0:00:13 > 0:00:16Hello and welcome to Politics Scotland. Coming up on the
0:00:16 > 0:00:20programme: Scotland bucks the UK unemployment trend as jobless
0:00:20 > 0:00:27figures improve - 3000 fewer people are seeking work. But it's not all
0:00:28 > 0:00:31good news - there's concern on the shop floor as retail sales plummet.
0:00:31 > 0:00:38As concern grows about the state of the world economy, the Finance
0:00:38 > 0:00:41Secretary will this afternoon chart the way ahead for Scotland. And,
0:00:41 > 0:00:46here at Westminster, could we be heading towards a winter of
0:00:46 > 0:00:50discontent? Public sector unions say they will ballot for strike
0:00:50 > 0:00:55action. Good afternoon. Let's start with
0:00:55 > 0:00:58the economy, where we're seeing a very mixed picture. The latest
0:00:58 > 0:01:01unemployment figures show the number of people seeking work in
0:01:01 > 0:01:05Scotland in the three months to July was down by 3000 on the
0:01:05 > 0:01:08previous quarter. That means 204,000 Scots were looking for work.
0:01:08 > 0:01:10Although the number of people claiming unemployment benefit was
0:01:10 > 0:01:17up slightly, these latest figures also found an increase of 23,000
0:01:17 > 0:01:20Scots in employment. But it's a much less optimistic picture on the
0:01:20 > 0:01:24retail front, where sales have slumped - the second worst annual
0:01:24 > 0:01:27drop in 12 years. Let's get some analysis now with our business and
0:01:27 > 0:01:34economy editor Douglas Fraser and our political editor Brian Taylor,
0:01:34 > 0:01:38who's at Holyrood. Good afternoon, thank you for
0:01:38 > 0:01:42joining me. Force of four, Douglas, let's look at these unemployment
0:01:42 > 0:01:46figures. Scotland does seem to be faring better than the rest of the
0:01:46 > 0:01:50UK. All of this is relative. The figures are still higher than you
0:01:50 > 0:01:54would want them to be. But, if you look at where Scotland is that
0:01:54 > 0:01:58compared with the UK, particularly Scotland having been in a worse
0:01:58 > 0:02:03position for the last 18 months or so, it has now moved into a very
0:02:03 > 0:02:06clearly better position. One way of counting it is this labour market
0:02:06 > 0:02:11survey, of people looking for jobs over a three-month period. May,
0:02:11 > 0:02:16June and July down by 3,000. It is quite a modest improvement, but
0:02:16 > 0:02:21nonetheless it is a move in the right direction. All the regions of
0:02:21 > 0:02:24England have seen those numbers are going up. But, creeping up is the
0:02:24 > 0:02:29number of people on a Jobseeker's Allowance, which is a harder core
0:02:29 > 0:02:33of unemployed people. It is a higher threshold to get on to those
0:02:33 > 0:02:38numbers. From the other point of view, it is not just about
0:02:38 > 0:02:43unemployment, but also employment. If you look at the Scottish economy,
0:02:43 > 0:02:47according to these figures, the public sector is shedding a lot of
0:02:47 > 0:02:51jobs. Scotland is shedding them faster than the rest of the UK.
0:02:51 > 0:02:57Unlike the rest of the UK, Scotland's private sector, which we
0:02:57 > 0:03:01tend to be malign -- 10 to malign, is putting on jobs faster than the
0:03:01 > 0:03:05rest of the UK, so it's something is going relatively right for the
0:03:05 > 0:03:11Scottish economy. What about sales figures, they don't inspire much
0:03:11 > 0:03:14confidence on the High Street, do they? They don't. It was bad in May,
0:03:14 > 0:03:19the second-worst month since records began. The reason may be
0:03:19 > 0:03:24the weather. Also, inflation has eroded people's ability to spend.
0:03:24 > 0:03:28For instance, on food spending, the total spending on food has gone up,
0:03:28 > 0:03:32but not as fast as a food price inflation has gone up. People are
0:03:32 > 0:03:37either buying cheaper food or they are buying less fit. Also, job
0:03:37 > 0:03:41insecurity is an issue. In may mean that on big-ticket items in
0:03:41 > 0:03:46particular, like furniture, people are reining back. They have been
0:03:46 > 0:03:50doing that right to this downturn. These figures are worse even than
0:03:50 > 0:03:54the pulling back of spending that we saw in the worst of the
0:03:54 > 0:04:01recession three years ago. Brian, before we discuss the economy, you
0:04:01 > 0:04:04have got an update on the Edinburgh project. Yes, the minister
0:04:04 > 0:04:11responsible has said that the money that was going to be withheld by
0:04:11 > 0:04:16the Scottish government for this transport projects, that money, �72
0:04:16 > 0:04:21million, is going to be restored. Some intriguing announcements about
0:04:21 > 0:04:26the way the project will now be handled and governed. 18 from
0:04:26 > 0:04:34transport Scotland will join the team directing and controlling the
0:04:34 > 0:04:37trams project and tried to drive this forward. Also, very
0:04:37 > 0:04:41significantly, as part of the agreement between the Scottish
0:04:41 > 0:04:46government and Edinburgh council, Scottish government ministers will
0:04:46 > 0:04:51have the right and power to veto key strategic decisions regarding
0:04:51 > 0:04:54the trams. At the same time, they are not taking the financial risk
0:04:54 > 0:04:58into the Scottish government. That remains with the local authority.
