25/11/2015 Politics Scotland

Excellent. Now, in the run-up to today's statement we had some dire

warnings about the of spending cuts. Good afternoon

and welcome to a special edition The Chancellor sets out ?20 billion

worth of budget cuts, but cancels his planned tax credit

cuts in his spending review. The guardians of economic security,

the protectors of national security, the builders are better

future, this Government, the mainstream representatives of the

working people of Britain. Here at Westminster, we'll be getting

reaction and asking all the headlines today the real stories

behind the Autumn Statement? Well, George Osborne certainly made

a stir, even if it was by announcing he won't do what

everyone expected him to do. Your first box? You are hearing

Lords on his proposals to cut tax Your first box? You are hearing

there that this is not quite how it was dressed up in the July budget.

George Osborne has found some wiggle room with the help of higher tax

receipts and very low interest rates ensure that he is not being nearly

as much as had been expected to payoff that colossally large

interest on the national debt. explain to his backbenchers why...

Only for a year that they breach the cap will stop yes. In the first

years of the Parliament. Housing benefit is going to be capped in

particular. Then there is the question of public spending which is

what was going to be watched particularly closely in addition to

welfare. Capital spending is going up. You speaking a what about

housing and there will be a consequence for the Scottish budget

from that. Health is protected. Police in England is also

protected, police spending, and schools as we expected, are

protected as well. The departments that are not protected are taking

colossally big cuts. Business down by 15%, environment down, energy

down by 22%. That is not capital, that is day-to-day spending. He made

a big fuss in the speech of saying that while this is the current

budget actually in a lot of these areas you will increase the capital

spend. Yes. Capital spending is going up into infrastructure and

housing but the day-to-day spend, a lot of it goes on to salaries and

wages. That is going to get squeezed in these departments very tightly.

