23/11/2016 Politics Scotland

there will be a spring statement instead and viewers in Scotland will

leave us now for more on the impact of the Autumn Statement north of the

border. Good afternoon and welcome

to a special edition The Chancellor Philip Hammond says

the Scottish Government is to receive an extra ?800 million

per year as a result of increased infrastructure spending

in the rest of the UK. We resolve today to confront those

challenges head on, to prepare our country to seize the opportunities

ahead and in doing so, to build an economy that works for everyone.

Here at Westminster, we'll be getting political reaction

to the Chancellor's handiwork and asking, are the headlines

of today the real story behind the Autumn Statement?

In his Autumn Statement, Mr Hammond said the UK's deficit

would be cleared "as early as possible" after 2020.

He pledged new infrastructure spending and billions of pounds

And there's help for people on low and middle incomes.

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

To help us make sense of it all, I'll be speaking

to the economic commentator Alf Young

and our Business correspondent David Henderson.

But, first, let's hear what that boost to infrastructure spending

The major increase in infrastructure spending I have announced today will

represent a significant increase in funding through the Barnett formula

of over ?250 million to the Northern Ireland Executive, ?400 million to

the Welsh Government and ?800 million to the Scottish Government.

Let's have a chat to Alf Young and David Henderson first of all, give

us the big picture about what this all means. I think today's statement

was dominated by Brexit, that decision in June to leave the

European Union, it has had huge impact as a result on the official

figures from the Independent Office for Budget Responsibility, about the

state of the economy, that sets out predicted growth rates, that in turn

dictates room for manoeuvre that the Chancellor has today and the

decisions he is able to make. Let's start with the big picture, the key

one is growth rate. Here is the OBR's prediction for growth rate

over the next couple of years. 2.1% this year, falling down from 2.2%

down to 1.4%, so a sharp fall on where things might have been had

there not been a Brexit vote and only picking up back to somewhere

close to where growth would have been by 2020. Now, the OBR are

saying that because we don't know the future shape of the Brexit deal

in any sort of detail, it could be hard Brexit, it could be a soft

impact, those figures are going to have to be looked at and they may be

different, they may change as time goes on, so those are the growth

figures. "Get Out" was the word for it. We will take them for -- with a

pinch of salt. As a result of that, the Government is playing along

game. Remember, the plan was to return the UK Government's project

to surplus, in other words to raise more money than they spend. No plan

to do that in this Parliament. There is a hope that they can do it over

the course of the next parliament, but the end result of that is debt

will rise, it will rise by ?155 billion over five years. We also

heard there, you saw the clip from Philip Hammond, about a mild

stimulus, spend on infrastructure across the UK, the impact through

the Barnett in Scotland will be ?800 million. That is spread over the

period between now and 2021, so pretty mild stimulus package but

better than nothing. OK. Alf Young, what do you make of it? Well, the

decline in the growth forecast for the 2017 and 2018 is going to clog

quite a lot of activity out of the system. There are problems on the

tax front in terms of revenues coming in and some of the debt

figures that are emerging as a consequence of that, and as a

consequence of Philip Hammond's 23 billion programme over the whole of

the UK... Yes, one figure we should mention is the national debt as a

percentage of GDP is going to go to over 90%. And another way of looking

at it is net debt, by the end of this Parliament, could look like ?2

trillion. When the Tories came to power in 2010, it was under 1

trillion. Going to two at the end of the decade against a backdrop of

trying to negotiate this excerpt from the EU, possibly from the

single market. It is difficult times and I think the faces of ministers

who were trying to explain afterwards, I have seen some of that

already, it just looked a bit gloomy and grim. Why? What do you think the

plan is here? ?23 billion over five years, yes, fine, it is spending on

infrastructure. I don't think even they would claim that is some sort

of big fiscal stimulus and in Scotland, 800 million over five

years, fine, build a new road. It is pretty trivial. I get the impression

that what Philip Hammond is doing is not having a big fiscal stimulus

because he is really worried that in a couple of years' time, he is going

to need it then. Yes, because if he doesn't now on a big scale, it is

not there to do later on if it is needed in terms of the X it from the

EU. But it is billed as this great stimulus for productivity and he

pointed out we are 30 points behind US levels of productivity, we are

even eight points behind Italy and whether any of this is actually

going to get the average British worker, who is getting minor

tinkering here and there with their tax rates, to work harder...?

Productivity, like budget deficit, it is hard to target directly. You

might build new roads, it might not be the British workers open up. We

have tried for decades to increase productivity in the UK and

singularly failed to do it. We know how to do it against the backdrop of

leaving Europe, against mounting, mounting debt at a Government level.

It is not an easy Asko, any of it. And on that point, on productivity,

if you are wanting to solve the productivity problem, you have to

understand what causes it in the first place and I think Economist

steelworker -- struggle to work out. While productivity has collapsed

since the banking collapse. So you have seen the measures today to

avoid tax avoidance by big companies, little bit of a reward

for those who work hard, a little rise in the National Living Wage.

And great news. The link. -- for sterling. Not sterling, Stirling.