0:04:58 > 0:05:01Thank you for that update. Returning to the economy, you were
0:05:02 > 0:05:10at the first minister's briefing this morning. Yes, he was making
0:05:10 > 0:05:12the point that he was -- that the Scottish situation with regard to
0:05:12 > 0:05:17unemployment and employment is relatively better with regard to
0:05:17 > 0:05:20the rest of the UK. He attributed that to the policies being
0:05:20 > 0:05:26undertaken by the Scottish government, accelerated capital
0:05:26 > 0:05:29spending, access to finance. Also, the security that comes from
0:05:29 > 0:05:35offering no compulsory redundancies to those in the public sector who
0:05:35 > 0:05:39are directly under Scottish government control. He was calling
0:05:39 > 0:05:43for a special plan B from the Chancellor, George Osborne, who
0:05:43 > 0:05:47suggested that he should emulate the approach taken by the Scottish
0:05:47 > 0:05:54government. Thank you for that. Let's cross to the chamber now and
0:05:54 > 0:05:58hear what the Finance Secretary John Swinney is saying.
0:05:58 > 0:06:05He has been saying that Scotland is not immune to the global economic
0:06:05 > 0:06:09downturn. The public sector has a vital role in helping the economy
0:06:09 > 0:06:12emerged from the worst effects of recession, and this update to the
0:06:12 > 0:06:16Government's economic strategy is clear priority to accelerating
0:06:16 > 0:06:21economic recovery. As the first minister said last week, and as the
0:06:21 > 0:06:26cabinet secretary for education has just outlined, we are supporting
0:06:26 > 0:06:30our dumb people through a package of new measures. This includes a
0:06:30 > 0:06:34guarantee of a place in education and training for all 16-19 year-
0:06:34 > 0:06:37olds. The delivery of apprenticeship opportunities in
0:06:37 > 0:06:41each year for parliamentary term, and ensuring that access to higher
0:06:41 > 0:06:47education is based on the ability to succeed and not the ability to
0:06:47 > 0:06:50pay. Where we can, we will protect employment, ease uncertainty, and
0:06:50 > 0:06:55promote economic confidence. Our no compulsory redundancies policy does
0:06:55 > 0:07:01just that. We will also continue to protect household income as part of
0:07:02 > 0:07:05our commitment on the social wage. Economic recovery is a typically
0:07:05 > 0:07:09led by investment and we have argued strongly against the
0:07:09 > 0:07:14coalition's plans to cut our capital spending by nearly 40% in
0:07:14 > 0:07:18real terms. Our previous decision to accelerate capital was a success,
0:07:18 > 0:07:23and is estimated to have supported over 5,000 jobs through our
0:07:23 > 0:07:27programme of capital acceleration. Where possible, we will prioritise
0:07:27 > 0:07:35our spend on capital to maximise the impact of jobs and on the
0:07:35 > 0:07:39economy. We will deliver key infrastructure projects, we will
0:07:39 > 0:07:42take forward a new Housing Investment Programme, and we will
0:07:42 > 0:07:48support additional investment through alternative funding streams
0:07:48 > 0:07:52such as our �2.5 billion non-profit distributing programme and the use
0:07:52 > 0:07:55of tax incremental financing. We will also work to boost levels of
0:07:55 > 0:07:58private investment in the economy through initiatives such as the
0:07:58 > 0:08:03Scottish Investment Bank and our national renewables infrastructure
0:08:03 > 0:08:06fund. However, as I outlined to the parliament in June, long-term
0:08:06 > 0:08:10economic success cannot be supported solely by growth in the
0:08:10 > 0:08:13public sector. It is growth and investment in the private sector
0:08:13 > 0:08:20that is key to unlocking Scotland's potential and creating
0:08:20 > 0:08:23opportunities for all to flourish. The objective... I am glad that Mr
0:08:23 > 0:08:27Johnson acknowledges the success of the Government's agenda. If he
0:08:27 > 0:08:32wants to get to his feet to endorse it further, he would be welcome to
0:08:32 > 0:08:35do so. The objective for the Government is to provide the over
0:08:35 > 0:08:40arching economic framework, such as a competitive business environment
0:08:40 > 0:08:44and integrated economy, and a skilled and adaptable workforce
0:08:44 > 0:08:48which is conducive to sustained economic growth. That is what we
0:08:48 > 0:08:52aim to achieve through the Government's economic strategy. We
0:08:52 > 0:08:55are focusing our actions on six strategic priorities which will
0:08:55 > 0:09:00drive sustainable economic growth and develop a more resilient and
0:09:00 > 0:09:03adaptable economy. Our ability to promote prosperity and jobs depends
0:09:03 > 0:09:06on the performance of our businesses both large and small.
