24/02/2016 Politics Scotland


24/02/2016

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announces more cash for disadvantaged pupils,

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MPs told the fiscal framework is a new for Scotland.

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The UK and Scottish governments finally reached agreement yesterday

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on the fiscal framework - which underpins the transfer

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of further tax and welfare powers to Holyrood.

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A short while ago the Scottish Secretary David Mundell confirmed

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that deal in a statement to the House of Commons.

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This is a truly historic deal which will pave the way for the Scottish

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parliament to become one of the most powerful and accountable devolved

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parliaments in the world. We have respected all the principles set out

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in the cross-party Smith agreement and a livered deal that is fair for

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Scotland and fear for the whole United Kingdom. As Lord Smith

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himself yesterday evening, when the Smith agreement was passed to the

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Prime Minister and First Minister, both gave their word that they would

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deliver it into law. They have met that promise in full. Scotland's two

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governments will give more details in coming days but I would like to

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set out a few key elements of the deal. The Scottish Government will

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retain all of the revenue from the taxes that are being devolved or

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assigned, including around 12 billion of around income tax and

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around V -- 5 billion of VAT. The block grant of the Scottish

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Government will be adjusted to reflect the devolution and

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assignment of further taxes and the devolution of further spending

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responsibilities. We have kept our commitment to keep the Barnett

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formula, extending this to cover areas of devolved welfare. The tax

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we will use the UK was my government 's preferred funding model.

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That is fair to Scotland and fear to the rest of the United Kingdom.

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However, for a transitional period covering the next Scottish

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parliament, the government have agreed to share these risks as these

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powers are implemented. Specifically the Scottish Government will hold

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the economic risk, well the UK Government will hold the population

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risks. The Scottish Government will not receive a penny less than the

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Barnett funding over the spending review simply due to different

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population growth. And by the end of 2021, a review of the framework will

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be formed by an independent report so that we can ensure that we are

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continuing to deliver Smith in full, with the Scottish Government

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responsible for the full range of virgin teas and risks associated

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with its new responsibilities. We have also agreed that the Scottish

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Government will have additional new borrowing powers. It will invest up

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to 3 billion in fatal infrastructure. In line with the

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recommendation of the Smith agreement, we will provide the

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government ?2 million share to set up the new powers it will control.

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The government has delivered more powers to the Scottish people,

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ensuring that they have one of the most powerful devolved governments

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in the world and economic and national security that comes with

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being part of our United Kingdom. That is what we have agreed, and

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that is what we have delivered in full. Now that we have agreed this

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historic deal, the conversation must move on to how these new powers are

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to be used. The Scottish Government will have extensive powers on tax,

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welfare and spending. It will have control over income tax and be able

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to change the rates and thresholds. It will be able to create new

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benefits and of course the permanence of the Scottish permanent

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-- parliament as book with without any doubt. The people of Scotland

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voted for these new powers and they deserve to hear from the parties in

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Scotland how they will use them. New powers that infused Welp can broaden

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the economy and population. And bring greater opportunity and

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prosperity. I'm joined for the afternoon

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by Moray Macdonald, who is a former Director of the Scottish

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Conservatives, and is now a PR I know people are gripped by this.

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You know get Scotland's budget is baseline allocation. Plus Barnett

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formula money, minus block grant adjustment, based on what the

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British government wanted, plus money. Which basically compensates

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for some of the things taken away. That is right. It is the passport at

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the there that has been argued over. -- plus pot. It means it will have

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to be renegotiated at some point. This is because Scotland's

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population is growing at a slower rate than England. If we did it in

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the original manor, Scotland would get less money than England per

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capita. Does the same overall as being reasonable? Scotland has to

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take some responsibility of its population if it does not grow

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vastly. And you can see the Scottish Government sing, we do not have

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control over immigration, so we should not take that responsibility.

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There will always have to be compromises. The government in

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Scotland does not have all the levers it would want to have to

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change some things, for example immigration is easy. So the

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settlement they have come to, it means the Smith Commission is

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implemented in full. Through the powers that there, there will be no

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detriment to the Scottish taxpayer unless the Scottish Government

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decides to do that by cutting taxes whatever. Part of the principle of

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this, if the Scottish Government were to cut taxes and its revenues

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were to fault and not be replaced by extra taxes, Scotland there is a hit

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for that. Exactly. What Scotland is protected on now, if tax rates stay

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as they are. If they cut them, then yes, that is a decision of future

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government might take. It is one the SNP Government might take, then we

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would have to cut our budget. I do not think sufficient detail has been

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published for the answer to this. We had a hint a few weeks ago that it

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is not just population they might be recognising, they might be

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recognising that the Scotland population is ageing as well. I have

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not seen that data, but that is an issue in Scotland. We do not have

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enough people being born and we do not have controls over immigration.

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We have seen arguments over the last few weeks, wanting overseas students

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to stay in Scotland, after they have been studying. That has been knocked

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back by the Home Office. We might see some movement in the argument.

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The underlying issues about how to do this have not been resolved, have

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they? It is kicked into touch until 2022 and then you have another

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fight. I am not sure that is quite the face. There is a framework in

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place to allow political parties to decide what to do. We have a

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Scottish Government that could raise 50% of its revenue. No future

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governments will have to make decisions on how to spend it. We

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will back with you in a moment. Now, MSPs will scrutinise plans

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for next year's budget When it's passed, they will have

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set a Scottish Rate Let's cross over to the chamber now

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and hear from the Finance Secretary, The rate of tax paid by Scottish

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residents by 2016-17 will be the same as it is today. Our decisions

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have been based on the principles I set out in earlier legislation and

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are designed to deliver a coherent framework. The first decision on

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setting a rate of income tax in Scotland has been one of substance

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and one that has required me to bounce the opportunities and risks

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presented by new tax powers. It has not been about addressing proposals

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without looking at how they will be implemented and the effects on

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individuals. With land and buildings transition tax, the first tax

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devolved to this parliament in 300 years, I delivered a progressive

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regime were the UK Government had passed up the opportunity to look at

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that reform in the past. It is not sufficient justification for

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increasing the tax burden on the lowest paying taxpayers. Taxes must

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be promotion it to the ability to pay and I stress the ability to pay.

