest, especially from disabled people,

:03:31.:03:33.

who passionately believed they had been targeted

:03:34.:03:35.

The deepest wound a Work and Pensions

:03:36.:03:39.

Secretary could inflict on his own governments,

:03:40.:03:42.

On Wednesday we were touted a budget that would be dull,

:03:43.:03:51.

not much wriggle room or rabbits, sugared or otherwise.

:03:52.:03:54.

Nonetheless, the Chancellor and wannabe PM was

:03:55.:03:56.

The richest 1% pay 28% of all income tax revenue,

:03:57.:04:01.

a higher proportion than in any single year

:04:02.:04:09.

Proof that we are all in this together.

:04:10.:04:14.

But not so for many disabled people and enough Tory MPs,

:04:15.:04:17.

On welfare, last week my right honourable friend the Secretary

:04:18.:04:23.

of State for Work and Pensions, set out changes that will ensure

:04:24.:04:28.

that within the rising disability budget, support is better

:04:29.:04:31.

It was a confirmation of changes that just 48 hours later would see

:04:32.:04:38.

a resignation letter from the man the Chancellor was referring to,

:04:39.:04:40.

questioning if enough is being done to ensure

:04:41.:04:45.

These were changes to personal independence payments that have

:04:46.:04:51.

replaced disability living allowance, that would make it more

:04:52.:04:55.

likely large numbers of recipients got less money,

:04:56.:04:58.

and in some cases much less, in future.

:04:59.:05:09.

Something he regarded as a compromise too far.

:05:10.:05:12.

According to Mr Duncan Smith, the changes had demanded because too

:05:13.:05:14.

much emphasis on money-saving exercises and that his welfare

:05:15.:05:16.

to work reforms could not be repeatedly

:05:17.:05:17.

By this weekend, the government's unofficial paramedic

:05:18.:05:23.

was dispatched to patch up the internal wounds,

:05:24.:05:24.

Mr Duncan Smith's literary cuts had inflicted.

:05:25.:05:38.

by the whole Cabinet on Wednesday morning before the Chancellor

:05:39.:05:43.

And he was obviously part of that process.

:05:44.:05:47.

These proposals came from his department.

:05:48.:05:49.

And the PM's response to the letter stressed...

:05:50.:05:55.

In the hours after the budget, amid angry

:05:56.:05:57.

rumblings from the backbenches, suddenly the government

:05:58.:05:59.

where describing and announced policy

:06:00.:06:01.

Something that has been put forward, there has been a review,

:06:02.:06:06.

And the suggestion the next day from the PM

:06:07.:06:11.

We are going to discuss what we put forward

:06:12.:06:16.

with the disability charities and others, as the Chancellor said

:06:17.:06:19.

It is important this increase in money

:06:20.:06:27.

goes to the people who need it the most.

:06:28.:06:30.

The problem is, the internal party concerns were that it looked

:06:31.:06:32.

like money was going to those that didn't need it most.

:06:33.:06:34.

The headline rate of capital gains tax currently stands at 28%.

:06:35.:06:36.

I am cutting the capital gains tax paid by basic rate

:06:37.:06:41.

Iain Duncan Smith said the disability

:06:42.:06:46.

reforms couldn't be defended within a budget that benefits

:06:47.:06:48.

I'm told this was the most toxic aspect for a large number

:06:49.:06:55.

And that he was not the only conservative in government

:06:56.:07:00.

who'd considered resignation over this.

:07:01.:07:02.

But not everyone was sorry to see him go.

:07:03.:07:04.

The problems have been at the heart of the DWP.

:07:05.:07:11.

I do not see eye to eye with the Treasury,

:07:12.:07:14.

I'm not the Chancellor's biggest supporter,

:07:15.:07:18.

shall we say, but the reality is, in all the experiences I've had,

:07:19.:07:21.

the problems have been with an evangelical point of view,

:07:22.:07:23.

They have consistently failed disabled people

:07:24.:07:28.

As Stephen Crabb takes on work and pensions,

:07:29.:07:33.

But clearly the quiet man reflected if

:07:34.:07:41.

you're going to turn up the volume at all,

:07:42.:07:43.

best rattle the windows of Downing Street.

:07:44.:07:45.

A war of words has now broken out in Iain Duncan Smith's

:07:46.:07:49.

old department, with one junior minister accusing him

:07:50.:07:52.

of "shocking" behaviour, but three other ministers rounding

:07:53.:07:54.

Mr Duncan Smith gave his first post-resignation interview to Andrew

:07:55.:07:59.

Anybody who thinks this is a here today, gone tomorrow

:08:00.:08:05.

I am genuinely frustrated, I have no personal ambitions. If I never go

:08:06.:08:16.

back into government again, I will not cry about that, it is not my

:08:17.:08:21.

ambition. I came into this government, and let me be clear, I

:08:22.:08:25.

came into this government because I cared about welfare reform. I spent

:08:26.:08:32.

eight years in social justice trying to figure out why certain

:08:33.:08:35.

communities were so badly off and how could we get them back to work

:08:36.:08:40.

and solve that one. Everything I have done has been driven by my

:08:41.:08:44.

desire to improve the quality of life for the worst. We can debate my

:08:45.:08:48.

policies, but my motivation has always been a bad back. My motive

:08:49.:08:56.

now, I am concerned that I want to succeed and it cannot do the things

:08:57.:09:02.

it should because it is too focused on narrowly getting the deficit down

:09:03.:09:04.

without saying where it should for. Minutes later the energy

:09:05.:09:19.

secretary Amber Rudd, popped up to attack her former

:09:20.:09:21.

cabinet colleague - saying she resents Mr Duncan Smith's

:09:22.:09:24.

"high moral tone". I do remain perplexed. It indicated

:09:25.:09:35.

he was making progress. He wrote a letter on Thursday night saying what

:09:36.:09:39.

he was doing and why we should support it. So I don't understand. I

:09:40.:09:46.

do remain perplexed about it, but I am disappointed. This is an man I

:09:47.:09:51.

sat a cabinet with for nearly a year. He was a cabinet minister for

:09:52.:09:56.

nearly six years. I do respect him, so to suddenly launch a bombshell on

:09:57.:10:03.

the rest of us in a way that is difficult for us all to understand,

:10:04.:10:12.

is disappointing. It is the Tory party now in open welfare and it is

:10:13.:10:21.

not easily quelled? If Amber Rudd is perplexed, it is a dereliction of

:10:22.:10:25.

duty on her part to understand what has been going on in her own

:10:26.:10:30.

Administration. In a way, there is nothing sudden about this for Iain

:10:31.:10:33.

Duncan Smith, it has been brewing for a long time. She has known that.

:10:34.:10:39.

He has been rustling for a long time whether he can do better, staying

:10:40.:10:43.

where he is and operating within the difficult constraints the Treasury

:10:44.:10:48.

has imposed on him. Or whether he is better off out and saying what he

:10:49.:10:52.

really thinks. That is what tipped him over the edge. The Downing

:10:53.:10:57.

Street strategy is to paint Iain Duncan Smith as a kind of,

:10:58.:11:02.

head-banging Eurosceptic and try to pretend it is all about the EU

:11:03.:11:06.

referendum. I don't think anyone who watched Iain Duncan Smith this

:11:07.:11:09.

morning giving that powerful interview to Andrew Marr, could

:11:10.:11:15.

really doubt that what this is about is Iain Duncan Smith's real desire

:11:16.:11:19.

to do the right thing by the disadvantaged. The rest is just

:11:20.:11:28.

noises off. When you look at some of these clips come he comes out

:11:29.:11:32.

against the welfare cap, to arbitrate. If you are sitting in the

:11:33.:11:40.

Labour Party right now, you will be cutting up that interview and

:11:41.:11:44.

pouring it out at every opportunity. This story will go on and on? I

:11:45.:11:50.

interviewed Iain Duncan Smith about two months after the 2010 election.

:11:51.:11:56.

He said if George Osborne wants me to be a cheese parer and do

:11:57.:12:00.

arbitrate cuts, I will be out. Isabel says commie has been rustling

:12:01.:12:05.

for six years with this. He came into this after the visit to the

:12:06.:12:11.