They want a city deal to mirror that of other cities. There's also talk

of initiating discussions with Perth and Dundee to get a Tayside deal put

in place to try to boost productivity and boost investment

there as well. And the ?800 million, we should stress, it is over five

years and ?200 million in the context of the Scottish economy is

pretty trivial. Well, it is and it is a steady as she goes budget,

there is no doubt about that. The problem for Philip Hammond is he is

looking ahead to Brexit of negotiations. He needs to keep money

in the kitty in case he needs it next year. He needs to know what

type of stimulus he needs to present before he makes a commitment. The

difficulty for him is we don't know what Brexit really mean jet, we

don't know what kind of Brexit there is going to be. -- means yet. It is

like patching up an injury, you have to know what the injury is before

you patch them up and what kind of plastic to apply and if you don't,

you keep your plasters in your first aid kit and who you really need

them. That was a metaphor you managed to stretch for many

sentences. Don't go away, we will be back. Let's get the reaction from

Holyrood. Political editor Brian Taylor joins us. What do they think

of it there? In terms of the 800 million, it is over four years,

16-17 up to 20-21, and the current year is nearly done, and then the

remainder over the period. With regard to the Brexit timetable, I

think the calculation by most is that it can take two to three years

for capital investment to have a productive impact on the economy and

employment, so he is doing it now perhaps with an eye to that period

around 2019, where it is presumed that Brexit will actually have

happened because at this stage, all we have is the impact of the vote.

In terms of the commentary upon the Chancellor's performance generally,

he isn't going to rival Michael McIntyre, he won't get a role in

panto any time soon, but he did try a few funnies and most of them were

effective but most of it was deadpan and self-contained. Why? Because the

figures he was giving right at the top, right up front, are pretty

grim. Higher borrowing, higher debt and above all, that figure that

album drew attention to, potential growth, to put 4% lower than it

would have been as a direct consequence of Brexit -- 2.4%. He

was telling it straight and have an trying to offer the remedy of

enhanced investment in housing and productivity. I am confused about

what you think the political reaction will be. Although the

figures as you say are grim, and when you read the OBR report, it

really is grim, but he presented it in a very upbeat way. Are the

Brexiteers going to say this is an attempted countercoup by someone who

voted remain, or will they swallow his rhetoric rather than the

underlying reality? They will have to take it, because they haven't put

forward an alternative prospectus to that of the Chancellor, they have

not put forward any ideas whatsoever, frankly, as to how

Brexit will be handled in practice. I was talking to somebody from the

Conservative team the other day who was saying, OK, which I did Alex

Salmond over his white paper in advance of the independence

referendum in 2014 but at least he put forward a prospectus. Those who

were advocating a departure from the European Union basted upon that

simple offer, rather than a prospectus explaining how that might

happen -- based it. The Chancellor is trying to say there is an

underlying strength to the UK economy, there is a long-running

problem with productivity and there is, perhaps, he hopes, a temporary

challenge coming from Brexit. He is praising the first bit and trying to

tackle the other two and he is tackling them in a way which deals

with the long-term problem of productivity and, he hopes, the

short-term problem of the hoped for a need for a capital stimulus. I

don't think he can come under attack from Brexiteer is for dealing with

the facts that are presented to him, not from the Treasury but from the

OBR taking an independent outlook. Brian, thank you.

David Porter has some sunshine and Ian Murray. You know it is a busy

day at Westminster when it is a busy College Green and it is very busy

today and I am pleased to say it Murray, Scottish Labour's

Westminster spokesman has found his way to us.

