:00:37. > :00:41.It's Sunday morning and this is the Sunday Politics.
:00:42. > :00:43.Her position may be safe for the time-being.
:00:44. > :00:46.But what about Theresa May's policies?
:00:47. > :00:49.As ministers drops hints about easing the public sector pay
:00:50. > :00:53.cap, is the Conservative Party undergoing a rebrand?
:00:54. > :00:56.Jeremy Corbyn takes to the streets to call for an end to austerity.
:00:57. > :00:59.But with his party's divisions on Brexit thrust into the open
:01:00. > :01:05.is his post-election honeymoon coming to an end?
:01:06. > :01:10.And, with Brexit talks under way, we know there's plenty at stake
:01:11. > :01:12.for Britain, as it negotiates a new relationship.
:01:13. > :01:14.But what's at stake for the remaining EU countries?
:01:15. > :01:17.We speak to a leading European politician.
:01:18. > :01:21.With the economy here described as being in a "precarious position",
:01:22. > :01:24.I'll be asking the three main political parties who's to blame,
:01:25. > :01:38.And, on the eve of Wimbledon, I'm joined by the three top seats
:01:39. > :01:40.of political commentary, Tom Newton Dunn, Isabel Oakeshott
:01:41. > :01:46.They'll be serving up aces throughout the programme.
:01:47. > :01:52.Is the Government going to change its policy on public sector pay?
:01:53. > :01:56.for public sector workers would remain in place
:01:57. > :01:59.until 2020, saving up to ?5 billion a year by then.
:02:00. > :02:06.Earlier this week there were rumblings that the policy
:02:07. > :02:08.would be reviewed, before the Treasury weighed in to suggest
:02:09. > :02:13.The new Environment Secretary, Michael Gove, was asked about it
:02:14. > :02:18.on the Andrew Marr show earlier today.
:02:19. > :02:21.I was Education Secretary and I know the schoolteachers pay review body
:02:22. > :02:30.Not a poodle but they work underneath the overall strategy
:02:31. > :02:32.set by the Chancellor, set by the government.
:02:33. > :02:34.They take account of that, but they also take account
:02:35. > :02:37.of other questions as well, including the number of people
:02:38. > :02:40.who are entering the profession, whether we need to have an increase
:02:41. > :02:43.in pay in order to ensure we get the best people in the profession.
:02:44. > :02:46.These pay review bodies have been set up in order to ensure we can
:02:47. > :02:49.have authoritative advice on what is required in order
:02:50. > :02:51.to ensure the public services on which we rely are effectively
:02:52. > :02:59.staffed and the people within them are effectively supported.
:03:00. > :03:01.I think we should respect the integrity of that process.
:03:02. > :03:04.I'm not an individual, I am a member of the government,
:03:05. > :03:13.Michael Gove. Two U-turns in one day, maybe going for the hat-trick
:03:14. > :03:17.this week. It sounds they are thinking of ways of loosening up the
:03:18. > :03:21.pay freeze but Mr Hammond doesn't want it to come out until the autumn
:03:22. > :03:24.budget. That is absolutely right. My understanding is the deal is already
:03:25. > :03:29.done. We've reported this week that 20 quite senior Tory MPs went to see
:03:30. > :03:34.the new chief of staff on Wednesday, to make it very clear indeed they
:03:35. > :03:37.would be voting for a budget that allowed the public sector pay freeze
:03:38. > :03:44.to continue. Fine, we're going to do this, we're going to give fresh
:03:45. > :03:48.advice to the pay review bodies that there remit has been expanded but we
:03:49. > :03:53.cannot do it today because it's a victory for comrades Jeremy Corbyn
:03:54. > :03:57.if we do. There we see, in a sense, the weakness of ten Downing St. They
:03:58. > :04:03.can't direct this policy themselves. They are overruled by Mr Hammond
:04:04. > :04:06.from Mr 11, and it only takes about 20 Tory MPs to say, hey, this is
:04:07. > :04:11.what we want and at the very least the government has to listen to them
:04:12. > :04:13.very seriously. They have to listen to the man they have to act, because
:04:14. > :04:16.very seriously. They have to listen that is the fragility of the new
:04:17. > :04:22.House of Commons. We saw it last week on another issue. If you have
:04:23. > :04:26.20 people saying hey has got to rise in the public sector, beyond the
:04:27. > :04:30.cap, pay will rise in the public sector beyond the cap, because they
:04:31. > :04:33.won't be up to get it through the House of Commons. I think there are
:04:34. > :04:37.other issues involved beyond the numerical situation in the Commons.
:04:38. > :04:42.Lots of MPs came back after that election, including Gavin Barrell
:04:43. > :04:47.who is in number ten, who lost his seat, saying teachers and others
:04:48. > :04:50.were saying we can't carry on with the pay restraint up until 2020. I
:04:51. > :04:56.think it is going to happen for a combination of reasons. What happens
:04:57. > :05:01.to deficit reduction? The deficit is going to rise this year. There were
:05:02. > :05:05.a few Tory MPs but not many who feel it is wrong for the party to
:05:06. > :05:09.capitulate, having made such a point of principle about posterity, that
:05:10. > :05:14.it looks very, very week just to be caving in. I think Steve is right.
:05:15. > :05:18.This isn't just about the maths and the -- in the House of Commons, Tory
:05:19. > :05:24.MPs are frightened in a way I have never known them frightened before,
:05:25. > :05:30.at the momentum behind Jeremy Corbyn at the moment. There is a real
:05:31. > :05:34.feeling about the Tory brand being really in a very, very difficult
:05:35. > :05:38.place at the moment, where Tories look nasty, there isn't nearly
:05:39. > :05:44.enough sympathy and it feels politically impossible to stick with
:05:45. > :05:48.the pay limits as they are. That may be one reason that will keep Tory
:05:49. > :05:52.MPs in line, because the last thing they want at the moment is an
:05:53. > :05:55.election. When they say the country doesn't need on another election it
:05:56. > :06:01.means the Tory party doesn't mean another election, isn't that right?
:06:02. > :06:06.That's right and I think the view is settled. Notwithstanding frenzied
:06:07. > :06:09.speculation in Sunday newspapers, the daily newspapers are a lot more
:06:10. > :06:18.responsible! LAUGHTER But every Tory MP says to Reza until
:06:19. > :06:22.the end of Brexit, we don't want to open Pandora's box. -- Theresa May
:06:23. > :06:26.until the end of Brexit. The problem still remains, she does have a lot
:06:27. > :06:32.less authority, which is why you get bigwigs left, right and Centre for
:06:33. > :06:35.Michael Gove to Damian Green and Justine Greening rattling that
:06:36. > :06:42.instant more money. You have to keep the balance by leaving by consensus
:06:43. > :06:43.and a general for all, which we are in danger of looking like this
:06:44. > :06:45.morning. OK, we will see. So it's not exactly what you might
:06:46. > :06:48.call "strong and stable", but after a turbulent couple
:06:49. > :06:55.of weeks, it appears the Prime Minister has
:06:56. > :06:56.brought less instability, The Government's legislative
:06:57. > :07:01.programme is in place and Brexit So has Theresa May done
:07:02. > :07:04.enough to steady the ship It's been an action-packed story
:07:05. > :07:10.of suspense, drama and intrigue. The latest instalment,
:07:11. > :07:19.hotly anticipated. "I got us into this mess",
:07:20. > :07:22.she told her MPs after the election, This week, Theresa May
:07:23. > :07:26.tried to do just that. To get the Democratic Unionist
:07:27. > :07:30.Party's ten MPs to back the minority government,
:07:31. > :07:32.the PM pledged ?1 billion Opposition parties branded it a bung
:07:33. > :07:41.and as the week went on, some have their own MPs
:07:42. > :07:43.who are less than enthusiastic. Mr Speaker, I can barely put
:07:44. > :07:47.into words my anger at the deal But having signed that piece
:07:48. > :07:53.of paper, the Tories now had a tight working majority of 13 to pass key
:07:54. > :07:56.Commons votes. It was, at the very
:07:57. > :08:00.least, breathing space. So, a deep breath and, midweek,
:08:01. > :08:04.and Labour proposal that the cap on public sector pay rises
:08:05. > :08:08.should be lifted. Some Tory MPs, including ministers,
:08:09. > :08:15.agreed, in principle. Labour's challenge failed,
:08:16. > :08:17.but the Government had We will listen to what people
:08:18. > :08:21.in this house have said before The public sector pay cap,
:08:22. > :08:25.by the way, was designed to save ?5 billion for the public
:08:26. > :08:27.purse by 2020. But the policy looks like it
:08:28. > :08:31.could be on its last legs. Thursday was the big moment,
:08:32. > :08:34.the Queen's Speech, which passed, Tory support for a Labour amendment
:08:35. > :08:41.led to a government pledge to front abortions in England for women
:08:42. > :08:44.from Northern Ireland. The ayes have it,
:08:45. > :08:49.the ayes have it, unlock. The last-minute compromises in this
:08:50. > :08:52.Queen's Speech suggests the Prime Minister is acutely aware
:08:53. > :08:55.of the arithmetic in Parliament. She will have to listen more
:08:56. > :08:59.to her own MPs and they know that. One former Cabinet minister told me
:09:00. > :09:02.every time seven of us get together, And yet, after this week,
:09:03. > :09:08.the Prime Minister may not be such I think the ship is
:09:09. > :09:13.certainly steadier. I think there is a degree
:09:14. > :09:16.of what I call a rolling probation for the Prime Minister
:09:17. > :09:18.at the moment. And I think the Prime Minister's
:09:19. > :09:26.performances in the chamber, Prime Minister's Questions,