What about the effect this will have on Scotland? As this feeds through,

you have health protected, your police protected, your school is

protected, but you get lots of other things that get cut. Fed through to

the block grant and that means in real terms cut over the next four

years by 5% in day-to-day spending. The more positive story is about

capital spending. Infrastructure, which the Scottish Government agrees

is a priority, 14% up on that. That is much lower than the day-to-day

spending budget. It has had a very hard time through the past five

years. John Swinney was able to do a bit of shifting around, but capital

will now be more significant than George Osborne's budget and feeds

through to Hollywood as well. We should have the Scottish loch grants

coming to Hollywood could reach almost ?30 billion four years from

now, but I know what you're about to say, Gordon, that is a bit of a

fiction because... We're going to talk about that later on so let's

give Alf a chance. It is difficult in a way because when the economy is

renting, your options shrink, when the economy is growing, the wiggle

room that George Osborne had is pretty high, isn't it? I think that

is right and the OBR growth forecast were pretty optimistic right through

the forecast period withdraws regularly hitting 2.5% or

thereabouts right through the period. They are hoping in thinking

and here's hoping that tax revenues will be higher. He is talking partly

through a bit of shifting about about resetting and how the whole

thing is measured because English Housing Association debt is being

included. Here's hoping that's here's got something like ?27

billion more to play with than he had in July. Whether it is a real

?27 billion or the numbers have all been recalibrated, until you get

into the books. Briefly, because we have to go to London. There is a

problem for the opposition because even those who criticised austerity,

it makes sense to balance the budget and even have a surplus when the

economy is growing, as it is. In terms of where he was parking his

tanks, as someone was saying earlier, it is almost as if he could

have stood up and said I have learned my lesson from the tax

credits fiasco, austerity is over. Didn't quite say that, but you can

see that that is where he was trying to position himself in terms of

leaving John McDonnell with very little to say. OK. We will come back

too on. Throughout the afternoon we'll be

hearing from the four main political parties at Westminster as they react

to George Osborne's statement. Let's head back there now to

our correspondent, David Porter. Very pleased to say it is a nice day

so far so let's not tempt the weather gods. Joining me now is the

secretary of state for Scotland, David Mundell. So what did George

Osborne do for Scotland? I think it is a really good deal. He is

delivered ?16 billion in terms of capital spending. We heard a lot

over the period of projects being there to be done in Scotland to

improve infrastructure. Now the money is there to do it so let's see

some shovelling, because Scotland does need significant infrastructure

improvements in the context of the overall settlement in the UK I think

Scotland has got a good settlement, which is sustainable in terms of the

Scottish Government's projected finances. I think there are some

very good things in there, such as the Amsterdam roots. There is money

for the Burrell collection, the city deals and we heard the major

investment in Scotland and the defence industries. But your

opponents will say that when you strip away all of the spin, by 2020

will have meant a decade of austerity. I don't accept that it is

an austerity budget when you have six in 5p to spend on capital

infrastructure in Scotland. -- ?6.5 billion. I think we need to identify

those projects and get them forward so we can improve the economy in

Scotland and improve people's lives. People have got to remember that the

SNP only a couple of weeks ago were arguing for a full fiscal autonomy

and under today's goes, there are projections would have been down

94%. That is billions of pounds out of the Scottish budget and no idea

where that money would come from, so as part of the UK on the Scotland

has got a really good deal, a stable deal, a deal that allows us to

invest and move forward and that is what we need to do. Let's deal with

a key political story from the statement. George Osborne shelved

the planned cuts to tax credits. Noting touring comedy has decided he

will abandon it altogether. -- no messing about. That is right. I

think the same people who had criticised the tax credits proposal

will now criticise us for making changes. The Chancellor's view was

that it was to conflict to start adjusting the rings and entry

rates, but because he was any better financial position with higher tax

and lower rolling costs that he didn't need to make the savings that

he needed at the time of the summer budget and therefore could

accommodate the tax credit payments as they move forward into the new

Universal Credit rating. But it is right to say now that they are not

going to talk -- cut tax credits, why a view months ago did he think

it was such a good idea? The position a few months ago was that

the financial situation was a lot tighter. He did not cut tax credits

just the sake of doing so, you did it because we are operating in a

very tight fiscal situation. What has happened over the past few

months is that we have seen higher tax receipts and lower borrowing

costs which is meant that envelope is not as tight and it means that

continuing to pay tax credits for the time being as we move forward to

a Universal Credit can be accommodated within his financial

projections. So does that mean if the figures got worse the tax

receipts weren't so good in future comic he may come and I stress may,

come back and look at this again? He's made the commitment to not go

forward with the proposal on tax credits. I don't envisage any

circumstances in which that would change. We are with the roll-out of

Universal Credit and over time it is that that will accommodate the issue

completely. Thank you very much for joining us this afternoon. We will

be having more political reaction from Westminster in a few moments

but back to you. So what's the reaction

from Holyrood? Our political editor, Brian Taylor,

can tell us. Brian, I don't expect the Scottish

Government will say this openly, but do you think they are actually

believed that they don't have to worry about how to ameliorate the

effect of tax credits cuts? I think they are punching the air. People

say it was just a political decision but I think it was entirely a

calculation on part of the translator -- Chancellor and it was

purely a clinical decision taken by the Chancellor and one does not

blame him for that. He was any mess and has dug himself out of that.

Here at Holyrood, all the parties are claiming credit. I stress, all

of the parties are cleaning credit for the Chancellor's U-turn,

including the Tories. He was under pressure on this and she has

responded but the SNP are particularly pleased because they

were under pressure of a different sort from Labour who were offering

to fill the gap, fill any gaps left by the cuts in tax credits, fill

that in Scotland and they were demanding that the SNP do the same.

John Swinney said let's wait to see what actually emerges from the

Chancellor. What has emerged that is cutting tax credits has been

stopped. I guess there will still be benefit cuts are particularly to

housing benefit, but right now this is really made aprons and altered

the dynamic of the political in Scotland. We have already alluded to

this peculiar polarity in spending in Scotland. The OBR's bought has

indicated figures but they can only be indicative because we don't

really know what the UK Government's contribution to

spending in Scotland will be because of the Scotland act. That is right.

That is an act to give additional tax powers to Scotland. What I think

the Scottish Government must say is that the figures which are announced

today which is a 14% increase but a 5% in day-to-day spending up to

2020. I am sure John Swinney will say that is a further pressure on

his budget. The key point is what happens with regard to the fiscal

framework. John Swinney will say, I am sure, that the figures the

Chancellor sets out all the level that should be obtained, no matter

how those sums are raised, because the debate that is going on between

the Scottish permit and the Treasury is as to whether there should be

further entrench and within the fiscal framework itself. I think

today is the benchmark around which those talks will be based, but the

Chancellor did say that we have the figures now, let's get on with a

deal. He seemed very anxious indeed to cut a deal and I think on the

fiscal framework that is a compromise.