What is in this for Scotland? This is the Tory Brexit bed that everyone

has to lie in, growth is down, deficit is up, dead is up, and

although he has put some slight infrastructure spending into the

economy, it is a drop in the ocean to what is required. I am glad he

has come round to some infrastructure spending, we have

been calling for that since 2010, to boost infrastructure and employment,

but it is too little, too late, and he has failed again on everything

they set back in March at the Budget, and the chance that needs to

find a way to manage it rather than austerity. May it not be eight canny

political move, keeping something in the locker in case it gets worse,

and that the next Budget, if things are not looking good, I can put

those in? Does it not make political sense to say, I will keep a little

bit in the back? It me, but this is a consequence of Brexit. Everyone

who said, let's vote to leave the European Union, Britain will be at

the height of the G20, that is falling apart, because he is about

to borrow ?122 billion more than was forecast just a few months ago. The

deficit is stubbornly high at well over 62 ?5 billion, he said he would

eradicate that in 2010, so this Budget is a Groundhog Day failing

all the targets are not doing what is in the interests of the British

people. Brexit is bad for the UK, bad for Scotland, and this Autumn

Statement shows how bad it is going to be. He can do not about Brexit,

he may not like what the electorate have said, but the UK Government is

now bound to take the UK out of the EU, so he has to deal with the

situation he has got. Of course he does, but if the previous

Chancellor, his predecessor, was not so gung ho in terms of austerity and

his lack of ambition is for investment in terms of

infrastructure to create employment, that growth would be in a better

position than we are now. He has downgraded growth by over 2.2%

between now and 2020, a significant impact on the economy, where dead is

still continuing to rise and the deficit is stubbornly high. It is

good news for Scotland in terms of the ?800 million of additional

capital spending, the Scottish Parliament now has control of income

tax, so they can make different choices in terms of public spending,

and I was delighted to hear that the Edinburgh city deal which we have

fought for so long, that looks like it will be signed, and sterling is

on the march to get one as well. The fundamentals of austerity, of dead,

of deficit, of missing the targets, that is the key principle in the

Budget. Every city in Scotland is going to have a city deal, it does

seem to me that if you are a city in Scotland, as opposed to a town, you

will get special treatment. These are regional deals, so the Edinburgh

deal takes into account Fife and the Borders, it is much larger than just

Edinburgh, so there are impacts for the wider regions, and that is why

the deals are attractive. It does go into the towns and a smaller places

that we require to have investment in, but the key thing about a city

deals and this Autumn Statement is you have to invest in the

infrastructure of the future to create the jobs and growth of the

future. That is what these deals are, so the Chancellor has proven

the point that Labour have been calling for for six years, you have

to borrow to create economic growth. I am glad he has come some way

towards that, but he is still not doing enough. You mention the extra

?800 million for the Scottish Parliament - does that mean it

blunts their argument, if they are getting extra money, they are going

to use that money, they can decide where it goes within parameters of

it being for capital spending, so does that mean it puts the onus on

the Scottish Government themselves? Well, the Scottish Government have

to deliver, because now they are getting a next ?800 million of

capital expenditure, which they can spend on Scottish infrastructure, a

whole host of things they could be looking ats broadband could

transform the Scottish economy, along with 5G, getting rural places

onto the network properly could be really good for economic growth. The

two key things to look at from the Scottish Parliament true

perspective, firstly, the Scottish Parliament has to use the powers it

has got to take a different path from austerity down here, and so far

they have refused to do that. Secondly, they have to welcome these

powers, the money that is coming to Scotland, spend it wisely and take a

second independence referendum off the table, clearing that additional

uncertainty. Ian Murray, thank you very much for joining me, Gordon,

back to you. One point you mentioned, it was sunshine down

here, you need a new pair of glasses! The problem is I have just

got a new pair, they are clearly not working! Philip Hammond announced

that the national living wages to increase by 30p an hour to ?7.50,

and cuts two in-work benefits will be softened, but will it be enough

for what I've been called the Jam families, those were just about

managing? I'm joined by the director of Child Poverty Action Group.

Firstly, your reaction overall, is it helpful, do you think? Overall,

this is hugely disappointing. There is a helpful improvement in the

taper within universal credit that will benefit families to the amount

of a few hundred fans, but in the context of cuts to the work

allowance within universal credit, announced a nasty's Budget, and

which the Chancellor is pressing ahead with, these will impact low

income families, they will lose thousands of pounds a year. --

announced in last year's Budget. His response to the problem is totally

inadequate, to the pressures and cuts that these low income families,

who are just about managing at the moment, but with these cuts, they

will be pushed over the edge. Which would be your view by the end of

this Parliament low income families will be worse off because of the

cuts you have just mentioned and the freeze in benefits, worse off even

with the measures announced today than they are now? Got absolutely,

these measures are a drop in the ocean. They are worth overall

hundreds of millions a year compared to the billions a year that have

been removed from family pockets, by the end of the decade, by the end of

the parliament. We know that the cuts, the freeze to benefits, the

cuts to the work allowance of universal credit, the first child

element of universal credit, the introduction of the two child policy

- these are all going to slash the financial support available to low

income working families who are just about managing, but who are already

struggling at the moment to put food on the table, to pay the bills, to

enable their children to participate in school chips and activities. The

scale of the cuts they will see in the coming years completely dwarf

the few hundred pounds that they are going to see as a result of the

improvement in universal credit tapering. Can you just explain, the

taper on universal credit is all very well, and I may be completely

wrong on this, but as I understood it, universal credit was being

rolled out at the moment... That is right. And it keeps being delayed, I

am not sure what proportion of people on benefits are actually on

universal credit yet. It is being rolled out at the moment, so

increasingly more and more families will be receiving universal credit

as opposed to the current tax credits... What proportion are on it

at the moment? A small proportion at the moment, and we are also seeing

significant cuts, a freeze on benefits, for example, a blanket tax

credits as well as to the universal credit. The two child policy applies

to that as well, so a significant number of cuts, particularly that

freeze on benefits, that complete breaking of the link between the

value of financial support to families and inflation, with

inflation likely to increase in the years ahead, that will break that

link, and increasingly leave low-income families both in and out

of work further behind, struggling even more to pay for essentials. But

the rise in the minimum wage you would presumably welcome?

Absolutely, that rise is welcome. Again, my understanding is that it

is less than was expected and what was recommended. It is still far

below the living wage that campaigners as at ?8.45 an hour, so

clearly it is good news in itself, but it is completely outweighed by

the same families, particularly families with children, who rely on

tax credits and the universal credit system to support their wages. The

cuts to those, they dwarf the gains that we have seen through the

increase in the national minimum wage. OK, thank you very much

indeed. Alf Young is still here, you were going to chip in on universal

credit. I think it is about 400,000 who are getting it across the UK.

Which is what? A fairly small proportion? Presumably, this taper

will benefit those who are already on it, but if you do not have to be

on it, you are not going to get the benefit. Because the roll-out has

been delayed and delayed. It goes down from 65p steal 63, it seems

very modest, it is not going to claw back all that they are going to

suffer from, and then as John rightly says, the onset of high

inflation, which looks likely with the collapse of sterling, is going

to add to bills at the supermarket. We will come back to you at the

moment, because I believe we have the Chief Secretary to the Treasury,

David Gauke, yes we do. Hello, can you hear me? I can, yes.