0:09:06 > 0:09:10That is why we are committed to maintaining and further investing
0:09:10 > 0:09:13in a supportive business environment. Reflecting the
0:09:13 > 0:09:19opportunity we have to take advantage of Scotland's relative
0:09:19 > 0:09:23comparative advantage in the local economy, we have established a new
0:09:23 > 0:09:31strategic priority of the transition to a low carbon economy,
0:09:31 > 0:09:36and I will say more about this shortly. I will give way. Clearly
0:09:36 > 0:09:41kit and -- commitment to a low carbon economy it is something
0:09:41 > 0:09:46shared. Can you tell us how inclusion in this document changes
0:09:46 > 0:09:52the support from the Scottish government on this? What it does is
0:09:52 > 0:09:56give the private sector, and also those decision-makers within the
0:09:56 > 0:10:01public sector, the absolute clarity of the direction of government
0:10:01 > 0:10:05policy. What that means is that went private sector organisations
0:10:05 > 0:10:10are looking at the colossal range of investment opportunities that
0:10:10 > 0:10:14exist in the low carbon sector within Scotland, whether that is in
0:10:14 > 0:10:18offshore renewables sector, whether that is in some of the low carbon
0:10:18 > 0:10:23vehicle technologies which some of our companies are pioneering, or
0:10:23 > 0:10:27whether it is in some of the initiatives about ensuring that we
0:10:27 > 0:10:30maximise the utilisation of energy resources within our country,
0:10:30 > 0:10:36private investors can see the Government is absolutely serious
0:10:36 > 0:10:39about this approach. Equally, it is the strongest possible signal to
0:10:39 > 0:10:45those involved in the public sector that we have to make sure that we
0:10:45 > 0:10:49have the skills and labour market composition that will ensure that
0:10:49 > 0:10:54the demands of the low carbon economy can be satisfied by the
0:10:54 > 0:10:58focus within our higher and further education institutions. In all of
0:10:58 > 0:11:03that, it gives policy certainty to the public sector, and clarity to
0:11:04 > 0:11:06the private sector for these investments to be undertaken.
0:11:06 > 0:11:10cabinet secretary mentioned opportunities for employment
0:11:10 > 0:11:13throughout those sectors. Would he agree that it is important to have
0:11:13 > 0:11:17more opportunities for young people in those high-growth sectors,
0:11:17 > 0:11:24particularly given the UN force should figures we had today of
0:11:24 > 0:11:30youth unemployment? -- unfortunate figures? Part of what the
0:11:30 > 0:11:35Government has said, indeed, the First Minister's first paragraph of
0:11:35 > 0:11:38the statement last week to Parliament was about the importance
0:11:38 > 0:11:43of ensuring opportunities for all of our young people. I don't think
0:11:43 > 0:11:48the Government could have attached a greater priority to ensuring that
0:11:48 > 0:11:56providing opportunities for our young people is fundamental. On a
0:11:56 > 0:11:58recent visit I made in the presiding officer's constituency to
0:11:58 > 0:12:03the five energy park, it was clear to me the apprenticeship
0:12:03 > 0:12:08recruitment that had gone on in that facility was very much linked
0:12:08 > 0:12:16to the low carbon economy. I saw more of that at a company I visited
0:12:16 > 0:12:20on Monday where substantial apprenticeship opportunities were
0:12:20 > 0:12:25being created for young people and the Government would endorse that.
0:12:25 > 0:12:31That is my point in response to Mr McDonald, in that of the meaningful
0:12:31 > 0:12:34content of this strategy is not to have a glossy document available.
0:12:34 > 0:12:39It is to say to the key decision- makers within the public sector
0:12:39 > 0:12:48that we expect provision and planning to reflect the contents of
0:12:48 > 0:12:54the Government's economic strategy. Our strategic priority... You need
0:12:54 > 0:12:58to wind up, Mr Swinney. Sorry, my mistake, you have got 14 minutes.
0:12:58 > 0:13:08Thank you, presiding officer. You almost encouraged a very healthy
0:13:08 > 0:13:11
0:13:11 > 0:13:16transformation in my contribution Our focus on infrastructure,
0:13:16 > 0:13:20development, seeks to harness our cities and rural areas and we will
0:13:20 > 0:13:23ensure Scotland is positioned to take full advantage of the
0:13:24 > 0:13:28opportunities offered by the digital age. Our cities are vital
0:13:28 > 0:13:32to success and later this year we will introduce a strategy to
0:13:32 > 0:13:37support cities and their regions to maximise their potential as engines
0:13:37 > 0:13:41of economic growth. Effective government is our next strategic
0:13:41 > 0:13:44priority, fundamental to the successful implementation of the
0:13:44 > 0:13:48government's economic strategies. It is only by the actions of the
0:13:48 > 0:13:53public sector being fully co- ordinated that we can maximise
0:13:53 > 0:13:58Scotland's economic potential. Finally, the government makes clear
0:13:58 > 0:14:03our commitment to ensuring that growth is characterised by the
0:14:03 > 0:14:07achievement of equity. Social, regional and Inter generational, to
0:14:07 > 0:14:13ensure that the transformation of our economy is driven by these
0:14:13 > 0:14:19characteristics and opportunities. We believe that our strategy should
0:14:19 > 0:14:23focus on the key elements of growth companies, growth markets and
0:14:23 > 0:14:27growth sectors. We should take initiatives to support the
0:14:27 > 0:14:31development of growing companies by the focus of our enterprise
0:14:31 > 0:14:35agencies supporting companies in every way we can and by
0:14:35 > 0:14:39characteristics of schemes such as the small business bonus scheme to
0:14:39 > 0:14:43assist the small-business community in Scotland. The major theme of the
0:14:43 > 0:14:46economic strategy is the expansion of international exporting and
0:14:46 > 0:14:51business development opportunities and that will be the focus of
0:14:51 > 0:14:56Scottish Development International, who will work to support the 1,000
0:14:56 > 0:15:01to 10,000 businesses who we recognise need to develop skills to
0:15:01 > 0:15:04expand their international activities. This work is
0:15:04 > 0:15:10particularly characterised by our focus on the transition to a low
0:15:10 > 0:15:14carbon economy, the importance of ensuring Scotland is equipped for
0:15:14 > 0:15:18digital infrastructure and that we used the instrument of public
0:15:18 > 0:15:25procurement to boost the economic impact of government expenditure.
