08/03/2017 Politics Scotland


08/03/2017

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Good afternoon and welcome to a special edition

:00:00.:00:07.

The Chancellor Philip Hammond says the Scottish government

:00:08.:00:10.

is to receive millions extra every year.

:00:11.:00:19.

For the devolved administrations, our announcements today deliver

:00:20.:00:25.

additional funding of ?350 million for the Scottish Government... ?200

:00:26.:00:28.

million... Over the next hour we'll crunching

:00:29.:00:33.

the numbers and getting Here at Westminster, the Chancellor

:00:34.:00:42.

has had his say. We will be gauging reaction to his handiwork.

:00:43.:00:48.

The Chancellor Philip Hammond has delivered his first

:00:49.:00:50.

Budget to the Commons, and the first since Britain voted

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He told the Commons that the Budget provides a strong platform

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for Brexit negotiations and continues the task

:00:58.:00:58.

of getting Britain back to living within its means.

:00:59.:01:02.

There is no room for complacency and you will not find any on these

:01:03.:01:08.

benches. As we prepare for future outside the EU, we cannot rest on

:01:09.:01:15.

our past achievements. We must focus on keeping Britain at the cutting

:01:16.:01:20.

edge of the global economy. The deficit is down, but that is still

:01:21.:01:25.

too high. Employment is up but productivity remains stubbornly low.

:01:26.:01:30.

Too many of our young people are leaving formal education without the

:01:31.:01:34.

skills they need for two-day's labour market. And too many families

:01:35.:01:39.

are still feeling the squeeze, almost a decade after the crash. So

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our job is not done. Our task today is to take the next steps in

:01:46.:01:48.

preparing Britain for a global future.

:01:49.:01:49.

We'll look in a moment at how he might do that.

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But first, to help us make sense of it all,

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our Business Correspondent David Henderson is here.

:01:55.:01:56.

We should start off by pointing out this is the last spring budget. So

:01:57.:02:04.

it is not, and there will be run in the autumn, so it is not surprising

:02:05.:02:09.

it is a bit thin compared to what we are used to. But give us the

:02:10.:02:16.

highlights. It was a bit thin, bit of a relaxed speech, poking fun at

:02:17.:02:20.

the Labour front bench at times, making jokes. But limited in terms

:02:21.:02:26.

of its content, as steady as you go budget. When it comes to making the

:02:27.:02:36.

tough economic decisions, it'll be over the Chancellor. Much of this

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speech focused on England and English domestic matters, issues

:02:46.:02:48.

which are reserved to Westminster. Issues which we deal with up here

:02:49.:02:54.

through the Scottish Parliament. Things like transport and social

:02:55.:03:00.

care and suchlike, the NHS. Philip Hammond was making announcements

:03:01.:03:03.

there which relate solely to England. So the impact here is

:03:04.:03:09.

indirect, it is through the Barnett funding formula. Let's look at the

:03:10.:03:14.

key takeaway points. First, the health of the economy. The

:03:15.:03:20.

Chancellor told us the independence for budget responsibility has

:03:21.:03:25.

upgraded its forecast. You can see therefore the UK economic forecasts,

:03:26.:03:31.

up from 1.4%, as announced last August to 2%. That initial

:03:32.:03:36.

announcement was made in the depth of gloom in the impact of Brexit. A

:03:37.:03:41.

happier outlook on that front for the economy this year. Borrowing, he

:03:42.:03:51.

said would be lower than forecast. ?16.4 billion lower than forecast

:03:52.:03:56.

during that Autumn Statement in November. Again, standing at about

:03:57.:04:04.

?52 billion. So a better outlook for the economy, more taxes available

:04:05.:04:09.

for the government to spend on hospitals and schools. The end

:04:10.:04:13.

result, as he announced, will be extra spending for the devolved

:04:14.:04:19.

administrations including, he said, an extra ?350 million for Scotland.

:04:20.:04:26.

We take that to mean over the term of this Parliament, funded through

:04:27.:04:30.

the Barnett formula. He also announced a focus on the North Sea.

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Not much detail, he announced a review of North Sea taxes, the

:04:39.:04:42.

intention to see how companies here can be helped to recover as much oil

:04:43.:04:46.

and Gas UK is possible from the North Sea. But the one I think will

:04:47.:04:51.

generate the most political heat, already generating a lot of

:04:52.:04:56.

headlines, the impact on workers. The big story for workers,

:04:57.:05:00.

self-employed workers are facing a rise in national insurance

:05:01.:05:05.

contributions. Philip Hammond saying it was unfair that the self-employed

:05:06.:05:10.

should pay less tax than people earning the same amount of money. He

:05:11.:05:15.

said that would ultimately generate ?145 million a year for public

:05:16.:05:25.

services. It breaches their manifesto commitment? A quote from

:05:26.:05:30.

the Conservative manifesto it says... We will commit to no

:05:31.:05:36.

increases in VAT, national insurance contributions or income tax.

:05:37.:05:40.

So whatever the rights and wrongs of that policy, the issues around

:05:41.:05:44.

fairness, their opponents are accusing them of breaching their

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manifesto commitment. David, thank you very much indeed.

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Now, the Chancellor said the Budget will deliver an extra ?350 million

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of funding for the Scottish Government.

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Let's cross to Holyrood now, and our Political Editor Brian Taylor.

:05:56.:05:57.

Is this ?350 million over the terms of the parliament, ?350 million a

:05:58.:06:11.

year? I understand it is over three years but it is front-loaded with

:06:12.:06:16.

the bulk of the cash coming in the first year. It arises out of

:06:17.:06:21.

expenditure south of the border on hospitals and social care. But the

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Scottish Government can spend it as they wish. When the Chancellor made

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the announcement, you saw him waving towards the SNP benches, encouraging

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them to cheer. But they didn't. It isn't the role of the opposition to

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cheer Chancellor's budget. Few cheers coming from the Scottish

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Government. They point out it is over an extended period. They do

:06:47.:06:50.

welcome extra cash but it is a product of the formula, it is not a

:06:51.:06:54.

huge uplift. Be sceptical about the announcement on the North Sea. They

:06:55.:06:59.

say they have been looking for these fields to be given a tax boots. But

:07:00.:07:04.

the Chancellor has announced another review and examination of it. The

:07:05.:07:09.

money coming to Scotland is great news, aiming to the SNP should

:07:10.:07:17.

cancel their proposals on taxation. I think we will wait a long time

:07:18.:07:24.

before that happens. On this oil and gasping, there was some speculation

:07:25.:07:29.

there would be specific measures. -- gas thing. The it was expected

:07:30.:07:38.

something might actually do something, but basically they have

:07:39.:07:42.

said they will have a look at? It was expected by Scottish ministers

:07:43.:07:46.

something would be done. They said they have been calling over the last

:07:47.:07:50.

two or three budgets for action to be taken on this area to spread tax

:07:51.:07:57.

redistribution to help the smaller companies who are taking on these

:07:58.:08:03.

later fields. Good news for the oil and gas industry, potentially it is,

:08:04.:08:08.

but at the moment at this stage it is just setting up an expert review

:08:09.:08:13.

group. This is to do with keeping the oil flowing, it is not to do

:08:14.:08:18.

with getting money out of oil. I noticed hidden away in the OBR

:08:19.:08:27.

outlook, the revenue from oil is forecasted to be zero right until

:08:28.:08:35.