Lowe, it is Gordon Brewer in Glasgow. First of all, can I just

ask you, what would you say to people who, for the past six years,

have taken seriously or government's rhetoric about austerity? If they

work for the public sector, they may have lost their jobs, they have been

suffering as private citizens from services being cut back, and now

your government turns around, and you were passionately involved with

George Osborne in influencing those policies, and now suddenly balancing

the budget doesn't matter any more. Well, it does matter, but we are in

different circumstances now following the Brexit vote and the

challenges that we face as a consequence of that. Delivering the

surplus target that we previously had is not feasible. We have

responded in a pragmatic way, we are still making it clear that at some

point in the course of the next parliament we will get into overall

surplus, but we have to respond to the circumstances that we are in at

the moment. That is why we are taking longer to eliminate the

deficit, that is why we are investing in infrastructure... Hang

on, balancing the budget doesn't matter any more? When Philip Hammond

stood up there and said, oh, we will eliminate the deficit in the next

parliament, he might as well have whistled The White Cliffs Of Dover,

it is completely meaningless. What you have done is completely

abandoned the targets which you have spent six years telling us work the

overridingly important thing! Got circumstances have changed, it is

because of the measures that have been taken over the last six years

that we do have the credibility with the markets to have the greater

flexibility at the moment. That is why we are in a position to be able

to invest in our infrastructure and take longer to reach that surplus

target. The Government is not abandoning it, I am grateful for the

opportunity to make it clear that we do have to address that, but at the

moment we are in a period of uncertainty, and the priority has to

be to deal with that period of uncertainty. That is why we need to

have flexibility. It is also why we need to drive up productivity, which

is why we are investing more in research and development, and we are

investing more in transport and housing in England, which obviously

leads through to greater money. And through the Barnett formula. When

balancing the books was of overriding importance, you told us

that you should have credible targets to balance the books by the

end of the decade, by 2015 originally, but then by the end of

the decade, you were worried that Britain's credit rating would be

downright - it was downgraded anyway. Do you assume that Britain's

credit rating will be downgraded even further because you have got

off balancing the budget into the never-never? That is a matter for

the credit rating agencies. Would you be concerned if they do

downgraded? What is very clear if you look at the way in which the

Government is able to borrow and the rate at which we are able to borrow,

the international markets that we depend upon to continue to view the

UK as a reliable entity to lend to. It is the case that we are able to

borrow at historically low prices. That has been the case since 2008,

you could have borrowed at historically low rate of interest,

but you told us you have to have austerity. Now you are at admitting

there was no need for that. Not at all, far from it. The point is,

because the UK has taken difficult decisions, because we have

demonstrated that we are serious about the public finances, over a

period of time, and sometimes there have been significant challenges, it

has been clear that the markets have believed that the UK is a place that

can be lent to safely. Now, had we not taken the action that we did in

2010, and followed that up over the course of the past six years, we

would not be in that position, we would not have flexibility, we would

not have any choice. Like other countries, we would have been forced

into much more significant measures to get control of public spending.