0:15:25 > 0:15:32These will be the central themes of our strategy, we will maximise our
0:15:32 > 0:15:36powers. We may Clare our aspiration to have a full range of economic
0:15:36 > 0:15:46powers to ensure we can transform the Scottish economy and have it --
0:15:46 > 0:15:48
0:15:48 > 0:15:54deliver the best opportunities for I now call on Richard and Baker --
0:15:54 > 0:15:58Richard Baker. You have 10 minutes. We welcome the Scottish
0:15:58 > 0:16:03government's economic strategy. This morning there were harsh words
0:16:03 > 0:16:07for the refreshed strategy. While we are not unconditionally positive
0:16:07 > 0:16:10about the new document, we welcome its publication because while we
0:16:10 > 0:16:14have joined with the Scottish government in calling for a Plan B
0:16:14 > 0:16:18from the coalition government at Westminster, whose economic
0:16:18 > 0:16:24strategy is clearly not working, it is equally important for a new plan
0:16:24 > 0:16:29to be put in place in Scotland. We continue to hear from ministers for
0:16:29 > 0:16:34the mantra of recession in Scotland and the rest of the UK. The reality
0:16:34 > 0:16:37is we continue to be in a powerless economic situation. The last GDP
0:16:37 > 0:16:42figures show the Scottish economy on the cusp of returning to a
0:16:42 > 0:16:49situation where it was contracting. Growth of only 0.1%, lower than
0:16:49 > 0:16:51that of the rest of the UK. Today Scottish from the Scottish Retail
0:16:51 > 0:16:55Consortium show the second worst annual drop in sales for 10 years.
0:16:56 > 0:17:00Today's employment figures do show an increase in employment and a
0:17:00 > 0:17:05drop in unemployment against the UK trend and that is welcome, but
0:17:05 > 0:17:09there is absolutely no room for complacency with a significant
0:17:09 > 0:17:13increase in the benefits claimant count and youth unemployment up.
0:17:13 > 0:17:19Levels not seen since John Major's government in the early 90s. That
0:17:19 > 0:17:25is why we have said these economic challenges require a new response
0:17:25 > 0:17:29from the Scottish government. Because despite the focus by
0:17:29 > 0:17:33ministers on demands for new powers, we heard again at the end of the
0:17:33 > 0:17:40speech from the Cabinet Secretary, the Scottish government is far from
0:17:40 > 0:17:45Palace in this situation. It has very significant levers at its
0:17:45 > 0:17:49disposal to influence our economy. The way it spends the budget is
0:17:49 > 0:17:57crucial in shaping our economic fortunes, which is why the Spending
0:17:57 > 0:17:59Review to be published next week will also be so important to allow
0:17:59 > 0:18:03wider economic future. Our welcome for this document is qualified
0:18:03 > 0:18:07because we would have liked to have seen more new thinking given the
0:18:07 > 0:18:11new concerns about future developments in the Scottish and
0:18:11 > 0:18:15world economy. Many of the initiatives are welcome, but they
0:18:15 > 0:18:19are ones which have been previously announced. Of course we can
0:18:19 > 0:18:24particularly welcome the proposals which were brought forward by
0:18:24 > 0:18:27Scottish Labour. It was refreshing and surprising to read George
0:18:28 > 0:18:32cavern of all people giving Labour the credit, rightly, for the
0:18:32 > 0:18:37initiatives which have been brought forward on modern apprenticeships.
0:18:37 > 0:18:40He could have also given us credit for other policies, like the first
0:18:41 > 0:18:44troops scheme for first-time buyers, but I'm sure he will get round to
0:18:44 > 0:18:48doing that another time. Let's get some reaction to that now
0:18:48 > 0:18:53from my two guests this afternoon - Stephen Boyd from the STUC and John
0:18:53 > 0:18:59McLaren from the Centre for Public Policy from the Regions. John, what
0:18:59 > 0:19:05do you make of Mr swingy's statement, talking about growth,
0:19:05 > 0:19:09growth, growth. That was what he was emphasising. He was. That is
0:19:09 > 0:19:14what you would expect him to say. He has to put forward a positive
0:19:14 > 0:19:17message. In reality, like in many other parts of the UK and countries
0:19:17 > 0:19:22around the world, it is difficult to know where that growth will come
0:19:22 > 0:19:26from. The world as a whole is still in recession and it could go into
0:19:26 > 0:19:30double-dip. It is not clear where the increased consumption is going
0:19:30 > 0:19:34to come from all the investment by companies because there are so many
0:19:34 > 0:19:40worrying things still happening, whether it is the euro or American
0:19:40 > 0:19:46house prices or debt levels of things like that. The best he can
0:19:46 > 0:19:51do at the moment is try to keep the Scottish economy in the shape that
0:19:51 > 0:19:55it is well situated for when things pick up. That means keeping skill
0:19:55 > 0:20:00levels up and probably keeping productive capacity through
0:20:00 > 0:20:05infrastructure going. That is the way he is talking about things. Not
0:20:05 > 0:20:09exactly in those terms, but that is what he is trying to do. Mr swingy
0:20:09 > 0:20:14is doing his sums for next week for his draft budget and he will have
0:20:14 > 0:20:19some very difficult questions to face when it comes to cuts. What do
0:20:19 > 0:20:22you think are the possibilities of public-sector redundancies? I have
0:20:22 > 0:20:26more reason to doubt the Scottish government's good faith at this
0:20:26 > 0:20:30present moment to avoid compulsory redundancies in the public sector
0:20:30 > 0:20:37and we have seen efforts from Scottish Labour that we have not
0:20:37 > 0:20:46seen replicated across the UK. There is a lot to be answered.
