:00:26. > :00:30.Hello and welcome to politics Scotland. The Governor of the Bank
:00:31. > :00:35.of England gives his assessment of how our currency union could work in
:00:36. > :00:42.an independent Scotland. Our live debate in the chamber today
:00:43. > :00:46.discusses whether Scottish farmers could be worse off under the EU
:00:47. > :00:49.farming policy. The first Minister and the Governor
:00:50. > :00:54.of the Bank of England have meant in Edinburgh to discuss Scotland's
:00:55. > :01:00.currency options in the event of a yes vote in the referendum. The
:01:01. > :01:06.first Minister said he found the Governor's visit useful. When the
:01:07. > :01:11.governor speaks, we will see what he has to say but he will be giving a
:01:12. > :01:15.technocrat assessment of the institutional changes necessary to
:01:16. > :01:20.make a single currency work. He will not be arguing that, but as for the
:01:21. > :01:25.Scottish people, nor will he be saying whether Scotland will be
:01:26. > :01:29.worse off as an independent country. That is for the Scottish people to
:01:30. > :01:34.decide. The government finished off his speech a short time ago. The
:01:35. > :01:43.Scottish government has stated in the event of independence, it would
:01:44. > :01:47.seek to maintain the pound. That would be a matter for the Scottish
:01:48. > :01:50.and UK parliaments. If such deliberations were to happen, they
:01:51. > :01:56.would need to carefully consider what the economic of currency unions
:01:57. > :02:01.suggest are the necessary foundations for a durable union,
:02:02. > :02:06.particularly given the risk if these foundations are not that in place.
:02:07. > :02:13.Those risks have been clearly demonstrated in the euro area over
:02:14. > :02:19.past years. Large divergence is in economic performance has been shown.
:02:20. > :02:25.Your area is beginning to -- the euro area is beginning to rectify
:02:26. > :02:31.its shortcomings but the sharing of risk and the pooling of fiscal
:02:32. > :02:37.resources needs to be improved. A successful currency union requires
:02:38. > :02:44.some seeding of national unity. I am joined by Professor from the
:02:45. > :02:49.University and an economist. Thank you for joining me. David, a clear
:02:50. > :02:54.warning from Mike Carney that keeping the pound would require some
:02:55. > :02:59.compromise. Absolutely. He is very, very clear on that point. He talked
:03:00. > :03:05.about the Eurozone and he sums it up in a sentence. A juror Bob,
:03:06. > :03:10.successful currency union requires some seeding of national
:03:11. > :03:14.sovereignty. By that, he mean to Scotland and the rest of the UK do a
:03:15. > :03:18.deal on a currency union, they need to reach a compromise on other
:03:19. > :03:23.things, on the way the governments run the economy. He pointed to the
:03:24. > :03:28.Eurozone, to the problems that occurred there, to the fact that
:03:29. > :03:34.competing economic demands between these countries almost pulled the
:03:35. > :03:38.union apart. He warned that the lessons from that is that individual
:03:39. > :03:42.countries who are part of a currency union have two agree broadly and
:03:43. > :03:46.fiscal measures, on taxation levels, on spending levels. That is
:03:47. > :03:51.what would need to happen between Scotland and the rest of the UK in
:03:52. > :03:57.the event of independence. He also pointed that there would have to be
:03:58. > :04:01.an agreement on the size of deficit these countries would be allowed to
:04:02. > :04:06.run up. There would have to be a single lender of last resort. He in
:04:07. > :04:11.effect, he is saying, you cannot go and do as you please if you are part
:04:12. > :04:17.of a currency union, at least in economic terms. Where does this
:04:18. > :04:21.leave us, do you think? What he does not say is what is important. He did
:04:22. > :04:26.not say, as someone hoping, that currency union is impossible in the
:04:27. > :04:35.event that Scotland becomes an independent country. What he has
:04:36. > :04:39.done no, in effect, is re-stated the point is that the no campaign have
:04:40. > :04:44.pointed to. He has also gone over points which we know the SNP have
:04:45. > :04:49.looked at already. He needs to meet the measures of financial stability.
:04:50. > :04:53.The need for compromise, banking union. We know these are things
:04:54. > :05:00.which have been broadly ceded by the SNP in the independence campaign.
:05:01. > :05:06.What he has not said today is whether it might be possible,
:05:07. > :05:10.whether a currency union is even possible between two countries which
:05:11. > :05:14.are pulling apart politically. He took his seat and reaction flooded
:05:15. > :05:21.in straightaway. What has it been like? You know speech is reasonably
:05:22. > :05:24.well-balanced when both sides are claiming it them their point. We
:05:25. > :05:28.have had the Scottish finance secretary welcoming this
:05:29. > :05:38.intervention is a serious and sensible analysis. He says, such a
:05:39. > :05:40.shared currency area, a currency agreement is a common-sense position
:05:41. > :05:44.as it is in the overwhelming economic interest of both Scotland
:05:45. > :05:50.and the rest of the UK. He goes on to try to nail that issue as to
:05:51. > :05:54.whether it is worth it, in effect. Whether independence is worth the
:05:55. > :05:59.effort because of the compromises involved. He says an independent
:06:00. > :06:09.Scotland would control 100% of our own revenues as opposed to 7% at the
:06:10. > :06:14.moment. We have also had response from the Treasury. They say it gives
:06:15. > :06:16.them their point and it highlights the principal difficulties of
:06:17. > :06:23.entering a currency union and that as a result, the Scottish government
:06:24. > :06:26.needs a plan B. An interesting time in Edinburgh today. Both sides
:06:27. > :06:33.claiming credit. What is your reaction? I think, for most part,
:06:34. > :06:36.most economists would say this is going over standard ground. There
:06:37. > :06:42.has been a lot of research over the last few years about what makes a
:06:43. > :06:45.successful currency union and what are the risks as well as the
:06:46. > :06:49.opportunities that flow from that. The governor was essentially giving
:06:50. > :06:52.us a mini lecture on that today. Many of the point he was making,
:06:53. > :06:57.both in terms of monetary unions promoting more trade but also coming
:06:58. > :07:03.with risk which has to be mitigated, we have heard a lot of it
:07:04. > :07:09.already in the referendum. This has caused a great steel of excitement
:07:10. > :07:15.amongst journalists, commentators, journalists etc but how much effect
:07:16. > :07:21.it will have on the Scottish people is debatable. There is quite a
:07:22. > :07:24.degree of scepticism with in the British -- the Scottish public that
:07:25. > :07:31.they would be allowed to use the pound. Apparently three quarters of
:07:32. > :07:34.the Scottish people would like to be allowed to use the pound in an
:07:35. > :07:43.independent Scotland but many less think they would be allowed to.