Now, in the circumstances we are at the moment, because of the

uncertainty that we face, because that is likely to be through into

business investment, and therefore wage growth, we now face more

challenging circumstances. What a government should do in those

circumstances is be pragmatic, reset the position, but member that,

ultimately, we have to live between our means. And today we have set out

the path by which we can do that. This investment programme but the

Chancellor announced today, five or 6 billion a year for the next four

years, about 200 million a year up here in Scotland, presumably even

you would not claim this is a fiscal stimulus? The spending on roads

might be a good idea but it is so trivial, it is not a fiscal

stimulus. The case is not for a fiscal stimulus, the case is for

targeted spending in areas that can improve the productivity of all of

the United Kingdom. So you are right, I am not claiming this is a

fiscal stimulus or the purpose is a fiscal stimulus. The purpose is to

make the United Kingdom are more productive economy. And presumably

the reason it's not a fiscal stimulus is that you need to have

some flexibility over the next few years? Because these forecasts, both

from the Treasury and the OBR, must, to some extent, the wild guesses,

because we don't know what kind of Brexit we will have? Presumably,

what you want to do is have the ability to pump money into the

economy if it tanks? Well it is the case that we have flexibility within

the rules the Chancellor set out today, so there is scope for us to

take action if that is the right thing to do for the economy. But the

circumstances we face at the moment, let's remember, this year, 2016, the

UK will be the fastest-growing G-7 economy. Although the OBR have

revised down growth for next year and the year after, we will still be

growing on a way that is compatible with Germany and a little bit faster

than France and Italy. But, yes, it is the case we face a greater range

of uncertainty. The OBR is very clear about that and any pragmatic,

sensible Government would want to give itself room to respond to that

uncertainty. That's exactly what we have announced today. Your party has

been in power in one form or another since 2010, promising all that time

to balance the books and we now learn that the national debt is

going to go to over 90% of GDP, and absolutely enormous quantity of

debt. I mean, if this is not an index of failure, I don't know what

is. Well, we are a Government that has presided over the

fastest-growing economy in the G-7, record levels of employment and

particularly in the last couple of years, significant increases in

living standards. But it is right that we do remember the public

finances, there are plenty of politicians and political parties

who would say you shouldn't bother about it at all and not to worry. We

do have the recognise... Virtual record on public finances is

dreadful. Ultimately, we have to bring that number down. That would

be much worse but for the decisions we have taken over the last six

years. Ultimately, we are going to have to bring those numbers down but

we now face a set of circumstances where there is uncertainty and the

sensible, pragmatic response for any Government is to ensure we give

ourselves the room to respond to that and we set out policies that

can improve the long-term growth of the economy. You have presided over

six years of rising debt, what is your message to the public watching

this? Are you trying to say your austerity policy failed in terms of

getting debt down or are you saying you never really implemented your

austerity policies in the way you claimed you were doing? In simple

terms, debt is the accumulation... We inherited an annual deficit that

was at their peacetime record, we have brought it down every year and

we are forecast to bring it down every year, but from a very, very

high level. There are some that criticises that we went too far, too

fast and were too obsessed with bringing down the deficit is. I

don't think they are now in a position to criticise us for the

debt levels being where they are. We have sought to bring down the

deficit but that has continued to grow and until we essentially

reduced the deficit further, it will continue to grow but we have set out

a long-term plan as to how we do that. George Osborne, for whom you

worked, claimed that balancing the books was the number one most

important thing that the Treasury had to do. Would you finally and

briefly give us your guess as to when the books will be balanced in

Britain? Give us a date. What the Chancellor says... I know what the

Chancellor says, give us your guess. I agree with the Chancellor that we

should eliminate the overall surplus in the course of the next

Parliament. Putting a date on it at this point in time doesn't make

sense because we are going to go through a period of uncertainty. He

raised a very good point... It made sense in every budget George Osborne

produced but now doesn't make sense? There is uncertainty over what will

happen in the years ahead as we go through the Brexit negotiation

process. Now, given that uncertainty, it does not make sense

to specify a specific date at this point. Look, thank you very much for

joining us. Let's get some reaction from the Scotland business

community. Colin Boyland, your reaction to this? I think all eyes

will be on the ?800 million of capital spending coming to the

Scottish Government. There are people who have argued consistently

about the economic benefits of infrastructure spending and it was

heartening. It is not very much, 200 million a year. Well, it is about ?2

billion it is reckoned to get things up to scratch on local roads, but it

is better than nothing and targeted investment could make a difference.

So the real test here will be how Scottish ministers choose to spend

it. These city projects and city deals, there is one for Stirling and

they are talking about one for the Perth Dundee area. Can you explain

in simple terms what that means? Essentially, it is a way of leave

the ring UK Government money, along with Scottish and other money, into

delivering large infrastructure projects. I think the key thing for

those city deals is it has got to be business lead, stuff that local

businesses say are going to help us. What sort of things? I would like to

see more stuff around about making it easier for people to get about to

do business, to trade, to get to the market on time, rather than maybe

larger... The big-ticket things that perhaps deliver less in terms of

economic value. I think they are talking in the Stirling area, the

idea is that Central Scotland, you could pretty much get from

everywhere to anywhere else and it would be commuting distance, isn't

that the idea? I'm not upon the details of the Stirling one but if

are going to improve connectivity between areas, that is good news but

when you get to those ordnance centres, you have to be able to get

about and do business easily. That is what the local transport

infrastructure fund, I think that is what the Chancellor is aiming for.

Big cuts but they won't necessarily apply here, will they? They won't

and the 6 billion was previously announced. We are going to see the

Scottish judgment next month, I think we are already committed to

something like 100,000 properties benefiting in Scotland, so that has

got to be good news. An interesting thing with business rates, we talked

about how new fibre will attract 100% relief. It will be interesting

to see if that will be replicated north of the border. Was there

anything that you were looking for that didn't materialise? I wanted to

hear a little more about quarterly tax reporting. It is a big concern,

this idea that rather than doing itemised tax reports, turning over

quarterly. -- annualised tax reports. I wanted to hear a little

bit more, that is interesting and a bit more about the self-employed,

how we will get something of a fairer deal for them. There was a

reference to how self-employment is operating in the UK economy now. I

don't know if that is about maximising tax take but... It

sounded like it was, but I might be wrong. I think reading between the

lines, that is what it looked like. There is a lot we can do when so

many of us are no self-employed to get the self-employed a fairer deal

and it is something the UK Government needs to look at before

it is overtaken by other events. Colin Borland, thank you. Alf? David

Gauke, what did you think? It is difficult, because everything they

are telling us is the most important thing goes out the window. You are

right, but a lot of people said back in the day, immediately after the

crash and immediately after they came to power, that they had the

opportunity to borrow at historically low rates. They could

have done quite a lot of infrastructure work then. We were

now presumably seeing some of the feed through benefits of that. Now

they are starting it next year with a new fund which is... Which is not

very big. And it is not going to bridge the benefits until we are

right in the middle of that X from Europe. I thought it was interesting

that he said he is not even claiming this is a fiscal stimulus. No, I

think the analysis that says they are keeping their main powder dry

because they know they have do, because they don't know what the

process of getting out of Europe will look like and what the

consequences of it are going to be, so they are holding back and this

was, in a sense, do as little as you can but get the odd headline here

and there that might bring you some good news. But when any of that is

put under any kind of scrutiny, since it has been said, they look so

kind of downbeat and rather... It is not a stimulus after all. It is

already looking a wee bit threadbare, isn't it? And they are

quite boxed in, you can understand why they want to keep some

flexibility for a fiscal stimulus should things go badly with Brexit,

because interest rates are already at zero and they don't have that.