0:20:46 > 0:20:54There was a report which was not so different from the last strategy.
0:20:54 > 0:21:01As John has said, the UK level is such that the Scottish government's
0:21:01 > 0:21:05ability to influence economic growth is very, very limited.
0:21:05 > 0:21:09Gummer what do you make of that? We were hearing from Richard Baker
0:21:09 > 0:21:14talking about the Scottish government always demanding new
0:21:14 > 0:21:20powers. What do you make of that when it comes to the Scottish
0:21:20 > 0:21:26government actually working within the powers they have? Well, working
0:21:26 > 0:21:30within the powers they have, then it is still quite a lot you can do
0:21:30 > 0:21:35in terms of retaining skills in terms of large infrastructure
0:21:35 > 0:21:39projects, in terms of pushing renewables. If you have more powers,
0:21:39 > 0:21:43there is more potential, but it doesn't mean to say it could do an
0:21:43 > 0:21:48awful lot. Fiscal and monetary policy, monetary policy is already
0:21:48 > 0:21:52about as low as it could be so there is not much more you could do.
0:21:52 > 0:21:55Even if they did have greater control, they would struggle in the
0:21:55 > 0:22:02same way the UK government is. The only thing is if they had more
0:22:02 > 0:22:08borrowing powers, they could deficit fund things, but that is a
0:22:08 > 0:22:14risk as well. But it is another way they could go. One of the other
0:22:14 > 0:22:22things that is difficult... Growth sectors that they want to push. But
0:22:22 > 0:22:25at the minute in Scotland, some of the sectors like tourism and
0:22:25 > 0:22:29financial services are not doing well and they haven't been doing
0:22:29 > 0:22:32well for a while. I couldn't see anything in the growth strategy
0:22:32 > 0:22:35which shows why they should all of a sudden turn around the
0:22:35 > 0:22:41performance and start being providers of taking Scotland
0:22:41 > 0:22:44forward. There seems to be a lack of analysis on how these sectors,
0:22:44 > 0:22:49important as they are, actually work and what is needed to kick-
0:22:49 > 0:22:56start them to make them work better. On the apprenticeships, he was
0:22:56 > 0:23:01talking a lot about apprenticeships. How far can we put our eggs in that
0:23:01 > 0:23:07one basket when it comes to training to try to stimulate growth
0:23:07 > 0:23:12in that way? You're not going to stimulate growth through as
0:23:12 > 0:23:17apprenticeships, you will prepare the economy for a robust recovery
0:23:17 > 0:23:20when it finally appears. Apprenticeships are a very
0:23:20 > 0:23:27important route. Anything the Scottish government can do will be
0:23:27 > 0:23:32welcome. You do have to bear in mind that youth unemployment in
0:23:32 > 0:23:35Scotland is over 20%. We have seen figures today that clearly the
0:23:35 > 0:23:45Scottish government are putting a positive spin on, but there is much
0:23:45 > 0:23:50
0:23:50 > 0:23:55in the figures that is a cause for concern. Apprenticeships, yes, do
0:23:55 > 0:23:57what you can, but it is not going to bring the economy round. Thank
0:23:57 > 0:24:00you. You're watching Politics Scotland
0:24:00 > 0:24:02from the BBC. Still to come on the programme:
0:24:02 > 0:24:09How to improve education and vocational training for the over-
0:24:09 > 0:24:1216s - the under-pressure Education Secretary will set out his thinking.
0:24:12 > 0:24:17The Labour leader, Ed Miliband, says the Government is "the byword
0:24:17 > 0:24:19for complacency" on unemployment. Meanwhile at a a lively Prime
0:24:19 > 0:24:22Minister's Questions, Sir Peter Tapsell, father of the House, put
0:24:22 > 0:24:29on a display of self-caricature by asking about the 18th century
0:24:29 > 0:24:37before getting to his question about banks. And the Prime Minister
0:24:37 > 0:24:42was even asked about oil revenues Today's figures show that
0:24:42 > 0:24:48unemployment is up by 80,000. Does the Prime Minister still think the
0:24:48 > 0:24:51British economy is out of the danger zone? First of all, these
0:24:51 > 0:24:56unemployment figures are disappointing figures. I don't want
0:24:56 > 0:24:59to hide from that. Every last job is a tragedy for that family and I
0:24:59 > 0:25:05want to do everything I can and this government will do everything
0:25:05 > 0:25:09it can to help those people back into work. That is why we have
0:25:09 > 0:25:13360,000 apprenticeships starting this year, that is why we have
0:25:13 > 0:25:1710,000 extra university places and that is why in the work programme,
0:25:17 > 0:25:21we have the biggest welfare to Work programme this country has seen
0:25:21 > 0:25:25since the 1930s. But at the same time, let me say to the right
0:25:25 > 0:25:29honourable gentleman it is right that we get on top of our debts and
0:25:29 > 0:25:33duller deficits. Her today of all days shows the danger of getting
0:25:33 > 0:25:38into a position other European countries are in whether whole
0:25:38 > 0:25:43credibility is being questioned. and his government on the byword
0:25:43 > 0:25:48for complacency in this country on unemployment. Youth unemployment
0:25:48 > 0:25:54was falling at the general election and it has risen on his watch. It
0:25:54 > 0:25:59is his responsibility. Women's unemployment, too, is at its
0:25:59 > 0:26:05highest level since 1988. Mr Speaker, he is making the situation
0:26:05 > 0:26:08work. By cutting the childcare tax credit. How does it make sense,
0:26:08 > 0:26:13when unemployment is rising for women, to cut the support that
0:26:13 > 0:26:19helps them back into work? Let me just remind the right honourable
0:26:19 > 0:26:22gentleman unemployment went up by 40% under the last government.