:07:44. > :07:46.Those who are sceptical about that would be sceptical about the
:07:47. > :07:53.independence project, or so you would think. You discover that is
:07:54. > :07:56.not the case though. Whether or not people think an independent Scotland
:07:57. > :08:00.would have an economy that is better or worse than it is at the moment,
:08:01. > :08:03.you discover that the views of those people who think that Scotland board
:08:04. > :08:11.to have the pound but wouldn't have it are virtually independent so far
:08:12. > :08:14.as the economic independence as those who would like to keep the
:08:15. > :08:19.pound and would have it. It is clear that this debate is not linked to
:08:20. > :08:23.what the economic consequences would be. Those who have different views
:08:24. > :08:32.are similar when it comes to voting yes or no. Thank you very much.
:08:33. > :08:38.Campaigners have called on the Scottish government to provide ?50
:08:39. > :08:44.million to mitigate the effect of the bedroom tax in Scotland. Giving
:08:45. > :08:56.evidence to the petition committee, it was said the money is needed to
:08:57. > :09:04.protect honourable people. This policy penalises tenants who are on
:09:05. > :09:09.benefits. This, to me, is not a good situation. It is not political, it
:09:10. > :09:14.is ethical, moral, what is right and what is wrong. This is wrong. What
:09:15. > :09:18.can we do? We can't repeal the policy here so we need to mitigate
:09:19. > :09:24.the effect of the policy. We are asking the Scottish government to
:09:25. > :09:30.fund the bedroom tax shortfall. This temporary funding measure would
:09:31. > :09:35.protect tenants from the debt and would also protect them from
:09:36. > :09:40.landlords. We do not specify a mechanism for this although we do
:09:41. > :09:49.except that DHP funding is at its maximum level. Where would you
:09:50. > :09:52.suggest we find the money from? I have a suggestion for where
:09:53. > :09:59.particularly the funding could come from. My point is that we need
:10:00. > :10:05.housing to be fully funded and we need tenants to be protected. The
:10:06. > :10:08.Parliament needs to take a decision here to make it a political
:10:09. > :10:12.priority. I think this is one of the most important decisions the
:10:13. > :10:16.Parliament has had to take in its history, in that this is exactly why
:10:17. > :10:19.people wanted a Scottish parliament. They knew that down the line there
:10:20. > :10:22.would be Conservative governments who would take extreme measures that
:10:23. > :10:27.people would want some protection from. That is what we are facing
:10:28. > :10:32.now, social chaos being caused by this policy. We appreciate that this
:10:33. > :10:36.puts the government in a difficult position, but the point we are
:10:37. > :10:39.saying is this is the level of emergency which we need to
:10:40. > :10:44.prioritise in order to assist tenants with paying their rent. We
:10:45. > :10:54.are here because it is desperate measures. I have got a friend, which
:10:55. > :10:59.probably explains this well, she used to be in the Army, as veteran
:11:00. > :11:05.who fought for this country, and she said she has tried really hard to
:11:06. > :11:12.readjust to life. That happened to me when I left the Army. Although my
:11:13. > :11:19.friend spent -- had a good quality of life, the system the state
:11:20. > :11:25.provided to maintain her welfare worked and it provided her with a
:11:26. > :11:39.safety net and a launch pad to give her a happy life. Everything was
:11:40. > :11:45.fined -- fine until she was considered to be fit for work when
:11:46. > :11:52.she wasn't. She has been in her family home for 20 years and when
:11:53. > :11:58.the bedroom tax came in, she was told you would lose it. She appealed
:11:59. > :12:02.for DHP what but was told she had failed. She has a choice, paying her
:12:03. > :12:07.rent or feeding herself and her family. She decided not to pay her
:12:08. > :12:12.rent. Because of that, and because she is not in the best of
:12:13. > :12:18.situations, she had to be hospitalised and they have split up
:12:19. > :12:24.a family. In December, she found out she is exempt from the bedroom tax,
:12:25. > :12:31.so all of that was for nothing. The bedroom tax is about rent, but it is
:12:32. > :12:34.not, it is about families in horrible, sad situations and it is
:12:35. > :12:39.not their fault. It is through the fog of a senseless, mindless,
:12:40. > :12:45.short-sighted policy that has caused more trouble than it is worth. It
:12:46. > :12:51.has cost more money and it is hurting people really, really badly.
:12:52. > :12:54.I acknowledge that this would mitigate other aspects of the
:12:55. > :12:57.welfare reform, but this is affecting some of the most
:12:58. > :13:03.vulnerable people who need the most help and are not getting any.