2022? Absolutely, it has declined. The Chancellor while announcing what

:08:36.:08:41.

could be benefits to the North Sea, there is a political underlying

:08:42.:08:45.

message as well, which is to save these measures are only required

:08:46.:08:50.

because the take from the North Sea is declining so sharply. In the past

:08:51.:08:55.

year and the past decade, the past several decades, it has been an

:08:56.:08:58.

issue of contention in Scotland with regard to the economy and also with

:08:59.:09:03.

regard to the prospects of the Scottish economy and their

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independence. Thank you for joining us this afternoon.

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Well, with me in the studio this afternoon are two Budget experts.

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Ray Perman is Director of the David Hume Insititute,

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and Dr Angela O'Hagan is a lecturer in social and public policy

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Let's take a look at something we were talking about earlier. He has

:09:18.:09:31.

increased growth forecast but it goes back to 1.6, comes back up to

:09:32.:09:40.

2% by 2020. All of this is lower than the normal, the shadow of the

:09:41.:09:45.

financial crash is still over us? The world changed in 2008. For over

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30 years before that we were average 2.5% growth for the UK. Since 2008

:09:54.:09:59.

that has taken a knock. Getting back to 2% this year is pretty good going

:10:00.:10:06.

in the present circumstances. But as the OBR was forecasting, that will

:10:07.:10:10.

fall and will get back to 2% until 2020. We assume this is the shadow

:10:11.:10:14.

of recession? People were surprised Brexit didn't

:10:15.:10:30.

have an immediate effect after the vote last year. We are still members

:10:31.:10:37.

of the EU, but it will have an effect on the economy. The

:10:38.:10:40.

Chancellor has foreseen that and it will come in the next five years.

:10:41.:10:44.

The paradox at the moment is business investment is due to fall,

:10:45.:10:49.

perhaps even falling at the moment, but as consumers we are out spending

:10:50.:10:56.

like there is no tomorrow and it is keeping the economy going?

:10:57.:10:59.

Unfortunately we are all borrowing like there's no tomorrow, that

:11:00.:11:04.

cannot go on for ever so consumer spending will decline. Angela, can

:11:05.:11:09.

you pick up on this thing about the self-employed. It is being presented

:11:10.:11:14.

as an anomaly that there is a difference in the national insurance

:11:15.:11:16.

rates for self-employed and be employed. The points you are making

:11:17.:11:23.

is, a lot of the people are counted as self-employed are only there

:11:24.:11:28.

because of the financial crash? Yes, we were hearing about the resilience

:11:29.:11:32.

of the economy, but who is paying for that resilience? It is low paid

:11:33.:11:38.

workers. Many of those low-paid workers are among the newly created

:11:39.:11:42.

self-employed, which we have seen huge reforms and restructuring in

:11:43.:11:46.

the labour market since the recession and since the crash of

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almost ten years ago. One of the consequences of that is the

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combining of those effects with welfare reform and sanctions and the

:11:58.:12:01.

punitive system there is now has forced the lot of people into

:12:02.:12:06.

self-employment. So your point would be, we still have a mental image of

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self-employed people, quite a middle-class. Not the same people

:12:11.:12:16.

who were there before 2008, this is people on low income who were driven

:12:17.:12:22.

into it by the financial crisis? As research based in Scotland is

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showing, a lot of those newly created self-employed people are not

:12:26.:12:32.

earning the minimum wage. A lot of them are using self-employment as

:12:33.:12:37.

opposed to benefits and benefit sanctions. We are also seeing, they

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are not reaching the levels of the national minimum wage, so what were

:12:43.:12:50.

the implications of setting thresholds of 16,500 B for people on

:12:51.:12:53.

low incomes and those who are just tipped over that 16,000 threshold,

:12:54.:12:58.

are seeing an increase in their contributions. The Chancellor

:12:59.:13:03.

saying, it will only be 60p a week. People are still to do the numbers

:13:04.:13:10.

on what that means. If you are just tipping into profitability in your

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owner occupied, sole trader capacity, you will be hit again. The

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biggest increase in self-employment is women leaving formal or paid

:13:19.:13:23.

employment for all sorts of reasons, and during sex discrimination. But

:13:24.:13:28.

those women are amongst those very low earners. Let's be more positive,

:13:29.:13:37.

the OBR forecast said we are over the recession but they are not

:13:38.:13:42.

forecasting a recession as a result of Brexit. The OBR figures are

:13:43.:13:47.

supposed to be independent of the government. They are showing no

:13:48.:13:51.

Brexit effect until right out until 2022?

:13:52.:13:56.

The OBR forecasts are no better than anybody else's. The economists are

:13:57.:14:02.

no better than forecasting the weather man, but actually the

:14:03.:14:07.

weatherman or improved! We can't take it as gospel. They are not

:14:08.:14:11.

forecasting that Brexit is going to push us into recession, they are

:14:12.:14:15.

forecasting that it is going to read juice growth, therefore it will

:14:16.:14:19.

reduce earnings and tax revenues. -- reduce growth. It is just forecasts,

:14:20.:14:29.

and corrected by 2020. It is corrected just before the next

:14:30.:14:33.

general election. Howard Davies say that, they are completely

:14:34.:14:38.

independent! You will get a row for that. I shall next time I see him.

:14:39.:14:44.

But I think the Chancellor will be clinging to that. The Chancellor

:14:45.:14:49.

said he will build up reserves against Brexit uncertainty. Now,

:14:50.:14:53.

Britain doesn't have reserves. What we have is borrowing, we have that.

:14:54.:14:57.

What he is doing is borrowing less at the moment so that he can borrow

:14:58.:15:01.

more later, and that is how he is going to get us through the problems

:15:02.:15:06.

of Brexit. Should they arise. We will be back with both of you later

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on. Let's get reaction to

:15:08.:15:08.

Philip Hammond's Budget speech from the Scottish Secretary David

:15:09.:15:10.

Mundell. David, first of all, this ?350

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million, can you just clarify, that's over three years, is it? Yes,

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it is. It is through the 2021. It involves a combination of capital

:15:28.:15:32.

and revenue. But combined with the ?800 million that came with the

:15:33.:15:35.

Autumn Statement, it means that the Scottish Government have over ?1

:15:36.:15:39.

billion extra which they didn't anticipate having this time last

:15:40.:15:44.

year. So it is additional money, it means that there are not excuses for

:15:45.:15:48.

not doing the things that need to be done in Scotland in relation to

:15:49.:15:53.

health and education, in relation to bring forward significant capital

:15:54.:15:56.

projects. And with the powers which made this year's Scottish Budget so

:15:57.:16:01.

historic and significant, the Scottish Government have the

:16:02.:16:05.

resources available to do what they say they need to do in Scotland.

