05/12/2012 Politics Scotland

Time to say goodbye to viewers in Scotland. Welcome to the coverage

of the Autumn Statement in Scotland. We have a panel of experts standing

The news is not good. The Chancellor made clear that he will

go on for longer than he had hoped, -- austerity will go on for longer

than he had hoped. It is taking time, but the British economy is

healing. We will be hearing from Scottish businesses making a living

under tough economic circumstances. It has taken the money outer pocket,

to try to give the kids something for Christmas, we just can't do it

anymore. Westminster MPs are still going through the fine print of

this, the Autumn Statement. What about the politics and economics of

the Chancellor's handiwork? George Osborne has admitted he will miss

his own target and will have to extend the austerity measures till

2018, but said that we are on the right track.

It law growth was the result of Government's fiscal policy, they

would say so, but they do not. They say the economy has performed less

strongly than expected. They forecast growth this year of mine

is 0.1%. -- -0.1 %. But they say the expected growth can be

accounted for by over-optimism for net trade. They previously assumed

that the eurozone would begin to recover in the second half of this

year, but instead it has continued to contract. But has had the

exports to these markets and the net trade numbers. In short, the

tougher economic conditions mean that while the deficit is forecast

to go on falling, instead of taking three years to get the debt falling,

it will take four. Confronted with this news, some say that we should

abandon the deficit plan and try to borrow more. They think by

borrowing more we can borrow less. That would risk higher interest

rates, more or debt interest payments and a complete loss of

Britain's fiscal credibility. We are not taking the road to ruin.

Scotland, or Wales and Northern Ireland will get their Barnett

formula share of additional capital spending put at their disposal. On

top of this �5 billion for infrastructure and support for

business, we can provide a... The pay restraint in businesses and

government. Average earnings have risen around 10% since 2007. Out of

work benefits have gone up by around 20%. That is not fair to

working people who pay the taxes that fund them. Those working in

the public services who have seen their basic pay frozen will now see

it rise by an average of 1%. A similar approach of a 1% rise

should apply to those in receipt of benefits. That is fair and it will

ensure that we have a welfare system Britain can afford. We will

support the vulnerable secure as benefits and disability benefits

will be increased in line with inflation. We are extending support

for mortgage interest for two more years. We will apply a similar

approach to the uprating of some tax thresholds as we have to

welfare. The higher rate threshold to will be increased by 1% in the

tax years of 2014-15 and 2015-16. The income at which people start

paying the 40% rate will go up from four to �1,450, and then to 42,285

pts. I want to be completely clear with people. This is an increase,

it is the first cash increase in the higher rate threshold and

Parliament, but it is not in line with inflation, so it is as �1

billion of revenue by 2015-16. -- it raises �1 billion. We are joined

by the political commentator for the day, Bill Jamieson, and Douglas

Fraser. Thank you for joining me. What

really stood up for your? Just to pick out the bits that

matter most, the forecast growth has been downgraded. It is much

weaker than previously thought. Borrowing appears to be falling,

but that appears to be because they have included money they have not

yet got in. They have not even fixed a deal for selling the 4G

network spectrum for mobile. Aid years of austerity, which was well

past the next Westminster election. There are �5 billion of investment,

part of which is coming to Scotland. There is a squeeze on most working-

age benefits, you got some of the details the, and 1% of public-

sector pay. A big boost for business to try to get more

allowances for investment and Corporation Taxes coming down to

21% in 2014. The big thing is he will abandon the three pence

increase in fuel duty, which was expected in January, and had

already been postponed. If we look at what this means for Scotland,

Scots are affected by the fuel duty, and the benefits squeeze effect a

lot of Scots. In terms of what comes to Holyrood, the net effect

over three years as we will get �330 million more than previously

thought. Most of that is coming in as capital but they will have to

You have been looking at the figures. You thought it Neddy was

not as bad as it might have been. Many people were thrown by the fact

that the forecast for the budget deficit for this financial year was

not nearly as bad as had been widely forecast. That is what

through the Shadow Chancellor when he was giving his replies. He was

quite thrown by the forecast. As Douglas said, I suspect that what

the Chancellor has done is to beat in the Revenue not yet received

from the sale of the Forgie licensing. What is the big picture

here? We are now in the fiscal consolidation. That is austerity.

