21/09/2011 Politics Scotland


21/09/2011

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LineFromTo

Good afternoon, and welcome to Holyrood for live coverage of the

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Scottish budget and Spending Review. Outside this building, it has not

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just been raining this afternoon but persistently pouring. And in a

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few minutes inside the chamber, I wonder if the Finance Secretary

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John Swinney will be able to offer at brighter outlook for the public

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finances in Scotland? So we will cover that's beach life. But you

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may be in line for a bonus if you are able to stay with us this

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afternoon, we are also going to keep up with developments at the

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Liberal Democrat conference, including the speech of Nick Clegg.

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So let's just concentrate on the Scottish budget.

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And bring in the economic commentator, Alf Young. So what is

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the trick for John Swinney this afternoon? It is a huge trade. He

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has to do what he could have done last November before the election

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but did not do. He has to tell us what the full scale and of the pain

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on public spending is going to be. He has to do it against the

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backdrop of big commitments he made in the election, two universities,

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council tax freeze, the decline in real terms budget, which looks like

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a decline for some time to come. And within all that, he has just

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said that they can deliver more from less. He could do with a

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little bit of magic, perhaps! We will talk more in a moment, but

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lets cross live to Burningham, at the Liberal Democrat conference.

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David Porter is their. Her here in Burningham, Nick Clegg is preparing

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his end of conference speech to the Liberal Democrats. He will say that

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being in coalition is not easy, but despite all the problems, it is the

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right thing to do. As I said, we will cover Nick Clegg's speech live

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during this programme. We are on air until 4pm. The first main event

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is the Scottish budget speech, the Finance Secretary John Swinney is

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preparing to address the chamber up the stairs at Holyrood. We will get

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a little bit more on what we might expect from Alf Young. You

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mentioned of course they headline election promises that the SNP made,

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that swept them to victory back in May. Can John Swinney keep all

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those promises, the five-year council tax freeze and all the rest

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of it? He can keep them, but he will keep them in a declining

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budget by sacrificing something else. Something has to give

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somewhere. Money does not come from nowhere to fund your promises. And

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he is also, in the light of the fragile economic situation we are

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in, he has also got to try to shift some money into the capital budget.

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Because the capital budget in particular has taken a big hit.

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Let's hear what he has to save. Cameron Buttle is in the chamber.

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You joined last as John Swinney - next 20 takes to his feet.

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spending plans for the subsequent two years. The Spending Review

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Falls after -- at a defining moment. It is a moment that is uniquely

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challenging, with a fragile global economy and savage reductions in

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the real value of the Scottish Budget. At the same time, it is a

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hopeful moment. In the optimism that exists in our country and the

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Trust placed by the people in this government. Throughout our first

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time in office, we applied careful stewardship to public finances. We

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have delivered savings above annual targets for each of the last three

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years, which had been reinvested to strengthen public services in

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Scotland and equip them for the challenges ahead. Yesterday, I

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wrote to the convenor of the finance company -- committee to

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advise Parliament that we have delivered efficiency savings of

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over �2.2 billion in 2011, �673 million more than a target. I would

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like to pay tribute to staff in the Scottish public sector for this

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achievement. Over the last four years a minority government secured

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parliamentary support for its budget, balance the budget in each

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year and thereby demonstrated its financial competence. That is a

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record of which we are proud. The impact of the recession since 2008

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has created a serious economic context for our actions in

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government. We responded quickly and decisively with a detailed

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recovery plan that help support 15,000 jobs across Scotland. We

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have attracted major international companies to invest in Scotland and

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support of jobs, particularly in their construction sector. We have

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delivered the Small Business Bonus Scheme, which has removed or

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reduced the burden for tens of thousands of businesses across

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Scotland. It has established the Scottish investment bank which is

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helping Scottish companies to access finance. These and other

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measures we have taken have resulted in a recession that, while

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damaging, was shorter than that experienced by the UK as a whole.

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We are making progress towards economic recovery. Over the most

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recent three month period, Scotland was the only part of the UK with

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falling unemployment. Over the year, unemployment has fallen by 33,000

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in Scotland compared with an increase of 44,000 across the UK as

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a whole. At the same time, employment levels have increased by

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36,000 over the year. Scotland now has a highest employment rate of

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any UK nation. So too does you give out lectures on gross, and on

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presiding over stagnation, we say, learn a lesson from the record of

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investment, job creation and balanced budgets being delivered in

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Scotland. Now we face further financial challenges, as the

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Westminster government has imposed heavy cuts. In 2011 to 2012, we had

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been forced to reduce public spending by �1.3 billion compared

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to last year. We have an �800 million cash reduction to lack

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capital budget. Under the dance of the UK Government Spending Review,

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between 2010 and 11 and 2014-15, we face real terms reductions of 9.2 %

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and a real terms cut to lack capital budget of 36.7 %. We have

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argued consistently that the UK Government is cutting spending too

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far and too fast, and that its actions run the risk of damaging

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the fragile recovery in Scotland and the UK. Against this backdrop,

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we are determined to make the best use of the constrained resources

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available to us, and to build on the progress we have made over the

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last four years. Three in Scotland will steer a distinct course. We

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are committed to prioritising capital investment, protecting

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public sector employment and supporting household income says

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key drivers of economic recovery. The programme for government sets

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out how we want to continue to change our country for the better

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at how we will take forward the manifesto that secured widespread

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backing from the people of Scotland. The government's economic strategy

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identified as priorities for driving growth. It highlights how

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we will make full use of those economic levers, currently devolved

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to the Scottish Government, with the aim of improving Scotland's

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rate of sustainable economic growth. Many elements lie outside our remit.

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For example, 90 % of Scottish tax rates Aachen trolled by Westminster

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and I said without reference to economic circumstances here or

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preferences and needs. We have made clear that our immediate

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constitutional priority is to see economic teeth added to the

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Scotland Bill, and we had made the case for new powers on corporation

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tax, the Crown Estate and more expensive capital borrowing powers.

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But with independence we could do much more. It would provide the

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freedom to best thatcher you the unique opportunities in our economy,

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to maximise our potential and put us on a par with other successful,

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independent nations. But for the purposes of this Spending Review,

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we must work within the existing financial and constitutional

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framework, and today, I set out my plans for the future. I will focus

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of the Spending Review, that is just accelerates its economic

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recovery, deliver public sector reform and deliver a social wage

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for the people. Vital to economic recovery is the size of our capital

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investment. The government has agreed to take decisive action to

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boost investment in the infrastructure of Scotland,

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supporting jobs and promoting growth. The government is using

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every lever available to it to maximise investment. We are taking

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board at �2.5 billion pipeline of projects using the non-profit

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distributing model, including major investments, such as the package of

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improvements to the M eight, the Aberdeen peripheral route and the

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new hospital for sick children. We are maximising the use of Network

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Rail's regulatory rate to fund new rail projects. These include the

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Glasgow Hospitals project. We are funding manifesto commitments to

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deliver 30,000 new affordable homes over this Parliament. We have

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decided over the period until 2015 to switch from resorts expenditure

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to lack capital programme, a total of over it �750 million. We're

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using innovative mechanisms such as the National Housing Trust to

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secure additional sums and maximise investment. Taken together, these

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steps will ensure that government supported investment continues to

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grow, despite cuts in our capital budget. I am delighted to inform

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Parliament that our capital programme makes funding available

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to meet in full the government's commitments to upgrade the A et to,

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to construct her Majesty's Prison in Grampian, and to support the

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development of the V&A at Dundee. We are prioritising our investment

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in Scotland's young people to enable them to achieve their

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potential. This includes supporting 125,000 Modern apprenticeship

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places during the lifetime of this Parliament, and delivering on our

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commitment that every 16-19-year- old in Scotland to is neither in

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work, part of a Modern apprenticeship scheme nor receiving

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education is offered are learning more training opportunities. We

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will also insure a reproach to procurement is used to create jobs

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by insuring the recipients of public contract work deliver

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training and apprenticeship opportunities. This Spending Review

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settlement guarantees that the university sector in Scotland will

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remain internationally competitive, and it closes the funding gap with

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England in full. In addition to keeping our manifesto commitments

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on free access to higher education, we will introduce a minimum income

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for the lowest income students as we promised during the election

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campaign of at least �7,000. Our priority for the Spending Review

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period is to deliver on the ambition of next generation brought

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bands to all by 2020, with a particular focus on rural

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communities, and we expect significant process by 2015. We

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will also ensure that businesses across Scotland have the skills and

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aspirations to enable them to innovate and compete in global

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digital economy is. Over the next four years, we will provide over

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�62 million in funding for the digital economy, and broadband

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infrastructure, and the believer in up to �25.5 million of investment

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from EU funds, as well as additional funding from local

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authorities and the private sector. We will continue to provide

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business with the most generous package available anywhere in the

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United Kingdom, worth �2.6 billion. We will continue with the small

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business bonus scheme, which is helping tens of thousands of

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businesses across the country, in tough economic times. I will bring

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forward legislation to reform empty property relief from April 2013.

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This will introduce incentives to brink vacant premises back into use,

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reduce the prevalence of empty shops, and support the process of

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urban regeneration. The government will embark on a review of the

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operation of business rates in advance of the next revaluation in

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2015. Key initiatives included in the government economic strategy

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and funded in the Spending Review include introducing a enterprise

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areas in Scotland to maximise their impact and attractiveness to

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investors. For developing a read -- providing support, promoting

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exports to capitalise on opportunities in growth markets,

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particularly in emerging markets such as China and India, with an

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ambitious target to deliver a 50 % increased by 2017, and increasing

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our support for the development of the food and drink industry and its

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exporting potential. Presiding officer -- Scotland has a

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competitive advantage in terms of the low carbon economy, that is why

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this economic strategy establish the transition to the low carbon

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economy as a new strategic priority. That reflects the opportunity we

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now have to secure further investment in jobs from this

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growing sector, and the benefits of this change will be visible across

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our communities. The fund will help leveraged private investment into

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renewables, part of over �200 million of investment in renewable

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such recommit to throughout this We are delivering on our climate

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change targets. The further targets will shortly be in place until 2027.

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Today we also publish our carbon assessment which set out spending

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plans in terms of emissions. Investment in climate change is

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bringing jobs and other benefits for communities. These are

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demonstrated through the continuation of the hugely

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successful climate challenge fund, the work of our energy assistance

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package and the home installation scheme and our efficiency programme

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has helped 800 businesses to reduce their waste and make better use of

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resources. We will take forward our commitments manifesto which include

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working to a 70 % target for recycled waste and a maximum of 5%

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to be sent to landfill by 2025. We will press for the Scottish

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Parliament to take on responsibility for the Crown Estate

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Commission said that the resources generated in Scotland will stay in

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Scotland. Of equal importance to the global agenda is the need to

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insure actions we take to cut emissions also deliver benefits to

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the people of Scotland. As I have mentioned, energy and resource

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efficiency will be a priority, and assisting people and businesses to

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be more efficient will tackle fuel poverty. We are working with energy

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companies to strengthen their activities in Scotland and further

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announcements will be made in due course. We aim to reduce impact on

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transport, reduce congestion and support better public transport,

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Active Travel and LOCOG and vehicles. This spending review

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confirms an ambitious programme of delivery that we will take forward

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over the life of this Parliament. However, the scale and breadth of

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Westminster's cuts also mean we have been forced to make choices --

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tough choices. The equality statement published today sets at

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the impact of our approach to continue to invest in building a

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society where people achieve regardless of their background and

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well -- and where barriers to opportunity got removed. To deliver

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on our commitments we must strive for greater productivity, reduce

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further the cost of Government, pursue a policy of peer restrained

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and push forward our renewal of public services. We have taken a

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strategic and collective approach to identifying our priorities and

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savings. We are reducing organisational costs including a

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reduction of 18% in the course of his Government's operating costs

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over three years and with a requirement that all public bodies

