:00:05. > :00:09.Time to say goodbye to viewers in Scotland. Welcome to the coverage
:00:09. > :00:19.of the Autumn Statement in Scotland. We have a panel of experts standing
:00:19. > :00:35.
:00:35. > :00:39.The news is not good. The Chancellor made clear that he will
:00:39. > :00:44.go on for longer than he had hoped, -- austerity will go on for longer
:00:44. > :00:49.than he had hoped. It is taking time, but the British economy is
:00:49. > :00:59.healing. We will be hearing from Scottish businesses making a living
:00:59. > :01:00.
:01:00. > :01:05.under tough economic circumstances. It has taken the money outer pocket,
:01:05. > :01:08.to try to give the kids something for Christmas, we just can't do it
:01:08. > :01:13.anymore. Westminster MPs are still going through the fine print of
:01:13. > :01:18.this, the Autumn Statement. What about the politics and economics of
:01:18. > :01:26.the Chancellor's handiwork? George Osborne has admitted he will miss
:01:26. > :01:30.his own target and will have to extend the austerity measures till
:01:30. > :01:40.2018, but said that we are on the right track.
:01:40. > :01:48.
:01:48. > :01:54.It law growth was the result of Government's fiscal policy, they
:01:54. > :02:00.would say so, but they do not. They say the economy has performed less
:02:00. > :02:08.strongly than expected. They forecast growth this year of mine
:02:08. > :02:16.is 0.1%. -- -0.1 %. But they say the expected growth can be
:02:16. > :02:19.accounted for by over-optimism for net trade. They previously assumed
:02:19. > :02:23.that the eurozone would begin to recover in the second half of this
:02:23. > :02:29.year, but instead it has continued to contract. But has had the
:02:29. > :02:32.exports to these markets and the net trade numbers. In short, the
:02:32. > :02:36.tougher economic conditions mean that while the deficit is forecast
:02:36. > :02:43.to go on falling, instead of taking three years to get the debt falling,
:02:43. > :02:48.it will take four. Confronted with this news, some say that we should
:02:48. > :02:53.abandon the deficit plan and try to borrow more. They think by
:02:53. > :02:58.borrowing more we can borrow less. That would risk higher interest
:02:58. > :03:02.rates, more or debt interest payments and a complete loss of
:03:02. > :03:05.Britain's fiscal credibility. We are not taking the road to ruin.
:03:05. > :03:13.Scotland, or Wales and Northern Ireland will get their Barnett
:03:13. > :03:19.formula share of additional capital spending put at their disposal. On
:03:19. > :03:28.top of this �5 billion for infrastructure and support for
:03:28. > :03:33.business, we can provide a... The pay restraint in businesses and
:03:33. > :03:38.government. Average earnings have risen around 10% since 2007. Out of
:03:38. > :03:43.work benefits have gone up by around 20%. That is not fair to
:03:43. > :03:45.working people who pay the taxes that fund them. Those working in
:03:45. > :03:51.the public services who have seen their basic pay frozen will now see
:03:51. > :03:55.it rise by an average of 1%. A similar approach of a 1% rise
:03:55. > :04:00.should apply to those in receipt of benefits. That is fair and it will
:04:00. > :04:05.ensure that we have a welfare system Britain can afford. We will
:04:06. > :04:11.support the vulnerable secure as benefits and disability benefits
:04:11. > :04:15.will be increased in line with inflation. We are extending support
:04:15. > :04:18.for mortgage interest for two more years. We will apply a similar
:04:18. > :04:26.approach to the uprating of some tax thresholds as we have to
:04:26. > :04:33.welfare. The higher rate threshold to will be increased by 1% in the
:04:33. > :04:43.tax years of 2014-15 and 2015-16. The income at which people start
:04:43. > :04:43.
:04:43. > :04:47.paying the 40% rate will go up from four to �1,450, and then to 42,285
:04:47. > :04:52.pts. I want to be completely clear with people. This is an increase,
:04:52. > :04:57.it is the first cash increase in the higher rate threshold and
:04:57. > :05:05.Parliament, but it is not in line with inflation, so it is as �1
:05:05. > :05:12.billion of revenue by 2015-16. -- it raises �1 billion. We are joined
:05:12. > :05:16.by the political commentator for the day, Bill Jamieson, and Douglas
:05:16. > :05:24.Fraser. Thank you for joining me. What
:05:25. > :05:30.really stood up for your? Just to pick out the bits that
:05:30. > :05:34.matter most, the forecast growth has been downgraded. It is much
:05:34. > :05:37.weaker than previously thought. Borrowing appears to be falling,
:05:37. > :05:42.but that appears to be because they have included money they have not
:05:42. > :05:51.yet got in. They have not even fixed a deal for selling the 4G
:05:51. > :05:58.network spectrum for mobile. Aid years of austerity, which was well
:05:58. > :06:02.past the next Westminster election. There are �5 billion of investment,
:06:02. > :06:06.part of which is coming to Scotland. There is a squeeze on most working-
:06:06. > :06:15.age benefits, you got some of the details the, and 1% of public-
:06:15. > :06:22.sector pay. A big boost for business to try to get more
:06:22. > :06:28.allowances for investment and Corporation Taxes coming down to
:06:28. > :06:32.21% in 2014. The big thing is he will abandon the three pence
:06:32. > :06:37.increase in fuel duty, which was expected in January, and had
:06:37. > :06:42.already been postponed. If we look at what this means for Scotland,
:06:42. > :06:50.Scots are affected by the fuel duty, and the benefits squeeze effect a
:06:50. > :06:54.lot of Scots. In terms of what comes to Holyrood, the net effect
:06:54. > :07:01.over three years as we will get �330 million more than previously
:07:01. > :07:11.thought. Most of that is coming in as capital but they will have to
:07:11. > :07:17.
