:00:15. > :00:20.-- Good afternoon and welcome to the Politics Scotland budget
:00:20. > :00:26.special. We will be crossing to the chamber of the Scottish Parliament
:00:26. > :00:34.for the Finance Secretary's big statement very soon. With me in the
:00:34. > :00:42.studio is our Business and Economy Editor, Douglas Fraser. You can
:00:42. > :00:46.also follow our live online budget page at bbc.co.uk/scotlandnews.
:00:46. > :00:55.Lots of ways to get of the information for what is an
:00:55. > :01:01.important day at Holyrood. Firstly, John Swinney has �28 billion to
:01:01. > :01:06.spend or so over the coming year, what will happen? It is getting
:01:06. > :01:12.squeezed and he has boxed himself in with some promises. Protect the
:01:12. > :01:17.NHS, free tuition fees. But he must talk about growth and jobs. The
:01:17. > :01:27.politics as an v public demand that he says something about that. He
:01:27. > :01:34.
:01:34. > :01:41.will have to say something about fairness.
:01:41. > :01:45.I look forward to it Parliament's scripted it -- scrutiny of our
:01:45. > :01:51.budget bill. I will work with other parties to build as much consensus
:01:51. > :01:55.as I can. Stop and continues to face significant challenges as a
:01:55. > :02:00.result of global economic conditions and the UK Government's
:02:00. > :02:05.approach to public finances. The settlement we have received is the
:02:05. > :02:11.toughest since devolution. Over a four-year period, the Scottish
:02:11. > :02:17.Government budget has been cut by more than 11% in real terms. Within
:02:17. > :02:22.that, our capital budget has been reduced by a third. The position
:02:23. > :02:28.for next year is particularly challenging. It represents the 4th
:02:28. > :02:35.consecutive year for which there has been a real-terms reduction in
:02:35. > :02:37.paused on at the Budget are mine. In June 2010, when the Office for
:02:37. > :02:47.Budget Responsibility set out initial forecasts for the UK
:02:47. > :02:47.
:02:47. > :02:55.economy, if the predicted growth of nearly 3% in 2012. Recent forecasts
:02:55. > :02:59.are less than half a percentage for 2012. UK GDP has now contracted for
:03:00. > :03:05.four consecutive quarters. The decline has been driven by a sharp
:03:05. > :03:09.fall in the construction sector which has fallen by 80% over this
:03:09. > :03:19.period. This data reinforces the case Scottish Government continues
:03:19. > :03:21.
:03:21. > :03:27.to make, that a different strategy is required from the UK Government.
:03:27. > :03:33.There should be a stimulus for the construction sector. It will also
:03:33. > :03:39.help to provide better housing, hospitals and schools. That is why
:03:39. > :03:45.they called again on the UK Government to support a targeted
:03:45. > :03:53.fiscal stimulus to create jobs. Global economic conditions continue
:03:53. > :03:56.to affect us severely. Household income as remain under pressure. We
:03:56. > :04:02.are focused on enhancing confidence in order to encourage private
:04:02. > :04:05.sector investment and growth, and to help thousands were we can.
:04:05. > :04:09.While the UK Government refuses to change course, this administration
:04:09. > :04:13.will continue to do all we can within our power has to deliver
:04:13. > :04:19.growth and support jobs. Over the past 12 months, we have acted
:04:19. > :04:23.decisively to achieve this. Last September, we published our
:04:23. > :04:27.economic strategy and the spending review which set out measures to
:04:27. > :04:36.tackle unemployment. In the face of cuts being made to a capital
:04:36. > :04:41.budgets, we are boosting capital investment through infrastructure
:04:41. > :04:45.projects which will be delivered through a non-profit making model.
:04:45. > :04:50.We are supporting a range of innovative finance initiatives,
:04:50. > :04:54.such as the National Housing Trust. Our major investment programmes
:04:54. > :05:00.support thousands of jobs across Scotland. Here are some compelling
:05:00. > :05:04.cases which reinforce the strength of this administration's approach.
:05:04. > :05:10.95% offer annual transport budget was last year invested back into
:05:10. > :05:14.the private sector, supporting over 25% of civil engineering contracts
:05:14. > :05:19.in Scotland and more than 12,000 jobs. It is estimated that our
:05:19. > :05:23.housing budget of more than 750 million over three years would
:05:23. > :05:28.generate around �3 billion of economic activity and support up to
:05:28. > :05:34.8,000 jobs each year. Spending review also provided significant
:05:34. > :05:37.investment in skills and post 16 education, including through it
:05:38. > :05:44.hour opportunities for all initiative, guaranteeing a training
:05:44. > :05:51.opportunity for all people aged between 16 and 19 who are not in
:05:51. > :06:01.employment, education or training. It lent opportunities to real jobs.