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will reduce the debt comparable cost. We will take forward the

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recommendations in the MacLellan review of ICD infrastructure,

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working with the Scottish futures Trust on our infrastructure

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programme and building the approaches. We also need to ensure

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we are the spending to the public appetite for services to be

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delivered in ways convenient to them. The MacLellan review looked

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at achieving better value for money from ICT Investment and in using

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ICT for more effective sharing of services. In setting at the

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Government's spending plans today, I expect every public sector

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organisation to demonstrate how they will contribute to the

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potential savings identified in a report of up to �1 billion in the

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next five years. I have also considered the options for raising

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additional income to help support investment. The updated

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infrastructure investment plans will be published later in the

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autumn, highlighting how we will improve asset management and

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release savings. Building on the work of the Scottish features Trust,

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we will take forward and asset management strategy for the central

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Government to state to reduce its size by and his 25 % over the next

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five years and achieve savings of around �28 million a year in

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operating costs by 2016. Last year I had to at public sector workers

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to bear some of the burden in dealing with the fall in public-

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spending. We did that to protect employment in the public sector,

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which is a valuable part of our economy and an essential foundation

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of our public services. Public sector pay accounts for around 55 %

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of the total Scottish resource budget and spending and decisions

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in this area of vital to our overall financial position. A

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public sector pay policies for 2012-13, published alongside the

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spending review today, balance difficult decisions on tight peer

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restraint with the need to sustain employment opportunities across the

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public sector. To help maintain staffing levels, it is essential

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that we continue to control pay growth and keep pay at an

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affordable and sustainable level. The policy for 2012-13 therefore

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extends the freeze on basic pay it and bonuses for a further year. In

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implementing a basic pay freeze for all staff we have been able to

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provide measures to support the lower paid. We will insure any

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employee learning -- earning less than dredge �1,000 continues to

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receive at least a �250 rise in net salary and I can announce that we

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will be maintaining our commitment to the Scottish living wage, up

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rating this to �7.20 an hour. Ministers will also be freezing

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their own pay in 2012-13 for the fourth year in succession. My aim

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is that 2012-13 will be the last year it of... And we may be able to

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see modest increases in the year that followed. I express my

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gratitude a game to the thousands of public-sector workers whose

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commitment to their valuable work has continued. Our objective is to

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protect public sector employment to support economic recovery. One of

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the threats to that objective comes to -- from UK Government decisions.

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The Government has made it clear that at a time of pressure, an

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interruption in employee pension contributions is unwanted. But

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should increases not be applied, the UK Government will decrease our

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budget. That would reduce public sector employment and run contrary

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to the direction of our employment policy. We believe that the UK

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Government is taking the wrong course of action and we reiterate

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our call for them to change direction. Should the UK Government

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refused to change its position, the Scottish Government will have no

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choice but to apply the increases in employee pension contributions

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for NHS, teachers, police and fire schemes in Scotland. We were put in

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place protections for the low-paid and we will leave the decision

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making under the local Government pension scheme to those who manage

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that scheme. We will not impose on local Government in Scotland what

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the United Kingdom Government has imposed on us.

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The pensions issue illustrates the need for this parliament and

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Government to be responsible for our own resources and revenue

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instead of being held to ransom by a United Kingdom Government that

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the people of Scotland did not vote for.

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Given the impact of these changes on public sector workers, the

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Scottish Government makes clear we will continue in 2012-13 our policy

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of no compulsory redundancies for those areas under our direct

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control. Within this commitment, we will pursue agreements on flexible

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working practices which will reduce costs while maintaining head count

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and services. The people of Scotland attach the highest Bali to

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the public services and the Government shares his view. --

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value. As we promised in our manifesto, we are protecting

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national health service spending but allocating an additional �826

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million to the health revenue budget in Scotland over three years.

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This means our commitment to pass on in full to the NHS and Scotland

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-- in Scotland the benefit of the bonnet resource consequential from

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the UK health settlement. As a result of this commitment and at a

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time of real time reductions in the overall Scottish budget, the core

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budgets that the health boards have to spend are protected in real

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terms in each of the next three years. This will allow us to drive

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forward continuous improvement in the quality of health care services

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in the interests of our economy with the help of well-being and

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communities across Scotland. We will continue to work in

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partnership with local Government. We have discussed and agreed with

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Cosla leadership and approach with national and local Government. The

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settlement will allow local authorities to deliver it the

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impact of shared... Including freezing the council tax, helping

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families through to have economic times, funding police boards to

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allow them to maintain 1000 additional police officers on our

0:24:440:24:47

streets, maintaining teacher numbers in line with pupil numbers,

0:24:470:24:52

and securing places for all probationers under the teacher

0:24:520:24:56

induction scheme and meeting the needs of our most vulnerable and

0:24:560:24:59

elderly through the NHS councils working together to improve adult

0:25:000:25:08

social care. The 2011-12 funding will be maintained, but with

0:25:080:25:13

additional resources to maintain teacher employment. Local

0:25:130:25:16

Government throughout the spending review will receive a larger share

0:25:160:25:18

of the funds controlled by the Scottish Government including

0:25:180:25:25

business rates and the position we inherited in 2007-2008. I also

0:25:250:25:30

confirmed that from 2012-13 onwards, the Government will honour its

0:25:300:25:34

commitment to ensure no local authority receives less than 85 %

0:25:340:25:38

of the average per-capita support of Scottish Local authorities. In

0:25:380:25:42

addition, I have to get a decision on the local Government capital

0:25:420:25:45

settlement that maintains their share of the total capital funding

0:25:450:25:49

across the period but will be re profiled over the main deck --

0:25:490:25:55

remainder of this Parliament. We want to maximise the ability --

0:25:550:25:59

availability of capital spending and recognise that local

0:25:590:26:03

governments have the power to borrow to supplement their budgets.

0:26:030:26:07

We will work with local governments to see to what extent this can be

0:26:070:26:13

used. The strong support for key public services and local

0:26:130:26:17

Government and the NHS provides the foundation for setting out the way

0:26:170:26:21

ahead in public service reform. The Government has pursued a vigorous

0:26:210:26:26

programme of efficiency and public service reform since 2007. We MORI

0:26:270:26:34

the work of the independent budget received. -- we appreciate the work.

0:26:340:26:40

Today, alongside the spending review, I am publishing a response

0:26:400:26:44

to the Christie Commission. These reviews have informed are decisions

0:26:440:26:48

for the future. We will lead an ambitious programme of Sir --

0:26:480:26:51

public service reform that challenges the public sector in

0:26:510:26:54

Scotland to reshape, integrate and deliver better services to those

0:26:540:26:59

who use them, consistent with the recommendations of the Christie

0:26:590:27:02

Commission and with the requirement to deliver savings. Ministers have

0:27:020:27:06

already set out our plans for the creation of a single police and

0:27:060:27:09

single fire and rescue Service, as the best way to safeguard the vital

0:27:090:27:13

frontline services upon which communities depend. The case for

0:27:130:27:17

reform is clear. Single services for Scotland will retain local

0:27:170:27:21

services for local communities while giving all parts of Scotland

0:27:210:27:24

access to national expertise and assets whenever and wherever they

0:27:240:27:30

are needed. Estimated savings of �130 million per year can be

0:27:300:27:34

achieved by making sure money is spent on the front line and not on

0:27:340:27:39

unnecessary duplication across eight services. We have also

0:27:390:27:43

started a significant programme of reform of post 16 education,

0:27:430:27:47

putting learners at the centre. This will reflect our determination

0:27:470:27:51

to make the whole post 16 education system deliver better outcomes for

0:27:510:27:55

individuals, outcomes, and ultimately, the economy. They

0:27:550:27:59

reformed system will prioritise provision for young people, help

0:27:590:28:02

learners develop the skills employers need now for the future,

0:28:020:28:07

and support the development of businesses. As part of the public

0:28:070:28:10

sector reform agenda we will give full consideration to the proposals

0:28:100:28:14

from local Government to deliver savings by removing the need for

0:28:140:28:18

authorities to advertise public information, to strengthen their

0:28:180:28:22

constitutional role and to extend the duty of best value across the

0:28:220:28:28

public sector. We have also made clear our intention to integrate

0:28:280:28:32

health and social care services more closely to help other people.

0:28:320:28:37

There will be four themes to our public service reform agenda. First,

0:28:370:28:42

the improvement on outcomes for older people will seek an

0:28:420:28:46

integration of services driven by better collaboration. Building on

0:28:460:28:51

progress achieved in the last four years. We will sharpen the focus of

0:28:510:28:55

public services as a magnet for partnership and the bases for

0:28:550:29:00

stronger community participation in the design of local services. The

0:29:000:29:02

Government will drive for greater collaboration in services design

0:29:020:29:06

and collaborate at a local level, firmly in line with the focus on

0:29:060:29:11

improving outcomes we have taken forward since 2007 in joint work

0:29:110:29:15

with the local Government, the health service and the third sector.

0:29:150:29:18

Second, there should be greater investment in people who deliver

0:29:180:29:21

services, through enhanced workforce development, and we

0:29:210:29:26

reject the argument that suggests that public sector employment is a

0:29:260:29:29

drain on the nation's resources. We are certain that the work done by

0:29:290:29:33

public-sector workers is essential to underpin our national prosperity

0:29:330:29:38

and quality of life. We have done our utmost to safeguard frontline

0:29:380:29:42

posts by Pierre restraint and going forward, we are committed to the

0:29:420:29:45

further development of the public service workforce and its

0:29:450:29:50

leadership. Third, we have committed to creating an open and

0:29:500:29:53

rigorous performance culture within Scottish public services to create

0:29:530:29:57

greater clarity around objectives and a short clear lines of

0:29:570:30:05

accountability that stance of service will be improved. External

0:30:050:30:11

scrutiny such as audits in -- an inspection can assist local

0:30:110:30:14

authorities and partners to work together to deliver even better

0:30:140:30:18

outcomes. I have therefore written today to the Accounts Commission,

0:30:180:30:23

asking them to work with others to explore how best scrutiny activity

0:30:230:30:33
0:30:330:30:35

We must not lose sight of our duty to recruit our country for the

0:30:350:30:40

challenges ahead. That is why it Keast feature of this Spending

0:30:400:30:42

Review is setting up a long-term course for their country. The

0:30:430:30:47

decision of the people to give his government a parliamentary majority

0:30:470:30:51

provides us with the opportunity to take bold action for the future.

0:30:510:30:56

am delighted to announce that this Spending Review marks a decisive

0:30:560:30:59

shift towards preventative spending in Scotland, the 4th and final

0:31:000:31:03

element of our Public Service Reform agenda. Focusing on

0:31:030:31:08

preventing problems by intervening area is not only the right approach,

0:31:080:31:12

but too many of the social and other issues facing us today, as it

0:31:120:31:18

also secures better value for the taxpayer. It will help to tackle

0:31:180:31:20

inequalities and insure the sustainability of our public

0:31:200:31:26

services, as demand for a range of acute services reduces over time.

0:31:260:31:30

The government's shift to target investment in preventative approach

0:31:300:31:35

is that deliver better outcomes and value for money, in respect to the

0:31:360:31:40

parliamentary consensus. Our focus will be on supporting adult social

0:31:400:31:45

care, and tackling reoffending with specific funding that will only be

0:31:450:31:49

available for joint working across institutional boundaries and

0:31:490:31:53

sectors. Over the next three years, through joint work, preventative

0:31:530:31:58

spending initiatives will be boosted by a total of over �500

0:31:580:32:04

million. In order to support for the shift to preventative spending,

0:32:040:32:10

I have looked to increase revenue for this purpose. Scotland's health

0:32:110:32:14

and social problems associated with alcohol and tobacco abuse are well

0:32:140:32:17

documented, and they are things we are addressed -- committed to

0:32:170:32:22

addressing. They affect their health of the population and create

0:32:220:32:28

additional burdens on policing and the NHS. As such, I propose that

0:32:280:32:31

the business rates paid by large retailers on tobacco and alcohol

0:32:310:32:37

will be increased by a supplement from the first will be able to 1012.