And it has been going on for eight years. Is the British economy going

through a fundamental change? We are not going back to the old

business cycle where we bounce back after recession and get back into

growth of 3.5% quite quickly. We are not seen that. If that is the

case, the next big hurdle for George Osborne is whether the

rating agencies might take that view and decide early next year

that they're going to downgrade our triple-A rating.

The Scottish Government will be poring over these figures, too,

analysing what they might mean for Scotland. I am joined by our

political editor. Thank you for joining me. Douglas mentioned those

figures briefly, but you have been crunching through them as well. Can

you give us a bit more detail about what these so-called Barnett

consequences mean for Scott and? The initial capital spending for

Scott and his �394 million over the two year remaining period up to

2015. There is a basic increase in revenue a for Scotland of �90

million. That is more than might decide by the French since the

Chancellor has announced generally. The top slicing of department

limits. Whitehall budgets, are generally one or 2% of the above

that level. But because the departments in Scotland compared

with the departments and England's, generally health and schools are

the big ones, they are being relatively protected in England,

therefore there is a relative benefit to Scotland. They have only

been cut not 0.4% over all. You're taking about 60 million and net out

of the revenue budget in Scotland over those two years. 394 extra in

capitals. It is worth 331 million more were John Swinney to spend. He

was answering questions here 30 minutes ago. He is welcoming that

expenditure, but this Government has pointed out that it comes off

the backs of very substantial cuts in capital expenditure, which they

have previously deplored. The Scotland officers pointed out that

extra money for Scotland, understandably. They're pointing

out those who were taken out of tax and benefit from the fuel duty

increase being cancelled. It might have been a shortage of space which

oblige them to leave out those who will face cuts in their benefits.

Scotland has been asking for money and we must be welcoming this now.

Scottish industry must be welcome next as well.

To be fair to John Swinney, he very positively welcomed it. He is

getting his shovel light even my! It's a budget dominated by bleak

economic figures. Let's find out more about what the UK government

are saying and how it reflects on Scotland. Our Westminster

correspondent has been speaking to the Secretary of State for Scotland,

Michael Moore. A bit of a difficult balancing act

for the Chancellor today. He had to admit that economic growth was

lower than he wanted and also that the debts were higher than he

wanted. But all politics is local, so what exactly does this autumn

statement mean for Scotland? The man who can tell us is the

Secretary of State for Scotland. Thank you for joining us. In

essence, it is a bit of a curate's egg, isn't it? Good in some parts,

but in others. Growth is down and debt is up. The austerity measures

will go on for longer. The medicine will have to be taken for longer.

What people see and they see it across Europe are some very tough

economic circumstances. There is a backdrop that shows us the

challenges facing us in the economy in Scotland and across the United

Kingdom. What we are seeking to do is have targeted measures which we

can afford as a country which will help Scotland the to get on the

road to recovery and particularly, through the extra capital that we

will be a liar and the Scot has Government to spend, they will be

able to focus on the road, transport or other capital projects

to get the economy moving. We are seeing the cancellation of fuel

duty. With the further increase in the starting point for paying tax,

low and middle income Scots across the country will see a much reduced

tax bill or no tax at all. We will talk about some of the

specifics in a moment. But it is worth pointing out that the

austerity programme is going to go on longer. We're going to be poorer

and harder up for longer than you Government had sold us.

The circumstances that we are aware thing us are much tougher than the

forecast a couple of years ago. The depth of the recession that we are

recovering from is also a deeper than we were told the couple of

years ago. When people look at Europe, I see that they see a very

tough set of circumstances. Those are some of our most important

exports. And we have to work with what we have. What we're doing here

is we have targeted measures to make sure that we have affordable

programmes that will help the Scottish economy, whether it is in

capital spending, cancellation of fuel duty increase water better tax

provisions for low to middle income earners.

You say you're making extra funding available to the Scottish

Government. You want that to go on capital projects. They have said in

the past that they want more money for capital projects. But there is

no guarantee that the money you give them they will spend in the

way that you might want. We make a distinction between

capital spending and resource spending. They will stick within

those broad parameters. However, what they have been asking for and

what we are delivering is a significant opportunity to invest

in capital projects. Whether those are transport projects are other

infrastructure projects, that has got to be good news for the country

and I hope they will come forward as good, productive suggestions

very quickly. The Chancellor said it was fiscally

neutral. What he gave with one hand, he was taking away with the other

point As far as Scotland is concerned, can you come up with the

figure to say that Scotland will be this a much better off because of

this autumn statement or this amount worse off?

