21/09/2011

0:00:14 > 0:00:19Good afternoon, and welcome to Holyrood for live coverage of the

0:00:19 > 0:00:24Scottish budget and Spending Review. Outside this building, it has not

0:00:24 > 0:00:28just been raining this afternoon but persistently pouring. And in a

0:00:28 > 0:00:33few minutes inside the chamber, I wonder if the Finance Secretary

0:00:33 > 0:00:38John Swinney will be able to offer at brighter outlook for the public

0:00:38 > 0:00:42finances in Scotland? So we will cover that's beach life. But you

0:00:42 > 0:00:46may be in line for a bonus if you are able to stay with us this

0:00:46 > 0:00:50afternoon, we are also going to keep up with developments at the

0:00:50 > 0:00:55Liberal Democrat conference, including the speech of Nick Clegg.

0:00:55 > 0:00:59So let's just concentrate on the Scottish budget.

0:00:59 > 0:01:03And bring in the economic commentator, Alf Young. So what is

0:01:03 > 0:01:06the trick for John Swinney this afternoon? It is a huge trade. He

0:01:06 > 0:01:12has to do what he could have done last November before the election

0:01:12 > 0:01:16but did not do. He has to tell us what the full scale and of the pain

0:01:16 > 0:01:20on public spending is going to be. He has to do it against the

0:01:20 > 0:01:25backdrop of big commitments he made in the election, two universities,

0:01:25 > 0:01:30council tax freeze, the decline in real terms budget, which looks like

0:01:30 > 0:01:35a decline for some time to come. And within all that, he has just

0:01:35 > 0:01:40said that they can deliver more from less. He could do with a

0:01:40 > 0:01:45little bit of magic, perhaps! We will talk more in a moment, but

0:01:45 > 0:01:52lets cross live to Burningham, at the Liberal Democrat conference.

0:01:52 > 0:01:58David Porter is their. Her here in Burningham, Nick Clegg is preparing

0:01:58 > 0:02:02his end of conference speech to the Liberal Democrats. He will say that

0:02:02 > 0:02:10being in coalition is not easy, but despite all the problems, it is the

0:02:10 > 0:02:16right thing to do. As I said, we will cover Nick Clegg's speech live

0:02:16 > 0:02:20during this programme. We are on air until 4pm. The first main event

0:02:20 > 0:02:25is the Scottish budget speech, the Finance Secretary John Swinney is

0:02:25 > 0:02:30preparing to address the chamber up the stairs at Holyrood. We will get

0:02:30 > 0:02:35a little bit more on what we might expect from Alf Young. You

0:02:35 > 0:02:40mentioned of course they headline election promises that the SNP made,

0:02:40 > 0:02:44that swept them to victory back in May. Can John Swinney keep all

0:02:44 > 0:02:48those promises, the five-year council tax freeze and all the rest

0:02:48 > 0:02:52of it? He can keep them, but he will keep them in a declining

0:02:52 > 0:02:57budget by sacrificing something else. Something has to give

0:02:57 > 0:03:01somewhere. Money does not come from nowhere to fund your promises. And

0:03:01 > 0:03:07he is also, in the light of the fragile economic situation we are

0:03:07 > 0:03:13in, he has also got to try to shift some money into the capital budget.

0:03:13 > 0:03:21Because the capital budget in particular has taken a big hit.

0:03:21 > 0:03:30Let's hear what he has to save. Cameron Buttle is in the chamber.

0:03:30 > 0:03:34You joined last as John Swinney - next 20 takes to his feet.

0:03:35 > 0:03:38spending plans for the subsequent two years. The Spending Review

0:03:38 > 0:03:43Falls after -- at a defining moment. It is a moment that is uniquely

0:03:43 > 0:03:47challenging, with a fragile global economy and savage reductions in

0:03:47 > 0:03:52the real value of the Scottish Budget. At the same time, it is a

0:03:52 > 0:03:56hopeful moment. In the optimism that exists in our country and the

0:03:56 > 0:04:01Trust placed by the people in this government. Throughout our first

0:04:01 > 0:04:04time in office, we applied careful stewardship to public finances. We

0:04:04 > 0:04:09have delivered savings above annual targets for each of the last three

0:04:09 > 0:04:13years, which had been reinvested to strengthen public services in

0:04:13 > 0:04:17Scotland and equip them for the challenges ahead. Yesterday, I

0:04:17 > 0:04:21wrote to the convenor of the finance company -- committee to

0:04:21 > 0:04:28advise Parliament that we have delivered efficiency savings of

0:04:28 > 0:04:32over �2.2 billion in 2011, �673 million more than a target. I would

0:04:32 > 0:04:38like to pay tribute to staff in the Scottish public sector for this

0:04:38 > 0:04:42achievement. Over the last four years a minority government secured

0:04:42 > 0:04:45parliamentary support for its budget, balance the budget in each

0:04:45 > 0:04:50year and thereby demonstrated its financial competence. That is a

0:04:50 > 0:04:54record of which we are proud. The impact of the recession since 2008

0:04:54 > 0:04:58has created a serious economic context for our actions in

0:04:58 > 0:05:03government. We responded quickly and decisively with a detailed

0:05:03 > 0:05:08recovery plan that help support 15,000 jobs across Scotland. We

0:05:08 > 0:05:14have attracted major international companies to invest in Scotland and

0:05:14 > 0:05:16support of jobs, particularly in their construction sector. We have

0:05:16 > 0:05:19delivered the Small Business Bonus Scheme, which has removed or

0:05:19 > 0:05:24reduced the burden for tens of thousands of businesses across

0:05:24 > 0:05:28Scotland. It has established the Scottish investment bank which is

0:05:28 > 0:05:32helping Scottish companies to access finance. These and other

0:05:32 > 0:05:37measures we have taken have resulted in a recession that, while

0:05:37 > 0:05:42damaging, was shorter than that experienced by the UK as a whole.

0:05:42 > 0:05:46We are making progress towards economic recovery. Over the most

0:05:46 > 0:05:52recent three month period, Scotland was the only part of the UK with

0:05:52 > 0:05:55falling unemployment. Over the year, unemployment has fallen by 33,000

0:05:55 > 0:06:01in Scotland compared with an increase of 44,000 across the UK as

0:06:01 > 0:06:07a whole. At the same time, employment levels have increased by

0:06:07 > 0:06:1336,000 over the year. Scotland now has a highest employment rate of

0:06:13 > 0:06:17any UK nation. So too does you give out lectures on gross, and on

0:06:17 > 0:06:20presiding over stagnation, we say, learn a lesson from the record of

0:06:20 > 0:06:27investment, job creation and balanced budgets being delivered in

0:06:28 > 0:06:36Scotland. Now we face further financial challenges, as the

0:06:36 > 0:06:40Westminster government has imposed heavy cuts. In 2011 to 2012, we had

0:06:40 > 0:06:46been forced to reduce public spending by �1.3 billion compared

0:06:46 > 0:06:51to last year. We have an �800 million cash reduction to lack

0:06:51 > 0:06:59capital budget. Under the dance of the UK Government Spending Review,

0:06:59 > 0:07:03between 2010 and 11 and 2014-15, we face real terms reductions of 9.2 %

0:07:03 > 0:07:07and a real terms cut to lack capital budget of 36.7 %. We have

0:07:07 > 0:07:10argued consistently that the UK Government is cutting spending too

0:07:10 > 0:07:15far and too fast, and that its actions run the risk of damaging

0:07:15 > 0:07:18the fragile recovery in Scotland and the UK. Against this backdrop,

0:07:18 > 0:07:22we are determined to make the best use of the constrained resources

0:07:22 > 0:07:26available to us, and to build on the progress we have made over the

0:07:26 > 0:07:30last four years. Three in Scotland will steer a distinct course. We

0:07:30 > 0:07:34are committed to prioritising capital investment, protecting

0:07:34 > 0:07:38public sector employment and supporting household income says

0:07:38 > 0:07:40key drivers of economic recovery. The programme for government sets

0:07:40 > 0:07:44out how we want to continue to change our country for the better

0:07:44 > 0:07:50at how we will take forward the manifesto that secured widespread

0:07:50 > 0:07:53backing from the people of Scotland. The government's economic strategy

0:07:53 > 0:07:57identified as priorities for driving growth. It highlights how

0:07:57 > 0:08:01we will make full use of those economic levers, currently devolved

0:08:01 > 0:08:11to the Scottish Government, with the aim of improving Scotland's

0:08:11 > 0:08:13

0:08:13 > 0:08:19rate of sustainable economic growth. Many elements lie outside our remit.

0:08:19 > 0:08:23For example, 90 % of Scottish tax rates Aachen trolled by Westminster

0:08:23 > 0:08:27and I said without reference to economic circumstances here or

0:08:27 > 0:08:30preferences and needs. We have made clear that our immediate

0:08:30 > 0:08:34constitutional priority is to see economic teeth added to the

0:08:34 > 0:08:39Scotland Bill, and we had made the case for new powers on corporation

0:08:40 > 0:08:44tax, the Crown Estate and more expensive capital borrowing powers.

0:08:44 > 0:08:46But with independence we could do much more. It would provide the

0:08:46 > 0:08:51freedom to best thatcher you the unique opportunities in our economy,

0:08:51 > 0:08:58to maximise our potential and put us on a par with other successful,

0:08:58 > 0:09:01independent nations. But for the purposes of this Spending Review,

0:09:01 > 0:09:07we must work within the existing financial and constitutional

0:09:07 > 0:09:11framework, and today, I set out my plans for the future. I will focus

0:09:11 > 0:09:16of the Spending Review, that is just accelerates its economic

0:09:16 > 0:09:21recovery, deliver public sector reform and deliver a social wage

0:09:21 > 0:09:24for the people. Vital to economic recovery is the size of our capital

0:09:24 > 0:09:27investment. The government has agreed to take decisive action to

0:09:27 > 0:09:31boost investment in the infrastructure of Scotland,

0:09:31 > 0:09:37supporting jobs and promoting growth. The government is using

0:09:37 > 0:09:40every lever available to it to maximise investment. We are taking

0:09:40 > 0:09:44board at �2.5 billion pipeline of projects using the non-profit

0:09:44 > 0:09:50distributing model, including major investments, such as the package of

0:09:50 > 0:09:55improvements to the M eight, the Aberdeen peripheral route and the

0:09:55 > 0:10:02new hospital for sick children. We are maximising the use of Network

0:10:02 > 0:10:08Rail's regulatory rate to fund new rail projects. These include the

0:10:08 > 0:10:11Glasgow Hospitals project. We are funding manifesto commitments to

0:10:12 > 0:10:16deliver 30,000 new affordable homes over this Parliament. We have

0:10:16 > 0:10:25decided over the period until 2015 to switch from resorts expenditure

0:10:26 > 0:10:29to lack capital programme, a total of over it �750 million. We're

0:10:29 > 0:10:34using innovative mechanisms such as the National Housing Trust to

0:10:34 > 0:10:36secure additional sums and maximise investment. Taken together, these

0:10:36 > 0:10:42steps will ensure that government supported investment continues to

0:10:42 > 0:10:44grow, despite cuts in our capital budget. I am delighted to inform

0:10:44 > 0:10:53Parliament that our capital programme makes funding available

0:10:53 > 0:10:59to meet in full the government's commitments to upgrade the A et to,

0:10:59 > 0:11:06to construct her Majesty's Prison in Grampian, and to support the

0:11:06 > 0:11:10development of the V&A at Dundee. We are prioritising our investment

0:11:10 > 0:11:14in Scotland's young people to enable them to achieve their

0:11:14 > 0:11:19potential. This includes supporting 125,000 Modern apprenticeship

0:11:19 > 0:11:23places during the lifetime of this Parliament, and delivering on our

0:11:23 > 0:11:26commitment that every 16-19-year- old in Scotland to is neither in

0:11:26 > 0:11:30work, part of a Modern apprenticeship scheme nor receiving

0:11:30 > 0:11:35education is offered are learning more training opportunities. We

0:11:35 > 0:11:39will also insure a reproach to procurement is used to create jobs

0:11:39 > 0:11:42by insuring the recipients of public contract work deliver

0:11:42 > 0:11:47training and apprenticeship opportunities. This Spending Review

0:11:47 > 0:11:50settlement guarantees that the university sector in Scotland will

0:11:50 > 0:11:57remain internationally competitive, and it closes the funding gap with

0:11:57 > 0:12:01England in full. In addition to keeping our manifesto commitments

0:12:01 > 0:12:05on free access to higher education, we will introduce a minimum income

0:12:05 > 0:12:10for the lowest income students as we promised during the election

0:12:10 > 0:12:13campaign of at least �7,000. Our priority for the Spending Review

0:12:13 > 0:12:17period is to deliver on the ambition of next generation brought

0:12:17 > 0:12:22bands to all by 2020, with a particular focus on rural

0:12:22 > 0:12:26communities, and we expect significant process by 2015. We

0:12:26 > 0:12:31will also ensure that businesses across Scotland have the skills and

0:12:31 > 0:12:35aspirations to enable them to innovate and compete in global

0:12:35 > 0:12:38digital economy is. Over the next four years, we will provide over

0:12:38 > 0:12:44�62 million in funding for the digital economy, and broadband

0:12:44 > 0:12:47infrastructure, and the believer in up to �25.5 million of investment

0:12:47 > 0:12:52from EU funds, as well as additional funding from local

0:12:52 > 0:12:55authorities and the private sector. We will continue to provide

0:12:55 > 0:13:01business with the most generous package available anywhere in the

0:13:01 > 0:13:03United Kingdom, worth �2.6 billion. We will continue with the small

0:13:03 > 0:13:08business bonus scheme, which is helping tens of thousands of

0:13:08 > 0:13:14businesses across the country, in tough economic times. I will bring

0:13:14 > 0:13:18forward legislation to reform empty property relief from April 2013.