:07:17. > :07:22.You have been looking at the figures. You thought it Neddy was
:07:22. > :07:25.not as bad as it might have been. Many people were thrown by the fact
:07:25. > :07:32.that the forecast for the budget deficit for this financial year was
:07:32. > :07:37.not nearly as bad as had been widely forecast. That is what
:07:37. > :07:41.through the Shadow Chancellor when he was giving his replies. He was
:07:41. > :07:45.quite thrown by the forecast. As Douglas said, I suspect that what
:07:45. > :07:51.the Chancellor has done is to beat in the Revenue not yet received
:07:51. > :07:59.from the sale of the Forgie licensing. What is the big picture
:07:59. > :08:06.here? We are now in the fiscal consolidation. That is austerity.
:08:06. > :08:11.And it has been going on for eight years. Is the British economy going
:08:11. > :08:15.through a fundamental change? We are not going back to the old
:08:15. > :08:21.business cycle where we bounce back after recession and get back into
:08:21. > :08:26.growth of 3.5% quite quickly. We are not seen that. If that is the
:08:26. > :08:30.case, the next big hurdle for George Osborne is whether the
:08:30. > :08:36.rating agencies might take that view and decide early next year
:08:36. > :08:39.that they're going to downgrade our triple-A rating.
:08:39. > :08:44.The Scottish Government will be poring over these figures, too,
:08:44. > :08:50.analysing what they might mean for Scotland. I am joined by our
:08:50. > :08:54.political editor. Thank you for joining me. Douglas mentioned those
:08:54. > :08:59.figures briefly, but you have been crunching through them as well. Can
:08:59. > :09:03.you give us a bit more detail about what these so-called Barnett
:09:03. > :09:09.consequences mean for Scott and? The initial capital spending for
:09:09. > :09:15.Scott and his �394 million over the two year remaining period up to
:09:15. > :09:20.2015. There is a basic increase in revenue a for Scotland of �90
:09:20. > :09:24.million. That is more than might decide by the French since the
:09:24. > :09:29.Chancellor has announced generally. The top slicing of department
:09:29. > :09:34.limits. Whitehall budgets, are generally one or 2% of the above
:09:34. > :09:37.that level. But because the departments in Scotland compared
:09:37. > :09:41.with the departments and England's, generally health and schools are
:09:41. > :09:46.the big ones, they are being relatively protected in England,
:09:46. > :09:52.therefore there is a relative benefit to Scotland. They have only
:09:52. > :09:57.been cut not 0.4% over all. You're taking about 60 million and net out
:09:57. > :10:05.of the revenue budget in Scotland over those two years. 394 extra in
:10:05. > :10:09.capitals. It is worth 331 million more were John Swinney to spend. He
:10:09. > :10:12.was answering questions here 30 minutes ago. He is welcoming that
:10:12. > :10:16.expenditure, but this Government has pointed out that it comes off
:10:16. > :10:20.the backs of very substantial cuts in capital expenditure, which they
:10:20. > :10:24.have previously deplored. The Scotland officers pointed out that
:10:24. > :10:28.extra money for Scotland, understandably. They're pointing
:10:28. > :10:34.out those who were taken out of tax and benefit from the fuel duty
:10:34. > :10:41.increase being cancelled. It might have been a shortage of space which
:10:41. > :10:44.oblige them to leave out those who will face cuts in their benefits.
:10:44. > :10:49.Scotland has been asking for money and we must be welcoming this now.
:10:49. > :10:53.Scottish industry must be welcome next as well.
:10:53. > :10:57.To be fair to John Swinney, he very positively welcomed it. He is
:10:57. > :11:00.getting his shovel light even my! It's a budget dominated by bleak
:11:00. > :11:03.economic figures. Let's find out more about what the UK government
:11:03. > :11:05.are saying and how it reflects on Scotland. Our Westminster
:11:05. > :11:12.correspondent has been speaking to the Secretary of State for Scotland,
:11:12. > :11:15.Michael Moore. A bit of a difficult balancing act
:11:15. > :11:19.for the Chancellor today. He had to admit that economic growth was
:11:19. > :11:25.lower than he wanted and also that the debts were higher than he
:11:25. > :11:29.wanted. But all politics is local, so what exactly does this autumn
:11:29. > :11:33.statement mean for Scotland? The man who can tell us is the
:11:33. > :11:38.Secretary of State for Scotland. Thank you for joining us. In
:11:38. > :11:44.essence, it is a bit of a curate's egg, isn't it? Good in some parts,
:11:44. > :11:48.but in others. Growth is down and debt is up. The austerity measures
:11:48. > :11:53.will go on for longer. The medicine will have to be taken for longer.
:11:53. > :11:57.What people see and they see it across Europe are some very tough
:11:57. > :12:00.economic circumstances. There is a backdrop that shows us the
:12:00. > :12:05.challenges facing us in the economy in Scotland and across the United
:12:05. > :12:09.Kingdom. What we are seeking to do is have targeted measures which we
:12:09. > :12:14.can afford as a country which will help Scotland the to get on the
:12:14. > :12:17.road to recovery and particularly, through the extra capital that we
:12:17. > :12:20.will be a liar and the Scot has Government to spend, they will be
:12:20. > :12:28.able to focus on the road, transport or other capital projects
:12:28. > :12:33.to get the economy moving. We are seeing the cancellation of fuel
:12:33. > :12:37.duty. With the further increase in the starting point for paying tax,
:12:37. > :12:42.low and middle income Scots across the country will see a much reduced
:12:42. > :12:46.tax bill or no tax at all. We will talk about some of the
:12:46. > :12:50.specifics in a moment. But it is worth pointing out that the
:12:50. > :12:54.austerity programme is going to go on longer. We're going to be poorer
:12:54. > :12:59.and harder up for longer than you Government had sold us.