:16:06.:16:10.

Now, we have been hearing from Angela O'Hagan how a lot of people,

:16:11.:16:14.

not just in Scotland but throughout the UK, who are now self-employed

:16:15.:16:19.

Afri ended up being there because of the recession, they have been driven

:16:20.:16:26.

out of the labour force. How can you justify increasing National

:16:27.:16:28.

Insurance contributions for groups of people, some of whom are only

:16:29.:16:32.

there as a result of the recession? Firstly, as your piece did

:16:33.:16:37.

acknowledge, nobody earning less than ?16,500 will be affected by

:16:38.:16:42.

these measures. But the underlying approach, which Philip Hammond has

:16:43.:16:46.

that outcome is one of fairness. People who are currently

:16:47.:16:49.

self-employed are often paid thousands of pounds less in National

:16:50.:16:53.

Insurance companies than people doing the same job who are employed.

:16:54.:16:58.

In the past, there were different arrangements for pensions and other

:16:59.:17:01.

benefits if you are self-employed compared to if you were on the PAYE

:17:02.:17:08.

system. That is not the case as much now. And therefore it is a measure

:17:09.:17:13.

that is based on treating people who are doing the same job, getting the

:17:14.:17:19.

same income, fairly. Oil and gas, there were hopes amongst some in the

:17:20.:17:21.

Scottish Government that measures would be announced to help the

:17:22.:17:27.

particular tax issues of smaller companies taking over fields which

:17:28.:17:32.

are depleted. Instead there's a review. How serious is that review?

:17:33.:17:36.

Will there be specific measures coming from it, and when will that

:17:37.:17:41.

be? It is a very serious attempt to deal with the issue of smaller

:17:42.:17:49.

fields with the decommissioning in the North Sea. It is bringing

:17:50.:17:52.

forward a significant group of experts to look at how we can

:17:53.:17:59.

maximise the take in terms of oil. Obviously from a Government point of

:18:00.:18:02.

view in terms, you know, of ensuring that the industry can go on for as

:18:03.:18:07.

long as is possible in the North Sea. And of course we will act on

:18:08.:18:12.

the recommendations. We already took forward very significantly with the

:18:13.:18:18.

?2.3 billion package that there has been over the last couple of years.

:18:19.:18:22.

The recommendations and lobbying that we have had from the industry.

:18:23.:18:26.

This is a really important industry, not just for Scotland, for the whole

:18:27.:18:30.

of the UK, and we take it very, row seriously. What is the timescale for

:18:31.:18:36.

this? If there are people running some of these small companies, it is

:18:37.:18:39.

because they haven't paid a lot of tax in the past so they don't get

:18:40.:18:43.

the full effect of tax benefits when it comes to decommissioning, and you

:18:44.:18:47.

want to do something about that. If they are watching this now I'm

:18:48.:18:51.

thinking, well, when we going to see specific measures announced? When is

:18:52.:18:55.

that going to be? There is no reason for measures that are recommended to

:18:56.:19:00.

be adopted as we move forward. We have heard from the Chancellor both

:19:01.:19:07.

in the autumn and now that the main fiscal event will now be the autumn

:19:08.:19:10.

Budget, as the Budget will be in the autumn. So there is no reason why

:19:11.:19:14.

measures that come forward from this group cannot be brought forward in

:19:15.:19:18.

this Budget. There is no reason why they cannot be brought forward

:19:19.:19:23.

before them, actually, if specific things are identified... Before the

:19:24.:19:27.

Budget or in the Budget? I don't see any reason why they can't be brought

:19:28.:19:30.

forward before the Budget if there are specific things that require to

:19:31.:19:34.

be done can be identified and agreed upon. One of the problems with the

:19:35.:19:39.

new measures on National Insurance for the self-employed is that you

:19:40.:19:44.

promised in your election manifesto not to do this. What the election

:19:45.:19:50.

manifesto referenced was income tax and class one National Insurance

:19:51.:19:58.

contributions. This relates to class or National Insurance contributions.

:19:59.:20:01.

I don't want to get into a technical argument. We should read

:20:02.:20:05.

Conservative manifesto is with a magnifying glass, should we? What

:20:06.:20:09.

the manifesto was quite clear about was, in relation to income tax and

:20:10.:20:13.

in relation to National Insurance contributions within the class one,

:20:14.:20:17.

within the PAYE system more generally. This relates to class

:20:18.:20:21.

four National Insurance companies, it has affected the self-employed

:20:22.:20:26.

and we have set out the basis for doing that as fairness to ensure

:20:27.:20:30.

that people doing the same job, getting roughly the same income and

:20:31.:20:33.

doing the same. You will still be at use of breaking a manifesto pledge.

:20:34.:20:40.

So you will store but used. What pledge would you like the manifesto

:20:41.:20:46.

-- the SNP to break in their manifesto? I move forward in hope

:20:47.:20:53.

rather than expectation on that, I think that it is a demonstration,

:20:54.:20:57.

the benefits that Scotland gets from being part of the UK, I want to see

:20:58.:21:02.

that money used to improve services. You have an open invitation to say

:21:03.:21:06.

they should stop talking about another referendum, and you didn't

:21:07.:21:11.

take it! We were referencing the Budget, Gordon. Of course I take any

:21:12.:21:16.

opportunity to say to take the threat of another independence

:21:17.:21:19.

referendum of the table. On a second prompting, thank you, David!

:21:20.:21:21.

Let's get some economic analysis now.

:21:22.:21:23.

Professor Graeme Roy from the Fraser of Allander Institute

:21:24.:21:25.

at the University of Strathclyde has been crunching the numbers.

:21:26.:21:29.

What flies out at you, Graeme? A couple of things are quite

:21:30.:21:36.

interesting. Firstly, the big forecast upward revision for this

:21:37.:21:40.

year is growth in 2017 up to 2%. That essentially the ABI have taken

:21:41.:21:45.

up of economic performance over the next few years. Essentially the

:21:46.:21:48.

economy end up actually back where we thought it was in the Autumn

:21:49.:21:52.

Statement. So there is a bit more timing rather than actually any

:21:53.:21:56.

strength in the overall economy. Do you think that reflects Brexit or

:21:57.:22:01.

your expectations about Brexit? Two things, if you go back to the

:22:02.:22:05.

forecast before Brexit, even under the OBR numbers predicted it was

:22:06.:22:08.

smaller than it was prior to the referendum. The Brexit effect is

:22:09.:22:14.

still there. Where we have done what we did previously, we have not

:22:15.:22:18.

forecast much further wrote about what the Brexit situation could look

:22:19.:22:21.

like, what the trade relationships could be like for the UK once

:22:22.:22:26.

Article 50 is triggered. So there is a bit of almost Wei Tan see, because

:22:27.:22:32.

we don't actually yet know what the settlement will be -- wait and see.

:22:33.:22:37.