0:13:18 > 0:13:23This will introduce incentives to brink vacant premises back into use,

0:13:23 > 0:13:29reduce the prevalence of empty shops, and support the process of

0:13:29 > 0:13:34urban regeneration. The government will embark on a review of the

0:13:34 > 0:13:37operation of business rates in advance of the next revaluation in

0:13:37 > 0:13:422015. Key initiatives included in the government economic strategy

0:13:42 > 0:13:46and funded in the Spending Review include introducing a enterprise

0:13:46 > 0:13:55areas in Scotland to maximise their impact and attractiveness to

0:13:55 > 0:13:59investors. For developing a read -- providing support, promoting

0:13:59 > 0:14:03exports to capitalise on opportunities in growth markets,

0:14:03 > 0:14:08particularly in emerging markets such as China and India, with an

0:14:08 > 0:14:12ambitious target to deliver a 50 % increased by 2017, and increasing

0:14:12 > 0:14:17our support for the development of the food and drink industry and its

0:14:17 > 0:14:22exporting potential. Presiding officer -- Scotland has a

0:14:22 > 0:14:25competitive advantage in terms of the low carbon economy, that is why

0:14:25 > 0:14:29this economic strategy establish the transition to the low carbon

0:14:29 > 0:14:32economy as a new strategic priority. That reflects the opportunity we

0:14:32 > 0:14:39now have to secure further investment in jobs from this

0:14:39 > 0:14:45growing sector, and the benefits of this change will be visible across

0:14:45 > 0:14:49our communities. The fund will help leveraged private investment into

0:14:49 > 0:14:58renewables, part of over �200 million of investment in renewable

0:14:58 > 0:15:05such recommit to throughout this We are delivering on our climate

0:15:05 > 0:15:09change targets. The further targets will shortly be in place until 2027.

0:15:09 > 0:15:15Today we also publish our carbon assessment which set out spending

0:15:15 > 0:15:21plans in terms of emissions. Investment in climate change is

0:15:21 > 0:15:24bringing jobs and other benefits for communities. These are

0:15:24 > 0:15:28demonstrated through the continuation of the hugely

0:15:28 > 0:15:32successful climate challenge fund, the work of our energy assistance

0:15:32 > 0:15:38package and the home installation scheme and our efficiency programme

0:15:38 > 0:15:42has helped 800 businesses to reduce their waste and make better use of

0:15:42 > 0:15:47resources. We will take forward our commitments manifesto which include

0:15:47 > 0:15:52working to a 70 % target for recycled waste and a maximum of 5%

0:15:52 > 0:15:55to be sent to landfill by 2025. We will press for the Scottish

0:15:55 > 0:15:59Parliament to take on responsibility for the Crown Estate

0:15:59 > 0:16:06Commission said that the resources generated in Scotland will stay in

0:16:06 > 0:16:10Scotland. Of equal importance to the global agenda is the need to

0:16:10 > 0:16:14insure actions we take to cut emissions also deliver benefits to

0:16:14 > 0:16:19the people of Scotland. As I have mentioned, energy and resource

0:16:19 > 0:16:24efficiency will be a priority, and assisting people and businesses to

0:16:24 > 0:16:28be more efficient will tackle fuel poverty. We are working with energy

0:16:28 > 0:16:32companies to strengthen their activities in Scotland and further

0:16:33 > 0:16:38announcements will be made in due course. We aim to reduce impact on

0:16:38 > 0:16:40transport, reduce congestion and support better public transport,

0:16:40 > 0:16:44Active Travel and LOCOG and vehicles. This spending review

0:16:44 > 0:16:49confirms an ambitious programme of delivery that we will take forward

0:16:49 > 0:16:53over the life of this Parliament. However, the scale and breadth of

0:16:53 > 0:16:59Westminster's cuts also mean we have been forced to make choices --

0:16:59 > 0:17:04tough choices. The equality statement published today sets at

0:17:04 > 0:17:09the impact of our approach to continue to invest in building a

0:17:09 > 0:17:15society where people achieve regardless of their background and

0:17:15 > 0:17:18well -- and where barriers to opportunity got removed. To deliver

0:17:18 > 0:17:22on our commitments we must strive for greater productivity, reduce

0:17:22 > 0:17:27further the cost of Government, pursue a policy of peer restrained

0:17:27 > 0:17:30and push forward our renewal of public services. We have taken a

0:17:31 > 0:17:34strategic and collective approach to identifying our priorities and

0:17:34 > 0:17:39savings. We are reducing organisational costs including a

0:17:40 > 0:17:44reduction of 18% in the course of his Government's operating costs

0:17:44 > 0:17:49over three years and with a requirement that all public bodies

0:17:49 > 0:17:52will reduce the debt comparable cost. We will take forward the

0:17:52 > 0:17:57recommendations in the MacLellan review of ICD infrastructure,

0:17:57 > 0:18:06working with the Scottish futures Trust on our infrastructure

0:18:06 > 0:18:09programme and building the approaches. We also need to ensure

0:18:09 > 0:18:13we are the spending to the public appetite for services to be

0:18:13 > 0:18:20delivered in ways convenient to them. The MacLellan review looked

0:18:20 > 0:18:24at achieving better value for money from ICT Investment and in using

0:18:24 > 0:18:27ICT for more effective sharing of services. In setting at the

0:18:27 > 0:18:30Government's spending plans today, I expect every public sector

0:18:30 > 0:18:35organisation to demonstrate how they will contribute to the

0:18:35 > 0:18:38potential savings identified in a report of up to �1 billion in the

0:18:38 > 0:18:43next five years. I have also considered the options for raising

0:18:43 > 0:18:48additional income to help support investment. The updated

0:18:48 > 0:18:52infrastructure investment plans will be published later in the

0:18:52 > 0:18:55autumn, highlighting how we will improve asset management and

0:18:55 > 0:19:00release savings. Building on the work of the Scottish features Trust,

0:19:00 > 0:19:04we will take forward and asset management strategy for the central

0:19:04 > 0:19:08Government to state to reduce its size by and his 25 % over the next

0:19:08 > 0:19:14five years and achieve savings of around �28 million a year in

0:19:14 > 0:19:17operating costs by 2016. Last year I had to at public sector workers

0:19:17 > 0:19:21to bear some of the burden in dealing with the fall in public-

0:19:21 > 0:19:25spending. We did that to protect employment in the public sector,

0:19:25 > 0:19:29which is a valuable part of our economy and an essential foundation

0:19:29 > 0:19:32of our public services. Public sector pay accounts for around 55 %

0:19:32 > 0:19:37of the total Scottish resource budget and spending and decisions

0:19:37 > 0:19:42in this area of vital to our overall financial position. A

0:19:42 > 0:19:46public sector pay policies for 2012-13, published alongside the

0:19:46 > 0:19:49spending review today, balance difficult decisions on tight peer

0:19:49 > 0:19:52restraint with the need to sustain employment opportunities across the

0:19:52 > 0:19:57public sector. To help maintain staffing levels, it is essential

0:19:57 > 0:20:02that we continue to control pay growth and keep pay at an

0:20:02 > 0:20:09affordable and sustainable level. The policy for 2012-13 therefore

0:20:09 > 0:20:13extends the freeze on basic pay it and bonuses for a further year. In

0:20:13 > 0:20:17implementing a basic pay freeze for all staff we have been able to

0:20:17 > 0:20:20provide measures to support the lower paid. We will insure any

0:20:20 > 0:20:26employee learning -- earning less than dredge �1,000 continues to

0:20:26 > 0:20:30receive at least a �250 rise in net salary and I can announce that we

0:20:30 > 0:20:37will be maintaining our commitment to the Scottish living wage, up

0:20:37 > 0:20:43rating this to �7.20 an hour. Ministers will also be freezing

0:20:43 > 0:20:50their own pay in 2012-13 for the fourth year in succession. My aim

0:20:50 > 0:20:55is that 2012-13 will be the last year it of... And we may be able to

0:20:55 > 0:20:57see modest increases in the year that followed. I express my

0:20:57 > 0:21:06gratitude a game to the thousands of public-sector workers whose

0:21:06 > 0:21:10commitment to their valuable work has continued. Our objective is to

0:21:10 > 0:21:20protect public sector employment to support economic recovery. One of

0:21:20 > 0:21:24

0:21:24 > 0:21:31the threats to that objective comes to -- from UK Government decisions.

0:21:31 > 0:21:35The Government has made it clear that at a time of pressure, an

0:21:35 > 0:21:41interruption in employee pension contributions is unwanted. But

0:21:41 > 0:21:45should increases not be applied, the UK Government will decrease our

0:21:45 > 0:21:50budget. That would reduce public sector employment and run contrary

0:21:50 > 0:21:53to the direction of our employment policy. We believe that the UK

0:21:53 > 0:21:58Government is taking the wrong course of action and we reiterate

0:21:58 > 0:22:01our call for them to change direction. Should the UK Government

0:22:01 > 0:22:05refused to change its position, the Scottish Government will have no

0:22:05 > 0:22:11choice but to apply the increases in employee pension contributions

0:22:11 > 0:22:15for NHS, teachers, police and fire schemes in Scotland. We were put in

0:22:15 > 0:22:18place protections for the low-paid and we will leave the decision

0:22:18 > 0:22:23making under the local Government pension scheme to those who manage

0:22:23 > 0:22:25that scheme. We will not impose on local Government in Scotland what

0:22:25 > 0:22:33the United Kingdom Government has imposed on us.

0:22:33 > 0:22:37The pensions issue illustrates the need for this parliament and

0:22:37 > 0:22:41Government to be responsible for our own resources and revenue

0:22:41 > 0:22:43instead of being held to ransom by a United Kingdom Government that

0:22:43 > 0:22:50the people of Scotland did not vote for.

0:22:50 > 0:22:55Given the impact of these changes on public sector workers, the

0:22:55 > 0:22:58Scottish Government makes clear we will continue in 2012-13 our policy

0:22:58 > 0:23:02of no compulsory redundancies for those areas under our direct

0:23:02 > 0:23:07control. Within this commitment, we will pursue agreements on flexible

0:23:07 > 0:23:11working practices which will reduce costs while maintaining head count

0:23:11 > 0:23:16and services. The people of Scotland attach the highest Bali to

0:23:16 > 0:23:24the public services and the Government shares his view. --

0:23:24 > 0:23:28value. As we promised in our manifesto, we are protecting

0:23:28 > 0:23:32national health service spending but allocating an additional �826

0:23:32 > 0:23:37million to the health revenue budget in Scotland over three years.

0:23:37 > 0:23:41This means our commitment to pass on in full to the NHS and Scotland

0:23:41 > 0:23:46-- in Scotland the benefit of the bonnet resource consequential from

0:23:46 > 0:23:51the UK health settlement. As a result of this commitment and at a

0:23:51 > 0:23:57time of real time reductions in the overall Scottish budget, the core

0:23:57 > 0:24:05budgets that the health boards have to spend are protected in real

0:24:05 > 0:24:08terms in each of the next three years. This will allow us to drive

0:24:08 > 0:24:13forward continuous improvement in the quality of health care services

0:24:13 > 0:24:15in the interests of our economy with the help of well-being and

0:24:16 > 0:24:21communities across Scotland. We will continue to work in

0:24:21 > 0:24:27partnership with local Government. We have discussed and agreed with

0:24:27 > 0:24:30Cosla leadership and approach with national and local Government. The

0:24:30 > 0:24:36settlement will allow local authorities to deliver it the

0:24:36 > 0:24:39impact of shared... Including freezing the council tax, helping

0:24:39 > 0:24:44families through to have economic times, funding police boards to

0:24:44 > 0:24:47allow them to maintain 1000 additional police officers on our

0:24:47 > 0:24:52streets, maintaining teacher numbers in line with pupil numbers,

0:24:52 > 0:24:56and securing places for all probationers under the teacher

0:24:56 > 0:24:59induction scheme and meeting the needs of our most vulnerable and

0:25:00 > 0:25:08elderly through the NHS councils working together to improve adult

0:25:08 > 0:25:13social care. The 2011-12 funding will be maintained, but with

0:25:13 > 0:25:16additional resources to maintain teacher employment. Local

0:25:16 > 0:25:18Government throughout the spending review will receive a larger share

0:25:18 > 0:25:25of the funds controlled by the Scottish Government including

0:25:25 > 0:25:30business rates and the position we inherited in 2007-2008. I also

0:25:30 > 0:25:34confirmed that from 2012-13 onwards, the Government will honour its

0:25:34 > 0:25:38commitment to ensure no local authority receives less than 85 %

0:25:38 > 0:25:42of the average per-capita support of Scottish Local authorities. In

0:25:42 > 0:25:45addition, I have to get a decision on the local Government capital

0:25:45 > 0:25:49settlement that maintains their share of the total capital funding

0:25:49 > 0:25:55across the period but will be re profiled over the main deck --

0:25:55 > 0:25:59remainder of this Parliament. We want to maximise the ability --

0:25:59 > 0:26:03availability of capital spending and recognise that local

0:26:03 > 0:26:07governments have the power to borrow to supplement their budgets.

0:26:07 > 0:26:13We will work with local governments to see to what extent this can be

0:26:13 > 0:26:17used. The strong support for key public services and local

0:26:17 > 0:26:21Government and the NHS provides the foundation for setting out the way

0:26:21 > 0:26:26ahead in public service reform. The Government has pursued a vigorous

0:26:27 > 0:26:34programme of efficiency and public service reform since 2007. We MORI

0:26:34 > 0:26:40the work of the independent budget received. -- we appreciate the work.