0:26:22 > 0:26:27278,000 more young people unemployed when he was sitting in
0:26:27 > 0:26:31the Treasury and breaking our banking system and bankrupting our
0:26:31 > 0:26:35economy. That is what people remember. When it comes to
0:26:35 > 0:26:39childcare, what this government is doing, and we are the first to do
0:26:39 > 0:26:42it, is making sure there are 15 hours of free childcare for every
0:26:42 > 0:26:46three year-old and four year-old and we have extended that for every
0:26:46 > 0:26:53two year-old. We have focussed the tax credit system on the poorest
0:26:53 > 0:27:02people in this country. In the 18 San Shroot -- century it was the...
0:27:02 > 0:27:08In the 19th century it was the roofless industrialists humanised
0:27:08 > 0:27:18by Shaftesbury. In the 20th century it was the trade union leaders
0:27:18 > 0:27:23
0:27:23 > 0:27:30tamed by Lady Thatcher. In the United States... The federal
0:27:30 > 0:27:35authorities are prosecuting a wide swathe of the top banks. When is
0:27:35 > 0:27:39that going to happen here? I think the serious point the right
0:27:39 > 0:27:43honourable gentleman is making his right, we do need to see
0:27:43 > 0:27:47responsibility from our bankers. I rode -- I support what John Vickers
0:27:47 > 0:27:50have said in terms of reforms. If people break the law, no matter
0:27:50 > 0:27:55where they come from all who they are, they should face the
0:27:56 > 0:28:01consequences and be punished. poll last week showed 68% of Scots
0:28:01 > 0:28:11want oil revenues devolved to Scotland. Does the Prime Minister
0:28:11 > 0:28:19
0:28:19 > 0:28:24agree that 68% of Scots -- Withe Well, if you ask a stupid question,
0:28:24 > 0:28:27you will get a stupid answer! The fact is, the whole of the United
0:28:27 > 0:28:31Kingdom rightly has invested in the North Sea. The whole of the United
0:28:31 > 0:28:35Kingdom should benefit from the North Sea. I think we should do
0:28:35 > 0:28:40everything possible to keep the United Kingdom together because we
0:28:40 > 0:28:42are stronger, England, Scotland, Northern Ireland and Wales, than we
0:28:42 > 0:28:45ever would be separate. Party conference season is almost
0:28:45 > 0:28:48upon us for the UK political parties. The TUC have already been
0:28:48 > 0:28:51meeting and it's been a challenging time for the Labour leader Ed
0:28:51 > 0:28:58Miliband. Let's cross to London and to our correspondent David Porter
0:28:58 > 0:29:02who's gauging the mood at Westminster.
0:29:03 > 0:29:07At times like this I am reminded to use that old political adage, it is
0:29:07 > 0:29:10the economy stupid, and with unemployment rising, the euro
0:29:10 > 0:29:15economy in dire straits, and the trade unions are threatening strike
0:29:15 > 0:29:19action, there is no shortage of things for the Government, and
0:29:19 > 0:29:23indeed ammunition for the opposition parties. No shortage of
0:29:23 > 0:29:27things either to discuss. I am joined by two political
0:29:27 > 0:29:32commentators. Catherine, let me start with you. Unemployment
0:29:32 > 0:29:35figures out today. You know from your time when you were advising
0:29:35 > 0:29:39Alistair Darling in the Treasury, when unemployment is rising, it is
0:29:39 > 0:29:43never a good time for the Government, is it? No, it is a
0:29:43 > 0:29:46terrible time for the Government went to 0.5 million people are
0:29:46 > 0:29:51unemployed and they will be very worried about it. George Osborne
0:29:51 > 0:29:55will be thinking very hard about how he can rectify the situation. I
0:29:55 > 0:29:59don't know if he can do that without changing his plan, because
0:29:59 > 0:30:02up until now he has been hell bent on cutting the deficit, which he
0:30:02 > 0:30:08certainly has to do, but perhaps he has got to do something else as
0:30:08 > 0:30:12well. It was noticeable that today at Prime Minister's Questions that
0:30:12 > 0:30:16there was not even one iota of a plan B. You get the impression they
0:30:16 > 0:30:19are battening down the hatches on this one. They are trying to
0:30:19 > 0:30:23maintain an aura of stability. I'm not sure David Cameron did that
0:30:23 > 0:30:27today. He seemed tired after his Moscow trip and had not really
0:30:27 > 0:30:30prepared for premises questions, and he seemed to be constantly on
0:30:30 > 0:30:34the defensive. It feels that it is very much a government fighting on
0:30:34 > 0:30:38every front at the moment, and as a result there is a feeling of
0:30:38 > 0:30:43disarray. That is the opposite - they need to create the idea of
0:30:43 > 0:30:47stability. Opposite to him was Ed Miliband, who did all right, but I
0:30:47 > 0:30:53still don't know myself quite what Labour's economic policy. As long
0:30:53 > 0:30:57as that uncertainty prevails, I think David Cameron is OK. You talk
0:30:57 > 0:31:02about the trade unions, and you can already see as a newspaperman the
0:31:02 > 0:31:06headline writers writing winter of discontent, but how serious do you
0:31:06 > 0:31:11see this in political and economic terms? The trade unions are trying
0:31:11 > 0:31:14to top this up. Yesterday, Ed Miliband went to the TUC and got
0:31:14 > 0:31:18tackled. I think that draws him water was the centre ground if he
0:31:18 > 0:31:22is an opposition to the unions, but is it actually going to happen? Are
0:31:23 > 0:31:27we going to have a bad winter? Let's hope not. It is a tricky one
0:31:27 > 0:31:31for Labour this, isn't it? Ed Miliband can't condone the strikes,
0:31:31 > 0:31:35but he knows that is what his union friends want him to do. Yes, it is
0:31:35 > 0:31:42very tricky for Ed Miliband. He will not want them to strike. He
0:31:42 > 0:31:45will think that they will be taking the moral high ground away from him
0:31:45 > 0:31:50because I think the economic figures are not going to get any
0:31:50 > 0:31:55better. We are going to get higher unemployment. Ed Miliband will want
0:31:55 > 0:31:58to capitalise on these figures if the trade unions persist in having
0:31:58 > 0:32:03a strike, and it is believed that they will, then that will just
0:32:03 > 0:32:07detract from his positioning. are about to come to the party
0:32:07 > 0:32:10political conferences, when the Westminster decant to various
0:32:10 > 0:32:15cities throughout the UK. It will be one of those areas where there
0:32:15 > 0:32:21will be mixed fortunes for all of the main parties, I went there?