:06:01. > :06:04.
:06:04. > :06:08.Completion rates have increased our record 75%. From 2007 until the end
:06:08. > :06:15.of this spending review period, we will have invested almost �5
:06:15. > :06:24.billion in colleges, 45% more in cash terms than the investment made
:06:24. > :06:30.under the two terms of the previous administration. The spending review
:06:30. > :06:36.confirms decisive support for business, including great success
:06:36. > :06:42.in a food and drink exports. Also the establishment of enterprise
:06:42. > :06:50.industries. And generous business relief rates. Valued at �2 billion
:06:50. > :06:53.over five years. At a time when household budgets and public
:06:53. > :06:58.services are under pressure, the spending review provided funding to
:06:58. > :07:02.deliver key commitments we have made to the people of Scotland.
:07:02. > :07:10.Working with local government partners to support -- to enforce
:07:10. > :07:17.the council tax freeze. Keeping our policy of no tuition tax -- and no
:07:17. > :07:21.tuition fees. Scrapping it prescriptions charges. Improving
:07:21. > :07:29.schools with the curriculum for excellence. Maintaining teacher
:07:29. > :07:36.rumbles. Giving 1,000 extra police officers. Our draft budget will
:07:36. > :07:41.ensure the delivery of -- of all of these commitments over 2013-14.
:07:41. > :07:49.This is a government that delivers on its promises. The spending
:07:49. > :07:55.review almost -- also put public reformed at the heart of dealing
:07:55. > :08:01.with our economy. We want to use our resources effectively to meet
:08:01. > :08:08.the needs of Scotland. We made sure that the shift to preventative
:08:08. > :08:12.spending is essential to ensure sustainability of public services.
:08:12. > :08:17.We have made �500 million available to three funds to support early
:08:17. > :08:25.years adult social care and tackle reoffending. The draft budget
:08:25. > :08:30.announced today provides an update on these funds. Looking forward, I
:08:30. > :08:37.confirm today that'come agreements will incorporate a long-term
:08:37. > :08:47.prevention plan that makes the A8 commitment to -- that makes the
:08:47. > :08:47.
:08:47. > :08:57.commitment to invest further in a intervention. It reflects agreement
:08:57. > :08:57.
:08:57. > :09:02.with local authority partners regarding police and fire services.
:09:02. > :09:06.We must remain vigilant to changing economic conditions and respond
:09:06. > :09:11.decisively. In developing the draft budget, I have scrutinised in
:09:11. > :09:16.detail what scope exists to create additional flexible -- flexibility
:09:16. > :09:20.to provide further stimulus. I have reached the following conclusions.
:09:20. > :09:25.Scottish Water has delivered significant improvements in
:09:25. > :09:32.services over 10 years. With an annual turnover in excess of 1
:09:32. > :09:37.billion, it sustains 20% of the Scottish civil construction
:09:37. > :09:44.industry. After four years of water charges being frozen, average
:09:44. > :09:48.household charges are �50 lower than in England and Wales. The
:09:48. > :09:52.quality of water services has been improved. Against this background
:09:52. > :10:00.of high performance and efficiency, I have reconsidered the financial
:10:00. > :10:05.position and have agreed that we can reduce our lending by �45
:10:05. > :10:15.million in 2013 with no detriment to services or their investment
:10:15. > :10:15.
:10:15. > :10:21.programmes. Furthermore, alone at made in 2008 will be repaid -- 8
:10:21. > :10:29.bank loan. These steps demonstrate beyond doubt the value of retaining
:10:29. > :10:34.Scottish Water in public ownership. I have also reviewed the benefits
:10:34. > :10:39.of a robust approach to the management of major infrastructure
:10:39. > :10:43.projects, such as the 4th replacement crossing. I am able to
:10:43. > :10:49.release budget contingency of �20 million this year. I have taken
:10:49. > :10:51.into account the efficiencies that Scottish Futures Trust is helping
:10:51. > :10:57.us to love her in our overall capital programme. Over the past
:10:57. > :11:01.three years, they have delivered a total of �371 million in savings
:11:01. > :11:07.and benefits to the people of Scotland. We expect further
:11:07. > :11:11.benefits in future, including in building new schools. I am able to
:11:11. > :11:17.carry forward more than originally planned through the budget exchange
:11:17. > :11:27.mechanism, freeing up �40 million of additional resources to be
:11:27. > :11:33.