0:32:370:32:42

Four the estimated income this will raise will be used to contribute

0:32:420:32:45

towards the preventative send letters that will be taken forward

0:32:450:32:48

jointly with the Scottish Government, local authorities, the

0:32:480:32:53

NHS and the third sector. They will be complemented by the launch of

0:32:530:32:58

the Scottish Futures Fund which we promised at the election. We will

0:32:580:33:02

invest more than �160 million over their next three years, and a

0:33:020:33:07

further �90 million across the five components of this fund, to support

0:33:070:33:11

our key social environmental and economic objectives. The move to

0:33:110:33:15

preventative spending, the launch of the Scottish Futures Fund. These

0:33:150:33:18

are the actions of a government building a nation fit for the

0:33:180:33:22

future. At the heart of this government's work is our

0:33:220:33:26

partnership with the Scottish people. The social wage is one part

0:33:260:33:30

of our commitment to building a freer society. It means that in

0:33:300:33:33

that time of financial constraint for households, the government

0:33:330:33:36

seeks to give a helping hand. It means that where council tax is

0:33:360:33:42

frozen, prescriptions and personal care are free. Concessionary bus

0:33:420:33:46

travel is available and access to higher education is based on the

0:33:460:33:50

ability to succeed rather than the ability to pay. We all share a part

0:33:500:33:53

of the Scotland we want to be, despite the financial pressures

0:33:530:33:59

they face, we believe that to be the correct approach. The

0:33:590:34:01

government has had just -- published a budget that he quit

0:34:020:34:07

Scotland for the challenges that lie ahead. I stand ready to support

0:34:070:34:11

parliament's detailed scrutiny of these proposals. We have set out

0:34:110:34:15

her response to the challenges we face, making tough choices they

0:34:150:34:19

require. Our decisions are designed to equip Scotland for economic

0:34:190:34:23

recovery, sustainable public services and new opportunities for

0:34:230:34:32

our people. I commend the budget to parliament.

0:34:320:34:37

John Swinney delivering his draft budget there during these tough

0:34:370:34:43

economic times, promising to transfer more than �750 million

0:34:430:34:45

into the capital investment programme to support economic

0:34:450:34:54

recovery. Good afternoon. Let's get some instant reaction from our

0:34:540:34:58

guests in the studio, our business and economy editor, Douglas Fraser

0:34:580:35:03

and John McLaren from the Centre for Public Policy for the regions.

0:35:030:35:09

Douglas, you instant reaction to that budget? No big surprises

0:35:090:35:12

compared with what we had expected, and a lot of top spin about what

0:35:120:35:16

they're doing. I suspect there is a lot hidden in this, particularly

0:35:160:35:20

when you look at the increases for departments other than health.

0:35:200:35:23

Health is getting an increase in line with inflation, but it may not

0:35:230:35:27

be in line with all the inflation we are seeing over the next three

0:35:270:35:31

years. The other departments are going to Take That squeeze, and it

0:35:310:35:36

is putting an awful lot of emphasis on to higher you get efficiency in

0:35:360:35:41

order to deal with the squeeze they're going to have to take. It

0:35:410:35:46

looks like one area of controversy will be with the council. There

0:35:460:35:50

does not seem to be any new money to pay for this year's council tax

0:35:500:35:59

freeze. They had been encouraged not to increase it. That does not

0:35:590:36:03

look like the case this year. And they are being asked to use their

0:36:030:36:08

borrowing powers in order to fill some gaps in the capital budget.

0:36:080:36:12

John McLaren, a key point in the Budget. What were the other key

0:36:120:36:18

points? There is a pay freeze for one more year, which helps things,

0:36:180:36:24

but then, it says it is an end. Then he said we may be able to give

0:36:240:36:31

you some extra money after that. Additives like, how much? That is

0:36:310:36:36

the big unknown. But there are a number of areas where new money has

0:36:360:36:42

had to be found and moved. So the money from resource to capital

0:36:420:36:50

budget, more than 800 million for Health, but there has not been

0:36:500:36:55

anywhere that new money has come from. And so there is going to be a

0:36:550:36:59

squeeze elsewhere. At the moment, it is difficult to see where that

0:36:590:37:04

is. Perhaps it is just from the efficiency savings. Because that,

0:37:040:37:09

from the manifesto, was where most of the savings come from. But you

0:37:090:37:13

can find anything, including council tax freeze if you use those

0:37:130:37:18

efficiency savings. But what are they? Are a real? How do you insure

0:37:180:37:22

their happen? Douglas, the Conservatives were saying

0:37:220:37:25

efficiency savings should be monitored to see if they are true

0:37:250:37:31

and actual. And insisting there on the tax for retailers on alcohol

0:37:310:37:37

and tobacco use? For yes, one year ago, John Swinney proposed nearly

0:37:370:37:44

�30 million of additional tax. got knocked back because he did not

0:37:440:37:47

have a majority then to do so. He does not have a problem with that

0:37:470:37:51

now, but he does have a problem if retailers are told that tax is

0:37:510:37:56

going to go up. It is an odd signal to send when you are trying to

0:37:560:38:01

reduce tax. But if you are hitting tobacco and alcohol, that is what

0:38:010:38:07

he is going after this time. That involves the same people, the big

0:38:070:38:11

supermarkets. And he is clearly going to pursue them for that. Also

0:38:110:38:18

worth looking at his is invest to save - the preventative spending.

0:38:180:38:21

Everybody can agree that is a good thing to do, to keep somebody out

0:38:210:38:26

of prison 20 years by-now by making sure they get good schooling this

0:38:260:38:31

year. But that is very expensive. Your reward is 20 years from now a.

0:38:320:38:36

And this does not seem like an easy time to do that. He seems to be

0:38:360:38:39

freeing up money from elsewhere, we have yet to find out where, to make

0:38:390:38:47

that possible. Four we go back to the chamber.

0:38:470:38:50

The Scottish Government is passing on the painful stop the crucial

0:38:500:38:54

part of that is that once again, it is being passed on to local

0:38:540:38:58

authorities. The fight your council tax freeze, the pledge on police

0:38:580:39:05

numbers. The Christie Commission tells us that the gap between

0:39:050:39:10

revenue and demand for local authorities by 2016 will be �3

0:39:100:39:17

billion. If councils are to meet the costs of the SNP's ledgers, it

0:39:180:39:22

will mean more council workers losing their jobs, further cuts in

0:39:220:39:25

service and the evidence of the last Parliament is that education

0:39:250:39:30

and social work budgets will be badly hit. It will mean more and

0:39:300:39:37

more public sector jobs going, it will mean some of the most

0:39:370:39:40

vulnerable in our communities being denied the services on which they

0:39:400:39:44

depend, and it will hit local education budgets, which are

0:39:440:39:48

crucial to our young people. The Scottish Government might think

0:39:480:39:55

this is a good political trick, but these will be cuts because of

0:39:550:39:58

decisions they have taken. And I have no doubt they will be resisted

0:39:580:40:04

strongly. We know there is great concern amongst her local-authority

0:40:040:40:08

leaders, at least amongst those who are allowed to be concerned about

0:40:080:40:13

the settlement. That is clear from the fact that there is no agreement

0:40:130:40:17

with local authority leaders that this settlement is adequate in a

0:40:170:40:22

number of key areas. On maintaining police numbers, all that has been

0:40:220:40:26

currently agreed is that there will be flat cash settlements for police

0:40:260:40:30

forces. No commitment that this will be enough to maintain numbers.

0:40:300:40:35

We have already voiced her concern that the loss of hundreds of police

0:40:350:40:39

Staffs. Despite the many statements made in advance of the elections on

0:40:390:40:43

Scottish Government policy on no compulsory redundancies, no such

0:40:430:40:47

agreement has been reached with local authorities. And there is

0:40:470:40:52

great concern amongst councils about Mr Swinney's plans to cut

0:40:520:40:58

their capital spending by �120 million, and �100 million in the

0:40:580:41:01

next two years, in the expectation that they will borrowed to fill

0:41:010:41:05

this gap over that period. I am a supporter of the Scottish

0:41:050:41:08

Government having borrowing powers at a higher level than those

0:41:080:41:12

proposed in the Scotland Bill, and at a faster rate. But in asking

0:41:120:41:16

local authorities to do that borrowing for them, Mr Swinney has

0:41:160:41:20

received no commitment this will actually happen. And given the

0:41:200:41:23

financial pressures local authorities are under, this cannot

0:41:230:41:27

be surprising, particularly because he has apparently not said if he

0:41:270:41:30

will reimburse councils for the substantial interest payments which

0:41:300:41:35

will accrue on those loans. We can only hope that this move will not

0:41:350:41:38

mean that and local infrastructure investment will be stalled or

0:41:380:41:43

cancelled. We do not believe this is a fiscal stimulus, but rather, a

0:41:430:41:48

slight of hand. This is of crucial importance, because one area of

0:41:480:41:52

agreement in principle between us is on the need to maximise spending

0:41:520:41:58

on infrastructure in order to stimulate economic growth. Richard

0:41:580:42:02

Baker their. Live coverage of the Scottish budget debate continues on

0:42:020:42:08

our website. We will go to the Garden Lobby,

0:42:080:42:17

where we can speak to Paul wheelhouse and Lewis MacDonald.

0:42:170:42:24

Good afternoon. Paul, first of all, let's take up on what Richard Baker

0:42:240:42:28

was saying. The local authorities had been left high and dry and are

0:42:280:42:32

having to borrow to fund his plans? For example, the council tax freeze

0:42:320:42:39

well stocked I would not make that linkage myself. I think it is clear

0:42:400:42:42

that in 2011 local government will have a higher share than they had

0:42:420:42:48

prior to coming into office in 2007, and in terms of borrowing powers,

0:42:480:42:53

we are anticipating the Scotland Bill will give us borrowing powers

0:42:530:42:58

to fund capital projects. It is too early to jump to conclusions that

0:42:580:43:02

local government is being punished. But you criticise Labour for

0:43:020:43:07

running up debt. It looks like this is what the SNP are doing. It looks

0:43:070:43:12

like John Swinney is pushing that pressure on to local councils so

0:43:120:43:20

that he can balance his books. on as John is a fitting description,

0:43:200:43:25

but what we are talking about here, there is obviously a severe drop

0:43:250:43:29

off in the capital budget and the Scottish Government has to work

0:43:290:43:32

with. And we are asking for a partnership between the Scottish

0:43:320:43:35

Government and local governments to ensure that vital projects can

0:43:350:43:42

Tintin youth -- continue. And we have an opportunity with the

0:43:420:43:45

introduction of borrowing powers later on in the turn of the

0:43:450:43:49

parliament to try and increase the capital funding we have available.

0:43:490:43:58

Lewis MacDonald, the haters could have been left by your own

0:43:580:44:02

government. Are you not impressed that John Swinney is doing a good

0:44:020:44:08

job in balancing the books? If no, because what I have seen so far or

0:44:080:44:14

shows that the way he is doing it... We need to see the detail. And when

0:44:140:44:20

we see an example of money being cut from the housing regeneration

0:44:200:44:26

programme, you have to ask whether indeed housing regeneration are

0:44:260:44:30

being given the priority they deserve. We have also a singer Cat

0:44:300:44:37

in the funding for further education, up also for capital

0:44:370:44:42

funding of Scottish Water, on the very day we have heard reports of

0:44:420:44:46

unsafe water delivery in the north of Glasgow a few months ago. There

0:44:460:44:50

are real concerns about where these cuts will hit, and when Paul

0:44:500:44:53

Wheelhouse talks about asking for a partnership with local government,

0:44:540:44:57

we have to ask the question, when used a partnership, do you mean it

0:44:580:45:00

you agree or do you mean that John Swinney tells the councils that

0:45:010:45:08

they are funding -- their funding will be be profiled by the Scottish

0:45:080:45:12

Government with no pay back from the Scottish Government for the

0:45:120:45:15

money. So, a while we do not know the detail, we are concerned by

0:45:150:45:25
0:45:250:45:26

What will happen with Labour council leaders across Scotland?