For people confuse like I am about some of this stuff, is it that no

:22:38.:22:42.

matter how important Europe is, trade just isn't that important, and

:22:43.:22:45.

it's going to make a huge difference to the GDP? You have to put it in

:22:46.:22:51.

context. The vast majority of economic output a country produces

:22:52.:22:55.

is produced domestic Rhiannon sold domestic league, and also other

:22:56.:22:58.

trading partners that we have -- domestic output is sold domestic

:22:59.:23:04.

league. It is a damper on growth in the long run, what that might mean

:23:05.:23:08.

for things like productivity and skull migration etc. It is more that

:23:09.:23:11.

the economy would be small in the future. A little bit smaller because

:23:12.:23:18.

of that affects, but the long-term effects, as you say, could be, how

:23:19.:23:22.

does limiting immigration affect productivity in the economy, for

:23:23.:23:27.

example, how do tariffs affect not just what we pay for things but the

:23:28.:23:31.

impulse to British industry. Very much so. You see that also, where

:23:32.:23:34.

that comes through is in the borrowing figures for the next three

:23:35.:23:38.

years as well. Again he has been able to rely on the fact that the

:23:39.:23:42.

borrowing figures look better this year than they did in November.

:23:43.:23:46.

Looking into what happens at the end of the decade, you are back exactly

:23:47.:23:50.

where the OBR were forecasting back in November. There is an uplift this

:23:51.:23:56.

year, but a substantial increase in borrowing predicted in November.

:23:57.:23:59.

Brexit is still there, and the Government will be borrowing much

:24:00.:24:02.

more over the next few years than we thought they were before the

:24:03.:24:07.

referendum. Which is why balancing the Budget now seems to have been

:24:08.:24:11.

officially put off into the never never. Yes, they had been thinking

:24:12.:24:14.

about, George Osborne had been planning for a surplus of ?10

:24:15.:24:21.

billion by 2020, at the Government will still be borrowing. But they

:24:22.:24:25.

will not be balancing even in the next Parliament. Exactly, further

:24:26.:24:29.

consolidation or started is going to continue well into the 2020s. Oil

:24:30.:24:33.

and gas, it is difficult talking about, he says some measures have

:24:34.:24:40.

come forward even before the Budget. In terms of revenues, though, the

:24:41.:24:44.

figures showed as a percentage of GDP, they are not expecting any

:24:45.:24:48.

revenues right until the end of the forecast period, 2022. They are

:24:49.:24:54.

expecting some revenues. ?1 billion, that is what they think will happen

:24:55.:25:01.

in the 20s. In contrast to previous years where you have oil revenues of

:25:02.:25:06.

?12 billion, you are really looking at essentially North Sea revenues no

:25:07.:25:10.

longer really making a significant fiscal contribution to the UK

:25:11.:25:15.

economy. A percentage of GDP evens out. And also there are costs. Some

:25:16.:25:20.

of the big petroleum revenue tax receipts or in the negative, that

:25:21.:25:23.

presumably reflects the commissioning, does it? Protected

:25:24.:25:29.

revenues will actually be negative in 2016-17. And the rise becomes

:25:30.:25:33.

more positive in the next few years. You are talking about hundreds of

:25:34.:25:36.

millions of pounds rather than billions of pounds. The basic point

:25:37.:25:42.

about this, though, is that in any debate over Scotland, whether it

:25:43.:25:45.

stays part of the UK or whether it is independent, what it would have

:25:46.:25:48.

money to spend on, it is not just that the oil prices have fallen a

:25:49.:25:52.

bit. Because of decommissioning and the running out in the North Sea,

:25:53.:26:01.

North Sea revenues are never going to be a particularly important

:26:02.:26:03.

factor any more, they? Effectively, take them out of the debate. It is

:26:04.:26:06.

highly unlikely you will get significant revenues now from the

:26:07.:26:08.

North Sea. You are right, prices might recover, they might take a

:26:09.:26:11.

while to recover, but you are looking up the field entering really

:26:12.:26:15.

quite mature stage. So the actual production levels coming out are

:26:16.:26:18.

actually going to be relatively smaller, can the new windfall. They

:26:19.:26:22.

peaked in 1999 and have fallen since then -- continuing to fall. Once you

:26:23.:26:26.

start going to decommissioning, then you start to offset the tax revenues

:26:27.:26:31.

paid in the past, so it becomes that negative. What do you make of the

:26:32.:26:36.

lip Amman? Was he boring for Britain like he wants to do?! -- of Philip

:26:37.:26:41.

Hammond. As an economist, we are quite used to be boring! He does

:26:42.:26:53.

manage to give of this are, move on, nothing to see here. The Budget was

:26:54.:26:55.

arguably one of the most boring we have had in years. Grey, thank you

:26:56.:26:57.

very much indeed. As usual, politicians have been

:26:58.:26:59.

giving their reaction to the Budget. Our Westminster Correspondent David

:27:00.:27:01.

Porter is with one of them. I'm sorry, David is not there. Let's

:27:02.:27:12.

talk to Mike Tholen, head of upstream policy at Oil and Gas UK.

:27:13.:27:16.

I'm sure that David Polter will be with an MP later on. What do you

:27:17.:27:22.

make of the announcements on oil and gas? Were you hoping for something a

:27:23.:27:26.

little bit more definite? I think we have had the good news that the

:27:27.:27:29.

Treasury recognise the problem that we face, and it is one of trying to

:27:30.:27:33.

get the market to work really well for buying and selling of assets in

:27:34.:27:37.

the North Sea, and so from that point of view, to understand the

:27:38.:27:39.

problem and offered to help resolve it is probably the best progress we

:27:40.:27:44.

can see in this Budget. The problem is a bit technical. As I understand

:27:45.:27:48.

it, the problem is that a lot of the fields which roamed by the oil

:27:49.:27:52.

majors have been bought by small companies. They get tax relief and

:27:53.:27:55.

decommissioning, but because they haven't owned them for ever, they

:27:56.:27:59.

haven't paid a lot of tax, so there needs to be some mechanism where

:28:00.:28:03.

they can get the full benefits of taking on decommissioning, is that

:28:04.:28:07.

roughly it? Pretty much. The problem is that for many companies that have

:28:08.:28:18.

on the field for a while, they see a different value from decommissioning

:28:19.:28:20.

than the companies that might want to buy the field. What we are hoping

:28:21.:28:24.

as we can get to a point where we can resolve that and make it easier

:28:25.:28:26.

to buy and sell fields in the North Sea. Why is it advantageous to

:28:27.:28:29.

encourage buying and selling of deals? Well, like in any market or

:28:30.:28:31.

any business, you want a diversity of investors in the market trying to

:28:32.:28:34.

do a diversity of things. And also it is mature, and in many cases some

:28:35.:28:39.

of the majors are pursuing really exciting opportunities west of the

:28:40.:28:42.