Quantitative easing, we have had masses of that but economists are

still arguing about whether it has much or indeed any effect. So the

only thing they have got left is the tool box. They have run out of road

and monetary policy, there is nowhere for central banks to go in

terms of printing money or lowering rates, there is virtually nowhere

else go. They didn't do any stimulus in the early years, so they have not

got the impact of that coming through. They are struggling to get

tax take and Colin Borland was worried about what they were saying

about the self-employed, they were also saying things about

incorporation as a way of paying less tax and being tougher on that.

They have confirmed they are going down the road of lower corporation

tax rate, it is going to go to 17%. Theresa May at the CBI even hinted

it would go lower still, so they have got huge challenges on raising

revenue, on seeing the impact of a belated mini stimulus in terms of

infrastructure and the great unknown of how Brexit actually formulates

into an actual exit with consequences, but what these

consequences are going to be and what it will look like, we don't

begin to know. Dogs that didn't bark. There was all sort of talk

before the Autumn Statement that they might cut VAT, as Alistair

Darling did to stimulate the economy, talk of cutting air

passenger duty or abolishing it, because it will help the famous deer

Theresa May talks about. If you are -- one of these famous Jams. The

cuts to universal credits are still apply, the freeze to payments still

apply. Are people going to end up worse off? I think they are, on the

margin. We will hear from the IFS and others who will, in due course,

be telling us more but I think that is probably the case, yes. We will

be back with you in a moment but let's go back to a bleak

Westminster, with David Porter. We will try and raise your spirits in

the next few minutes. Joining me now is the SMP Treasury spokesman

Stewart Hosie. Stewart Hosie, would you characterise this as an Autumn

Statement that was shaped by Brexit and had reacted to the fact that we

are going to get Brexit? No, I wouldn't and I

wish it had been. The Treasury know the numbers, potentially 66 billion

loss of tax, GDP down 10%, 80,000 jobs in Scotland. He should have

been much more explicit today about how he was going to mitigate those

dangers, even saying he wanted a soft Brexit, access to the single

market. Those things were missing. Is that your way of saying he should

have loosened the purse strings even more. I think he should have. Over

the five, six year period, the total increase in total expenditure was

1.5% on the previous forecast, so this was not a massive fiscal

stimulus, but tackling Brexit didn't necessarily mean spending more money

but it would have been very helpful indeed if he had laid out detailed

plans about how they would have mitigated the damage and he failed

to do that. Surely if he laid out plans, you would have been saying

those plans need more money? Only if they needed more money and cost more

money. If he had argued for a soft Brexit it rapidly Brexit, things

that might not have had a massive cost but could be beneficial and

mitigate the losses that follow, he could have done that easily. While

we are talking about numbers, a figure he was very keen to put

forward was ?800 million extra to the Scottish Government over the

next five years for capital projects. As your Administration in

Edinburgh got those projects ready? The Scottish Government will be

announcing its Budget in a couple of weeks' time, but what I would say

is, since this government came to power, we have had a 10% cut in

revenue spending, a 16% cut in capital spending, so however long

the 800 million is, it does not reverse the damage already done. It

may not go as far as you would like, that is pretty obvious, but it puts

the onus on your administrations - OK, we have a list of projects, we

will get the diggers digging holes in the ground pretty quickly. The

Scottish Government have a good track record of making sure

shovel-ready projects are up and running, and I do not doubt that the

money will be spent on the appropriate capital projects to help

boost the economy and a liver resilience in the long run. He said

he's going to keep the help for the oil and gas industry, and he has

frozen fuel duty as well. As far as the new phrase that we are all

using, Jams, just about managing, the fuel duty is quite astute

politics, isn't it? We called for the freeze, it makes sense to do

that, putting that on families now would have been silly. In terms of

the oil and gas sector more generally, he said what is there

will be maintained, but there was nothing in terms of decommissioning

allowances, and I think we need to look very carefully at whether he

means this is it and no more, or whether there is more wriggle room

to see what can be delivered in the future. He also announced that

sterling would be encouraged to go for city Deal status, which would

mean all of the six recognise cities in Scotland should be able to get

the help that goes with that. Stirling. Your own city, Dundee, is

looking to go down this process - in local political terms, how important

is the city Deal? They are important if they are properly constructive,

infrastructure creates jobs, you will have long-term benefits from

them, and I'm very pleased about that, but the credit should go to

the various local authorities and others who put these deals together.