Easterhouse estate in Glasgow. He had in Europe and championed the

:12:12.:12:15.

vulnerable. He came to it with a mission to try and increase

:12:16.:12:19.

incentives for the low paid to combat to work. To George Osborne,

:12:20.:12:25.

it is the bottom line. But it is not going to go away, you have the

:12:26.:12:29.

extraordinary spectacle of three ministers in his former department,

:12:30.:12:32.

pretty Patel included, putting out statements in support of the Iain

:12:33.:12:38.

Duncan Smith. And you have the pensions minister delivering a

:12:39.:12:41.

Downing Street script saying this is about Europe, even though there is

:12:42.:12:43.

not a word about Europe in Iain Duncan Smith's statement. Ross

:12:44.:12:49.

Altman, who was unhappy with Downing Street and the Treasury on the

:12:50.:12:53.

pension changes coming out and delivering what Downing Street one.

:12:54.:12:57.

It is a mess and it shows the normal discipline you would expect in

:12:58.:13:01.

government really is a challenge but the referendum. It is over the

:13:02.:13:08.

George Osborne? If wasn't on the budget. Tax credits last summer,

:13:09.:13:12.

reversal on pension reforms this year. And now this, you cannot

:13:13.:13:18.

deliver but on Wednesday which is just a proposition by Thursday

:13:19.:13:20.

evening and by Friday evening provokes a senior Cabinet colleagues

:13:21.:13:23.

resignation. It is bad for him. The government should be able to

:13:24.:13:38.

stun them month after a general election Monday, ... And start with

:13:39.:13:46.

them all going in different ways during the referendum, it could get

:13:47.:13:50.

worse. They need this referendum out of the way as quickly as possible.

:13:51.:13:55.

They need a comfortable victory by would suggest, with the remaining

:13:56.:14:00.

side, David Cameron's side to have any chance of putting a look on

:14:01.:14:06.

this. In four years' time, at a general election will determine

:14:07.:14:11.

George Osborne's leadership chances? Quite possibly. I don't know how the

:14:12.:14:15.

Chancellor will put this back together again if you EU referendum

:14:16.:14:20.

campaign. It might not just be a Osborne's future on the line, it

:14:21.:14:25.

could be the Prime Minister's the Chancellor's fate if tied to the

:14:26.:14:28.

Prime Minister. They are the project, they have worked together

:14:29.:14:32.

to make the Conservatives electable again. It George Osborne goes down,

:14:33.:14:37.

David Cameron's position is in doubt. I am not suggesting we care

:14:38.:14:42.

at this point, the it is destabilising.

:14:43.:14:46.

And don't forget Cameron has never been master of these events. As

:14:47.:14:53.

ever, he ain't controlling it. As we know, these things have a life of

:14:54.:14:56.

their own, so it should keep us busy.

:14:57.:15:03.

Iain Duncan Smith's resignation has been simmering for some time

:15:04.:15:06.

but it was triggered by plans to make cuts to disability benefits

:15:07.:15:09.

A few days before George Osborne's budget, the government previewed

:15:10.:15:14.

plans to change the way claimants were assessed for certain disability

:15:15.:15:19.

benefits, saving ?1.3 billion a year. The office of budgetary

:15:20.:15:23.

responsibility said the changes to the personal independence payments,

:15:24.:15:30.

or Pips, would adversely affect 370,000 people by 2020. The amount

:15:31.:15:36.

of Paire pick a person receives is decided by awarding points based on

:15:37.:15:46.

need -- the amount of PIP. Grab rails, personal toilet seats,

:15:47.:15:48.

arguing people would audit have these items. Iain Duncan Smith

:15:49.:15:53.

resigned, saying the changes were not responsible. Replying to the

:15:54.:16:01.

resignation, the Prime Minister said it had now been agreed not to

:16:02.:16:04.

proceed with the policies in their current form. But that wasn't the

:16:05.:16:09.

only major criticism levelled at George Osborne's budget. The

:16:10.:16:12.

Chancellor confirmed he will miss Fiorentina of his three fiscal

:16:13.:16:16.

rules. Next financial year, welfare bill cost almost ?120 billion, well

:16:17.:16:22.

over the cap of ?115 billion, which he introduced himself to restrict

:16:23.:16:27.

overall welfare spending. And he also broke his debt rule, which

:16:28.:16:30.

promised that national debt would decline every year as a proportion

:16:31.:16:36.

of national income. This financial year, total debt is expected to be

:16:37.:16:44.

83.7% of GDP, up from 83.3% in 2014-15.

:16:45.:16:47.

We did ask the Government for an interview about the disability

:16:48.:16:49.

But we were told no one was available.

:16:50.:16:52.

It's a familiar refrain these days, especially when the government

:16:53.:16:55.

I'm joined now by the head of the Institute for

:16:56.:16:59.

Welcome to the programme. It looks like the government is making a

:17:00.:17:08.

U-turn on these cuts to disability payments, how big a haul does that

:17:09.:17:15.

blow in the Chancellor's efforts to get a budget surplus by 2020? The

:17:16.:17:19.

truth is we are talking very small numbers in the context of ?800

:17:20.:17:23.

billion a year or so of spending. The Chancellor is aiming for nearly

:17:24.:17:28.

a billion pound surplus, he doesn't get this, it takes just down to

:17:29.:17:31.

under ten, so in that sense it doesn't matter all that much to his

:17:32.:17:38.

target the 2020. But he has already inked in 3.5 billion of unspecified

:17:39.:17:41.

cuts, we don't know what they would be to get this surplus, but there

:17:42.:17:45.

are about eight or 9 billion of watch some might call

:17:46.:17:49.

jiggery-pokery, cuts to public investment in the final year, and

:17:50.:17:52.

now this. It must make it more difficult for them. There are all

:17:53.:18:03.

sorts of things in the budget aimed at that particular year. Numbers are

:18:04.:18:07.

being moved around and there are some unspecified spending cuts. It

:18:08.:18:11.

is important to see this in the broader context. Unless something

:18:12.:18:16.

awful happens, we will get close to a budget balance in 2019-20, which

:18:17.:18:22.

given that we were over 150 billion in deficit in 2010, the biggest

:18:23.:18:26.

deficit in his time that we have had, to get from their too close to

:18:27.:18:30.

surplus will be quite an achievement. Economically and

:18:31.:18:37.

enormously, but economically, the enormously, but economically, the

:18:38.:18:40.

difference between a ?10 billion surplus and the deficit is almost

:18:41.:18:43.

hear the dash-mac when neither here nor there.

:18:44.:18:52.

The Treasury would expect that department to find ?1.3 billion

:18:53.:18:58.

elsewhere, is that right? Not necessarily, this is unlike the

:18:59.:19:04.

health budget or the education budget, it is determined by the

:19:05.:19:07.

demands on the budget. So I think if they don't put these changes in, the

:19:08.:19:15.

presumption will be at least that the spending will still be in the

:19:16.:19:18.

budget. The day after the budget, you said the Chancellor had only a

:19:19.:19:24.

50-50 chance of filling his surplus in 2020. Would you like to

:19:25.:19:30.

recalibrate these odds? It is a relatively small change in the

:19:31.:19:33.

context of where we are, still a 50-50 shot. The thing that will

:19:34.:19:39.

determine it is much less changes of this kind and parsley more what

:19:40.:19:42.

happens to the economy, whether the economy does better or worse than

:19:43.:19:47.

currently expected. In many ways, the most important thing we learned

:19:48.:19:51.

on Wednesday is that the O BR has much less optimistic about the

:19:52.:19:55.

economy, and therefore we will all be worse off than we thought we were

:19:56.:20:01.

going to be. The Treasury, as Iain Duncan Smith has been saying, has

:20:02.:20:07.

been clawing away at working age benefits the years, for him this was

:20:08.:20:10.

the final straw. But isn't that inevitable, if you have a government

:20:11.:20:18.

who ring fences pensions and the NHS, the only big travel figure

:20:19.:20:21.

spending line is welfare? If you are looking, like the government has

:20:22.:20:25.

been common to really dramatically reduce the deficit significantly,

:20:26.:20:30.

you are not going to avoid doing things on the welfare side. Much

:20:31.:20:35.

more than ?100 billion was spent on just working age welfare, covered by

:20:36.:20:39.

that welfare cap, which is far more than we spend on almost anything

:20:40.:20:43.

else, apart from health service and pensions. But the Chancellor has

:20:44.:20:50.

created this fiscal position. Even though it was weaker, he cut

:20:51.:20:56.

business rates, he cut corporation tax, capital gains tax, he raised

:20:57.:20:59.

the personal allowance, and he raised 40p income tax threshold. He

:21:00.:21:04.

didn't have to do any of that. Even if he had done only some of that, he

:21:05.:21:08.

would not have had to look for these cuts in disability for study has

:21:09.:21:12.

made that himself will stop you are right, she didn't have to make any

:21:13.:21:15.

of those changes, but it was very clearly in the Conservative

:21:16.:21:19.

manifesto to increase the personal allowance. So presuming that he

:21:20.:21:24.

would have kept the manifesto changes, he would have had to have

:21:25.:21:27.

done that, and has to do quite a lot more route. Cutting those taxes

:21:28.:21:31.

clearly means you have to do some other things to maintain his target.