We're aiming to get fairness across the whole of the United Kingdom.

We're asking people to tighten their belts further and for longer

and we are also targeting the very wealthy to ensure that they're

making a very big contribution to the deficit reduction plans. We

have to keep things on track and remain credible with the

international financial markets. We have to create the right economic

conditions which allow Scottish prisons is to thrive and employ

more people. The Chancellor has announced that

he is operating some of the tax rates and the allowances by 1%. He

is also doing the same with benefits. That is less than the

same -- the rate of inflation. For many people in and out of work,

that will be a reduction in their living standards, want it?

And we are seeing quite a tough message today. But we are clear

that we have a programme here that will get the country through these

very difficult times and get us properly on the road to recovery.

Those investment plans and support for those on their Loryn comes will

help people to get through these difficult times for and have a much

more sustainable position than we ever had done at the last

Government. The Autumn Statement is all about

forecast. But there is no guarantee that this time everything is in

place. The Chancellor may be coming to us in a few months' time and say

things are worse again. These forecasts are independently

provided and assessed. There will be plenty of commentators who will

be able to make a judgement on it, but we think there fair assessments.

We have to make sure that against this very difficult backdrop, we

take the right measures which are affordable for the country. With

this Autumn Statement, the Chancellor has got this right.

I'm now joined from our newsroom by Stephen Boyle from Royal Bank of

Scotland. He's been crunching the figures. Tell us first of all what

the big picture is here? He was mentioning Europe. We are being

buffeted by trade wins from the Continent. That is why the British

economy is suffering so bad. The head winds from Europe are an

important factor. The problems of the eurozone has meant that demand

in the eurozone for Scottish and British exports is much weaker than

its might otherwise have been. The enduring problem that the UK

economy faces is the extent of indebtedness. As long as that is

there, it will take a long time for growth to return to the types of

rates that we have been used to in the past.

Bill was talking about a major shift in Britain's economy, where

we used to be able to bounce back quickly, we cannot any more of.

Nobody who is alive in the UK today has been been through a period of

weak gross like this. It is because of the extent of indebtedness.

We have that eight years of austerity measures. What does that

mean for a living standards for people across the UK and Scotland?

It means the Government is going to be taking more out of your pockets

than it will be putting in. In comes, certainly in respect of the

tax and spending condition, are going to be constrained. People's

living standards are not going to increase that the kind of rates

that we have seen in the past. We should expect the growth in living

standards to be extremely modest over the next few years.

The pines in people's pockets is getting less valuable. But what

does it mean for business? There is a corporation tax of 21% by 20th

April 14. Business will welcome that. In

England, there is the continuing restriction on the growth of

business rates. But as the Chancellor made clear, this

announcement today is fiscally neutral. Anything that has been

given is also being taken away in the life of this Parliament. In

balance, it should not have any over all effect.

Thank you. Businesses mostly welcome measures

announced in the state and. Our Business Correspondent has been --

Visit One. They have been making roles here in

Glasgow for 47 years. John Heaney has been here for 17 of those.

We're still the same company that has here seven years ago. You

struggle. You cannot buy the stuff that used to be able to live. The

price of everything has gone up, so it is taking the money out of power

pocket. We cannot give the kids what we want to give them at

Christmas. The company is under new management and things are turning

around. They have introduced new products. Now, as well as the

famous roles, the company makes a whole range of cakes and pastries.

But margins are always under pressure. Why on of the major

issues facing the company is the increase in flower. That is our

biggest raw-material. Over the past year, due to the economic climate

and third rights that we have had throughout Europe, it has increased

dramatically. We have already seen two price increases last year.

Fortunately for us, we have actually fixed our price of flour

for another year. We will not see any more price increases for the

next year and that. That is the biggest impact it has had on us

this year. Scrapping the planned rise in fuel

duty will help. The company has invested in a new fleet of vans to

deliver to its customers to write the whole of the Western for --

West of Scotland. They're great for the business. It has reduced the

cost on the distribution side and it will give us an opportunity to

invest in other areas. The Government has a major parts to

play to stop the rises and help us through this difficult period.

Morten's are hoping its customers are not feeling the squeeze.