:13:04. > :13:09.Professor Curtis, you are still with me. Interesting to hear what was the
:13:10. > :13:12.evidence in the committee yesterday. Obviously these welfare reforms have
:13:13. > :13:16.had quite an impact politically speaking when you think of the bad
:13:17. > :13:20.press the UK government gets when you see something like that. There
:13:21. > :13:26.is no doubt that the bedroom tax has become widely known as not very
:13:27. > :13:34.politically successful austerity measure. That said, we should be
:13:35. > :13:41.aware that the reason politicians on both sides of the Westminster
:13:42. > :13:46.divide, not necessarily just the SNP in Scotland, have been increasingly
:13:47. > :13:50.adopting what sounds like an anti-welfare rhetoric is because, in
:13:51. > :13:56.truth, that is the action in which rhetoric has been going. Older
:13:57. > :14:02.people, those on welfare benefits, those with disabilities who cannot
:14:03. > :14:05.work, all fine. Single people who are of working age and are not
:14:06. > :14:09.working, then you have people saying, why are we spending money on
:14:10. > :14:13.these people? A lot of people think that Scotland is immune from this
:14:14. > :14:20.change in public opinion but it is not clear that it is. Most Scottish
:14:21. > :14:25.public attitudes which looked at welfare funding in general and
:14:26. > :14:29.particularly on spending on welfare and unemployment benefits, which it
:14:30. > :14:34.has looked at since the advent of devolution, we now find that 60% of
:14:35. > :14:38.people in Scotland agree that employment benefits are too high and
:14:39. > :14:42.they put people off from seeking work. That is clearly a record high
:14:43. > :14:47.figure for Scotland and it suggests, along with other figures,
:14:48. > :14:52.that in Scotland, as south of the border, the public has become more
:14:53. > :14:57.critical of welfare, at least for certain groups in our society, and
:14:58. > :15:00.for that reason we should not assume that public opinion on welfare in
:15:01. > :15:04.general, though not necessarily the bedroom tax, is to call off the
:15:05. > :15:15.austerity programme the UK government has been pursuing. ?20
:15:16. > :15:21.million has been set aside to mitigate the effects. They want more
:15:22. > :15:28.money, but the SNP 's were making it clear there is an opportunity cost.
:15:29. > :15:31.Yes, the Labour Party are doing the Scottish Government should try to
:15:32. > :15:37.find what they think is the full amount of money required to mitigate
:15:38. > :15:40.the effects. Arguments about whether the SNP are deliberately not
:15:41. > :15:45.mitigating the cost in order to make people aware of the consequences of
:15:46. > :15:51.the Scotland being inside the UK. Whether that is right or not is for
:15:52. > :15:54.people to decide, but in some senses it as per BSN PNA politically
:15:55. > :16:04.slightly awkward position of apparently being more awkward than
:16:05. > :16:08.that Labour Party. Certainly, one of the motivations for some people for
:16:09. > :16:12.creating the Scottish parliament was to defend Scotland against what they
:16:13. > :16:16.thought were unwonted UK Government policies, but of course whatever the
:16:17. > :16:20.Scottish Government does always has to be within the framework of a
:16:21. > :16:26.budget the total size of which is still divided by Westminster.
:16:27. > :16:28.Now to the debate live in the chamber, and the words "Common
:16:29. > :16:31.Agricultural Policy" can make most people wilt, but it is an important
:16:32. > :16:34.issue. Today, the Scottish Government are commending the policy
:16:35. > :16:36.for delivering viable food production. However, SNP ministers
:16:37. > :16:39.are criticising the UK Government for leaving Scotland with the lowest
:16:40. > :16:49.per-hectare funding in Europe. The Rural Affairs Secretary Richard
:16:50. > :16:54.Lochhead is speaking now. The cat must deliver clearer
:16:55. > :16:59.benefits for the public purse. We also insist Europe does not lose
:17:00. > :17:07.sight of the primary purpose of supporting viable food production.
:17:08. > :17:17.It is worth reminding ourselves that the objectives of our Government
:17:18. > :17:22.differ from the UK's. The UK still wanted a substantial reduction in
:17:23. > :17:26.spending, especially the direct payments to Scottish farmers. It
:17:27. > :17:33.wants to abolish support and phase out these payments completely. The
:17:34. > :17:38.negotiations finished last autumn. As always, the final compromise was
:17:39. > :17:45.far from perfect, but Scotland did score some negotiating successes. We
:17:46. > :17:49.secured a clause to ensure new entrants can be treated fairly and
:17:50. > :17:53.we changed the details so that it fits better with real farming
:17:54. > :17:56.practices. We fought off the risk that Heather would be ineligible
:17:57. > :18:01.whether or not it is genuinely farmed, and ensured the timetable
:18:02. > :18:05.for changing the less favoured area system was realistic. We secured
:18:06. > :18:11.more flexibility and remove the worst of the bureaucracy in the
:18:12. > :18:14.original proposals. I think I speak the many in Scotland when I say
:18:15. > :18:19.alongside the successes there were of course some disappointments.