:09:27. > :09:28.we had the first one back this week, where she reasserted
:09:29. > :09:31.a deal of her authority. And I think there is a great deal
:09:32. > :09:37.of relief and respect for that. Others say the party
:09:38. > :09:39.should reflect on more It doesn't matter if we have
:09:40. > :09:46.Alexander the great or the Ark Angel Gabriel as leader,
:09:47. > :09:49.unless we have fundamental reform. At the moment, often we have these
:09:50. > :09:52.policies but it's like a whole load of clothes pegs without a washing
:09:53. > :09:54.line, bringing them together. So we need to explain
:09:55. > :09:57.what we are about. The Conservative Party
:09:58. > :09:58.is there to help working The Conservative Party
:09:59. > :10:02.is there because we are the party of the ladder of opportunity to get
:10:03. > :10:04.people up that ladder. We have a moral purpose, too,
:10:05. > :10:07.just as the Labour Party do. Several MPs told me the debate
:10:08. > :10:13.within the party is still when, Anybody who says it will definitely
:10:14. > :10:18.be Theresa May as the leader of the Conservative Party
:10:19. > :10:21.going into the next general election It might be, I have
:10:22. > :10:28.to say at the moment it's But conversely, there is absolutely
:10:29. > :10:36.no appetite whatsoever, thre are no manoeuvres going on,
:10:37. > :10:39.no operations going on to instigate a leadership challenge
:10:40. > :10:41.to have a new leader of the Conservative Party
:10:42. > :10:48.in the immediate future. One theory is that Theresa May stays
:10:49. > :10:51.on as PM to negotiate To be something of a scapegoat
:10:52. > :10:54.for what will be, at best controversial,
:10:55. > :10:59.at worst, deeply unpopular. And then, to move aside to make way
:11:00. > :11:03.for a less tarnished leader, who can take the Conservatives
:11:04. > :11:06.into the next general election. It's the immediate future
:11:07. > :11:14.Theresa May will be focused on. This week, a G20 meeting in Hamburg
:11:15. > :11:17.with other world leader chums. Back home, she can't
:11:18. > :11:19.take her friends for granted and told her own MPs,
:11:20. > :11:21.she'd serve as long Joining me now is the Minister
:11:22. > :11:35.for International Trade Greg Hands. Welcome to the programme. Good
:11:36. > :11:39.morning, Andrew. Do you agree with your old Treasury boss, George
:11:40. > :11:43.Osborne, who said easing up on austerity would risk the mistakes of
:11:44. > :11:47.the past which led Britain to the point where there was no money left?
:11:48. > :11:50.There is no change in government policy. We must live within our
:11:51. > :11:55.means. That is the right thing to do. We have reduced the deficit by
:11:56. > :12:00.three quarters since 2010. That is work that is still ongoing. It's
:12:01. > :12:02.very important that we keep budget discipline, because it's impossible
:12:03. > :12:07.to pay for our public services without having a growing economy,
:12:08. > :12:11.the taxes coming into pay for all the services people want and expect.
:12:12. > :12:14.How can you continue to cut the deficit, it's actually rising this
:12:15. > :12:18.year compared to last year, how do you continue to cut the deficit? ?1
:12:19. > :12:22.billion to find for the DUP, you have to find the money you could in
:12:23. > :12:25.debt because you couldn't change national insurance, and if you
:12:26. > :12:29.loosen up on the public sector pay freeze, you have to find money for
:12:30. > :12:35.that as well, how do you do both? It's important to have a prudent
:12:36. > :12:39.policy, a prudent fiscal budget policy. The Chancellor will be
:12:40. > :12:41.laying out his budget in the autumn... How do you square the
:12:42. > :12:45.circle and me all these demands? Your own ministers are talking about
:12:46. > :12:51.them and yet continue with deficit reduction? It's very important to
:12:52. > :12:55.consider what we have done on public sector pay. Actually by having that
:12:56. > :12:59.cap in place we have saved around 200,000 public sector jobs. We have
:13:00. > :13:04.done a lot for the lower paid public sector workers by raising the
:13:05. > :13:08.personal allowance... I'm not asking about that, I'm asking how do you
:13:09. > :13:11.meet the demand for extra public spending and continue with deficit
:13:12. > :13:16.reduction? I think over the last seven years the government has had a
:13:17. > :13:20.very good record on this, Andrew. In terms of being able to reduce the
:13:21. > :13:24.deficit... While still putting in place increases in public funding.
:13:25. > :13:27.For example, in the Conservative manifesto we pledged 4 billion extra
:13:28. > :13:34.on schools and 8 billion extra on health. We can do the two together,
:13:35. > :13:37.but it does require that budget discipline overall, making sure that
:13:38. > :13:40.something is to get out of control. You were a number two in the
:13:41. > :13:44.Treasury during George Osborne's tenure. You protected pensioners
:13:45. > :13:48.with triple lock, free bus passes, the Winter fuel allowance but
:13:49. > :13:51.trebled tuition fees on young folk made it impossible for many of them
:13:52. > :13:56.to get a foot on the property ladder. Is it any wonder young
:13:57. > :13:59.people to vote for you? I think that's an important question for us
:14:00. > :14:04.and an important question as we look at the election. That's why I asked
:14:05. > :14:07.the question, what is the answer? We have to improve our offer and young
:14:08. > :14:11.people and provide more housing. I think we need to look at more money
:14:12. > :14:16.into schools, improving our schools as we go forward and making sure
:14:17. > :14:19.that cities like mine in London are made more liveable and more
:14:20. > :14:23.cost-effective for young people. Why haven't you done that in the past
:14:24. > :14:27.seven years? Instead you have secured the pensioners and you have
:14:28. > :14:31.knocked young folk may have turned against you. Why should young people
:14:32. > :14:35.believe in capitalism if they have no chance of accruing any capital? I
:14:36. > :14:39.think what we have done over the last seven years has actually been
:14:40. > :14:43.to build more homes. We just need to build the more quickly. Your record
:14:44. > :14:49.of building homes is even worse than the last Labour government and you
:14:50. > :14:54.know that. 62% of 18-24 -year-olds voted Labour. 62%. 56 of 25-35
:14:55. > :14:58.-year-olds. You didn't build enough houses for these people. That is one
:14:59. > :15:03.of the reasons why we are addressing that. Why haven't you addressed it?
:15:04. > :15:06.1.5 million new homes over the course of this Parliament and what
:15:07. > :15:10.we have done that with things like starter homes, shared ownership,
:15:11. > :15:14.it's much more flexible forms of tenure to make sure homes are more
:15:15. > :15:18.attractive to younger people, particularly younger people starting
:15:19. > :15:22.off in life. Ministers have bent telling me this for seven years and
:15:23. > :15:25.you never do it. -- been telling me. That is what the programme is
:15:26. > :15:27.designed to do. We have been building more homes. We need to
:15:28. > :15:34.accelerate that. We'll phone need an open conversation about how we
:15:35. > :15:40.improve elsewhere for young people in schools and universities and so
:15:41. > :15:47.on that. OK, Brexit. You are the International Trade Minister. Will
:15:48. > :15:52.the UK leave the customs union in March 2019, and if it doesn't make
:15:53. > :15:56.its own trade deals? Our position on exit and the customs union is
:15:57. > :16:00.unchanged. What is it? To leave the single market and Customs union. But
:16:01. > :16:05.other components of free trade agreement with the European Union
:16:06. > :16:08.and customs arrangements, so we have frictionless free trade with the
:16:09. > :16:13.European Union. Will that happen by March 2019? That is the negotiation
:16:14. > :16:16.that has just started. I am not putting an end state on that. What
:16:17. > :16:22.I'm saying is the objective in this is to make sure that we frictionless
:16:23. > :16:25.trade with the EU and come to a future customs arrangements to buy
:16:26. > :16:30.it's not clear we will be able to start making our own trade deals
:16:31. > :16:34.after March 2019? Once we leave the European Union, yes, I am clear we
:16:35. > :16:39.will be able to make our own trade deals. March 2019? When we leave the
:16:40. > :16:42.single union and the customs union we come to an arrangement with the
:16:43. > :16:51.European Union. We will be able to make free trade deals but at the
:16:52. > :16:54.moment we can't because we are in the EU. Will you be able to make
:16:55. > :16:56.them if there is a transition period? That remains to be seen. You
:16:57. > :16:59.might not. We have only just started the negotiation. You had a year to
:17:00. > :17:02.think about it. To think about a transition period and when it might
:17:03. > :17:05.start and then... What we are clear about is there should be no cliff
:17:06. > :17:09.edge for businesses in the UK and the European Union and to make sure
:17:10. > :17:13.the trade continues as frictionless as possible. We don't yet know if we
:17:14. > :17:20.will be able to make our free trade deals during the transitional
:17:21. > :17:24.period? It could be postponed until 2021 or 22? We don't yet know if
:17:25. > :17:28.we're going to have a transition period, to be fair. The objection in
:17:29. > :17:31.all of this is to have frictionless free trade with the European Union
:17:32. > :17:38.and come to a customs arrangement. That is the objective.