Shetlands and in deep and difficult waters. And maybe smaller investors

:28:43.:28:46.

have better appetites for some of the fields and opportunities around

:28:47.:28:51.

existing fields. Why is that? Is it because they don't have to make so

:28:52.:28:55.

much money? For example, an oil field but it's one it is off running

:28:56.:29:02.

out, BP or Gel, it is been at -- peanuts for them.

:29:03.:29:11.

It is around appetite and where you can best put your resources. Some of

:29:12.:29:18.

the companies are learning how to manage oil reserves late in life and

:29:19.:29:25.

making a success out of that. I don't know if you could hear David

:29:26.:29:30.

Mundell a few minutes ago, but he said this review, there might be

:29:31.:29:37.

some actual measures that could be announced, either in the new budget

:29:38.:29:42.

date in the autumn, or he said even before that, is it something you

:29:43.:29:47.

would welcome? We would very much like the Treasury and the experts to

:29:48.:29:51.

crack on with this. It is a problem we have all known about for quite

:29:52.:29:57.

awhile. The longer we wait, you might hold deals that could shape

:29:58.:30:00.

the investment and the future the North Sea. What do you think the

:30:01.:30:06.

prospects are for activity in the North Sea over the next few years.

:30:07.:30:10.

It has been an extremely difficult period over the last couple of

:30:11.:30:15.

years, are things going to pick up or chant along at roughly the level

:30:16.:30:21.

they are now? We have seen a transformation in the North Sea over

:30:22.:30:27.

the last two years. We have seen companies raise their efficiency and

:30:28.:30:31.

competitiveness and we have seen the fruits of that starting to be

:30:32.:30:37.

delivered. We have seen production increasing by 15%. There is still a

:30:38.:30:41.

need for further activity and further investment and that is why

:30:42.:30:49.

we are looking to this Chancellor to attract investors to the North Sea.

:30:50.:30:53.

As usual, politicians have been giving their reaction to the Budget.

:30:54.:31:03.

What do you make of it? If you are one of the families who are

:31:04.:31:10.

struggling, this budget does not thing. It does not think to track

:31:11.:31:15.

all the rises of inflationary have been seeing. The price of tea and

:31:16.:31:21.

butter has gone up by 15%. This will be worse when it comes to Brexit.

:31:22.:31:27.

Why is the price of butter going to get worse as a result of Brexit? The

:31:28.:31:34.

way imports and exports work, increased tariffs, we will have less

:31:35.:31:39.

support for agriculture. We don't know any of that yet, do we? It is a

:31:40.:31:45.

pretty safe bet those things will happen. We will see installation.

:31:46.:31:50.

When people go into the supermarket, we will be spending a few quid extra

:31:51.:31:54.

every week because of the increased price of food. It has already gone

:31:55.:32:04.

up over the last three months. The Chancellor has done nothing to

:32:05.:32:06.

recognise the impact of Brexit on normal people. But the OBR is not

:32:07.:32:14.

forecasting any impacts from Brexit, and they are independent from the

:32:15.:32:19.

government. You cannot then expect the government is so things will be

:32:20.:32:25.

worse than the OBR are suggesting? Those are the GDP figures, it is the

:32:26.:32:30.

price consumers will face when they go to the shop. People don't care

:32:31.:32:37.

what the headline GDP figures are. I didn't see any, I must admit, I have

:32:38.:32:42.

had time to look at the data, but the inflation forecasts were not

:32:43.:32:46.

particularly high? Inflation has already started to bite. It is 2%,

:32:47.:32:57.

isn't it? Inflation is about 2%. Can you hear me? Our new go. Inflation

:32:58.:33:12.

is about 2%? In terms of inflation, if wages are not going, this is the

:33:13.:33:18.

worst period we have seen for 70 years. According to the Chancellor,

:33:19.:33:24.

wages are growing faster than inflation? According to the

:33:25.:33:30.

Chancellor, but people are not feeling that. If you speak to people

:33:31.:33:35.

in the street... I am sorry, you cannot say wages are declining and

:33:36.:33:39.

then say it maybe they are going up faster than inflation but people are

:33:40.:33:44.

not feeling it, it doesn't make sense. I didn't say wages were

:33:45.:33:51.

declining, I said it was the lowest period of wage growth in 70 years.

:33:52.:33:56.

The Chancellor is right, he has more people back in work and the

:33:57.:34:04.

unemployment figures have increased, but the GDP figures are not helping

:34:05.:34:08.

people at the bottom of the pile. Families will be feeling that. If

:34:09.:34:13.

you ask people how are their budgets, how are they managing? That

:34:14.:34:18.

is what they were said to, they are worrying and they cannot save and

:34:19.:34:22.

this budget has done nothing to recognise that. More money for the

:34:23.:34:25.

Scottish Government, you welcome that? It isn't really though is it?

:34:26.:34:32.

Since 2010 that 11 we have had a real terms cut of 2.9 billion and

:34:33.:34:39.

even for David Mundell to suggest we are getting 1 billion extra, it

:34:40.:34:46.

doesn't touch the sides. He suggested ?350 million extra? Sorry,

:34:47.:34:51.

I misheard him. It is a knock on effect of the Barnett formula, money

:34:52.:34:56.

we will need to spend, but nothing in comparison to ?2.9 billion. We

:34:57.:35:02.

will have to leave it there, my apologies you could not hear me. I

:35:03.:35:06.

don't know what is going on behind you, but there is an incredible

:35:07.:35:12.

racket. People concerned they are not getting their pensions, so they

:35:13.:35:14.

are here protesting. Ray Perman and Dr Angela O'Hagan

:35:15.:35:19.

are still with me. Oil and Gas UK, David Mundell said

:35:20.:35:30.

there might be action before the budget, will it be OK? I don't think

:35:31.:35:40.

it will amount to very much. We will see in the budget in November now.

:35:41.:35:47.

It is quick for the review of experts to calculate tax incentives

:35:48.:35:50.

that will make a real difference. I don't think it will amount to a huge

:35:51.:35:57.

amount. What is your take on what Kirsty Blackman was saying against

:35:58.:36:01.

incomes? Incomes at the moment I think are going up in real terms.

:36:02.:36:05.

But there has been a long period where they have been stagnating or

:36:06.:36:09.

falling, so where are we now on that front? Kirsty has just voted the ISS

:36:10.:36:15.

figures pointing to stagnation, that is not just UK, put across Europe.

:36:16.:36:25.

-- IFS. So I put two people's living standards alongside increases and

:36:26.:36:29.

costs of living. Add to the structuring and hollowing out... But

:36:30.:36:34.

that is not happening now, is it not the case real incomes are going up

:36:35.:36:40.

now? Not really, if we look at the recent public sector pay awards. We

:36:41.:36:46.

are still looking at freezes or stagnation across the public sector.

:36:47.:36:50.