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It will be limited reassurance to our pensioners or our newly

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qualified teachers know that people in higher incomes will be paying

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more than they will be, as we see their weekly budget under strain.

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They will not kill others are being more, they will care that they will

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have to pay more. That is not a burden I am willing to impose in

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this budget. -- they will not be interested. Because of these

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financial straitjacket, we are now imposing these cuts. A senior SNP

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councillor spoke out today warning about cuts to music, to school

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transport, but also to vulnerable children. Is he listening to anybody

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about these cuts to local authorities? For -- it is for

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individual authorities to take decisions about their own budgets.

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If I look at some of the examples that he cites in the list he is just

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given there, these are often the options that are circulated before

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council meetings. When councils take their decisions, they reject these

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options that are put before them. That is what is happened around

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countless laboratories around the country. If it is for local councils

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to make their own decisions about how to manage these cuts, why isn't

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it also for local councils to make their own decisions about tax rates

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that should be set locally? Because the government has a commitment to

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freeze the council tax for the duration of this government, and

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we're determined to ensure that we deliver the commitment to the people

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of Scotland that we given a 2011 elections. Governments that keep

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their policies respected by the public. Instead of increasing the

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tax burden, this budget protects house called incomes, provides

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leadership across the country by assuming that over 50,000 of

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Scotland's lowest workers receive a pay rise and earn at least a living

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edge. Given that tens of thousands of public sector jobs are going to

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be lost as a result of this budget, regardless of whose fault it is,

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given that tens of thousands of jobs are going to be lost, will the Dev T

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First Minister consider setting up an emergency tax forced to help

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these people get other jobs? -- deputy. The claims about public

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sector employment are exaggerated. That is what I think about in this

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debate. And I will cite the evidence for that. Order! In the last 12

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months, the number of jobs lost in the public sector in Scotland in the

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devolved public sector has spent 500. 0.1... That is the context I

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would put on the point is that Mr Reilly has raised with me in the

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debate today. This budget ensures that over -- older citizens can

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access free personal care in an integrated health and social gives

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system. The prescription tax is abolished, saving those with

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long-term illnesses around ?104 a year. Countries around the country

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will benefit from free school meals and 600 hours of early learning in

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childcare, saving ?707 per child per year and council tax is frozen for

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the ninth consecutive year, saving the average household around ?1550

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over the course of this parliament and we continue as a government to

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mitigate the most damaging effects of the UK Government s' welfare

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cuts. That is what this government is doing to protect household income

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in Scotland, and that is what is implicit in the budget reform

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Parliament today. -- before Parliament today. what he feels

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about the Clackmannanshire SNP budget which was passed last week,

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which imposed a 7.1% cut on every single third sector organisation,

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primarily supporting self-management in health conditions but also

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children. If you take into account RPI, that is in real terms a cut of

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8.4%. Is that what he does approve of? What I would say to Doctor

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Simpson is that individual local authorities must make their choices

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within the resources available to them, but I am also entitled to

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insist upon the need to freeze the council tax, about the need to

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invest in health and social care and its integration with ?250 million of

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new investment. Is Doctor Simpson against that investment and also

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ensuring that the Government takes steps to protect the delivery of

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education at local authority level? To which I now come in my remarks.

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We'll be back with that debate shortly, but first,

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I'm joined from Holyrood's Garden Lobby by the Conservative Alex

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Liam McArthur from the Liberal Democrats and Linda Fabiani

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There they are, all neatly arranged. I think we just missed what John

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Swinney was about to say about money for pupils do you know anything

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about that? No, I'm afraid I do not. I was hoping to get up there to

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learn about it. What you are hoping for is some sort of commitment to do

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something about Nicola Sturgeon and her personal issue about the

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attainment gap? Absolutely. She has made it a personal issue. She feels

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very strongly about it and I think that is a general feeling right

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across the Chamber so I am sure there will be something in there

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that will help us to achieve that and monitor its properly and make

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sure that we really do make a difference. And Iain Gray, if John

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Swinney does come up with extra money or the pupil premium as some

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call it, you presumably will say that is fantastic, well done, and

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now we do not need to put the income tax up? Well, you will have to come

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up with quite a lot. You can't pretend to be investing in closing

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the attainment gap in our schools while you're cutting hundreds of

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millions of pounds from the budgets of the council to deliver those

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skills and let's not forget this budget in real terms cut colleges

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and universities as well, so it was only last week that we asked the

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Scottish Government to commit to protect education budgets and they

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simply refuse to do so. Alex Johnson, what do you make of this?

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Would you like to see taxes cut? At the moment, I think it is

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inappropriate for us to be speaking about cutting taxes but that is a

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prospect that exists with the new power as that were agreed under the

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fiscal framework yesterday. What we have to remember is the most

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important thing for Scotland is that we went in the stability of the

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economy and the most important thing to do that is not started writing

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more money out of eight by increasing taxation so one of the

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positives that John Swinney has put forward in this budget is keeping

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the Scottish rate of income tax at 10p so that we do not pay any more

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than they do anywhere else in Britain. Sorry, as a conservative,

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just explain to me why think it is inappropriate to be speaking about

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tax cuts now. I think there is a time in an economic cycle when

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cutting the burden of taxation on the economy as a whole will boost

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growth and will increase production and employment but we are at the

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point is now it is vital that while we are under pressure to finance

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public services that we have a sensible, balanced budget, and in

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that respect, that is one of the things that John Swinney is actually

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delivering today. Liam McArthur, would you accept that should John

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Swinney come up with a substantial amount of cash to channel in the

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direction of schools, then we do not need to have our taxes put up? I

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will need to see the detail of it. If he goes down the route of a pupil

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premium, attaching the funding to the needs of the individual child

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rather than the approach taken today which has been on an area basis

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which had excluded 11 local authorities and many schools right

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across the country, that would be a welcome change and approach from the

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Government, but I think what we need to see is the detail of it and where

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that money will come from. We are seeing ?500 million of cuts being

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placed upon local authorities. We are seeing evidence of what that

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means in terms of the cuts to local services, whether in terms of loss

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of staff in our schools, whether it be increased costs for transport,

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for school meals, for music tuition and the like, and therefore what we

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need to do is see this in the right, but if we go down the route of a

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pupil premium and recognise that there are children in need, children

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in poverty in every community across the country, not just those elected

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by ministers, that will be a step in the right direction. But the trouble

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is you would equate cuts to local authorities with cuts to schools.