:17:39. > :17:50.You are minister for London so let's turn to the Grenfell Tower disaster.
:17:51. > :17:54.Kensington and Chelsea Council is in chaos. The leader resigned on Friday
:17:55. > :18:02.and the chief executive has gone as well. That is what I mean, it is in
:18:03. > :18:05.chaos. We're waiting for a new leader for the council because it is
:18:06. > :18:10.important for local democracy to have its say. It is quite a big
:18:11. > :18:19.thing for government to to go in and put a Council on special measures.
:18:20. > :18:25.It is in a state, you have lost the chief executive, you've lost the
:18:26. > :18:29.council leader, it is lacking in experience and surely if there is
:18:30. > :18:35.ever a time to send in the Commissioners to get a grip of this
:18:36. > :18:41.crisis, it is now? We are waiting for a new leader. There is an
:18:42. > :18:44.interim chief executive coming over from Lewisham Council. Clearly,
:18:45. > :18:51.there will be lessons to be learned and that is a matter for the public
:18:52. > :18:57.enquiry. There will be an election within the Conservative group on the
:18:58. > :19:01.council. There are very capable councillors in Kensington and
:19:02. > :19:11.Chelsea. We haven't seen much sign of that, did you have any
:19:12. > :19:17.involvement in the resignation of the council leader? I spoke to him,
:19:18. > :19:21.like all council leaders do. I spoke to him, I spoke to the previous
:19:22. > :19:26.leader and the leader of might of the council. It is natural that MPs
:19:27. > :19:29.speak to their council leaders on an ongoing basis. We know the Council
:19:30. > :19:38.opted for cheaper cladding because they want good costs. So that cheese
:19:39. > :19:45.pairing is inevitable in town halls when central government, has yours
:19:46. > :19:49.has done, cut their budget by 40%? I don't accept the premise to that
:19:50. > :19:54.because a lot of financing has been devolved back to local government.
:19:55. > :20:00.But you have cut local government financing by 40%. There is 200
:20:01. > :20:03.billion available over the rest of this Parliament to the local
:20:04. > :20:10.councils and we believe that is fair. Kensington and Chelsea Council
:20:11. > :20:17.spent ?8.6 million on this refurbishment. It is not necessarily
:20:18. > :20:22.a shortage of funds. Indeed, they have 274 million in reserves and
:20:23. > :20:28.they put people at risk to save ?300,000. If that is not a case of
:20:29. > :20:32.putting in the Commissioners, what is? That is a matter for the ongoing
:20:33. > :20:36.enquiry and the lessons to be learned from that and how it
:20:37. > :20:37.happened is a matter for the different enquiries, including the
:20:38. > :20:39.public enquiries. Thank you. a stronger hand in the Brexit
:20:40. > :20:45.the election last month was to get But it's worth remembering that
:20:46. > :20:50.there's a lot at stake for both After all, the UK is a major net
:20:51. > :20:54.contributor to the EU budget and a big trading partner for the 27
:20:55. > :20:58.countries remaining in the EU. When Mr Davis and Mr Barnier kicked
:20:59. > :21:09.off the talk a couple of weeks ago, the tone was businesslike
:21:10. > :21:11.and broadly constructive. The two men agreed that the first
:21:12. > :21:14.age of the negotiation The rights of EU citizens
:21:15. > :21:18.living here and British The financial settlement
:21:19. > :21:23.that the UK will pay the EU, On citizens rights, the EU published
:21:24. > :21:27.their proposals three weeks ago, and the UK Government came forward
:21:28. > :21:30.with their plan last Monday. The UK offer, however,
:21:31. > :21:34.was greeted with scepticism. The Dutch Prime Minister
:21:35. > :21:50.Mark Rutte said... But elsewhere, some EU figures have
:21:51. > :21:53.begun to worry about the financial implications of Brexit
:21:54. > :21:55.for the remaining 27 countries. Gunther Oettinger, the EU's budget
:21:56. > :21:58.Commissioner, said this week that Brexit would leave a hole
:21:59. > :22:01.in the EU's finances of at least That's because the UK is a net
:22:02. > :22:06.contributor to the budget. The UK also runs a large trade
:22:07. > :22:09.deficit with the EU. Last year we bought ?312
:22:10. > :22:12.billion worth of goods That is 71 billion more
:22:13. > :22:21.than we sold to the So the introduction of trade tariffs
:22:22. > :22:29.would be costly for both sides. The Brexit negotiations
:22:30. > :22:31.will continue every month. Mr Davis and Mr Barnier
:22:32. > :22:34.will have their next face-to-face meeting in Brussels on Monday
:22:35. > :22:36.the 17th of July. Joining me now from Rome
:22:37. > :22:38.is Roberto Gualtieri. He's a Socialist MEP,
:22:39. > :22:49.and part of the European Welcome to the programme. The
:22:50. > :22:54.British government has published a detailed plan to protect the rights
:22:55. > :23:00.of EU citizens living in the UK. The EU response was highly critical,
:23:01. > :23:09.will that be the EU's response to everything Britain proposes? First,
:23:10. > :23:17.we welcome the intention to protect EU citizens. But, our reading of the
:23:18. > :23:23.plan is that it falls short of its own ambitions, so there are a number
:23:24. > :23:33.of issues to be clarified. I think also to be corrected. For instance,
:23:34. > :23:38.while our proposal is based on a new low, this is based on a UK low and
:23:39. > :23:43.there are no guarantees that might be changed in the future. Then there
:23:44. > :23:47.is the famous issue of enforcement, which is based on UK courts. And
:23:48. > :23:54.third, there are a number of rights which seem to be missing. For
:23:55. > :24:02.instance, a family member will have to make his own request for settled
:24:03. > :24:09.status and we consider that an conceivable there might be two
:24:10. > :24:15.different answers. My own child, for instance. You are right, there are
:24:16. > :24:21.things to discuss. This wasn't a take it or leave it offer by the
:24:22. > :24:25.British government, it was the beginning of a negotiation. But
:24:26. > :24:29.Michel Barnier said it lacked clarity and vision. Someone else
:24:30. > :24:31.said it was worrisome and the Dutch Prime Minister said there were
:24:32. > :24:38.thousands of questions left unanswered. These are not helpful
:24:39. > :24:43.responses? It is not an issue of tones, it is an issue of the start
:24:44. > :24:50.of the negotiation, indeed. We are commentating the paper, identifying
:24:51. > :24:54.what is good, and the rights similar, there are a number of
:24:55. > :24:59.loopholes and there are some more from the issues relating to the
:25:00. > :25:04.legal status... It just sounds very constructive. Instead of saying,
:25:05. > :25:14.this is a good start, but there is much more to do. But you just sound
:25:15. > :25:17.negative. No, I don't think so. My first sentence was, I welcome the
:25:18. > :25:23.intention to protect the rights of EU citizens. That is a very
:25:24. > :25:27.constructive sentence. Then one has to be consistent and to find a
:25:28. > :25:32.mechanism which fully guarantees the right and the negotiation, and they
:25:33. > :25:36.are exactly for this purpose. Brussels is now worrying about how
:25:37. > :25:42.to fill the huge financial hole that Britain's departure will create in
:25:43. > :25:47.EU revenues. There is a number of ideas being floated at the moment,
:25:48. > :25:52.introduce an EU VAT supplement or take an axe to the common
:25:53. > :25:57.agricultural policy which is about 40% of the budget. Does that appeal
:25:58. > :26:03.to you? There are two different problems. The first is to define the
:26:04. > :26:10.settlement, which has to be an integral part of the withdrawal
:26:11. > :26:17.agreement. We are not looking for fines, we are looking for only
:26:18. > :26:22.commitment to be paid. Then there is the issue for the future, were of
:26:23. > :26:27.course the union will have to reassess and redefine and improve
:26:28. > :26:36.its mechanism in its own resources so it can have an efficient finances
:26:37. > :26:40.in the future. So what do you want, and EU VAT or cutting money to
:26:41. > :26:48.Italy? I think the union deserves a better system of resources. This is
:26:49. > :26:52.for the future and we are working on that. Do you agree with the bustle's
:26:53. > :27:03.commission every member of the EU should adopt the euro by 2025? Yes,
:27:04. > :27:06.of course it is possible. Like it was for the United Kingdom, for
:27:07. > :27:13.Denmark, but in principle, the members of the union members of the
:27:14. > :27:23.union. So we think it would be good to a allowed the euro. There is the
:27:24. > :27:28.political will of the country to be taken into account but I think the
:27:29. > :27:32.euro has proven to be a successful currency, protecting citizens. I
:27:33. > :27:40.expect the membership will be broadened in the future. Why is it's
:27:41. > :27:47.GDP below what it was 15 years ago and the industrial output is below
:27:48. > :27:52.them what it was in 1984 so the euro hasn't been successful to you. You
:27:53. > :27:59.now run a massive deficit with Germany, where is the success? It
:28:00. > :28:07.should not be confused, the currency with the economic crisis we had. The
:28:08. > :28:11.also mistake in the conductor of the economic policy. We are changing
:28:12. > :28:18.austerity politics for more growth policies. Your country hasn't grown
:28:19. > :28:22.since you join the euro. The economic policy is another thing, so
:28:23. > :28:28.we need to change the economic policy. The common currencies is a
:28:29. > :28:35.strong protection for all of us. Your country hasn't grown since you
:28:36. > :28:42.joined the euro. I don't think your assessment is correct. Yes it is. By
:28:43. > :28:48.the way now, Italy is growing and that is good. Europe is growing. In
:28:49. > :28:58.2017 it is growing more than the US and the UK. Do you accept if Britain
:28:59. > :29:03.had stayed in and been forced to join the euro in 2025, there is no
:29:04. > :29:10.public opinion support for joining the euro here? This is a joke.