:11:33. > :11:37.deployed in the coming year. There is �31 million to be deployed. I
:11:37. > :11:42.have considered the scope for redirecting resources within
:11:42. > :11:48.existing budgets. I have considered an our position on non-domestic
:11:48. > :11:56.rates. The Government has introduced several proportionate
:11:56. > :12:00.measures. We continue to keep this matter under review. Last year, we
:12:00. > :12:05.put in place a package of measures to help regenerate town centres and
:12:05. > :12:08.encourage empty properties back into use. As part of this, we
:12:08. > :12:16.believe the changes we are making to empty property relief have a key
:12:16. > :12:20.role to play. I recognise there is more we can do. Two further
:12:20. > :12:23.incentivising empty properties back into use, the local government
:12:23. > :12:31.minister yesterday launched an amendment which will be used to
:12:31. > :12:36.reward those who bring premises back into use. I come from to
:12:36. > :12:40.Parliament that we're progressing the additional powers set out in
:12:40. > :12:44.the stock and back with an additional �3 million allocated in
:12:44. > :12:50.this Budget to meeting implementation costs in at 2014. By
:12:50. > :12:54.exploring all avenues, the steps I have taken enable me to make a
:12:54. > :13:01.number of other spending announcements today to boost
:13:01. > :13:05.capital investment, tackle young unemployment and enhance economic
:13:05. > :13:10.confidence by encouraging private sector investment. In February, we
:13:10. > :13:16.announced a package of �380 million of capital spending over the period
:13:16. > :13:24.until 2015, focusing on transport, housing, digital and maintenance
:13:24. > :13:30.projects. In June, we announced shovel ready projects valued at
:13:30. > :13:37.�105 million, targeted towards renewables, housing and transport.
:13:37. > :13:47.There will be further investment in a road improvements and tourism
:13:47. > :13:47.
:13:47. > :13:57.project. We will provide all �40 million this autumn and next year
:13:57. > :13:59.
:13:59. > :14:05.for affordable housing. Please save the applause until the end. We will
:14:05. > :14:15.deliver more homes more efficiently than was ever achieved under the
:14:15. > :14:19.previous administration. 600 new homes were delivered last year. To
:14:19. > :14:23.further boost the construction industry, we are unable to expand
:14:23. > :14:29.the number of schools being built. We will increase the number of
:14:29. > :14:34.schools being built from 55 up to 67 and we will build them sooner.
:14:34. > :14:38.The Education Secretary will confirm details shortly, but I have
:14:38. > :14:48.offered -- authorised the financing of more rapid delivery of the
:14:48. > :14:48.
:14:48. > :14:54.programme, by bringing forward plant future involvement in two
:14:54. > :14:58.this coming year -- planned. 350 schools have already been built or
:14:58. > :15:03.refurbished in the last four financial years. More than the
:15:03. > :15:07.previous administration was able to deliver in eight years. We have
:15:07. > :15:14.half the number of children in crumbling schools. Our partnership
:15:14. > :15:19.with local authorities remains central to our delivery programme.
:15:19. > :15:21.I know that Parliament will welcome the joint commitment the First
:15:21. > :15:29.Minister and the president of COSLA have made today, to work together
:15:29. > :15:34.wherever possible to support economic recovery. Investment in a
:15:34. > :15:39.Green economy can deliver Malta bolt economic and environmental
:15:39. > :15:46.benefits. I am announcing �130 million of funding over this year
:15:46. > :15:51.and next for a programme for energy efficiency measures. This will
:15:51. > :15:57.provide opportunities for small and medium-sized construction firms. A
:15:57. > :16:00.package will focus on supporting domestic households to improve home
:16:00. > :16:10.insulation and measures to improve energy efficiency in the public
:16:10. > :16:15.
:16:15. > :16:18.We will provide further funding of �2.5 million... Provide the
:16:18. > :16:28.challenges we face, the Government is focused on opportunities for
:16:28. > :16:31.
:16:31. > :16:41.growth and encouraging development. We have seen success in tourism. We
:16:41. > :16:43.
:16:43. > :16:52.have had a 5% increase in visitor numbers. I announce the Investment
:16:52. > :16:56.of �1.5 million in marketing. The National Museum of Scotland it is a
:16:56. > :17:04.wonderful success, and has attracted over 2 million visitors
:17:04. > :17:14.since it reopened. �1 million will be given to the maintenance of
:17:14. > :17:20.