Again, majority of employees are women. Add to that, the changes in

:36:51.:36:56.

employment contracts terms and conditions and so on. We are seeing

:36:57.:37:00.

an increase in flexibility in the labour market, but that means zero

:37:01.:37:05.

hours contracts, and reduction in working hours and there might be

:37:06.:37:08.

more people in employment, we have seen the figures for women's figures

:37:09.:37:14.

increase but we need to look at the character of those jobs. Precarious,

:37:15.:37:20.

low pay, low skills. The figures show incomes are rising, so you are

:37:21.:37:24.

saying it is misleading because of the composition of how this is

:37:25.:37:29.

happening? When you look at household budgets increasing as a

:37:30.:37:34.

result of wages, then what we are seeing is an increase of in work

:37:35.:37:39.

poverty. People who are working, people who have jobs are amongst

:37:40.:37:47.

those who are experiencing more poverty than previously. So we are

:37:48.:37:51.

not seeing an increase in wages that is offsetting... One glaring

:37:52.:37:58.

omission in that budget is there was some expectation the Chancellor

:37:59.:38:01.

might announce something to mitigate the freeze in benefits. Because of

:38:02.:38:07.

the just getting by people as Theresa May calls them? As far as I

:38:08.:38:13.

could see, there wasn't anything at all? A number of things that were

:38:14.:38:17.

flagged that will possibly coming in the budget that have not

:38:18.:38:22.

materialise, more for the just managing, the jams as Theresa May

:38:23.:38:25.

called them. Very little for them. The other one was the gig economy,

:38:26.:38:31.

it was flagged perhaps the Chancellor would bring in some

:38:32.:38:36.

measures to mitigate against zero hours contracts for example. There

:38:37.:38:41.

was nothing on that. And the third, you remember Theresa May when she

:38:42.:38:45.

became Prime Minister said she was going to do about fairness in the

:38:46.:38:50.

workplace and particularly excess rises in executive pay. Nothing in

:38:51.:38:58.

that either. Workers on the board... There was going to be workers on the

:38:59.:39:03.

boards of companies, did she have a rush of blood to the head? I think

:39:04.:39:09.

her idealism was quickly tempered by her colleagues and quickly

:39:10.:39:13.

forgotten. Yes, but it might be a theme she wants to come back to

:39:14.:39:17.

because that is the way the Conservatives want to position

:39:18.:39:21.

themselves isn't it, Angela? By saying we may not share some of the

:39:22.:39:26.

liberal values like Jeremy Corbyn, but we are the party for working

:39:27.:39:30.

people and we will look to do something like that, but there was

:39:31.:39:33.

very little of that in Philip Hammond's budget? There was nothing

:39:34.:39:40.

for the people who are just about managing. Giving groups of people

:39:41.:39:44.

names like that makes it easier to ignore them and move on. People who

:39:45.:39:48.

are affected by the underinvestment in social care and the stripping out

:39:49.:39:52.

of social care, they will be disappointed to see... There was a

:39:53.:39:57.

shed load of money for social care in England? Not really, not in the

:39:58.:40:02.

scheme of things of what is needed. It is not really what those who have

:40:03.:40:08.

been campaigning and July in desperate need of social care, will

:40:09.:40:13.

think. We have to move on, but that does need to be rethought, it is not

:40:14.:40:22.

just about money is it? It is one of the impacts on the NHS because if

:40:23.:40:26.

there is no place to go into adult care, he was talking particularly

:40:27.:40:31.

about older people, they remain in hospital beds and that blocks of the

:40:32.:40:36.

people coming in for emergency treatment or elective operations.

:40:37.:40:39.

Not to scare people, Angela, the fact there is a review on this, we

:40:40.:40:45.

might be asked to pay for it through an insurance scheme? The tax

:40:46.:40:51.

giveaways and corporation tax were flag, a tax giveaway that could have

:40:52.:40:55.

funded social care. We will be back with you later on.

:40:56.:40:58.

Back to Westminster, and our correspondent David Porter

:40:59.:41:00.

I do indeed. That MP is Iain Murray from Scottish Labour who has joined

:41:01.:41:14.

me at a very lively College Green this afternoon. As far as Labour is

:41:15.:41:20.

concerned, what is or not in this budget for Scotland? It was a budget

:41:21.:41:28.

that we have not been said already that we have not heard already. Debt

:41:29.:41:33.

will still increase. Crucially, the Chancellor didn't mention Brexit

:41:34.:41:38.

once which is the biggest economic issue facing the entirety of the

:41:39.:41:41.

country for a generation. In terms of Scottish workforce, the increases

:41:42.:41:48.

to national insurance for the self-employed will be hard-hitting,

:41:49.:41:51.

those people who drove the economy after the crash. Taxi drivers,

:41:52.:41:56.

plumbers, joiners, builders, those workers who will be hard hit by this

:41:57.:41:59.

budget and they are the drivers of the economy at the moment. The fact

:42:00.:42:04.

the Chancellor is making it specifically about the

:42:05.:42:07.

self-employed. It is not fair they get a better deal than others, they

:42:08.:42:11.

use the services by the state so they should pay for them.

:42:12.:42:15.

Self-employed people don't get holiday pay or sick pay. A whole

:42:16.:42:21.

host of self-employed people forego by not being an employee. It is easy

:42:22.:42:27.

to say they use services and don't contribute, they do. All of those

:42:28.:42:32.

traditional self-employed people do. The government have forced people

:42:33.:42:35.

into self-employment over recent years. Has been a massive explosion

:42:36.:42:41.

of self-employed people, the government failed to transform the

:42:42.:42:45.

economy the way they should have done in 2010. You are a UK

:42:46.:42:49.

Government minister and you are saying since Theresa May became

:42:50.:42:51.

Prime Minister, the Scottish Government has got more than ?1

:42:52.:42:56.

billion extra they were not banking on. They would argue it shows they

:42:57.:43:00.

are looking after the union and they are doing a good by Scotland? That

:43:01.:43:05.

is the way the Barnett formula works and the Labour Party has fought for

:43:06.:43:10.

the Barnett formula because of the consequential is for Scotland. But

:43:11.:43:15.

the key aspects in terms of some of the statistics Diks, the Scottish

:43:16.:43:19.

economy growth still lags behind the United Kingdom. So the additional

:43:20.:43:23.

money going to Scotland must be spent on improving productivity and

:43:24.:43:27.

improving the Scottish economy. To do that, to take away the

:43:28.:43:34.

uncertainty of a second independence referendum, at least up the level of

:43:35.:43:39.

the UK, if not better. You mentioned it in your first answer, this is a

:43:40.:43:44.

budget which has to be seen through the prism of Brexit? He didn't

:43:45.:43:48.

mention Brexit, it is extraordinary it didn't come out of the mouth of

:43:49.:43:52.

the Chancellor in a speech that was almost an hour. He has squirrelled

:43:53.:43:58.

away a ?60 billion Brexit fund. It is a Brexit value fund because we

:43:59.:44:02.

were told it would be wonderful and Rosie. It will cost 2% in growth

:44:03.:44:08.

until 2020, and it will cost a huge amount in deficit and debt and he

:44:09.:44:12.

has that to put away ?60 billion because of the Brexit headwinds. The

:44:13.:44:16.