:29:11. > :29:18.Whenever they say, if the UK had stayed in the union, the UK would be
:29:19. > :29:24.forced to join the euro. This is not true. That is what the Brussels
:29:25. > :29:27.delegation said. The Brussels commission said it thinks everybody
:29:28. > :29:36.in the EU should adopt the euro by 2025. As I said, no. If you want to
:29:37. > :29:42.make a political statement, you are free to do so. But the fact is, the
:29:43. > :29:47.member of the delegation to the euro are supposed to join. Members who
:29:48. > :29:51.have decided to stay out of the euro, are free to stay out of the
:29:52. > :29:54.euro whilst they are in the EU. That is perfectly possible. Thank you for
:29:55. > :29:57.speaking to us from Rome today. Jeremy Corbyn has had a bit
:29:58. > :30:02.of a spring in his step Indeed, despite the party's
:30:03. > :30:05.internal splits, Labour But earlier this week,
:30:06. > :30:09.Labour's divisions on Brexit were thrust into the open as 50
:30:10. > :30:12.Labour MPs defied the party line to vote in favour of a backbench
:30:13. > :30:15.amendment calling for the UK to remain members of the EU single
:30:16. > :30:18.market and customs union. One of those rebels was Labour MP
:30:19. > :30:21.Stella Creasy who had this to say What a lot of us are saying
:30:22. > :30:28.is we want, in these negotiations, To have a government that has forced
:30:29. > :30:34.through a hard Brexit, especially in the light
:30:35. > :30:37.of the general election result, with the public very clearly
:30:38. > :30:39.rejecting Theresa May's approach, And across the house, again,
:30:40. > :30:44.there are MPs saying, We don't know what is possible
:30:45. > :30:48.to achieve, but what we do know is if you walk in the room
:30:49. > :30:51.and you throw away something like single market membership,
:30:52. > :30:53.which 650,000 jobs in London alone are part of that,
:30:54. > :30:56.it's irresponsible. I'm joined now by the Shadow Justice
:30:57. > :31:09.Secretary Richard Burgon. Welcome to the programme. Thank you.
:31:10. > :31:14.On Thursday 49 MPs, almost a fifth of the Parliamentary party, rebelled
:31:15. > :31:17.against the leadership over Brexit, including three shadow ministers,
:31:18. > :31:21.were subsequently sacked by Jeremy Corbyn. Labour is now more divided
:31:22. > :31:26.on Brexit than the Tories? I don't think so. I think the amendment was
:31:27. > :31:30.regrettable and premature, and I agree with the Labour deputy leader
:31:31. > :31:34.Tom Watson, when he said he was disappointed about that. Actually,
:31:35. > :31:38.the difference in the Labour Party, the difference of nuance on the
:31:39. > :31:42.single market between those who definitely want to be a member of
:31:43. > :31:45.the single market, including some people who backed that amendment,
:31:46. > :31:52.and those who want tariff free access to the single market. The
:31:53. > :31:54.reality is, not just on Brexit, but a whole host of issue, it's the
:31:55. > :32:00.Conservative government that is completely divided and that odds
:32:01. > :32:07.with itself. If it is just nuance and you are not divided, Mark our
:32:08. > :32:10.card. The Chancellor said single access market mentorship is not on
:32:11. > :32:15.the table, the Brexit secretary said it should be and another shadow
:32:16. > :32:18.ministers speaks about seeking reformed membership of the European
:32:19. > :32:25.market and the customs union. Which one is Labour policy? Brexit is a
:32:26. > :32:27.settled issue, in that Labour accents Britain is leaving the
:32:28. > :32:32.European Union but we believe Britain has to have a relationship
:32:33. > :32:37.with the institutions. Which one is Labour policy of these three
:32:38. > :32:43.statements? Labour believes that we should be having a job 's first
:32:44. > :32:48.Brexit. A Brexit that puts the economy first. As our manifesto
:32:49. > :32:54.says, Britain's leaving the European Union, for example that also means
:32:55. > :32:59.the freedom of movement of labour, and the UK's part of that, will end
:33:00. > :33:03.when Britain leads the EU. Do you want freedom of movement to end?
:33:04. > :33:10.What we do want to end is the practice of unscrupulous employers,
:33:11. > :33:13.only recruiting workers from abroad and also an scrupulous employers
:33:14. > :33:19.trying to use the free you movement of labour to breakdown -- drag down
:33:20. > :33:22.terms and conditions. You can do that if we are in or out of the
:33:23. > :33:28.single market. Do you want freedom of movement to end? It is inevitable
:33:29. > :33:31.the freedom of movement will end. Do you want it to do is a question that
:33:32. > :33:34.that is the difference. Your manifesto said what you just said, I
:33:35. > :33:40.asked you if you want it to end? What Labour wants is Brexit that
:33:41. > :33:47.puts jobs on the economy that is. What Labour doesn't want is to put
:33:48. > :33:51.immigration and fall 's immigration targets as the Conservatives did on
:33:52. > :33:55.the table. What is the answer? It's quite simple, the free movement of
:33:56. > :33:58.labour will end in terms of when the UK leads the European Union.
:33:59. > :34:04.Labour's priority is not any other issue than jobs on the economy being
:34:05. > :34:07.put first and that is really important. Putting jobs on the
:34:08. > :34:12.economy does, should we leave or stay in the customs union? I think
:34:13. > :34:18.we need to leave all the options open on that. We need to negotiate
:34:19. > :34:23.without putting options off the table. You can't negotiate unless
:34:24. > :34:27.you know what your aim is, is it to leave or stay in the customs union?
:34:28. > :34:33.British manufacturers gain a lot, and their workers, in jobs, in terms
:34:34. > :34:38.of the current arrangement with a customs union. What we want is an
:34:39. > :34:42.equivalent benefit. We want the benefits of being in the customs
:34:43. > :34:45.union, even if when we leave the European Union we can't be in the
:34:46. > :34:50.customs union. These are the kind of demands that Theresa May should be
:34:51. > :34:54.making, and her ability to do so, I'm afraid, has been severely
:34:55. > :34:58.weakened by the fact you can't even command a majority now after she
:34:59. > :35:02.asked for a majority to do so. You have criticised the government for
:35:03. > :35:06.saying no deal is better than a bad deal, which I understand. But does
:35:07. > :35:12.that mean Labour's position is that any deal is better than no Deal? Any
:35:13. > :35:15.deal better than no Deal? No, no. It would be strange to say any deal is
:35:16. > :35:21.better than no Deal. We want a good deal for Britain. But if you can't
:35:22. > :35:27.get that? We are confident a Labour government could get that, we want a
:35:28. > :35:30.job 's first Brexit that puts jobs first and puts living standards
:35:31. > :35:34.first and doesn't use, as the Conservative government has tried to
:35:35. > :35:40.do, Brexit as a smoke screen to try and create some kind of low
:35:41. > :35:46.regulated tax haven... You could be in government for very shortly and
:35:47. > :35:49.the in these negotiations. If the EU does not budge on demanding 1
:35:50. > :36:00.billion euros divorce Bill, would you just sack that for the sake of
:36:01. > :36:04.any deal or say no? -- suck it up? Labour won't be sucking up to
:36:05. > :36:08.anyone, the EU or anyone else. A Labour government would negotiate
:36:09. > :36:11.hard for Britain. What if they wouldn't budge? On the demand for
:36:12. > :36:17.100 billion euros? What would you do? These are hypothetical
:36:18. > :36:23.scenarios, and these negotiations are nuanced and compensated. Labour
:36:24. > :36:26.would campaign, in opposition, hold the government to account for and in
:36:27. > :36:30.government deliver jobs first Brexit, that puts the economy does.