0:26:40 > 0:26:44Today, alongside the spending review, I am publishing a response

0:26:44 > 0:26:48to the Christie Commission. These reviews have informed are decisions

0:26:48 > 0:26:51for the future. We will lead an ambitious programme of Sir --

0:26:51 > 0:26:54public service reform that challenges the public sector in

0:26:54 > 0:26:59Scotland to reshape, integrate and deliver better services to those

0:26:59 > 0:27:02who use them, consistent with the recommendations of the Christie

0:27:02 > 0:27:06Commission and with the requirement to deliver savings. Ministers have

0:27:06 > 0:27:09already set out our plans for the creation of a single police and

0:27:09 > 0:27:13single fire and rescue Service, as the best way to safeguard the vital

0:27:13 > 0:27:17frontline services upon which communities depend. The case for

0:27:17 > 0:27:21reform is clear. Single services for Scotland will retain local

0:27:21 > 0:27:24services for local communities while giving all parts of Scotland

0:27:24 > 0:27:30access to national expertise and assets whenever and wherever they

0:27:30 > 0:27:34are needed. Estimated savings of �130 million per year can be

0:27:34 > 0:27:39achieved by making sure money is spent on the front line and not on

0:27:39 > 0:27:43unnecessary duplication across eight services. We have also

0:27:43 > 0:27:47started a significant programme of reform of post 16 education,

0:27:47 > 0:27:51putting learners at the centre. This will reflect our determination

0:27:51 > 0:27:55to make the whole post 16 education system deliver better outcomes for

0:27:55 > 0:27:59individuals, outcomes, and ultimately, the economy. They

0:27:59 > 0:28:02reformed system will prioritise provision for young people, help

0:28:02 > 0:28:07learners develop the skills employers need now for the future,

0:28:07 > 0:28:10and support the development of businesses. As part of the public

0:28:10 > 0:28:14sector reform agenda we will give full consideration to the proposals

0:28:14 > 0:28:18from local Government to deliver savings by removing the need for

0:28:18 > 0:28:22authorities to advertise public information, to strengthen their

0:28:22 > 0:28:28constitutional role and to extend the duty of best value across the

0:28:28 > 0:28:32public sector. We have also made clear our intention to integrate

0:28:32 > 0:28:37health and social care services more closely to help other people.

0:28:37 > 0:28:42There will be four themes to our public service reform agenda. First,

0:28:42 > 0:28:46the improvement on outcomes for older people will seek an

0:28:46 > 0:28:51integration of services driven by better collaboration. Building on

0:28:51 > 0:28:55progress achieved in the last four years. We will sharpen the focus of

0:28:55 > 0:29:00public services as a magnet for partnership and the bases for

0:29:00 > 0:29:02stronger community participation in the design of local services. The

0:29:02 > 0:29:06Government will drive for greater collaboration in services design

0:29:06 > 0:29:11and collaborate at a local level, firmly in line with the focus on

0:29:11 > 0:29:15improving outcomes we have taken forward since 2007 in joint work

0:29:15 > 0:29:18with the local Government, the health service and the third sector.

0:29:18 > 0:29:21Second, there should be greater investment in people who deliver

0:29:21 > 0:29:26services, through enhanced workforce development, and we

0:29:26 > 0:29:29reject the argument that suggests that public sector employment is a

0:29:29 > 0:29:33drain on the nation's resources. We are certain that the work done by

0:29:33 > 0:29:38public-sector workers is essential to underpin our national prosperity

0:29:38 > 0:29:42and quality of life. We have done our utmost to safeguard frontline

0:29:42 > 0:29:45posts by Pierre restraint and going forward, we are committed to the

0:29:45 > 0:29:50further development of the public service workforce and its

0:29:50 > 0:29:53leadership. Third, we have committed to creating an open and

0:29:53 > 0:29:57rigorous performance culture within Scottish public services to create

0:29:57 > 0:30:05greater clarity around objectives and a short clear lines of

0:30:05 > 0:30:11accountability that stance of service will be improved. External

0:30:11 > 0:30:14scrutiny such as audits in -- an inspection can assist local

0:30:14 > 0:30:18authorities and partners to work together to deliver even better

0:30:18 > 0:30:23outcomes. I have therefore written today to the Accounts Commission,

0:30:23 > 0:30:33asking them to work with others to explore how best scrutiny activity

0:30:33 > 0:30:35

0:30:35 > 0:30:40We must not lose sight of our duty to recruit our country for the

0:30:40 > 0:30:42challenges ahead. That is why it Keast feature of this Spending

0:30:43 > 0:30:47Review is setting up a long-term course for their country. The

0:30:47 > 0:30:51decision of the people to give his government a parliamentary majority

0:30:51 > 0:30:56provides us with the opportunity to take bold action for the future.

0:30:56 > 0:30:59am delighted to announce that this Spending Review marks a decisive

0:31:00 > 0:31:03shift towards preventative spending in Scotland, the 4th and final

0:31:03 > 0:31:08element of our Public Service Reform agenda. Focusing on

0:31:08 > 0:31:12preventing problems by intervening area is not only the right approach,

0:31:12 > 0:31:18but too many of the social and other issues facing us today, as it

0:31:18 > 0:31:20also secures better value for the taxpayer. It will help to tackle

0:31:20 > 0:31:26inequalities and insure the sustainability of our public

0:31:26 > 0:31:30services, as demand for a range of acute services reduces over time.

0:31:30 > 0:31:35The government's shift to target investment in preventative approach

0:31:36 > 0:31:40is that deliver better outcomes and value for money, in respect to the

0:31:40 > 0:31:45parliamentary consensus. Our focus will be on supporting adult social

0:31:45 > 0:31:49care, and tackling reoffending with specific funding that will only be

0:31:49 > 0:31:53available for joint working across institutional boundaries and

0:31:53 > 0:31:58sectors. Over the next three years, through joint work, preventative

0:31:58 > 0:32:04spending initiatives will be boosted by a total of over �500

0:32:04 > 0:32:10million. In order to support for the shift to preventative spending,

0:32:11 > 0:32:14I have looked to increase revenue for this purpose. Scotland's health

0:32:14 > 0:32:17and social problems associated with alcohol and tobacco abuse are well

0:32:17 > 0:32:22documented, and they are things we are addressed -- committed to

0:32:22 > 0:32:28addressing. They affect their health of the population and create

0:32:28 > 0:32:31additional burdens on policing and the NHS. As such, I propose that

0:32:31 > 0:32:37the business rates paid by large retailers on tobacco and alcohol

0:32:37 > 0:32:42will be increased by a supplement from the first will be able to 1012.

0:32:42 > 0:32:45Four the estimated income this will raise will be used to contribute

0:32:45 > 0:32:48towards the preventative send letters that will be taken forward

0:32:48 > 0:32:53jointly with the Scottish Government, local authorities, the

0:32:53 > 0:32:58NHS and the third sector. They will be complemented by the launch of

0:32:58 > 0:33:02the Scottish Futures Fund which we promised at the election. We will

0:33:02 > 0:33:07invest more than �160 million over their next three years, and a

0:33:07 > 0:33:11further �90 million across the five components of this fund, to support

0:33:11 > 0:33:15our key social environmental and economic objectives. The move to

0:33:15 > 0:33:18preventative spending, the launch of the Scottish Futures Fund. These

0:33:18 > 0:33:22are the actions of a government building a nation fit for the

0:33:22 > 0:33:26future. At the heart of this government's work is our

0:33:26 > 0:33:30partnership with the Scottish people. The social wage is one part

0:33:30 > 0:33:33of our commitment to building a freer society. It means that in

0:33:33 > 0:33:36that time of financial constraint for households, the government

0:33:36 > 0:33:42seeks to give a helping hand. It means that where council tax is

0:33:42 > 0:33:46frozen, prescriptions and personal care are free. Concessionary bus

0:33:46 > 0:33:50travel is available and access to higher education is based on the

0:33:50 > 0:33:53ability to succeed rather than the ability to pay. We all share a part

0:33:53 > 0:33:59of the Scotland we want to be, despite the financial pressures

0:33:59 > 0:34:01they face, we believe that to be the correct approach. The

0:34:02 > 0:34:07government has had just -- published a budget that he quit

0:34:07 > 0:34:11Scotland for the challenges that lie ahead. I stand ready to support

0:34:11 > 0:34:15parliament's detailed scrutiny of these proposals. We have set out

0:34:15 > 0:34:19her response to the challenges we face, making tough choices they

0:34:19 > 0:34:23require. Our decisions are designed to equip Scotland for economic

0:34:23 > 0:34:32recovery, sustainable public services and new opportunities for

0:34:32 > 0:34:37our people. I commend the budget to parliament.

0:34:37 > 0:34:43John Swinney delivering his draft budget there during these tough

0:34:43 > 0:34:45economic times, promising to transfer more than �750 million

0:34:45 > 0:34:54into the capital investment programme to support economic

0:34:54 > 0:34:58recovery. Good afternoon. Let's get some instant reaction from our

0:34:58 > 0:35:03guests in the studio, our business and economy editor, Douglas Fraser

0:35:03 > 0:35:09and John McLaren from the Centre for Public Policy for the regions.

0:35:09 > 0:35:12Douglas, you instant reaction to that budget? No big surprises

0:35:12 > 0:35:16compared with what we had expected, and a lot of top spin about what

0:35:16 > 0:35:20they're doing. I suspect there is a lot hidden in this, particularly

0:35:20 > 0:35:23when you look at the increases for departments other than health.

0:35:23 > 0:35:27Health is getting an increase in line with inflation, but it may not

0:35:27 > 0:35:31be in line with all the inflation we are seeing over the next three

0:35:31 > 0:35:36years. The other departments are going to Take That squeeze, and it

0:35:36 > 0:35:41is putting an awful lot of emphasis on to higher you get efficiency in

0:35:41 > 0:35:46order to deal with the squeeze they're going to have to take. It

0:35:46 > 0:35:50looks like one area of controversy will be with the council. There

0:35:50 > 0:35:59does not seem to be any new money to pay for this year's council tax

0:35:59 > 0:36:03freeze. They had been encouraged not to increase it. That does not

0:36:03 > 0:36:08look like the case this year. And they are being asked to use their

0:36:08 > 0:36:12borrowing powers in order to fill some gaps in the capital budget.

0:36:12 > 0:36:18John McLaren, a key point in the Budget. What were the other key

0:36:18 > 0:36:24points? There is a pay freeze for one more year, which helps things,

0:36:24 > 0:36:31but then, it says it is an end. Then he said we may be able to give

0:36:31 > 0:36:36you some extra money after that. Additives like, how much? That is

0:36:36 > 0:36:42the big unknown. But there are a number of areas where new money has

0:36:42 > 0:36:50had to be found and moved. So the money from resource to capital

0:36:50 > 0:36:55budget, more than 800 million for Health, but there has not been

0:36:55 > 0:36:59anywhere that new money has come from. And so there is going to be a

0:36:59 > 0:37:04squeeze elsewhere. At the moment, it is difficult to see where that

0:37:04 > 0:37:09is. Perhaps it is just from the efficiency savings. Because that,

0:37:09 > 0:37:13from the manifesto, was where most of the savings come from. But you

0:37:13 > 0:37:18can find anything, including council tax freeze if you use those

0:37:18 > 0:37:22efficiency savings. But what are they? Are a real? How do you insure

0:37:22 > 0:37:25their happen? Douglas, the Conservatives were saying

0:37:25 > 0:37:31efficiency savings should be monitored to see if they are true

0:37:31 > 0:37:37and actual. And insisting there on the tax for retailers on alcohol

0:37:37 > 0:37:44and tobacco use? For yes, one year ago, John Swinney proposed nearly

0:37:44 > 0:37:47�30 million of additional tax. got knocked back because he did not

0:37:47 > 0:37:51have a majority then to do so. He does not have a problem with that

0:37:51 > 0:37:56now, but he does have a problem if retailers are told that tax is

0:37:56 > 0:38:01going to go up. It is an odd signal to send when you are trying to

0:38:01 > 0:38:07reduce tax. But if you are hitting tobacco and alcohol, that is what

0:38:07 > 0:38:11he is going after this time. That involves the same people, the big

0:38:11 > 0:38:18supermarkets. And he is clearly going to pursue them for that. Also

0:38:18 > 0:38:21worth looking at his is invest to save - the preventative spending.

0:38:21 > 0:38:26Everybody can agree that is a good thing to do, to keep somebody out

0:38:26 > 0:38:31of prison 20 years by-now by making sure they get good schooling this

0:38:32 > 0:38:36year. But that is very expensive. Your reward is 20 years from now a.

0:38:36 > 0:38:39And this does not seem like an easy time to do that. He seems to be

0:38:39 > 0:38:47freeing up money from elsewhere, we have yet to find out where, to make

0:38:47 > 0:38:50that possible. Four we go back to the chamber.

0:38:50 > 0:38:54The Scottish Government is passing on the painful stop the crucial

0:38:54 > 0:38:58part of that is that once again, it is being passed on to local

0:38:58 > 0:39:05authorities. The fight your council tax freeze, the pledge on police

0:39:05 > 0:39:10numbers. The Christie Commission tells us that the gap between

0:39:10 > 0:39:17revenue and demand for local authorities by 2016 will be �3

0:39:18 > 0:39:22billion. If councils are to meet the costs of the SNP's ledgers, it

0:39:22 > 0:39:25will mean more council workers losing their jobs, further cuts in

0:39:25 > 0:39:30service and the evidence of the last Parliament is that education

0:39:30 > 0:39:37and social work budgets will be badly hit. It will mean more and

0:39:37 > 0:39:40more public sector jobs going, it will mean some of the most

0:39:40 > 0:39:44vulnerable in our communities being denied the services on which they

0:39:44 > 0:39:48depend, and it will hit local education budgets, which are

0:39:48 > 0:39:55crucial to our young people. The Scottish Government might think

0:39:55 > 0:39:58this is a good political trick, but these will be cuts because of

0:39:58 > 0:40:04decisions they have taken. And I have no doubt they will be resisted

0:40:04 > 0:40:08strongly. We know there is great concern amongst her local-authority

0:40:08 > 0:40:13leaders, at least amongst those who are allowed to be concerned about

0:40:13 > 0:40:17the settlement. That is clear from the fact that there is no agreement

0:40:17 > 0:40:22with local authority leaders that this settlement is adequate in a

0:40:22 > 0:40:26number of key areas. On maintaining police numbers, all that has been

0:40:26 > 0:40:30currently agreed is that there will be flat cash settlements for police

0:40:30 > 0:40:35forces. No commitment that this will be enough to maintain numbers.