Let's get some further political reaction from Westminster's

opposition parties now, and our correspondent David Porter

is with the Shadow Scottish Secretary, Ian Murray.

David. Thank you very much, Garden. I put that same question to Ian

Murray. What does this do not for Scotland? I think the first thing

that it does which we are very pleased about this is the U-turn on

tax credits which Scottish people who are in receipt of tax credits

will be incredibly pleased about. It is something the Labour Party has

campaigned very hard on and a complete vindication of the House of

Lords sending it back to the Chancellor. The devil is always in

the detail in this Chancellor has an uncanny knack of creating a budget

which unravels within days. Caravan tax, all those things have

unravelled within days. We are very pleased about this reversal. Without

getting into the debate, has he shot your fox? I don't think he has

because we always said we wanted him to look at this. This is about

working people so if the Government come forward with something which is

a victory for working people then we will certainly support them on it.

This U-turn has certainly achieved that we are pleased. Was it Labour

wasn't actually the House of Lords should be thanking? We should be

thanking the House of Lords of course because it was Labour Lords

that brought this forward. We can do it in the House of Commons because

the Government have a majority but the Lords deserve a great deal of

credit for this U-turn. We need to see where this money is coming from,

of course. That is the big danger but certainly on that policy we are

pleased. Well done for fighting against the sirens there. He does

seem to have found more money, whether it be from the back of the

so far whenever to actually bring forward things that perhaps you

thought it couldn't have been done. This Chancellor was supposed to have

wiped out the deficit by the end of the last parliament. It is going to

take until the end of this Parliament and every time he comes

to that dispatch box he changes his we have to look at the detail of

this. We are delighted by the capital expenditure that will come

to Scotland and I hope we can focus that on housing prices and some of

the big infrastructure problems that we have in Scotland but we will be

looking book and those details but again this is ten years of

posterity. This is not a good news budget. This is the Chancellor

admitting he has been completely wrong although we back to 2010. You

still try to fight the deficit. The other thing and then we should be

looking at any budget is he mentioned the city deals and this is

something I've been pushing on particularly hard. Inverness and

Edinburgh and all city deals, we need to get those delivered. The

Chancellor, as you mention, has put extra money into things like health

in England and there will be knock-on effects for the Scottish

Government. They are going to get more money. Is it now going to be a

problem for the Scottish Government as they will be able to say to

Westminster, you are not giving us anything. It shows you how important

the Barnett formula is and we seem to be the only party that is going

to defend the Barnett formula that does give Scotland consequential is

when the protected departments like the education service in the NHS are

protected, Scotland gets that Warwick consequential to invest in

the Scottish Cup public services -- Barnett consequential. But the

Scotland act also allows the Scottish Parliament to do what it so

wishes under the Government of the day so there is a Barnett

consequential but there is also the powers in the Scotland Bill are

Scotland two tickets on path. And how important is it now that

Scotland is getting these new powers that the UK Government and the

Scottish permit very clearly come to an understanding of the way that the

financing is going to be done and that everyone knows about it so it

is transparent? The fiscal framework has to be transparent if that is

something I have been calling for. The House of Lords called Britain

last week in the Lords in the second reading of the Scotland Bill were

calling for it yesterday. It have to be transparent and this is a huge

gap to factor of 62. Without the Barnett formula it puts Scottish

public services in jeopardy and we want to make sure the fiscal

framework is transparent. I am very grateful for you joining us this

afternoon. Back to you. The SNP were in some difficulty

explaining how they were going to help people to not feel the effects

of the tax credit cuts and Labour were challenging them to say that

they would do it and now they can forget about it. It changes the

dynamic, as Brian was saying earlier altogether because although the SNP

were going to do something towards, I think they had tacitly admitted

they didn't have the resources to make it all happen.

So it has changed the dynamic completely. It is also taken a

difficulty for the Chancellor off his back, because there are a lot of

Conservative backbenchers who were unhappy about it as well, not just

in Scotland but across the whole country. A lot of the others were

unhappy about it, so it has taken it off his back. But I think the other

problem in all of this is we had this great shower of mini

announcements, ?5 million for the borough and all the other things, a

great raft of things. I suspect anyone who has watched Osborne as

Chancellor over the years since 2010, he's always talking about

delivering on things like infrastructure. But if you look just

the day before the statement was made, there was some news about

previous infrastructure plan that dated back to 2012, where he was

offering ?40 billion of backing for big infrastructure projects. It's

got less than a year to run, that particular initiative. Of the ?40

billion, only 3 and a bit billion has been committed to projects.