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Local authorities, as both John Swinney and David Cameron have been

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saying, can make efficiencies. I keep coming back to this point. The

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head of COSLA was on the Sunday Politics in a few weeks ago and

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conceded that the budgets over the past few years had not really meant

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a decline in the quality of service. He argued that any more cuts would,

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but the point is that there is no evidence that people find public

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services any less good than they were five years ago. I think you

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answered your own question. I think what we have seen is cuts being made

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where they can't efficiencies, but we are at a stage now where the

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effect of a ?500 million cut is to dig into services so that they are

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removed entirely or are being charged for or they are badly

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affected. What we are saying is we have powers in this Parliament to do

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something about it and a penny on income tax would deliver ?475

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million that could be invested in education and let's not forget, most

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of what councils do is in education and children's services. Linda, if

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we can do a quick pan across to you. This is reminding us here in the

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studio, it is a challenge for us in the studio, of that David Frost

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sketch with John Cleese in it. John Swinney has said that councils can

:20:54.:20:56.

make efficiency savings and don't necessarily have to cut schools.

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Yes, and I think that is absolutely right and I also have to say I think

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the Liberal Democrats in particular have a blooming cheek speaking about

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cuts when they and the Tories presided over a whole Westminster

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Parliament of cuts which meant that a lot of the Scottish budget hat to

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go to mitigation. We are mitigating the excess and then when you look at

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what is happening, yes, we could have efficiency savings. Liam after

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is behind you. Yes, he is muttering away. These things are about

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choices. You have chosen to fun things like free prescription

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charges by cutting local authority bust budgets. You could choose to

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put prescription charges back on. Arguably, free prescription charges

:21:47.:21:51.

only benefit the middle classes, and spend the proceeds in schools. You

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cannot say it is only the fault of London. These are choices that you

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have made. Yes, anything we have made the right choices. I believe in

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universality of certain basic services. That is what my party

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believes in. It is absolute the gristle. When you look at what we

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are doing, we look at health and social care, that is major. I defy

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anyone to look at their own local authority and say that there cannot

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be efficiencies made. We all know there can be. They have to make

:22:17.:22:20.

choices too. There you are, Iain Gray. Can we get to Iain Gray? There

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he is. Just hack a bit more of efficiency savings. I do not accept

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the premise of your original question because it is not true to

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say that services have not suffered and if you look at schools alone, we

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have 4500 fewer teachers in our schools which saw figures last week

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showing there had been a drop of a third in teachers in nursery schools

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in early years, we have seen literacy and new Morrissey skills

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fall, class sizes increasing. -- new Morrissey. -- numeracy. So it is not

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conceivable to suggest that you can cut hundreds of millions of pounds

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cumulatively and in a single year, this year, from local authority

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budgets, when schools are such a big part of what they do, without having

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an impact on the future of our children and grandchildren. Why it

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-- what would your reply to that be? They are having to implement

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austerity. We are looking at an extraordinary position when in a

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year when inflation has been virtually zero, this budget

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represents in cash terms and increase, not a decrease. If there

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are cuts within this budget then these cuts are decisions that were

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made by this Scottish Government and have been targeted on local

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authorities and colleges and other services, not because of anything

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that happened in Westminster, but because of decisions that were made

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here in Scotland by an SMP -- SNP Scottish Government. The cuts are

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about this Government and nobody else. We will have to leave it

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there. We are going to have a last chance to see this marvellous shot

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of you altogether. Thank you very much.

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Back to the Chamber where the Scottish Government's budget

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The Finance Secretary has pledged not to change income tax rates,

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but following criticism from opposition parties Mr Swinney

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has made an effort to help reduce the educational attainment gap

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by offering a cash boost to schools for disadvantaged pupils.

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Labour leader Kezia Dugdale is on her feet now.

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Kezia Dugdale is not giving way at the moment. I say to Mr Stewart that

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he should listen to the facts before he ignores them anyway. Analysis

:24:50.:24:57.

from spice shows that out of every pound raised by this measure, 92p

:24:58.:25:01.

will come from the top half of earners. Two thirds come from the

:25:02.:25:08.

top 20% of earners. And those SNP MSPs who told us that an entirely

:25:09.:25:13.

new state could be established in 18 months now tell us that a simple

:25:14.:25:17.

flat rate payment of ?100 could not be paid until the new powers come

:25:18.:25:29.

in. Oh, go on. Mr Stewart. Thank you, presiding officer. We have yet

:25:30.:25:33.

to hear from the Labour Party after many, many requests how that rebate

:25:34.:25:38.

scheme is actually going to work. Maybe Kezia Dugdale outline exactly

:25:39.:25:43.

how that is going to work or is she willing to take the gamble of making

:25:44.:25:48.

the poorest in our society pay for their mistake in being unable to

:25:49.:25:58.

deliver that rebate scheme? Order. They tell us it is all too

:25:59.:26:11.

difficult, it can't be done. Council leader after council leader have

:26:12.:26:14.

come out and told us that this cannot be done. Union leader after

:26:15.:26:18.

union leader has said that it is fair. And can I say to them? The

:26:19.:26:24.

expert analysis shows that because of the changes to the personal

:26:25.:26:29.

allowance, even before our ?100 payment, even if you accept that

:26:30.:26:34.

such a simple thing for a single year is all too difficult, even then

:26:35.:26:42.

no one earning under ?19,000 a year will pay a penny more in tax next

:26:43.:26:50.

year than they did this year. The University of Stirling, the

:26:51.:26:53.

resolution foundation, the House of Commons library all confirmed that

:26:54.:26:57.

the riches would pay a higher amount in percentage terms and in cash

:26:58.:27:03.

terms. That is a progressive policy. First Minister. F for a moment I can

:27:04.:27:13.

assume she manages to get the ?100 to low income households, can she

:27:14.:27:16.

confirmed today will any of that ?100 be God back in tax or tax

:27:17.:27:22.

credits? It is a simple question. Can we get a simple answer? It is

:27:23.:27:26.

quite clear that it is protected from tax. Look at the experts.