Chancellor should have said, for the benefit of the economy, I will tell

:44:17.:44:20.

you what Brexit means to the United Kingdom economy and this is how we

:44:21.:44:23.

will will solve it. First, he could have done something about EU

:44:24.:44:27.

nationals, then he should have ploughed every penny into

:44:28.:44:30.

investments at the country can be in a better position post Brexit. We

:44:31.:44:39.

will have to leave it there. Thank you for your positions and

:44:40.:44:41.

projection. For the moment, back to the studio.

:44:42.:44:46.

It looks like you have got a personal demonstration against you!

:44:47.:44:52.

I managed to annoy a lot of people in life, it looks like I have

:44:53.:44:54.

annoyed a few more today! Philip Hammond told the Commons that

:44:55.:45:14.

the current low taxes paid by self-employed workers were unfair.

:45:15.:45:18.

It raises a net ?145 million per year. Mr Deputy Speaker, that is an

:45:19.:45:27.

average of around 60p per week herself employed person in this

:45:28.:45:33.

country. According to the Federation of Small Businesses, more than

:45:34.:45:36.

250,000 people in Scotland are self-employed.

:45:37.:45:38.

First of all, let's just get this straight, you are only affected by

:45:39.:45:50.

this if you make ?16,000 per year or more? It is the slice of your income

:45:51.:45:55.

that is between the lower earning band, which is about eight grand,

:45:56.:46:02.

which up to the upper earnings limit which is rising to 45 grand from

:46:03.:46:08.

next month. Who is going to be affected? What would you have to be

:46:09.:46:12.

making before you are going to be affected by this? It is a

:46:13.:46:16.

percentage. You are paying 9% at the moment on that slice of your income,

:46:17.:46:20.

it is going to go up to 11% in two years' time. I did a very quick

:46:21.:46:28.

calculation on this, and I think if everything stays the same, you will

:46:29.:46:33.

probably talking about an extra ?740 at the top end of the spectrum. Is

:46:34.:46:40.

that significant? Is that going to affect people in a significant way?

:46:41.:46:44.

This is a big deal, you are right, a quarter of a million people in

:46:45.:46:47.

Scotland are self-employed. To put it in the spectre, that is 80,000

:46:48.:46:54.

more than work in the NHS. And these are people who risk their homes,

:46:55.:46:58.

they risk their assets, their savings, their family security and

:46:59.:47:01.

everything just to go it alone and get out there and do something. It

:47:02.:47:04.

is exactly the sort of people we should be backing rather than

:47:05.:47:08.

singling out for such... Special treatment. I Kim section to the idea

:47:09.:47:12.

that they are freeloading or getting something for nothing. -- I take

:47:13.:47:16.

exception to the idea. Although you are paying less, we don't have

:47:17.:47:21.

statutory sick pay or paternity leave or employment benefits. Philip

:47:22.:47:25.

Hammond's arguments seem to be because of the state guaranteed

:47:26.:47:30.

pension that in the past there was a reason because people had to pay

:47:31.:47:33.

into pension funds and all the rest of it, but that reason is not there

:47:34.:47:38.

any more. You reject that idea? There is still an awful lot that we

:47:39.:47:41.

have to pay for. Whether or not it is the thing is that the state fund,

:47:42.:47:46.

like maternity leave, or things that the state have told employers to

:47:47.:47:51.

provide, like pension contributions, these are things which, regardless

:47:52.:47:55.

of who is paying for them, self-employed individuals have to

:47:56.:47:58.

draw out of their own pocket. Typically incomes among the

:47:59.:48:00.

self-employed are not vast, and then it is going to have to be found from

:48:01.:48:06.

somewhere. I think if the self-employed are going to start

:48:07.:48:10.

paying more like employees, it is a reasonable question to ask if they

:48:11.:48:13.

are not going to get the same sort of benefits. Do you have any idea

:48:14.:48:18.

how much or what proportion of self-employed people in Scotland are

:48:19.:48:26.

earning under 12 or ?15,000 per year? There is a big variation. Some

:48:27.:48:29.

are earning very small amounts because it is a multiple income

:48:30.:48:34.

source. There are others, about 10% of our members we reckon, and

:48:35.:48:40.

between ?2000 and ?5,000 per week. I think the average is about 19,000

:48:41.:48:53.

per month. -- sorry, 1800 thousand -- ?1800 per month. The income

:48:54.:48:59.

levels aren't massive, they are not generous. And it is the sort of

:49:00.:49:06.

level of income where small increases, when you look at

:49:07.:49:09.

everything else at the moment, really can make the difference. I do

:49:10.:49:16.

wonder why, with this employment review done by Matthew Taylor, Wiebe

:49:17.:49:19.

couldn't have waited to announce these changes. Thank you.

:49:20.:49:21.

Back to Wesminster now, and David Porter.

:49:22.:49:31.

Welcome back to College Green. Apologies for the lateness of

:49:32.:49:37.

acknowledging Hugh, it is quite a noisy atmosphere here this

:49:38.:49:40.

afternoon. We don't normally have this type of reaction to a Budget.

:49:41.:49:44.

What do the Liberal Democrats in Scotland think of it? To tell me is

:49:45.:49:50.

their spokesman Alistair Carmichael. Alistair, what does this Budget do

:49:51.:49:54.

or not do for Scotland? The one thing you see coming out of this

:49:55.:50:01.

Budget is just how out of touch this Conservative government, Philip

:50:02.:50:03.

Hammond is the Chancellor of the Exchequer, really is. It is quite

:50:04.:50:06.

incredible. This is his first opportunity to say something to the

:50:07.:50:11.

sectors of our economy that really need reassurance since Theresa May's

:50:12.:50:18.

Mansion House Speech on the subject of Brexit, determination to take out

:50:19.:50:21.

of the Single Market, her willingness in walking away without

:50:22.:50:25.

a deal. Whether it is that the City of London or the farmers and

:50:26.:50:30.

fishermen in Orkney and Shetland, my constituency, he had absolutely

:50:31.:50:34.

nothing to say. They are out of touch and they are out of ideas.

:50:35.:50:38.

Realistically, what could he have said, when the negotiations haven't

:50:39.:50:42.

even started yet? He could have made it very clear that he has a pathway,

:50:43.:50:47.

a determination, as the financial services sector, for example, is not

:50:48.:50:55.

going to be the edge of a cliff. There are farmers and fishermen who

:50:56.:50:58.

rely on that access to the Single Market for their exports, they are

:50:59.:51:02.

not going to be left at a competitive disadvantage or have a

:51:03.:51:06.

20% tariff on their goods being sold into these markets in the future.

:51:07.:51:09.