:36:31. > :36:35.The kind of post-Brexit Britain we want to see is one in which there is
:36:36. > :36:39.investment in industry, assistance from the government in industry and
:36:40. > :36:43.are more equal society with high wage jobs. Ian Wright Fricke, your
:36:44. > :36:56.new party says Labour is currently too broad a church. Do
:36:57. > :37:01.broad church, socialists and trade unionists and long may it be so. You
:37:02. > :37:05.don't agree? The Labour Party is a broad church and it should be. Do
:37:06. > :37:10.you support lowering the threshold of MPs needed, that you need to get
:37:11. > :37:13.to stand for the Labour leadership? It is going to be debated at your
:37:14. > :37:20.autumn conference? This question isn't seen as dead about the
:37:21. > :37:23.leadership election many people predicted would occur after the
:37:24. > :37:27.general election won't be occurring. Do you support? Tom Watson says
:37:28. > :37:32.Jeremy Corbyn is secure for many years. I do believe all parties,
:37:33. > :37:35.including the Labour Party, need to be made more democratic. We have a
:37:36. > :37:39.membership of well over half a million and I would like the members
:37:40. > :37:45.to have more say in our party's policies and in the way the party is
:37:46. > :37:51.run. Jeremy Corbyn spoke at a left-wing rally in London yesterday.
:37:52. > :37:57.Among the crowd there were placards calling Theresa May a murderer,
:37:58. > :38:00.pictures of Mrs May's head on communist flags and Trotskyite
:38:01. > :38:04.banners. Are these the kind of people Mr Corbyn should be
:38:05. > :38:07.associating himself with, if he is a Prime Minister in waiting? The
:38:08. > :38:11.reality is when you speak at an outdoor meeting, you have no control
:38:12. > :38:16.who turns up or who is walking past. You have no control over the kind of
:38:17. > :38:19.banners people make. I understand the hundred and 50,000 members of
:38:20. > :38:26.the public at that event. No, there won't, 15,000. I spoke the night
:38:27. > :38:30.before the general election, in an event in Leeds city centre. For all
:38:31. > :38:34.I know, there could have been all sorts of people walking past,
:38:35. > :38:38.watching. The key thing is to judge Jeremy by his words, Judge Labour by
:38:39. > :38:44.our words on what we've done. We do believe in a new kind of politics.
:38:45. > :38:48.Also politics committed to changing our society for the better. OK,
:38:49. > :38:51.Richard Burgen, thank you for joining us today. It is coming up to
:38:52. > :38:57.11:40pm. Good morning and welcome
:38:58. > :38:59.to Sunday Politics Scotland. A leading think tank
:39:00. > :39:03.here says our economy's I'll be asking the Government
:39:04. > :39:08.and the leading political parties where the problem lies,
:39:09. > :39:12.and what needs to be done. And, she would have been a strong
:39:13. > :39:15.contender but decided not to stand. What stopped Jo Swinson from going
:39:16. > :39:23.for the Lib Dem leadership? There's been a warning that Scotland
:39:24. > :39:26.may be slipping into recession. In fact, Scotland may be
:39:27. > :39:28.in recession right now. We'll know for sure when we get
:39:29. > :39:31.the official figures this week. But aside from that,
:39:32. > :39:34.we've seen several recent reports from experts concerned
:39:35. > :39:35.about sluggish growth So what needs to be
:39:36. > :39:55.done to improve things? For the last mile, experts reckon
:39:56. > :40:00.Scotland's economy is a bit like a lock in the summer. It is very
:40:01. > :40:04.definitely there, but apart from a few ripples, there has not been much
:40:05. > :40:13.action. That begs an important question. Is Scotland's economy in
:40:14. > :40:15.trouble? This week a report from the Fraser of Allander Institute, and
:40:16. > :40:19.economic think tank, said that Scotland had been stuck in a cycle
:40:20. > :40:25.of low growth and continues to lag behind the UK as a whole. Could a
:40:26. > :40:28.bit more trouble over the hill? Aspects have predicted that
:40:29. > :40:32.Scotland's economy is in a precarious position and could be
:40:33. > :40:38.headed into recession. How do you go about stimulating economic growth?
:40:39. > :40:43.Bar from the calm waters, in a heart of Glasgow, in this creative digital
:40:44. > :40:48.agency is part of the economy of the future. Clients want what they have
:40:49. > :40:52.to offer but the problem is employing people with the right
:40:53. > :40:57.skills. Over the years we have seen a change in the universities and
:40:58. > :41:01.colleges, changing their curriculum, but I sympathise with them because
:41:02. > :41:06.somebody, we live and breathe this every day, a course might start in
:41:07. > :41:09.September and by December some of the teachings of what they are
:41:10. > :41:19.trying to do might already be out of date. We do understand that it is
:41:20. > :41:22.past, but we are seeing in terms of finding the high-quality people, it
:41:23. > :41:28.is probably more a competitive market these days. We are finding it
:41:29. > :41:34.quite tough to get those people in. What we tend to seek, and I'm going
:41:35. > :41:39.by when we recruit, if it is a marketing or brand related job, we
:41:40. > :41:45.inundated and could probably come down to a short list and be picking
:41:46. > :41:49.one of five easily. There seems to be typically that the shortage of
:41:50. > :41:53.skills comes from the technical development side of things. And when
:41:54. > :42:00.it comes to the wider economy, what do the experts think are the main
:42:01. > :42:02.issues? In the fall had a bad consequence for the north-east,
:42:03. > :42:07.which can be spread out across the rest of Scotland. I guess other
:42:08. > :42:13.parts of the country have lacked dynamism in the last ten years, so
:42:14. > :42:20.we have got a situation where the Scottish economy is performing at
:42:21. > :42:24.pretty poorly for a fairly long period of time. Are there any
:42:25. > :42:28.measures, long short-term, that the Scottish Government can implement to
:42:29. > :42:35.try and improve things? They should be looking at the long-term factors,
:42:36. > :42:40.what we're thinking about is infrastructure investment, and much
:42:41. > :42:44.more clear skills policies to ensure that if businesses do want to come
:42:45. > :42:49.to Scotland, there are people available that could make these
:42:50. > :42:53.businesses prosper. And private sector entrepreneurs like David
:42:54. > :42:58.reckon that governments have to play a direct role. There is a general
:42:59. > :43:03.responsibility for the Government to stimulate growth. We have went
:43:04. > :43:09.through a period of austerity, I do think that very much generate a
:43:10. > :43:13.negative head down attitude, and I think to the spending increase,
:43:14. > :43:21.obviously with an a sensible limit, would definitely help stimulate that
:43:22. > :43:25.thinking. Boosting the economy is something politicians are always
:43:26. > :43:30.reflecting on what with concerns about a possible Scottish recession,
:43:31. > :43:37.Ferguson minds? -- focus minds Here to discuss some of the issues
:43:38. > :43:40.arising from that is -- the Scottish Government's Minister
:43:41. > :43:46.for Employability and that report mentioned said the
:43:47. > :43:52.weakness in the Scottish economy cannot be just explained by the fall
:43:53. > :43:56.in oil price and the effect of oil and gas industry cannot beat Spain
:43:57. > :44:00.by Brexit, because the economy down south is doing well at the moment.
:44:01. > :44:06.It says instead it would appear that the economy is not a cycle of low
:44:07. > :44:12.growth, weak investment and fragile confidence. Why do you think that
:44:13. > :44:17.is? First thing to reflect on is that the Fraser of Allander
:44:18. > :44:22.Institute do say that about two thirds of the sluggish growth in the
:44:23. > :44:26.economy, it is in fact down to the downturn in oil. Just like no one is
:44:27. > :44:33.denying that oil and gas is a big factor, what they are saying is that
:44:34. > :44:38.they cannot explain, such weakness cannot beat Rangers by the downturn
:44:39. > :44:43.in oil and gas. I am not saying it is solely that, but to two thirds of
:44:44. > :44:48.it. Just like what else is going on? There are other underlying trends
:44:49. > :44:52.that need to get under the skin off, but the other thing we should
:44:53. > :44:58.reflect on, there are other strengths in the Scottish economy. I
:44:59. > :45:01.asked you why you think there is a weakness beyond the fall in the oil
:45:02. > :45:06.and gas industry. What is your answer before you start to how
:45:07. > :45:10.marvellous everything is? I wasn't going to say it is marvellous, I am
:45:11. > :45:14.not denigrating the nature of the challenge we face. We have seen in
:45:15. > :45:17.the last quarter, attraction in the economy, I am not seeking to
:45:18. > :45:21.downplay that. I would caution against Scott currently talking down
:45:22. > :45:24.the Scottish economy. I am not talking anything down, I am asking
:45:25. > :45:29.you to explain why you as it represented of the Government, the
:45:30. > :45:33.Scottish economy other than oil and gas is still so weak, relative to
:45:34. > :45:41.the economy in a mess of the UK? The point and try to make is that
:45:42. > :45:45.ultimately I would agree we cannot be totally down to oil and gas. Two
:45:46. > :45:48.thirds of it by the Fraser of Allander Institute balls own
:45:49. > :45:54.measure, clearly there are issues about confidence in terms of people
:45:55. > :45:58.utilising capital and putting it productively into the economy....