0:40:35 > 0:40:39We have already voiced her concern that the loss of hundreds of police

0:40:39 > 0:40:43Staffs. Despite the many statements made in advance of the elections on

0:40:43 > 0:40:47Scottish Government policy on no compulsory redundancies, no such

0:40:47 > 0:40:52agreement has been reached with local authorities. And there is

0:40:52 > 0:40:58great concern amongst councils about Mr Swinney's plans to cut

0:40:58 > 0:41:01their capital spending by �120 million, and �100 million in the

0:41:01 > 0:41:05next two years, in the expectation that they will borrowed to fill

0:41:05 > 0:41:08this gap over that period. I am a supporter of the Scottish

0:41:08 > 0:41:12Government having borrowing powers at a higher level than those

0:41:12 > 0:41:16proposed in the Scotland Bill, and at a faster rate. But in asking

0:41:16 > 0:41:20local authorities to do that borrowing for them, Mr Swinney has

0:41:20 > 0:41:23received no commitment this will actually happen. And given the

0:41:23 > 0:41:27financial pressures local authorities are under, this cannot

0:41:27 > 0:41:30be surprising, particularly because he has apparently not said if he

0:41:30 > 0:41:35will reimburse councils for the substantial interest payments which

0:41:35 > 0:41:38will accrue on those loans. We can only hope that this move will not

0:41:38 > 0:41:43mean that and local infrastructure investment will be stalled or

0:41:43 > 0:41:48cancelled. We do not believe this is a fiscal stimulus, but rather, a

0:41:48 > 0:41:52slight of hand. This is of crucial importance, because one area of

0:41:52 > 0:41:58agreement in principle between us is on the need to maximise spending

0:41:58 > 0:42:02on infrastructure in order to stimulate economic growth. Richard

0:42:02 > 0:42:08Baker their. Live coverage of the Scottish budget debate continues on

0:42:08 > 0:42:17our website. We will go to the Garden Lobby,

0:42:17 > 0:42:24where we can speak to Paul wheelhouse and Lewis MacDonald.

0:42:24 > 0:42:28Good afternoon. Paul, first of all, let's take up on what Richard Baker

0:42:28 > 0:42:32was saying. The local authorities had been left high and dry and are

0:42:32 > 0:42:39having to borrow to fund his plans? For example, the council tax freeze

0:42:40 > 0:42:42well stocked I would not make that linkage myself. I think it is clear

0:42:42 > 0:42:48that in 2011 local government will have a higher share than they had

0:42:48 > 0:42:53prior to coming into office in 2007, and in terms of borrowing powers,

0:42:53 > 0:42:58we are anticipating the Scotland Bill will give us borrowing powers

0:42:58 > 0:43:02to fund capital projects. It is too early to jump to conclusions that

0:43:02 > 0:43:07local government is being punished. But you criticise Labour for

0:43:07 > 0:43:12running up debt. It looks like this is what the SNP are doing. It looks

0:43:12 > 0:43:20like John Swinney is pushing that pressure on to local councils so

0:43:20 > 0:43:25that he can balance his books. on as John is a fitting description,

0:43:25 > 0:43:29but what we are talking about here, there is obviously a severe drop

0:43:29 > 0:43:32off in the capital budget and the Scottish Government has to work

0:43:32 > 0:43:35with. And we are asking for a partnership between the Scottish

0:43:35 > 0:43:42Government and local governments to ensure that vital projects can

0:43:42 > 0:43:45Tintin youth -- continue. And we have an opportunity with the

0:43:45 > 0:43:49introduction of borrowing powers later on in the turn of the

0:43:49 > 0:43:58parliament to try and increase the capital funding we have available.

0:43:58 > 0:44:02Lewis MacDonald, the haters could have been left by your own

0:44:02 > 0:44:08government. Are you not impressed that John Swinney is doing a good

0:44:08 > 0:44:14job in balancing the books? If no, because what I have seen so far or

0:44:14 > 0:44:20shows that the way he is doing it... We need to see the detail. And when

0:44:20 > 0:44:26we see an example of money being cut from the housing regeneration

0:44:26 > 0:44:30programme, you have to ask whether indeed housing regeneration are

0:44:30 > 0:44:37being given the priority they deserve. We have also a singer Cat

0:44:37 > 0:44:42in the funding for further education, up also for capital

0:44:42 > 0:44:46funding of Scottish Water, on the very day we have heard reports of

0:44:46 > 0:44:50unsafe water delivery in the north of Glasgow a few months ago. There

0:44:50 > 0:44:53are real concerns about where these cuts will hit, and when Paul

0:44:54 > 0:44:57Wheelhouse talks about asking for a partnership with local government,

0:44:58 > 0:45:00we have to ask the question, when used a partnership, do you mean it

0:45:01 > 0:45:08you agree or do you mean that John Swinney tells the councils that

0:45:08 > 0:45:12they are funding -- their funding will be be profiled by the Scottish

0:45:12 > 0:45:15Government with no pay back from the Scottish Government for the

0:45:15 > 0:45:25money. So, a while we do not know the detail, we are concerned by

0:45:25 > 0:45:26

0:45:26 > 0:45:30What will happen with Labour council leaders across Scotland?

0:45:30 > 0:45:35Last time Mr Swinney managed to insure the council tax freeze using

0:45:35 > 0:45:39the carrot and stick method. think Labour council leaders will

0:45:39 > 0:45:44be very concerned at what has been put in front of them and will want

0:45:44 > 0:45:51to know first to the detail and second how their ability to deliver

0:45:51 > 0:45:55public services for their communities will be affected. There

0:45:55 > 0:46:03may be a degree of compulsion around that so-called partnership

0:46:03 > 0:46:09approach. We also know because of the SNP are planning a five-year

0:46:09 > 0:46:14council tax freeze, we are bound to wonder how that will allow public

0:46:15 > 0:46:23services to continue to be funded towards the end of that period.

0:46:23 > 0:46:27Paul, so many of the new SNP's have come from a local Government. What

0:46:27 > 0:46:34do you make of that, about this compulsion and have divorced

0:46:34 > 0:46:40partnership working? I do not think there is an enforced compulsion.

0:46:40 > 0:46:45There is an incentive here for councils to conform to the council

0:46:45 > 0:46:51tax freeze, because they are asking their employees and residents to

0:46:51 > 0:46:55absorb the pay freeze for the forthcoming year. There is a

0:46:55 > 0:46:59requirement then to introduce a social wage which we very much back

0:46:59 > 0:47:03in the SNP. There is a responsibility for individual

0:47:03 > 0:47:06families and those working in the public sector and we have a council

0:47:06 > 0:47:11tax freeze which allows them to maintain their standard of living

0:47:11 > 0:47:18without putting additional pressure on as a result of Westminster's

0:47:18 > 0:47:22cuts. Thank you very much. There is one other major political event

0:47:22 > 0:47:25taking place this afternoon. The Deputy Prime Minister, Nick Clegg,

0:47:25 > 0:47:30is due to address the party faithful at the Lib Dem conference

0:47:30 > 0:47:32in Birmingham. He has spent the week trying to convince the public

0:47:32 > 0:47:37that the Lib Dems are making a difference in Government. Let's

0:47:37 > 0:47:42cross once again to of Westminster correspondent who is standing by

0:47:42 > 0:47:46behind the conference hall. about a quarter of an hour, Nick

0:47:46 > 0:47:50Clegg will be getting up to make that speech and what has he got to

0:47:50 > 0:47:54say, and what type of a week has it been for the Liberal Democrats down

0:47:54 > 0:47:58here in Birmingham? To answer those questions, I enjoyed by two

0:47:58 > 0:48:04Scottish activists, Jenni Lang from Edinburgh and Callum Leslie from

0:48:04 > 0:48:09Fife. Jenni, what has your leader got to do this afternoon to rebuild

0:48:09 > 0:48:14the party's confidence in what has been a dreadful year for you in

0:48:14 > 0:48:18electoral terms. The press seem to be quite bemused by the fact that

0:48:18 > 0:48:22at this conference we have all been upbeat and there has not been a

0:48:22 > 0:48:28sense of panic. He does not need to do much to build our confidence.

0:48:28 > 0:48:34The number of people who have campaigned remember of -- a time

0:48:34 > 0:48:38when poll ratings were down and there was no discernible support.

0:48:38 > 0:48:42We are comfortable where we have to go and we know what we have to do.

0:48:42 > 0:48:47I think the key now is looking forward and for the speech today,

0:48:47 > 0:48:53it has got to be about looking forward and the positives we are

0:48:53 > 0:48:58bringing to Government. Callum Leslie, you are from the Fife area.

0:48:58 > 0:49:02How easily are you and your colleagues in the Liberal Democrats

0:49:02 > 0:49:06about the body beamed in coalition with the Conservatives, and it

0:49:06 > 0:49:12seems as far as Scotland is concerned, you pay a price for that

0:49:12 > 0:49:16in May. There is no doubt be paid a price. The Liberal Democrats have

0:49:16 > 0:49:22always paid a price for being the junior partner in a coalition. They

0:49:22 > 0:49:31do not think we are finding it easy to be in the collision but we are

0:49:31 > 0:49:40confident we were made -- we make the correct decision. The

0:49:40 > 0:49:44electorate chose not to give any part in the majority. The message

0:49:44 > 0:49:48he is going to get across this afternoon is, it is tough being in

0:49:48 > 0:49:52coalition. It is right that we will have to come on with the reduction

0:49:52 > 0:49:56plans for the deficit. Is that a message you can sell on the

0:49:56 > 0:50:01doorsteps in Fife? That is definitely what we have to do and

0:50:01 > 0:50:05that is how we go about regaining the support of voters. The

0:50:05 > 0:50:10activists need to get back on doorsteps and spell at the

0:50:11 > 0:50:16positives to local people. When we go back, it is because the Liberal

0:50:16 > 0:50:20Democrats are in Government that the poorest families have been

0:50:20 > 0:50:23lifted out of income tax. It is about selling those things. There

0:50:23 > 0:50:27is a number of things that have happened because the Liberal

0:50:27 > 0:50:31Democrats are in Government and would not have happened if it had

0:50:31 > 0:50:34been a Conservative minority. Those things we can take to the doorstep.

0:50:34 > 0:50:40We have to start being more confident in going out and telling

0:50:40 > 0:50:44the good stories we have to tell. For Scotland, the big question is

0:50:44 > 0:50:48independence referendum. What is your view on this? Your party seems

0:50:48 > 0:50:52to be saying when it comes along they will fight against it. Should

0:50:52 > 0:50:56your party be more proactive on that? My personal view is that we

0:50:56 > 0:51:00should have done it in the previous Government, prior to the SNP having

0:51:00 > 0:51:04the majority. At that point, the question would have been possibly

0:51:04 > 0:51:09quite different to what we may get in this particular Government. Do I

0:51:09 > 0:51:16think we should be independent? Absolutely not. Should be campaign

0:51:16 > 0:51:19against it? Absolutely. Should we ask the questions? I am a Liberal

0:51:19 > 0:51:23Democrat and I believe in the will of the people. They should be asked

0:51:23 > 0:51:31the question. Karen, do you want to see a referendum sooner rather than

0:51:31 > 0:51:36later? -- Callum. Yes but we need to see the SNP coming clean on the

0:51:36 > 0:51:41costs and implications of independence. We really need to see

0:51:41 > 0:51:44a bit more leadership from the SNP on this, to show they are fit to

0:51:44 > 0:51:49govern and to give us a straight answer on the costs and

0:51:49 > 0:51:52implications of independence. you very much. I will let you get

0:51:52 > 0:51:54back into the conference now when the fight will be making that

0:51:54 > 0:51:59speech probably in about ten minutes or quarter of an hour,

0:51:59 > 0:52:03where he will be answering that specific question that still many

0:52:03 > 0:52:07Liberal Democrats have, if we are in coalition, what are we in

0:52:07 > 0:52:13coalition for? And secondly, how to have the will things be in the

0:52:13 > 0:52:16weeks and months ahead? We will have that speech from Nick

0:52:16 > 0:52:24Clegg lies. The political commentator Hamish Macdonell is

0:52:24 > 0:52:30with me for the rest of the programme. What political message

0:52:30 > 0:52:33is John Swinney trying to convey? With this budget there are two

0:52:33 > 0:52:37distant stories. There is the number crunching and the economics

0:52:37 > 0:52:41of it and then the politics. There is a fairly clear political thread

0:52:41 > 0:52:45that runs all the way through this and it is to do with comparisons

0:52:45 > 0:52:49and particularly comparisons with England. If you look at what he

0:52:49 > 0:52:53says, he's saying, learn from us in Scotland. We are doing it right. It

0:52:53 > 0:52:57took him just two minutes to mention how could the unemployment

0:52:57 > 0:53:01statistics are in Scotland compared to England. Then he says, give us

0:53:01 > 0:53:05more powers and we will do even better. Finally, he says our aim is

0:53:05 > 0:53:08that Scotland will be in a better position than England. Come the

0:53:08 > 0:53:11referendum, we will have the statistics to prove it so that the

0:53:11 > 0:53:14public can then vote for independence. That is the political

0:53:14 > 0:53:20thread running through it and that is a consistent theme we have seen

0:53:20 > 0:53:23from the SNP. One of us talking to the SNP MSP earlier, I was

0:53:23 > 0:53:29mentioning be honest John caricature all. Is John Swinney

0:53:29 > 0:53:35able to blame London and then shift some of the blame on to local

0:53:35 > 0:53:39councils to maintain his team come up -- clean-cut image? This is

0:53:39 > 0:53:44where he has trouble all we in the future. There are couple of

0:53:44 > 0:53:47constituencies at their way he has to try to sort it out. One thing is

0:53:47 > 0:53:49the councils and there are things in the Budget which a lot of

0:53:49 > 0:53:54councils will find very difficult to swallow. On the other hand, he