0:45:260:45:30

Last time Mr Swinney managed to insure the council tax freeze using

0:45:300:45:35

the carrot and stick method. think Labour council leaders will

0:45:350:45:39

be very concerned at what has been put in front of them and will want

0:45:390:45:44

to know first to the detail and second how their ability to deliver

0:45:440:45:51

public services for their communities will be affected. There

0:45:510:45:55

may be a degree of compulsion around that so-called partnership

0:45:550:46:03

approach. We also know because of the SNP are planning a five-year

0:46:030:46:09

council tax freeze, we are bound to wonder how that will allow public

0:46:090:46:14

services to continue to be funded towards the end of that period.

0:46:150:46:23

Paul, so many of the new SNP's have come from a local Government. What

0:46:230:46:27

do you make of that, about this compulsion and have divorced

0:46:270:46:34

partnership working? I do not think there is an enforced compulsion.

0:46:340:46:40

There is an incentive here for councils to conform to the council

0:46:400:46:45

tax freeze, because they are asking their employees and residents to

0:46:450:46:51

absorb the pay freeze for the forthcoming year. There is a

0:46:510:46:55

requirement then to introduce a social wage which we very much back

0:46:550:46:59

in the SNP. There is a responsibility for individual

0:46:590:47:03

families and those working in the public sector and we have a council

0:47:030:47:06

tax freeze which allows them to maintain their standard of living

0:47:060:47:11

without putting additional pressure on as a result of Westminster's

0:47:110:47:18

cuts. Thank you very much. There is one other major political event

0:47:180:47:22

taking place this afternoon. The Deputy Prime Minister, Nick Clegg,

0:47:220:47:25

is due to address the party faithful at the Lib Dem conference

0:47:250:47:30

in Birmingham. He has spent the week trying to convince the public

0:47:300:47:32

that the Lib Dems are making a difference in Government. Let's

0:47:320:47:37

cross once again to of Westminster correspondent who is standing by

0:47:370:47:42

behind the conference hall. about a quarter of an hour, Nick

0:47:420:47:46

Clegg will be getting up to make that speech and what has he got to

0:47:460:47:50

say, and what type of a week has it been for the Liberal Democrats down

0:47:500:47:54

here in Birmingham? To answer those questions, I enjoyed by two

0:47:540:47:58

Scottish activists, Jenni Lang from Edinburgh and Callum Leslie from

0:47:580:48:04

Fife. Jenni, what has your leader got to do this afternoon to rebuild

0:48:040:48:09

the party's confidence in what has been a dreadful year for you in

0:48:090:48:14

electoral terms. The press seem to be quite bemused by the fact that

0:48:140:48:18

at this conference we have all been upbeat and there has not been a

0:48:180:48:22

sense of panic. He does not need to do much to build our confidence.

0:48:220:48:28

The number of people who have campaigned remember of -- a time

0:48:280:48:34

when poll ratings were down and there was no discernible support.

0:48:340:48:38

We are comfortable where we have to go and we know what we have to do.

0:48:380:48:42

I think the key now is looking forward and for the speech today,

0:48:420:48:47

it has got to be about looking forward and the positives we are

0:48:470:48:53

bringing to Government. Callum Leslie, you are from the Fife area.

0:48:530:48:58

How easily are you and your colleagues in the Liberal Democrats

0:48:580:49:02

about the body beamed in coalition with the Conservatives, and it

0:49:020:49:06

seems as far as Scotland is concerned, you pay a price for that

0:49:060:49:12

in May. There is no doubt be paid a price. The Liberal Democrats have

0:49:120:49:16

always paid a price for being the junior partner in a coalition. They

0:49:160:49:22

do not think we are finding it easy to be in the collision but we are

0:49:220:49:31

confident we were made -- we make the correct decision. The

0:49:310:49:40

electorate chose not to give any part in the majority. The message

0:49:400:49:44

he is going to get across this afternoon is, it is tough being in

0:49:440:49:48

coalition. It is right that we will have to come on with the reduction

0:49:480:49:52

plans for the deficit. Is that a message you can sell on the

0:49:520:49:56

doorsteps in Fife? That is definitely what we have to do and

0:49:560:50:01

that is how we go about regaining the support of voters. The

0:50:010:50:05

activists need to get back on doorsteps and spell at the

0:50:050:50:10

positives to local people. When we go back, it is because the Liberal

0:50:110:50:16

Democrats are in Government that the poorest families have been

0:50:160:50:20

lifted out of income tax. It is about selling those things. There

0:50:200:50:23

is a number of things that have happened because the Liberal

0:50:230:50:27

Democrats are in Government and would not have happened if it had

0:50:270:50:31

been a Conservative minority. Those things we can take to the doorstep.