:45:59. > :46:03.Why should be a problem here and not in England? I would beg to differ
:46:04. > :46:10.will stop economic performance all in all has not exactly been a
:46:11. > :46:16.powerhouse either. Ultimately... Between the end of 2015 and in 2016,
:46:17. > :46:21.the British economy grew by 1.9%. The Scottish economy do not grow at
:46:22. > :46:26.all. Over in the last year, this logic on eBay grow, comm-mac Where
:46:27. > :46:32.already clear on that. This year coming, it will grow again. Any last
:46:33. > :46:40.quarter, it was challenging. As we go into the... We need to work with
:46:41. > :46:43.the capital to get the confidence to invest, that is something we are
:46:44. > :46:49.constantly doing to our economic strategy and labour market strategy,
:46:50. > :46:53.we have got the Scottish growth. Let me not ask your question but let the
:46:54. > :46:58.Fraser of Allander Institute ask you. They say, what our economy
:46:59. > :47:00.needs more than ever is clear policy strategies backed by concrete
:47:01. > :47:04.action. The Scottish economy has been flat-lining for two years,
:47:05. > :47:09.contrary to what you have said. The EU referendum result was known 12
:47:10. > :47:12.months ago. What genuinely new policy actions with immediate effect
:47:13. > :47:19.had been taken in the response of what has been the impact? With
:47:20. > :47:23.respect, I don't think the economy has been flat-lining. I was not
:47:24. > :47:28.saying anything other than what the Fraser of Allander Institute has
:47:29. > :47:35.said. What is your answer to the question? We got the Scottish growth
:47:36. > :47:40.scheme, ?500 million. That supports businesses to export. Small business
:47:41. > :47:44.owners which continues to support small medium enterprise sector,
:47:45. > :47:49.which lets remember, we have expanded that game, it still takes
:47:50. > :47:57.100,000 businesses of having to pay business rates. This is not having
:47:58. > :48:04.any impact. The impact is that the Scottish economy is possibly being
:48:05. > :48:08.going into recession. We measure economic growth in quarterly cycles.
:48:09. > :48:13.I am not trying to downplay or denigrate the concerns that exist
:48:14. > :48:16.about the last quarter where we did see some contraction in the Scottish
:48:17. > :48:20.economy. Any time that happens, immediately summon could say we're
:48:21. > :48:23.on the brink of recession. We'll see the latest GDP figures this week. I
:48:24. > :48:29.am not going to presuppose them. There is a lot to be confident about
:48:30. > :48:35.the Scottish economy. Scottish oil and gas... Let's forget about
:48:36. > :48:39.recession. And they are saying they should be confidence in the sector,
:48:40. > :48:45.which has accounted for so many of the issues of the last two years. I
:48:46. > :48:50.except that two quarters, it is a narrow definition. It is not really
:48:51. > :48:53.the most important thing. The important thing is growth in the
:48:54. > :48:59.Scottish economy is substantially below growth in the British economy
:49:00. > :49:08.and has been for several years. You don't seem to have any explanation
:49:09. > :49:13.for that. Other than oil and gas. I've already said we need to imbue a
:49:14. > :49:18.greater sense of confidence to those who have capital to invest. Why is
:49:19. > :49:22.that specific to Scotland? If you look across the UK, there is a
:49:23. > :49:28.regional variation, we're positive... The difference is... The
:49:29. > :49:32.UK's economic growth is predicated on London and the south-east. Other
:49:33. > :49:37.parts of the UK, we are doing better. Better than some parts but
:49:38. > :49:40.what has happened is that for many years Scotland was doing relatively
:49:41. > :49:44.well compared to areas of England, like the north and even the
:49:45. > :49:48.Midlands, and that is not happening any more. Go here is lower than in
:49:49. > :49:52.most of these areas in England. In the latest figures, if you look at
:49:53. > :49:57.the labour market, we have a very resilient labour market,
:49:58. > :50:02.unemployment is at a 25 year low. That is lighter because they
:50:03. > :50:06.dropping out of the labour market. More people went into employment I
:50:07. > :50:10.went into inactivity. Inactivity as an economic measure is all to often
:50:11. > :50:12.misunderstood. That includes people who are studying and fun and higher
:50:13. > :50:20.education. What you have done is disputed the
:50:21. > :50:26.Fraser of Allander Institute figures. You have district --
:50:27. > :50:33.disregarded my interpretation. You have come up with no explanation
:50:34. > :50:39.about whether the government is concerned about the situation. Have
:50:40. > :50:45.you got any big idea or a you going to chug on and continue what you are
:50:46. > :50:51.doing? We would be concerned with a contraction. Give me one idea. We
:50:52. > :50:55.will continue to do what we are seeking to do. We are investing in
:50:56. > :51:00.people to make sure they have opportunity to advance in the labour
:51:01. > :51:09.market through education, apprenticeships. We are investing in
:51:10. > :51:13.our transport infrastructure. To have 100% broadband coverage by
:51:14. > :51:19.2021. These will be necessary to ensure we have economic progress.
:51:20. > :51:24.The problem is the Scottish economy is flat-lining relative to the rest
:51:25. > :51:29.of the UK. They may be marvellous in the long term but they are not
:51:30. > :51:34.addressing the specific problem. To the contrary. If you take it back,
:51:35. > :51:38.this is where I am not disputing the Fraser of Allander Institute and
:51:39. > :51:42.what they are saying. We would like to see more growth and the project
:51:43. > :51:45.in this year the economy will continue to grow. Jamie Hepburn,
:51:46. > :51:47.thank you very much. Well, for a couple of alternative
:51:48. > :51:49.perspectives on the Fraser of Allander report,
:51:50. > :51:51.I'm joined by two MSPs. From Edinburgh, Dean Lockhart
:51:52. > :51:53.of The Scottish Conservatives, and with me here in Glasgow,
:51:54. > :52:05.Scottish Labour's Jackie Baillie. Dean Lockhart, do you accept this
:52:06. > :52:11.explanation that there is nothing to explain? No, not at all. This is a
:52:12. > :52:17.real indictment. A leading institute in Scotland have said we have had a
:52:18. > :52:22.lost decade under the SNP. That is right. Scotland was Mike economy is
:52:23. > :52:30.underperforming, we are on the brink of recession. While the rest of the
:52:31. > :52:35.UK economy is one of the strongest in Europe... Fraser of Allander
:52:36. > :52:40.Institute say it is not just oil and gas. What is your explanation of
:52:41. > :52:45.what that is. Can I see a couple of things. To grow the economy, if you
:52:46. > :52:53.look at successful economies worldwide, Singapore, Germany, you
:52:54. > :52:58.need a whole government approach. Every department needs to be aligned
:52:59. > :53:02.to grow the economy. We have not here in Scotland Scottish Government
:53:03. > :53:06.that has its priorities elsewhere. Nicola Sturgeon has said that
:53:07. > :53:12.independence transcends the case for the economy for national wealth. As
:53:13. > :53:17.Jamie Hepburn has the listing, they have the listing initiatives. The
:53:18. > :53:19.problem seems to be that they are not addressing whatever that
:53:20. > :53:25.specific problem in Scotland is and it is still unclear. Economists are
:53:26. > :53:29.unclear about it. Politicians are unclear about it. The Fraser of
:53:30. > :53:38.Allander Institute is very clear when they see that the Scottish
:53:39. > :53:43.Government's approach of having the strategy... It is less clear what
:53:44. > :53:47.those policies should be. It is about successful implementation.
:53:48. > :53:51.Having focus on what works and the economy and this government after
:53:52. > :53:59.ten years, they do not understand. Give me one big idea of yours. We
:54:00. > :54:02.have published on a UK wide level 140 page industrial strategy that
:54:03. > :54:10.incorporates a centre approach to the economy that is basically, it is
:54:11. > :54:12.supported by the Royal Society of Edinburgh, the Scottish Whisky
:54:13. > :54:17.Association who have asked the Scottish Government to support a UK
:54:18. > :54:22.wide industrial strategy. That is what we are seeing. We want a new
:54:23. > :54:26.approach to the economy and that is about harnessing a strength in
:54:27. > :54:30.different sectors. Food and drink is a success. That is what we should be
:54:31. > :54:39.doing. We should be focusing on a UK wide level. Jackie Baillie, what is
:54:40. > :54:44.your explanation? If you look at the Scottish economy, over the past ten
:54:45. > :54:48.years, it has grown by 1.2%. That is a really small figure when you
:54:49. > :54:53.compare it to the preceding seven years where they grew by 17%. The
:54:54. > :54:57.thing that has been common in the last ten years as a constant
:54:58. > :55:01.obsession with independence, and I have to say when you talk to
:55:02. > :55:05.businesses, businesses hate uncertainty. They did not like
:55:06. > :55:09.Brexit because of the uncertainty. They do not like the threat of an
:55:10. > :55:13.independence referendum because of the uncertainty. There is little
:55:14. > :55:19.hard evidence to back that up. There have been good figures for foreign
:55:20. > :55:25.direct investment in Scotland. It is difficult to argue that. If you look
:55:26. > :55:30.at foreign direct investment in 2014, it dropped. If you look at
:55:31. > :55:33.foreign direct investment in the property market, it dropped
:55:34. > :55:42.significantly. It is not as saying it. Even if we concede the point
:55:43. > :55:46.that the threat of an independence referendum might affect this, it
:55:47. > :55:51.does not explain what you have said that over the last decade, 1.2%
:55:52. > :55:56.growth. I am not sure what the current figure is for the UK, but it
:55:57. > :56:01.is much higher than that. The UK grew at a higher rate. The Scottish
:56:02. > :56:08.economy, particularly in the last two years... It is a combination of
:56:09. > :56:13.different factors. In the last two years the difference between the
:56:14. > :56:17.Scottish economy and the UK economy has then start, and that is about
:56:18. > :56:22.oil and gas. What we need to get beyond saying it is this sector and
:56:23. > :56:26.that sector. We have to understand it is the Scottish economy as Apple
:56:27. > :56:31.and to bring into play the actions required to make a difference. We
:56:32. > :56:37.have an economic strategy. Give me one. With exports, about 100
:56:38. > :56:43.companies are responsible for a 60% of our exports. They tend not to be
:56:44. > :56:47.SME 2-mac which is the backbone of the Scottish economy. If you invest
:56:48. > :56:53.in small to medium enterprises to ensure that they are taking on board
:56:54. > :56:57.export opportunities, that is one mechanism for growing the economy.