0:53:54 > 0:53:57has the unions, and the Budget seems to be earning more on the

0:53:57 > 0:54:02side of the unions, particularly the public sector unions, in terms

0:54:02 > 0:54:05of things like pay and teacher numbers. On the other hand, he is

0:54:05 > 0:54:13then probably coming in to fight the battle with cancer at the same

0:54:13 > 0:54:18time. John McLaren, there is that incredible pressure on its John

0:54:18 > 0:54:23Swinney in terms of the final budget allocation. Is he coping

0:54:23 > 0:54:27with that pressure? He has to cope with it because he has to balance

0:54:27 > 0:54:31his budget. It is inevitable he has to do that. We will have to wait

0:54:31 > 0:54:36and see how these plans act. There are a lot of commitments made their

0:54:36 > 0:54:39but we have not seen the details. He has said he will fully fund the

0:54:39 > 0:54:47higher education gap. I do not think it is possible to know what

0:54:47 > 0:54:50that is going to beat yet so that is a moot point. The local

0:54:50 > 0:54:57Government is going to be an important one. He has only gone one

0:54:57 > 0:55:03year ahead with the wages but that will be satisfactory and leave the

0:55:03 > 0:55:07next two years Open. The ring back to the point about his attempt to

0:55:07 > 0:55:12make Scotland look like it is in a better position than the UK. --

0:55:13 > 0:55:16going back. In terms of the economy. In a few months' time, when you

0:55:16 > 0:55:21have more day debt, the data could look worse. The data is not even

0:55:21 > 0:55:24that strong. If you look back two years, the UK has done better on

0:55:24 > 0:55:29unemployment and in Scotland and the figures within Scotland are

0:55:29 > 0:55:34very... Art, shall we say? There has apparently been a huge increase

0:55:34 > 0:55:40in health and social workers, up 15 % of the last six months. I doubt

0:55:40 > 0:55:45that that is true. So the position could shift quite quickly so that

0:55:46 > 0:55:51strand of the argument could be weak. Thank you. We will be back

0:55:51 > 0:55:57with you gentleman in a moment. Now on to our economics commentator Alf

0:55:57 > 0:56:01Young, in the garden lobby. What do you make of the budget? I thought

0:56:01 > 0:56:06it was complex in terms of trying to balance all these forces. There

0:56:06 > 0:56:13were one or two surprises. I think the surprise at the end about new

0:56:13 > 0:56:18spending on preventative measures balanced up by taking muzhik --

0:56:18 > 0:56:21money off sales of alcohol and that is back to the old Tesco tax which

0:56:21 > 0:56:26they did not manage to get through last time. It will be interesting

0:56:26 > 0:56:32to see how they do that in a way that does not have borderline cases

0:56:32 > 0:56:35and complications about who pays it and whose does not. Also, some key

0:56:36 > 0:56:39points and pate and pensions as well. Mr Swinney was saying the UK

0:56:39 > 0:56:42Government is taking the wrong course of action when it comes to

0:56:42 > 0:56:45public sector pensions, but he was saying they will have to follow

0:56:45 > 0:56:53that course of action themselves if the UK Government did not change

0:56:53 > 0:56:55their cause of action. Absolutely. Faced with the possibility of

0:56:55 > 0:56:59losing over �8 million a month from their own budget, they have decided

0:56:59 > 0:57:03to say that if the British Government goes ahead with it, that

0:57:03 > 0:57:06will happen. So there is talk of another year of salary freeze and

0:57:06 > 0:57:14donors freeze. People will have to pay more for their pensions and

0:57:14 > 0:57:19that will have copies consequences in terms of living through the

0:57:19 > 0:57:25biggest, longest living squeezed -- squeeze on living standards since

0:57:25 > 0:57:31the 1920s in the UK. In that context, treating up workers in

0:57:31 > 0:57:36that way we'll squeeze their living standards even more. It will be

0:57:36 > 0:57:40interesting to see how they treat individuals rather than judging one

0:57:40 > 0:57:44party's political pitch against another us. What did you make in

0:57:44 > 0:57:48terms of the pledges when it comes to public sector workers would be

0:57:48 > 0:57:52no compulsory redundancies, the pay freeze, and he did mention the

0:57:52 > 0:57:57extra flexibility that would be required of them? I think a lot of

0:57:57 > 0:58:04that is in the detail. What does he mean by flexibility and integration

0:58:04 > 0:58:09and the other nice words he came away with? In general terms, I

0:58:09 > 0:58:14think the message to public sector workers is that times are going to

0:58:14 > 0:58:18be quite tough. Not having a compulsory redundancy scheme is one

0:58:18 > 0:58:22thing but it did look at the Government's own Civil Service, I

0:58:22 > 0:58:26was talking to a civil servant not long ago he was telling me that one

0:58:26 > 0:58:29in six of the Scottish Government's own workforce has already gone, not

0:58:29 > 0:58:34because of compulsory redundancy but there are other ways of making

0:58:34 > 0:58:42the atmosphere such that the job is no longer needed, off you go. There

0:58:42 > 0:58:46has been quite a big exodus already. Mr Swinney promised an extra �826

0:58:46 > 0:58:50million for the health budget in Scotland. I suppose he is ensuring

0:58:50 > 0:58:54that in cash terms there is a real increase there? Yes, but doing that,

0:58:54 > 0:58:58because it is such a big part of the overall budget, inevitably

0:58:58 > 0:59:02other things will be hit and I have already had people saying that the

0:59:02 > 0:59:05housing regeneration budget is going to be hit. I am involved in

0:59:05 > 0:59:10that personally. I do not have the numbers yet but we have already

0:59:10 > 0:59:13taken a pretty massive hit last time. If we take another massive

0:59:13 > 0:59:17hit you wonder whether things like regeneration projects are possible

0:59:17 > 0:59:23to deliver at all if the Government is not going to be committed to

0:59:23 > 0:59:27them in the longer term. Thank you. Before we go live to Birmingham for

0:59:27 > 0:59:31Nick Clegg's speech, I'm joined again by my guests in the studio,

0:59:31 > 0:59:35Hamish Macdonell. What do you think Nick Clegg will tell delegates and

0:59:35 > 0:59:39what kind of a week have they had in Birmingham? This is probably the

0:59:39 > 0:59:42toughest speech he has had to deliver. He had a tough one last

0:59:42 > 0:59:47year after they went into Government but this year, things

0:59:47 > 0:59:50are even worse. The overall message will have to be, keep the faith,

0:59:50 > 0:59:53stick with it. We have got liberalism in Government. He will

0:59:53 > 0:59:57have to come out with lots of examples of the things the Liberal

0:59:57 > 1:00:06Democrats have done to say, we are actually achieving things. Do not

1:00:06 > 1:00:11listen to all the critics or the Michael Moore was promising to look

1:00:11 > 1:00:16at trading and grows in Scotland. What can be done there in terms of

1:00:16 > 1:00:20the UK Government trying to improve that in Scotland? There are a

1:00:20 > 1:00:26number of things, economic powers that are still held at the Treasury

1:00:26 > 1:00:30which could try and improve trade. But most of the powers that way are

1:00:30 > 1:00:34now really in Scotland, whether it is to do with skills, or planning

1:00:34 > 1:00:41regulations, things like that. There are some things that can be

1:00:41 > 1:00:44done, but to be almost, it is the world's conditions that are the

1:00:44 > 1:00:49most important thing, it is what is going to happen in the euro-zone

1:00:49 > 1:00:54and in America, as well as in China, that will really drive whether

1:00:54 > 1:00:59there is a recovery or not. These are things that can prepare you for

1:00:59 > 1:01:04the recovery. Get you in a good position for when it comes. But the

1:01:04 > 1:01:08recovery will be partly the bigger picture that will happen, not just

1:01:08 > 1:01:12Scotland but the UK. Hamish, we have seen at the Liberal Democrat

1:01:13 > 1:01:15conference they had been critical of the situation in Scotland,

1:01:15 > 1:01:20warnings from the Scottish delegates that a referendum could

1:01:20 > 1:01:24endanger a gross. Should the SNP be concerned about these warnings from

1:01:24 > 1:01:30their opponents? Big business were obviously making the same. A couple

1:01:30 > 1:01:33of weeks ago? I think the SNP would be worried about business saying it,

1:01:33 > 1:01:36not the Liberal Democrats. They will just look at the polls and

1:01:36 > 1:01:40think that the Liberal Democrats are suffering and they will not pay

1:01:40 > 1:01:45much attention. I think one of the points that John was making, one of

1:01:45 > 1:01:50the key points we have to get from Nick Clegg's speech is one of tone.

1:01:50 > 1:01:54Does he adopt the same kind of tone as we saw from Vince Cable, or does

1:01:54 > 1:01:58he tried to inject some positivity into it? Does he talk about the

1:01:58 > 1:02:01referendum, does he talk about Scottish independence or try to

1:02:01 > 1:02:08sell the more positive message, which is more difficult given the

1:02:08 > 1:02:11circumstances we are in. So John McLaren, we are hearing some double

1:02:12 > 1:02:16speak from the Liberal Democrats when it comes to Plan A and Plan B.

1:02:16 > 1:02:19There was talk of a plan a plus, where they were promising �5

1:02:19 > 1:02:25billion of capital investment in broadband and transport projects

1:02:25 > 1:02:30and so on. Other Liberal Democrats pushing for a move to Plan B,

1:02:30 > 1:02:37whereas the Conservatives are happy to stick with Plan A? I think

1:02:37 > 1:02:43Dannii Alexander, Vince Cable and Nick Clegg all must know how wedded

1:02:43 > 1:02:46Jock -- Jack Osborne and David Cameron are to plan A, and that it

1:02:46 > 1:02:50will undermine their credibility. They are probably looking at little

1:02:50 > 1:02:55bits of money that have been underspent being spent on other

1:02:55 > 1:03:02areas. But it seems as though the gap is getting bigger from the

1:03:02 > 1:03:06IMF's figures yesterday. And that puts the pressure today, will they

1:03:06 > 1:03:11have even more cuts to meet the target, not will there be a Plan B

1:03:11 > 1:03:17with extra money. I cannot see there being, and less something

1:03:17 > 1:03:22dramatically shifts, I cannot see there being a Plan B. Hamish, Alex

1:03:22 > 1:03:26Salmond has been promising Plan MacB, that has been the Scottish

1:03:26 > 1:03:31Government's proposal. In terms of that, how credible is that as a

1:03:31 > 1:03:35substitute plan? I think that Plan MacB, as it has been dubbed, is

1:03:35 > 1:03:38really about putting money into infrastructure projects and trying

1:03:38 > 1:03:43to galvanise the economy by using public sector spending in areas

1:03:43 > 1:03:46which can create jobs and create wealth. So what we have seen from

1:03:46 > 1:03:50the Scottish Government today has been an attempt to use what they

1:03:50 > 1:03:54would seek the minor levers they have round the edges to push money

1:03:54 > 1:03:58into those areas. And if it works, and again this comes down to

1:03:58 > 1:04:02statistics, we do not know where things will go, but if it works,

1:04:02 > 1:04:06they can then say that Plan MacB is working and that it should be taken

1:04:06 > 1:04:13down south. This could be embarrassing for the Coalition

1:04:13 > 1:04:17Government if, as IMF were saying, if we slip into a further recession,

1:04:17 > 1:04:22it the IMF were saying that they could maybe the have Plan B. Do you

1:04:22 > 1:04:27think that is giving some succour to Alex Salmond? I think that any

1:04:27 > 1:04:32chance he gets, he will raise the IMF and say, look, the IMF are

1:04:32 > 1:04:35saying this, change course. George Osborne has shown no indication

1:04:36 > 1:04:39that he is attempting more willing to change course. We will see that

1:04:39 > 1:04:44when the Conservatives gather for their conference. But I expect him

1:04:44 > 1:04:48to stick with the plan A, and try to see it through. His is not just

1:04:48 > 1:04:52about economics, it is about ideology as well for the

1:04:52 > 1:04:57Conservatives. John, do you think that has been difficult for the

1:04:57 > 1:05:01Liberal Democrats this week, the mixture of ideology and economics?

1:05:01 > 1:05:04Do you think delegates have found it uncomfortable? I think the

1:05:04 > 1:05:08delegates have, but I think the delegates and some of the ministers

1:05:08 > 1:05:12are in different places anyway. There has been a strain of the

1:05:12 > 1:05:18Liberal Democrats that have been more conservative-minded in terms

1:05:18 > 1:05:21of economics and finances than their normal party members. So I do

1:05:21 > 1:05:25not think people like Vince Cable and Nick Clegg are more relaxed

1:05:25 > 1:05:29with that position. They want other things on the social side put

1:05:29 > 1:05:33forward. But I think they are reasonably relaxed about the

1:05:33 > 1:05:38overall position in terms of the economy. Hamish come up we are

1:05:38 > 1:05:43almost going to that speech. It has been a reasonably successful week

1:05:43 > 1:05:47for them in terms of media coverage. Reasonably upbeat, things are

1:05:47 > 1:05:54perhaps not so bad as they were when students were writing in

1:05:54 > 1:05:57December. I think so, but I think they were starting from a low point.

1:05:57 > 1:06:01I think what they do in the coalition has been driving things

1:06:01 > 1:06:04behind the scenes. It is a question of whether they can afford to pull

1:06:04 > 1:06:09themselves away from the Tories electorally, and if they do, would

1:06:09 > 1:06:12they get stuffed? So I think that yes, it has not been a bad

1:06:12 > 1:06:18conference, but they have had better ones in the past when they

1:06:18 > 1:06:23were not in government. We are hearing from Chris Huhne about his

1:06:24 > 1:06:28plan to tackle the big energy companies. Do you think the Liberal

1:06:28 > 1:06:32Democrats had hit a positive note with that? Do you think that will

1:06:32 > 1:06:38appeal to the public, Lower Terrace, making it easier for people to

1:06:38 > 1:06:44switch? Yes, it will appeal to the public, things like that usually do.