:21:32.:21:38.

But he didn't have to do them. Also, perhaps his leadership tensions did

:21:39.:21:41.

play a part. There were two major areas where they could have raised a

:21:42.:21:45.

lot of money, pension reform, by taking away the top tax-free, which

:21:46.:21:51.

could have saved billions, and raising the fuel duty. If you don't

:21:52.:21:55.

visit now, when will you? Both could have raised billions and he chose

:21:56.:21:59.

not to do it. Those are two very different kinds of things. Yes, you

:22:00.:22:03.

are right, it is astonishing with petrol prices at their lowest level

:22:04.:22:08.

for a very long time, chatty on petrol at its lowest level since the

:22:09.:22:12.

mid-19 90s, the cost of driving a car at its lowest level for perhaps

:22:13.:22:16.

30 years. If you can't increase fuel duties even then, that is a

:22:17.:22:20.

long-term problem for the Treasury, because it brings in a lot of money,

:22:21.:22:24.

?30 billion a year, and if that goes it is a real problem. On pension tax

:22:25.:22:28.

will if it is a much more complex issue. There are good economic

:22:29.:22:33.

arguments, for maintaining it as we have at the moment, and had you got

:22:34.:22:36.

rid of that 40% relief, you would have hit the 5 million or so people

:22:37.:22:42.

who pay 40% tax, it would have been another slice of the population

:22:43.:22:46.

rather unhappy. The national debt, not the deficit, will be 1.7 4

:22:47.:22:53.

trillion by 20 20. If the government was then to run a surplus of say 10

:22:54.:22:59.

billion a year for ten years, which would be unprecedented in British

:23:00.:23:02.

government, after a decade, the debt would still, by my simple rhythmic

:23:03.:23:10.

calculation, the ?1.64 trillion. Is that what you mean by economically

:23:11.:23:16.

irrelevant in running a surplus? The key point about the size of the debt

:23:17.:23:20.

is it is size as a fraction of national income. More important than

:23:21.:23:30.

the absolute level. As the -- even running a surplus of 10 billion or

:23:31.:23:33.

so a year, you don't get too prerecession levels of debt until

:23:34.:23:39.

the mid 2030s. The argument the Chancellor would make the running a

:23:40.:23:43.

surplus year after year is that even if you just run a balanced budget,

:23:44.:23:55.

it takes quite a lot of time just to undo the damage that the crisis did.

:23:56.:24:00.

Joining me now from Glasgow is the Shadow Work and Pensions

:24:01.:24:03.

Owen Smith, in his resignation letter, Iain Duncan Smith says it is

:24:04.:24:15.

now time to look at ending the protection of pensions. Do you agree

:24:16.:24:19.

with that? I don't think that should be the first thing they look at at

:24:20.:24:24.

all, Andrew. I think the very clear message that Iain Duncan Smith

:24:25.:24:26.

himself has delivered is their word choices that could have been made in

:24:27.:24:30.

the budget, and the Chancellor made them and he made the wrong ones

:24:31.:24:33.

coming chose to cut the benefits from disabled people. As we have

:24:34.:24:39.

heard, the PIP cuts taking many thousands of pounds away from the

:24:40.:24:43.

370,000 people, and instead he chose that he was going to cut corporation

:24:44.:24:49.

tax, which he -- is going to benefit large countries in this country, and

:24:50.:24:53.

he chose to cut capital gains tax, which were largely benefit people

:24:54.:24:57.

who have got a bit of money. So I think there were different changes

:24:58.:24:59.

he could have made even within the terms of this budget that would have

:25:00.:25:07.

been much fairer. I understand that, but which are nevertheless have

:25:08.:25:11.

thinks it the benefits? -- ring fenced? We need to look at all these

:25:12.:25:21.

things long-term, but it would be for a Labour government when we get

:25:22.:25:26.

closer to the next election to the absolute specifics on all of those

:25:27.:25:30.

pension benefits, but by and large, let's be clear. The last Labour

:25:31.:25:34.

government worked incredibly hard to raise pensioners out of poverty. We

:25:35.:25:39.

were incredibly successful in that regard, a million pensioners lifted

:25:40.:25:42.

out of poverty under the last Labour government and I don't think they

:25:43.:25:44.

ought to be the target for cuts, just as I don't believe that

:25:45.:25:48.

disabled people ought to be. There are myriad other choices the

:25:49.:25:52.

government could have taken. Iain Duncan Smith today I think has been

:25:53.:25:56.

very honest in explaining how George Osborne could have taken different

:25:57.:25:59.

choices, should have done, and in his words he is dividing Britain,

:26:00.:26:05.

moving away from any notion of us all being in it together. But you

:26:06.:26:17.

are committed to balancing current spending, but if you have ring

:26:18.:26:22.

fenced pensions, as you have told us this morning, presumably you would

:26:23.:26:26.

ring fence the NHS, or even add to spending in the NHS, and you want to

:26:27.:26:30.

ring fence nearly all of welfare as well. Where do the cuts come from

:26:31.:26:36.

the balance current spending? I have just given you two, let's be very

:26:37.:26:42.

specific, Labour would be saying today if it were our budget, that we

:26:43.:26:46.

would not have done the cuts to corporation tax, that would have

:26:47.:26:51.

given us in year ?600 million, and we would not have done the cut to

:26:52.:26:54.

capital gains tax, that would give us another ?600 million. That nets

:26:55.:27:01.

off the PIP cuts annually, the ?1.2 billion, and there are other similar

:27:02.:27:06.

choices we could look at. We would not have taken corporation tax back

:27:07.:27:11.

to 19%. We would have been taking far more from large multinational

:27:12.:27:14.

companies than this government is. So far you have given me 1.2

:27:15.:27:18.

billion, but you have announced much more than that in spending plans. So

:27:19.:27:24.

I am not quite clear how it is you would balance current spending,

:27:25.:27:28.

because I think we can both agree an extra 1.2 billion went to do it,

:27:29.:27:34.

will it? No, but a corporation tax alone by 2020 would be giving us

:27:35.:27:40.

?2.5 billion, if we were to revert back to the April 2015 rate of 20%.

:27:41.:27:46.

We would still have a corporation tax in this country that was 10%

:27:47.:27:50.

lower than Germany, 15% lower than America, 10% lower than Australia.

:27:51.:27:54.

It would be an extremely competitive rate of tax. I just highlight that

:27:55.:28:01.

?1 billion example, ?3 billion example, how we would make different

:28:02.:28:05.

choices. Right, but as I say, in many of your spending plans you have

:28:06.:28:10.

already spent that sort of money. You also talk about fair taxes, you

:28:11.:28:14.

would not cut the corporation tax any further, what else to you mean

:28:15.:28:19.

by fair taxes? What would you raise by fair taxes? As I said a minute

:28:20.:28:26.

ago, we can't for years out from a budget before, a pre-election budget

:28:27.:28:32.

from Labour, tell you precisely what all of our spending plans will be, I

:28:33.:28:36.

don't think that is a reasonable thing to ask any opposition

:28:37.:28:38.

government to do but I think we are setting very clear indicators about

:28:39.:28:49.

what we think the benefits would be. Give us another example. It is

:28:50.:28:57.

reflective of our belief that those who have the largest amounts of

:28:58.:28:59.

money ought to bear the largest burden in our society. It is unclear

:29:00.:29:08.

whether that raises you very much. The government's own analysis showed

:29:09.:29:13.

there was ?3 billion forgone in cutting that top rate of tax. I now

:29:14.:29:16.

see they are trying to argue they have somehow applied a famous curve

:29:17.:29:24.

and ?8 billion they have made. I think corporation tax shows you very

:29:25.:29:27.

clearly, corporation tax receipts have been flat, they have managed to

:29:28.:29:33.

cut from 28% to 20% in the last six years, and the amount of receipts we

:29:34.:29:40.

are getting in has gone from 43 billion to 43 billion. Investment

:29:41.:29:41.

has decreased. What are used to call sickness

:29:42.:29:51.

benefit comes to over 50 billion pounds a year. You would leave it

:29:52.:29:56.

untouched? No, we want to reform the system. Take for example, Iain

:29:57.:30:01.