Although austerity is here to stay, business has welcomed the release

of money for capital investment. Although not as much as the

Scottish Government was calling for, major construction projects in

Scotland could now get the go-ahead. Sweet news for businesses. The loss

of benefit from a cut in corporation tax -- tax, also new

incentives to invest in plant machinery and the extra funding to

try to boost exports, who knows, Norton's rolls and cakes could soon

be available in other parts of the We have opposition party leading

figures here. Two of them are friends from the coalition party at

Westminster. But we have divided them today. Thank you for joining

us. Debt target is off, growth cut -- target is off. You have to look

at everything. Unemployment will be far lower than projected, far lower

than any other countries in the world. We are still being less in

terms of borrowing than we ever have before. Much less than just

about any other country in the world. We have more people in

employment. Lots of positive news out there. I think the approach

taken by the Chancellor is right, he has to stick to it. Sticking to

it. He says he has to stick to it. He did not say there is no

alternative, but he said he had to stick to the targets. That was the

most worrying message. When George Osborne came in, Labour warned that

if he continued with the austerity approach when we would be heading

for a double-dip recession. From the forecast today, it could be a

triple trough by the sound of it. This is not how to get the economy

going. He has missed his bowling targets. The whole point was to

reduce borrowing, but he has borrowed more. We have more than 2

million unemployed. But he did say that the deficit is being reduced

every year, and he will continue with that on -- as an objective.

sets different targets, but the one he said himself is to reduce

borrowing. The only thing he has got out of this is the sale of the

4G network spectrum. If it had not been for that, the figures would

have been even worse. It is time for a change of direction from a

government. -- from the Government. I do not think there were any

surprises in the sense that there was going to be bad news in the

Budget statement, but as Davan pointed out, there are other trains

moving in the right direction, and amidst all the pleas for a change

of direction, what we have not had it is an alternative package that

would get us out of the problem that they left us in. We saw Danny

Alexander smiling gently in the Commons when that announcement was

made about increasing the personal allowance, getting close to the

10,000 level, to take people out of tax. He was not smiling so much

when the constraints on benefits were announced. Yes, in terms of

the commitment to take those on the lowest incomes out of tax, that was

very much a Liberal Democrat priority going into the coalition

negotiations, and we are now at the point of removing another 21,000

people in Scotland out of paying tax all together. You did not enter

politics to strip people of benefits. What we have all agreed

in terms of the welfare package, something had to be done, we could

not continue on the same trajectory, and so we have committed to a 1%

increase thereafter. It would be interesting to see if Labour would

do this. What do you make of these points? I think the Chancellor has

revealed he has the wrong priorities. He is punishing people

for being unemployed, which is fundamentally unfair, he is also

punishing working families and creating a new class of working

poor. EZ is is unfair to watch someone going out of the door to

work, when he is lying on -- he is saying it is unfair to watch

someone going out of the door to work when you are earning the same

for doing nothing. He said the private sector would make up for

the public sector losses, but they have not. His priorities are the

wealthy, while the working poor suffer if. The Labour Party want to

spend more money, but if you want to do that you have to increase tax.

On the point about welfare reductions, excluded from that are

carers and the disability allowance. There are exceptions. But you have

to look at last year's big position where there was a 5% increase. --

And the scrapping of the planned dual duty increase. -- fuel duty.

Yes, he felt that simply delaying this was not the right thing to do.

It was beautiful stop it may have been in the House, -- it was

theatre. The price of petrol has gone up so much, his revenue from

taxing it has gone up so she did not need the increase. John Swinney

will be a -- here in a moment, pointing out the North Sea oil.

Labour said do not introduce the three pence rise. Let us talk about

the Scottish budget. Up 331 million, but John Swinney was saying that it

comes against a background of very big cuts in capital expenditure.

Look at it over the spending review period. You are now at well over �1

billion in terms of Barnett formula consequential, but the announcement

of �394 million of capital spend can be applied to projects. The

challenge for the Scottish government is to prove that these

projects are actually shovel ready, and we can go ahead. The capital

will be welcome and it is needed in the economy to get people working

again, for example in the housing area, which the Scottish Government

have cut. But it is worrying that the Scottish Government have cut

back their investment programme, which has slipped by more than 330

million. So this money is actually only just filling all that they

created. That is right. There are some questions over whether these

projects were shovel ready. What we have seen in terms of the UK

announcement today about the �390 million in extra capital spending

is that the SNP's bluff has been called, it is up to them to get on

with projects. Thank you. We will be hearing from John

Swinney later. You're watching a special Politics

Scotland with the analysis of the Chancellor's Autumn Statement, and

what it means for us. This is a recap of what George Osborne said a

couple of hours ago. Austerity measures are extended until 2018.