1:06:44 > 1:06:48It is how you go about doing it. And if at the same time they are

1:06:48 > 1:06:52going to champion Moorgreen power, more renewables, at the minute,

1:06:52 > 1:07:00there is a subsidy involved in that which would push energy prices back

1:07:00 > 1:07:05up. So it is not a wholly convincing package. We are almost

1:07:05 > 1:07:10going to the conference. Nick Clegg is just about to speak. There was

1:07:10 > 1:07:13an amusing cartoon in The Times on Saturday, David Cameron and George

1:07:13 > 1:07:17Osborne checking Liberal Democrat candidates before they went in. How

1:07:17 > 1:07:22much of what the senior Liberal Democrats can say, how much to gain

1:07:22 > 1:07:26liaise with the Conservatives? think they will liaise, but I think

1:07:26 > 1:07:31David Cameron is pretty relaxed. He knows that this is Nick Clegg

1:07:31 > 1:07:37talking to his mates as he has to, and he has to let off steam. And I

1:07:37 > 1:07:41think the Conservatives know that. It is just running a few minutes

1:07:41 > 1:07:45late. Are there any other points that Nick Clegg will try to put a

1:07:45 > 1:07:50paw and -- across? Anything that he will try to hit home so that the

1:07:50 > 1:07:54delegates go away with a spring in their step? What I will be looking

1:07:54 > 1:07:58for is to see whether he mentioned anything on Europe. That is the

1:07:58 > 1:08:02elephant in the room. You have a coalition where the Tories have

1:08:02 > 1:08:07always been more sceptical about it, the Liberal Democrats have been in

1:08:07 > 1:08:10favour. The euro is going through huge troubles, does he tackle that

1:08:10 > 1:08:15head on and make a difference between what the Liberal Democrats

1:08:15 > 1:08:19are doing, or does he leave that to one side as a difficult subject? I

1:08:19 > 1:08:25will be interested to see on whether he touches on that issue of

1:08:25 > 1:08:35Europe and the euro. We go to Birmingham, when Nick Clegg is

1:08:35 > 1:09:11

1:09:11 > 1:09:19Thank you everybody. Thank you. Friends, his party, the Liberal

1:09:19 > 1:09:27Democrats, we have now been in government for 500 days. Not easy,

1:09:27 > 1:09:33is it? None of us thought it would be a walk in the park. But I

1:09:33 > 1:09:43suspect none of us predicted just how tough it would turn out to be.

1:09:43 > 1:09:49We have lost support, we have lost seats, and we lost a referendum. I

1:09:49 > 1:09:54know how painful it has been to face anger and frustration on the

1:09:54 > 1:10:03doorstep. Some of you may have even wondered, will it all be worth it

1:10:03 > 1:10:12in the end? It will be. And today, I want to explain why. But above

1:10:12 > 1:10:19all, I want to pay tribute to you. You're resilience, Your Grace Under

1:10:19 > 1:10:27Fire. I had been genuinely moved by your spirit and your strength.

1:10:27 > 1:10:34Thank you. And thank you above all for never forgetting what we are in

1:10:34 > 1:10:40politics for. At the May elections, Alex Cole Hamilton, one of her

1:10:40 > 1:10:44defeated candidates in Edinburgh, said that if losing was part

1:10:44 > 1:10:53payment for ending child detention, then, as he said, I except it was

1:10:53 > 1:11:03all my heart. That is the liberal spirit. And that is something we

1:11:03 > 1:11:06

1:11:06 > 1:11:11will never lose. Five it is a spirit, it is the same as varied

1:11:11 > 1:11:17that gave birth to our party 150 years ago, that kept us alive when

1:11:17 > 1:11:23the other two parties tried to kill us off. Is there is that means,

1:11:23 > 1:11:29however great our past, our fight will always be for a better future.

1:11:30 > 1:11:33Downing Westminster, we had been vilified like never before. The

1:11:33 > 1:11:38left and the right, they did not like as much in opposition, and

1:11:38 > 1:11:43they like us a lot less now we are in government. The left accuse us

1:11:43 > 1:11:47of being powerless habits, duped by a right-wing Conservative clique,

1:11:47 > 1:11:50and the right to accuse us of being as sinister left-wing clique he had

1:11:50 > 1:11:59duped powerless Conservatives. I wish they would make up their

1:11:59 > 1:12:05minds! So yes, it has been hard. And adversity tests the character

1:12:05 > 1:12:13of a party just as it tests any person. We have shown, you have

1:12:13 > 1:12:19shown, immense strength. After being hit hard, we picked ourselves

1:12:19 > 1:12:26up. And we came out fighting. Fighting to keep the NHS safe, to

1:12:26 > 1:12:35protect human rights, to create jobs, for every family. Not doing

1:12:35 > 1:12:41the easy thing. But doing the right thing. Not easy. But right. And as

1:12:41 > 1:12:47for all those seats, let me tell you this. I will not rest, we will

1:12:47 > 1:12:57not rest until we have won every single one of those seats back! And

1:12:57 > 1:13:11

1:13:11 > 1:13:18Now these may not be easy times for us as a party. But more importantly,

1:13:18 > 1:13:24these are not easy times for our country. Economic insecurity,

1:13:24 > 1:13:30conflict, terrorism, disorder flaring up on our streets. Times

1:13:30 > 1:13:36like these can breed protectionism and populism. So at times like

1:13:36 > 1:13:43these are when liberals are needed most. Our party has fought for

1:13:43 > 1:13:53liberal values for a 150 years, justice, optimism, freedom. We are

1:13:53 > 1:14:04

1:14:04 > 1:14:08This conference centre is on the site of the old Bingley Hall, where

1:14:08 > 1:14:17William Gladstone's did 130 years ago to found the National Liberal

1:14:17 > 1:14:23Federation. He observed that day that Birmingham had shown it was no

1:14:23 > 1:14:30place for weak-kneed liberalism. No change there, then! So we are

1:14:30 > 1:14:40strong. We are united, true to our values, back in government, and on

1:14:40 > 1:14:47

1:14:47 > 1:14:53In Government, your faced with hard choices every single day. The

1:14:53 > 1:15:00question is how you make them. Some ask, how can we get a market to

1:15:00 > 1:15:05work here? Others, had can this win has more votes? A few, what will

1:15:05 > 1:15:13the press think? For liberals, the litmus test is always the national

1:15:13 > 1:15:18interest. Not doing the easy thing but doing the right thing. And that

1:15:18 > 1:15:22takes a certain type of character. One which we have seen on display

1:15:22 > 1:15:28in the last few months and indeed the last few days, here in

1:15:28 > 1:15:32Birmingham. Brave, principled, awkward, resolute, optimistic,

1:15:32 > 1:15:42unstoppable, and I am not just talking about Paddy Ashdown! I am

1:15:42 > 1:15:44

1:15:44 > 1:15:51talking about every single one of you in this for? -- in this hall!

1:15:51 > 1:15:58But I think people still need to know more about the character of

1:15:58 > 1:16:03our party. Not just how we govern but why. We proved something about

1:16:03 > 1:16:08ourselves last year when we face a historic choice. Whether or not to

1:16:08 > 1:16:13enter Government in coalition with the Conservatives. The easy thing

1:16:13 > 1:16:17would have been to sit on the opposition benches throwing rocks

1:16:17 > 1:16:22at the Government as it tried to get control of the public finances.

1:16:22 > 1:16:27It might even, in the short run, have been more comfortable. But it

1:16:27 > 1:16:33would not have been right. At that moment, Britain needed a strong

1:16:33 > 1:16:40Government. Alistair Darling's recent book is called back from the

1:16:40 > 1:16:46brink. In reality, Labour left us on the brink. Teetering on the edge

1:16:46 > 1:16:50of an economic precipice. So be put aside party differences for the

1:16:50 > 1:16:55sake of the national interest. -- so we put aside. People we for

1:16:55 > 1:16:59politics, nation before party. And whilst other countries have been

1:16:59 > 1:17:04riven by political bickering, we have shown that a coalition forged

1:17:04 > 1:17:08in a time of an emergency could be a different type of Government,

1:17:08 > 1:17:13because let me tell you this, you do not play politics at a time of

1:17:13 > 1:17:16national crisis. You did not play politics with the economy, and you

1:17:16 > 1:17:26never, ever play politics with people's jobs!

1:17:26 > 1:17:37

1:17:37 > 1:17:44Are first big decision was, of course, to clear the structural

1:17:44 > 1:17:53deficit in this Parliament, to wipe the slate clean by 2015. This has

1:17:53 > 1:17:59meant painful cuts, agonisingly difficult decisions. Not easy. But

1:17:59 > 1:18:04right. Because handing control of the economy to the bond traders,

1:18:04 > 1:18:09that is not progressive. Burying your head in the sand, that is not

1:18:09 > 1:18:14a liberal. Sadly our children with the nation's debt, that is not fair.

1:18:14 > 1:18:22-- saddling up. Labour says the Government is going too far too

1:18:22 > 1:18:32fast. I say, Labour would have offered too little, too late.

1:18:32 > 1:18:36

1:18:36 > 1:18:42Imagined for a moment if Ed Miliband and Ed Balls had still

1:18:42 > 1:18:46been in power. Gordon Brown's backroom boys when Labour was

1:18:46 > 1:18:54failing to balance the books, failing to regulate the financial

1:18:54 > 1:18:59markets, and failing to take on the banks. Ed Balls and Ed Miliband

1:18:59 > 1:19:03behind the scenes, always plotting, lurking in the shadows, scheming,

1:19:03 > 1:19:08never taking responsibility. And that this time of crisis, what

1:19:08 > 1:19:18Britain needs is real leadership. This is no time for the backroom

1:19:18 > 1:19:23

1:19:23 > 1:19:30boys. Labour's economy is based on bad

1:19:30 > 1:19:36debt and false hope. Labour got us into this mess. And they are

1:19:36 > 1:19:42clueless about how to get us out. Another term of Labour would have

1:19:42 > 1:19:49been a disaster for our economy. So don't for a moment let Labour get

1:19:49 > 1:19:53away with it. Do not forget the chaos, the fear of 2008, and never,

1:19:53 > 1:20:03ever Trust Labour again with the economy.

1:20:03 > 1:20:08

1:20:08 > 1:20:11Government is certainly a bit of a learning experience. You go on

1:20:11 > 1:20:16these international visits. You have to exchange gifts with foreign

1:20:16 > 1:20:22dignitaries. But what do you get them? When I met the French Prime

1:20:22 > 1:20:27Minister for the first time, he had done his research, he had found out

1:20:27 > 1:20:32what you I was born and presented me with a rev bottle of 1967

1:20:32 > 1:20:42branded. Might office told me he liked hiking, so what did I give

1:20:42 > 1:20:44

1:20:44 > 1:20:51him? A bar of Kendal mint cake. But Government has also brought

1:20:51 > 1:20:58difficult decisions. And of course, the most part wrenching for me for

1:20:58 > 1:21:06all of us was on university funding. Like all of you, I saw the anger, I

1:21:06 > 1:21:11understand it. I felt it. And I have learned from it. I know how

1:21:11 > 1:21:16much damage this has done to us as a party. By far the most painful

1:21:16 > 1:21:21part of our transition from the easy promises of opposition to the

1:21:22 > 1:21:28invidious choices of Government. And probably the most important

1:21:28 > 1:21:35lesson I have learned is this. No matter how hard you work on the

1:21:35 > 1:21:40details of a policy, it is no good if the perception is wrong. We can

1:21:40 > 1:21:46say until we are blue in the face that no one will have to pay any

1:21:46 > 1:21:51fees as the student, but still people do not believe it. Once you

1:21:51 > 1:21:56have left university, you will pay less a week in, week out, than

1:21:56 > 1:22:00under the current system. But still people do not believe it. But the

1:22:00 > 1:22:08support given to students from poorer families of will increase

1:22:08 > 1:22:13dramatically. But still, people do not believe it. The simple truth is,

1:22:13 > 1:22:19the Conservatives and Labour were both said on increasing fees. And

1:22:19 > 1:22:23in those Sercombe stances, we did the best thing we could. -- in

1:22:23 > 1:22:28those circumstances. Working tirelessly to ensure that anyone

1:22:28 > 1:22:33who wants to go to university can. Freeing of part-time students from

1:22:33 > 1:22:40upfront fees for the first time, ensuring there are repayments for

1:22:40 > 1:22:45all graduates. -- insuring that repayments are more fair. But we

1:22:45 > 1:22:49failed to explain this, to explain that there were no other easy

1:22:49 > 1:22:58options, and we have failed so far to show that the new system will be

1:22:58 > 1:23:04much, much better than people fear. So yes, lessons learnt. But the

1:23:04 > 1:23:09most important thing right now is to get out there and show that the

1:23:09 > 1:23:14university is for everyone. And we should all take a leaf out of Simon

1:23:14 > 1:23:18Hughes's book. He has been busting a gut as the Government's advocate

1:23:18 > 1:23:23for access, travelling the country, explaining the new system, finding

1:23:23 > 1:23:27ways to get young people from all backgrounds to apply to university.

1:23:27 > 1:23:31Simon did not like the decision we make, for reasons I respect. But

1:23:31 > 1:23:36rather than sitting back, he has rolled up his sleeves and got on

1:23:36 > 1:23:46with making the new system work. Simon, thank you.