:12:59. > :13:03.The circumstances that we are aware thing us are much tougher than the
:13:03. > :13:06.forecast a couple of years ago. The depth of the recession that we are
:13:06. > :13:12.recovering from is also a deeper than we were told the couple of
:13:12. > :13:16.years ago. When people look at Europe, I see that they see a very
:13:16. > :13:22.tough set of circumstances. Those are some of our most important
:13:23. > :13:26.exports. And we have to work with what we have. What we're doing here
:13:26. > :13:30.is we have targeted measures to make sure that we have affordable
:13:30. > :13:35.programmes that will help the Scottish economy, whether it is in
:13:35. > :13:38.capital spending, cancellation of fuel duty increase water better tax
:13:38. > :13:42.provisions for low to middle income earners.
:13:42. > :13:46.You say you're making extra funding available to the Scottish
:13:46. > :13:50.Government. You want that to go on capital projects. They have said in
:13:50. > :13:53.the past that they want more money for capital projects. But there is
:13:53. > :13:56.no guarantee that the money you give them they will spend in the
:13:56. > :14:01.way that you might want. We make a distinction between
:14:01. > :14:04.capital spending and resource spending. They will stick within
:14:04. > :14:07.those broad parameters. However, what they have been asking for and
:14:07. > :14:11.what we are delivering is a significant opportunity to invest
:14:11. > :14:15.in capital projects. Whether those are transport projects are other
:14:15. > :14:18.infrastructure projects, that has got to be good news for the country
:14:18. > :14:22.and I hope they will come forward as good, productive suggestions
:14:22. > :14:27.very quickly. The Chancellor said it was fiscally
:14:27. > :14:30.neutral. What he gave with one hand, he was taking away with the other
:14:30. > :14:34.point As far as Scotland is concerned, can you come up with the
:14:34. > :14:37.figure to say that Scotland will be this a much better off because of
:14:37. > :14:41.this autumn statement or this amount worse off?
:14:41. > :14:45.We're aiming to get fairness across the whole of the United Kingdom.
:14:45. > :14:48.We're asking people to tighten their belts further and for longer
:14:48. > :14:52.and we are also targeting the very wealthy to ensure that they're
:14:52. > :14:57.making a very big contribution to the deficit reduction plans. We
:14:57. > :15:00.have to keep things on track and remain credible with the
:15:00. > :15:03.international financial markets. We have to create the right economic
:15:03. > :15:06.conditions which allow Scottish prisons is to thrive and employ
:15:06. > :15:10.more people. The Chancellor has announced that
:15:10. > :15:15.he is operating some of the tax rates and the allowances by 1%. He
:15:15. > :15:19.is also doing the same with benefits. That is less than the
:15:19. > :15:23.same -- the rate of inflation. For many people in and out of work,
:15:23. > :15:27.that will be a reduction in their living standards, want it?
:15:27. > :15:30.And we are seeing quite a tough message today. But we are clear
:15:30. > :15:37.that we have a programme here that will get the country through these
:15:37. > :15:40.very difficult times and get us properly on the road to recovery.
:15:40. > :15:43.Those investment plans and support for those on their Loryn comes will
:15:43. > :15:46.help people to get through these difficult times for and have a much
:15:46. > :15:50.more sustainable position than we ever had done at the last
:15:50. > :15:56.Government. The Autumn Statement is all about
:15:56. > :16:00.forecast. But there is no guarantee that this time everything is in
:16:00. > :16:04.place. The Chancellor may be coming to us in a few months' time and say
:16:04. > :16:07.things are worse again. These forecasts are independently
:16:07. > :16:11.provided and assessed. There will be plenty of commentators who will
:16:11. > :16:16.be able to make a judgement on it, but we think there fair assessments.
:16:16. > :16:20.We have to make sure that against this very difficult backdrop, we
:16:20. > :16:24.take the right measures which are affordable for the country. With
:16:24. > :16:27.this Autumn Statement, the Chancellor has got this right.
:16:27. > :16:30.I'm now joined from our newsroom by Stephen Boyle from Royal Bank of
:16:30. > :16:40.Scotland. He's been crunching the figures. Tell us first of all what
:16:40. > :16:42.
:16:42. > :16:46.the big picture is here? He was mentioning Europe. We are being
:16:46. > :16:51.buffeted by trade wins from the Continent. That is why the British
:16:51. > :16:55.economy is suffering so bad. The head winds from Europe are an
:16:55. > :17:00.important factor. The problems of the eurozone has meant that demand
:17:00. > :17:03.in the eurozone for Scottish and British exports is much weaker than
:17:03. > :17:08.its might otherwise have been. The enduring problem that the UK
:17:08. > :17:11.economy faces is the extent of indebtedness. As long as that is
:17:11. > :17:15.there, it will take a long time for growth to return to the types of
:17:15. > :17:22.rates that we have been used to in the past.
:17:22. > :17:28.Bill was talking about a major shift in Britain's economy, where
:17:28. > :17:31.we used to be able to bounce back quickly, we cannot any more of.
:17:31. > :17:38.Nobody who is alive in the UK today has been been through a period of
:17:38. > :17:41.weak gross like this. It is because of the extent of indebtedness.
:17:41. > :17:46.We have that eight years of austerity measures. What does that
:17:46. > :17:50.mean for a living standards for people across the UK and Scotland?
:17:50. > :17:55.It means the Government is going to be taking more out of your pockets
:17:55. > :17:59.than it will be putting in. In comes, certainly in respect of the
:17:59. > :18:02.tax and spending condition, are going to be constrained. People's
:18:02. > :18:08.living standards are not going to increase that the kind of rates
:18:08. > :18:13.that we have seen in the past. We should expect the growth in living
:18:13. > :18:18.standards to be extremely modest over the next few years.