0:32:21 > 0:32:25Miliband has to overcome deep held scepticism within his own party
0:32:25 > 0:32:30that he could be the next prime minister. I think David Cameron has
0:32:30 > 0:32:33to reassure the Tories before he reassures anyone else that he is on
0:32:33 > 0:32:37course. I think a lot of Tories in Parliament are jittery because they
0:32:37 > 0:32:41don't know what he is standing for. And Nick Clegg has got to convince
0:32:41 > 0:32:45the Lib Dems that they have not sold out, that they are not their
0:32:45 > 0:32:49letting the Tories run riot in the country. It is a bit of a false
0:32:49 > 0:32:54world when we all go to conference... It is absolutely
0:32:55 > 0:32:59bonkers. The party conferences are mad, particularly this year. It is
0:32:59 > 0:33:05going to be most peculiar. But we are all going to be, as a political
0:33:05 > 0:33:09journalistic class, we are going to be obsessing about these tensions.
0:33:09 > 0:33:13Are they going to have any real effect on the economy and on
0:33:13 > 0:33:21Britain's prospects? I suspect not. For a question briefly to both of
0:33:21 > 0:33:26you. Party conferences aside, whatever happens, British economy -
0:33:26 > 0:33:31- the British economy is in for hard graft, isn't it? I think it is.
0:33:31 > 0:33:34There is any so much that David Cameron and George Osborne can do.
0:33:34 > 0:33:39Events -- it matters they much what happens in Europe and America. In a
0:33:39 > 0:33:42way, they are bobbing along in the wake of these catastrophic events
0:33:42 > 0:33:46that are happening in Europe and America, and they should not be
0:33:46 > 0:33:50underestimated. It strikes me that we are still living in a dream and.
0:33:50 > 0:33:54We don't quite understand the effect that the changes are going
0:33:54 > 0:33:58to have, the reductions in public spending. I think a lot of people
0:33:58 > 0:34:04have not quite grasped what is about to happen. Thank you both for
0:34:04 > 0:34:09joining me. We will be packing up shortly to go to that of bonkers
0:34:09 > 0:34:11world, better known as the party conferences. David, thank you for
0:34:11 > 0:34:14that. Back to Holyrood now, and a major
0:34:14 > 0:34:24announcement by the Education Secretary Michael Russell on
0:34:24 > 0:34:24
0:34:24 > 0:35:45Apology for the loss of subtitles for 81 seconds
0:35:45 > 0:35:50I think a lot of the things around education and training are up
0:35:50 > 0:35:53complicated. We need to simplify this. We can deliver that bed and
0:35:53 > 0:35:57an income and that is important because we want to make sure that
0:35:57 > 0:36:01young people are not deterred from study. A lot of the noise
0:36:01 > 0:36:05surrounding further and higher education is deterring young people
0:36:05 > 0:36:08because secure these ludicrous figures. We are trying to focus
0:36:08 > 0:36:14people on the opportunities in front of them and the opportunities
0:36:14 > 0:36:19that leads to. We will get onto those charges but staying with
0:36:19 > 0:36:23colleges, you talk about mergers. What would that mean in practice?