Duncan Smith made a lot about universal credit this morning. He

:30:02.:30:06.

has said George Osborne has stripped out the guts of universal credit. I

:30:07.:30:13.

was asking about disability? Some people who are disabled will be in

:30:14.:30:15.

receipt of universal credit. What would you do about the disability 50

:30:16.:30:22.

billion pounds annual budget? We wouldn't be making the changes the

:30:23.:30:29.

current government are proposing. They are lying to the British public

:30:30.:30:33.

about this, spending on the disabled is increasing. If you take all

:30:34.:30:42.

disability benefits, I am publishing figures today that say it has

:30:43.:30:46.

declined around 60% that the government have already cut disabled

:30:47.:30:54.

benefits. -- 6%. That will not be my target. Would you keep this increase

:30:55.:30:57.

in the threshold for people who enter the 40% tax bracket? Yes, we

:30:58.:31:03.

would keep that. It is fair to say the fiscal drag of people being

:31:04.:31:09.

pulled into the 40p rate has been increasing. I think we will need to

:31:10.:31:14.

reform taxation much more fundamentally. I still think the key

:31:15.:31:18.

thing today is we have got to understand George Osborne is the man

:31:19.:31:23.

in the dock. I am going to have to stop you there. We look forward to

:31:24.:31:27.

talking to you in the future about your plans for tax reform. Now let's

:31:28.:31:35.

go to the Conservative MP who has spearheaded the back bench

:31:36.:31:42.

opposition to George Osborne's tax cuts. Was a Iain Duncan Smith right

:31:43.:31:49.

to resign? He was coming he had reached a point where he had had

:31:50.:31:54.

enough of the purse strings being pulled so he couldn't deliver the

:31:55.:31:58.

welfare reform he wanted to. He had no option. Mr Cameron says he is

:31:59.:32:05.

puzzled by the resignation and the position of the government on these

:32:06.:32:08.

welfare reforms and cuts had been collectively agreed. I am learning,

:32:09.:32:17.

I am still a relatively new MP. You can keep your powder dry for so

:32:18.:32:20.

long, you are convinced by the whips that this is the right thing to do.

:32:21.:32:26.

Your conscience will kick in, it did for me last year over tax credits.

:32:27.:32:30.

The rumblings are more open this year than they were last year over

:32:31.:32:33.

The rumblings are more open this tax credits. Iain Duncan Smith

:32:34.:32:38.

looked around him and saw many MP is saying how unhappy they were and he

:32:39.:32:41.

couldn't proceed any longer. Would you have been one of the rebels if

:32:42.:32:45.

the government had proceeded with what was in the budget for the

:32:46.:32:50.

disability payments? Absolutely, I would have been. Iain Duncan Smith,

:32:51.:32:56.

perhaps under Treasury pressure over the years has presided over a number

:32:57.:33:03.

of cuts to welfare. Now he is resigning over a cut that isn't

:33:04.:33:07.

going to happen, as far as we can make out. What is the logic in that?

:33:08.:33:14.

The first thing to say, I cannot say the certain it wouldn't have

:33:15.:33:18.

happened. I have had no letter or e-mail coming from the Treasury

:33:19.:33:20.

saying we will be looking at it again. A lot of what has been cut

:33:21.:33:28.

from Iain Duncan Smith's point of view, so the tax credit taper rate,

:33:29.:33:36.

universal taper rate, PIP, it has been coming thick and fast. He has

:33:37.:33:41.

had to deliver what it was revolutionary welfare reforms. He

:33:42.:33:45.

wanted to do them the right way. Everything I talked about in my

:33:46.:33:51.

maiden speech about doing it gently and allowing the minimum wage to

:33:52.:33:56.

rise. The Treasury whole the purse strings and they stopped him

:33:57.:33:58.

delivering the policies the way he wanted to. Given what happened to

:33:59.:34:04.

tax credits, which was a move to take away some welfare benefits from

:34:05.:34:09.

the working poor, is it not puzzling the Chancellor then moved in to an

:34:10.:34:15.

even more difficult group to deal with, in terms of taking things

:34:16.:34:20.

away, into the disabled and seem to have learned nothing from the tax

:34:21.:34:27.

credit U turn? I guess we will see in the days and weeks to come. It is

:34:28.:34:34.

not just PIP, you will remember the extra payment given to claimants who

:34:35.:34:40.

had been ill for a long time and were returning to work. I voted

:34:41.:34:44.

against that also. I hope Stephen Crabb, the new Secretary of State

:34:45.:34:47.

will have a conversation with the Treasury and this will be brought to

:34:48.:34:50.

the table. We have made some poor decisions. Some of the areas of

:34:51.:34:55.

taxation we have opted for instead, are wrong. It doesn't send the right

:34:56.:34:59.

message that as a Conservative Party we can look after everybody in

:35:00.:35:03.

society. It is only the Conservatives who can, because we do

:35:04.:35:06.

need the strong economy to deliver any of this. But it has got to come

:35:07.:35:14.

back to the table and we have got to start again. Is it your view it

:35:15.:35:18.

wouldn't be enough just to tinker with what the government was

:35:19.:35:20.

planning to do with the personal mobility independent payments and do

:35:21.:35:24.

what it did with tax credits, which was to scrap what it was planning to

:35:25.:35:33.

do and start again? I have spoken to a lot of disability charities. I am

:35:34.:35:39.

putting myself through and Mark PIP assessment because I want to feel

:35:40.:35:45.

what it is like. It just doesn't work that so many groups of ill and

:35:46.:35:50.

disabled people. Tinkering with two tiny point isn't good enough. We

:35:51.:35:53.

need to look at the whole process and start from scratch and work with

:35:54.:35:59.

these charities, who understand the pressures put on these people so we

:36:00.:36:03.

have a system that works for them. Your party is in open warfare this

:36:04.:36:08.

morning, you have a resignation and people are referring to you as the

:36:09.:36:13.

nasty party. How big a crisis is this for the Conservatives? I have

:36:14.:36:18.

been thinking about this this morning. I am trying to keep my own

:36:19.:36:27.

wooden spoon in my kitchen drawer. I think, in a funny sort of way,

:36:28.:36:32.

because there has been so much focus on the EU, this might lead the sense

:36:33.:36:37.

check we need. All MPs are good people trying to do the best they

:36:38.:36:41.

can. This could be the slap to the face we all need that says hang on,

:36:42.:36:46.

get back together and sort ourselves out. We are the party that should be

:36:47.:36:49.

looking after people. In fact, I think it could bring us together. If

:36:50.:36:55.

you are to be brought together for a fresh start from tax credit to

:36:56.:37:00.

disability payments, is George Osborne still the right Chancellor

:37:01.:37:04.

to do it? It depends how he responds to the challenge. I am hoping so.

:37:05.:37:16.

The jury is still out? Yes. Are his chances to be Prime Minister below

:37:17.:37:23.

the water line? Sometimes the strength of a man is how he picks

:37:24.:37:27.

himself up from a fall. So let's see how he responds. If this is

:37:28.:37:32.

attempted to be brushed under the carpet, I think his chances are

:37:33.:37:36.

over. If he lets himself up and shows he is listening, making

:37:37.:37:40.

mistakes is OK, providing you correct them before they affect

:37:41.:37:44.

people. He did that with tax credits. Some ways it was a big

:37:45.:37:48.

thing because it would have affected millions and millions of people. But

:37:49.:37:55.

we need to wait and see what he is going to do with this. Your wooden

:37:56.:38:00.

spoon is always welcome on this programme.

:38:01.:38:08.

Good morning and welcome to Sunday Politics Scotland.

:38:09.:38:10.

Kezia Dugdale tells Labour conference delegates

:38:11.:38:15.

that the Holyrood poll is not a "foregone conclusion",

:38:16.:38:18.

as she faces her toughest ever electoral challenge.

:38:19.:38:25.

What difference will a city deal make to Inverness?

:38:26.:38:27.

The Chancellor is expected to make an announcement within days.