There's a real problem, there's a lot of talk about high-speed rail

and the rest of it, but having credible projects and, critically,

having the workforce to deliver it, because so many people in the

construction industry left the industry in the really bad years

after the crash. A lot of young people are not training in those

craft apprenticeships in these areas. Whether you've got the

workforce to deliver this scale of infrastructure that's now going to

come not just in England but in Scotland and Wales... Briefly coming

back to something we were talking about earlier. He's found the extra

money by saying interest rates and debt are low and tax receipts are

going to go up. The economy is starting to grow. We are not in a

crisis any more. Not only can George Osborne find this wriggle room this

year but probably in every budget up until the next election. Absolutely.

I think lease lifted the curtain on a strategy. This isn't just about

him getting the economy right. This is about a quest to succeed the next

Prime Minister, when he goes for the next election in 2020. He's

indicated where he is going to go for a lot of his strict responses.

There's always changes, but you can see now where he's going to, if we

have a continued period of low interest rates and the rest of it,

he's got wriggle room all over the place. Alf, we'll back with you

later on. Back to Westminster

and more political reaction. Let's rejoin our correspondent,

David Porter. Thank you Gordon. I'm pleased to say

I'm joined by Stewart Hosie? SNP's Treasury spokesman and deputy leader

of the pear. A question I've been putting to the other politicians I

will put to you. How shall we gave this for Scotland? We know there was

a real terms cut to revenue spending and there's been a slight change in

capital spending but overall this is a continuation of what we've saw

over the last Parliament. More cuts, a continued squeeze, that's the

bottom line. But he's listened to what people like you have been

saying and he's going say in future I'm not going to cut the tax

credits, I'm going to shelve that idea. I'm glad he has overturned,

U-turned on his tax credit plans. But remember he always announced

today he intends to maintain ?12 billion of welfare savings and he

still intends to take ?42 billion a year out of the economy. More cuts

than is necessary to run a balanced budget. He's going to have the find

the money from somewhere. Looks likes he's done a humiliating U-turn

on tax credits, which is to be welcomed, but he's going to take the

money from many of the same people through housing benefit. As always

with the Tories it is smoke and mirrors. But he will argue that the

scoffs have a manifesto commitment to reduce welfare by this

announcement. People voted for the Conservatives in the May election,

so he has a mandate to go ahead with it. He will absolutely argue that.

His party won 36% of the total electorate. Barely a third of the

vote. They won next to nothing in Scotland. The worst result since

1865. If he claims 36% or so of the total electorate is a mandate he's

kidding himselfment nobody voted for a decade of austerity. As a

philosophical point, you raise it in the House of Commons when you

questioned him. By 2020 the level of economic activity, let's put it like

that, that the state will have, will have gone down from

Conservatives came into power in come down to the 35% he tried last

year to 36 and a bit % he announced today, these are the spending levels

we haven't routinely seen since the 1930s or 1940s. This is pure

ideology and that's what's driving the cuts. But to some extent it

won't affect Scotland so much, will it? You from next year will probably

have more powers over income tax and raising money in Scotland.

have more powers over income tax and them. And because I've been able to

announce today an improvement in the public finances, the simplest thing

to do is not to phase these changes in but to avoid them altogether. Tax

credits are being phased out anyway as we introduce universal credit. I

set a lower wherever cap in the Budget. The House should know that

helping with the transition means that we will not be within that

lower wherever cap in the first years, but the House should also

know that thanks to our welfare reforms we meet the cap in the later

part of this Parliament. Indeed, on the figures published today, we

still achieved the ?12 billion per year of welfare savings we promised.

We're joined now by the director of the Poverty Alliance, Peter Kelly.