:18:18. > :18:23.The pines in people's pockets is getting less valuable. But what
:18:23. > :18:27.does it mean for business? There is a corporation tax of 21% by 20th
:18:27. > :18:31.April 14. Business will welcome that. In
:18:31. > :18:36.England, there is the continuing restriction on the growth of
:18:36. > :18:40.business rates. But as the Chancellor made clear, this
:18:40. > :18:44.announcement today is fiscally neutral. Anything that has been
:18:44. > :18:47.given is also being taken away in the life of this Parliament. In
:18:47. > :18:56.balance, it should not have any over all effect.
:18:56. > :19:00.Thank you. Businesses mostly welcome measures
:19:00. > :19:04.announced in the state and. Our Business Correspondent has been --
:19:04. > :19:14.Visit One. They have been making roles here in
:19:14. > :19:16.
:19:16. > :19:20.Glasgow for 47 years. John Heaney has been here for 17 of those.
:19:20. > :19:25.We're still the same company that has here seven years ago. You
:19:25. > :19:30.struggle. You cannot buy the stuff that used to be able to live. The
:19:30. > :19:34.price of everything has gone up, so it is taking the money out of power
:19:34. > :19:38.pocket. We cannot give the kids what we want to give them at
:19:38. > :19:42.Christmas. The company is under new management and things are turning
:19:42. > :19:46.around. They have introduced new products. Now, as well as the
:19:46. > :19:51.famous roles, the company makes a whole range of cakes and pastries.
:19:51. > :19:55.But margins are always under pressure. Why on of the major
:19:55. > :20:00.issues facing the company is the increase in flower. That is our
:20:00. > :20:04.biggest raw-material. Over the past year, due to the economic climate
:20:04. > :20:09.and third rights that we have had throughout Europe, it has increased
:20:09. > :20:14.dramatically. We have already seen two price increases last year.
:20:14. > :20:18.Fortunately for us, we have actually fixed our price of flour
:20:18. > :20:21.for another year. We will not see any more price increases for the
:20:21. > :20:25.next year and that. That is the biggest impact it has had on us
:20:25. > :20:30.this year. Scrapping the planned rise in fuel
:20:30. > :20:34.duty will help. The company has invested in a new fleet of vans to
:20:34. > :20:39.deliver to its customers to write the whole of the Western for --
:20:39. > :20:44.West of Scotland. They're great for the business. It has reduced the
:20:44. > :20:47.cost on the distribution side and it will give us an opportunity to
:20:47. > :20:52.invest in other areas. The Government has a major parts to
:20:52. > :20:56.play to stop the rises and help us through this difficult period.
:20:56. > :21:00.Morten's are hoping its customers are not feeling the squeeze.
:21:00. > :21:04.Although austerity is here to stay, business has welcomed the release
:21:04. > :21:08.of money for capital investment. Although not as much as the
:21:08. > :21:13.Scottish Government was calling for, major construction projects in
:21:14. > :21:19.Scotland could now get the go-ahead. Sweet news for businesses. The loss
:21:19. > :21:22.of benefit from a cut in corporation tax -- tax, also new
:21:22. > :21:26.incentives to invest in plant machinery and the extra funding to
:21:26. > :21:36.try to boost exports, who knows, Norton's rolls and cakes could soon
:21:36. > :21:39.
:21:39. > :21:43.be available in other parts of the We have opposition party leading
:21:43. > :21:47.figures here. Two of them are friends from the coalition party at
:21:47. > :21:56.Westminster. But we have divided them today. Thank you for joining
:21:56. > :22:00.us. Debt target is off, growth cut -- target is off. You have to look
:22:00. > :22:05.at everything. Unemployment will be far lower than projected, far lower
:22:05. > :22:08.than any other countries in the world. We are still being less in
:22:08. > :22:12.terms of borrowing than we ever have before. Much less than just
:22:12. > :22:19.about any other country in the world. We have more people in
:22:19. > :22:24.employment. Lots of positive news out there. I think the approach
:22:24. > :22:29.taken by the Chancellor is right, he has to stick to it. Sticking to
:22:29. > :22:34.it. He says he has to stick to it. He did not say there is no
:22:34. > :22:39.alternative, but he said he had to stick to the targets. That was the
:22:39. > :22:43.most worrying message. When George Osborne came in, Labour warned that
:22:43. > :22:47.if he continued with the austerity approach when we would be heading
:22:47. > :22:53.for a double-dip recession. From the forecast today, it could be a
:22:53. > :22:58.triple trough by the sound of it. This is not how to get the economy
:22:58. > :23:02.going. He has missed his bowling targets. The whole point was to
:23:02. > :23:10.reduce borrowing, but he has borrowed more. We have more than 2
:23:10. > :23:15.million unemployed. But he did say that the deficit is being reduced
:23:15. > :23:19.every year, and he will continue with that on -- as an objective.
:23:19. > :23:25.sets different targets, but the one he said himself is to reduce
:23:25. > :23:28.borrowing. The only thing he has got out of this is the sale of the
:23:28. > :23:32.4G network spectrum. If it had not been for that, the figures would
:23:32. > :23:40.have been even worse. It is time for a change of direction from a
:23:40. > :23:45.government. -- from the Government. I do not think there were any
:23:45. > :23:50.surprises in the sense that there was going to be bad news in the
:23:50. > :23:55.Budget statement, but as Davan pointed out, there are other trains
:23:55. > :23:58.moving in the right direction, and amidst all the pleas for a change
:23:59. > :24:04.of direction, what we have not had it is an alternative package that
:24:04. > :24:07.would get us out of the problem that they left us in. We saw Danny
:24:07. > :24:10.Alexander smiling gently in the Commons when that announcement was
:24:10. > :24:15.made about increasing the personal allowance, getting close to the
:24:15. > :24:22.10,000 level, to take people out of tax. He was not smiling so much
:24:22. > :24:26.when the constraints on benefits were announced. Yes, in terms of
:24:26. > :24:30.the commitment to take those on the lowest incomes out of tax, that was
:24:30. > :24:34.very much a Liberal Democrat priority going into the coalition
:24:34. > :24:38.negotiations, and we are now at the point of removing another 21,000
:24:38. > :24:41.people in Scotland out of paying tax all together. You did not enter
:24:41. > :24:49.politics to strip people of benefits. What we have all agreed
:24:49. > :24:55.in terms of the welfare package, something had to be done, we could
:24:55. > :24:58.not continue on the same trajectory, and so we have committed to a 1%
:24:58. > :25:08.increase thereafter. It would be interesting to see if Labour would
:25:08. > :25:08.