0:50:310:50:34

We have to start being more confident in going out and telling

0:50:340:50:40

the good stories we have to tell. For Scotland, the big question is

0:50:400:50:44

independence referendum. What is your view on this? Your party seems

0:50:440:50:48

to be saying when it comes along they will fight against it. Should

0:50:480:50:52

your party be more proactive on that? My personal view is that we

0:50:520:50:56

should have done it in the previous Government, prior to the SNP having

0:50:560:51:00

the majority. At that point, the question would have been possibly

0:51:000:51:04

quite different to what we may get in this particular Government. Do I

0:51:040:51:09

think we should be independent? Absolutely not. Should be campaign

0:51:090:51:16

against it? Absolutely. Should we ask the questions? I am a Liberal

0:51:160:51:19

Democrat and I believe in the will of the people. They should be asked

0:51:190:51:23

the question. Karen, do you want to see a referendum sooner rather than

0:51:230:51:31

later? -- Callum. Yes but we need to see the SNP coming clean on the

0:51:310:51:36

costs and implications of independence. We really need to see

0:51:360:51:41

a bit more leadership from the SNP on this, to show they are fit to

0:51:410:51:44

govern and to give us a straight answer on the costs and

0:51:440:51:49

implications of independence. you very much. I will let you get

0:51:490:51:52

back into the conference now when the fight will be making that

0:51:520:51:54

speech probably in about ten minutes or quarter of an hour,

0:51:540:51:59

where he will be answering that specific question that still many

0:51:590:52:03

Liberal Democrats have, if we are in coalition, what are we in

0:52:030:52:07

coalition for? And secondly, how to have the will things be in the

0:52:070:52:13

weeks and months ahead? We will have that speech from Nick

0:52:130:52:16

Clegg lies. The political commentator Hamish Macdonell is

0:52:160:52:24

with me for the rest of the programme. What political message

0:52:240:52:30

is John Swinney trying to convey? With this budget there are two

0:52:300:52:33

distant stories. There is the number crunching and the economics

0:52:330:52:37

of it and then the politics. There is a fairly clear political thread

0:52:370:52:41

that runs all the way through this and it is to do with comparisons

0:52:410:52:45

and particularly comparisons with England. If you look at what he

0:52:450:52:49

says, he's saying, learn from us in Scotland. We are doing it right. It

0:52:490:52:53

took him just two minutes to mention how could the unemployment

0:52:530:52:57

statistics are in Scotland compared to England. Then he says, give us

0:52:570:53:01

more powers and we will do even better. Finally, he says our aim is

0:53:010:53:05

that Scotland will be in a better position than England. Come the

0:53:050:53:08

referendum, we will have the statistics to prove it so that the

0:53:080:53:11

public can then vote for independence. That is the political

0:53:110:53:14

thread running through it and that is a consistent theme we have seen

0:53:140:53:20

from the SNP. One of us talking to the SNP MSP earlier, I was

0:53:200:53:23

mentioning be honest John caricature all. Is John Swinney

0:53:230:53:29

able to blame London and then shift some of the blame on to local

0:53:290:53:35

councils to maintain his team come up -- clean-cut image? This is

0:53:350:53:39

where he has trouble all we in the future. There are couple of

0:53:390:53:44

constituencies at their way he has to try to sort it out. One thing is

0:53:440:53:47

the councils and there are things in the Budget which a lot of

0:53:470:53:49

councils will find very difficult to swallow. On the other hand, he

0:53:490:53:54

has the unions, and the Budget seems to be earning more on the

0:53:540:53:57

side of the unions, particularly the public sector unions, in terms

0:53:570:54:02

of things like pay and teacher numbers. On the other hand, he is

0:54:020:54:05

then probably coming in to fight the battle with cancer at the same

0:54:050:54:13

time. John McLaren, there is that incredible pressure on its John

0:54:130:54:18

Swinney in terms of the final budget allocation. Is he coping

0:54:180:54:23

with that pressure? He has to cope with it because he has to balance

0:54:230:54:27

his budget. It is inevitable he has to do that. We will have to wait

0:54:270:54:31

and see how these plans act. There are a lot of commitments made their

0:54:310:54:36

but we have not seen the details. He has said he will fully fund the

0:54:360:54:39

higher education gap. I do not think it is possible to know what

0:54:390:54:47

that is going to beat yet so that is a moot point. The local

0:54:470:54:50

Government is going to be an important one. He has only gone one

0:54:500:54:57

year ahead with the wages but that will be satisfactory and leave the

0:54:570:55:03

next two years Open. The ring back to the point about his attempt to

0:55:030:55:07

make Scotland look like it is in a better position than the UK. --

0:55:070:55:12

going back. In terms of the economy. In a few months' time, when you

0:55:130:55:16

have more day debt, the data could look worse. The data is not even

0:55:160:55:21

that strong. If you look back two years, the UK has done better on

0:55:210:55:24

unemployment and in Scotland and the figures within Scotland are

0:55:240:55:29

very... Art, shall we say? There has apparently been a huge increase

0:55:290:55:34

in health and social workers, up 15 % of the last six months. I doubt

0:55:340:55:40

that that is true. So the position could shift quite quickly so that

0:55:400:55:45

strand of the argument could be weak. Thank you. We will be back

0:55:460:55:51

with you gentleman in a moment. Now on to our economics commentator Alf

0:55:510:55:57

Young, in the garden lobby. What do you make of the budget? I thought

0:55:570:56:01

it was complex in terms of trying to balance all these forces. There

0:56:010:56:06

were one or two surprises. I think the surprise at the end about new

0:56:060:56:13

spending on preventative measures balanced up by taking muzhik --

0:56:130:56:18

money off sales of alcohol and that is back to the old Tesco tax which

0:56:180:56:21

they did not manage to get through last time. It will be interesting

0:56:210:56:26

to see how they do that in a way that does not have borderline cases

0:56:260:56:32

and complications about who pays it and whose does not. Also, some key

0:56:320:56:35

points and pate and pensions as well. Mr Swinney was saying the UK

0:56:360:56:39

Government is taking the wrong course of action when it comes to

0:56:390:56:42

public sector pensions, but he was saying they will have to follow

0:56:420:56:45

that course of action themselves if the UK Government did not change

0:56:450:56:53

their cause of action. Absolutely. Faced with the possibility of

0:56:530:56:55

losing over �8 million a month from their own budget, they have decided

0:56:550:56:59

to say that if the British Government goes ahead with it, that

0:56:590:57:03

will happen. So there is talk of another year of salary freeze and

0:57:030:57:06

donors freeze. People will have to pay more for their pensions and

0:57:060:57:14

that will have copies consequences in terms of living through the

0:57:140:57:19

biggest, longest living squeezed -- squeeze on living standards since

0:57:190:57:25

the 1920s in the UK. In that context, treating up workers in

0:57:250:57:31

that way we'll squeeze their living standards even more. It will be

0:57:310:57:36

interesting to see how they treat individuals rather than judging one

0:57:360:57:40

party's political pitch against another us. What did you make in

0:57:400:57:44

terms of the pledges when it comes to public sector workers would be

0:57:440:57:48

no compulsory redundancies, the pay freeze, and he did mention the

0:57:480:57:52

extra flexibility that would be required of them? I think a lot of

0:57:520:57:57

that is in the detail. What does he mean by flexibility and integration

0:57:570:58:04

and the other nice words he came away with? In general terms, I

0:58:040:58:09

think the message to public sector workers is that times are going to

0:58:090:58:14

be quite tough. Not having a compulsory redundancy scheme is one

0:58:140:58:18

thing but it did look at the Government's own Civil Service, I

0:58:180:58:22

was talking to a civil servant not long ago he was telling me that one

0:58:220:58:26

in six of the Scottish Government's own workforce has already gone, not

0:58:260:58:29

because of compulsory redundancy but there are other ways of making

0:58:290:58:34

the atmosphere such that the job is no longer needed, off you go. There

0:58:340:58:42

has been quite a big exodus already. Mr Swinney promised an extra �826

0:58:420:58:46

million for the health budget in Scotland. I suppose he is ensuring

0:58:460:58:50

that in cash terms there is a real increase there? Yes, but doing that,

0:58:500:58:54

because it is such a big part of the overall budget, inevitably

0:58:540:58:58

other things will be hit and I have already had people saying that the

0:58:580:59:02

housing regeneration budget is going to be hit. I am involved in

0:59:020:59:05

that personally. I do not have the numbers yet but we have already

0:59:050:59:10

taken a pretty massive hit last time. If we take another massive

0:59:100:59:13

hit you wonder whether things like regeneration projects are possible

0:59:130:59:17

to deliver at all if the Government is not going to be committed to

0:59:170:59:23

them in the longer term. Thank you. Before we go live to Birmingham for

0:59:230:59:27

Nick Clegg's speech, I'm joined again by my guests in the studio,

0:59:270:59:31

Hamish Macdonell. What do you think Nick Clegg will tell delegates and

0:59:310:59:35

what kind of a week have they had in Birmingham? This is probably the

0:59:350:59:39

toughest speech he has had to deliver. He had a tough one last

0:59:390:59:42

year after they went into Government but this year, things

0:59:420:59:47

are even worse. The overall message will have to be, keep the faith,

0:59:470:59:50

stick with it. We have got liberalism in Government. He will

0:59:500:59:53

have to come out with lots of examples of the things the Liberal

0:59:530:59:57

Democrats have done to say, we are actually achieving things. Do not

0:59:571:00:06

listen to all the critics or the Michael Moore was promising to look

1:00:061:00:11

at trading and grows in Scotland. What can be done there in terms of

1:00:111:00:16

the UK Government trying to improve that in Scotland? There are a

1:00:161:00:20

number of things, economic powers that are still held at the Treasury

1:00:201:00:26

which could try and improve trade. But most of the powers that way are

1:00:261:00:30

now really in Scotland, whether it is to do with skills, or planning

1:00:301:00:34

regulations, things like that. There are some things that can be

1:00:341:00:41

done, but to be almost, it is the world's conditions that are the

1:00:411:00:44

most important thing, it is what is going to happen in the euro-zone

1:00:441:00:49

and in America, as well as in China, that will really drive whether

1:00:491:00:54

there is a recovery or not. These are things that can prepare you for

1:00:541:00:59

the recovery. Get you in a good position for when it comes. But the

1:00:591:01:04

recovery will be partly the bigger picture that will happen, not just

1:01:041:01:08

Scotland but the UK. Hamish, we have seen at the Liberal Democrat

1:01:081:01:12

conference they had been critical of the situation in Scotland,

1:01:131:01:15

warnings from the Scottish delegates that a referendum could

1:01:151:01:20

endanger a gross. Should the SNP be concerned about these warnings from

1:01:201:01:24

their opponents? Big business were obviously making the same. A couple

1:01:241:01:30

of weeks ago? I think the SNP would be worried about business saying it,

1:01:301:01:33

not the Liberal Democrats. They will just look at the polls and

1:01:331:01:36

think that the Liberal Democrats are suffering and they will not pay

1:01:361:01:40

much attention. I think one of the points that John was making, one of

1:01:401:01:45

the key points we have to get from Nick Clegg's speech is one of tone.

1:01:451:01:50

Does he adopt the same kind of tone as we saw from Vince Cable, or does

1:01:501:01:54

he tried to inject some positivity into it? Does he talk about the

1:01:541:01:58

referendum, does he talk about Scottish independence or try to

1:01:581:02:01

sell the more positive message, which is more difficult given the

1:02:011:02:08

circumstances we are in. So John McLaren, we are hearing some double

1:02:081:02:11

speak from the Liberal Democrats when it comes to Plan A and Plan B.

1:02:121:02:16

There was talk of a plan a plus, where they were promising �5

1:02:161:02:19

billion of capital investment in broadband and transport projects

1:02:191:02:25

and so on. Other Liberal Democrats pushing for a move to Plan B,

1:02:251:02:30

whereas the Conservatives are happy to stick with Plan A? I think

1:02:301:02:37

Dannii Alexander, Vince Cable and Nick Clegg all must know how wedded

1:02:371:02:43

Jock -- Jack Osborne and David Cameron are to plan A, and that it

1:02:431:02:46

will undermine their credibility. They are probably looking at little

1:02:461:02:50

bits of money that have been underspent being spent on other

1:02:501:02:55

areas. But it seems as though the gap is getting bigger from the

1:02:551:03:02

IMF's figures yesterday. And that puts the pressure today, will they

1:03:021:03:06

have even more cuts to meet the target, not will there be a Plan B

1:03:061:03:11

with extra money. I cannot see there being, and less something

1:03:111:03:17

dramatically shifts, I cannot see there being a Plan B. Hamish, Alex

1:03:171:03:22

Salmond has been promising Plan MacB, that has been the Scottish

1:03:221:03:26

Government's proposal. In terms of that, how credible is that as a

1:03:261:03:31

substitute plan? I think that Plan MacB, as it has been dubbed, is

1:03:311:03:35

really about putting money into infrastructure projects and trying

1:03:351:03:38

to galvanise the economy by using public sector spending in areas

1:03:381:03:43

which can create jobs and create wealth. So what we have seen from

1:03:431:03:46

the Scottish Government today has been an attempt to use what they

1:03:461:03:50

would seek the minor levers they have round the edges to push money

1:03:501:03:54

into those areas. And if it works, and again this comes down to

1:03:541:03:58

statistics, we do not know where things will go, but if it works,

1:03:581:04:02

they can then say that Plan MacB is working and that it should be taken

1:04:021:04:06

down south. This could be embarrassing for the Coalition

1:04:061:04:13

Government if, as IMF were saying, if we slip into a further recession,

1:04:131:04:17

it the IMF were saying that they could maybe the have Plan B. Do you

1:04:171:04:22

think that is giving some succour to Alex Salmond? I think that any

1:04:221:04:27

chance he gets, he will raise the IMF and say, look, the IMF are

1:04:271:04:32

saying this, change course. George Osborne has shown no indication

1:04:321:04:35

that he is attempting more willing to change course. We will see that

1:04:361:04:39

when the Conservatives gather for their conference. But I expect him

1:04:391:04:44

to stick with the plan A, and try to see it through. His is not just

1:04:441:04:48

about economics, it is about ideology as well for the

1:04:481:04:52

Conservatives. John, do you think that has been difficult for the

1:04:521:04:57

Liberal Democrats this week, the mixture of ideology and economics?

1:04:571:05:01

Do you think delegates have found it uncomfortable? I think the

1:05:011:05:04

delegates have, but I think the delegates and some of the ministers

1:05:041:05:08

are in different places anyway. There has been a strain of the

1:05:081:05:12

Liberal Democrats that have been more conservative-minded in terms

1:05:121:05:18

of economics and finances than their normal party members. So I do

1:05:181:05:21

not think people like Vince Cable and Nick Clegg are more relaxed

1:05:211:05:25

with that position. They want other things on the social side put

1:05:251:05:29

forward. But I think they are reasonably relaxed about the

1:05:291:05:33

overall position in terms of the economy. Hamish come up we are

1:05:331:05:38

almost going to that speech. It has been a reasonably successful week

1:05:381:05:43

for them in terms of media coverage. Reasonably upbeat, things are

1:05:431:05:47

perhaps not so bad as they were when students were writing in

1:05:471:05:54

December. I think so, but I think they were starting from a low point.

1:05:541:05:57

I think what they do in the coalition has been driving things

1:05:571:06:01

behind the scenes. It is a question of whether they can afford to pull

1:06:011:06:04

themselves away from the Tories electorally, and if they do, would

1:06:041:06:09

they get stuffed? So I think that yes, it has not been a bad

1:06:091:06:12

conference, but they have had better ones in the past when they

1:06:121:06:18

were not in government. We are hearing from Chris Huhne about his

1:06:181:06:23

plan to tackle the big energy companies. Do you think the Liberal

1:06:241:06:28

Democrats had hit a positive note with that? Do you think that will

1:06:281:06:32

appeal to the public, Lower Terrace, making it easier for people to

1:06:321:06:38

switch? Yes, it will appeal to the public, things like that usually do.

1:06:381:06:44

It is how you go about doing it. And if at the same time they are

1:06:441:06:48

going to champion Moorgreen power, more renewables, at the minute,

1:06:481:06:52

there is a subsidy involved in that which would push energy prices back

1:06:521:07:00

up. So it is not a wholly convincing package. We are almost

1:07:001:07:05

going to the conference. Nick Clegg is just about to speak. There was

1:07:051:07:10

an amusing cartoon in The Times on Saturday, David Cameron and George

1:07:101:07:13

Osborne checking Liberal Democrat candidates before they went in. How

1:07:131:07:17

much of what the senior Liberal Democrats can say, how much to gain

1:07:171:07:22

liaise with the Conservatives? think they will liaise, but I think

1:07:221:07:26

David Cameron is pretty relaxed. He knows that this is Nick Clegg

1:07:261:07:31

talking to his mates as he has to, and he has to let off steam. And I

1:07:311:07:37

think the Conservatives know that. It is just running a few minutes

1:07:371:07:41

late. Are there any other points that Nick Clegg will try to put a

1:07:411:07:45

paw and -- across? Anything that he will try to hit home so that the

1:07:451:07:50

delegates go away with a spring in their step? What I will be looking

1:07:501:07:54

for is to see whether he mentioned anything on Europe. That is the

1:07:541:07:58

elephant in the room. You have a coalition where the Tories have

1:07:581:08:02

always been more sceptical about it, the Liberal Democrats have been in

1:08:021:08:07

favour. The euro is going through huge troubles, does he tackle that

1:08:071:08:10

head on and make a difference between what the Liberal Democrats

1:08:101:08:15

are doing, or does he leave that to one side as a difficult subject? I

1:08:151:08:19

will be interested to see on whether he touches on that issue of

1:08:191:08:25

Europe and the euro. We go to Birmingham, when Nick Clegg is

1:08:251:08:35
1:08:351:09:11

Thank you everybody. Thank you. Friends, his party, the Liberal

1:09:111:09:19

Democrats, we have now been in government for 500 days. Not easy,

1:09:191:09:27

is it? None of us thought it would be a walk in the park. But I

1:09:271:09:33

suspect none of us predicted just how tough it would turn out to be.

1:09:331:09:43

We have lost support, we have lost seats, and we lost a referendum. I

1:09:431:09:49

know how painful it has been to face anger and frustration on the

1:09:491:09:54

doorstep. Some of you may have even wondered, will it all be worth it

1:09:541:10:03

in the end? It will be. And today, I want to explain why. But above

1:10:031:10:12

all, I want to pay tribute to you. You're resilience, Your Grace Under

1:10:121:10:19

Fire. I had been genuinely moved by your spirit and your strength.

