26/06/2013 Politics Scotland


26/06/2013

Similar Content

Browse content similar to 26/06/2013. Check below for episodes and series from the same categories and more!

Transcript


LineFromTo

Thank you. Good afternoon. George Osborne House laid out his

:00:09.:00:17.

suspending envelope. More than 11.5 in -- 11.5 William pounds in cuts.

:00:17.:00:23.

We will hear what is in store for the Scottish Finance Secretary and

:00:23.:00:32.

get the political reaction from Holyrood. -- 11.5 billion pounds.

:00:32.:00:41.

Here at Westminster we chew over the Chancellor's handiwork.

:00:41.:00:44.

With me for the next hour in the studio is our political commentator

:00:44.:00:51.

Albert Young and our dismiss and economy editor. Welcome to you both.

:00:51.:00:58.

Alf, what is your reaction? I think a lot of that was trailed in

:00:59.:01:02.

advance, we knew the global number and which department was going to be

:01:02.:01:10.

hit and which would be ring fenced. The bit at the end about the further

:01:10.:01:14.

attack on welfare benefits for those who lose work, and more particularly

:01:14.:01:19.

the idea that in the civil service, at not just here, in the health

:01:19.:01:24.

service, in schools, in prisons and in the police service there will not

:01:24.:01:30.

be any more progression pay. If that is going to happen here in Scotland,

:01:30.:01:38.

there will be a row about that. have been trying to crunch the

:01:39.:01:45.

numbers for Scotland, Douglas. How is it looking? The bits that are

:01:45.:01:51.

used to keep services turning over of nearly 2%, that is applied

:01:51.:01:57.

through the Barnett formula. This year we are talking about, 2015,

:01:57.:02:02.

2016 is down the road, we are looking at 27.5 billion pounds of

:02:02.:02:08.

money available. It is a cut of nearly 2%. The capital budget is

:02:08.:02:13.

increasing quite substantially. 13% and part of that is because there

:02:13.:02:17.

are new powers coming in through the Scotland Act with additional powers

:02:17.:02:24.

coming into Scotland. The Barnett formula takes all the different

:02:24.:02:27.

departmental spending decisions and applies them so local government

:02:27.:02:32.

gets clobbered again. There is a consequential effect on the budget

:02:32.:02:38.

for Scotland. There really the thing that Holyrood spends on, that is

:02:38.:02:40.

health and schools, or ring fenced and largely protected, but only

:02:41.:02:49.

just. Is a little bit of shipping away. Overall, the Scottish budget

:02:49.:02:55.

is yet to be distributed, but that is less bad than we have seen.

:02:55.:03:02.

Fashion mag chipping away. -- chipping away. There are a

:03:02.:03:09.

unorthodox means of getting the budget and progression awards in

:03:09.:03:17.

focus here. The NHS is so big, �110 billion being spent according to

:03:17.:03:22.

today's figures, the effect of protecting all of that means if you

:03:22.:03:27.

have to apply cuts as the government must, then you must apply them are

:03:27.:03:30.

severely elsewhere. That includes local government. What they are

:03:30.:03:37.

talking about for England does not apply here in Scotland yet. It makes

:03:37.:03:42.

a lot of sense in terms of delivery of the services for people who can

:03:42.:03:45.

get stuck between the two systems. We have been talking about it for

:03:45.:03:51.

years. In financial terms, it is significant that the health budget

:03:51.:03:55.

may be getting a little shaved off at the edges in order to help other

:03:55.:04:00.

departments that are suffering. Thank you all stop let us get a

:04:00.:04:08.

straight to some of the reaction here in Scotland. We can speak to

:04:08.:04:11.

the Finance Secretary John Sweeney who has been busy day jesting the

:04:11.:04:21.
:04:21.:04:25.

figures. -- busy day jesting. -- busy assimilating. What are the top

:04:25.:04:30.

line for Scotland? It demonstrates a further reduction in the operating

:04:30.:04:36.

expenditure of the Scottish Government. We have seen that

:04:36.:04:41.

reduced in 2015, 2016. The capital budget is largely flat on the

:04:41.:04:46.

position at the end of 2014, 2015. The UK government is putting in

:04:46.:04:49.

place additional financial measures including robbing that we knew was

:04:49.:04:54.

coming. It will have to be paid back either Scottish Government were we

:04:54.:05:00.

to use these facilities. The Chancellor has set out a clear

:05:00.:05:02.

roadmap of further reductions in public expenditure that will go all

:05:02.:05:10.

the way through to 2017, 2018 and it demonstrates that the power of the

:05:10.:05:14.

United Kingdom is on is one of austerity and budget reduction. It

:05:14.:05:17.

Scotland stays part of the United Kingdom that is exactly what we will

:05:17.:05:24.

get. The Chancellor was clear about the reasons for austerity. He

:05:24.:05:28.

pointed out some departments are being cut by 10% but Scotland is

:05:28.:05:35.

having a 2% cut, so we are getting off relatively lately? That is

:05:35.:05:45.
:05:45.:05:45.

related to the Barnett formula. Let us not be in any way deceived by

:05:45.:05:50.

this. It represents a reduction in public expenditure into 2015, 2016

:05:50.:05:54.

and that is not something that has happened in one year. We have in

:05:54.:06:00.

dealing with this since 2010, 2011. The capital budget has come down by

:06:00.:06:06.

25%, between 2010 and 2015. We have seen reductions in our operating

:06:06.:06:11.

budget by 7% over the same period. We are dealing with significantly

:06:11.:06:15.

reduced public expenditure. If the Chancellor wanted to do something

:06:15.:06:21.

about that he should have invested to expand and grow the economy. He

:06:21.:06:27.

has burrowed over 275 billion pounds more than he expected simply to did

:06:27.:06:31.

with the costs of failure within the economic policy over which he has

:06:31.:06:38.

precise and that is a terrible economic legacy. He said he had to

:06:38.:06:43.

ride the rough waves of the eurozone crisis and the rising oil prices. He

:06:43.:06:53.
:06:53.:06:53.

said he was trying to inject growth into the economy. In 2015, 20 62,

:06:53.:06:56.

you will have capital spending projects and spend three points

:06:56.:07:01.

three billion pounds. That is a product of the Barnett formula. We

:07:01.:07:05.

are getting to facilities, financial transactions which we will have to

:07:05.:07:11.

pay back, borrowing facilities which we will have to pay back, but the

:07:11.:07:15.

traditional core capital budget is remaining flat at a much reduced

:07:15.:07:22.

level and a level that is 25% lower than it was in 2010, 2011. In

:07:22.:07:28.