:18:20. > :18:29.Couples support is the only remaining to for directly supporting
:18:30. > :18:38.production. Scotland is laminated -- eliminated... Willie concede the UK
:18:39. > :18:49.Government totally opposed this support at all. Well, I hope we did
:18:50. > :18:55.influence the UK Government. We had a situation where the UK Government
:18:56. > :18:57.wanted zero support, which given the disproportionate importance of
:18:58. > :19:03.livestock to Scotland would have been grave news for our economy. So
:19:04. > :19:09.we got the 8% just now and other countries have 13%. The UK says it
:19:10. > :19:14.is prepared to discuss letting us go a bit higher. That offer is hedged
:19:15. > :19:17.with conditions. It reminds us they did fail to negotiate what Scotland
:19:18. > :19:23.needed in the first place, just as they did on the budget. We entered
:19:24. > :19:31.negotiations with the best -- worst budget in Europe. The UK had the
:19:32. > :19:36.opportunity to get a fairer deal but did not even lift a finger to try to
:19:37. > :19:40.do that. To add insult to injury, when dividing the budget within the
:19:41. > :19:44.UK, they took the so-called convergence money the Europe
:19:45. > :19:49.intended the Scotland and spread it across all UK sectors, leaving us
:19:50. > :19:56.with the worst per hectare budgets in Europe for both direct payments
:19:57. > :19:59.and development budgets. Had we've been an independent country we would
:20:00. > :20:06.have got an extra billion euros which would have estimated about
:20:07. > :20:12.2500 new jobs in Scotland. We would have been able to negotiate a better
:20:13. > :20:19.deal and a too, where it is easier to target support on active farmers
:20:20. > :20:28.then Peller one. Faced with this impossible situation, our budget was
:20:29. > :20:32.so poor that without a transfer we would have been unable to meet our
:20:33. > :20:40.rural development commitments such as legal requirements of the
:20:41. > :20:46.environment. So, after taking stakeholders' views, I decided on a
:20:47. > :20:54.policy which would strike the right balance. Even with the transfer, our
:20:55. > :20:58.budget for the rural development programme is extremely low,
:20:59. > :21:03.requiring tough decisions about prioritisation within that
:21:04. > :21:13.programme. I do continue to look at envy with other member states. I
:21:14. > :21:16.would love to be like Ireland, to be able to fund a big beef sector
:21:17. > :21:21.improvement given their large budgets, but Scotland's budget is
:21:22. > :21:24.tiny in comparison with their mini other countries. My proposals for
:21:25. > :21:30.the rural development programme will protect payments and increase
:21:31. > :21:35.environment schemes by ?10 million a year. We are having to squeeze
:21:36. > :21:37.budgets in other areas, and in particular farmed cattle grunts will
:21:38. > :21:45.have to be more focused on new entrants, for example. We ever
:21:46. > :21:50.separate consultation on direct payments which finishes in
:21:51. > :21:54.mid-March. To complement those consultations, I will be writing
:21:55. > :22:02.shortly to all farmers in Scotland who received payments about the
:22:03. > :22:08.remainder in -- of the consultation period so they can submit their
:22:09. > :22:15.views. In relation to the consultation, be aware that in our
:22:16. > :22:18.own constituency where agriculture is intensive and important, there
:22:19. > :22:29.are issues. I received a briefing from the local farming union
:22:30. > :22:35.suggesting one stream -- vestry could be losing thousands of pounds
:22:36. > :22:37.as a result of these changes. Has he had time to reflect on what sort of
:22:38. > :22:46.interventions might be possible to try to compensate or redress that
:22:47. > :22:53.problem? I will come to some of the wider issues that are similar to the
:22:54. > :22:56.situation he suggests. This is why we were keen to protect payments
:22:57. > :23:03.which account for a third of the budget.
:23:04. > :23:05.Scotland's newest MSP has taken his seat at Holyrood this afternoon.
:23:06. > :23:09.Alec Rowley won the Cowdenbeath by-election last week. He took the
:23:10. > :23:13.oath of affirmation in the chamber a short time ago. Mr Rowley, who was
:23:14. > :23:16.the leader of Fife Council, beat the SNP's Natalie McGarry with an 11%
:23:17. > :23:24.swing - a majority of more than 5,000 votes.
:23:25. > :23:34.Scotland's newest MSP has taken his seat at Holyrood this afternoon.
:23:35. > :23:37.Let's speak to some of his new colleagues now. I'm joined from
:23:38. > :23:39.Holyrood by a trio of MSPs. From the Scottish Conservatives, Alex
:23:40. > :23:41.Johnstone, Iain Gray from Scottish Labour and Mark Macdonald from the
:23:42. > :23:47.SNP. Let's go back to the top story, Mark
:23:48. > :23:53.Carney speaking about currency. The Conservatives are saying he has
:23:54. > :23:58.delivered a hammer blow to SNP plans for a currency union. They've
:23:59. > :24:03.obviously been listening to a very different speech and press
:24:04. > :24:06.conference, because the issues Mark Carney identified were all factored
:24:07. > :24:10.into their considerations of the physical working group when it drew
:24:11. > :24:14.up its recommendation that a sterling zone was the optimum
:24:15. > :24:17.approach an independent Scotland should take. There is nothing in
:24:18. > :24:22.what he said that hasn't been factored into their considerations,
:24:23. > :24:29.so I'm entirely unsure where these doom mongering comments from the
:24:30. > :24:36.Tories are coming from. Maybe Mark Carney is the doom monger. He says
:24:37. > :24:43.currency union involves ceding some national sovereignty. There is a
:24:44. > :24:46.difference between independents and isolation. Independence is about
:24:47. > :24:50.choosing how you exercise your sovereignty where it is appropriate
:24:51. > :24:54.in your national interest and when you choose to share it. That is what
:24:55. > :24:59.independence is about, having the opportunity to take those decisions.
:25:00. > :25:03.We've decided that in terms of a currency union, that would be in the
:25:04. > :25:09.national interest of Scotland, and the national interest of the rest of
:25:10. > :25:15.the UK. On both sides of the debate, that is the best option. Alex
:25:16. > :25:19.Johnstone, I was quoting from your press release, but we hear from Mr
:25:20. > :25:29.McDonald how the plans can still work and a currency union. What
:25:30. > :25:36.would Mark Carney no? Is only the governor of the bank of England. But
:25:37. > :25:40.he pointed out was something very clear to many people who'd looked at
:25:41. > :25:44.currency union in Europe, and that is, you cannot have currency union
:25:45. > :25:49.without some form of political union. We in this country have
:25:50. > :25:55.political and currency union already and that is how things should
:25:56. > :26:03.remain. What was your reaction? It sounds like the technocrat it
:26:04. > :26:09.discussions that were had mean that foundations could be laid in place
:26:10. > :26:16.for this. Mark Carney looked at a number of monetary union is. The
:26:17. > :26:21.successful examples such as Canada and Australia are a nation state.
:26:22. > :26:24.The euro is much less successful for the reason that it does not have
:26:25. > :26:30.integration around taxation and spending. But the last thing in his
:26:31. > :26:40.speech that he said was it would not be him who decided the pros and
:26:41. > :26:49.cons, it would be the politicians. We know that, contrary to what Mark
:26:50. > :26:53.Carney said, Ed Balls does not believe it would work, Carl Wynn
:26:54. > :26:59.Jones does not believe it would be in their interest. So the fact is
:27:00. > :27:05.this is not going to happen and SNP and Alex Salmond need to tell us
:27:06. > :27:09.what their fallback planners. But if the people of Scotland do vote yes
:27:10. > :27:13.in a referendum, it is something that simply does have to happen. It
:27:14. > :27:18.is Scotland's pound as much as the rest of the UK's pound. At that
:27:19. > :27:25.point, Scotland would have walked away from the pound. They would have
:27:26. > :27:30.to decide if monetary union was in the interests of the rest of the UK.