They are the ones who say, this will deliver real economic benefit for

our citizens. All the credit should go to them. Listening to you, you

would have obviously liked more, do you get the feeling this is Philip

Hammond saying, I will keep a bit more in my back pocket in case the

Brexit negotiations do not go well and the economy takes a turn for the

worst? Do you think you might find that there are a few more sweepers

next year? No, I do not think there will be. What we got today is

appalling deficit figures, what was put five years ago will not be met

in this Parliament. He has gone as far as he can in admitting that sort

of austerity was a failure, but not far enough to deliver the real

fiscal stimulus to match the monetary policy activism of the

central bank to grow the economy. Stewart Hosie, thank you very much

for joining me. Gordon, back to you. who gets to mark the Chancellor's

homework after an event like this. It's Paul Johnson, the director of

the Institute for Fiscal Studies. Paul, can we start with something

really basic, which we were talking to David Gauke about earlier on? How

is it, after years of George Osborne's austerity, that we have

got debt forecast to rise to over 90% of GDP? It doesn't seem to make

any sense. It is essentially because the economy has not really been

doing all that well. If you don't have the economy growing, you don't

bring in the tax revenue that you are looking for, and of course the

dead is the accumulation of all the deficit, so the deficit was over

?150 billion a year back in 2010, and that has really come down quite

a lot over that period. But we still have a big deficit, and that is

adding to the debt every year, so it is not surprising in that sense that

it continues to rise. The forecast is that it will start 2-level off

and fall by the end of the parliament, even with the numbers

that we got today. Is that 90% of GDP higher than you were

forecasting? I think we can over focus on that 90% number, because

some of it is down to some strange accounting, the way that the Bank of

England does stuff. If you strip that out, it remains about 85% of

national income, which is roughly where we thought it would stay.

Let's try to get some clarity on public spending - am I right in

thinking that they did not really announce any change from George

Osborne's public spending targets? Austerity, in that sense, is still

in place. Austerity is very much still in place, there were very

small changes to the benefit cuts, but essentially they all stay in

place. Spending on things like the NHS and local government and so

won't remain very much as it was, so that is pretty or steel. -- and so

on. The one recently significant change is that there has been a bit

of an increase in the amount allocated for capital spending over

the next several years, so more money for transport and housing in

particular. David Gold said that he was not claiming this was

sufficiently large to count as a fiscal still is. -- David Gauke. It

would certainly be a very small fiscal stimulus if that is what it

is, but I think the Chancellor has given himself some wiggle room for

more WISPA stimulus in six months or year's time, if the economy seems to

be doing a bit worse in response to the Brexit vote than the OBR thinks.

-- fiscal stimulus. Or if things get better than he is expecting without

being able to get into a deficit. This is very much a wait and see

statement, because he has so much uncertainty to deal with at the

moment. What about these people who are just managing, the Jams, as

Theresa May has dubbed them? Does it really make any difference for them,

this Budget? There are claims that they will end up worse off. There is

really not very much in here for that group. There is a small rowing

back on the cuts to universal credit, which comes in in a few

years' time, but still the cuts announced last year basically stay

in place. Not much else, there is the freezing of fuel duty, that

helps anyone who is a driver, and you are more likely to use more

petrol if you are better off than if you are worse off. The really bad

news for the just about managings and everybody else is the

confirmation from the OBR that along with everybody else they think that

growth will be less, therefore earnings growth will be less, and

inflation will be higher than it otherwise would have been, and that

means all of the income that anybody get is going to go less far. So we

will be less well off than we thought we were going to be because

of lower growth and higher inflation. There are always, Paul,

risks in economic forecasting - presumably they are much larger this

time than they would be usually, because depending on what happens

with the Brexit negotiations, or even if it becomes clear up before

they are finalised what kind of Brexit Britain is going to undergo,

that could have enormous effects on confidence in the British economy,

and presumably enormous effect on things like tax revenues. I think

you are exactly right. The Office for Budget Responsibility, by law,

has to provide a single central forecast, but there is clearly a

huge amount of uncertainty around this one. Both in the short run,

because there is quite a lot of disagreement about what the

short-term impact of the vote will be, and in particular at the 29

when, in principle we should be of the European Union. -- after 2019.

We do not know what can of impact it will have on trade, so there is a

huge amount of uncertainty, particularly in the back end of this

forecast, which is why I think the Chancellor has not done ever so much

to give himself the wiggle room, and secondly he has a new fiscal target

which is looser than the one he had before, and again it gives him a bit

of a get out clause if things turn out to be worse than expected. And

balancing the budget just seems to be over the hill and far away - to

say it will be balanced some time in the next Parliament is, you know,

given the history of the last ten years, utterly meaningless. It

doesn't have a lot of meaning, does it, to say that? I think he got it

even slightly looser than that, when it is possible, when you can get it

down to that level - and that could be right up to 2025. I think he was

forced into that position, to be honest, because of what we were

talking about, the level of uncertainty he is facing. So he is

saying, we will keep the deficit within about 2% of national income,

?40 billion by the end of the parliament - he has quite a lot of

headroom on that - and we will try to keep getting it down after that.

He is between a rock and a hard place, he had to get some sense of

direction but did not want to tie himself to anything specific.

Briefly, if we are not going to count the 23 billion as a serious

fiscal stimulus and if they want flexibility to have one should the

economy starts tanking because of Brexit, I mean, what kind of scale

of fiscal stimulus do they have room for? David Gauke said that they do

have room for that at some point over the term of this Parliament,

but what would need to be make any difference? Well, it depends, of

course, on what sort of downturn we might face, but what the Chancellor

has left unsolved in terms of wiggle room is ?20 billion of borrowing at

the end of the Parliaments, or a bit more than that, still to stay within

his new this, crepe target. Just to be clear, that 23 billion is a

number that I hate, because it is accumulated over a few years. He has

got the scope within the disk two numbers, if he needs to, to increase

spending by 20 billion. -- the fiscal numbers. So there is scope in

that situation, but if we get into a situation where growth is worse and

tax revenues are down, to keep to that deficit target, he has less

space than it looks like at the moment. Thank you very much indeed.