:25:08. > :25:11.do this. What do you make of these points? I think the Chancellor has
:25:11. > :25:15.revealed he has the wrong priorities. He is punishing people
:25:15. > :25:19.for being unemployed, which is fundamentally unfair, he is also
:25:19. > :25:26.punishing working families and creating a new class of working
:25:26. > :25:33.poor. EZ is is unfair to watch someone going out of the door to
:25:33. > :25:36.work, when he is lying on -- he is saying it is unfair to watch
:25:36. > :25:40.someone going out of the door to work when you are earning the same
:25:40. > :25:45.for doing nothing. He said the private sector would make up for
:25:45. > :25:50.the public sector losses, but they have not. His priorities are the
:25:50. > :25:56.wealthy, while the working poor suffer if. The Labour Party want to
:25:56. > :26:04.spend more money, but if you want to do that you have to increase tax.
:26:04. > :26:07.On the point about welfare reductions, excluded from that are
:26:07. > :26:15.carers and the disability allowance. There are exceptions. But you have
:26:15. > :26:25.to look at last year's big position where there was a 5% increase. --
:26:25. > :26:29.
:26:29. > :26:36.And the scrapping of the planned dual duty increase. -- fuel duty.
:26:36. > :26:43.Yes, he felt that simply delaying this was not the right thing to do.
:26:43. > :26:49.It was beautiful stop it may have been in the House, -- it was
:26:49. > :26:55.theatre. The price of petrol has gone up so much, his revenue from
:26:55. > :27:05.taxing it has gone up so she did not need the increase. John Swinney
:27:05. > :27:10.
:27:10. > :27:16.will be a -- here in a moment, pointing out the North Sea oil.
:27:16. > :27:24.Labour said do not introduce the three pence rise. Let us talk about
:27:24. > :27:29.the Scottish budget. Up 331 million, but John Swinney was saying that it
:27:29. > :27:35.comes against a background of very big cuts in capital expenditure.
:27:35. > :27:40.Look at it over the spending review period. You are now at well over �1
:27:40. > :27:44.billion in terms of Barnett formula consequential, but the announcement
:27:44. > :27:48.of �394 million of capital spend can be applied to projects. The
:27:48. > :27:56.challenge for the Scottish government is to prove that these
:27:56. > :27:59.projects are actually shovel ready, and we can go ahead. The capital
:27:59. > :28:04.will be welcome and it is needed in the economy to get people working
:28:04. > :28:07.again, for example in the housing area, which the Scottish Government
:28:07. > :28:13.have cut. But it is worrying that the Scottish Government have cut
:28:13. > :28:17.back their investment programme, which has slipped by more than 330
:28:17. > :28:27.million. So this money is actually only just filling all that they
:28:27. > :28:28.
:28:28. > :28:32.created. That is right. There are some questions over whether these
:28:32. > :28:35.projects were shovel ready. What we have seen in terms of the UK
:28:35. > :28:40.announcement today about the �390 million in extra capital spending
:28:40. > :28:45.is that the SNP's bluff has been called, it is up to them to get on
:28:45. > :28:52.with projects. Thank you. We will be hearing from John
:28:52. > :28:55.Swinney later. You're watching a special Politics
:28:55. > :29:00.Scotland with the analysis of the Chancellor's Autumn Statement, and
:29:00. > :29:09.what it means for us. This is a recap of what George Osborne said a
:29:09. > :29:15.couple of hours ago. Austerity measures are extended until 2018.
:29:15. > :29:19.Eight years of austerity. The growth forecast for 2012 has been
:29:19. > :29:25.downgraded to -0.1 %. He missed his target for rigorous in -- reducing
:29:25. > :29:32.national debt, but there will be 5 billion extra in capital spend.
:29:32. > :29:40.We also have a cut in corporation tax to 21%. That comes in in April,
:29:40. > :29:44.2014. The income tax threshold will be raised. And good news for her
:29:44. > :29:48.prep -- hard pressed motorists, the three pence fuel duty rise has been
:29:48. > :29:53.can sold. Joining me in the studio is Bill
:29:53. > :29:56.Jamieson and Douglas Fraser. First of all, Douglas, looking at the
:29:56. > :30:01.politics of this, the Chancellor says he was on the right track and
:30:01. > :30:07.did not want to go down the road to ruin. He thinks the Labour Party
:30:07. > :30:11.would do this. Yes, the track has to stop at some point for an
:30:11. > :30:19.election, which is the crucial point of this. The crucial plan he
:30:19. > :30:26.had at the start of this was that we have a narrative arc ending in
:30:26. > :30:35.5th -- 2015, at which point a grateful electorate would vote for
:30:35. > :30:38.them. Now we're progressing three years beyond that, and they may not
:30:38. > :30:43.feel as grateful as George Osborne hope they would feel. So it will be
:30:43. > :30:47.a tough election in 2015. It is worth also stressing that the
:30:47. > :30:51.austerity is moving at a different pace, depending on what you look at.
:30:51. > :30:58.The tax rises as part of what he is doing, most of them have been
:30:58. > :31:03.implemented. The capital cuts go long way down the road. They have
:31:03. > :31:09.been quite severe in the L -- early stages of the austerity programme,
:31:09. > :31:13.but the cuts to services and service provision, we are nowhere
:31:13. > :31:23.close to they have we point on that. There is a great deal more of that
:31:23. > :31:23.