:27:31. > :27:35.There are a number of factors they would have to take into account.
:27:36. > :27:39.And, as I say, George Osborne and Ed Balls have said that in their view
:27:40. > :27:45.it would not be in the interests of the rest of the UK. Would it really
:27:46. > :27:48.be in their interests have the Bank of England continued to be the
:27:49. > :27:53.lender of last resort for another country? I didn't think it would. So
:27:54. > :28:02.that those reasons, we've been told it is unlikely monetary union would
:28:03. > :28:07.be possible. Let us put these points to Mr McDonald. Surrendering control
:28:08. > :28:11.of fiscal policies such as tax and spending rates - you talk about
:28:12. > :28:14.isolation and independence, but if you are surrendering these controls,
:28:15. > :28:24.how can Scotland operate as an adequate economy with a proper
:28:25. > :28:32.fiscal policy? The same question rebounds on this argument we've been
:28:33. > :28:35.getting from the campaign against independence. You cannot argue on
:28:36. > :28:38.the one hand that you could make a currency union work if you have
:28:39. > :28:41.depression on taxation and spending policy and then at the same time
:28:42. > :28:45.hold that a carrot saying Scotland will get much greater tax and
:28:46. > :28:49.spending powers with further demolition. The two things cannot be
:28:50. > :28:53.argued simultaneously by the other side. We've made it very clear in
:28:54. > :28:59.terms of the physical working group, and it is interesting to note
:29:00. > :29:06.is that he highlighted one great influence on his career. Professor
:29:07. > :29:12.James is one of the members of the this core working group who drew up
:29:13. > :29:21.proposals for a server linked loan. -- for a sterling zone. I want to
:29:22. > :29:28.move onto welfare reform. Alex Johnstone, on the so-called bedroom
:29:29. > :29:34.tax the housing minister was down Westminster about this loophole that
:29:35. > :29:37.is going be closed. If you'd been in rented accommodation for more than
:29:38. > :29:44.17 years, you will be free of the so-called bedroom tax. That loophole
:29:45. > :29:54.is now being closed. This policy is a mess, isn't it? No, it is a vital
:29:55. > :29:59.form of welfare reform. We have a Government who apparently don't
:30:00. > :30:02.believe in the policy, in the view of a number of Westminster
:30:03. > :30:07.ministers, they have the power to deal with it if they wish to and
:30:08. > :30:11.they are doing nothing about it. So I think the Scottish Government, the
:30:12. > :30:17.ball is in their court. Mark McDonald, the ball is in your court.
:30:18. > :30:21.You've spent 20 million to mitigate the effects of welfare reform. You
:30:22. > :30:25.could spend more if you want to do. Do you want to give this issue going
:30:26. > :30:32.ahead of the referendums so that people think, when not that keen on
:30:33. > :30:37.the UK Government? We've advance the discussion about housing payments
:30:38. > :30:42.having a legal cap. There could be additional money and there are
:30:43. > :30:46.discussions ongoing between the Government and the Labour Party. I'm
:30:47. > :30:50.not privy to them so I don't know their position, but mitigation is
:30:51. > :30:54.one thing. If we want to truly get rid of the bedroom tax, we need to
:30:55. > :31:00.have the powers over welfare here in Scotland. We need to look further
:31:01. > :31:06.down the line about removing housing benefit for under 25 's. We couldn't
:31:07. > :31:13.deal with that within a devolved budget context without making
:31:14. > :31:26.significant constraints elsewhere. Finally, at where there is no --
:31:27. > :31:32.Westminster are you trying to come across as tough on welfare reform?
:31:33. > :31:36.Well, if we were elected next year we would abolish the bedroom tax. We
:31:37. > :31:41.believe the bedroom tax could be abolished in Scotland completely.
:31:42. > :31:47.Until now, the SNP have said the law doesn't allow them to do that. This
:31:48. > :31:50.morning, I met with John Swinney and presented him with a plan as to how
:31:51. > :31:55.that could be done. That includes legal advice as to the legality of
:31:56. > :32:03.that approach. I'm very hopeful that all of theirs, the SNP and Labour,
:32:04. > :32:08.agree that this is a horrible tax and we should abolish it.
:32:09. > :32:16.Thank you all very natural joining me. Back to our live debate in the
:32:17. > :32:22.chamber on the common agricultural policy. Labour's Claire Baker is
:32:23. > :32:27.moving Labour's Amendment on that at the moment. Scotland compares better
:32:28. > :32:35.but per hectare that is the chosen measure. We all agreed during the
:32:36. > :32:39.last debate that the UK government should recognise the challenge of
:32:40. > :32:47.Scotland's distinct and diverse agricultural needs. They did not and
:32:48. > :32:50.that was a disappointment to everybody here but also to farmers
:32:51. > :32:54.and all communities across the country. As we enter today's debate
:32:55. > :33:03.looking back at that decision, and using that to further political
:33:04. > :33:08.agendas, that would be a mistake. We owe it to grow communities to have a
:33:09. > :33:12.frank discussion on how we implement this common agricultural policy and
:33:13. > :33:19.how we go forwards. That is why we must not be dismissive of anything
:33:20. > :33:27.the UK government suggests. The NFU has a written assurance that there
:33:28. > :33:32.will be a review of CAP funds and whilst that will not change the
:33:33. > :33:40.current budget, that is something we must consider. The Cabinet Secretary
:33:41. > :33:44.is mistaken to dismiss the review. He may be sceptical that such a
:33:45. > :33:47.review will take place, but we cannot put everything on pause and
:33:48. > :33:53.hope it sorts itself out. The government must start working
:33:54. > :33:56.towards a review, completing a move from historic payments and holding
:33:57. > :34:01.the UK government to a proper review. This should not be a
:34:02. > :34:06.political football to be used as it is about the future livelihood of
:34:07. > :34:10.farmers across the length and breadth of Scotland. The onus is now
:34:11. > :34:16.on Scotland from historic two area -based payments. Direct payments
:34:17. > :34:25.take a step forward and that is to be welcomed. Movement from
:34:26. > :34:29.historic... Briefly. The member is focusing on historic two area -based
:34:30. > :34:34.payments and I understand why she also cognisant of the need to
:34:35. > :34:38.support production. The member makes a point that I am sure will be
:34:39. > :34:42.focused on during the debate, the importance of activity and I will
:34:43. > :34:48.move on to make some comments on that. Movement from historic two
:34:49. > :34:55.area -based can give distinction from smaller two large farms and
:34:56. > :35:01.those who need subsidies from us to thrive. To have a thriving farming
:35:02. > :35:04.sector, we need a varied farming set including smaller farms and high
:35:05. > :35:08.nature value farming. We need timescales for this to happen. I was
:35:09. > :35:13.pleased to hear the Cabinet secretaries comments around the
:35:14. > :35:20.Irish tunnel model and that would result in funding being maintained.