Let's have a recapture what the Chancellor's statement means - more

capital spending for and the daft Budget for Scotland is just a few

weeks ago. -- and the draft Budget for Scotland is just a few weeks

away. 200 million is not not think, is it? It is not nothing, the

investment spend by the Scottish Parliament is around 3.5 billion a

year, less than 10% of that, so it is a fairly small addition, but

nevertheless there are things that the Scottish Government have lined

up that they could do with this. And they will do it, will they? They

have the powers to reallocate that to current spending. That is an

interesting issue. I mean, they may decide to move staff into current

spending. I suspect that they won't. At the moment, the main power, the

new powers next year will be the income tax powers. I think, once you

get the welfare powers, which are a bit farther down the line, then the

question about moving stuff about will become a lot tougher, because

you know, there will be very strong political pressure, it seems to me,

to increase welfare spending in Scotland when the new powers become

available. What do you make of this debt? I keep mentioning this figure

of 90%, there was a very influential paper produced after the financial

crisis which said economy is recovering from severe financial

crises, that is us, if the stock of debt as a percentage of GDP goes

over 90%, that is very bad news for future growth. I know they qualified

that have it, and I know Paul Johnson says some of it is

accounting, it is actually 85%, but it is not a great place to be, is

it? It is not fantastic, and that paper was based on an error in an

excel spreadsheet! They'd you -- they do claim they got the numbers

right by doing it again! There are countries with higher debts, Italy

has 110, Japan 120%. Their economic record has not been a strong

recently. So it is not a good direction to be heading, put it that

way, because what matters really is what are the debt interest charges

that you are paying? At the moment, because of the rates of interest

that the Government is paying an debt, relatively low, that amounts

to just over 1.5% of GDP, which, in historic isn't huge. So the interest

payments are manageable. What you do not want to happen is interest rates

to go up very significantly. If you were Derek Mackay and had two and ?1

million in your pocket, what would you do with it? -- and had ?200

million. It has got to the stage where it is difficult, I used to be

vaguely involved in this in a local regeneration context, and I know

that spending money from the city deal, on things we used to want to

be doing but could not raise the funding for, and... What sort of

things? Things like reinforcing Haarbocht wars, so you could bring

more cruise ships in. -- harbour walls. Redeveloping a power station

as housing. The kind of things that are part of the statement today. One

of the things about this is that it does take time, you have got

planning, you have got all the pre-dealing and putting together

developers and all the rest of it. So you know, I wouldn't be too

worried about finding... There are plenty of things to do, but maybe

the best way is to do it in quite small packages.

That is what Colin Borland was saying. You can turn it around

quickly and deal with local pinch points, whether it is in transport

or access or ... The Budget now moving to the autumn, we had to

rethink the whole architecture about what devolved nations and regions do

with their planning for the next year and what the Government used to

do in March. On this point about the two governments like to do big

projects instead of little things? In reports ahead of the budget and

what he was saying, Philip Hammond were saying the money that was

announced for roads in England was very, apart from the Oxford or

Cambridge thing, was very much that, little bypasses and pinch points. Do

you think that makes sense, take that extra money in Scotland and do

a whole lot of things that might make a difference rather than build

a third Forth Road Bridge? I agree very much with that. We have a

capital stock, we can add to it by adding new bridges or roads but you

have got to maintain the capital stock, you have to make sure it

doesn't appreciate, which means you have to spend money on maintaining

the capital stock, wherever that may be. I think we would all agree that

over the last seven or eight years, large chunks of Scotland's capital

stock aren't in as good shape as they used to be, so let's spend some

money in these areas. Make it consistent so it joins up. We have a

mile and a half near we live -- Way we live of a dedicated cycle path

which, to my eyes, is not actually attracting that they cyclists

because it doesn't start or end in a very interesting place, but the

council have now changed the plans for the next step, so there will not

be the next stage. So if you do one stage and not the next, it is a

waste of money. So it has to be smaller and more fleet of foot but

it has to be knitted together into some conception of where you deliver

something. The rhetoric was all about productivity and, you know,

harbour walls, cycle paths, new roads and bridges, they might, in

the very long-term have an effect on productivity we have a deficit in

productivity now and it's not show anything addresses this. There is a

bit of extra money for science and innovation, but that is long

gestation money, it seems to me. One of the things, in a way, the UK

economy perhaps doesn't need a fiscal stimulus at the moment

because we are at full employment. The part of the problem associated

with that is we have lots of people employed in very low skilled jobs,

they are not very productive in those tasks and what we really need

to find is a way of basically enhancing the people who are in

these kinds of jobs to move them up the productivity chain a bit. That

could have a massive effect on the economy as a whole, but it seems to

be a very difficult nut to crack. We will have to leave it there, thank

you both very much for joining us. That's all we have time for, join us

for First Minister's questions tomorrow. Until then, goodbye.