:17:20. > :17:25.historic buildings across Scotland. Building on the momentum provided
:17:25. > :17:30.by the Olympics, Paralympics and the promise of the Commonwealth
:17:30. > :17:35.Games, and recognising the impact sporting success can have, I have
:17:35. > :17:39.allocated an additional �1 million to support athletes in the run-up
:17:39. > :17:49.to the Commonwealth Games. We are committing an additional �6 million
:17:49. > :17:51.
:17:51. > :18:01.across this year and next to focus on a community Leeds Initiative.
:18:01. > :18:18.
:18:18. > :18:28.Our investment in cycling is is part of a wider investment. We are
:18:28. > :18:34.responding as best as we can to mitigate threat. This project
:18:34. > :18:42.contains �23 million to mitigate the cuts to council tax benefit,
:18:42. > :18:49.and we will continue to engage with the Department of Work and Pensions.
:18:49. > :18:57.There were has the case for independence been made more clearly
:18:57. > :19:02.than in the area of wealth -- of welfare. Scotland will continue to
:19:03. > :19:09.take a distinctive calls that uses public money effectively, and
:19:09. > :19:19.reflect our core values that we must support the most vulnerable in
:19:19. > :19:25.
:19:25. > :19:35.society. We will continue to implement Policies, including the
:19:35. > :19:37.
:19:37. > :19:47.abolition of prescription charges, to help households across Scotland.
:19:47. > :20:11.
:20:11. > :20:21.Our policy includes a commitment to implement the Scottish living wage,
:20:21. > :20:23.
:20:23. > :20:28.not just in 2013-14, but for the remainder of this Parliament. These
:20:28. > :20:38.measures will help enhance economic confidence, provide security 2000,
:20:38. > :20:41.
:20:41. > :20:51.and support jobs across the economy -- provide security to thousands.
:20:51. > :20:53.
:20:53. > :21:01.Latest figures show youth unemployment remains far too high.
:21:01. > :21:11.I have been determined to do more to support those training for work.
:21:11. > :21:14.
:21:14. > :21:24.I want to keep a student numbers at 2011-2012 levels. I will allocate
:21:24. > :21:26.
:21:26. > :21:36.resources to establish an energy skills Academy, to support schools
:21:36. > :21:58.
:21:58. > :22:02.for -- to support skills. 18 to 24- year-old need supporting. The
:22:02. > :22:08.Government will assist in the creation of up to 10,000 jobs for
:22:08. > :22:14.young people in the private sector. These measures confirm our
:22:14. > :22:23.determination to do all we can to support the young people of
:22:23. > :22:33.Scotland. The Government has produced a draft budgets. I have
:22:33. > :22:36.
:22:36. > :22:44.announced Investment in a Green economy, skills and the work force
:22:44. > :22:54.of a quarter of a billion pounds. I commend the budget to parliament.
:22:54. > :22:54.
:22:54. > :23:04.Typical John Swinney. A call for the UK Government to provide
:23:04. > :23:09.capital investment. Interesting to see what the opposition parties say.
:23:09. > :23:15.I think Ken Mackintosh will speak first, then Gavin Brown for the
:23:15. > :23:20.Conservatives, then we need one -- N will he Rennie. The cabinet
:23:20. > :23:28.secretary for finance said last year he was describing a Budget for
:23:28. > :23:38.jobs and growth, he plans to steer Scotland in a certain course. Now,
:23:38. > :23:44.
:23:44. > :23:49.unemployment is higher in Scotland than the UK average. This SNP
:23:49. > :23:53.Minister and administration have cost 30,000 public sector jobs over
:23:53. > :24:00.the last year alone. The Finance Minister stands before us today
:24:00. > :24:10.with no hint of humility, and no hint of apology. The worrying truth
:24:10. > :24:15.
:24:15. > :24:25.is, he seems content to pass the bog. -- buck. Either to Westminster,
:24:25. > :24:27.
:24:28. > :24:32.or to local authorities. He did not have the courage to mentioned the
:24:33. > :24:38.consequences. What is the real terms cut to local authorities? How
:24:38. > :24:44.many bin men having to lose jobs? How many people will have to
:24:44. > :24:50.struggle for support? How many schools will suffer? How does his
:24:50. > :24:56.decision mitigate the welfare cuts inflicted from the UK Government?
:24:56. > :24:59.Scotland's young people at being harshly affected by the recession.
:24:59. > :25:09.Why did the finance minister slam the college door shut in their
:25:09. > :25:09.