:35:21. > :35:26.The Scottish government have argued for convergence across the euro zone
:35:27. > :35:30.and the UK and we need to see that applied to funding within Scotland.
:35:31. > :35:35.I welcome the consultation that is taking place but the Cabinet
:35:36. > :35:40.Secretary needs to assure that he hears -- needs to ensure that he
:35:41. > :35:44.hears a broad range of views. There is an appetite for redistribution of
:35:45. > :35:49.areas that need the support most and has evidence of giving the greatest
:35:50. > :35:53.public benefit. In terms of public regions, we need something as simple
:35:54. > :36:00.as possible but also something that is fair. Guarding something against
:36:01. > :36:07.becoming too complex runs the risk of failure. We have the issue of
:36:08. > :36:13.slipper farmers which have been a negative aspect of CAP payment for
:36:14. > :36:18.too long. We need to enter your this is ended as soon as possible and
:36:19. > :36:24.that there are no further loopholes to be exploited. It is important
:36:25. > :36:28.that all CAP payments are as transparent and clear as possible.
:36:29. > :36:33.This is not just about farming businesses and food production.
:36:34. > :36:40.Agriculture is one of Scotland's biggest areas of the missions. There
:36:41. > :36:43.is more the agricultural sector can do towards meeting how climate
:36:44. > :36:47.change climates, along with our biodiversity targets, and we must
:36:48. > :36:50.see a stronger move towards sustainable farming. This will
:36:51. > :36:56.benefit not just our farmers but also our rural communities. That was
:36:57. > :36:59.Claire Baker speaking in the live debate on the common agricultural
:37:00. > :37:08.policy. You can watch the rest of that on demand on our website.
:37:09. > :37:14.Professor John Curtis is still with me here in the studio. John, we are
:37:15. > :37:17.listening to the MSPs give their reaction to Mark Carney 's visit.
:37:18. > :37:24.What did you make of the arguments on both sides? Inevitably, his
:37:25. > :37:26.dispassionate and carefully crafted speech was greeted by the
:37:27. > :37:31.politicians from the perspective of what they would like it to say as
:37:32. > :37:37.opposed to what it necessarily said. We saw the Tory as -- the Tory MSP
:37:38. > :37:41.is saying you cannot have political union without monetary union. My
:37:42. > :37:45.reading of the speech was not that he went that far. He said you needed
:37:46. > :37:48.fiscal commune occasion and coordination but not that you needed
:37:49. > :37:55.a single government. He said there were risks but they had to be
:37:56. > :38:01.mitigated. Mark McDonald, when asked about things said, if you are going
:38:02. > :38:08.to have a monetary union, you have to have an agreed fiscal stance with
:38:09. > :38:17.the rest of the United Kingdom, so if that is a criticism of devolution
:38:18. > :38:23.it is a criticism of devolution marks. I do not think people have
:38:24. > :38:29.said they expect Scotland to have for economic freedom but that is
:38:30. > :38:33.what the SNP have said. The point about independence is that we could
:38:34. > :38:36.control our taxation and spending. Certainly we would have more control
:38:37. > :38:40.over taxation and spending now we have at the moment but whether we
:38:41. > :38:44.would have full control, if indeed you would have do agree a broad
:38:45. > :38:52.fiscal stance with another government, shall we say is at least
:38:53. > :38:59.in question. Two prime ministers questions now. David Cameron refused
:39:00. > :39:10.three times to rule out cutting the top rate of tax to 40%. They began
:39:11. > :39:14.over the issue of Syrian refugees. Mr Speaker, all sides of the house
:39:15. > :39:18.will welcome the change of heart on Syrian refugees which I raised with
:39:19. > :39:22.him last week. We look forward to the Home Secretary's statement but
:39:23. > :39:25.now the decision has apparently been taken, will he reassure the house
:39:26. > :39:28.that he will act with the utmost urgency because we are talking about
:39:29. > :39:35.the most vulnerable people who need help now. What I can assure him of
:39:36. > :39:38.is that we will act with the greatest urgency because, when it
:39:39. > :39:46.comes to Syria, we have done so throughout. We have made available
:39:47. > :39:51.?600 million, which makes us the second largest humanitarian donor,
:39:52. > :39:56.we have provided food for 188,000 people, clean water for almost a
:39:57. > :39:59.million, medical consultations for almost 250000 and, as the Home
:40:00. > :40:03.Secretary will make clear, we will come forward with a scheme to help
:40:04. > :40:07.the most needy people in those refugee camps and other them a home
:40:08. > :40:12.in our country. We want to make sure we particularly help those who have
:40:13. > :40:17.been victims of sexual violence, a cause which the Home Secretary has
:40:18. > :40:24.championed across the world. Does he ruled out, and the Chancellor could
:40:25. > :40:30.keep quiet for a second, ruling out giving another tax break to the
:40:31. > :40:42.richest in society by cutting the tax -- the top tax rate to 40p. Calm
:40:43. > :40:48.down, calm down. Yes or no? There is so much good news, I can't wait to
:40:49. > :40:52.get up and tell it. Our priority is to cut taxes for the lowest paid in
:40:53. > :40:57.our country. That is why we have taken 2 million people out of tax.