:31:23. > :31:26.do come, and that is going to be painful. North and south of the
:31:26. > :31:30.border, there are stories coming through about the health service,
:31:30. > :31:37.which has been detected, but service provision and the level of
:31:37. > :31:41.care is really getting squeezed. Bill Jamieson, he is pointing out
:31:41. > :31:46.how politicised the budget is, but he may not even the Chancellor than
:31:46. > :31:51.2018. The Budget was a huge shambles, and they spent a long
:31:51. > :31:55.time trying to clear up from that. There has been a new Treasury team.
:31:55. > :31:59.Howard successful is this Autumn Statement in terms of reaching out
:31:59. > :32:06.to people and telling them the Chancellor is the right man to do
:32:06. > :32:11.the job? There were very few leaks this time in terms of what we saw
:32:11. > :32:16.in March, so I think the Treasury has been very busy. A lot of effort
:32:16. > :32:25.went into the driving home the political points on clamping down
:32:25. > :32:32.on tax evasion, he made some very good points on that, to his credit.
:32:32. > :32:42.The Slater fund was up that there is much made -- the sleight of hand
:32:42. > :32:43.
:32:43. > :32:49.was that there was much made about the deficit, and that is where he
:32:49. > :32:59.is able to reduce the magic numbers on the deficit. In terms of, is he
:32:59. > :33:04.
:33:04. > :33:08.on track? The mantra is wearing thin. If you look at the situation,
:33:08. > :33:10.there is only one track to go down, and I do not think there would be
:33:10. > :33:14.much difference between the three parties.
:33:14. > :33:17.One of the most worrying aspects of the downturn has been the bleak
:33:17. > :33:23.prospects for young people. Youth unemployment stands at 24% in
:33:23. > :33:33.Scotland. A summit to tackle back has been taking place in Edinburgh,
:33:33. > :33:36.Later today we will find out from the Chancellor the state of the
:33:36. > :33:40.economy from his perspective as he gives the Autumn Statement. But the
:33:40. > :33:50.state of the economy and the personal impact the recession has
:33:50. > :33:52.
:33:52. > :33:56.had on lots of people is felt here. Here are some people taking part in
:33:56. > :34:02.the youth employment summit. Are you looking at -- for work that the
:34:02. > :34:10.more mint? Not just now. I am doing work experience, which I have been
:34:10. > :34:20.doing for four beaks. How long have you been looking for work? -- about
:34:20. > :34:21.
:34:21. > :34:25.one year. Was it easy to find the opportunity? It was easy to find it.
:34:25. > :34:30.Is this your experience the as well? Yes, I have applied for loads
:34:30. > :34:34.of jobs, had some interviews, but nothing yet. What do you think is
:34:35. > :34:43.stopping you get the more permanent opportunity? I think it is lack of
:34:43. > :34:53.experience. That is why am at the JobCentre doing work experience. I
:34:53. > :34:58.
:34:58. > :35:02.want to do admin and office work. Other employers are looking for
:35:02. > :35:10.people with experience and I get to know how to use the computers and
:35:10. > :35:20.the abdomen and the filing work. there a job at the end of the? --
:35:20. > :35:25.the admin. Hopefully. You're the chairperson of the youth employment
:35:25. > :35:31.organisation. You know there is a big problem with youth unemployment.
:35:31. > :35:36.What can days like today do to help this? It helps bring together young
:35:36. > :35:40.people, and the Scottish government, and it allows young people to
:35:40. > :35:44.explain to the ministers, to explain to Parliament, to explain
:35:44. > :35:47.to Civil Service, exactly what the problems are, and where they are
:35:47. > :35:53.finding trouble, so ministers can get first-line experience of what
:35:53. > :35:57.is going on so they can take that to employers and places like the
:35:57. > :36:04.JobCentre, and that can make it easier for young people. What kind
:36:04. > :36:08.of information will ministers get today? Problems like accessibility,
:36:08. > :36:13.and information. Those are two problems. Also the general creation
:36:13. > :36:16.of jobs. We have been delighted at the Scottish river -- Youth
:36:16. > :36:24.Parliament to the Government's commitment to lowering youth
:36:24. > :36:28.unemployment. Today is a first step in that. We have been working with
:36:28. > :36:31.cabinet ministers here today, and employers. That shows the strength
:36:31. > :36:38.of feeling there is that young people have to be involved in the
:36:38. > :36:41.The Chancellor's bleak economic figures provided rich pickings for
:36:41. > :36:43.the Shadow Chancellor Ed Balls. He was able to launch a stinging
:36:43. > :36:46.critique on the Chancellor's credibility, which left George
:36:46. > :36:55.Osborne and those on the government benches shaking their heads and
:36:55. > :37:00.jeering. Here's a taste of what happened.
:37:00. > :37:04.Bar a holiday this year is contracting. The Chancellor has
:37:04. > :37:09.confirmed that Government borrowing is revised up this year, next year
:37:09. > :37:19.and every year. The national deficit is rising and is not
:37:19. > :37:20.
:37:20. > :37:23.falling. I will say it again. Our economy is contracting this year.
:37:23. > :37:29.Government borrowing and the deficit is revised up this year,
:37:29. > :37:35.next year and every year and the national debt is rising. It is not
:37:35. > :37:39.falling. It is people already struggling to make ends meet,
:37:39. > :37:45.middle and lower income families and pensioners, who are paying the
:37:45. > :37:52.price, while millionaires get a tax cut, a �3 billion welfare handout
:37:52. > :38:02.to the people who need at least, Mr Speaker. Let me spell out the full
:38:02. > :38:03.
:38:03. > :38:08.facts for the house. They should listen, they might learn something.