1:10:191:10:27

Thank you. And thank you above all for never forgetting what we are in

1:10:271:10:34

politics for. At the May elections, Alex Cole Hamilton, one of her

1:10:341:10:40

defeated candidates in Edinburgh, said that if losing was part

1:10:401:10:44

payment for ending child detention, then, as he said, I except it was

1:10:441:10:53

all my heart. That is the liberal spirit. And that is something we

1:10:531:11:03
1:11:031:11:06

will never lose. Five it is a spirit, it is the same as varied

1:11:061:11:11

that gave birth to our party 150 years ago, that kept us alive when

1:11:111:11:17

the other two parties tried to kill us off. Is there is that means,

1:11:171:11:23

however great our past, our fight will always be for a better future.

1:11:231:11:29

Downing Westminster, we had been vilified like never before. The

1:11:301:11:33

left and the right, they did not like as much in opposition, and

1:11:331:11:38

they like us a lot less now we are in government. The left accuse us

1:11:381:11:43

of being powerless habits, duped by a right-wing Conservative clique,

1:11:431:11:47

and the right to accuse us of being as sinister left-wing clique he had

1:11:471:11:50

duped powerless Conservatives. I wish they would make up their

1:11:501:11:59

minds! So yes, it has been hard. And adversity tests the character

1:11:591:12:05

of a party just as it tests any person. We have shown, you have

1:12:051:12:13

shown, immense strength. After being hit hard, we picked ourselves

1:12:131:12:19

up. And we came out fighting. Fighting to keep the NHS safe, to

1:12:191:12:26

protect human rights, to create jobs, for every family. Not doing

1:12:261:12:35

the easy thing. But doing the right thing. Not easy. But right. And as

1:12:351:12:41

for all those seats, let me tell you this. I will not rest, we will

1:12:411:12:47

not rest until we have won every single one of those seats back! And

1:12:471:12:57
1:12:571:13:11

Now these may not be easy times for us as a party. But more importantly,

1:13:111:13:18

these are not easy times for our country. Economic insecurity,

1:13:181:13:24

conflict, terrorism, disorder flaring up on our streets. Times

1:13:241:13:30

like these can breed protectionism and populism. So at times like

1:13:301:13:36

these are when liberals are needed most. Our party has fought for

1:13:361:13:43

liberal values for a 150 years, justice, optimism, freedom. We are

1:13:431:13:53
1:13:531:14:04

This conference centre is on the site of the old Bingley Hall, where

1:14:041:14:08

William Gladstone's did 130 years ago to found the National Liberal

1:14:081:14:17

Federation. He observed that day that Birmingham had shown it was no

1:14:171:14:23

place for weak-kneed liberalism. No change there, then! So we are

1:14:231:14:30

strong. We are united, true to our values, back in government, and on

1:14:301:14:40
1:14:401:14:47

In Government, your faced with hard choices every single day. The

1:14:471:14:53

question is how you make them. Some ask, how can we get a market to

1:14:531:15:00

work here? Others, had can this win has more votes? A few, what will

1:15:001:15:05

the press think? For liberals, the litmus test is always the national

1:15:051:15:13

interest. Not doing the easy thing but doing the right thing. And that

1:15:131:15:18

takes a certain type of character. One which we have seen on display

1:15:181:15:22

in the last few months and indeed the last few days, here in

1:15:221:15:28

Birmingham. Brave, principled, awkward, resolute, optimistic,

1:15:281:15:32

unstoppable, and I am not just talking about Paddy Ashdown! I am

1:15:321:15:42
1:15:421:15:44

talking about every single one of you in this for? -- in this hall!

1:15:441:15:51

But I think people still need to know more about the character of

1:15:511:15:58

our party. Not just how we govern but why. We proved something about

1:15:581:16:03

ourselves last year when we face a historic choice. Whether or not to

1:16:031:16:08

enter Government in coalition with the Conservatives. The easy thing

1:16:081:16:13

would have been to sit on the opposition benches throwing rocks

1:16:131:16:17

at the Government as it tried to get control of the public finances.

1:16:171:16:22

It might even, in the short run, have been more comfortable. But it

1:16:221:16:27

would not have been right. At that moment, Britain needed a strong

1:16:271:16:33

Government. Alistair Darling's recent book is called back from the

1:16:331:16:40

brink. In reality, Labour left us on the brink. Teetering on the edge

1:16:401:16:46

of an economic precipice. So be put aside party differences for the

1:16:461:16:50

sake of the national interest. -- so we put aside. People we for

1:16:501:16:55

politics, nation before party. And whilst other countries have been

1:16:551:16:59

riven by political bickering, we have shown that a coalition forged

1:16:591:17:04

in a time of an emergency could be a different type of Government,

1:17:041:17:08

because let me tell you this, you do not play politics at a time of

1:17:081:17:13

national crisis. You did not play politics with the economy, and you

1:17:131:17:16

never, ever play politics with people's jobs!

1:17:161:17:26
1:17:261:17:37

Are first big decision was, of course, to clear the structural

1:17:371:17:44

deficit in this Parliament, to wipe the slate clean by 2015. This has

1:17:441:17:53

meant painful cuts, agonisingly difficult decisions. Not easy. But

1:17:531:17:59

right. Because handing control of the economy to the bond traders,

1:17:591:18:04

that is not progressive. Burying your head in the sand, that is not

1:18:041:18:09

a liberal. Sadly our children with the nation's debt, that is not fair.

1:18:091:18:14

-- saddling up. Labour says the Government is going too far too

1:18:141:18:22

fast. I say, Labour would have offered too little, too late.

1:18:221:18:32
1:18:321:18:36

Imagined for a moment if Ed Miliband and Ed Balls had still

1:18:361:18:42

been in power. Gordon Brown's backroom boys when Labour was

1:18:421:18:46

failing to balance the books, failing to regulate the financial

1:18:461:18:54

markets, and failing to take on the banks. Ed Balls and Ed Miliband

1:18:541:18:59

behind the scenes, always plotting, lurking in the shadows, scheming,

1:18:591:19:03

never taking responsibility. And that this time of crisis, what

1:19:031:19:08

Britain needs is real leadership. This is no time for the backroom

1:19:081:19:18
1:19:181:19:23

boys. Labour's economy is based on bad

1:19:231:19:30

debt and false hope. Labour got us into this mess. And they are

1:19:301:19:36

clueless about how to get us out. Another term of Labour would have

1:19:361:19:42

been a disaster for our economy. So don't for a moment let Labour get

1:19:421:19:49

away with it. Do not forget the chaos, the fear of 2008, and never,

1:19:491:19:53

ever Trust Labour again with the economy.

1:19:531:20:03
1:20:031:20:08

Government is certainly a bit of a learning experience. You go on

1:20:081:20:11

these international visits. You have to exchange gifts with foreign

1:20:111:20:16

dignitaries. But what do you get them? When I met the French Prime

1:20:161:20:22

Minister for the first time, he had done his research, he had found out

1:20:221:20:27

what you I was born and presented me with a rev bottle of 1967

1:20:271:20:32

branded. Might office told me he liked hiking, so what did I give

1:20:321:20:42
1:20:421:20:44

him? A bar of Kendal mint cake. But Government has also brought

1:20:441:20:51

difficult decisions. And of course, the most part wrenching for me for

1:20:511:20:58

all of us was on university funding. Like all of you, I saw the anger, I

1:20:581:21:06

understand it. I felt it. And I have learned from it. I know how

1:21:061:21:11

much damage this has done to us as a party. By far the most painful

1:21:111:21:16

part of our transition from the easy promises of opposition to the

1:21:161:21:21

invidious choices of Government. And probably the most important

1:21:221:21:28

lesson I have learned is this. No matter how hard you work on the

1:21:281:21:35

details of a policy, it is no good if the perception is wrong. We can

1:21:351:21:40

say until we are blue in the face that no one will have to pay any

1:21:401:21:46

fees as the student, but still people do not believe it. Once you

1:21:461:21:51

have left university, you will pay less a week in, week out, than

1:21:511:21:56

under the current system. But still people do not believe it. But the

1:21:561:22:00

support given to students from poorer families of will increase

1:22:001:22:08

dramatically. But still, people do not believe it. The simple truth is,

1:22:081:22:13

the Conservatives and Labour were both said on increasing fees. And

1:22:131:22:19

in those Sercombe stances, we did the best thing we could. -- in

1:22:191:22:23

those circumstances. Working tirelessly to ensure that anyone

1:22:231:22:28

who wants to go to university can. Freeing of part-time students from

1:22:281:22:33

upfront fees for the first time, ensuring there are repayments for

1:22:331:22:40

all graduates. -- insuring that repayments are more fair. But we

1:22:401:22:45

failed to explain this, to explain that there were no other easy

1:22:451:22:49

options, and we have failed so far to show that the new system will be

1:22:491:22:58

much, much better than people fear. So yes, lessons learnt. But the

1:22:581:23:04

most important thing right now is to get out there and show that the

1:23:041:23:09

university is for everyone. And we should all take a leaf out of Simon

1:23:091:23:14

Hughes's book. He has been busting a gut as the Government's advocate

1:23:141:23:18

for access, travelling the country, explaining the new system, finding

1:23:181:23:23

ways to get young people from all backgrounds to apply to university.

1:23:231:23:27

Simon did not like the decision we make, for reasons I respect. But

1:23:271:23:31

rather than sitting back, he has rolled up his sleeves and got on

1:23:311:23:36

with making the new system work. Simon, thank you.

1:23:361:23:46
1:23:461:23:58

Right now, of course, our biggest concern is the economy. The

1:23:581:24:03

recovery is fragile. Every worker, every family knows that. There is a

1:24:031:24:09

long, hard road ahead. Just in the last few days alone, we have seen

1:24:091:24:13

the financial storm in the eurozone, rising unemployment, falling

1:24:131:24:18

stockmarkets. So we were right to pull the economy back from the

1:24:181:24:24

brink. It is clearer now than ever that deficit reduction was

1:24:241:24:28

essential to protect the economy, to protect homes and jobs, because

1:24:281:24:33

deficit reduction lays the foundations for growth but on its

1:24:331:24:38

own it is not enough. And that is why we are already investing in

1:24:381:24:44

infrastructure, reducing red tape, the meeting -- promoting new skills,

1:24:441:24:48

getting the bank's lending. The average for the global economy has

1:24:481:24:54

got worse. So we need to do more. - - the outlook has got worse. We

1:24:551:25:04
1:25:051:25:11

will do more for growth and jobs. Because we are not in politics just

1:25:111:25:16

to repair the damage done by Labour, too glued back together the pieces

1:25:161:25:24

of the old economy. We are here to build a new economy. A new economy

1:25:241:25:28

save from casinos speculation. That is why a Liberal Democrat Business

1:25:281:25:32

Secretary is putting a firewall into the banking system, protecting

1:25:321:25:37

the people who have worked hard and saved. A new economy that

1:25:371:25:46

safeguards the economy -- safeguards the environment. The

1:25:461:25:50

world's first Green Investment Bank is being created. A new economy

1:25:501:25:56

where the lowest paid get to keep the money they earn and that is why

1:25:561:25:59

a Liberal Democrat Chief Secretary to the Treasury has put �200 into

1:25:591:26:03

the pocket of every basic rate taxpayer and taken almost one

1:26:031:26:09

million workers, most of them women, out of income tax altogether.