:40:58. > :41:04.But let us look to the reaction to his 50p an announcement. His Mrs
:41:05. > :41:07.have said it would cost jobs. -- businesses have said. Labour
:41:08. > :41:10.ministers that he has served alongside have said it is
:41:11. > :41:16.economically illiterate and the ISS as have said it would raise hardly
:41:17. > :41:23.any money. It has been a disastrous policy launch from a disastrous
:41:24. > :41:28.economic team in labour. A member of my constituency has recently been
:41:29. > :41:39.convicted of blasphemy and sentenced to death in Pakistan. He was
:41:40. > :41:43.diagnosed with schizophrenic tendencies but they refused to take
:41:44. > :41:47.that into advance. Can you assure me that you are doing all you can to
:41:48. > :41:53.support this man and to see him returned to the UK, where he can get
:41:54. > :41:57.the treatment he needs. I can certainly give the lady the
:41:58. > :42:01.assurance that she asks for. I am deeply concerned about the death
:42:02. > :42:11.sentence is passed and she knows it is our long-term policy to view
:42:12. > :42:17.these death sentences negatively. We have been speaking to people in
:42:18. > :42:23.Pakistan, raising this case and we are meeting the high commission
:42:24. > :42:27.officials in London today to discuss this case. We take this extremely
:42:28. > :42:32.seriously and we are making this clear at every level. People in my
:42:33. > :42:36.constituency and up and down the country are working harder and
:42:37. > :42:40.harder to make ends meet as their pay is persistently outstripped by
:42:41. > :42:44.wages. Does the prime Minister agree with the business secretary who said
:42:45. > :42:49.that a properly fuelled recovery is the wrong kind of recovery and, may
:42:50. > :42:56.I be helpful to the prime Minister, the answer is on page 30 in his
:42:57. > :43:02.older. The business secretary said that it is welcome in terms of our
:43:03. > :43:05.GDP growth that we have seen strong increase in and not just in
:43:06. > :43:11.services. In terms of making sure that we genuinely help people as the
:43:12. > :43:16.economy grows, we need to cut people 's taxes. We have cut people 's
:43:17. > :43:21.taxes because we have made difficult decisions about public spending.
:43:22. > :43:24.Every one of those has been opposed by the party opposite. If we had
:43:25. > :43:27.listened to the people opposite, people would have a more difficult
:43:28. > :43:33.standard of living rather than a better one. Let us talk to our
:43:34. > :43:40.correspondence standing by on a wet college green right now. It is a
:43:41. > :43:44.very wet college green indeed. I believe the polite term is it is
:43:45. > :43:47.facilitated down. Let me introduce you to the three guests who are
:43:48. > :43:52.joining me this afternoon, Angus MacNeil from the SNP, Ian Murray
:43:53. > :43:56.from Labour and Jerry Purves from the Liberal Democrats. A big day
:43:57. > :44:02.economically down here and in Scotland today, with the Governor of
:44:03. > :44:05.the bank of up -- the Bank of England intervening in the debate.
:44:06. > :44:13.He seemed to indicate that, given the pros and cons of her currency
:44:14. > :44:20.unit if Scotland adopted the pound, they would have do adopt some time
:44:21. > :44:25.me if they were to keep the pound. George Osborne was hinting and
:44:26. > :44:31.pretending that Scotland would not have the pound and with that gone,
:44:32. > :44:35.the reality is there. Of course we would need some autonomy but that
:44:36. > :44:46.would have to happen with both people. The UK government ceded some
:44:47. > :44:52.of their autonomy when they shifted things to responsibility with the
:44:53. > :44:55.Bank of England. Is it true, as most people understand it, that if you
:44:56. > :45:03.are having your fiscal policy decided by the Bank of England? You
:45:04. > :45:07.would have an agreement on monetary policy and you would have lending
:45:08. > :45:11.limits for both parties, which I think is welcome, especially given
:45:12. > :45:16.that Scotland's deficit is less than the UK's deficit. They are in a much
:45:17. > :45:20.better position and it is a happy day to day as you could see from the
:45:21. > :45:24.smiles from Alex Salmond on the steps with Mark Carney. It is the
:45:25. > :45:31.management of the scare stories that we have heard from me usual
:45:32. > :45:39.suspects, fear, scare, and we are separating from that. Ed Murray, you
:45:40. > :45:43.do not see that? I think we need to bring the SNP back down to earth.
:45:44. > :45:47.That is not what Mark Carney said today. He compared Scotland in a
:45:48. > :45:52.monetary union to the year a situation and we have seen that
:45:53. > :45:56.almost demise across individual may show governments do not have that
:45:57. > :46:01.fiscal consolidation that is required for a physical union. Mark
:46:02. > :46:06.Carney also said, clearly, but we also have a situation whereby if you
:46:07. > :46:09.build a barrier of any kind, it stops trade. Bearing in mind that
:46:10. > :46:13.most of Scotland's trade is with the rest of the United Kingdom, that is
:46:14. > :46:17.a natural progression. Mark Carney said today he was not being
:46:18. > :46:21.political and he has given some very harsh political lessons -- reality
:46:22. > :46:27.lessons. The SNP are saying we will be an Internet and independent
:46:28. > :46:37.country from September and we would have to give up a lot to the UK.