:56:58. > :57:01.Investing in skills is another. Companies tell us all the time there
:57:02. > :57:05.is a skills gap in Scotland. Construction, engineering, they are
:57:06. > :57:11.needed to boost the Scottish economy. There is a reduction in the
:57:12. > :57:16.number of students at colleges, the very place they learn the skills.
:57:17. > :57:20.The skills point, the chap in the film was making that point as well.
:57:21. > :57:26.He said that people coming out of universities are not really equipped
:57:27. > :57:31.with the skills that they need. Again, why is that a problem given
:57:32. > :57:35.that education has been such a priority, not just on the creed of
:57:36. > :57:41.the SNP but before that? It is, Gordon. It is a problem here. Nicola
:57:42. > :57:47.Sturgeon said education would be her top priority. What we have seen
:57:48. > :57:51.under the SNP in the next -- last decade, new Morrissey is dropping.
:57:52. > :57:59.Is the problem that the one that Jackie Mark -- Jackie Baillie
:58:00. > :58:02.identified. Is it something about people taking the wrong, not the
:58:03. > :58:06.wrong degrees, but people should be a later date liberal arts degrees if
:58:07. > :58:10.they want, there are not enough people doing the type of degrees
:58:11. > :58:17.that would be useful to the company we saw in the film? Again, in order
:58:18. > :58:23.to address the issue we need a hall of government approach which is to
:58:24. > :58:27.prioritise the economy. And going to education, it is about college
:58:28. > :58:30.places which are essential. It is all very well having great
:58:31. > :58:39.universities. Scotland has world-class potential. But college
:58:40. > :58:44.places are essential because they provide training for people who can
:58:45. > :58:50.fill that skills gap. We are going to have a wee bit there. Thank you
:58:51. > :58:52.both very much indeed. -- going to have to leave it there.
:58:53. > :58:54.Now, maybe in a couple of years' time, Jo Swinson might stand
:58:55. > :58:59.She had the chance this time around, but instead she decided to go
:59:00. > :59:02.for the deputy leadership, which she won with a unanimous vote.
:59:03. > :59:04.Meanwhile, Vince Cable looks like the overwhelming favourite
:59:05. > :59:15.You are now the deputy leader of the Liberal Democrats. Why did you not
:59:16. > :59:21.stand to be leader of the Liberal Democrats? It's not a job that I
:59:22. > :59:26.wanted to be doing. At the moment. I thought it through, lots of people
:59:27. > :59:29.said lots of lovely messages encouraging me to stand, but at the
:59:30. > :59:36.end of the day it had to be my decision. It is a huge job that you
:59:37. > :59:38.cannot do lightly. And work between my constituency response teams in
:59:39. > :59:43.East Berkshire where I have been recently re-elected, and other
:59:44. > :59:50.aspects of my life, it did not seem to be the right thing to do. --
:59:51. > :59:55.where I have been recently be elected in East Dumbarton Sheriff.
:59:56. > :00:00.You made some comments at the time. Let me say at the time, a feminist
:00:01. > :00:13.but I am, I have two underwater bloke in my position would do. Many
:00:14. > :00:17.would run for a leader like a shot. Just because a man would do it does
:00:18. > :00:23.not make it the right thing to do. Which left a lot of people,
:00:24. > :00:27.feminists and others, mystified by what you meant. A lot of people
:00:28. > :00:32.don't understand what I meant. Your first question to me was querying
:00:33. > :00:36.why I did not run for a leader. Sometimes there is an assumption in
:00:37. > :00:39.politics that anybody who is a member of Parliament member as
:00:40. > :00:43.Scottish parliament must automatically must always want to be
:00:44. > :00:48.doing the leadership role. I would be questioning that assumption about
:00:49. > :00:52.why that assumption exists. Part of that is gender. There are
:00:53. > :00:58.expectations that are often put on men and women, and indeed that can
:00:59. > :01:03.be quite constraining on men who might not necessarily fit that what
:01:04. > :01:06.is perceived to be the outer note stereotype that they were perhaps
:01:07. > :01:10.pressure to do as well. Are you saying that it is something you
:01:11. > :01:15.would not like to do. No. So you would like to do it at some point? I
:01:16. > :01:22.you should never say never. I'd note you should never say never. I'd note
:01:23. > :01:29.-- I did not predict that Theresa May would call another election. I
:01:30. > :01:35.am not going to planet the rest of my career right now. Many people are
:01:36. > :01:39.saying, should Vince Cable become the leader, which looks likely,
:01:40. > :01:44.National treasure though he is, he is 74 no. He would be 79 if you made
:01:45. > :01:49.the heroic assumption that this parliament will last for five years
:01:50. > :01:53.and he may well not even want to lead the party into another
:01:54. > :01:58.election. People are saying you would at that point Stefan. Or at
:01:59. > :02:04.least and for a leader. Vince had made clear that he is perfectly
:02:05. > :02:10.prepared to do that. He has reference in Gladstone who became
:02:11. > :02:13.Prime Minister at 82. We should not be ageist about this and making
:02:14. > :02:19.assumptions. People have got a lot to offer, politics from young
:02:20. > :02:23.people. I have been involved in getting young people involved in
:02:24. > :02:29.politics. And we should not be rating people off because they are
:02:30. > :02:35.older. Should you be called upon to lead the Liberal Democrats into the
:02:36. > :02:39.next election, assuming it could be in two weeks' time, let's assume it
:02:40. > :02:46.is not. Let's assume it is several weeks away -- years away. Would you
:02:47. > :02:51.be prepared and would you feel you would be after that? I have made my
:02:52. > :02:54.decision when Tim resigned as the leader of the Liberal Democrats. I
:02:55. > :03:02.thought about it carefully and to my decision. I have said never, you
:03:03. > :03:10.have to have a look at the situation at the time. Do you buy Tim Farron's
:03:11. > :03:15.decision and explanation for why he resigned? Hearing Tim talk about it
:03:16. > :03:19.and before he made his public decision, he was clear. It made him
:03:20. > :03:25.feel personally very unhappy that that sort of inner turmoil and
:03:26. > :03:29.therefore, you know, you hear him saying that. You cannot fault them
:03:30. > :03:35.for coming to the conclusion that he did. I hope he could have stayed on.
:03:36. > :03:39.He was a good leader of the party. Do you think it is a good or bad
:03:40. > :03:45.situation. I am sure that you would not agree with some of Tim's views
:03:46. > :03:51.on homosexuality, for example. But he clearly felt that it own personal
:03:52. > :03:57.views were incompatible, being a political leader. Even though you
:03:58. > :04:02.might agree -- disagree with his views, is it a healthy situation
:04:03. > :04:07.when someone feels they cannot read a political party because of their
:04:08. > :04:13.religious views? I am a humanist and I do not believe in God. People of
:04:14. > :04:19.faith do contribute a lot to society. Politicians should be
:04:20. > :04:24.judged by the policies they've bought and the votes that they cast
:04:25. > :04:29.as parliamentarians on behalf of the people that they represent. I did
:04:30. > :04:33.feel uncomfortable at some of that questioning. I understand that
:04:34. > :04:37.people have the right to ask the questions. The focus should be on
:04:38. > :04:43.how people act. I think Tim always stood up for equality. The Liberal
:04:44. > :04:48.Democrats have got a proud history of doing that. Suppose the argument
:04:49. > :04:51.would be that as long as you support policies, which are equal rights
:04:52. > :04:55.policies, your private opinions should be your private opinions.
:04:56. > :04:59.There has been a long debate about whether faith has got a role in
:05:00. > :05:05.politics. It was Tony Blair's team who said we do not to God. There are
:05:06. > :05:09.a lot of people in the country who are going to church, there are a lot
:05:10. > :05:17.of people who are Muslim Jewish who have got all sorts of faiths
:05:18. > :05:20.beliefs, we are a stronger country and our politics. We have a Muslim
:05:21. > :05:24.era of London. We want to be embracing people of faith and
:05:25. > :05:30.politics. One thing that may happen is a big realignment in British
:05:31. > :05:37.politics. We have got to rather obviously wanes of the Labour Party.