Eight years of austerity. The growth forecast for 2012 has been

downgraded to -0.1 %. He missed his target for rigorous in -- reducing

national debt, but there will be 5 billion extra in capital spend.

We also have a cut in corporation tax to 21%. That comes in in April,

2014. The income tax threshold will be raised. And good news for her

prep -- hard pressed motorists, the three pence fuel duty rise has been

can sold. Joining me in the studio is Bill

Jamieson and Douglas Fraser. First of all, Douglas, looking at the

politics of this, the Chancellor says he was on the right track and

did not want to go down the road to ruin. He thinks the Labour Party

would do this. Yes, the track has to stop at some point for an

election, which is the crucial point of this. The crucial plan he

had at the start of this was that we have a narrative arc ending in

5th -- 2015, at which point a grateful electorate would vote for

them. Now we're progressing three years beyond that, and they may not

feel as grateful as George Osborne hope they would feel. So it will be

a tough election in 2015. It is worth also stressing that the

austerity is moving at a different pace, depending on what you look at.

The tax rises as part of what he is doing, most of them have been

implemented. The capital cuts go long way down the road. They have

been quite severe in the L -- early stages of the austerity programme,

but the cuts to services and service provision, we are nowhere

close to they have we point on that. There is a great deal more of that

do come, and that is going to be painful. North and south of the

border, there are stories coming through about the health service,

which has been detected, but service provision and the level of

care is really getting squeezed. Bill Jamieson, he is pointing out

how politicised the budget is, but he may not even the Chancellor than

2018. The Budget was a huge shambles, and they spent a long

time trying to clear up from that. There has been a new Treasury team.

Howard successful is this Autumn Statement in terms of reaching out

to people and telling them the Chancellor is the right man to do

the job? There were very few leaks this time in terms of what we saw

in March, so I think the Treasury has been very busy. A lot of effort

went into the driving home the political points on clamping down

on tax evasion, he made some very good points on that, to his credit.

The Slater fund was up that there is much made -- the sleight of hand

was that there was much made about the deficit, and that is where he

is able to reduce the magic numbers on the deficit. In terms of, is he

on track? The mantra is wearing thin. If you look at the situation,

there is only one track to go down, and I do not think there would be

much difference between the three parties.

One of the most worrying aspects of the downturn has been the bleak

prospects for young people. Youth unemployment stands at 24% in

Scotland. A summit to tackle back has been taking place in Edinburgh,

Later today we will find out from the Chancellor the state of the

economy from his perspective as he gives the Autumn Statement. But the

state of the economy and the personal impact the recession has

had on lots of people is felt here. Here are some people taking part in

the youth employment summit. Are you looking at -- for work that the

more mint? Not just now. I am doing work experience, which I have been

doing for four beaks. How long have you been looking for work? -- about

one year. Was it easy to find the opportunity? It was easy to find it.

Is this your experience the as well? Yes, I have applied for loads

of jobs, had some interviews, but nothing yet. What do you think is

stopping you get the more permanent opportunity? I think it is lack of

experience. That is why am at the JobCentre doing work experience. I

want to do admin and office work. Other employers are looking for

people with experience and I get to know how to use the computers and

the abdomen and the filing work. there a job at the end of the? --

the admin. Hopefully. You're the chairperson of the youth employment

organisation. You know there is a big problem with youth unemployment.

What can days like today do to help this? It helps bring together young

people, and the Scottish government, and it allows young people to

explain to the ministers, to explain to Parliament, to explain

to Civil Service, exactly what the problems are, and where they are

finding trouble, so ministers can get first-line experience of what

is going on so they can take that to employers and places like the

JobCentre, and that can make it easier for young people. What kind

of information will ministers get today? Problems like accessibility,

and information. Those are two problems. Also the general creation

of jobs. We have been delighted at the Scottish river -- Youth

Parliament to the Government's commitment to lowering youth

unemployment. Today is a first step in that. We have been working with

cabinet ministers here today, and employers. That shows the strength

of feeling there is that young people have to be involved in the

The Chancellor's bleak economic figures provided rich pickings for

the Shadow Chancellor Ed Balls. He was able to launch a stinging

critique on the Chancellor's credibility, which left George

Osborne and those on the government benches shaking their heads and

jeering. Here's a taste of what happened.