:38:28.:38:29.

MSPs back in 1999 - we'll talk to some of those

:38:30.:38:32.

who are standing down from the Scottish Parliament.

:38:33.:38:41.

Iain Duncan Smith, who was, until his resignation on

:38:42.:38:43.

Friday night, the Work and Pensions Secretary, has confronted criticism

:38:44.:38:45.

about his resignation, insisting it was a matter

:38:46.:38:47.

of principle based on his concerns about welfare reform.

:38:48.:38:52.

He told Andrew Marr this morning that his decision has nothing to do

:38:53.:38:56.

with Europe and everything to do with cuts to the welfare budget,

:38:57.:38:59.

while health and pensions are ring-fenced.

:39:00.:39:03.

Senior ministers insist Mr Duncan Smith had previously

:39:04.:39:05.

Yesterday the party's Scottish leader, Ruth Davidson,

:39:06.:39:14.

said there had been some "short-termism" in the Chancellor's

:39:15.:39:16.

plans to cut personal independence payments.

:39:17.:39:21.

I think the Conservative worked really hard over the years to

:39:22.:39:27.

try to reform welfare. It is a thorny issue. We have worked hard to

:39:28.:39:33.

get people back into work. More than 2 million people are in jobs than

:39:34.:39:37.

they were before. But we cannot let short-term cuts and do all of that

:39:38.:39:41.

good work. I am pleased the government is looking again at

:39:42.:39:45.

changes and I think the new secretary is exactly the amount take

:39:46.:39:52.

forward. -- the man to take that forward.

:39:53.:39:53.

Joining me now is the Scottish Political Editor

:39:54.:39:55.

at the Sunday Herald, Tom Gordon, and the writer and journalist

:39:56.:39:57.

David Torrance, who's in our London studio.

:39:58.:39:59.

We heard there that Tory backbenchers aren't exactly rushing

:40:00.:40:07.

out to support George Osborne. It is a completely open season. I never

:40:08.:40:11.

thought he had much of a chance of ever becoming the Conservative

:40:12.:40:16.

leader. He always seems too cold and rectally. Now he has a Syria record

:40:17.:40:21.

of failure behind him. There is no way the Conservative Party will put

:40:22.:40:26.

him at the helm. I also think that it is difficult for Ruth Davidson.

:40:27.:40:31.

She has set her party a very specific goal of becoming the

:40:32.:40:35.

official opposition, overtaking Labour. I think this argument about

:40:36.:40:39.

taking away from the disabled reminds a lot of swing voters why

:40:40.:40:43.

they do not vote Conservative. This is a party that is perceived as

:40:44.:40:49.

pampering the rich and punishing the poor. -- reptilian and cold. The

:40:50.:40:59.

important thing is that what the government wants to do about these

:41:00.:41:04.

cuts. It appears from David Cameron's letter to IDS that they

:41:05.:41:12.

may not go ahead. So you wonder what the point of all this was. Was it

:41:13.:41:19.

all meant to cause damage? And indirectly lead to resignations and

:41:20.:41:22.

generate bad headlines. All of this highlights that David Cameron has

:41:23.:41:26.

for a long time papered over the cracks within his party. And has

:41:27.:41:32.

exposed them as looking quite shambolic. And I think, more

:41:33.:41:39.

broadly, what you have is tension a more strategic, considered approach

:41:40.:41:44.

by Iain Duncan Smith, who is not ambitious. He has been leader of the

:41:45.:41:49.

party. He was not seeking greater advancement. And others have said he

:41:50.:42:00.

is a more -- has a more -- a more short-term approach from the

:42:01.:42:07.

Chancellor. If clever is screwing up several budget and not becoming

:42:08.:42:10.

leader, I think I would go with Iain Duncan Smith. Do you think that his

:42:11.:42:22.

chances of becoming Prime Minister have been shot? He had his

:42:23.:42:26.

omnishambles budget. He publicly have been shot? He had his

:42:27.:42:32.

floated pension reforms, which were not carried out. And now this. There

:42:33.:42:38.

is a pattern there. As Tom has said, and judging from today's quotes, it

:42:39.:42:45.

does seem extremely unlikely that Osborne will become the next leader.

:42:46.:42:48.

There are even suggestions that he won't even put his name forward. Who

:42:49.:42:57.

is your favourite? I think anyone who knows the Conservative Party

:42:58.:43:01.

history knows that whoever becomes leader is never expected. That was

:43:02.:43:05.

true of David Cameron, true Iain Duncan Smith and further back it was

:43:06.:43:07.

true of Margaret Thatcher. I think a Duncan Smith and further back it was

:43:08.:43:10.

figure will emerge that isn't Duncan Smith and further back it was

:43:11.:43:13.

necessarily being discussed at the moment. I don't think it will be

:43:14.:43:17.

Boris Johnson either. Tom Gordon, you were saying this could be bad

:43:18.:43:22.

for the Tories in Scotland with an election coming up. I think the

:43:23.:43:26.

other way you could play it is to say that this was short termism, as

:43:27.:43:31.

Ruth Davidson hinted. But we are not doing it. This shows that the

:43:32.:43:36.

Conservative Party, far from being the heartless, hated Tories,

:43:37.:43:43.

responds to people. MPs have said that, you know, our voters like

:43:44.:43:50.

cutting welfare, but not taking away from the disabled. How are they

:43:51.:43:55.

going to do it? I don't think that is what she was saying. She said

:43:56.:44:00.

sought termism was bad. Most people think that. The point about the PIP

:44:01.:44:08.

changes were that they were narrow. The money was going to go down and

:44:09.:44:13.

stay down. This was not a short-term cut. The point is that that can now

:44:14.:44:25.

be pinned on George Osborne. But from David Cameron's letter to Iain

:44:26.:44:29.

Duncan Smith, that is not the case. They may come back from it. They

:44:30.:44:36.

might find cuts from elsewhere in the budget. That doesn't necessarily

:44:37.:44:42.

mean the disabled and low paid will be safe. Or would see their money

:44:43.:44:46.

affected at all. George Osborne coming had his omnishambles budget.

:44:47.:44:58.

This was the instashambles budget. Ruth Davidson has to come out and

:44:59.:45:13.

realise this is a bad budget. Instashambles. What about the

:45:14.:45:18.

broader budget. Let's see David Cameron loses the EU referendum, it

:45:19.:45:26.

might become so. It would only need IDS to say he was wrong onto welfare

:45:27.:45:28.

and Europe, he is not fit to be IDS to say he was wrong onto welfare

:45:29.:45:32.

Prime Minister. It is not the same, IDS to say he was wrong onto welfare

:45:33.:45:35.

because David Cameron will not be Prime Minister in a year or so. Even

:45:36.:45:41.

if he wins the referendum, he says he will stand down and would contest

:45:42.:45:46.

the next election. If he loses, it won't take a critical comment from

:45:47.:45:50.

Iain Duncan Smith to push him out. He wore me is pretty quickly off his

:45:51.:45:55.

own accord. And it shows you that referendums are subject to the law

:45:56.:45:59.

of unintended consequences. Once you open this Pandora's box... I think

:46:00.:46:06.

the Prime Minister was perfectly right to do so. It is difficult to

:46:07.:46:10.

control the political dynamic afterwards. We have seen that. In

:46:11.:46:16.

terms of external and internal party politics and, as I suggested a long,

:46:17.:46:23.

long papered over cracks at every level. -- suggested earlier. Thank

:46:24.:46:28.

you. Kezia Dugdale was in a confident

:46:29.:46:29.

mood yesterday as she told delegates that Labour would end

:46:30.:46:32.

austerity in Scotland. She pledged to use the Scottish

:46:33.:46:34.