:27:27.:27:35.

Order, order! Come 2017, the First Minister will have the power to do

:27:36.:27:40.

this. Is she still opposed to it? Is it the detail? Order! Kezia Dugdale,

:27:41.:27:48.

would you sit down for one seconds please? Mr Swinney was heard in

:27:49.:27:54.

almost perfect silence, please. Please can we extend the same

:27:55.:27:59.

courtesy to Kezia Dugdale. Please proceed. Such is the weight of

:28:00.:28:03.

evidence that those searching for reasons to oppose her plans now

:28:04.:28:07.

scrabble in the dirt for excuses not to do the right thing. Each time

:28:08.:28:15.

this has been raised in this Parliament, the First Minister and

:28:16.:28:18.

the Deputy First Minister talk low paid workers that the lowest paid

:28:19.:28:21.

will pay more than higher earners. For them to do this, when they know

:28:22.:28:27.

that the richest will pay more than 100 times more than the lower paid,

:28:28.:28:32.

it is beneath the office that they hold.

:28:33.:28:40.

It is just plain wrong. The second thing, this is now beyond doubt,

:28:41.:28:49.

this budget will inflict unnecessary pain on every community in Scotland.

:28:50.:28:55.

Almost unbelievably the Deputy First Minister told this government that

:28:56.:28:59.

the cuts in this budget would have a minimal impact. You need only read

:29:00.:29:04.

the front pages of any local newspaper, top to any teacher, he

:29:05.:29:11.

did not speak to the hundreds of trade unionists that assembled

:29:12.:29:15.

outside this parliament a lunchtime today, to understand how utterly

:29:16.:29:19.

divorced from reality that position has become. Because the terrible

:29:20.:29:23.

toll of these cuts are there and black-and-white in the budgets being

:29:24.:29:27.

passed with heavy, heavy Hearts by local councillors of all political

:29:28.:29:32.

colours. Here are some of those choices, 170 jobs lost in Angus this

:29:33.:29:37.

week. Clackmannanshire will consider cutting 150 posts, Highland 252.

:29:38.:29:46.

Across Scotland, thousands of workers losing their jobs, cleaners,

:29:47.:29:51.

supply teachers, early years staff. Some ghoul librarians sacked in

:29:52.:29:55.

Argyll and Bute. English and maths teachers cut. -- in the Deputy First

:29:56.:30:06.

Minister's first -- own backyard, they have cut support for families

:30:07.:30:13.

with additional support needs with more cuts across the country. They

:30:14.:30:17.

can put whatever spin they want on these cuts. They can really them,

:30:18.:30:20.

they can re-badge them, they can even be profiled on. But they cannot

:30:21.:30:27.

deny that these cuts are real and that they are painful. The final

:30:28.:30:31.

thing that has been clear since the start of this process is that our

:30:32.:30:35.

proposal is the only alternative to these cuts. Why? Because we cannot

:30:36.:30:41.

escape the responsibility of the choice we are faced with. Will we

:30:42.:30:45.

use powers, the powers we came together to demand, or will we

:30:46.:30:52.

accept cuts? Scottish Labour cannot do anything other than argue to use

:30:53.:30:54.

those powers. It is never others to search their own conscience.

:30:55.:30:59.

Earlier this morning the Finance committee heard from John Swinney.

:31:00.:31:10.

He says that it can be no detriment to Scotland and he can recommend the

:31:11.:31:16.

Scotland Bill for further consent. This is what he had to say to the

:31:17.:31:20.

finance committee. Under this proposal there will not be a single

:31:21.:31:24.

penny of detriment to the Scottish Government's budget. The UK

:31:25.:31:32.

Government will guarantee the outcome of the Scottish Government's

:31:33.:31:38.

preferred funding model, per Capita index model, is used in each of

:31:39.:31:41.

these years. Alongside this there will be a review that will be

:31:42.:31:44.

informed by an independent report with recommendations represented to

:31:45.:31:50.

the governments at the end of 2021. It will not include or assume the

:31:51.:31:57.

method for adjusting the block grant for this period. The two governments

:31:58.:32:01.

will be required to jointly agree that method as part of the review

:32:02.:32:03.

and this must deliver results consistent with the Smith Commission

:32:04.:32:10.

's recommendations, including taxpayer furnace, and the principle

:32:11.:32:13.

of no detriment. This secures no detriment now and for the next six

:32:14.:32:18.

years. And we have ensured that there can be no detriment imposed on

:32:19.:32:23.

Scotland at any point in the future. On capital borrowing we have

:32:24.:32:29.

increased the Scottish borrowing limits to ?3 billion. Cumulatively

:32:30.:32:31.

?3 billion worth than your flexible to 50% of that. This increases are

:32:32.:32:44.

annual borrowing facilities to invest in infrastructure. On

:32:45.:32:46.

resource borrowing, we will receive the powers necessary to manage tax

:32:47.:32:50.

volatility by increasing the resource borrowing limit set by the

:32:51.:32:56.

Scotland act, as well as introducing a new reserve. The aggregate annual

:32:57.:33:04.

limit for forecast error and economic shock will be set at 600

:33:05.:33:07.

million. The overall resource debt will be one point 7 million. We have

:33:08.:33:17.

agreed a one-off payment of ?200 million to support implementation

:33:18.:33:22.

costs and ongoing funding of ?66 million per annum. The committee

:33:23.:33:26.

will be keen to hear that I have also agreed the Scottish fiscal

:33:27.:33:30.

commission will produce the official forecast of GDP and tax revenues and

:33:31.:33:34.

I will bring forward appropriate amendments at stage three of the

:33:35.:33:38.

commission and bill to give effect to these provisions. This forms the

:33:39.:33:42.

basis of the fiscal framework that is true to the principles of Smith.

:33:43.:33:46.

It will ensure the deal for Scotland cannot be changed within the

:33:47.:33:50.

Scottish Government's agreement, protects the Barnett formula, and

:33:51.:33:53.

allow the powers in the Scotland Bill to be delivered. I am acutely

:33:54.:33:59.

aware that none of the details are in front of the committee today.

:34:00.:34:03.