Scotland, we are delivering better economic news. We have rising

:07:28.:07:33.

employment and falling unemployment. The economic developments and

:07:33.:07:36.

positive pieces of economic news in the United Kingdom have emanated

:07:36.:07:42.

from the you -- the economic performance of Scotland. We have

:07:42.:07:44.

taken a different economic approach than the Chancellor of the

:07:44.:07:49.

Exchequer. What we are concerned about is the good investments that

:07:49.:07:54.

we have been making will be thwarted in the actions of the UK government

:07:54.:07:58.

who are determined to inflict more austerity on the people of Scotland.

:07:58.:08:01.

The Chancellor hopes to end the automatic pay increases for public

:08:01.:08:07.

sector workers. That will applied to the UK public sector workers based

:08:07.:08:10.

in Scotland. What about public sector workers when it comes to the

:08:10.:08:13.

Scottish Government, the ones you control, such as the NHS and the

:08:13.:08:20.

police? Do you foresee an end to automatic pay rises for them?

:08:20.:08:24.

Scottish Government takes all its decisions overpay seriously. The

:08:24.:08:28.

government will consider all of the issues about public sector pay

:08:28.:08:32.

policy as we do within the context of the resources we have available.

:08:32.:08:37.

One of the most important thing is I think has to be remembered at this

:08:37.:08:43.

time, is as we try to reform public services, to adjust public services

:08:43.:08:46.

to the changing financial landscape, we have got to make sure we take the

:08:46.:08:51.

workforce with us. That is the spirit that the Scottish Government

:08:51.:08:55.

will take forward as we address these issues and address the further

:08:55.:08:58.

reductions in our budget that we face. Forgive me for

:08:58.:09:04.

interrupting... We must have a responsible pay policy that we can

:09:04.:09:09.

afford. If you want to take public sector workers with you it sounds

:09:09.:09:15.

like you will not be implementing this procedure. As I said, we will

:09:15.:09:18.

resolve the pay issues when it comes to the setting of the budget in

:09:18.:09:23.

September. I think anyone that wants to take forward a serious programme

:09:23.:09:27.

of public sector reform, which the Scottish Government is currently

:09:27.:09:33.

doing, must recognise that they must take the workforce with them. We

:09:33.:09:38.

will be mindful of that. Tough new rules when it comes to job-seekers?

:09:38.:09:43.

You must wait seven days before you can claim and you must learn how to

:09:43.:09:49.

speak English. What is your reaction? These are indicative of

:09:49.:09:52.

the approach that has been taken on the wider welfare agenda within the

:09:52.:09:59.

UK government. One of the problems in the UK is that they must satisfy

:09:59.:10:04.

themselves to reduce budgets at the UK level but they move the Scottish

:10:05.:10:08.

Government -- the problems onto the Scottish Government under local

:10:08.:10:12.

authority partners. We are dedicated to giving people the support they

:10:12.:10:17.

require, because by getting them into employment, we can create

:10:17.:10:21.

economic opportunities and growth that lead to long-term economic

:10:21.:10:24.

sustainability and that is how we tackle the issues in our public

:10:24.:10:33.

finances. Thank you. We will recapture some of the main

:10:33.:10:37.

point is that the Chancellor outlined. There are cuts of 11.5

:10:37.:10:41.

early in pounds and some departments are protected including schools and

:10:41.:10:45.

health and overseas aid. That will have a knock-on effect on the money

:10:45.:10:49.

allocated to Scotland. The Chancellor got to his feet over two

:10:49.:10:53.

hours ago and started by detailing why the government is carrying out

:10:53.:10:57.

this policy. We act on behalf of everyone who knows that Britain must

:10:57.:11:03.

live within its means. We have applied three principles to the

:11:03.:11:07.

spending round I set out today. Reformed to get more from every

:11:07.:11:13.

pound we spend, growth to get Britain the education, enterprise

:11:13.:11:17.

and economic infrastructure it needs to win the global race and

:11:17.:11:23.

fairness, making sure we are all in it together, by ensuring those with

:11:23.:11:30.

the broadest shoulders the largest burdens. We must make sure the

:11:30.:11:32.

unfairness of the something for nothing culture in our welfare

:11:32.:11:38.

system is changed. We are reforming pay in the public sector and holding

:11:38.:11:46.

down pay awards. Public sector pay rises will be limited to an average

:11:46.:11:50.

about two 1% for 2015, 2016. The biggest reform we make on page is to

:11:50.:11:55.

automatic regression paid. This is the practice were many employees not

:11:55.:12:02.

only get a pay rise every year, but also automatically move up a pay

:12:02.:12:06.

grade every single year, regardless of performance. Some public sector

:12:06.:12:12.

employees see annual pay rises of 7%. Progression pay can best be

:12:12.:12:16.

described as antiquated. At worst it is deeply unfair to other parts of

:12:16.:12:21.

the public sector who do not get it. The private sector must pay for it

:12:22.:12:26.

so we will end automatic regression pay in the civil service by 2015,

:12:26.:12:31.

2016. Because we have prioritised health and schools in England, this

:12:31.:12:37.

leads through the Barnett formula to require resource savings of around

:12:37.:12:40.

2% in Scotland, Wales and Northern Ireland. The Scottish resource

:12:40.:12:45.

budget will be set at 25 points �7 billion in Scotland will benefit

:12:45.:12:50.

from new capital borrowing powers of almost �300 million. Being part of

:12:50.:12:54.

the United Kingdom means Scotland will see its capital spending power

:12:54.:13:00.

increase by almost 13% in real terms in 2015, 2016. It is for the

:13:00.:13:05.