Bar a holiday this year is contracting. The Chancellor has

confirmed that Government borrowing is revised up this year, next year

and every year. The national deficit is rising and is not

falling. I will say it again. Our economy is contracting this year.

Government borrowing and the deficit is revised up this year,

next year and every year and the national debt is rising. It is not

falling. It is people already struggling to make ends meet,

middle and lower income families and pensioners, who are paying the

price, while millionaires get a tax cut, a �3 billion welfare handout

to the people who need at least, Mr Speaker. Let me spell out the full

facts for the house. They should listen, they might learn something.

In June 2010, the Office of Budget Responsibility for cast our economy

would grow by 2.8%. In March of this year, they said there would

still be gross, but they revised it down to just 0.8%. Today, we

learned that the Chancellor has not even manage that. Growth has not

only been downgraded yet again, but he has confirmed following a double

dip recession that our economy is now forecast to actually contract

inside this year by 0.1%. Let me remind the house what the

Chancellor promised over two years ago in the June budget. He said, we

have provided the foundations for economic recovery in all parts of

our nation. He said, we have set the course for a balanced budget

and falling national debt by the end of this Parliament.

I at one point, Ed Balls was wandering about dodgy dealings. He

was rather suspicious of the Chancellor's figures, wasn't he?

He was. I don't think all the calculations have been put out into

the public domain as yet. I suspect that you may have been referring to

the way in which George Osborne looks to have included the proceeds

of the seal of the Ford G licences, which are not due until March. He

is not certain he will get this money, but he has added �3.5

billion into the figures. So, the deficit did not look as bad as most

people were expecting. Let's get some more reaction from

Westminster. MPs have had two cars to in really

digest the Autumn Statement and I am sure they know what words for

word. Let's test them on it. Margaret, let me start with you.

Presumably, you will tell me you do not like this. Why?

Because we have seen George Osborne come to the chamber this afternoon

and essentially admits his policies are feeling. He told us some time

ago that we would have growth this year in the British economy. We now

see that it is actually a -0.1 %. We have a shrinking economy. People

want to get their families prospering and get back to work and

get this economy moving. The Chancellor can play all sorts of

games, but he has failed. You're not happy with what the

Chancellor is doing. What would your party be doing differently?

We would have a plan for jobs and growth, which are essential

difference with this Government. You need to encourage demand,

confidence, get people spending. Don't spend money on unemployment

benefit. Let people spend their own money on tax receipts and that is

how you get the economy moving its. Gross is lower than it is in Europe,

even with the eurozone crisis. The British Chancellor is doing

something fundamentally wrong. The UK Government has announced

that Scotland will get an extra �331 million to spend. They say

they want to spend on capital projects. You Government says it

wants more money for capital projects. Does that mean that we

can see these shovels doing some work in Scotland and people getting

back into work? The Scottish Government has long

been pressing for investment in growth, for more money for these

projects. There is a long list of projects. Obviously, this money is

welcome. It is nowhere near enough. We need to get growth going. We

need to get people back into work. The Chancellor has shown us that

that we are facing more and more years of austerity and unless we

get coast going, things will not get any better. Although the money

for capital projects has welcome, he has only uprated benefits by 1%

for the next three years. That will pile misery upon misery for people

who are already suffering very badly in huge areas of Scotland.

But you will never get everything you want. Surely, you Government,

who has been calling for this extra money, should now be in a position

to say here is a list of what we can do and we are going out to go

and do it. As I said, the Government has been

calling for that for some time and this should have been done a long

time ago. There is a list of projects and the Government will be

looking at it and looking at the amount of money they have to see

which of these projects they can get going night to get people back

into work and to get real growth in the economy.

Margaret, high political aid budget is this? How difficult will it

speak for your party to reduce benefits for people who are

unemployed or at work? That probably go down quite well with

the majority of the electorate, doesn't it?

George Osborne thinks too much of his political party's position and

not enough of the interest of the people. Unemployment is now higher

in Scotland than it is in the rest of the UK. We are squeezed between

two governments to have got their priorities wrong. The SNP should be

setting up to do more and make sure these capital projects are spent in

a way that brings jobs to Scotland and not jobs overseas.