Parliament's new powers to raise taxes to mitigate billions of pounds

:46:35.:46:36.

of Tory cuts and threw down a challenge to the SNP

:46:37.:46:39.

to do the same. Her comments came as the latest poll

:46:40.:46:42.

indicated Labour could fall into third place behind the Tories

:46:43.:46:44.

in the May election. Our reporter Andrew Black

:46:45.:46:47.

was at the conference and sent us This summer, get ready for an epic

:46:48.:47:01.

clash of the Titans. As Labour prepares to take on the SNP in the

:47:02.:47:07.

ultimate battle for supremacy. Scottish Labour is facing one of its

:47:08.:47:13.

toughest challenges yet. At last year 's Westminster election, the

:47:14.:47:16.

party was all but wiped out. Now they are hoping that just a Frome

:47:17.:47:21.

months from the Scottish election, they can avoid history repeating

:47:22.:47:25.

itself. They beheld its spring conference this weekend in a cinema

:47:26.:47:31.

in Glasgow, were helped to -- hoped to rally as much support. Will it be

:47:32.:47:36.

a tale of triumph for the underdog, or will it turn out to be a disaster

:47:37.:47:40.

movie? After things got underway, the conference began its search for

:47:41.:47:45.

the big idea, although, with the election in May, there's not a huge

:47:46.:47:49.

amount of time left to come up with it. One delegate used the occasion

:47:50.:47:53.

to get into the spirit of his surroundings. I have another

:47:54.:48:00.

persona, which I intend to reveal here and now for the first time to

:48:01.:48:06.

conference, I am also... Labour cap conference, I am also... Labour cap

:48:07.:48:25.

-- Labour Man! Alan Johnson came to see why Britain should stay in the

:48:26.:48:34.

UK. Kos our future is brighter in the EU then it is in splendid

:48:35.:48:39.

isolation. That is why I need you to join me and Kent -- Kezia Dugdale.

:48:40.:48:54.

Not everyone wanted to stay in. If you are in favour of a Leave vote,

:48:55.:48:57.

that doesn't make you an extremist. It doesn't put you on the fringes of

:48:58.:49:03.

politics, you in the centre. That is that is what is being considered,

:49:04.:49:06.

politics, you in the centre. That is contemplative by ordinary voters.

:49:07.:49:09.

Even if the politicians think it is too extreme and too out there, that

:49:10.:49:14.

is not what is reflected in the population. They want to be

:49:15.:49:19.

convinced in both directions, at the moment, everything is to play for.

:49:20.:49:24.

And then it was time for the main feature presentation. Kezia Dugdale

:49:25.:49:32.

the movie. In full 3-D. She dismissed the idea that the S NP had

:49:33.:49:39.

already won. People say it is a foregone conclusion is no interest

:49:40.:49:50.

in this campaign. They couldn't be more wrong. She talked about

:49:51.:49:55.

building council houses and ending austerity.

:49:56.:50:04.

I have no intention of making it easy for the SNP macro. Join me and

:50:05.:50:12.

this party can do again what we have always done at our best. Challenge

:50:13.:50:18.

the establishment, overturned the status quo, deliver real change now.

:50:19.:50:27.

Thank you. So, will that be enough for ultimate big today? We will know

:50:28.:50:31.

in May. Joining me now is Labour MSP

:50:32.:50:35.

Jackie Baillie, Shadow Spokesperson on Public Services

:50:36.:50:38.

and Wealth Creation. Kezia Dugdale says she wants to end

:50:39.:50:51.

austerity. Are you saying the penny tax rise you propose plus returning

:50:52.:50:57.

the top rate to 50p is sufficient to do that? We have looked at all the

:50:58.:51:03.

public finances available to Scotland, the new powers coming to

:51:04.:51:07.

Scotland, and we made the pledge. Having looked at that we would not

:51:08.:51:12.

continue the conveyor belt of austerity represented by the Tory

:51:13.:51:17.

policies. Are the tax rises you propose sufficient to do that? Yes,

:51:18.:51:22.

we've look and we find the detail when you announced the policy during

:51:23.:51:26.

the course of the next few weeks, you will see quite clearly where

:51:27.:51:31.

that money comes from, a combination of tax rises, borrowing powers, all

:51:32.:51:34.

that and we will set it out in detail. It is a pledge to end Tory

:51:35.:51:41.

austerity, to use the powers the Parliament now has. Let me quote you

:51:42.:51:45.

something Kezia Dugdale said, the pledge to end austerity won't be

:51:46.:51:50.

respective about what is spent it will set out the path that must be

:51:51.:51:55.

followed in order to dispense with austerity, what does that mean? In

:51:56.:52:02.

normal circumstances we know what the Scottish Government spending

:52:03.:52:04.

plans are, the UK Government spending plans are, we have a stark

:52:05.:52:10.

calculations on those and set out quite clearly the additional tax

:52:11.:52:14.

measures we have it in place. What do you need to be prospective about

:52:15.:52:19.

spending? Say it is a deep recession we enter into, nobody wants that to

:52:20.:52:24.

happen. You need the flexibility to respond to that soak, Alistair

:52:25.:52:28.

Darling when he was last Chancellor made the cut to VAT and we want to

:52:29.:52:33.

ensure his Mrs and the economy can be responded to. Your are, in

:52:34.:52:39.

effect, saying to voters in Scotland we are going to put your taxes up in

:52:40.:52:43.

order to spend more money on the public spec but we are not that

:52:44.:52:48.

bothered about what the money is spent on. That is not the case at

:52:49.:52:55.

all. If you look at our proposal for having a 50p top rate, that is

:52:56.:53:00.

entirely going to go on to education for a fairer stark fund so there is

:53:01.:53:08.

?1000 going pear child... I am not saying you have not outlined things

:53:09.:53:12.

you want to do with the money but you have not even respect truth

:53:13.:53:17.

about the next government spend. You are telling people of Scotland that

:53:18.:53:23.

taxes are going up but what UK and about as the Labour Party is putting

:53:24.:53:27.

taxes up and spending more money in the public sector rather than what

:53:28.:53:31.

the money is spent on. We said we care about what the people of

:53:32.:53:35.

Scotland care about. We said we would protect health services and

:53:36.:53:40.

education. This in a sense protect all of our public services that

:53:41.:53:43.

people care about in real terms. That is just another way of saying

:53:44.:53:49.

we will put your taxes up to spend on the public sector but we do not

:53:50.:53:52.

care what we spend it on. That is not the case. A ?500 million cut

:53:53.:53:58.

that would predominantly fall in education, if you care about the

:53:59.:54:03.

economy, about education in the country going, you invest in

:54:04.:54:08.

education. That ?500 million cut would have limited our aspiration as

:54:09.:54:11.

a country and we did not want to make that choice. My point is, there

:54:12.:54:17.

is also a basic point about ending austerity. Absolutely. During the

:54:18.:54:25.

financial class in Economist thought about ending austerity. He meant

:54:26.:54:26.

financial class in Economist thought government should talk about

:54:27.:54:30.

borrowing money and pump it into the economy in order to raise the man.

:54:31.:54:36.

He did not mean put taxes up to dispense more on the public sector,

:54:37.:54:39.

that has nothing to do with ending austerity. The choice we face in the

:54:40.:54:45.

Scottish Parliament is to use the new powers we have got or not. There

:54:46.:54:50.

is a basic point here, putting people's taxes up is adding to

:54:51.:54:54.

austerity, not taking away from it. I do not believe it is adding to

:54:55.:55:00.

austerity and here's why. Our investment would actually be in

:55:01.:55:04.

education and if you want to grow the economy and create additional

:55:05.:55:08.

wealth one of the key things you do is invest in our people, the

:55:09.:55:12.

education and everything else. I understand that but it want to have

:55:13.:55:17.

an argument and say money spent on education in the long-term pumping

:55:18.:55:22.

demand into the economy is more, raising taxes has less of an effect,

:55:23.:55:27.

I will concede the point to you but you're not borrowing money to pump

:55:28.:55:30.

into the economy, your extra spending is offset right putting

:55:31.:55:37.

people's taxes up and in terms of ending austerity, that is not an end

:55:38.:55:40.

to austerity it is merely shuffling it about. We are not shuffling it

:55:41.:55:46.

about, let me assure you. By investing in education you start to

:55:47.:55:50.

create the conditions for growing the economy. We have funds to build

:55:51.:55:57.

60,000 affordable homes, that is investment in construction that

:55:58.:56:00.

contributes to growing GDP and growing the economy. That might be

:56:01.:56:04.

fantastic but does not get you down the basic point that putting

:56:05.:56:08.

fantastic but does not get you down people's taxes up is by definition

:56:09.:56:12.

sucking demand out of the economy. It may be that all your investment

:56:13.:56:15.

demands are just wonderful but you cannot they macro it has anything to

:56:16.:56:20.

do with ending austerity. But they do because we will take the choices

:56:21.:56:25.

that makes cuts that the SNP and Tories are currently doing. We would

:56:26.:56:29.

invest in the country and invest in the country in the future. That is

:56:30.:56:33.

the choice facing people at this election, do they want to invest in

:56:34.:56:37.

the future or do they want a conveyor belt of cuts coming to the

:56:38.:56:41.