Once they are published, they will appear before the committee if it is

:34:04.:34:06.

their wish to look at the further detail when it is published to the

:34:07.:34:11.

course of the week. Thank you for that opening statement. I think we

:34:12.:34:16.

are delighted an agreement has been reached. You spoke to a number of

:34:17.:34:20.

areas. The Scottish Government did not compromise. In terms of

:34:21.:34:28.

borrowing there have been some compromise. I wonder if there are

:34:29.:34:32.

further compromises that have been made that you may wide -- quantifies

:34:33.:34:38.

the committee of? In the process of the negotiations, the Scottish

:34:39.:34:45.

Government has advanced particular propositions when we were trying to

:34:46.:34:51.

secure the agreement. For example, on borrowing, I argued for a higher

:34:52.:34:56.

limit than ?3 billion, but I accepted that there had to be the

:34:57.:35:04.

Smith commission requires this army, that the borrowing commission

:35:05.:35:06.

arrangement had to be consistent with that of the United Kingdom. --

:35:07.:35:15.

requires that. I have to accept that there are constraining factors and

:35:16.:35:23.

are -- we have to live within them. I have compromised on the degree to

:35:24.:35:29.

which the annual constraints within capital borrowing and a variety of

:35:30.:35:35.

other issues. Fundamentally, I think you have to take a step back from

:35:36.:35:43.

the conclusions and say in the round, is this a reasonable package

:35:44.:35:46.

that can be recommended to Parliament. And that my basis for

:35:47.:35:47.

them is Our political correspondent

:35:48.:35:48.

Andrew Kerr joins me Is that it? Mostly happy. There is

:35:49.:36:04.

almost a sense about a feeling of the morning after the night before.

:36:05.:36:09.

You heard Kenny Gibson saying that everyone is relieved that a deal has

:36:10.:36:15.

been done. When he appeared before the devolution committee yesterday

:36:16.:36:17.

morning, I think he was thinking that a deal might not be done at

:36:18.:36:23.

that stage. But there were more than calls during the course of the day,

:36:24.:36:26.

the Chancellor spoke to Nicola Sturgeon and eventually a deal was

:36:27.:36:30.

done. Most people are probably happy. There has been compromise on

:36:31.:36:36.

both sides I would say. It looks like the UK Treasury maybe didn't

:36:37.:36:39.

get their way. There is talk about the initial call about the ?7

:36:40.:36:44.

billion of cuts over ten years, whether that was the negotiating

:36:45.:36:47.

position or not, we are not quite sure. Now the Scottish Government

:36:48.:36:54.

have had to adopt the Treasury's adopted model of funding. But with

:36:55.:37:00.

making sure that there will be no doubt on to the Scottish budget for

:37:01.:37:07.

the next five years. Interesting as well, there was a row about this

:37:08.:37:12.

only are you few weeks ago. They have accepted that there will be a

:37:13.:37:16.

Scottish version of the Office for Budget Responsibility or sober as we

:37:17.:37:22.

have decided to call it in the studio, that will set the forecast

:37:23.:37:27.

independently of the government, which John Swinney will have to then

:37:28.:37:32.

bases budget around. That was our back track, a compromise, that is

:37:33.:37:36.

what Labour were calling it in the finance committee today. Previously

:37:37.:37:41.

John Swinney did not want these independent forecasts. But the UK

:37:42.:37:44.

Treasury were keen to have the fiscal commission checking, setting

:37:45.:37:51.

out the forecast, GDP and revenue and so on, because when it comes to

:37:52.:37:55.

that review I mentioned, that is going to be fairly critical, just

:37:56.:38:01.

who will decide on whether the preferred model is working or not,

:38:02.:38:03.

and Lott should be the way forward from that. In the House of Commons

:38:04.:38:09.

earlier, David Mandel put appointed criticism when he was saying that

:38:10.:38:15.

many people like to see themselves in Scotland as independent, but

:38:16.:38:18.

perhaps they are not really. -- David Mundell. Perhaps the Scottish

:38:19.:38:26.

Government would like to see this feeding into the current model they

:38:27.:38:32.

have chosen. Andrew, how should we take this? Is this a fantastically

:38:33.:38:36.

bit of diplomacy that has finessed everything and there can be a review

:38:37.:38:41.

and enamoured call discussion in five years? Or have they kicked

:38:42.:38:46.

everything into the long grass? There has been a process of

:38:47.:38:50.

negotiation. Everyone here are surprised. It has just taken so

:38:51.:38:56.

long. They started these initial discussions back in March, I

:38:57.:38:59.

remember waiting outside Saint Andrews house in September. The

:39:00.:39:06.

chief of the secretary was going into the talks. -- Treasury. It has

:39:07.:39:15.

been kicked into the long grass. Six years from now we will have to go

:39:16.:39:17.

through this whole process again. Nicola surgeon was yesterday quite

:39:18.:39:21.

clear to point out who knows what the setup may be in five or six

:39:22.:39:29.

years' time. She was saying, she wants an independent Scotland. Who

:39:30.:39:32.

knows what it might be like. Moray Macdonald is

:39:33.:39:37.

still here with me. Kezia Dugdale looked very fired up.

:39:38.:39:48.

She looked on form today and being very forthright and putting argument

:39:49.:39:55.

across. She is still fighting this idea of putting up income tax by 1p.

:39:56.:40:02.

You can see the politics of this. Labour are trying to... Johann

:40:03.:40:12.

Lamont said we now need to ask people to listen to what we're

:40:13.:40:15.

saying. That is the stage we are at. That is what they're trying to do.

:40:16.:40:21.

We are a left-wing party. And we are to the left of the SNP and put a bit

:40:22.:40:25.

of clear blue water between them. That will be interesting, whether

:40:26.:40:34.

that has, if it will be attractive to people. Will it? Labour's

:40:35.:40:40.

challenge is that they do have to try and do something a bit

:40:41.:40:44.

different, a bit creative, so the public listen to them. The public

:40:45.:40:47.

are apparently not listening to Labour. I am not convinced that a 1p

:40:48.:40:55.

tax rise is going to turn people. You heard earlier one of the MSTs

:40:56.:41:02.

saying that the economy is not ready for... There was a view that Ruth

:41:03.:41:10.