Scottish Parliament to decide how best to use it, that is devolution

:13:05.:13:13.

within a United Kingdom, delivering the results. Separately we will make

:13:14.:13:18.

10% savings to the Scotland, Wales and Northern Ireland offices. We

:13:18.:13:22.

will introduce a welfare cap to control the costs of the welfare

:13:22.:13:27.

bill. We will cap the system as a whole. Under the system we

:13:27.:13:32.

inherited, welfare was put into a category called annually managed

:13:32.:13:38.

expenditure, but it was not managed at all. It increased by a staggering

:13:39.:13:45.

50% even before the crash. Our welfare cap. That happening again.

:13:45.:13:52.

The cap will be set each year of the budget for four years. It will

:13:52.:13:57.

reflect forecast inflation, but it will be set in cash terms. In

:13:57.:14:01.

future, when a government looks to reach the cap because it is failing

:14:01.:14:08.

to control welfare, the OBE are will issue a warning and the government

:14:08.:14:16.

will be forced to take action and explain that to Parliament. A small

:14:16.:14:24.

number of the most psychical benefits will be preserved --

:14:24.:14:30.

cyclical. Pensioner benefits will all be included, but the state

:14:31.:14:40.
:14:41.:14:41.

pension will not be. I have representations that we should

:14:41.:14:45.

include the basic state pension in the welfare cap. That would mean

:14:45.:14:49.

that a future government can offset a rise in working age benefits by

:14:49.:14:54.

cutting the pensions of older people. That penalises people who

:14:54.:14:59.

worked hard all their lives, cutting pensions to pay for working age

:14:59.:15:04.

benefits is a choice this government is certainly not prepared to make.

:15:04.:15:08.

It is unfair, we won't do it and we rejected those representations

:15:08.:15:16.

completely. Half of all job-seekers need more help looking for work, so

:15:16.:15:20.

we will require them to come to the job centre every week rather than

:15:20.:15:27.

once a fortnight. We will give people more time with job centre

:15:27.:15:32.

advisers and proper progress reviews every three months, and we are going

:15:32.:15:36.

to introduce a new seven-day wait before people can claim their

:15:36.:15:41.

benefits. Those first few days should be spent looking for work,

:15:41.:15:47.

not looking to sign on. We do these things because we know they help

:15:47.:15:50.

people stay off benefits and help those on benefits get back into work

:15:50.:15:58.

faster. And here is a further change: From now on if claimants do

:15:58.:16:03.

not speak English they will have to attend language courses until they

:16:03.:16:08.

do. This is a reasonable requirement in this country. It will help people

:16:08.:16:11.

to find work, but if you are not prepared to learn English your

:16:11.:16:17.

benefits will be cut. Taken together, this new contract with

:16:17.:16:23.

people on benefits will save over �350 million each year and all that

:16:23.:16:27.

money will enable us to afford extra support to help people get into

:16:27.:16:34.

work. Helped to work, incentives to work and an expectation that people

:16:35.:16:39.

should do everything they can to find work. That is there for people

:16:39.:16:44.

out of work and it is fair for people in work who pay for them. The

:16:44.:16:49.

decisions we take today are not easy and these are difficult times, but

:16:49.:16:54.

with this statement we make more progress towards an economy that

:16:54.:16:59.

prospers, a state we can afford, a deficit coming down and a Briton on

:16:59.:17:08.

the rise and I commend this economic plan to the country. -- Britain.

:17:08.:17:12.

We will have more analysis right here, but first let's pick up on the

:17:12.:17:17.

interview with John Swinney we just had. He was not saying he would

:17:17.:17:22.

commit to ending the automatic pay increase. It sounded like he wasn't

:17:22.:17:27.

going to do it, at maybe that was just him. Young Mike it wasn't in

:17:27.:17:32.

keeping with every other -- It wasn't in keeping with every other

:17:32.:17:38.

challenge we have had. Generally they said we don't want to do this,

:17:38.:17:43.

sometimes we have to, or we will protect you from the nutty things

:17:43.:17:49.

happening in London. He is still not being clear. I wouldn't wish to

:17:49.:17:55.

guess which way he is going to jump in September. This wouldn't apply

:17:55.:18:05.

for UK reserved power workers, for example in the DWP and MoD. If it

:18:05.:18:10.

applies also to the devolved powers, the NHS, police and local

:18:10.:18:16.

government, they are separately negotiated, we would probably get a

:18:16.:18:21.

signal in the draft budget from John Swinney in September. He is trying

:18:21.:18:27.

to balance being affordable and responsible. Affordable is getting

:18:27.:18:31.

very tight at the moment. At the same time, he doesn't want a fight

:18:31.:18:35.

with the public sector unions. George Osborne has more appetite for

:18:36.:18:40.

a bit of aggression in dealing with the public sector unions. The other

:18:40.:18:47.

area we touched on what the spending on capital projects. �3.3 billion

:18:47.:18:55.

for 2015/16. Mr Swinney was very critical. He is going to have to

:18:56.:19:01.

borrow a bit of it anyway. He will be more reluctant to commit to

:19:01.:19:04.

borrowing because that will add to his longer term problems about

:19:04.:19:10.

fiscal credibility, whether to be an independent Scottish government. I

:19:10.:19:17.

think both sides have a problem. Thank you very much. Let's just get

:19:17.:19:21.

some political reaction to the Spending Review at Holyrood. I am

:19:21.:19:24.

joined by the leader of the Scottish Liberal Democrats Willie Rennie,

:19:24.:19:32.

Kevin McIntosh and Conservative spokesperson Simon Brown. I know you

:19:32.:19:35.

are joining us before the division bell goes, you are voting this

:19:35.:19:43.

afternoon. Let's get some Scottish Labour reaction to this. The

:19:43.:19:51.

Chancellor Berry critical of the Labour left. -- very critical.

:19:52.:19:55.

quite unbelievable. It is a disaster for Scotland and the rest of the

:19:55.:20:00.