:38:08. > :38:14.In June 2010, the Office of Budget Responsibility for cast our economy
:38:14. > :38:20.would grow by 2.8%. In March of this year, they said there would
:38:20. > :38:24.still be gross, but they revised it down to just 0.8%. Today, we
:38:24. > :38:29.learned that the Chancellor has not even manage that. Growth has not
:38:29. > :38:33.only been downgraded yet again, but he has confirmed following a double
:38:33. > :38:39.dip recession that our economy is now forecast to actually contract
:38:39. > :38:44.inside this year by 0.1%. Let me remind the house what the
:38:44. > :38:48.Chancellor promised over two years ago in the June budget. He said, we
:38:48. > :38:54.have provided the foundations for economic recovery in all parts of
:38:54. > :39:03.our nation. He said, we have set the course for a balanced budget
:39:03. > :39:07.and falling national debt by the end of this Parliament.
:39:07. > :39:11.I at one point, Ed Balls was wandering about dodgy dealings. He
:39:11. > :39:16.was rather suspicious of the Chancellor's figures, wasn't he?
:39:16. > :39:20.He was. I don't think all the calculations have been put out into
:39:20. > :39:26.the public domain as yet. I suspect that you may have been referring to
:39:26. > :39:32.the way in which George Osborne looks to have included the proceeds
:39:32. > :39:36.of the seal of the Ford G licences, which are not due until March. He
:39:36. > :39:42.is not certain he will get this money, but he has added �3.5
:39:42. > :39:46.billion into the figures. So, the deficit did not look as bad as most
:39:46. > :39:54.people were expecting. Let's get some more reaction from
:39:54. > :39:57.Westminster. MPs have had two cars to in really
:39:57. > :40:05.digest the Autumn Statement and I am sure they know what words for
:40:05. > :40:11.word. Let's test them on it. Margaret, let me start with you.
:40:11. > :40:14.Presumably, you will tell me you do not like this. Why?
:40:14. > :40:19.Because we have seen George Osborne come to the chamber this afternoon
:40:19. > :40:23.and essentially admits his policies are feeling. He told us some time
:40:23. > :40:29.ago that we would have growth this year in the British economy. We now
:40:29. > :40:32.see that it is actually a -0.1 %. We have a shrinking economy. People
:40:33. > :40:36.want to get their families prospering and get back to work and
:40:36. > :40:42.get this economy moving. The Chancellor can play all sorts of
:40:42. > :40:46.games, but he has failed. You're not happy with what the
:40:46. > :40:50.Chancellor is doing. What would your party be doing differently?
:40:50. > :40:54.We would have a plan for jobs and growth, which are essential
:40:54. > :40:59.difference with this Government. You need to encourage demand,
:40:59. > :41:03.confidence, get people spending. Don't spend money on unemployment
:41:03. > :41:08.benefit. Let people spend their own money on tax receipts and that is
:41:08. > :41:12.how you get the economy moving its. Gross is lower than it is in Europe,
:41:12. > :41:17.even with the eurozone crisis. The British Chancellor is doing
:41:17. > :41:22.something fundamentally wrong. The UK Government has announced
:41:22. > :41:26.that Scotland will get an extra �331 million to spend. They say
:41:26. > :41:30.they want to spend on capital projects. You Government says it
:41:30. > :41:33.wants more money for capital projects. Does that mean that we
:41:33. > :41:36.can see these shovels doing some work in Scotland and people getting
:41:37. > :41:41.back into work? The Scottish Government has long
:41:41. > :41:47.been pressing for investment in growth, for more money for these
:41:47. > :41:52.projects. There is a long list of projects. Obviously, this money is
:41:52. > :41:57.welcome. It is nowhere near enough. We need to get growth going. We
:41:57. > :42:00.need to get people back into work. The Chancellor has shown us that
:42:00. > :42:06.that we are facing more and more years of austerity and unless we
:42:06. > :42:11.get coast going, things will not get any better. Although the money
:42:11. > :42:15.for capital projects has welcome, he has only uprated benefits by 1%
:42:15. > :42:19.for the next three years. That will pile misery upon misery for people
:42:19. > :42:23.who are already suffering very badly in huge areas of Scotland.
:42:23. > :42:27.But you will never get everything you want. Surely, you Government,
:42:27. > :42:32.who has been calling for this extra money, should now be in a position
:42:32. > :42:35.to say here is a list of what we can do and we are going out to go
:42:35. > :42:39.and do it. As I said, the Government has been
:42:39. > :42:42.calling for that for some time and this should have been done a long
:42:42. > :42:45.time ago. There is a list of projects and the Government will be
:42:45. > :42:51.looking at it and looking at the amount of money they have to see
:42:51. > :42:55.which of these projects they can get going night to get people back
:42:55. > :43:03.into work and to get real growth in the economy.
:43:03. > :43:07.Margaret, high political aid budget is this? How difficult will it
:43:07. > :43:10.speak for your party to reduce benefits for people who are
:43:10. > :43:13.unemployed or at work? That probably go down quite well with
:43:13. > :43:16.the majority of the electorate, doesn't it?
:43:16. > :43:21.George Osborne thinks too much of his political party's position and
:43:21. > :43:26.not enough of the interest of the people. Unemployment is now higher
:43:26. > :43:31.in Scotland than it is in the rest of the UK. We are squeezed between
:43:31. > :43:35.two governments to have got their priorities wrong. The SNP should be
:43:35. > :43:42.setting up to do more and make sure these capital projects are spent in
:43:42. > :43:45.a way that brings jobs to Scotland and not jobs overseas.
:43:45. > :43:50.This is a very political Budget, isn't it?
:43:50. > :43:54.Yes. Margaret is quite wrong and what she's saying. The Scottish
:43:54. > :43:56.Government has brought a lot of jobs to Scotland, up but there
:43:56. > :44:00.governed by the European procurement rules, which a
:44:00. > :44:04.Government is in place. They are curating jobs and they will
:44:04. > :44:08.continue to create jobs. They will do everything they can and market
:44:08. > :44:13.stocks about this, but she is the one he wants to keep control of
:44:13. > :44:17.Scotland. We will have that argument on
:44:17. > :44:20.another day! Thank you. Joining me now from the Garden
:44:20. > :44:24.Lobby is the Finance Secretary John Swinney, who has been analysing the
:44:24. > :44:34.figures from the Treasury. I want to get you reaction first to the
:44:34. > :44:35.