1:26:091:26:19
1:26:191:26:27

A new economy based on skills. And that is why one Liberal Democrat

1:26:271:26:30

Minister is creating a quarter of a million new apprenticeships and

1:26:301:26:34

another is investing in schools and early years education. A new

1:26:341:26:38

economy that works for families, when men and women can choose how

1:26:381:26:43

to balance work and home. That is where Liberal Democrats are

1:26:431:26:47

bringing in a shared parental leave and more flexible working, and a

1:26:471:26:53

new economy run for ordinary people, rather than big finance. After the

1:26:531:26:56

so-called masters of the universe turned out to be the masters of

1:26:571:27:06
1:27:071:27:07

destruction instead. Which is why, when we come to sell those bank

1:27:071:27:13

shares, I want to see a pay back to British citizens. Your money was

1:27:131:27:18

put at risk. Your money was used to bail out the banks. And so the

1:27:181:27:25

money made by the banks is your money, too. An economy for everyone.

1:27:251:27:30

In Scotland, Wales, in every part of the United Kingdom. For women

1:27:301:27:37

and men. Young, old. Town, country. North, south. A new economy for the

1:27:371:27:47
1:27:471:27:55

whole nation. Because as Liberal Democrats, we

1:27:551:28:03

act for the whole nation. In our long, proud Liberal history, we

1:28:031:28:11

have never, never served the media moguls, the union barons, all the

1:28:111:28:16

bankers. We do not serve and we will never surf the vested

1:28:161:28:21

interests. We are in nobody's pocket.

1:28:211:28:31
1:28:311:28:39

And that is why... And that is why why...

1:28:391:28:49
1:28:491:28:54

OK! I get it, you agree with that! That is why we can make decisions

1:28:541:28:59

in the national interest. It is not easy, but right. That is why we

1:28:591:29:04

speak up, first and loudest, when the establishment Metz the people

1:29:041:29:10

down. In the last three years, we have seen establishment

1:29:101:29:14

institutions exposed one by one. The City of London shattered by the

1:29:141:29:19

greed of bankers. The media corrupted by phone hacking.

1:29:191:29:23

Parliament shamed by expenses. I was brought up to know that it is

1:29:231:29:31

not polite to say I told you so. Well, I am sorry, we did.

1:29:311:29:41
1:29:411:29:46

In 2006, Vince Cable warned that the banks were recklessly

1:29:461:29:53

irresponsible. In 2002, when Tom McNally said that the government

1:29:531:29:58

must guard the public interest as assiduously as Mr Murdoch guards

1:29:581:30:03

his shareholder interests. And in 1996, when Paddy Ashdown said that

1:30:031:30:08

Parliament had become a rotten mess, a dishevelled, disfigured all

1:30:081:30:13

records of what was once called the mother of Parliament. Never one to

1:30:131:30:23
1:30:231:30:28

pull his punches! We to tell it like it really is. Because we are

1:30:281:30:32

in nobody's pocket. Of all the claims, or all the claims Ed

1:30:321:30:40

Miliband has made, the most writable -- risible is that his

1:30:401:30:45

party is the enemy off best interests. I mean, give me a break!

1:30:451:30:48

When we were campaigning for changing the banking system, they

1:30:481:30:52

were on their prawn cocktail offensive in the city! While we

1:30:521:30:55

have led the charge against the media barons, Labour has cowered

1:30:551:31:02

before them for decades. Two Juneau, the most shocking thing about the

1:31:021:31:07

news that Tony Blair is godfather to one of Rupert Murdoch's children

1:31:071:31:16

is that nobody was really shocked at all. And today, today Labour is

1:31:161:31:23

in hock to the trade union barons. After their government stipend, 95

1:31:231:31:29

% of Labour's money comes from trade unions - most of it from just

1:31:291:31:32

four. Let me be clear, the values of trade unionism are as relevant

1:31:321:31:37

as ever - supporting workers and fighting for fairness at work. But

1:31:371:31:42

I do not think the unions should be able to buy themselves a political

1:31:421:31:52
1:31:521:31:58

party. Ed Miliband, Ed Miliband says he wants to loosen the ties

1:31:581:32:03

between Labour and the union barons who helped him to beat his brother.

1:32:031:32:09

OK, let's see him put his money where his mouth is. That's see if

1:32:091:32:13

he will support radical reform of party funding. Every previous

1:32:131:32:17

attempt has been blocked by the vested interests in the other two

1:32:171:32:22

parties. We are all stuck in a system that we know is wrong. We

1:32:221:32:27

have all been damaged by it. But if we learnt anything from the

1:32:271:32:30

expenses scandal, it is surely that if the system has broken, we should

1:32:301:32:40
1:32:401:32:52

not wait for the next scandal, we So whether it is securing the

1:32:521:32:59

economy, sorting the banks or cleaning up politics, we are making

1:32:591:33:07

the big, difficult decisions. Not easy. But right. And that is what

1:33:071:33:13

it means to be a party of national government again. Not just making

1:33:131:33:21

arguments, making change. In a coalition, we have two types of

1:33:211:33:26

power - the power to hold a coalition partners back, and the

1:33:261:33:31

power to move the government forward. So we can keep the

1:33:311:33:35

government to 11 will pass, and for the government in the centre ground.

1:33:351:33:40

We were absolutely right to stop the NHS Bill in its tracks. To

1:33:401:33:44

ensure change on our terms, no arbitrary deadlines, no backdoor

1:33:451:33:50

privatisation, no threat to the basic principles at the heart of

1:33:501:33:55

our NHS. We are right to stand up for civil liberties - no retreat to

1:33:551:34:00

the illiberal all populism of the Labour years. We are right to keep

1:34:001:34:04

insisting on a fair tax system, asking the most of the people who

1:34:041:34:11

have the most. And we will always defend human rights, at home as

1:34:121:34:21

well as abroad. The European Convention, the European Convention

1:34:221:34:26

on Human Rights and the Human Rights Act are not, as some would

1:34:261:34:30

have you believe, foreign in positions. These are British rides,

1:34:301:34:35

drafted by British lawyers, forged in the aftermath of the atrocities

1:34:361:34:40

of the Second World War. Fought for by Winston Churchill�. So let me

1:34:401:34:45

say something, really clearly, about the Human Rights Act. In fact,

1:34:451:34:55
1:34:551:35:18

I will do it in words of one So, France, we will always hold the

1:35:181:35:23

liberal line -- friends. But much more important, is the positive

1:35:231:35:28

power of government. Not just that - like stopping bad things, but

1:35:281:35:35

doing good things. Last year, I walked through the door of Number

1:35:351:35:40

Ten. But we all walked through a kind of draw together. To being,

1:35:401:35:48

once again, a party of national government. So we must now move

1:35:481:35:51

beyond the reflexes of opposition to the responsibilities of

1:35:521:35:57

government. And the opportunities of government, to. New social

1:35:571:36:03

housing, criminal justice reform, fixed-term, keeping our post

1:36:031:36:09

offices open, House of Lords reform, better mental health care, saver

1:36:091:36:14

banks, income tax down for ordinary workers, capital gains tax are for

1:36:141:36:18

the rich, compulsory retirement scrapped, pensions protected by a

1:36:181:36:24

triple lock, ID cards history, child detention ended. And just

1:36:241:36:34
1:36:341:36:36

look, just look at what we have announced in the last five days.

1:36:361:36:40

After decades of campaigning, thanks to Lynne Featherstone, equal

1:36:401:36:45

marriage, straight or gay, more powerful consumers over the energy

1:36:451:36:50

companies, calling time on rewards for failure in boardrooms.

1:36:501:36:54

Investing in education for girls in developing countries, new powers to

1:36:551:37:02

turn energy homes back into family homes -- empty homes. At �500

1:37:021:37:06

million investment in growth. Liberal achievements from a liberal

1:37:061:37:16
1:37:161:37:30

And we have steered our commitments to act on the environment. The

1:37:301:37:34

polls tell us that climate change has dropped down people's list of

1:37:341:37:39

worries. But people have more immediate concerns. And I

1:37:391:37:44

understand that. So the politically convenient thing which had been to

1:37:441:37:50

put this off to another day. Instead, we have acted immediately.

1:37:511:37:57

Not easy, but right. Ambitious carbon targets, energy market

1:37:571:38:02

reform, councils generating renewable energy, a green deal to

1:38:021:38:07

make bills lower and homes warmer, car on catcher and storage, green

1:38:071:38:13

buses, trains and trams, the world's first ever Green Investment

1:38:131:38:21

Bank. Green achievements from agreeing party of government. Fey -

1:38:211:38:31
1:38:311:38:40

I have learned quite a bit in the last 500 days. About the

1:38:411:38:45

responsibilities of government, about the resilience of our party,

1:38:451:38:50

the integrity of our members. About her determination to do the right

1:38:501:38:59

thing. In government, every single day brings hard choices. And you

1:38:591:39:04

can very quickly lose your way, unless you are absolutely certain

1:39:041:39:08

of your calls, off why you were there and the first place. For

1:39:081:39:16

every one of us, in this court, we have strong political convictions -

1:39:161:39:20

human rights, political reform, responsible capitalism, fighting

1:39:201:39:28

climate change. But every one of us has a political passion, to. The

1:39:281:39:35

fire inside that drove us into politics in the first place. Let me

1:39:351:39:43

tell you about what I care most about. My passion is ensuring a

1:39:431:39:51

fair start for every child. I have a simple, unquenchable belief that

1:39:511:39:56

every child can do good things, great things, if only we give them

1:39:561:40:02

the opportunities they deserve. Equal opportunities. It sounds so

1:40:021:40:08

simple, doesn't it? Everyone agrees with that. But then, we allow

1:40:081:40:14

prejudice, tradition, class to crash one million hopes and dreams.

1:40:141:40:19

Watch young children's lives go off track, even before they go to

1:40:191:40:26

school. Sit idly by pub talent goes to waste. I have had all the

1:40:261:40:32

advantages you could dream of, good school, great parents. I was lucky.

1:40:321:40:39

But it should not be about luck. On Saturday, I met a group of young

1:40:401:40:44

people just arriving -- just after I arrived in Birmingham. They were

1:40:441:40:49

from a charity. They all came from difficult backgrounds. One young

1:40:491:40:56

woman, she told me that she only started to survive when she found

1:40:561:41:03

someone who simply believed in her. I want every child to believe in

1:41:031:41:07

themselves. Because in terms of opportunity, we are a nation

1:41:071:41:13

divided. Children from a poor background, a year behind in

1:41:131:41:18

language skills before the age of five. More young black men in

1:41:181:41:27

prisons than at big universities. In Hammersmith, more than half the

1:41:271:41:32

children leading state schools had two-legged University. But just 30

1:41:321:41:41

minutes down the District lines to Tower Hamlets, just for % do. Odds

1:41:411:41:47

stacked against too many of our children. At deep injustice, when

1:41:471:41:52

birth his destiny. Sand that is why, that is why I had been leading the

1:41:521:42:02
1:42:021:42:13

charge for social mobility, for 44 but you know, people keep

1:42:131:42:20

telling me it is too hard. That it is futile to push for fairness into

1:42:201:42:25

their head winds of an economic slowdown. Or they say, it will just

1:42:251:42:29

take too long and I should find some politically convenient, quick

1:42:291:42:34

wins instead. I have also encountered fierce resistance from

1:42:341:42:39

those to do so well out of the status quo. But for liberals, the

1:42:391:42:45

only struggles worth having are the upper ones. Allowing schools to

1:42:451:42:51

move poorer children up the queue for admissions. Making universities

1:42:511:42:55

open their doors to everyone, making firms work harder to get

1:42:551:43:00

women on their boards, breaking open internships, all controversial,

1:43:001:43:10
1:43:101:43:19

So I am not backing down, I am not slowing down. Because this will not

1:43:191:43:25

be a liberal nation until every citizen can thrive and prosper,

1:43:251:43:35
1:43:351:43:35

until birth is no longer destiny, until every child is three to rise.