I presume this is great news for you? It is certainly good news. We

attacked the Chancellor when the tax credits changes were announced, so

therefore yeah, we are going to welcome when he completely reverses

them. It is a bit of a surprise but it does suggest what's his strategy

around welfare, what kind of welfare state does this Government want is

this I'm not sure the Chancellor really knows. Let's get your

reservations in a moment. But there is an interesting point there, Alf

Young, because the impression George Osborne had given when he announced

the tax credits was not that he was just going to make cuts in money,

but was challenging the idea that Gordon Brown had, that in times of

recession people automatically get subsidies in effect to keep working

of the it may have had an effect on employment levels in the last

session. Are we to take it that Gordon Brown now agrees with George

Osborne? I'm not going to go that far. What he announced in the budget

in July about progress towards a living wage and increasing the

threshold before people pay income tax, he sees world where a lot of

the people Peter was trying to defend in the fight against the tax,

particularly the working family tax credits, is going to shift in

Osborne's domain into better-paid work through this progression. And

also in the housing changes in England, in terms of the building of

starting homes and subsidised starter homes sold at a discount,

really what he's going to be saying is why should people at the lower

end of the income scale, people who are on what I hope to be more like a

living wage, why should they not also aspire to own their own home

rather than rent from the local authority or housing association?

You said in your phrase, good not great. What are your reservations

about this? Some of the changes announced in July are still

happening, so the freeze on working age benefits, that's still

happening. The loss of the family element in tax credits, as far as I

understand, that's still going. The restriction on children to second

and third child under tax credits, that's still there. That's

legislation that was passed last week. So whilst the big changes, the

tapers and the allowances, are not going to happen, there's still some

fundamental changes. As he said, we are still going to lose ?12 billion

a year out of our welfare spending. Do you think that ?12 billion will

come from indexing or not indexing things rather than actual cuts? It

is a cut to those whose income isn't staying up. But that's where some of

the biggest cuts have been made since 200. That's why we have 50% of

people who are living in poverty in Scotland, living in so-called severe

poverty. That's a big increase on ten years ago. Those changes, not

quite sleight of hand, we all know they are being made, but they are

not the big tax credit changes that were announced. But that's taking a

lot from people who aren't working. He now seems to have given up, the

criticism of the system, that it is subsidised by employers, to keep

people on rather than letting them go, that philosophical argument

seems to have gone away? That part of the argument perhaps has gone

away. The desire to have a smaller welfare state, and particularly to

have a punitive approach to those who aren't in work. That remains.

That's completely unchanged from what we heard today. Thank you Peter

Kelly for that. Now to the Chancellor's

announcement on public finances. It seems they're ?27 billion

better off than they were in July. Well joining me now with

their view on this, is Deputy Director of the Institute

for Fiscal Studies, Carl Emmerson. This seems to be almost a magic

trick, this sudden pierce of ?27 billion. Is it just jiggery-pokery

with the numbers or is there something substantial behind it? It

is important to remember that the ?27 billion underlying improvement

is over several years, it is not per year, and therefore it is not a big

change when Governments are collecting and spending billions of

pounds, you can get these kind of changes. What the example is doing

with this is interesting. He's banked part of it, but the rest is

used on the reversing the tax changes. Robert Peston said he

reckons that overall managed spend ing will be flat over the period of

this Spending Review. Have you come to the same conclusion? The overall

cut to spending isn't that deep. What's deep is the cut to the

unprotected departments. Not as deep as we might have thought before

today, but still deep cuts in terms of day-to-day spending on areas such

as justice, business and transport. Transport in particular, while it's

capital spending is rising its day-to-day spending has been cut

over the next fewer years. These big cuts to individual departments are

because other departmental spending is protected. But if overall it is

flat in real terms, can we say that the age of austerity for now is

over? There isn't any cuts happening to large part of the public sector,

no austerity in terms of the NHS, schools, at least in England. None

for the Defense Department, overseas aid, and none for pensioner benefit,

that's true. But there'll be cuts over justice, transport, where the

cuts will be very deep over the next four years. That's on top of the

cuts we've already had. Carl, sorry to hit you with this question, but

we've been puzzling about what the indicative figures for the Scottish

budget. The new tax powers coming to Scotland, presumably these are

indicative figures. The Government can't say what its grant would be to

Scotland base doesn't know. Clearly we can know under the status quo,

whereas the Government would get money under Barnet for schools and

hospitals, but Scotland can choose to allocate money differently fit

wishes. On the welfare, the cuts to tax credits are going, but there's

still going to be ?12 billion taken from the welfare budget. Where is

that coming from? People are saying it is going to come from the way in

which the index benefits are against inflation, is that right? Most

working age benefits are going to be frozen in cash terms over the next

four years. That's announced back in July. There's going to be

restriction on the amount of benefit you can receive if you have what's

deemed as a large number of children in your family. While the Chancellor

reversed tax credits, he didn't reverse universal credit, so while

existing claimants of tax credits will see in cash terms they won't

experience any cut, people moving on to these benefits in future,

particularly universal credit, they will get less than what they would

have got had the Chancellor not made the announcement back in July.