Scottish Parliament? You say a conveyor belt of cuts but according

:56:42.:56:47.

to the latest figures Labour made a song and dance about, according to

:56:48.:56:50.

those figures in Scotland we already spend 12 Wi-Fi has sent more of

:56:51.:56:55.

public money for every person who lives here and as a proportion of

:56:56.:57:00.

GDP, if you exclude oil revenues which I am sure you would be more

:57:01.:57:07.

than happy to do, we spent 8% of Scottish GDP more as the UK spends

:57:08.:57:11.

as a percentage of UK GDP on public services yet you are telling people

:57:12.:57:15.

in Scotland despite the fact we already spend all that extra money,

:57:16.:57:19.

our taxes have to go up to spend even more on the public sector

:57:20.:57:23.

without people in England's taxes do not have to go up. Devolution allows

:57:24.:57:30.

us to make different choices. We have our to do things differently in

:57:31.:57:35.

Scotland. The cuts that have even visited on us by the SNP and the

:57:36.:57:41.

Tories have 10% in the past in education, 16% in the future, will

:57:42.:57:45.

substantially damage this country and our economy. We are choosing to

:57:46.:57:53.

do things differently. It is widely recognised, I think, that the

:57:54.:57:56.

education system in England has done rather well over the last decade or

:57:57.:58:00.

so. It caught up hats with Scotland and perhaps in some areas has

:58:01.:58:04.

overtaken it. Nicola Sturgeon is talking about copying the London

:58:05.:58:10.

challenge which had such a dramatic effect on education the. We spend 12

:58:11.:58:16.

sent more per capita and you are saying we have to spend even more in

:58:17.:58:20.

order to help the education system. These changes in England were not

:58:21.:58:23.

order to help the education system. achieved high throwing money at the

:58:24.:58:26.

problem. It is all about spending money better and I agree with that

:58:27.:58:32.

point out what we have seen the SNP preside over is 14,000 teachers in

:58:33.:58:38.

our classrooms, 152,000 fewer places at colleges, that is not about

:58:39.:58:41.

investing in the country and young people in future so we need to make

:58:42.:58:46.

sure we do that. England did it while they were cutting budgets. I

:58:47.:58:51.

want to make sure we have the best possible education system, health

:58:52.:58:55.

service in this country. You do not achieve that by cutting budgets.

:58:56.:58:59.

service in this country. You do not lot of people watching this will say

:59:00.:59:04.

it is the same old Labour Party, the party of tax and spend, they want to

:59:05.:59:08.

spend more money on public services because it protects the people who

:59:09.:59:12.

vote for them and for ordinary people in Scotland, why do I have to

:59:13.:59:17.

pay more tax, they will say, when England does not? If you are

:59:18.:59:21.

ambitious and aspirational for this country then actually unique to

:59:22.:59:26.

invest in the right things. We do not think cutting education is the

:59:27.:59:31.

right thing to do. We are rejecting Tory austerity because we think it

:59:32.:59:35.

damages the country. There is a choice that affects people in

:59:36.:59:38.

Scotland, do you want to invest in the future or do you want more cuts

:59:39.:59:45.

from the Tories and the SNP? Thank you very much indeed.

:59:46.:59:48.

Among the less controversial announcements of the

:59:49.:59:50.

Chancellor's Budget was the latest tranche of city deals.

:59:51.:59:52.

These are intended as a funding mechanism to promote growth

:59:53.:59:54.

and improve infrastructure, with funds provided by Westminster

:59:55.:59:56.

and Holyrood, and which unlock wider access to finance

:59:57.:59:58.

George Osborne didn't mention Inverness in his speech,

:59:59.:00:01.

but it's believed that the deal will be announced this week.

:00:02.:00:04.

Our reporter Craig Anderson explains what it will mean

:00:05.:00:06.

It is imposing red sandstone walls that completely dominate the

:00:07.:00:21.

Inveresk skyline. It attracts thousands of duty is to list every

:00:22.:00:25.

year but the only way they are getting through these doors is by

:00:26.:00:31.

breaking the law. Inverness Castle is home to the city's Sheriff Court.

:00:32.:00:38.

The castle complex was all around the time Queen Victoria came to the

:00:39.:00:41.

throne but a major redevelopment into a top-flight tourist attraction

:00:42.:00:46.

is now on the cards and the City Deal could provide the millions of

:00:47.:00:52.

pounds needed for the beaver. The evening culture, cafe culture,

:00:53.:00:56.

restaurant culture is superb but during the day there is nothing to

:00:57.:00:59.

do. The leather is underdeveloped, everything is underdeveloped in

:01:00.:01:04.

terms of attracting visitors to Inverness. Something needs to be

:01:05.:01:07.

done and the City Deal is our opportunity. With contributions from

:01:08.:01:12.

Westminster and Holyrood government and from the Highland Council the

:01:13.:01:18.

catch pot could extend to ?300 million. As well as the castle

:01:19.:01:23.

conversion is to be an international standard sports and leisure hub

:01:24.:01:27.

containing a velodrome and conference centre. Other ideas

:01:28.:01:32.

include tarting up Inverness city centre and relieving traffic

:01:33.:01:35.

congestion with the transport infrastructure. In terms of the

:01:36.:01:43.

Pinch point we have got with infrastructure we are a victim of

:01:44.:01:46.

our own success. Things that have been talked about for decades now we

:01:47.:01:50.

really need to see them coming through. I believe the funding

:01:51.:01:54.

through the City Deal will help bring those projects to fruition.

:01:55.:01:59.

Earlier this year the Prime Minister announced the details of the ?250

:02:00.:02:04.

million city region deal for Aberdeen which will fund the

:02:05.:02:07.

creation of an oil and gas technology Centre to help the alias

:02:08.:02:10.

transition from an operations based to a hub for the trolley research

:02:11.:02:15.

and development. The cash will also support emerging industries and key

:02:16.:02:20.

transport infrastructure and, it is hoped, reeling billions in private

:02:21.:02:26.

investment. The City Deal can lead to other money which might total ?2

:02:27.:02:33.

billion from other public sector sources in the private sector. I

:02:34.:02:36.

believe it is going to make a real difference. The Inverness City Deal

:02:37.:02:41.

had been trailed heavily last week by the Scottish Secretary. It is

:02:42.:02:48.

no-show in the Chancellor 's budget deal on Wednesday has led some to

:02:49.:02:52.

believe it might not happen on will emerge substantially watered down.

:02:53.:02:55.

In the current climate I do not think they are likely to find

:02:56.:02:58.

funding for many of these projects if the City Deal does not cover them

:02:59.:03:02.

because capital spending is constrained as well as a two-day

:03:03.:03:07.

revenue spending by all the austerity we have at the moment. For

:03:08.:03:12.

these kind of projects if the City Deal doesn't come along and it is

:03:13.:03:16.

highly unlikely they will ever happen. The Westminster government

:03:17.:03:20.

dismisses any conspiracy theories and insists an announcement is

:03:21.:03:24.

imminent at it will have two B before Thursday because that's when

:03:25.:03:29.

the period again is an advance of the Scottish Parliament elections.

:03:30.:03:31.

As the say, watch this space. In 2014, the UK and Scottish

:03:32.:03:35.

governments agreed a City Deal with the eight local authorities

:03:36.:03:38.

covering Glasgow and Clyde Valley. I'm joined by the former leader

:03:39.:03:41.

of Glasgow City Council, Gordon Matheson, who's

:03:42.:03:43.

about to become visiting professor at Strathclyde University's

:03:44.:03:45.

Institute for Future Cities. The Glasgow one, leaders mode

:03:46.:03:57.

experience of that than anywhere else in Scotland, by and large, has

:03:58.:04:05.

it worked? Yes, it has. We kind of rogue the mould really. We're

:04:06.:04:09.

Glasgow has led its great to see other cities in Scotland are

:04:10.:04:13.

following. It is about achieving economic growth. The Glasgow City

:04:14.:04:17.

Deal will grow the economy by 4% which will add 4.2 billion to

:04:18.:04:25.

Glasgow 's economy and critically create 15,000 construction jobs plus

:04:26.:04:27.