UK. This is the same approach the Chancellor took five years ago. He

:20:00.:20:03.

said the problems caused by the deficit when it was caused by

:20:03.:20:08.

demand. He said that by increasing public spending that would Frink the

:20:08.:20:16.

deficit and grow the economy. -- shrink. The economy hasn't grown and

:20:16.:20:19.

unlike every other country in the Western world we are still stuck in

:20:19.:20:24.

recession. Instead of changing his policy he is doing the same thing

:20:24.:20:29.

all over again and he says that austerity is going to work. I don't

:20:29.:20:35.

know what has to go wrong for the Chancellor to rethink his approach.

:20:35.:20:40.

George Osborne has not shrunk the deficit. The economy is not

:20:40.:20:45.

growing. What is the problem? to disappoint Kevin McIntosh but he

:20:45.:20:51.

has trumped the deficit. It was 11% when he took office, it is now the

:20:51.:20:59.

tween seven and 8%. He has succeeded -- between seven and 8%. The growth

:20:59.:21:06.

is disappointing but unemployment is far lower than was predicted. He is

:21:06.:21:11.

getting the basics right but it is taking longer than predicted, and

:21:11.:21:18.

that is disappointing. He has cut the deficit by one third. Willie

:21:18.:21:21.

Rennie, the Democrats are all in this together with the

:21:21.:21:25.

Conservatives. We heard from Vince Cable holding out from cuts to his

:21:26.:21:34.

department. Then he caved in and accepted the cuts. Are you taking on

:21:34.:21:38.

Ken Macintosh's criticisms that George Osborne's policies are not

:21:38.:21:47.

working? The independent commentators see that the economy is

:21:47.:21:50.

recovering. It isn't me that is saying that, it is independent

:21:50.:21:56.

commentators. The deficit is coming down. This is Spending Review in

:21:57.:22:01.

that context is not significant. It is a small amount in comparison to

:22:01.:22:05.

the big achievements that have been made in recent months. We are not

:22:06.:22:12.

complacent, there is more to do, but Ken should be a bit cheery about the

:22:12.:22:19.

gains that have been made because things are getting better. All your

:22:19.:22:24.

colleagues are going up the steps to vote, we will let you go up there as

:22:24.:22:31.

well. Thank you very much. At the heart of it is our political

:22:31.:22:37.

correspondent, who has been standing by. Thank you for joining me. George

:22:37.:22:44.

Osborne, a 50 minute long speech. How do you think this will go down

:22:44.:22:51.

at Minster with the backbenchers and also the Labour Party? I think the

:22:51.:22:54.

Tory backbenchers will be very pleased. Labour will find things to

:22:54.:23:03.

criticise. Essentially it is a carrot and stick policy. There will

:23:03.:23:09.

be �11.5 billion of spending cuts in the financial year 2015/16. Why is

:23:09.:23:17.

that unimportant? Well, the financial year 2015/16 starts in

:23:17.:23:20.

April 2015 and that will be the last year of the present Parliament. The

:23:20.:23:27.

future cuts will take place in the first year of the new parliament.

:23:27.:23:33.

Many in Parliament agree the austerity programme will continue

:23:33.:23:39.

past 2015. The government that takes power will have to make more cuts

:23:39.:23:45.

along the line and those may be quite deep cuts. We may get to the

:23:45.:23:50.

point when the Chancellor feels they can no longer do it with spending

:23:50.:23:55.

cuts and there may be tax increases coming in along the line as well.

:23:55.:24:01.

That is all for the future. The stick apart, as most people were

:24:01.:24:09.

expecting, we won't welcome it. The carrot part is more money for

:24:09.:24:11.

infrastructure spending. For Scotland a large part of that will

:24:11.:24:17.

be seeing, we will give you the power to borrow extra money. You

:24:17.:24:21.

want these capital projects, you go out and get the money, you finance

:24:21.:24:26.

them, you do what you say you've been wanting to do. Now you have the

:24:26.:24:33.

power. This is for 2015/16. Who knows who could be in government

:24:33.:24:39.

then. It is interesting he has decided to have this now. Perhaps he

:24:39.:24:44.

is setting a time bomb for whoever is at number ten down the line. Ed

:24:44.:24:53.

Balls is having none of it. He made a Jeffrey, George and bungled

:24:53.:25:03.
:25:03.:25:04.

joint, referring to the characters in Rainbow. -- joke. I don't think

:25:04.:25:09.

it is a state secret if I told you that Ed Balls and George Osborne are

:25:10.:25:16.

hardly bosom buddies. They speak out against each other every time the

:25:16.:25:26.
:25:26.:25:27.

meat in Parliament. -- they meet. It is only for one year, 2015/16. He

:25:27.:25:32.

didn't have to hold a Spending Review, he could have done it next

:25:32.:25:36.

year, but what he is trying to do by invoking what the government will

:25:36.:25:41.

spend in that year 2015/16, he is laying out the rabbit is

:25:41.:25:51.
:25:51.:25:53.

economically for the next election. -- programme that is -- parameters.

:25:53.:26:01.

If you are going to be bound by these parameters, this week will be

:26:01.:26:07.

pivotal in moving towards the general election. We are to years

:26:07.:26:11.

away from the general election but already we are starting to see the

:26:11.:26:15.

ground being laid for that. We will be back with you shortly, thank you

:26:15.:26:20.

very much. The leader of the opposition has a

:26:20.:26:26.

right of reply, but at the Spending Review it is the Shadow Chancellor

:26:26.:26:33.

Ed Balls. He spoke for 50 minutes but not once did he mention the

:26:33.:26:40.

reason for this Spending Review. His comprehensive failure on living

:26:40.:26:47.

standards and the deficit. Prices rising faster than wages, families

:26:47.:26:54.

worse off, long-term unemployment up, welfare spending soaring, the

:26:54.:27:01.

economy flatlining, the slowest recovery for over 100 years. The

:27:01.:27:11.
:27:11.:27:11.

budget boasts, but borrowing went up, not down. He did not balance the

:27:11.:27:17.

books, a deficit of �96 billion. More borrowing to pay for his

:27:17.:27:22.

economic failure. That is why this Chancellor has been forced to come

:27:22.:27:28.

to the house today to make more cuts to our public services. Mr Speaker,

:27:29.:27:33.

that we ask the Chancellor. Does he recall what he said to this house

:27:33.:27:39.

two years ago? He said, we have already asked the British people for

:27:39.:27:45.

what is needed and we do not need to ask for more. We do not need to ask

:27:45.:27:51.

for more. Isn't his economic failure the reason why he is back here

:27:51.:28:01.
:28:01.:28:02.

asking for more today? More cuts to the police, more cuts to local

:28:02.:28:04.

services, this out of touch Chancellor has failed on living

:28:05.:28:08.

standards, growth and the deficit and families and businesses are

:28:08.:28:14.

paying the price for his failure. Of course, Mr Speaker, it wasn't

:28:14.:28:19.

supposed to turn out like this. Let me ask the Chancellor of the

:28:19.:28:24.