1:23:46 > 1:23:58

1:23:58 > 1:24:03Right now, of course, our biggest concern is the economy. The

1:24:03 > 1:24:09recovery is fragile. Every worker, every family knows that. There is a

1:24:09 > 1:24:13long, hard road ahead. Just in the last few days alone, we have seen

1:24:13 > 1:24:18the financial storm in the eurozone, rising unemployment, falling

1:24:18 > 1:24:24stockmarkets. So we were right to pull the economy back from the

1:24:24 > 1:24:28brink. It is clearer now than ever that deficit reduction was

1:24:28 > 1:24:33essential to protect the economy, to protect homes and jobs, because

1:24:33 > 1:24:38deficit reduction lays the foundations for growth but on its

1:24:38 > 1:24:44own it is not enough. And that is why we are already investing in

1:24:44 > 1:24:48infrastructure, reducing red tape, the meeting -- promoting new skills,

1:24:48 > 1:24:54getting the bank's lending. The average for the global economy has

1:24:55 > 1:25:04got worse. So we need to do more. - - the outlook has got worse. We

1:25:05 > 1:25:11

1:25:11 > 1:25:16will do more for growth and jobs. Because we are not in politics just

1:25:16 > 1:25:24to repair the damage done by Labour, too glued back together the pieces

1:25:24 > 1:25:28of the old economy. We are here to build a new economy. A new economy

1:25:28 > 1:25:32save from casinos speculation. That is why a Liberal Democrat Business

1:25:32 > 1:25:37Secretary is putting a firewall into the banking system, protecting

1:25:37 > 1:25:46the people who have worked hard and saved. A new economy that

1:25:46 > 1:25:50safeguards the economy -- safeguards the environment. The

1:25:50 > 1:25:56world's first Green Investment Bank is being created. A new economy

1:25:56 > 1:25:59where the lowest paid get to keep the money they earn and that is why

1:25:59 > 1:26:03a Liberal Democrat Chief Secretary to the Treasury has put �200 into

1:26:03 > 1:26:09the pocket of every basic rate taxpayer and taken almost one

1:26:09 > 1:26:19million workers, most of them women, out of income tax altogether.

1:26:19 > 1:26:27

1:26:27 > 1:26:30A new economy based on skills. And that is why one Liberal Democrat

1:26:30 > 1:26:34Minister is creating a quarter of a million new apprenticeships and

1:26:34 > 1:26:38another is investing in schools and early years education. A new

1:26:38 > 1:26:43economy that works for families, when men and women can choose how

1:26:43 > 1:26:47to balance work and home. That is where Liberal Democrats are

1:26:47 > 1:26:53bringing in a shared parental leave and more flexible working, and a

1:26:53 > 1:26:56new economy run for ordinary people, rather than big finance. After the

1:26:57 > 1:27:06so-called masters of the universe turned out to be the masters of

1:27:07 > 1:27:07

1:27:07 > 1:27:13destruction instead. Which is why, when we come to sell those bank

1:27:13 > 1:27:18shares, I want to see a pay back to British citizens. Your money was

1:27:18 > 1:27:25put at risk. Your money was used to bail out the banks. And so the

1:27:25 > 1:27:30money made by the banks is your money, too. An economy for everyone.

1:27:30 > 1:27:37In Scotland, Wales, in every part of the United Kingdom. For women

1:27:37 > 1:27:47and men. Young, old. Town, country. North, south. A new economy for the

1:27:47 > 1:27:55

1:27:55 > 1:28:03whole nation. Because as Liberal Democrats, we

1:28:03 > 1:28:11act for the whole nation. In our long, proud Liberal history, we

1:28:11 > 1:28:16have never, never served the media moguls, the union barons, all the

1:28:16 > 1:28:21bankers. We do not serve and we will never surf the vested

1:28:21 > 1:28:31interests. We are in nobody's pocket.

1:28:31 > 1:28:39

1:28:39 > 1:28:49And that is why... And that is why why...

1:28:49 > 1:28:54

1:28:54 > 1:28:59OK! I get it, you agree with that! That is why we can make decisions

1:28:59 > 1:29:04in the national interest. It is not easy, but right. That is why we

1:29:04 > 1:29:10speak up, first and loudest, when the establishment Metz the people

1:29:10 > 1:29:14down. In the last three years, we have seen establishment

1:29:14 > 1:29:19institutions exposed one by one. The City of London shattered by the

1:29:19 > 1:29:23greed of bankers. The media corrupted by phone hacking.

1:29:23 > 1:29:31Parliament shamed by expenses. I was brought up to know that it is

1:29:31 > 1:29:41not polite to say I told you so. Well, I am sorry, we did.

1:29:41 > 1:29:46

1:29:46 > 1:29:53In 2006, Vince Cable warned that the banks were recklessly

1:29:53 > 1:29:58irresponsible. In 2002, when Tom McNally said that the government

1:29:58 > 1:30:03must guard the public interest as assiduously as Mr Murdoch guards

1:30:03 > 1:30:08his shareholder interests. And in 1996, when Paddy Ashdown said that

1:30:08 > 1:30:13Parliament had become a rotten mess, a dishevelled, disfigured all

1:30:13 > 1:30:23records of what was once called the mother of Parliament. Never one to

1:30:23 > 1:30:28

1:30:28 > 1:30:32pull his punches! We to tell it like it really is. Because we are

1:30:32 > 1:30:40in nobody's pocket. Of all the claims, or all the claims Ed

1:30:40 > 1:30:45Miliband has made, the most writable -- risible is that his

1:30:45 > 1:30:48party is the enemy off best interests. I mean, give me a break!

1:30:48 > 1:30:52When we were campaigning for changing the banking system, they

1:30:52 > 1:30:55were on their prawn cocktail offensive in the city! While we

1:30:55 > 1:31:02have led the charge against the media barons, Labour has cowered

1:31:02 > 1:31:07before them for decades. Two Juneau, the most shocking thing about the

1:31:07 > 1:31:16news that Tony Blair is godfather to one of Rupert Murdoch's children

1:31:16 > 1:31:23is that nobody was really shocked at all. And today, today Labour is

1:31:23 > 1:31:29in hock to the trade union barons. After their government stipend, 95

1:31:29 > 1:31:32% of Labour's money comes from trade unions - most of it from just

1:31:32 > 1:31:37four. Let me be clear, the values of trade unionism are as relevant

1:31:37 > 1:31:42as ever - supporting workers and fighting for fairness at work. But

1:31:42 > 1:31:52I do not think the unions should be able to buy themselves a political

1:31:52 > 1:31:58

1:31:58 > 1:32:03party. Ed Miliband, Ed Miliband says he wants to loosen the ties

1:32:03 > 1:32:09between Labour and the union barons who helped him to beat his brother.

1:32:09 > 1:32:13OK, let's see him put his money where his mouth is. That's see if

1:32:13 > 1:32:17he will support radical reform of party funding. Every previous

1:32:17 > 1:32:22attempt has been blocked by the vested interests in the other two

1:32:22 > 1:32:27parties. We are all stuck in a system that we know is wrong. We

1:32:27 > 1:32:30have all been damaged by it. But if we learnt anything from the

1:32:30 > 1:32:40expenses scandal, it is surely that if the system has broken, we should

1:32:40 > 1:32:52

1:32:52 > 1:32:59not wait for the next scandal, we So whether it is securing the

1:32:59 > 1:33:07economy, sorting the banks or cleaning up politics, we are making

1:33:07 > 1:33:13the big, difficult decisions. Not easy. But right. And that is what

1:33:13 > 1:33:21it means to be a party of national government again. Not just making

1:33:21 > 1:33:26arguments, making change. In a coalition, we have two types of

1:33:26 > 1:33:31power - the power to hold a coalition partners back, and the

1:33:31 > 1:33:35power to move the government forward. So we can keep the

1:33:35 > 1:33:40government to 11 will pass, and for the government in the centre ground.

1:33:40 > 1:33:44We were absolutely right to stop the NHS Bill in its tracks. To

1:33:45 > 1:33:50ensure change on our terms, no arbitrary deadlines, no backdoor

1:33:50 > 1:33:55privatisation, no threat to the basic principles at the heart of

1:33:55 > 1:34:00our NHS. We are right to stand up for civil liberties - no retreat to

1:34:00 > 1:34:04the illiberal all populism of the Labour years. We are right to keep

1:34:04 > 1:34:11insisting on a fair tax system, asking the most of the people who

1:34:12 > 1:34:21have the most. And we will always defend human rights, at home as

1:34:22 > 1:34:26well as abroad. The European Convention, the European Convention

1:34:26 > 1:34:30on Human Rights and the Human Rights Act are not, as some would

1:34:30 > 1:34:35have you believe, foreign in positions. These are British rides,

1:34:36 > 1:34:40drafted by British lawyers, forged in the aftermath of the atrocities

1:34:40 > 1:34:45of the Second World War. Fought for by Winston Churchill�. So let me

1:34:45 > 1:34:55say something, really clearly, about the Human Rights Act. In fact,

1:34:55 > 1:35:18

1:35:18 > 1:35:23I will do it in words of one So, France, we will always hold the

1:35:23 > 1:35:28liberal line -- friends. But much more important, is the positive

1:35:28 > 1:35:35power of government. Not just that - like stopping bad things, but

1:35:35 > 1:35:40doing good things. Last year, I walked through the door of Number

1:35:40 > 1:35:48Ten. But we all walked through a kind of draw together. To being,

1:35:48 > 1:35:51once again, a party of national government. So we must now move

1:35:52 > 1:35:57beyond the reflexes of opposition to the responsibilities of

1:35:57 > 1:36:03government. And the opportunities of government, to. New social

1:36:03 > 1:36:09housing, criminal justice reform, fixed-term, keeping our post

1:36:09 > 1:36:14offices open, House of Lords reform, better mental health care, saver

1:36:14 > 1:36:18banks, income tax down for ordinary workers, capital gains tax are for

1:36:18 > 1:36:24the rich, compulsory retirement scrapped, pensions protected by a

1:36:24 > 1:36:34triple lock, ID cards history, child detention ended. And just

1:36:34 > 1:36:36

1:36:36 > 1:36:40look, just look at what we have announced in the last five days.

1:36:40 > 1:36:45After decades of campaigning, thanks to Lynne Featherstone, equal

1:36:45 > 1:36:50marriage, straight or gay, more powerful consumers over the energy

1:36:50 > 1:36:54companies, calling time on rewards for failure in boardrooms.

1:36:55 > 1:37:02Investing in education for girls in developing countries, new powers to

1:37:02 > 1:37:06turn energy homes back into family homes -- empty homes. At �500

1:37:06 > 1:37:16million investment in growth. Liberal achievements from a liberal

1:37:16 > 1:37:30

1:37:30 > 1:37:34And we have steered our commitments to act on the environment. The

1:37:34 > 1:37:39polls tell us that climate change has dropped down people's list of

1:37:39 > 1:37:44worries. But people have more immediate concerns. And I

1:37:44 > 1:37:50understand that. So the politically convenient thing which had been to

1:37:51 > 1:37:57put this off to another day. Instead, we have acted immediately.

1:37:57 > 1:38:02Not easy, but right. Ambitious carbon targets, energy market

1:38:02 > 1:38:07reform, councils generating renewable energy, a green deal to

1:38:07 > 1:38:13make bills lower and homes warmer, car on catcher and storage, green

1:38:13 > 1:38:21buses, trains and trams, the world's first ever Green Investment

1:38:21 > 1:38:31Bank. Green achievements from agreeing party of government. Fey -

1:38:31 > 1:38:40

1:38:41 > 1:38:45I have learned quite a bit in the last 500 days. About the

1:38:45 > 1:38:50responsibilities of government, about the resilience of our party,

1:38:50 > 1:38:59the integrity of our members. About her determination to do the right

1:38:59 > 1:39:04thing. In government, every single day brings hard choices. And you

1:39:04 > 1:39:08can very quickly lose your way, unless you are absolutely certain

1:39:08 > 1:39:16of your calls, off why you were there and the first place. For

1:39:16 > 1:39:20every one of us, in this court, we have strong political convictions -

1:39:20 > 1:39:28human rights, political reform, responsible capitalism, fighting

1:39:28 > 1:39:35climate change. But every one of us has a political passion, to. The

1:39:35 > 1:39:43fire inside that drove us into politics in the first place. Let me

1:39:43 > 1:39:51tell you about what I care most about. My passion is ensuring a

1:39:51 > 1:39:56fair start for every child. I have a simple, unquenchable belief that

1:39:56 > 1:40:02every child can do good things, great things, if only we give them

1:40:02 > 1:40:08the opportunities they deserve. Equal opportunities. It sounds so

1:40:08 > 1:40:14simple, doesn't it? Everyone agrees with that. But then, we allow

1:40:14 > 1:40:19prejudice, tradition, class to crash one million hopes and dreams.

1:40:19 > 1:40:26Watch young children's lives go off track, even before they go to

1:40:26 > 1:40:32school. Sit idly by pub talent goes to waste. I have had all the

1:40:32 > 1:40:39advantages you could dream of, good school, great parents. I was lucky.

1:40:40 > 1:40:44But it should not be about luck. On Saturday, I met a group of young

1:40:44 > 1:40:49people just arriving -- just after I arrived in Birmingham. They were

1:40:49 > 1:40:56from a charity. They all came from difficult backgrounds. One young

1:40:56 > 1:41:03woman, she told me that she only started to survive when she found

1:41:03 > 1:41:07someone who simply believed in her. I want every child to believe in

1:41:07 > 1:41:13themselves. Because in terms of opportunity, we are a nation

1:41:13 > 1:41:18divided. Children from a poor background, a year behind in

1:41:18 > 1:41:27language skills before the age of five. More young black men in

1:41:27 > 1:41:32prisons than at big universities. In Hammersmith, more than half the

1:41:32 > 1:41:41children leading state schools had two-legged University. But just 30

1:41:41 > 1:41:47minutes down the District lines to Tower Hamlets, just for % do. Odds

1:41:47 > 1:41:52stacked against too many of our children. At deep injustice, when

1:41:52 > 1:42:02birth his destiny. Sand that is why, that is why I had been leading the

1:42:02 > 1:42:13

1:42:13 > 1:42:20charge for social mobility, for 44 but you know, people keep

1:42:20 > 1:42:25telling me it is too hard. That it is futile to push for fairness into

1:42:25 > 1:42:29their head winds of an economic slowdown. Or they say, it will just

1:42:29 > 1:42:34take too long and I should find some politically convenient, quick

1:42:34 > 1:42:39wins instead. I have also encountered fierce resistance from

1:42:39 > 1:42:45those to do so well out of the status quo. But for liberals, the

1:42:45 > 1:42:51only struggles worth having are the upper ones. Allowing schools to

1:42:51 > 1:42:55move poorer children up the queue for admissions. Making universities

1:42:55 > 1:43:00open their doors to everyone, making firms work harder to get

1:43:00 > 1:43:10women on their boards, breaking open internships, all controversial,

1:43:10 > 1:43:19

1:43:19 > 1:43:25So I am not backing down, I am not slowing down. Because this will not

1:43:25 > 1:43:35be a liberal nation until every citizen can thrive and prosper,

1:43:35 > 1:43:35

1:43:35 > 1:43:45until birth is no longer destiny, until every child is three to rise.