:44:35. > :44:39.big picture, the key economic indicators the Chancellor outlined.
:44:39. > :44:44.The Chancellor was talking about the eurozone crisis.
:44:44. > :44:47.A yes, there are clearly problems in the eurozone and that is why
:44:47. > :44:51.actions taken in a domestic economy here to try and improve economic
:44:51. > :44:55.performance is important. What the Chancellor announced today in terms
:44:55. > :44:59.of their revised growth forecast, which is severely down, an
:44:59. > :45:03.increased level of borrowing, an extension of the period of
:45:03. > :45:06.austerity to 2018. These are all indications that the United Kingdom
:45:06. > :45:10.Government's economic policy has field and it has failed
:45:10. > :45:14.dramatically. That is why he has had to accept some of the advice
:45:15. > :45:17.that we have been giving him for some time that it is essential to
:45:17. > :45:20.invest in capital investment and that is what we have been pressing
:45:20. > :45:23.him to do for some time. The Chancellor said that the
:45:23. > :45:27.economy in Britain was performing better than our neighbours in
:45:27. > :45:31.France and Germany. He was pointing out that there was good news for
:45:31. > :45:36.employment prospects in England. But the unemployment rate here in
:45:36. > :45:42.Scotland is actually worse. The on employment position in England has
:45:42. > :45:45.been substantially enhanced by the one-off benefit of the Olympics
:45:45. > :45:50.that we have to look at the headline economic data that has
:45:50. > :45:53.come into this Autumn Statement. We have got the information on
:45:53. > :45:57.revised growth forecasts which are down. We have increased borrowing
:45:57. > :46:02.levels and higher levels of borrowing than anticipated. We have
:46:02. > :46:05.the extension of the austerity period to 2018. These are three
:46:05. > :46:10.indications that the Chancellor's economic policies have failed and
:46:10. > :46:16.he has that to take a different course.
:46:16. > :46:23.Talking about capital investment, you have just been granted an extra
:46:23. > :46:28.�331 million from them. Where will that go? The Clyde good way? --
:46:28. > :46:31.Gate way? Will you put your money for your mouth is?
:46:31. > :46:35.The Scottish Government has been taking action for the last four
:46:35. > :46:40.years to strengthen our capital investment. I have taken decisions
:46:40. > :46:43.to shift resource expenditure into capital projects. We have did a
:46:43. > :46:47.number of projects on to the non- profit distributing model, which
:46:47. > :46:50.means they can take their course, despite the 33% reduction in
:46:50. > :46:53.capital budgets that we face and the UK Government. What we're going
:46:53. > :46:57.to do now with the resources that have been allocated today as a
:46:57. > :47:01.consequence of our pressure is to deploy those projects as swiftly as
:47:01. > :47:04.we possibly can to start getting the building projects under way,
:47:04. > :47:09.creating employment and encouraging the economic recovery of Scotland.
:47:09. > :47:14.My only regret is that we have had to wait so long for this to happen.
:47:14. > :47:17.If the Chancellor had accepted our advice in 2010, we would not have
:47:17. > :47:19.faced a double dip recession and we could have invested in the
:47:19. > :47:23.construction industry in Scotland and in the economic infrastructure
:47:23. > :47:30.of our country. The Chancellor has to be taken the
:47:30. > :47:36.wind out of Alex Salmond's seals. He was after corporation tax of 20%,
:47:36. > :47:41.but the UK rate will be 21% by April 2014. What you make of that?
:47:41. > :47:47.Disaster has taken a welcome step in relation a corporation tax. --
:47:47. > :47:50.of the Chancellor. Then the Chancellor has been unable to rival
:47:50. > :47:52.the competitive position of business rates that the Scottish
:47:52. > :47:57.Government has put in place. We have the most competitive regime
:47:57. > :48:01.for business rates of any part of the United Kingdom. That
:48:01. > :48:06.demonstrates that Scotland is a part of the United Kingdom. It is
:48:06. > :48:10.able to put in place measures that are supportive of business and
:48:10. > :48:14.secure Investment in Scotland. That is why we are topping the league of
:48:14. > :48:17.investment in the United Kingdom. The steps we are taking are
:48:17. > :48:24.designed to make the country a competitive place to do business.
:48:24. > :48:28.If the UK has a rate of 21%, what rate would you like in Scotland?
:48:28. > :48:33.Discovers Government has always said we should have a competitive
:48:33. > :48:38.position on corporation tax. -- and the Scottish Government. The people
:48:38. > :48:40.of Scotland have on opportunity in 2014 to vote for that proposition
:48:40. > :48:43.in the referendum we will put to the people.
:48:43. > :48:50.Thank you. Let's get some more reaction from
:48:50. > :49:00.Let's speak now to David Watt from the Institute of Directors. Has he
:49:00. > :49:00.
:49:00. > :49:02.What kind of role of the Liberal Democrats played in this? If you
:49:02. > :49:08.look at the facial expressions of Nick Clegg, he doesn't look very
:49:08. > :49:13.happy at all! Especially when the Chancellor said
:49:13. > :49:16.there would be no resort to a mansion tax. That was one of the
:49:17. > :49:20.great Liberal Democrat clauses. This is a very difficult state and
:49:20. > :49:27.for any politician, not just the Liberal Democrats, to have to sell
:49:27. > :49:32.to the voters. I felt they could have had is perhaps a bit more in
:49:32. > :49:39.Pitt's on measures to help the supply side of the economy. --
:49:39. > :49:43.input. It but did not seem to be much help for small businesses. --
:49:43. > :49:50.they did not seem to be. That is the big missing factor.
:49:50. > :49:55.Thank you. The that's all we have time for.