Exchequer, does he remember what he told the House three years ago in

:28:24.:28:30.

his first budget and Spending Review? He said, the economy would

:28:30.:28:37.

grow by 6%. It has grown by just 1%. He pledged to get the banks lending,

:28:37.:28:43.

but bank lending is down month on month. He failed the number one test

:28:43.:28:50.

of his economic credibility, heaping the triple-A credit rating. --

:28:50.:28:56.

keeping the triple-A credit rating. He promised living standards would

:28:56.:29:01.

rise but they are falling year on year. He said we are all in this

:29:01.:29:08.

together but then he gave a huge tax cut to millionaires, Mr Speaker. He

:29:08.:29:11.

promised to balance the books and that promise is in tatters. Failed

:29:11.:29:19.

tests, broken promises, his friends call him George. The President calls

:29:19.:29:29.
:29:29.:29:32.

on Jeffrey. To everyone else, he is just Bungle! That was the comment

:29:32.:29:39.

from Ed Balls. The criticism of the Chancellor has been if you look at

:29:39.:29:44.

many of his comments on social media, is that they want to cut

:29:44.:29:48.

capital spending in 2010, that was one of their efficiency savings. Now

:29:48.:29:54.

in 2013, we are looking at 2015, 2016 when the capital budgets are

:29:54.:30:02.

going up. He wanted a quick hit as governments always do. They took one

:30:02.:30:09.

quarter out of the capital budget. As John Swinney said, governments

:30:09.:30:14.

are bad at delivering infrastructure. Ed Miliband was

:30:15.:30:24.
:30:25.:30:28.

having fun today. In areas like school building and housing, large

:30:28.:30:34.

numbers of project announced to years ago. He has delivered a

:30:34.:30:43.

fraction of these. In Scotland we have had a lot of talk about

:30:43.:30:49.

infrastructure. It has taken a long time to get into a rhythm and

:30:49.:30:58.

producing new programmes for school buildings and so forth. The idea

:30:58.:31:03.

that it all has an impact, and it makes things different and we

:31:03.:31:08.

recover growth -- growth because we build things, the rhetoric is one

:31:08.:31:15.

thing, the reality and delivering something else. Is George Osborne

:31:15.:31:21.

secretly pursuing a different course of action? He is trying to put more

:31:21.:31:28.

money into capital spending. As we have seen, the boosting of Scotland

:31:28.:31:31.

is as a result of the Scottish Government getting powers to borrow.

:31:31.:31:37.

South of the border, he has got to show that he can deliver on this. It

:31:37.:31:43.

is not happening. It is not now, it is in two years time. Thank you very

:31:43.:31:48.

much. The spending review was preceded by Prime Minister's

:31:48.:31:55.

Questions. As Alf was pointing out, as Ed Miliband and David Cameron

:31:56.:32:02.

clashed, they talked about infrastructure projects. He said he

:32:02.:32:05.

wanted to bring forward every single infrastructure project in the

:32:05.:32:13.

pipeline. Add a 576 project set out, how many have been completed?

:32:13.:32:19.

You cannot build a nuclear power station overnight! They had 13 years

:32:19.:32:26.

and they did not build a single one. Let me give him the figures. There's

:32:26.:32:31.

government is electrifying more than 300 miles of railway track. Perhaps

:32:31.:32:35.

he could tell us how many were electrified under the Labour Party?

:32:35.:32:42.

Nine miles. That is the record. Prime Minister promised to balance

:32:42.:32:47.

the books but rolling was up last year. He said we are all in it

:32:47.:32:50.

together but living standards are falling. He must to get holding

:32:50.:32:56.

Britain, they have not. All you need to know about this Spending Review

:32:56.:33:01.

is that British people are paying the price for their failure.

:33:01.:33:11.
:33:11.:33:13.

Speaker, let us remember what the Leader of the Opposition said at the

:33:13.:33:16.

time of the last Spending Review. He told us unemployment would go up, it

:33:16.:33:23.

has gone down. He told us crime would go up it has gone down. He

:33:23.:33:27.

told us who are students would not go to university, the percentage has

:33:27.:33:31.

gone up and he told us that the immigration policy would not work

:33:31.:33:41.
:33:41.:33:41.

but we have cut immigration by one third. That is what we have done.

:33:41.:33:43.

The Prime Minister told the Conservative Party conference that

:33:43.:33:48.

in five years time we will have Alan is the books. That promise will be

:33:48.:33:53.

broken, isn't it Prime Minister? have cut the deficit by one third

:33:53.:33:57.

and we will conduct further by the next election. Frankly, coming to

:33:57.:34:01.

this House and complaining about borrowing when you have got plans to

:34:01.:34:06.

put it up is a pretty odd political strategy. That is the question he

:34:06.:34:10.

must ask his front bench. Why, if borrowing is a problem, is Labour

:34:10.:34:16.

policy to put it up? Last week the Prime Minister said that people on

:34:16.:34:20.

these benches had forgotten about the bedroom tax but I can assure him

:34:20.:34:26.

my constituents have not. In my city last week, only 23 one bedroomed

:34:26.:34:36.
:34:36.:34:36.

homes were available to rent. Of those, four of them had over 200

:34:36.:34:39.

applicants. When is the Prime Minister going to admit that this is

:34:39.:34:45.

not the best way of reducing the housing benefit will? The point I

:34:45.:34:49.

would make to the honourable lady is that we are removing the spare room

:34:49.:34:53.

subsidy because it is right to be fair to people in private rented

:34:53.:34:56.

accommodation and those in socially rented accommodation at this in the

:34:56.:34:59.

way is the perfect value to the Spending Review we are going to hear

:35:00.:35:05.

about. Labour have told us they will be responsible about spending and

:35:05.:35:09.

they will accept the cuts that have made. We hear constantly, bag

:35:09.:35:12.

venture after backbencher and frontbench after frontbench,

:35:12.:35:16.

complaining about the difficult decisions we have had to take and

:35:16.:35:20.

promised to reverse them. They have no credibility.