29,000 permanent new jobs. create 15,000 construction jobs plus

:04:28.:04:31.

all this talk and it is all Georgian, of leveraging that you put

:04:32.:04:37.

up some public money and get the equivalent or more, has that

:04:38.:04:41.

happened in Glasgow? Yes, it is happening. The City Deal is a 20

:04:42.:04:46.

year programme and in Glasgow 's case it will be done over ten years

:04:47.:04:50.

but to give you an example of how this is done, this might not sound

:04:51.:04:54.

particularly sexy but it makes an impact. It is a major investment

:04:55.:04:57.

going on in terms of Renee age across Glasgow which will create

:04:58.:05:03.

land that can be a lot on which will be built 20,000 new jobs. Are these

:05:04.:05:12.

Langfield sites? Yes, the amount of investment needed to the Kameni land

:05:13.:05:19.

across the Clyde waterfront means it would be prohibitive for private

:05:20.:05:23.

sector is to come in and invest. Is that public money or a mixture?

:05:24.:05:32.

We want to boost the tourism trade from the ships that come in and also

:05:33.:05:40.

to service offshore wind farms, right through Glasgow and North

:05:41.:05:44.

Lanarkshire. That is being funded by the public sector. But there is a

:05:45.:05:55.

times three leverage on that. The critical point... And the private

:05:56.:06:02.

sector would do what? Build houses? Yes. Also, in the case of

:06:03.:06:06.

Inverclyde, what they will do service offshore. It will enhance

:06:07.:06:11.

the tourism trade. What we are looking to do is to create the

:06:12.:06:15.

circumstances which allow for investment. That requires public

:06:16.:06:22.

sector investment for it to happen. Do you think it is important...? In

:06:23.:06:27.

Aberdeen, there is a focus, we will build a centre which will help

:06:28.:06:33.

change Aberdeen's history as North Sea oil into a future of oil and gas

:06:34.:06:37.

technology expertise. Is there something in Glasgow like that, that

:06:38.:06:43.

is a permanent change to the nature of the Glasgow economy? I think that

:06:44.:06:48.

our two. One is the change in terms of growth. To add ?2 million every

:06:49.:06:55.

year is a step change. It will also increase tax, taken by the

:06:56.:07:02.

government. It will create 29,000 new jobs. Another example is part of

:07:03.:07:08.

the city jail in Glasgow being supporting new business growth. In

:07:09.:07:14.

particular, years two and three. A lot of companies get support

:07:15.:07:22.

initially. What year are you in now? The first funding started in 2015.

:07:23.:07:27.

All the works in Glasgow will be over a 10-year period. There is

:07:28.:07:37.

another very good example, being employed by colleagues at Glasgow

:07:38.:07:39.

University. That involves bioscience, because there is a lot

:07:40.:07:45.

of insights into how precise medicine can become. Glasgow is

:07:46.:07:49.

leading the world on that. That's another example where, by investing

:07:50.:07:53.

publicly, you can create the circumstances that allow for future

:07:54.:07:58.

growth. I am going into dangerous territory here in asking a man from

:07:59.:08:03.

Glasgow to advise what should happen in Edinburgh. What you think should

:08:04.:08:09.

happen? I am delighted that what is happening in Glasgow is being

:08:10.:08:12.

emulated by other cities. I am delighted that Edinburgh is pursuing

:08:13.:08:18.

a City Deal. Also Dundee and Inverness. Some places already have

:08:19.:08:30.

city deals in place. You can also get the transfer of significant

:08:31.:08:35.

powers. It will not come of age if it simply transfers powers to

:08:36.:08:44.

powers. It will not come of age if Holyrood. Am I talking to be future

:08:45.:08:53.

mayor of Glasgow? I don't... But do you see the future of mayors? I see

:08:54.:09:00.

a future in governments, so the extra power that cities are required

:09:01.:09:06.

to build the economy is properly available. When Tony Blair was in

:09:07.:09:10.

power, there was talk of devolving things like social welfare,. That

:09:11.:09:17.

never really happened. Do you think there is a case for that? I think

:09:18.:09:24.

the definition of both functioning powers, in terms of different

:09:25.:09:33.

policy, because that is how the grow the economy and tackle inequalities.

:09:34.:09:41.

So subsidiarity is the word we all like to use. I like to talk about

:09:42.:09:47.

growth. And the way to do that is to get controlling powers out of

:09:48.:09:53.

Parliament is into city regions. All right. Thank you for joining

:09:54.:09:56.

Everything has to come to an end, sometime.

:09:57.:09:58.

That's as true of political careers as it is of everything else.

:09:59.:10:01.

Some will be ended in May by the voters.

:10:02.:10:03.

But there is a group of MSPs who are exiting

:10:04.:10:05.

retiring, gracefully, from public life,

:10:06.:10:07.

including some who were at Holyrood at the very beginning.

:10:08.:10:10.

Among the so-called 99 as, posing for posterity, Fiona McLeod from the

:10:11.:10:24.

SNP. I do solemnly and sincerely declare... But she is standing down,

:10:25.:10:32.

not contesting. That brings on a bout of the reminiscences. It kind

:10:33.:10:36.

of worries me that every memory I have thought has been about me

:10:37.:10:41.

crying in Parliament. And I am not a big baby, but it was things like

:10:42.:10:46.

when we introduced the vote for 16 and 17-year-olds for the referendum.

:10:47.:10:49.

When we passed the equal marriage bill. When we elected Nicola

:10:50.:10:55.

Sturgeon as the First Minister. And I thought, why did it make me cry?

:10:56.:11:00.

And it was because they were joyous occasions, things I had campaigned

:11:01.:11:06.

for all my life. Mary Scanlon was there, too. Now she has made her

:11:07.:11:14.

last speech in the chamber. She is also retiring. I left school at 13,

:11:15.:11:20.

my father was a farm labourer and I left school with no qualifications.

:11:21.:11:25.

I went to university as a single parent and by sheer hard work and my

:11:26.:11:29.

circumstances, like a husband walking out on children, and they

:11:30.:11:33.

were both under three, for some reason I have managed to get here.

:11:34.:11:39.

So I wanted my last speech to say, if I can do this, you can do it. M S

:11:40.:11:50.

So I wanted my last speech to say, P's tent one macro has -- MSPs have

:11:51.:11:58.

time for reflection. Of course I could have done more, but I have

:11:59.:12:03.

done my best and the people are always on about the Highlands and

:12:04.:12:06.

Islands, but they do not have the strongest voice and they do need

:12:07.:12:13.

champions. He was there for Labour. Now he too is ticking of the things

:12:14.:12:19.

he's doing for the last time as a MSP and looking back on his time as

:12:20.:12:24.

a health minister. Clearly it wasn't a time without controversy. Health

:12:25.:12:28.

always isn't. I still think we made progress on the Labour -- under

:12:29.:12:37.

Labour. There have not been major breaks in health policy in England.

:12:38.:12:41.

We have a permanent revolution. There has been a lot of continuity.

:12:42.:12:47.

The reality is that if you look at them both, between 99 and now, there

:12:48.:12:54.

have been improvements. Now he is looking at what the future might

:12:55.:13:03.

hold. I want to see more employment and social security powers. I hope

:13:04.:13:07.

it will be about how we use those powers. The debate about the extent

:13:08.:13:13.

of the powers will never go away. Back at the marina, some advice for

:13:14.:13:19.

those about to throw themselves into Holyrood politics. Enjoy the

:13:20.:13:23.

privilege you have been given, work hard, but understand that you will

:13:24.:13:28.

have to work hard. This is not a nine to five, five day a week job.

:13:29.:13:33.

It takes over your life, that in a way that is just such an enormous

:13:34.:13:39.

privilege. The cliche is that all political careers end in failure.

:13:40.:13:51.

Perhaps what our cohort of retiring M S P' is that in the end we will

:13:52.:13:53.

judge them kindly. On Wednesday, you can watch the last

:13:54.:13:54.

First Minister's Questions before the Scottish Parliament

:13:55.:13:59.

is dissolved. We'll be back after

:14:00.:14:00.

Easter, on 10th April, It all comes down

:14:01.:14:08.

to this one chance.

:14:09.:14:34.

With Gordon Brewer.

Andrew Neil discusses the resignation of work & pensions secretary Iain Duncan Smith with Owen Smith MP and Heidi Allen MP, and the Budget with Paul Johnson.

On the political panel are Janan Ganesh (Financial Times), Isabel Oakeshott (Daily Mail) and Nick Watt (The Guardian).


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