:05:38. > :05:40.There are any number of divisions between the Conservative Party. Some
:05:41. > :05:42.who want the negotiations on a softer line or harder line. There
:05:43. > :05:47.could be a big realignment of softer could be a big realignment of softer
:05:48. > :05:50.-- British politics. That is what the Liberal Democrats lived for. Do
:05:51. > :05:52.you think there will be and what role do you think the Liberal
:05:53. > :06:01.Democrats can play? I figure we have a opportunity in a
:06:02. > :06:04.strong parliament with the Conservatives don't have an overall
:06:05. > :06:08.majority, they have done their deal with the DUP on key votes of
:06:09. > :06:11.confidence and supply, but otherwise to get business to they are going to
:06:12. > :06:18.convince Parliament, and that means that parties working together. Can
:06:19. > :06:21.you foresee a situation where there would be a realignment in British
:06:22. > :06:24.politics in the sense that you could have a new sectors party with
:06:25. > :06:27.elements of the Labour Party and elements of conservatives and
:06:28. > :06:33.presumably a role for the Liberal Democrats as well as Mac that is
:06:34. > :06:38.speculation, in reality we have got a strong Liberal Democrat party who
:06:39. > :06:41.are providing that voice that I do think many people want in terms of
:06:42. > :06:45.wanting a party that is padding after... You did not make the
:06:46. > :06:53.picture that you wanted to expect it to. We increase our seats by 50%. We
:06:54. > :06:58.have got... That has increased by 50%. I had a bacon roll when I
:06:59. > :07:01.arrived at Pacific tea this morning, that is 100% increase on the number
:07:02. > :07:08.of bacon rolls I normally eat in the morning. These figures, 8-12. You
:07:09. > :07:14.were hoping to get 30, 40 C to get back on serious business. We got the
:07:15. > :07:18.highest number of members and our party's history, we have increased,
:07:19. > :07:22.representation at Westminster and the most diverse group we have ever
:07:23. > :07:26.had, which I think it is a real strength. We have got momentum.
:07:27. > :07:30.Would I have preferred more seats? Obviously. But one of the things
:07:31. > :07:35.about this election to yesterday parliament and therefore the fool
:07:36. > :07:40.devastating impact of Brexit is perhaps as clear as it will become.
:07:41. > :07:42.Particularly if you start to look at economic indicators. We have also
:07:43. > :07:47.put a very clear marker down that we have been saying we think people
:07:48. > :07:51.should have a final say on Brexit, if they deal because back is a poor
:07:52. > :07:55.one, and when it comes back, and I feel very much it will be a bad
:07:56. > :07:59.deal, there would be more people who look at Liberal Democrats and we
:08:00. > :07:59.were right. Thank you very much indeed.
:08:00. > :08:06.And time now for a look at the Week Ahead.
:08:07. > :08:08.Well, I'm joined now by Times columnist Magnus Linklater,
:08:09. > :08:16.and Angela O'Hagan from Glasgow Caledonian University.
:08:17. > :08:25.The economy, Magnus, there doesn't be a problem. Yes, not just oil and
:08:26. > :08:30.gas. Listening to your various exchanges earlier, it is quite clear
:08:31. > :08:33.that in a sense I get the impression that the SNP Government is
:08:34. > :08:40.struggling with this. They seem to be on the one hand in denial about
:08:41. > :08:43.the reality of what faces us, which is Scotland hovering on the big of
:08:44. > :08:48.recession, could be in recession, I know these are technical terms, but
:08:49. > :08:55.clearly it is flat-lining, think that was a phrase. Despite you think
:08:56. > :09:00.there is a problem? There are different problem for different
:09:01. > :09:03.people, and always when we're this situation, the economy flat-lining
:09:04. > :09:07.of whether it is a recession, how that plays out for different people.
:09:08. > :09:11.We have seen over the years the cycles of recession and how they
:09:12. > :09:14.effect on women and men differently, and in the economic policies and
:09:15. > :09:20.strategies coming forward, we need to be addressing that is the core
:09:21. > :09:24.issue as well. The problem is, Magnus, your diet of a certain age,
:09:25. > :09:28.and when I hear politicians are talking about this, I remember being
:09:29. > :09:34.a business journalist in the 1980s and they all said exactly the same
:09:35. > :09:38.thing. Getting spin offs from Silicon Glen, about helping small
:09:39. > :09:42.and medium enterprises so that they can grow, it is about investment and
:09:43. > :09:46.skills, that is a secret. Here we are all these years later and
:09:47. > :09:49.Scottish economy grew quite well in the meantime. I'm not sure it had
:09:50. > :09:52.anything to do with any of these things the Government were doing
:09:53. > :09:57.rather than just general growth in the British colony. As you know,
:09:58. > :10:02.Government are not very good at getting involved in business, but
:10:03. > :10:07.they are... It is important that they set out certain signals and I
:10:08. > :10:12.think that while you cannot argue that independence is self has
:10:13. > :10:16.necessarily been a distraction, nevertheless there has been a vacuum
:10:17. > :10:21.in terms of economic policy. I would be hard pressed to say whether the
:10:22. > :10:24.SNP really stands on how to grow the Scottish economy, they've got this
:10:25. > :10:31.growth commission coming up, a lot is pinned on that, I don't have what
:10:32. > :10:34.it will say, but there has been this absence of leadership in terms of
:10:35. > :10:42.why Scotland should be going and how that economy should grow and where
:10:43. > :10:47.emphasis should be. The world does not... Since I was being told me
:10:48. > :10:50.since the 1980s, China has grown to the second largest economy in the
:10:51. > :10:56.world. Things around us change very fast. Liberalisation, we have just
:10:57. > :10:59.finished hearing from Jo Swinson about the affects of Brexit, clearly
:11:00. > :11:06.that is a concern for the Scottish economy. The point that Fraser of
:11:07. > :11:10.Allander Institute make is that it cant explain Scotland, because the
:11:11. > :11:14.rest of the UK is doing rather well and leaving me you as well. Brexit
:11:15. > :11:20.cannot really explain this. To go back to your question to Magnus
:11:21. > :11:25.about your fellow contributors about what we can do, think we have seen
:11:26. > :11:29.some glimpses and sparks of innovative thinking from the
:11:30. > :11:31.Scottish Government. There is a lot of positive discussion about
:11:32. > :11:38.includes a growth and what we meant by that. From my perspective, it is
:11:39. > :11:41.about recognising the centrality of care to our economy, and investment
:11:42. > :11:45.in social care and child care, not just for the workers who can access
:11:46. > :11:47.those services and build the workforce, but for building a
:11:48. > :11:52.workforce with in and building the economy with those sectors, as
:11:53. > :11:55.central to a economic infrastructure. That is the kind of
:11:56. > :11:58.language we heard a few years ago and we have seen investment in
:11:59. > :12:03.childcare from the Scottish Government, but we need a bit more
:12:04. > :12:08.boldness and conviction about the inclusive growth dynamic. Magnus, do
:12:09. > :12:10.you think... I remember in that enormous white paper the Scottish
:12:11. > :12:15.Government produced for independence there was some vague talk about
:12:16. > :12:22.German style model, something three may thought about, getting unions
:12:23. > :12:27.and employers, having a sort of German style training system.
:12:28. > :12:31.Doesn't seem to have featured much. I think the difference is that,
:12:32. > :12:35.under Alex Salmond, you felt that you did have this kind of stuff with
:12:36. > :12:39.the SNP were never going with business, he was business friendly.
:12:40. > :12:44.I don't get that same impression from Nicola Sturgeon. In defence of
:12:45. > :12:49.Nicola Sturgeon, she could say, but look at what Alex Salmond used to go
:12:50. > :12:53.on about, renewables, Saudi Arabia of wind, the whole idea that
:12:54. > :12:57.Scotland could have a new industry, not just have lots of wind turbines
:12:58. > :13:02.but have an industry which dealt particularly the offshore
:13:03. > :13:07.next-generation, and it has not happened. I think it is next week
:13:08. > :13:14.there is a decision on whether Scotland's large offshore wind
:13:15. > :13:19.energy plant of the Firth of Forth gets the go-ahead or not. If it does
:13:20. > :13:23.not, if that falls, we have no offshore. Magnus Meitner is one in
:13:24. > :13:31.the Pentland... This is the big one. A lot hangs on that. The is a
:13:32. > :13:34.contract, or am I wrong, Angela, between Alex Salmond's business
:13:35. > :13:37.approach and a... He was off to China, she gave off an image of
:13:38. > :13:42.Scotland is open for business which is not really there any more. I
:13:43. > :13:45.think they can see all sorts of other international perspectives,
:13:46. > :13:48.but what we have seen a important shift in the discourse that our
:13:49. > :13:50.economic and social policies had to go hand-in-hand. Guys like we have
:13:51. > :13:52.to leave it there. I'll be back at the
:13:53. > :13:55.same time next week.