:35:20.:35:24.

We stay at Westminster and David Court -- Porter has some company on

:35:24.:35:33.

College Green. The Chancellor has had his say and so has Ed Balls.

:35:33.:35:38.

What do others think? Let's find out. I am joined by three members of

:35:38.:35:44.

Parliament. We have a Conservative, a labourer, and an SNP

:35:44.:35:49.

representative. Good afternoon. However you dress this up, Scotland

:35:50.:35:56.

is facing cuts. This is a good deal for Scotland. We have additional

:35:56.:36:02.

capital funding of �3.3 billion, increased borrowing powers which the

:36:02.:36:05.

Scottish Government has asked for and they have been telling us they

:36:05.:36:10.

have got these projects at the ready. This is the opportunity to

:36:10.:36:18.

get out and buy shovels and yet shovelling! The ground for Scotland

:36:18.:36:23.

is going down? It is not going down in comparison to the level of cuts

:36:23.:36:27.

experienced by other departments. The Scottish budget has been

:36:27.:36:34.

protected by decisions made at Westminster. There will be a real

:36:34.:36:39.

terms cut of only 0.1%. I do not think in the environment we are in

:36:39.:36:42.

and the reality of cuts we are experiencing, that could become

:36:42.:36:52.
:36:52.:37:03.

claimed about. But obviously the SNP will try and do so. There are cuts

:37:03.:37:06.

but not as bad as England? Chancellor was forced to come to the

:37:06.:37:08.

chamber and admit his fundamental failures. This is an economic

:37:08.:37:11.

crisis. He said... He has failed in all his key tests, there is a crisis

:37:11.:37:14.

in wages and he needs to take the International Monetary Fund advice

:37:14.:37:17.

about stimulating the economy. That is where this government has failed.

:37:17.:37:22.

Let us put this on the record. At the Labour government came in in

:37:22.:37:27.

2015, you would abide by the spending cuts? The government is

:37:27.:37:32.

trying to avoid the issue. We need to borrow now to get the economy

:37:32.:37:39.

moving and get infrastructure building. We are not denying as the

:37:39.:37:42.

SNP sometimes do that you can sometimes forget all of this and

:37:42.:37:46.

there are no difficult challenges. We will always be honest about this

:37:46.:37:52.

but we cannot take try of the ball and we need action now. The UK

:37:52.:37:56.

coalition government says it will give you the power to borrow more.

:37:56.:38:02.

Get those shovels and get them working! We have just come off the

:38:02.:38:06.

back of the last Spending Review which is a 25% cut in capital

:38:06.:38:13.

spending and a 6-point fight card in revenue spending. We have a further

:38:13.:38:17.

cut in revenue spending. In terms of the additional money, such as it is,

:38:17.:38:21.

in capital, that is additional arrowing which is currently agreed

:38:21.:38:28.

and it said that all the money announced at the budget... What we

:38:28.:38:34.

needed from the Chancellor, across the UK, was our proper stimulus to

:38:34.:38:39.

the economy to kick-start it and get it going, but he failed. He has

:38:39.:38:45.

failed to learn the lessons of his own mistakes. He has failed and what

:38:45.:38:50.

we got today will fail again. power comes responsibility. You have

:38:50.:38:53.

the power to borrow. The UK government and I suspect the Labour

:38:53.:39:01.

Party, will say could your financial mouth were you want it and go

:39:01.:39:11.
:39:11.:39:13.

forward and bring these projects. must deliver projects, but this is

:39:13.:39:17.

not about capital spending in Scotland, it is about all of the UK.

:39:17.:39:22.

We have had massive posterity for the past three years. He said the

:39:22.:39:26.

pace will continue until 2018 and this was the yacht -- parole policy

:39:26.:39:36.
:39:36.:39:39.

prescription. He needs to practice what he preaches. For example, we

:39:39.:39:43.

have had a fall in house building completions. The housing budget has

:39:43.:39:51.

been cut. Economic experts will tell you you must build houses to get the

:39:51.:39:59.

economy moving. The SNP has led the Scottish people down very badly.

:39:59.:40:06.

This is typical Labour. You let the Conservative Party offer. The SNP

:40:06.:40:09.

are failing badly in Scotland because they are doing for the

:40:09.:40:11.

Conservative Party is doing across the rest of Britain. They are not

:40:11.:40:21.
:40:21.:40:22.

investing. These two guys sometimes look the same to me! I am not

:40:22.:40:29.

advocating more borrowing and more spending or debt. The prescription

:40:29.:40:33.

market this was the prescription that got us into this. Labour caused

:40:33.:40:39.

problems to the economy. If they address that, perhaps they could

:40:39.:40:44.

have some credibility on this issue. The economy is failing because of

:40:44.:40:47.

the state that you left it in and now we have no clarity on what you

:40:47.:40:52.

want to do about it. One day your leader announces that he is going to

:40:52.:40:57.

be tough on borrowing, the next day Ed Balls, who just seems to be able

:40:57.:41:03.

to say and do what he wants, announces something else. It is

:41:03.:41:07.

likely that whoever wins the next general election, there will be more

:41:08.:41:13.

pain to come, isn't there? We are in a difficult global environment to

:41:13.:41:17.

try and transform what is happening. We have issues and instability in

:41:17.:41:24.

the Eurozone. There are issues in China and in the Far East as well.

:41:24.:41:27.

We are going to be in a difficult situation and we are not ignoring

:41:27.:41:32.

that. What we have made clear to people across the United Kingdom is

:41:32.:41:36.

what we are going to do. It will now be for a Labour and other political

:41:36.:41:42.

parties to set out what they will do. In terms of Scotland, what the

:41:42.:41:46.