There's still ?12 billion of welfare cuts the Chancellor is getting there

in the end. Do you think we'll see more of this over the next few

years? We are not in a crisis any more. The economy is growing, not

shrinking. When an economy is growing, as we saw under Gordon

Brown's Chancellorship, the Chancellor can always come up with

unexpected ways to make changes. Some pleasant, positive news over

the next few years will be welcome. Does the Chancellor, if that

happens, does he use it to bank it, which would be perhaps what he

should do, given how large the deficit is? Or will he use the money

he was surprised with and hand it snout Thank you.

He said the so-called vow promising more powers for Scotland had been

delivered. It must be underpinned by a fiscal framework that's fair to

all taxpayers and we are ready now to reach and agreement. The wall is

in the court of the Scottish Government. Let's have a deal that's

fair to Scotland, fair to the UK and that's built to last. We are

implementing the city deal for Glasgow and negotiating deals with

Aberdeen and Inverness too. Of course, if Scotland had voted for

independence, they would have had their own Spending Review this

autumn and with world oil prices falling and revenues from the North

Sea cast by the OB Dr Be down 94%, we would have seen catastrophic cuts

in Scottish public services. But thankfully Scotland remains a strong

part of a stronger United Kingdom. CHEERING.

So the Scottish bloc grant will be over ?30 billion in 2019-20, while

capital spend ing will rise by 1.9 billion through to 2021. UK

Government giving Scotland the resources to invest in it its

long-term future. When you look at the OBR figures for

oil they are quite alarming. I think they are forecasting that oil

revenues will be ?100 million annum for four or five years? Tiny and

with the pool. Fields being decommissioned, the longer term

picture probably looks even worse in some ways. I think I'm right in

saying that the petroleum revenue tax figures are negative. In other

words more money given in subsidy to the oil companies in tax breaks to

clean up exploration than in revenue from them. That's a pressure and I

think there'll be another pressure on the SNP, if money is coming

through on protected service it is like health, an extra ?12 billion

over the life of the Parliament, ?6 billion up front. There's been an

argument in the past about whether all the consequentials from health

have been spent on health in Scotland or used by the SNP to do

other things. If that were to continue, I think there would be

pressure, particularly if there were the kind of problems we've seen at

the new hospital in Glasgow and in other areas of health provision in

Scotland. So there are some pressures in this for the Scottish

Government I think going forward. I just wonder, on oil, whether what we

are seeing, and please disagree with me if I'm wrong, is two things

coming together simultaneous, the fall in oil price, which would

always have a short term effect on revenues, but the coming to the end

of the North Sea oil. I wonder if we are in a situation where even if oil

price went back up for the foreseeable future, because the

costs of exploration and production get higher and higher you need more

subsidies for it, oil revenues never really come back? Absolutely. The

reason oil prices have fallen as high as it is is chronic

overproduction. The north sits in the sea of our sources of bon

feels... Saudi continues to pump like mad to try and stop fracking in

America. On a more general point, where is the vision? The two main

things, I'm knoll going to do what I said on tax credits and I'm not

going to do what you thought I was going to do on the police? He has a

catalogue of visionary language. Today it was return of the builders.

But when you try toage ides what they are actually delivering down

the years there's a lot less delivery than flowery language in

the beginning. We'll be back with you in a moment.

This time last year the Lib Dems were in government -

now they're firmly back on the opposition benches.

Let's get some reaction from them now with David Porter.