That is what they needed to hear from him today, and he had

:51:10.:51:13.

absolutely nothing to say. But, you know, it was when he got on to other

:51:14.:51:17.

areas. He was talking about National Insurance changes for the

:51:18.:51:24.

self-employed, for example, that you really saw just how little

:51:25.:51:27.

understanding he has of what life is like for people at the moment. On

:51:28.:51:34.

areas like Uber and other companies that are basically abusing the rules

:51:35.:51:38.

for the self-employed, he should be tackling them. He is instead

:51:39.:51:44.

tackling the window cleaners and the other self-employed people who

:51:45.:51:47.

struggle hard to make ends meet, and they are going to be clobbered again

:51:48.:51:51.

as a result of this Budget today. You talk about him not acknowledging

:51:52.:51:55.

the needs of agriculture and fishing and things like that. Yet he did

:51:56.:51:59.

make a point of saying, we are going to work with the oil and gas

:52:00.:52:03.

industry in Scotland, a large sector there to try and get as much out of

:52:04.:52:10.

that as possible. As far as that sector was concerned, it was a case

:52:11.:52:15.

of tomorrow and nothing today. What we got in fact was a promise that

:52:16.:52:19.

had already been made in previous statements in previous Budgets. The

:52:20.:52:22.

oil and gas industry came forward with a very reasonable and very well

:52:23.:52:27.

thought out ask. Quite a detailed ask. There was absolutely no

:52:28.:52:31.

reference to that today. Again, for the north-east of Scotland in

:52:32.:52:34.

particular, that is an area where the need for support is absolutely

:52:35.:52:40.

urgent. With every week that passes you see more companies in the supply

:52:41.:52:45.

chain, not just the big majors but the supply chain across the

:52:46.:52:48.

north-east, laying people off and closing down businesses. And the

:52:49.:52:52.

Chancellor had absolutely nothing to say to them today. As far as this

:52:53.:52:57.

Budget was concerned, it was treading water. He can't say too

:52:58.:53:00.

much because he doesn't know what position he is going to be in in a

:53:01.:53:03.

few months' time when the negotiations get underway. There are

:53:04.:53:07.

whole reams of areas. I will pick one for you. Climate change, for

:53:08.:53:12.

example, when he could have made a tremendous difference with a very

:53:13.:53:14.

small amount of money. That is something that is not going to be

:53:15.:53:18.

Brexit dependent. He could have come forward and told us how he is going

:53:19.:53:26.

to see the development of wave and tidal power, for example, something

:53:27.:53:28.

that is enormously important for our island communities. Again, the

:53:29.:53:31.

silence was absolutely deafening. As the Carmichael, we have to leave it

:53:32.:53:35.

there. Thank you for your perseverance with our friends behind

:53:36.:53:39.

us -- Alistair Carmichael. From a very noisy and lively College Green,

:53:40.:53:44.

back to you. I think it is your fans, David! I think they are

:53:45.:53:48.

shouting acclamation! It's a nice thought, isn't it?,.

:53:49.:53:55.

Let's get a final word from Ray Perman from

:53:56.:53:57.

the David Hume Insititute, and Dr Angela O'Hagan

:53:58.:53:59.

I think Philip Hammond mentioned Brexit at the beginning of his

:54:00.:54:04.

speech, but he didn't mention it after that. No, as we pointed to the

:54:05.:54:10.

other ways in which it seemed to be in a vacuum. I still enjoying the

:54:11.:54:15.

very noisy women and think it is brilliant they have had such a

:54:16.:54:19.

presence in the whole Budget discussion on International Women's

:54:20.:54:23.

Day, yet again another political decision that has disadvantaged

:54:24.:54:26.

women over the period. As far as Brexit is concerned, where are we on

:54:27.:54:31.

that? And where are we on all of the questions around inequality's going

:54:32.:54:37.

back to your earlier point, the government are positioning

:54:38.:54:41.

themselves for ordinary people, the effects of Brexit will be very

:54:42.:54:45.

significant ordinary people, not least the EU nationals, people who

:54:46.:54:48.

have come here and created a living and their families here in this

:54:49.:54:52.

country. Of course, what Philip Howard would say is, he himself and

:54:53.:54:59.

the OBR were wrong. It simply isn't as bad as everybody says it was

:55:00.:55:04.

going to be. It might be in the future, but as the figures right now

:55:05.:55:07.

are rather confounding for those who said that Brexit would be a

:55:08.:55:12.

disaster. Well, they are. But I think the OBR has already said, you

:55:13.:55:18.

shouldn't, and the Chancellor echoed this, you shouldn't project that

:55:19.:55:21.

into the future. This won't last. We are going to have a problem from

:55:22.:55:26.

Brexit. The other thing about Brexit is, the Government wants to try and

:55:27.:55:29.

start the negotiations, maybe as early as next week but certainly by

:55:30.:55:34.

the end of the month. Is that they have a plan, but as Mike Tyson

:55:35.:55:37.

memorably said, everybody has a plan until they get punched in the face,

:55:38.:55:42.

you know! The Brexit negotiations are pretty unpredictable. We don't

:55:43.:55:49.

know what the effect will be over the next two years on the economy.

:55:50.:55:52.

And there could be ups and downs of things like the pound, for example.

:55:53.:55:56.

Reports come out that some huge, massive impasse for example in

:55:57.:55:59.

negotiations, we are going to have to brace ourselves. Like that. Yes,

:56:00.:56:03.

we have to brace ourselves I think for all sorts of things, whatever

:56:04.:56:09.

happens that exhausted usual level in Scotland, whether it makes it or

:56:10.:56:17.

not. There are lots of unknowns at the moment. The general state of the

:56:18.:56:25.

world economy, and the British economy, on a slightly more cheerful

:56:26.:56:28.

note, we are not there. We might have the shadow of the recession,

:56:29.:56:34.

but things are by and large getting back to something like the way they

:56:35.:56:40.

were before 2007, aren't they? I think Graeme Morrice said earlier in

:56:41.:56:44.

the programme, you know, most of the GDP we generate is domestic. So

:56:45.:56:50.

there are problems in the outside world, we don't know about trade,

:56:51.:56:54.

but it is not the whole economy. So the rest of it is doing reasonably

:56:55.:56:58.

well at the moment, but there are problems, as we mentioned earlier,

:56:59.:57:02.

consumer spending is slowing, consumers are borrowing, and that

:57:03.:57:06.

can't go on for a very long time. So there are lots of difficulties

:57:07.:57:09.

there. I think it is well for so saying some things about Scotland.

:57:10.:57:14.

There wasn't much in the Budget that Scotland can change. So for example,

:57:15.:57:20.

we now have in Scotland the ability to change income tax, but we don't

:57:21.:57:23.

have the ability to change National Insurance contributions. So they

:57:24.:57:28.

will just happen? They will just happen, and they are just another

:57:29.:57:33.

form of income tax, in effect. That was very noticeable. You heard from,

:57:34.:57:41.

what he cannot do, is go on looking on Holyrood's and say, can you not

:57:42.:57:45.

implement it? Could they look at devolving that or would it cause

:57:46.:57:49.

problems? I think as well you can maximise the powers that we have,

:57:50.:57:53.

abusing our tax powers to generate tax. Sorry to cut you off, we're

:57:54.:57:59.

going to have to leave it there. We are completely out of time.

:58:00.:58:00.

And I'll be back this weekend for Sunday Politics Scotland.

:58:01.:58:06.

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