Scottish National Party and the Scottish Government needs to do,

:41:46.:41:54.

they need to get on with the projects that they said were ready.

:41:54.:41:59.

Looking ahead to 2015 and whoever wins the general election, they have

:41:59.:42:04.

lots and stark choices to make. There is no doubt it will be

:42:04.:42:11.

difficult. We need a different prescription of the way forward for

:42:11.:42:14.

all the people across the United Kingdom. But do not let that divert

:42:14.:42:20.

you from the need to take action now. This government must produce a

:42:20.:42:24.

viable economic plan. It needs to stimulate the economy, and cutting

:42:24.:42:29.

your way through everything is not the answer. We do recognise there

:42:29.:42:34.

will be real difficulties with spending. The best way to spend that

:42:34.:42:40.

is by growth. That must be faced. Whatever happens with the Scottish

:42:40.:42:45.

referendum next year has -- as far as Westminster is concerned, 2015

:42:45.:42:49.

general election, whoever gets here must give the UK some nasty

:42:49.:42:57.

medicine? Not necessarily. The last Labour government and this

:42:57.:43:02.

Conservative government had fundamentally the same plant, a

:43:02.:43:05.

deficit consolidation strategy over a fixed timescale that did not leave

:43:05.:43:13.

room to manoeuvre. There have been extenuating external factors such as

:43:13.:43:18.

Greece. Whoever wins the next election must reset the entire

:43:18.:43:23.

strategy. They must have a long-term strategy. I hope this is the last

:43:23.:43:27.

Westminster Spending Review Scotland has to supper. We will leave it

:43:27.:43:37.
:43:37.:43:39.

there. Thank you Albury much. -- thank you all very much. Thank you

:43:39.:43:44.

very much for that. Our political editor Brian Taylor has been

:43:44.:43:50.

crunching through the figures as well. Let's get his analysis. We

:43:50.:43:57.

were just hearing David say that Scotland's budget is being protected

:43:57.:44:01.

in comparison to some of the other budgets that are facing cuts of 10%,

:44:01.:44:09.

but there is still a cut of 2%. relative terms by comparison with

:44:09.:44:16.

some individual Whitehall cuts, 2% is less than that. You must regard

:44:16.:44:20.

the Scottish position in two ways. Scotland is affected by the overall

:44:20.:44:27.

UK changes, particularly those changes in welfare. Then you have

:44:27.:44:37.

the secondary element, the cuts to the direct Scottish budget. In

:44:37.:44:43.

England health and schools are relatively protected and they are

:44:43.:44:49.

large part of the Scottish budget, they are protected. John Swinney

:44:49.:44:55.

says it is a relative standstill comparatively. The money that is

:44:55.:45:03.

available, he says, is borrowing that will need to be paid back. This

:45:03.:45:13.
:45:13.:45:16.

is the advantage and Scotland should take the opportunity. The issue of

:45:16.:45:22.

pay, public sector pay is an issue. This is a large part of the

:45:22.:45:28.

Chancellor's strategy for stopping these automatic progressions

:45:28.:45:32.

year-on-year. John Swinney must decide whether he will replicate

:45:32.:45:36.

that or find some squeeze out of his existing budget to make it look a

:45:36.:45:41.

bit better. My guess is he will try to make it look better for Scottish

:45:41.:45:46.

public sector workers. Why? Because it fits with his general strategy

:45:46.:45:53.

and because of the matter of the referendum next year. There was a

:45:53.:45:58.

hint that we were getting here, no commitment but a hint. You mention

:45:58.:46:05.

the referendum. How does this play politically, because this is for

:46:05.:46:12.

2015/16 and there is the Scottish Parliament are action -- election in

:46:12.:46:19.

2016. People will be feeling disquieted by September 2014,

:46:19.:46:26.

dealing anxious about the economy. Will stop make them -- will that

:46:26.:46:33.

make them less likely to vote for change or will they look at it as an

:46:33.:46:42.

opportunity for Scotland to move out from under the wing of Westminster.

:46:42.:46:47.

I think this issue of blame or responsibility rather than blame

:46:47.:46:51.

will be a critical factor in the referendum. People attach

:46:51.:46:56.

responsibility and thus the blame to either the Scottish Government or

:46:56.:47:03.

Westminster, and that will be key. The Secretary of State for Scotland,

:47:03.:47:07.

Michael Moore, has been making 10% cuts to his own department. David

:47:07.:47:15.

Porter has been speaking to him. Chancellor has now sat down and MPs

:47:15.:47:19.

are getting a chance to distil what's the Spending Review means for

:47:19.:47:24.

them. What does it mean for Scotland? Thank you for joining us,

:47:24.:47:27.

Michael Moore. It is a simple question, what does this mean for

:47:27.:47:35.

Scotland? We get a huge increase in the capital budget for Scotland, a

:47:35.:47:41.

13% increase, which is great news for investing in Scottish capital

:47:41.:47:46.

projects and infrastructure. Here we are delivering for them. The

:47:46.:47:51.

Scottish budget is generally protected because a decision has

:47:51.:47:56.

been taken at a UK level to protect health and schools. It is a very

:47:56.:48:04.

difficult economic background, here we are making long-term decisions.

:48:04.:48:13.

Extra spending on investment, in financial terms what will it be?

:48:13.:48:16.

will be �296 million of new borrowing powers introduced by last

:48:16.:48:23.

year's Scotland Act. That gives the Scottish Government huge freedom to

:48:23.:48:29.

invest in schools and infrastructure, very important for

:48:29.:48:35.

us at this critical time. This is against the backdrop of the

:48:35.:48:38.

continuing challenges of the international economy, but we are

:48:38.:48:43.

confident that we are now in the recovery phase. We are taking the

:48:43.:48:47.

right decisions for the Scottish economy. This is not extra money

:48:47.:48:51.

coming from Whitehall, this is the ability for the Scottish Government

:48:51.:48:58.

to borrow that money. There will be a mixture of capital and consented

:48:58.:49:02.

purchase, something that we battled long and hard about to deliver in

:49:02.:49:07.

the Scotland Act. In effect you are bringing those borrowing powers

:49:07.:49:16.

forward. You are not giving Scotland extra money for infrastructure.