Davidson would go into the next Scottish elections going vote Tory

:41:11.:41:15.

and we will cut your taxes. Exactly. The opposite side of that is that

:41:16.:41:20.

the economy and people are not ready for a tax increase. Many families

:41:21.:41:25.

are still struggling, living hand to mouth on a monthly basis. A tax rise

:41:26.:41:29.

would hurt middle-class Scotland quite dramatically. There will be

:41:30.:41:36.

another political row, controversy, because of this deal that has been

:41:37.:41:40.

done. Presumably, some of the physician parties are going to say,

:41:41.:41:44.

we can start messing around with the tax bands, under the powers that may

:41:45.:41:50.

be coming in 2017. That means vacancy, we will put more tax on

:41:51.:41:58.

higher tax rate payers. But George Osborne has proposed to raise the

:41:59.:42:04.

rate from where you pay 40p. They could say, we are not going to do

:42:05.:42:09.

that. During the election campaign, we're going to see many ways of how

:42:10.:42:16.

you can raise tax, cut tax. One of the things that was interesting

:42:17.:42:21.

today, David Mundell turned around and said I am expecting the Scottish

:42:22.:42:25.

Parliament to use these powers straight after the election. John

:42:26.:42:29.

Swinney said, hang on, it will take us a while to do this. I found

:42:30.:42:40.

rather weird, because one month from today was going to be Independence

:42:41.:42:43.

Day. Given that the election may happen in May, those new powers will

:42:44.:42:46.

come during the term of that government. It is not unreasonable

:42:47.:42:51.

to ask whatever party is in power, what they will do with these birds

:42:52.:42:55.

during the election campaign. What will be exciting on that front, for

:42:56.:42:59.

the first time, the Scottish Government -- public will get a

:43:00.:43:03.

choice. We have been told for so long that Scotland is up for more

:43:04.:43:11.

tax to pay for more services. I am not convinced that is true. Now we

:43:12.:43:14.

will see if that is what the public want.

:43:15.:43:17.

And now to this week's Prime Ministers Questions,

:43:18.:43:18.

where the Labour leader pressed the Prime Minister

:43:19.:43:20.

over his government's dispute with junior doctors over

:43:21.:43:22.

Though it's not an issue that affects us here in Scotland,

:43:23.:43:26.

there were plenty questions raised that do affect us,

:43:27.:43:28.

from the new devolution deal to the state of our oil industry.

:43:29.:43:35.

The NHS staff survey purchased yesterday shows that nine out of ten

:43:36.:43:40.

junior doctors already work extra hours beyond their normal contract.

:43:41.:43:43.

The survey also showed falling morale amongst these vital group of

:43:44.:43:49.

staff. What does the Prime Minister think the Health Secretary's veto of

:43:50.:43:54.

a deal and imposition of a contract would do to their morale? First of

:43:55.:43:59.

all, the Health Secretary did not veto a deal. What matters is making

:44:00.:44:03.

sure we can have a genuine, seven-day NHS. What I say to junior

:44:04.:44:08.

doctor is an old junior doctor working those hours will receive a

:44:09.:44:12.

pay cut, this contract will not impose longer hours. In fact, it has

:44:13.:44:17.

tougher safeguards to make sure that introduces the hours that worked.

:44:18.:44:21.

We'll be Prime Minister congratulate the Scottish element and his own

:44:22.:44:24.

colleagues who secured a deal on financial arrangements for the next

:44:25.:44:28.

phase of Scottish devolution? The Treasury position initially in data

:44:29.:44:33.

?7 million -- ?7 billion of public funding. That was reduced to ?3

:44:34.:44:38.

billion and then yesterday ?2.5 billion. What change the mind of the

:44:39.:44:42.

Treasury and help them agree to a deal that will make Scotland nor

:44:43.:44:48.

less worse off? Let me agree with the right honourable gentleman. This

:44:49.:44:51.

is an excellent deal for Scotland, but it is also an excellent deal for

:44:52.:44:56.

the UK, are those of us who want to keep the UK together, what we have

:44:57.:45:00.

just demonstrated is that you can have school on devolution with a

:45:01.:45:05.

powerhouse parliament, with a fair fiscal settlement, inside the UK and

:45:06.:45:09.

that is something to be celebrated. Now we will move to the situation

:45:10.:45:13.

where the Scottish Government and the Scottish parliament will have to

:45:14.:45:16.

start talking about policies and decisions rather than processors,

:45:17.:45:20.

but I am happy that the negotiations went as they did and I am happy we

:45:21.:45:24.

have a good outcome and I'm happy that Lord Smith, who was responsible

:45:25.:45:28.

for so much of this, but out a statement saying that this delivers

:45:29.:45:33.

the principles in full, so no more grievance, no more fussing about

:45:34.:45:37.

process, no more arguments about the arrangements, now it is time to get

:45:38.:45:45.

on and governed. Angus Robertson. And we are indebted to John Swinney

:45:46.:45:51.

and Nicola Sturgeon for securing a no detriment deal for Scotland. The

:45:52.:45:55.

Prime Minister is right that all parties will have two layout there

:45:56.:45:58.

are plans in advance of the May election. So Kitty answer this

:45:59.:46:03.

question? Is it actually true that in this time of posterity, his

:46:04.:46:08.

party, the Conservative Party, is planning tax cuts for higher earners

:46:09.:46:13.

in Scotland? It will be Ruth Davidson who is the only proper

:46:14.:46:17.

opposition figure in Scotland will be setting out the plans. If you are

:46:18.:46:21.

worried in Scotland is about having a bit of a 1-party state and a lack

:46:22.:46:26.

of accountability, if you think that the Labour Party in Scotland has

:46:27.:46:30.

lost its way, there is only one choice and that is raised. But I

:46:31.:46:34.

will say this. I think there are opportunities to cut taxes. There

:46:35.:46:38.

are opportunities to shop in incentives. There are opportunities

:46:39.:46:41.

to attract businesses and people into Scotland and I am sure that

:46:42.:46:45.

Ruth Davidson will be making those arguments, and as she does, whatever

:46:46.:46:49.

she decides, she will have my full and unequivocal support. The

:46:50.:46:56.