1:43:45 > 1:43:48

1:43:48 > 1:43:54This summer or, we saw the consequences of a society in which

1:43:54 > 1:44:00some people feel they have no stake at all. Nobody could fail to be

1:44:00 > 1:44:05horrified by what we saw during the riots. These were not organised

1:44:05 > 1:44:09campaigns for change. They were outbursts of nihilism and greed. I

1:44:09 > 1:44:16will never forget the women I met in Tottenham he told me the close

1:44:16 > 1:44:22shoes didn't wear the early possession she had left in the

1:44:22 > 1:44:28world after her home was torched. But in every city, where trouble

1:44:28 > 1:44:31broke out, most people did the right thing. So many more people

1:44:31 > 1:44:36were out there to clean up the streets and went out to trash them

1:44:36 > 1:44:40in the first place. In Manchester, I met a cafe owner who boarded up

1:44:40 > 1:44:46her windows and started serving tea and coffee straight away to the

1:44:46 > 1:44:56people who were helping to clear up. And here in Birmingham, for the

1:44:56 > 1:44:58

1:44:58 > 1:45:02communities did together so in the Our emergency services, police and

1:45:02 > 1:45:08courts all rose to the challenge. But we have to now ensure that the

1:45:08 > 1:45:16offenders become ex-offenders. For good. Three after four had previous

1:45:16 > 1:45:19convictions. So we have to push ahead, not step back from the

1:45:19 > 1:45:25Government's rehabilitation revolution. Punishment matchsticks,

1:45:25 > 1:45:30but changes behaviour, an end to the corrosive cycle of crime. --

1:45:30 > 1:45:35punishment that sticks. I once the perpetrators to book their victims

1:45:35 > 1:45:40in the eye, to see the consequences of their actions and to put it

1:45:40 > 1:45:45right. That is why there will be community pay back projects in

1:45:45 > 1:45:51every city affected. Why we want -- are investing in drug recovery

1:45:51 > 1:45:53wings in our prisons, tackling gang culture, community sentences.

1:45:53 > 1:46:03Restorative Justice, liberal justice.

1:46:03 > 1:46:12

1:46:12 > 1:46:22Let me say something else. The rioters are not the face of

1:46:22 > 1:46:23

1:46:24 > 1:46:29Britain's young people. The vast majority of our young people are

1:46:29 > 1:46:34good, decent and doing the best they can. Do not condemn all of

1:46:34 > 1:46:44them because of the actions of a few.

1:46:44 > 1:46:49

1:46:49 > 1:46:53What really struck me was how many -- has so many of those who did to

1:46:53 > 1:46:57join the riots seemed to have nothing to lose. It was about what

1:46:57 > 1:47:04they could get, here and now. Not what lies in front of them in the

1:47:04 > 1:47:08years ahead. As if their own future had little value. Too many of these

1:47:08 > 1:47:13young people had simply fallen through the cracks. Not just this

1:47:13 > 1:47:19summer, but many summers ago, when they lost touch up with their own

1:47:19 > 1:47:24future. And as so often, the people who have gone off the rails are the

1:47:24 > 1:47:29ones who are struggling years earlier. Not least in making that

1:47:30 > 1:47:35critical leap from primary to secondary schools. So today I am

1:47:35 > 1:47:40launching a new scheme to help the children who need it most. In the

1:47:40 > 1:47:44summer before they start secondary school, a two-week summer school

1:47:44 > 1:47:49helping them to catch up in maths and English and getting them ready

1:47:49 > 1:47:55for the challenges ahead. Because then we know this is a time when

1:47:55 > 1:48:05too many children lose their way. So this is a �50 million investment

1:48:05 > 1:48:11

1:48:11 > 1:48:15to help them along the right path. And that is why we have found the

1:48:16 > 1:48:21money, even now, to invest in education. Protecting the schools

1:48:21 > 1:48:27budget. A �2.5 billion people premium by the end of the

1:48:27 > 1:48:30parliament. More investment in early years education. 15 hours for

1:48:30 > 1:48:37all three and four year olds. New provision for the poorest two year

1:48:37 > 1:48:42olds. Steps towards a society where nobody is enslaved by poverty,

1:48:43 > 1:48:49ignorance or conformity. Towards a liberal society. These are

1:48:49 > 1:48:55investments that will take years or even decades to pay off. By the

1:48:55 > 1:48:59time the two year-olds we help next yet come to vote, I will be 60! It

1:49:00 > 1:49:06is even possible that I will no longer be needed by then! Or at

1:49:06 > 1:49:12least, that is what I told Miriam. So why are we doing its? When it

1:49:12 > 1:49:16costs so much and take so long? Because investing early takes such

1:49:16 > 1:49:26a huge -- makes such a huge difference, especially for the

1:49:26 > 1:49:39

1:49:39 > 1:49:46poorest children. Not easy, but So, hold your heads up. Look our

1:49:46 > 1:49:51critics squarely in the eyes. This country would be in the trouble

1:49:51 > 1:49:55today -- deep trouble today if we have not gone into Government last

1:49:55 > 1:50:01year, and Britain will be a there are nation tomorrow because we are

1:50:01 > 1:50:06in Government today. -- A Ferrer nation. Never apologise for the

1:50:06 > 1:50:14difficult things we are having to do. We are serving a great country

1:50:14 > 1:50:19at a time of great need. Then there are no short answers, but we will

1:50:19 > 1:50:29not flinch. Our values are strong. Our instincts are good. Reason, not

1:50:29 > 1:50:43

1:50:43 > 1:50:50prejudice. Compassion, not greed. After the summer riots, message

1:50:50 > 1:50:55boards sprang up. They became known as peace walls. And on the peace

1:50:55 > 1:51:03wall in Peckham, there was a note that Simply Red, our home, our

1:51:03 > 1:51:12children, our future. Six words that say so much more than 600

1:51:12 > 1:51:18speeches. Our home, our children, our future. Britain is our home. We

1:51:18 > 1:51:24will make it safe and strong. These are our children. And we will tear

1:51:24 > 1:51:34down every barrier they face. And this is our future. We start

1:51:34 > 1:51:41

1:51:41 > 1:51:46building it today! Nick Clegg, the UK Liberal Democrat

1:51:46 > 1:51:50leader and deputy Prime Minister, receiving a standing ovation from

1:51:50 > 1:51:54the delegates in the hall there in Birmingham. He admitted it had been

1:51:54 > 1:51:58a tough 500 days, lost seats, support and the referendum but he

1:51:58 > 1:52:02said it would be worth it in the end, praised the delegates for

1:52:02 > 1:52:05their grace under fire. He said he wanted to anchor the Government in

1:52:05 > 1:52:09the central ground and the party had to hold their heads up as they

1:52:09 > 1:52:15were walking -- working towards a fairer nation. There is Mr Clegg

1:52:15 > 1:52:19with his wife, Miriam. Joining me is Hamish Macdonell, our

1:52:19 > 1:52:22commentator for the afternoon. What themes was Nick Clegg trying to get

1:52:22 > 1:52:27across? This was an interesting speech because usually when you get

1:52:27 > 1:52:31a party leader, particularly those in Government, they try to set at

1:52:31 > 1:52:35some kind of vision of the future, something that ties together the

1:52:35 > 1:52:40themes of all the policies. This was nothing like a visionary speech.

1:52:40 > 1:52:44It was mostly a really defensive speech. It was the most defensive

1:52:44 > 1:52:50speech I think I have ever heard a party did deliver. It was all about,

1:52:50 > 1:52:56this is why we are doing this. Trying to say, look, just stick

1:52:56 > 1:53:00with us. It was half conciliatory and Croft defensive. Let's go back

1:53:00 > 1:53:04to the first story recovered in the programme, the Scottish budget. We

1:53:04 > 1:53:09are joined in the garden lobby by Gavin Brown from the Scottish

1:53:09 > 1:53:13Conservatives and by the Scottish Lib Dem lever, Willie Rennie. --

1:53:13 > 1:53:16Leader. Willie Rennie, it looks like Mr Swinney has a tough

1:53:16 > 1:53:22balancing act trying to operate within the spending constraints

1:53:22 > 1:53:26laid down by the coalition Government. First, I would say that

1:53:26 > 1:53:32Nick's speech showed an amazing amount of determination in

1:53:32 > 1:53:38difficult times. I think his speech was fantastic. John Swinney's Today

1:53:38 > 1:53:42was more about a paper shuffling exercise. He was trying to pass the

1:53:42 > 1:53:47buck to others rather than expecting ability -- responsibility

1:53:47 > 1:53:51himself. He had some choice is today to make on capital spending,

1:53:51 > 1:53:57and he has cut that. He had dresses to make on Scottish Water

1:53:57 > 1:54:03investments which we proposed, �1.5 million, but he has avoided that.

1:54:03 > 1:54:10And he chose to cut council tax for five years, which any benefits

1:54:10 > 1:54:15people in big houses. Gavin Brown, what is your reaction? John Swinney

1:54:15 > 1:54:24is operating in the spending and the lead set by your colleague,

1:54:24 > 1:54:29George Osborne. Is he doing well by funnelling beat money into public

1:54:29 > 1:54:33spending? He has been aware of the spending envelope since the

1:54:33 > 1:54:37spending review last year so when the manifesto was written they knew

1:54:37 > 1:54:43how much they would have to spend for the next three or four years.

1:54:43 > 1:54:47Where it spelt out today was it was not a budget for the economy. They

1:54:47 > 1:54:51have said to judge them on the economy, yet they have cut the

1:54:51 > 1:54:56enterprise agency's budgets, but the innovation budget, so the best

1:54:56 > 1:54:59say is critical. Skills have been cut, higher at further education

1:54:59 > 1:55:03has been cut. Housing has been slashed. So a lot of the things you

1:55:03 > 1:55:07would think would make a difference to the economy has either been cut

1:55:07 > 1:55:13or slashed. I do not think the rhetoric matches the reality.

1:55:13 > 1:55:16Willie Rennie, what do you make about the council tax freeze? The

1:55:16 > 1:55:21Local Government gets the same amount of money as last year but

1:55:21 > 1:55:26may have to use their borrowing powers. I think they should reflect

1:55:26 > 1:55:29upon the priority that they have set for the council tax. In really

1:55:29 > 1:55:33difficult times, the Government should review its decisions, and

1:55:33 > 1:55:37I'd been five years worth of council tax fees I do not think is

1:55:37 > 1:55:41the right thing for just now and they should reflect on that and

1:55:41 > 1:55:46perhaps cut that back to invest instead in the economy. So I think

1:55:46 > 1:55:49the SNP should reflect on that. They have also taken the credit for

1:55:49 > 1:55:54increased NHS spending but actually criticised local Government because

1:55:54 > 1:55:57they are getting a cut. So they need to perhaps be a bit more

1:55:58 > 1:56:02consistent with their positions. Gavin Brown, what do you make of

1:56:02 > 1:56:06the fact that local authorities may have to borrow money themselves?

1:56:06 > 1:56:11For some local authorities, that will be extremely difficult. It is

1:56:11 > 1:56:16simply a case of the Scottish Government passing down the buck to

1:56:16 > 1:56:24local Government. Not only is it the capital budget being cut but in

1:56:24 > 1:56:29real terms, the revenue budget is being cut by about �1 billion, from

1:56:29 > 1:56:31�8.5 billion to �7.5 billion over the course of the spending review,

1:56:31 > 1:56:37despite the Cabinet Secretary saying it is probably going to be

1:56:37 > 1:56:42flat. I do not think losing �1 billion is flat. Thank you for

1:56:42 > 1:56:45joining us live from Holyrood. Let's round everything off for the

1:56:45 > 1:56:50final time in the company of our two commentators. We are hearing

1:56:50 > 1:56:55there from Gavin Brown talking about their not being a budget for

1:56:55 > 1:57:00growth. Yes, with all these things, the devil will be in the detail and

1:57:00 > 1:57:04we have not had the chance to go into those figures. But if what

1:57:04 > 1:57:08he's saying is right and the enterprise and innovation budgets

1:57:08 > 1:57:12are being cut, there is a pretty clear message here and what Johnny

1:57:12 > 1:57:15-- John Swinney appears to be doing here is bidding money into the

1:57:15 > 1:57:20constituencies he feels unease it, things like public-sector workers,

1:57:20 > 1:57:26and taking it out of things he feels does not need it. Innovation

1:57:26 > 1:57:30is one of them, councils is another, and the big supermarkets another.

1:57:30 > 1:57:35John McLaren, you will be crunching these because overnight. Anything

1:57:35 > 1:57:39jumping out at you so far? Yes, it will take a while to get through

1:57:39 > 1:57:44the figures. Just looking at some of them, on health, for example,

1:57:44 > 1:57:47the extra money was the money that was announced in January, so there

1:57:47 > 1:57:54has been no increase since then even though inflation has gone

1:57:54 > 1:58:02higher, so I am not sure how that stands up. And also, on higher

1:58:02 > 1:58:09education funding, Roussel spending will still be lower in 2014-15 in

1:58:09 > 1:58:18cash terms than in 2010-11. -- resource spending. I am not sure

1:58:18 > 1:58:22how that meets the commitment given in the speech. Thank you. We will

1:58:22 > 1:58:26be looking out for nought number- crunching tomorrow. You are

1:58:26 > 1:58:30releasing that did tell tomorrow. And Hamish Macdonell, thanks for

1:58:30 > 1:58:36your company here as well. That brings our political coverage to a