I'm joined by Lord Jeremy Purvis from the Liberal Democrats. What did

you make of what George Osborne did today? It was a mixed bag. There are

some areas I think were the wrong direction. But my vote as a Liberal

Democrat member of this Parliament worked against the tax credit cut

and the U-turn is a direct result of the vote I cast in yes the unelected

chamber but yes the chamber of the House of Lords which forced the

Government to think again. You think of all of the 55 or 54 SNP MPs that

there are, their votes were relevant on these issues. The Liberal

Democrats forced the hand of the Government and that means that

people across Scotland are going to be better off as a result. So this

is the new democracy, the new politics, the unelected House of

Lords don't like something, they defeat the UK and the UK Government

changes its mind? The constitution is something I want to change, I

think everybody knows that. As long as we have this system a Liberal

Democrat in Parliament will vote for people on low and Northern Ireland

income tax. This U-turn is a result of the Liberal Democrats vote and I

am proud to have played a part in that. Crudely putting a kilt on the

Spending Review, what's in it for Scotland? I think that in many

respects the choices are over to the Scottish Parliament, because the

reductions are in many respects less than what was anticipated, feared. I

think in some areas though the problems when it comes to the

further tax powers the Scottish Parliament are going to be having,

MSPs are going to have some serious choices to make. That's to the good.

We have to recognise that if we are going to be reversing the trend

under the SNP of cutting health expenditure, lower income tax for

education, we need some very serious policy choices and the SNP do need

to change course. One of the things we've seen south of the border with

perhaps changing on council tax freeze, does the Scottish Government

continue the tax cut for the people in the biggest house in this

Scotland, or do they realise that the system should be fair. I think

the Government in Scotland should be change its course. But the Scottish

Government will be getting more money as a result of the so-called

Barnet consequentials. Health in England will get more, therefore

Scotland will get more. It doesn't have to spend it on health but it

will be getting more money. I hope and my party hopes that the trend on

the SNP government to reduce expenditure, a 0.7% cut in health

expenditure in real terms under the SNP, we want that to be reversed. We

cannot afford for our NHS in Scotland to be starved of funding

under the SNP, so I want a change of direction. The Liberal Democrats

will be doing as much pressure as they can on the Scottish Government,

perhaps similar to what I and my colleagues do for George Osborne,

and get money back back into health in Scotland. Some of the figures,

from what you have deduced, rev flews in devolved Scotland are

perhaps not going to be as much as some people had thought. One of the

technical papers today, the OBR report, forecast of the devolved

revenue, we are moving into a new generation in Scotland in politics

where there's going a be a much bigger tax basket the responsibility

of the Scottish Government. Therefore it is going to be tougher

to secure greater revenue unless we grow the economy, to grow the tax

base, which is making people more prosperous, and turn around public

services is. The OBR warning is clear. The Scottish Government needs

to take this seriously, as they are taxpayers in Scotland as well as

users of the services. We'll be making sure we've got the right

balance going forward. That's probably a conversation for another

day. Thank you. Gordon, it may look sunny here. It is just about to

start bucketing down with rain. I'm going indoors.

Let us talk about what happens now? George Osborne could find himself

with more wriggle room. Does the debate in Scotland move on to OK you

are getting all these powers, what are your taxes going to be? That's

clear from what George Osborne said and the Prime Minister before him.

He had a go at one of the female MPs from the SNP on the topic of it is

up to you now, the ball's in your court. So they have some challenges

there. I think they will struggle to pin the austerity label, which was a

convenient political attack like, on Osborne, since he's done the U-turn

on the working family tax credit cuts he previously proposed. It is a

problem for Labour in Scotland as well isn't it? Their great wheeze is

this idea we'll demand of the Scottish Government, ameliorate the

tax credits cuts in full, and that's gone out of the window. The

leadership in Scotland has had to rethink. Essentially it was the big

idea since Cassia dug gale assumed the leadership, about how much she

would do on that front. It is classic George Osborne, in that he's

put both the governing party... It was described, Stewart Hosie

described it as a humiliating U turn. It was a U-turn. Or is it a

traffic wheeze? I thought George Osborne's expression thought he

thought it was a terrific wheeze. I would call it a U-turn with

politically strategic potential. In what sense? He's forcing them to

find new ground to fight him on. And is producing money they now have to

do something with. The other Scottish battle, the essential one,

is this fiscal framework. The thing that's been a thread throughout the

conversations we've had is how they are going to, with the changes from

the Scotland Bill, how they make that work. To be revolved. Alf

Young, thank you. That's all we have time

for this afternoon. I'm back with Sunday Politics

Scotland on Sunday morning. You were so nervous,

and you've just excelled yourself. This is a good sign, by the way,

when he reacts like this.