:49:16.:49:22.

are giving significant new powers, 2.2 billion in total, four capital

:49:22.:49:28.

borrowing in Scotland. That is a major breakthrough. It is not to be

:49:28.:49:34.

sniffed at. It is exactly the kind of freedoms that Scottish agitators

:49:34.:49:39.

have been calling for. This will get the Scottish economy on the right

:49:39.:49:48.

track. It is been a challenging few years. Let's deal with the stick.

:49:48.:49:56.

There will be a reduction, I'll be at a smaller one than in England, --

:49:56.:50:01.

albeit a smaller one than in England. You only have to look at

:50:01.:50:05.

Europe to see what is happening in the Eurozone, there are still major

:50:05.:50:10.

challenges. People haven't forgotten the legacy we were left with by the

:50:10.:50:15.

last Labour government, so we have to continue making tough choices but

:50:15.:50:23.

we believe in prioritising the way we have and making the right

:50:23.:50:27.

decisions for Scotland. It is worth saying that this settlement is only

:50:27.:50:34.

for a year. After the next general election there will have to be

:50:34.:50:40.

further decisions, weren't there? The recovery has been longer than

:50:40.:50:50.
:50:50.:50:51.

we'd hoped because of the international economy, but we are

:50:51.:50:59.

prioritising international investment -- infrastructure

:50:59.:51:03.

investment and tax reform. That is very important for us to continue to

:51:03.:51:09.

deliver and something that I am particularly proud of. Is it a case

:51:09.:51:17.

of pain deferred, not pain reduced altogether? What we are doing is

:51:17.:51:23.

taking responsible steps to move from the recovery phase... From the

:51:23.:51:27.

rescue phase to the recovery phase. Today's spending round supports

:51:28.:51:36.

that. The acid test for Scotland is if we are having this conversation

:51:36.:51:44.

in a year's time, will more people be in work and will those capital

:51:44.:51:49.

projects, the borrowing you are allowing, be up and running?

:51:49.:51:55.

Scottish Government say they have projects ready to go, we want to see

:51:55.:52:03.

those projects happen, but we are seen over the past three years over

:52:03.:52:07.

350,000 jobs created in the private sector, we want to reduce

:52:07.:52:13.

unemployment, we are not complacent and we want to make sure the economy

:52:13.:52:18.

continues on the right road. As far as these capital projects are

:52:18.:52:22.

concerned, is it up to the Scottish Government to decide what projects

:52:22.:52:26.

they choose will Whitehall be saying, we fancy that one, we don't

:52:26.:52:32.

fancy that one? These powers are devolved to the Scottish

:52:32.:52:35.

Government. The Scottish Government will set them for the country as a

:52:35.:52:41.

whole. UK Government will continue to invest across the whole country,

:52:41.:52:49.

whether it is working together on HS2, rural broadband or other

:52:49.:52:52.

initiatives that will be announced tomorrow. Across the UK we are

:52:52.:52:57.

continuing to invest and that is happening in Scotland as well.

:52:57.:53:05.

you for joining me, Andrew, back to you.

:53:05.:53:10.

A final word with this afternoon's commentator, Alf Young. What is the

:53:10.:53:15.

strategy behind this are Spending Review? What is the Chancellor up

:53:15.:53:19.

to? Is he trying to show he is responsible and credible, trying to

:53:19.:53:24.

put Labour in an awkward position? The core strategy is political

:53:24.:53:29.

positioning. This could have been done next year, but he is setting

:53:29.:53:35.

the scene. He is setting up some big points that he hopes he can go to

:53:35.:53:40.

labour into saying, we will do that as well. Some of the stuff about pay

:53:40.:53:45.

reform and welfare reform, he knows there is a constituency out there

:53:45.:53:51.

that thinks too many people are on welfare. He will hope to push Labour

:53:51.:53:56.

into that position. Equally, there is a strategy these are the Scotland

:53:56.:54:06.
:54:06.:54:08.

and the referendum -- vis-a-vis. John Swinney is reluctant about

:54:08.:54:17.

following the Chancellor 's reforms, he is having to say that

:54:17.:54:20.

this wouldn't happen if we were independent, but a lot of countries

:54:20.:54:26.

in the world are looking for growth and not finding it. The central

:54:26.:54:32.

issue is that question of growth and demand in the economy. If another

:54:32.:54:35.

144,000 people are leaving the public sector, if there is not going

:54:35.:54:40.

to be progression pay for these areas of the public sector, if pay

:54:40.:54:46.

itself is going to be continually capped right through to 2016, people

:54:46.:54:49.

will have less money in their pockets. People on welfare will have

:54:49.:54:54.

less money in their pockets. If they don't have money then they won't be

:54:54.:54:59.

spending, and if demand isn't there then it doesn't matter how many

:54:59.:55:05.

shovels you wield, if you build a bridge here or road there, there

:55:05.:55:14.

won't be any growth. The growth story, the backdrop, people will

:55:14.:55:19.

look at this and ask, where is it coming from? The story of the

:55:19.:55:25.

stimulus is still there to be fought over by one side or the other.

:55:25.:55:31.

Taylor was speaking about the blame game and the SNP -- Brian Taylor was

:55:31.:55:36.

speaking about the blame game, but that can be a risky strategy for the

:55:36.:55:42.

SNP. The SNP Government gets the money and spends it so it doesn't

:55:42.:55:45.

have responsibility for the bigger picture about where the growth is

:55:45.:55:53.

going to come from. They say, if only they had the power to do that,

:55:53.:55:57.

but they are asking if they are really going to get back to the

:55:57.:56:01.

growth we used to know or if there is a new world we are facing where

:56:01.:56:07.

growth is at a low level and not so easily gained. Thank you for your

:56:07.:56:10.

company this afternoon. More from Danny Alexander and the

:56:10.:56:14.

infrastructure programme tomorrow. That is all we have time from and

:56:14.:56:19.

that is indeed ask for this session of Holyrood. We will be back in

:56:19.:56:26.

Download Subtitles

SRT

ASS