Scottish Government, trade unions and oil and gas UK are calling for

:46:57.:47:00.

reductions to the headline rate of tax to support the industry in its

:47:01.:47:04.

hour of need. Yet instead of the so-called broad shoulders of the UK,

:47:05.:47:08.

what we see are the sloping shoulders of the Prime Minister

:47:09.:47:13.

repeatedly dodging his responsibilities. Will she commit to

:47:14.:47:17.

reduce the tax level on oil and gas and help this vital industry? First

:47:18.:47:23.

of all, in the budget last year, we reduce the burden of tax on oil and

:47:24.:47:27.

gas, something we were able to do because of the broad shoulders of

:47:28.:47:31.

the UK. And now let us just examine what has happened since that time.

:47:32.:47:38.

Oil and gas revenues are down 94%. If there were not the broad

:47:39.:47:43.

shoulders of the UK Government, if instead this was a genuinely

:47:44.:47:47.

fiscally independent Scotland, there would be a massive black hole in

:47:48.:47:51.

your budget. You would be cutting welfare, you'll be cutting spending,

:47:52.:47:55.

you would be putting up taxes, you would be facing a financial

:47:56.:47:56.

catastrophe. Our Westminster correspondent

:47:57.:47:57.

David Porter is joined by a quartet David. Garden. Thank you very much.

:47:58.:48:12.

The Scottish and the UK Government's former deal about finances, and Lo

:48:13.:48:18.

and behold, the Sun comes out over Westminster. There must be a moral

:48:19.:48:23.

in there somewhere. As we have been hearing, the fiscal framework made

:48:24.:48:29.

its appearance at PMQs. We will be concentrating our discussion on that

:48:30.:48:33.

this afternoon. Joining me for Labour, Stephen Gethin is for the

:48:34.:48:42.

SNP. From the UK Government's point of view, a good deal? When you can

:48:43.:48:49.

sell the elections? , well I think firstly we should congratulate both

:48:50.:48:52.

governments for reaching an agreement. This is a historic moment

:48:53.:48:56.

for both governments and for both peoples and the whole people of

:48:57.:49:02.

Great Britain. This is a good deal for both peoples. What I would now

:49:03.:49:07.

like to see is moving forward how the powers are going to be used in

:49:08.:49:12.

Scotland for the betterment of the people of Scotland, so it is a good

:49:13.:49:15.

deal and we should congratulate both governments for the hard work they

:49:16.:49:20.

both did to get an agreement. Is there a danger of consensus breaking

:49:21.:49:24.

out here? Everyone congratulating everyone else. If it was that easy,

:49:25.:49:30.

why did it take so long? Well, firstly the big bit of

:49:31.:49:33.

congratulations should go to John Swinney. This is what happens when

:49:34.:49:44.

you have a treasurer like this. A finance secretary who sticks to his

:49:45.:49:48.

guns and can beat the Treasury. Was it a case of there was always going

:49:49.:49:54.

to be a deal and the posturing of it was important was a touch and go

:49:55.:50:00.

until the final moments? I think it might have been touch and go. These

:50:01.:50:05.

negotiations are highly complicated. You're talking about very complex

:50:06.:50:10.

ways of indexation in terms of the block grant and income tax and all

:50:11.:50:13.

those big issues around it and it is quite right that the 2-party start

:50:14.:50:18.

of various ends of the spectrum and they come together. I am glad they

:50:19.:50:22.

have done. We are delighted there is fiscal framework in place now, but

:50:23.:50:27.

we will go back and we will now get on with it utilising those powers.

:50:28.:50:33.

This does make the most powerful devolved parliament in the world. We

:50:34.:50:38.

should use that for the benefit of all Scots. We have been putting a

:50:39.:50:42.

very positive policy platform together and we encourage all other

:50:43.:50:46.

parties to do the same. Let's get political on this. From your party's

:50:47.:50:51.

point of view, does this mean your party leader in Scotland, Ruth

:50:52.:50:54.

Davidson, can now going to lose elections and say we are the

:50:55.:50:58.

Conservatives, we are going to be a tax-cutting party in Scotland? It

:50:59.:51:02.

will be for Ruth Davidson and the party to determine the policies that

:51:03.:51:05.

best meet the needs of the people of Scotland. I don't want to get to

:51:06.:51:11.

political about this. This is about the people of Scotland. Hours are

:51:12.:51:15.

being transferred to the Scottish parliament. As Ian rightly said as

:51:16.:51:21.

well and what we now want to see is the Scottish Parliament is using the

:51:22.:51:25.

wealth of powers that it will now have two better the lives of the

:51:26.:51:29.

people of Scotland, so this is an historic moment. It is a good day

:51:30.:51:34.

that we have this agreement and let's now move forward positively

:51:35.:51:36.

and let the people of Scotland decide. I hope they decide that Ruth

:51:37.:51:40.

Davidson and the Scottish Conservative and Unionist party is

:51:41.:51:44.

the right party, but it will be for the people of Scotland to decide. It

:51:45.:51:49.

is boiling down to it. Now that we have this fiscal framework, with

:51:50.:51:52.

bright school responsibilities, particularly financial ones. Of

:51:53.:51:55.

course, that is why the Scottish Government authority set up in that

:51:56.:51:59.

they can tackle, such as Social Security and universal credit and

:52:00.:52:03.

getting rid of the betting tax. They will be looking to see what the

:52:04.:52:07.

other parties think of that. Are looking at Air Passenger Duty and

:52:08.:52:10.

how you can grow your economy. So the Scottish Government has set out

:52:11.:52:13.

its plans and we will see how people vote on that in the future but let's

:52:14.:52:17.

not forget the Treasury still holds an awful lot of the purse strings.

:52:18.:52:22.

Ian Murray, your party actually wants to increase taxation at the

:52:23.:52:28.

top rate in the Scottish elections. Do you think, as so many other

:52:29.:52:33.

elections Wetherby in London or in Edinburgh, will actually be

:52:34.:52:37.

dominated by the taxation issue now? Well, I think it should, because I

:52:38.:52:41.

think a grown-up parliament should have those taxation issues and we

:52:42.:52:43.

have already got a very distinctive difference between all of the

:52:44.:52:46.

political parties. We have the continuation of austerity which --

:52:47.:52:52.

and we have the SNP managing that austerity and refusing to use the

:52:53.:52:55.

powers of the Scottish Parliament and we have made the choice that

:52:56.:52:58.

when these are the joys of cutting into Scotland's feature or using

:52:59.:53:03.

those powers, we use -- we choose to use those powers. Local services

:53:04.:53:09.

have been decimated and local workers who provide those services

:53:10.:53:14.

are just about to be made unemployed and we have to drop a law -- a line

:53:15.:53:19.

under it. When we have a choice between using those powers or not,

:53:20.:53:24.

we choose to use them. These are extraordinary comments from Labour.