This is a very political Budget, isn't it?

Yes. Margaret is quite wrong and what she's saying. The Scottish

Government has brought a lot of jobs to Scotland, up but there

governed by the European procurement rules, which a

Government is in place. They are curating jobs and they will

continue to create jobs. They will do everything they can and market

stocks about this, but she is the one he wants to keep control of

Scotland. We will have that argument on

another day! Thank you. Joining me now from the Garden

Lobby is the Finance Secretary John Swinney, who has been analysing the

figures from the Treasury. I want to get you reaction first to the

big picture, the key economic indicators the Chancellor outlined.

The Chancellor was talking about the eurozone crisis.

A yes, there are clearly problems in the eurozone and that is why

actions taken in a domestic economy here to try and improve economic

performance is important. What the Chancellor announced today in terms

of their revised growth forecast, which is severely down, an

increased level of borrowing, an extension of the period of

austerity to 2018. These are all indications that the United Kingdom

Government's economic policy has field and it has failed

dramatically. That is why he has had to accept some of the advice

that we have been giving him for some time that it is essential to

invest in capital investment and that is what we have been pressing

him to do for some time. The Chancellor said that the

economy in Britain was performing better than our neighbours in

France and Germany. He was pointing out that there was good news for

employment prospects in England. But the unemployment rate here in

Scotland is actually worse. The on employment position in England has

been substantially enhanced by the one-off benefit of the Olympics

that we have to look at the headline economic data that has

come into this Autumn Statement. We have got the information on

revised growth forecasts which are down. We have increased borrowing

levels and higher levels of borrowing than anticipated. We have

the extension of the austerity period to 2018. These are three

indications that the Chancellor's economic policies have failed and

he has that to take a different course.

Talking about capital investment, you have just been granted an extra

�331 million from them. Where will that go? The Clyde good way? --

Gate way? Will you put your money for your mouth is?

The Scottish Government has been taking action for the last four

years to strengthen our capital investment. I have taken decisions

to shift resource expenditure into capital projects. We have did a

number of projects on to the non- profit distributing model, which

means they can take their course, despite the 33% reduction in

capital budgets that we face and the UK Government. What we're going

to do now with the resources that have been allocated today as a

consequence of our pressure is to deploy those projects as swiftly as

we possibly can to start getting the building projects under way,

creating employment and encouraging the economic recovery of Scotland.

My only regret is that we have had to wait so long for this to happen.

If the Chancellor had accepted our advice in 2010, we would not have

faced a double dip recession and we could have invested in the

construction industry in Scotland and in the economic infrastructure

of our country. The Chancellor has to be taken the

wind out of Alex Salmond's seals. He was after corporation tax of 20%,

but the UK rate will be 21% by April 2014. What you make of that?

Disaster has taken a welcome step in relation a corporation tax. --

of the Chancellor. Then the Chancellor has been unable to rival

the competitive position of business rates that the Scottish

Government has put in place. We have the most competitive regime

for business rates of any part of the United Kingdom. That

demonstrates that Scotland is a part of the United Kingdom. It is

able to put in place measures that are supportive of business and

secure Investment in Scotland. That is why we are topping the league of

investment in the United Kingdom. The steps we are taking are

designed to make the country a competitive place to do business.

If the UK has a rate of 21%, what rate would you like in Scotland?

Discovers Government has always said we should have a competitive

position on corporation tax. -- and the Scottish Government. The people

of Scotland have on opportunity in 2014 to vote for that proposition

in the referendum we will put to the people.

Thank you. Let's get some more reaction from

Let's speak now to David Watt from the Institute of Directors. Has he

What kind of role of the Liberal Democrats played in this? If you

look at the facial expressions of Nick Clegg, he doesn't look very

happy at all! Especially when the Chancellor said

there would be no resort to a mansion tax. That was one of the

great Liberal Democrat clauses. This is a very difficult state and

for any politician, not just the Liberal Democrats, to have to sell

to the voters. I felt they could have had is perhaps a bit more in

Pitt's on measures to help the supply side of the economy. --

input. It but did not seem to be much help for small businesses. --

they did not seem to be. That is the big missing factor.

Thank you. The that's all we have time for.