0:36:23 > 0:36:27They will undoubtedly been job losses. It will mean greater
0:36:27 > 0:36:32efficiency in delivering. We have talked in the paper about a
0:36:32 > 0:36:39regional model and we need to move to that model to make sure resource
0:36:39 > 0:36:43goes into the frontline and we encourage colleges to have a policy
0:36:43 > 0:36:51of no compulsory redundancies. So we have challenges but I am sure we
0:36:51 > 0:36:56can meet them with imagination. Let's turn to those charges. Would
0:36:56 > 0:37:01you agree with the First Minister? He said, would you prefer a more
0:37:01 > 0:37:08moderate approach? Yes, he is right. We have not seen the conclusion of
0:37:08 > 0:37:14this process. We have not yet had half of the university's... We have
0:37:14 > 0:37:19had a significant ones. It seems to be running out of control? We have
0:37:19 > 0:37:25had the ones who were always going to be at the top end. We have had
0:37:25 > 0:37:30less than half of them. Let us see what the springs at the end, the --
0:37:30 > 0:37:34expectations of the technical working group, we have to see what
0:37:34 > 0:37:37happens and the First Minister is right to express his disappointment
0:37:37 > 0:37:45and we share that. We have been looking at unemployment in the
0:37:45 > 0:37:50programme. This has been a very poor area for the SNP. Labour
0:37:50 > 0:37:57claimed it has increased by 89% since the SNP to power. Will these
0:37:57 > 0:38:04measures really address the problem? Accuracy is all,
0:38:04 > 0:38:07particularly for journalists. Today is a good news story, youth
0:38:07 > 0:38:12unemployment actually is better than we have done. Better than
0:38:12 > 0:38:16governments have done, particularly well in delivering training. When
0:38:16 > 0:38:22Labour quote figures, it is best to check them and I find they are
0:38:22 > 0:38:28usually not accurate. Thank you very much for joining us. Let's get
0:38:28 > 0:38:35accurate analysis from our guests. John McLaren and Stephen Boyd from
0:38:35 > 0:38:40the STUC. Stephen, I will ask you about youth unemployment. He did
0:38:40 > 0:38:45not think the figures from Labour were correct. Is this a problem
0:38:45 > 0:38:49that is concerning for the prop -- the country? Absolutely. The worst
0:38:49 > 0:38:55thing that can happen to a person of any age is to spend an extended
0:38:55 > 0:39:01period of time unemployed. It has a massive impact on their future life.
0:39:01 > 0:39:05It is very expensive to the country. In a social sense and economic. We
0:39:05 > 0:39:11should be very concerned about this and I will not get involved in any
0:39:11 > 0:39:16political debate about figures. It is far too high in Scotland and
0:39:16 > 0:39:20that has increased significantly over the last couple of years.
0:39:20 > 0:39:26have focused on the economy and employment. We hear about this in
0:39:26 > 0:39:30terms of the world economy and the French banks and the credit rating.
0:39:30 > 0:39:39There are meetings in Brussels to discuss the Greek debt. In terms of
0:39:39 > 0:39:47the global economy, or be on the brink of an abyss? -- are we.
0:39:47 > 0:39:53difficult to tell how it that it could get. I saw in 2008 when it
0:39:53 > 0:39:57really got bad it was not predicted, we thought 2007 was a turning point.
0:39:57 > 0:40:01Any sort of catastrophic change will probably come out of there
0:40:01 > 0:40:06fairly clear sky but what is more worrying is it is difficult to see
0:40:06 > 0:40:12were any upturn welcome from. I cannot see it the European
0:40:12 > 0:40:15situation and Greece being sorted out in any way that they want. Only
0:40:15 > 0:40:23in a way that they do not want. With something bad happening to
0:40:23 > 0:40:28Greece. Nobody wants that so it will keep on going for months and
0:40:28 > 0:40:35years and that means the uncertainty keeps on going. It is
0:40:35 > 0:40:39difficult to build confidence. But in America, they are not really
0:40:39 > 0:40:43planning, never mind in short-term, in the long term, to balance the
0:40:43 > 0:40:47budget and house prices are still falling so there is a lot of
0:40:47 > 0:40:52negative still going on. And the markets are not confident they have
0:40:53 > 0:41:00this sort it out. Until that changes, and we can get confidence
0:41:00 > 0:41:03that we know what will happen, there will remain a lot of sluggish
0:41:03 > 0:41:08growth and even if things get better, I do not think growth will
0:41:08 > 0:41:17rocket. It will be a prelude to another fall. We are going in for
0:41:17 > 0:41:21more than one decade of slow growth. We can see tutors and the market,
0:41:22 > 0:41:29civil unrest with the England riots and that good old cliche of the
0:41:29 > 0:41:35winter of discontent. The public sector workers going on strike. How
0:41:35 > 0:41:39bad could these strikes be in Britain? It would be irresponsible
0:41:39 > 0:41:44to speculate. Despite everything that has been said, negotiations
0:41:44 > 0:41:47will continue so it isn't inevitable these strikes will ochre
0:41:47 > 0:41:53and it is fair to say that there is a wave of anger among ordinary
0:41:53 > 0:41:57trade union members that is very high at this moment. They have seen
0:41:57 > 0:42:01wages falling significantly and job prospects following and pensions
0:42:01 > 0:42:06attacked and they are being encouraged to go see it by Mr
0:42:06 > 0:42:11Miliband and others and the indexation of pensions was not
0:42:11 > 0:42:16changed without any negotiation. Quite how this will transpire
0:42:16 > 0:42:22during the course of the winter is difficult to say. It is possible we
0:42:22 > 0:42:25will see strike action and it might not be as bad as we feel. We have
0:42:25 > 0:42:30seen leaders calling for strikes not to happen, including Ed
0:42:30 > 0:42:35Miliband. How far has has been promoted by the trade union leaders
0:42:35 > 0:42:41themselves? The BBC website has a comment from a reader who said the
0:42:41 > 0:42:45main civil service trade union is dominated by a left wing group. How
0:42:45 > 0:42:52much is being governed from the top and do the workers really want to
0:42:52 > 0:42:57be on strike? It is interesting. We have seen massive changes to that
0:42:57 > 0:43:01trade union legislation and the simple fact is, trade union leaders
0:43:01 > 0:43:10cannot take the unions out on strike in the win over told they
0:43:10 > 0:43:18used to do. -- in the way we were told. It happens in an informal --
0:43:18 > 0:43:23formal and secret ballot. And leaders simply are not able to do
0:43:23 > 0:43:29this in the way described by newspapers. The PCAS should point
0:43:29 > 0:43:32that out. The anger amongst members is understandable. They are
0:43:32 > 0:43:38effectively organised and if encouraged to band it, there is