:53:25.:53:28.

A Labour Chancellor said that he was going to cut deeper and tougher than

:53:29.:53:33.

Margaret Thatcher and George Osborne continued that, so Labour and the

:53:34.:53:40.

Conservatives are two peas in a pod. Responsibility is the word that you

:53:41.:53:44.

used. Finally the gripe and the grievance that the SNP have been

:53:45.:53:49.

drumming in this place behind us for years is over because we can hold to

:53:50.:53:54.

account Stephen's colleagues in the Scottish Parliament very shortly on

:53:55.:53:59.

how they use the Scottish powers in the Scottish Parliament for the

:54:00.:54:02.

betterment of the Scottish people and we can't come down here and

:54:03.:54:04.

write and complain about the Treasury or the Government or the

:54:05.:54:09.

Scottish Labour Party. We will be looking very closely at them and how

:54:10.:54:12.

they use these powers and if they do not use them wisely, they have got

:54:13.:54:16.

nobody but themselves to blame and the Scottish people at the election

:54:17.:54:19.

in May will be able to decide for themselves whether they want Ruth

:54:20.:54:23.

Davidson and the Scottish Conservatives to use as power wisely

:54:24.:54:28.

or an SNP Government that just has one agenda, the break-up of Britain.

:54:29.:54:31.

Stephen Gethin is, you have nowhere to hide financially in future. The

:54:32.:54:37.

Treasury still holds a lot of those powers. I am the only person here

:54:38.:54:43.

who has set out positive proposals for what we are going to do with

:54:44.:54:47.

those powers, so I think that is quite telling. They want to cut Air

:54:48.:54:50.

Passenger Duty which is to take flights and passenger flights rather

:54:51.:54:55.

than take them away from public services. We all talk about powers

:54:56.:54:59.

and the Treasury but ultimately this is about other services that are

:55:00.:55:04.

grandmothers use, that our children use, that our neighbours use. These

:55:05.:55:09.

are the services that are being dead submitted and we want to make sure

:55:10.:55:17.

they are not. -- been decimated. Thank you for sharing that consensus

:55:18.:55:24.

you all started with did not last for too long. Normal services

:55:25.:55:25.

resume. Moray Macdonald is with me

:55:26.:55:26.

for the final time this afternoon. Opposition parties, it is pretty

:55:27.:55:34.

obvious what they are toenails. We will give you powers. All, you will

:55:35.:55:40.

have to take responsibility for them. We will not hear any more

:55:41.:55:44.

grievances. I seem to remember hearing all of this in the mid-19

:55:45.:55:48.

90s before they set up a Scottish parliament and look where that got.

:55:49.:55:53.

Yes, absolutely. I think there is plenty of room left for grievances

:55:54.:55:56.

over the next five years preserving the SNP are still in power, may to

:55:57.:56:02.

lay the issues at Westminster's door, whether it is immigration or

:56:03.:56:07.

defence issues, they will still be griping about the fact that Trident

:56:08.:56:11.

will be based on pure in Scotland and the amount of money being spent

:56:12.:56:15.

on that so there is plenty of room for that. The new powers coming to

:56:16.:56:19.

Scotland are not just financial powers. They will have powers to

:56:20.:56:24.

spend more money on welfare issues, so if he wants to get rid of the

:56:25.:56:30.

bedroom tax, they cannot do that -- they can now do that. And there is

:56:31.:56:37.

also new powers about road speeds and road signs, exciting things like

:56:38.:56:41.

that, so a whole range of things being debated that we have not seen

:56:42.:56:45.

before. Can I ask you just for a moment to take off your former Tory

:56:46.:56:50.

adviser hat and put your involved in business hat on? Do you get any

:56:51.:56:55.

sense from business in Scotland that is new devolution of powers is

:56:56.:57:01.

important to them? I think most businesses at the moment do not see

:57:02.:57:06.

any potential risk. There are not any flag being raised that there

:57:07.:57:09.

will be huge changes to corporation tax at the moment or any other tax

:57:10.:57:13.

that will have a big impact on business. Businesses are impacted

:57:14.:57:20.

over things like the living wage where we have had a host of business

:57:21.:57:23.

is already paying that because they know that the Scottish Government

:57:24.:57:28.

wants to do that, so they don't have to do that, but it perhaps looks

:57:29.:57:33.

better for them if they do. I think most businesses are probably more

:57:34.:57:36.

focus on what is happening at Westminster and Brussels in terms of

:57:37.:57:40.

the EU referendum and that potentially has a bigger impact on

:57:41.:57:44.

businesses in the UK and in Scotland than some of the powers coming to

:57:45.:57:47.

the Scottish parliament. And in the short term, with the election

:57:48.:57:51.

campaign coming up, Labour clearly want to make it about tax. Each said

:57:52.:57:58.

it should be. Will it be about tax? I think it will, but all of the

:57:59.:58:02.

taxes that we have seen any of the party speaking about have all been

:58:03.:58:07.

about income tax on you and I, on the public, not on business, so I

:58:08.:58:11.

think that will be a feature. They think one of the issues might again

:58:12.:58:15.

be council tax. We're still not got that right. There is a lack of

:58:16.:58:19.

democracy at a local level with the fact that councils have actually

:58:20.:58:22.

lost any power to raise revenue because they have been restricted

:58:23.:58:32.

from doing that for the local level now will stop I think we will see

:58:33.:58:45.

powers from the SNP. We'll have to leave it there.

:58:46.:58:46.

I'll be back with Sunday Politics Scotland on Sunday at 11am.

:58:47.:58:50.

We are told that OJ Simpson is in that car,

:58:51.:59:05.

Do you think he did it? She was terrified of him.

:59:06.:59:16.

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