:46:38. > :46:42.Although he didn't say it explicitly, there was a hint that
:46:43. > :46:47.perhaps the same could happen. Well, he outlined some of the consequences
:46:48. > :46:54.of what you might have been not only a fiscal sterling union but also
:46:55. > :46:58.banking union. That means our economic future should not be based
:46:59. > :47:02.upon whether Alex Salmond smile this morning over a breakfast meeting,
:47:03. > :47:09.but whether there are the proper economic conditions for our
:47:10. > :47:13.pensions, deposits, mortgages. The reality is the banking and currency
:47:14. > :47:24.union we operate with is the optimum union. The fact that both sides of
:47:25. > :47:27.the partnership the SNP are hoping for after independence would be
:47:28. > :47:34.worth off, I think the governor's contribution has been good. A few
:47:35. > :47:43.years ago, Alex Salmond was staying -- saying the millstone would be
:47:44. > :47:47.around Scotland's neck. The great figures we've seen earlier this
:47:48. > :47:53.week, 1.9% for the UK for the last year, is that going to play well for
:47:54. > :48:00.your argument, Angus MacNeil, or for the unionist argument's unemployment
:48:01. > :48:08.is already low and that is because of taxes designed for Scotland.
:48:09. > :48:16.Scotland is a robust, strong economy, we pay more tax per head,
:48:17. > :48:24.we provide 9.9% of the tax despite being 8% of the population. People
:48:25. > :48:27.are swinging round to independence, we've only got to achieve less than
:48:28. > :48:32.we've already achieved in the last four months in the next eight months
:48:33. > :48:45.in Scotland will become an independence. The UK -- we can see
:48:46. > :48:51.when Scotland moves forward to independence that the situation is
:48:52. > :48:53.very good indeed. The underlying picture is Scotland's economic
:48:54. > :49:02.fundamentals are better than the UK's. I wouldn't have thought it
:49:03. > :49:10.would play that much of a role when you listen to the disingenuous
:49:11. > :49:16.comments of the SNP. Vince Cable hit the nail on the head on Monday. He
:49:17. > :49:20.said this was an uneven recovery, a recovery for the few and not the
:49:21. > :49:23.many. We are going through a cost of living Christ in the country, prices
:49:24. > :49:32.are far outstripping wages for any month apart from when the bankers
:49:33. > :49:34.bonuses came in. This has not been a recovery for everyone and ordinary
:49:35. > :49:45.people will know they don't pull that off. That same question to you.
:49:46. > :49:50.Is the economic situation going to be a key determining factor in this
:49:51. > :49:58.referendum? I think it will be. We will all be voting with our
:49:59. > :50:04.combination of our hearts and heads. The position the Lib Dems inherited
:50:05. > :50:08.when we came into Government in 2010, let's not forget the huge
:50:09. > :50:15.colossal crisis we had. We've now seen over 100,000 Scots on low and
:50:16. > :50:19.middle in come having a tax cut. Pensions are actually going up
:50:20. > :50:24.because of the policies we taken. The reality is, with Lib Dem
:50:25. > :50:31.ministers in the Treasury, taxes are lower and pensions are higher.
:50:32. > :50:37.Without Scotland being in the union and without Lib Dem in the tragedy,
:50:38. > :50:45.that cannot be guaranteed. -- Lib Dems in the Treasury. Tax is an
:50:46. > :50:51.important deal. Labour has been making noises about a 50p tax rate.
:50:52. > :50:56.What would an SNP administration do? We have to remember when the taxes
:50:57. > :50:59.were cut, Labour did not protest it. What I understand from Labour is
:51:00. > :51:03.they are talking about a temporary tax rise, I don't know why they're
:51:04. > :51:09.saying that. Is it because they want to reduce the deficit? If so, the UK
:51:10. > :51:13.deficit is larger than the Scottish deficit. We will do what is best in
:51:14. > :51:21.Scotland. It is for the next Parliament. The SNP should match 50%
:51:22. > :51:26.commitment and do it now. They simply have to tell us what they
:51:27. > :51:32.would do. If you vote Labour in 15, you get a 50p top rate tax, any
:51:33. > :51:37.other party, you get less. Your party has been making noises that
:51:38. > :51:41.you could support a top rate tax. Our conference last year except
:51:42. > :51:46.policy of retaining our current rates today. Moving further on
:51:47. > :51:50.reducing the millionaire pension benefits that they have that raise
:51:51. > :51:56.more revenue than the 50p rate. The absolute focus on priority for us is
:51:57. > :52:01.making sure those on low and middle income wages have cut. An
:52:02. > :52:06.unprecedented lifting of the threshold altogether across all
:52:07. > :52:09.parts of Scotland. That is our absolute priority. Making sure when
:52:10. > :52:15.the recovery is taking holders is now, people on lower and middle
:52:16. > :52:18.incomes benefit. 50p tax is an issue of fairness. We have to leave it
:52:19. > :52:27.there. I think we will discuss that issue plenty more in the future.
:52:28. > :52:31.Thank you for your time. This is a very wet College Green, I can assure
:52:32. > :52:35.you. We will let you get back inside! I'm
:52:36. > :52:45.now joined by Professor John Curtis for the final time this afternoon.
:52:46. > :52:52.Angus was saying the yes campaign has two achieve less in the last
:52:53. > :52:58.four months than in the now -- in the next four months than in the
:52:59. > :53:04.last eight months. Yes, there was a poll at the weekend. Once you took
:53:05. > :53:14.out the people who didn't know, 46% of people said yes, 54% said no.
:53:15. > :53:17.That was the highest proportion of yes and it was six points up on the
:53:18. > :53:23.last reading by the same organisation back in September. On
:53:24. > :53:27.its own, you might say, well, that is just a bit of an unusual poll.
:53:28. > :53:30.But it does come on the back of four other polls before Christmas, all of
:53:31. > :53:37.which were done after the White Paper. None showed a dramatic
:53:38. > :53:42.swimming -- swing in the guest direction, but all showed a small
:53:43. > :53:48.swing of about two points. Now looking at this poll, maybe the
:53:49. > :53:52.swing is even bigger. It would certainly be the first significant
:53:53. > :53:56.swing. A couple of caveats. If you take the average of all five opinion
:53:57. > :54:05.polls are just referred to, with still only talking about a yes vote
:54:06. > :54:09.of 39%. Certainly, one as to say this latest poll is rather view on
:54:10. > :54:16.young voters, a big swing among young voters. We have to leave it
:54:17. > :54:21.there. Thank you the joining us. That's all we have time for. We're
:54:22. > :54:29.back at the same time next week. Thank you for your company.