1:43:351:43:45
1:43:451:43:48

This summer or, we saw the consequences of a society in which

1:43:481:43:54

some people feel they have no stake at all. Nobody could fail to be

1:43:541:44:00

horrified by what we saw during the riots. These were not organised

1:44:001:44:05

campaigns for change. They were outbursts of nihilism and greed. I

1:44:051:44:09

will never forget the women I met in Tottenham he told me the close

1:44:091:44:16

shoes didn't wear the early possession she had left in the

1:44:161:44:22

world after her home was torched. But in every city, where trouble

1:44:221:44:28

broke out, most people did the right thing. So many more people

1:44:281:44:31

were out there to clean up the streets and went out to trash them

1:44:311:44:36

in the first place. In Manchester, I met a cafe owner who boarded up

1:44:361:44:40

her windows and started serving tea and coffee straight away to the

1:44:401:44:46

people who were helping to clear up. And here in Birmingham, for the

1:44:461:44:56
1:44:561:44:58

communities did together so in the Our emergency services, police and

1:44:581:45:02

courts all rose to the challenge. But we have to now ensure that the

1:45:021:45:08

offenders become ex-offenders. For good. Three after four had previous

1:45:081:45:16

convictions. So we have to push ahead, not step back from the

1:45:161:45:19

Government's rehabilitation revolution. Punishment matchsticks,

1:45:191:45:25

but changes behaviour, an end to the corrosive cycle of crime. --

1:45:251:45:30

punishment that sticks. I once the perpetrators to book their victims

1:45:301:45:35

in the eye, to see the consequences of their actions and to put it

1:45:351:45:40

right. That is why there will be community pay back projects in

1:45:401:45:45

every city affected. Why we want -- are investing in drug recovery

1:45:451:45:51

wings in our prisons, tackling gang culture, community sentences.

1:45:511:45:53

Restorative Justice, liberal justice.

1:45:531:46:03
1:46:031:46:12

Let me say something else. The rioters are not the face of

1:46:121:46:22
1:46:221:46:23

Britain's young people. The vast majority of our young people are

1:46:241:46:29

good, decent and doing the best they can. Do not condemn all of

1:46:291:46:34

them because of the actions of a few.

1:46:341:46:44
1:46:441:46:49

What really struck me was how many -- has so many of those who did to

1:46:491:46:53

join the riots seemed to have nothing to lose. It was about what

1:46:531:46:57

they could get, here and now. Not what lies in front of them in the

1:46:571:47:04

years ahead. As if their own future had little value. Too many of these

1:47:041:47:08

young people had simply fallen through the cracks. Not just this

1:47:081:47:13

summer, but many summers ago, when they lost touch up with their own

1:47:131:47:19

future. And as so often, the people who have gone off the rails are the

1:47:191:47:24

ones who are struggling years earlier. Not least in making that

1:47:241:47:29

critical leap from primary to secondary schools. So today I am

1:47:301:47:35

launching a new scheme to help the children who need it most. In the

1:47:351:47:40

summer before they start secondary school, a two-week summer school

1:47:401:47:44

helping them to catch up in maths and English and getting them ready

1:47:441:47:49

for the challenges ahead. Because then we know this is a time when

1:47:491:47:55

too many children lose their way. So this is a �50 million investment

1:47:551:48:05
1:48:051:48:11

to help them along the right path. And that is why we have found the

1:48:111:48:15

money, even now, to invest in education. Protecting the schools

1:48:161:48:21

budget. A �2.5 billion people premium by the end of the

1:48:211:48:27

parliament. More investment in early years education. 15 hours for

1:48:271:48:30

all three and four year olds. New provision for the poorest two year

1:48:301:48:37

olds. Steps towards a society where nobody is enslaved by poverty,

1:48:371:48:42

ignorance or conformity. Towards a liberal society. These are

1:48:431:48:49

investments that will take years or even decades to pay off. By the

1:48:491:48:55

time the two year-olds we help next yet come to vote, I will be 60! It

1:48:551:48:59

is even possible that I will no longer be needed by then! Or at

1:49:001:49:06

least, that is what I told Miriam. So why are we doing its? When it

1:49:061:49:12

costs so much and take so long? Because investing early takes such

1:49:121:49:16

a huge -- makes such a huge difference, especially for the

1:49:161:49:26
1:49:261:49:39

poorest children. Not easy, but So, hold your heads up. Look our

1:49:391:49:46

critics squarely in the eyes. This country would be in the trouble

1:49:461:49:51

today -- deep trouble today if we have not gone into Government last

1:49:511:49:55

year, and Britain will be a there are nation tomorrow because we are

1:49:551:50:01

in Government today. -- A Ferrer nation. Never apologise for the

1:50:011:50:06

difficult things we are having to do. We are serving a great country

1:50:061:50:14

at a time of great need. Then there are no short answers, but we will

1:50:141:50:19

not flinch. Our values are strong. Our instincts are good. Reason, not

1:50:191:50:29
1:50:291:50:43

prejudice. Compassion, not greed. After the summer riots, message

1:50:431:50:50

boards sprang up. They became known as peace walls. And on the peace

1:50:501:50:55

wall in Peckham, there was a note that Simply Red, our home, our

1:50:551:51:03

children, our future. Six words that say so much more than 600

1:51:031:51:12

speeches. Our home, our children, our future. Britain is our home. We

1:51:121:51:18

will make it safe and strong. These are our children. And we will tear

1:51:181:51:24

down every barrier they face. And this is our future. We start

1:51:241:51:34
1:51:341:51:41

building it today! Nick Clegg, the UK Liberal Democrat

1:51:411:51:46

leader and deputy Prime Minister, receiving a standing ovation from

1:51:461:51:50

the delegates in the hall there in Birmingham. He admitted it had been

1:51:501:51:54

a tough 500 days, lost seats, support and the referendum but he

1:51:541:51:58

said it would be worth it in the end, praised the delegates for

1:51:581:52:02

their grace under fire. He said he wanted to anchor the Government in

1:52:021:52:05

the central ground and the party had to hold their heads up as they

1:52:051:52:09

were walking -- working towards a fairer nation. There is Mr Clegg

1:52:091:52:15

with his wife, Miriam. Joining me is Hamish Macdonell, our

1:52:151:52:19

commentator for the afternoon. What themes was Nick Clegg trying to get

1:52:191:52:22

across? This was an interesting speech because usually when you get

1:52:221:52:27

a party leader, particularly those in Government, they try to set at

1:52:271:52:31

some kind of vision of the future, something that ties together the

1:52:311:52:35

themes of all the policies. This was nothing like a visionary speech.

1:52:351:52:40

It was mostly a really defensive speech. It was the most defensive

1:52:401:52:44

speech I think I have ever heard a party did deliver. It was all about,

1:52:441:52:50

this is why we are doing this. Trying to say, look, just stick

1:52:501:52:56

with us. It was half conciliatory and Croft defensive. Let's go back

1:52:561:53:00

to the first story recovered in the programme, the Scottish budget. We

1:53:001:53:04

are joined in the garden lobby by Gavin Brown from the Scottish

1:53:041:53:09

Conservatives and by the Scottish Lib Dem lever, Willie Rennie. --

1:53:091:53:13

Leader. Willie Rennie, it looks like Mr Swinney has a tough

1:53:131:53:16

balancing act trying to operate within the spending constraints

1:53:161:53:22

laid down by the coalition Government. First, I would say that

1:53:221:53:26

Nick's speech showed an amazing amount of determination in

1:53:261:53:32

difficult times. I think his speech was fantastic. John Swinney's Today

1:53:321:53:38

was more about a paper shuffling exercise. He was trying to pass the

1:53:381:53:42

buck to others rather than expecting ability -- responsibility

1:53:421:53:47

himself. He had some choice is today to make on capital spending,

1:53:471:53:51

and he has cut that. He had dresses to make on Scottish Water

1:53:511:53:57

investments which we proposed, �1.5 million, but he has avoided that.

1:53:571:54:03

And he chose to cut council tax for five years, which any benefits

1:54:031:54:10

people in big houses. Gavin Brown, what is your reaction? John Swinney

1:54:101:54:15

is operating in the spending and the lead set by your colleague,

1:54:151:54:24

George Osborne. Is he doing well by funnelling beat money into public

1:54:241:54:29

spending? He has been aware of the spending envelope since the

1:54:291:54:33

spending review last year so when the manifesto was written they knew

1:54:331:54:37

how much they would have to spend for the next three or four years.

1:54:371:54:43

Where it spelt out today was it was not a budget for the economy. They

1:54:431:54:47

have said to judge them on the economy, yet they have cut the

1:54:471:54:51

enterprise agency's budgets, but the innovation budget, so the best

1:54:511:54:56

say is critical. Skills have been cut, higher at further education

1:54:561:54:59

has been cut. Housing has been slashed. So a lot of the things you

1:54:591:55:03

would think would make a difference to the economy has either been cut

1:55:031:55:07

or slashed. I do not think the rhetoric matches the reality.

1:55:071:55:13

Willie Rennie, what do you make about the council tax freeze? The

1:55:131:55:16

Local Government gets the same amount of money as last year but

1:55:161:55:21

may have to use their borrowing powers. I think they should reflect

1:55:211:55:26

upon the priority that they have set for the council tax. In really

1:55:261:55:29

difficult times, the Government should review its decisions, and

1:55:291:55:33

I'd been five years worth of council tax fees I do not think is

1:55:331:55:37

the right thing for just now and they should reflect on that and

1:55:371:55:41

perhaps cut that back to invest instead in the economy. So I think

1:55:411:55:46

the SNP should reflect on that. They have also taken the credit for

1:55:461:55:49

increased NHS spending but actually criticised local Government because

1:55:491:55:54

they are getting a cut. So they need to perhaps be a bit more

1:55:541:55:57

consistent with their positions. Gavin Brown, what do you make of

1:55:581:56:02

the fact that local authorities may have to borrow money themselves?

1:56:021:56:06

For some local authorities, that will be extremely difficult. It is

1:56:061:56:11

simply a case of the Scottish Government passing down the buck to

1:56:111:56:16

local Government. Not only is it the capital budget being cut but in

1:56:161:56:24

real terms, the revenue budget is being cut by about �1 billion, from

1:56:241:56:29

�8.5 billion to �7.5 billion over the course of the spending review,

1:56:291:56:31

despite the Cabinet Secretary saying it is probably going to be

1:56:311:56:37

flat. I do not think losing �1 billion is flat. Thank you for

1:56:371:56:42

joining us live from Holyrood. Let's round everything off for the

1:56:421:56:45

final time in the company of our two commentators. We are hearing

1:56:451:56:50

there from Gavin Brown talking about their not being a budget for

1:56:501:56:55

growth. Yes, with all these things, the devil will be in the detail and

1:56:551:57:00

we have not had the chance to go into those figures. But if what

1:57:001:57:04

he's saying is right and the enterprise and innovation budgets

1:57:041:57:08

are being cut, there is a pretty clear message here and what Johnny

1:57:081:57:12

-- John Swinney appears to be doing here is bidding money into the

1:57:121:57:15

constituencies he feels unease it, things like public-sector workers,

1:57:151:57:20

and taking it out of things he feels does not need it. Innovation

1:57:201:57:26

is one of them, councils is another, and the big supermarkets another.

1:57:261:57:30

John McLaren, you will be crunching these because overnight. Anything

1:57:301:57:35

jumping out at you so far? Yes, it will take a while to get through

1:57:351:57:39

the figures. Just looking at some of them, on health, for example,

1:57:391:57:44

the extra money was the money that was announced in January, so there

1:57:441:57:47

has been no increase since then even though inflation has gone

1:57:471:57:54

higher, so I am not sure how that stands up. And also, on higher

1:57:541:58:02

education funding, Roussel spending will still be lower in 2014-15 in

1:58:021:58:09

cash terms than in 2010-11. -- resource spending. I am not sure

1:58:091:58:18

how that meets the commitment given in the speech. Thank you. We will

1:58:181:58:22

be looking out for nought number- crunching tomorrow. You are

1:58:221:58:26

releasing that did tell tomorrow. And Hamish Macdonell, thanks for

1:58:261:58:30

your company here as well. That brings our political coverage to a

1:58:301:58:36

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