:25:09. > :25:14.faces with last year's cuts to further education? Can If the
:25:14. > :25:20.finance minister, was he right then and therefore wrong now, or is he
:25:20. > :25:24.right now and therefore wrong then, because he cannot be both? One of
:25:24. > :25:29.the few straps of good news is some help for the housing sector. Given
:25:29. > :25:34.the cut last year, he is not even the undoing the damage he has
:25:34. > :25:44.wrought on this industry. 12,000 builders lost their jobs last year,
:25:44. > :25:46.
:25:46. > :25:55.due to his decision. Why not use Government revenue to free up
:25:55. > :26:05.capital? What we have head yet again is, it is not me. When will
:26:05. > :26:14.
:26:14. > :26:24.he take responsibility? Mr McIntosh axed asked about local authority
:26:24. > :26:26.
:26:26. > :26:36.funding. A larger share of the budget and I inherited from all of
:26:36. > :26:40.
:26:40. > :26:46.his Labour predecessors in Scotland. Secondly, let's look at the housing
:26:46. > :26:56.situation. Between 2007 and 2011, this Government invested �2.3
:26:56. > :27:04.billion in housing in Scotland. Between 2003 and 2007, �1.6 billion
:27:04. > :27:14.was invested by the Labour Government. They were able to build
:27:14. > :27:14.
:27:14. > :27:19.4832 houses. We were able to build 6882 homes, so I will take no
:27:19. > :27:29.lectures about housing from a Labour Party that was so
:27:29. > :27:31.
:27:32. > :27:37.inefficient in house construction, it could not build the houses. In
:27:37. > :27:41.terms of welfare cuts, welfare codes, I would remind him he is
:27:41. > :27:51.joined at the hip to the people who were cutting welfare in this
:27:51. > :27:59.
:27:59. > :28:06.country! They are joined at the he a! -- at the hip! What are we doing
:28:06. > :28:10.about it? As a result of partnership working with local
:28:10. > :28:19.Government, we are putting money into make-up for the code's in
:28:19. > :28:29.council tax benefit -- the court. We are not posturing with the
:28:29. > :28:34.
:28:34. > :28:39.Tories like Ken Mackintosh. Order! Order! And I will not take a scrap
:28:39. > :28:46.of a lesson from Ken Mackintosh about facing up to my
:28:46. > :28:50.responsibilities. I have set a budget, a balanced budget, since
:28:50. > :28:56.2007, and that lot have voted against any decent measure that has
:28:56. > :29:06.been brought forward. We will face up to our responsibilities and we
:29:06. > :29:11.
:29:11. > :29:17.will deliver for the people of Scotland. Gavin Brown. Can I thank
:29:17. > :29:26.the Cabinet Secretary for the statement and the draft budget. I
:29:26. > :29:35.was grateful for advance copies of the draft budget, because I found
:29:35. > :29:43.the total budget just over �34 million. -- effective �4 billion.
:29:43. > :29:49.More than �2 billion more at his disposable -- at his disposal than
:29:49. > :29:59.he had before, yet he complains about savage cut. At best, this can
:29:59. > :30:05.
:30:05. > :30:09.be described as an art full budget. Housing, John Swinney takes out
:30:09. > :30:15.�100 million and things we should be grateful because he has given
:30:15. > :30:21.�40 million back. The construction sector is struggling. We have high
:30:21. > :30:25.youth unemployment and he takes �50 million out of colleges, and today
:30:25. > :30:35.they should be grateful because they get so -- they are getting �70
:30:35. > :30:37.
:30:37. > :30:47.million back. We see reductions over the coals -- we see reductions
:30:47. > :30:56.
:30:56. > :31:00.all over. When you add this together, how does he justify his
:31:00. > :31:10.statements are, and saying he has an unrelenting pursuit for economic
:31:10. > :31:13.
:31:13. > :31:18.Can I thank him for his question? Can I start what the numbers? We're
:31:18. > :31:28.always loved to start with the numbers. If Mr Brown looks at the
:31:28. > :31:30.
:31:30. > :31:33.second page of the budget document, right up there, I'd chuck out the
:31:33. > :31:43.information about the UK Government's spending review
:31:43. > :31:44.
:31:44. > :31:54.settlement. -- I chart out. What it shows is that the total budget in
:31:54. > :31:55.
:31:55. > :32:00.2012 was a 28 million. -- billion. It is now 24 billion. That is a
:32:00. > :32:05.reduction in cash terms. If Mr Brown would care to look in detail
:32:05. > :32:11.at all the numbers, which I am sure he will do, he will recognise that
:32:11. > :32:16.the Conservative government in the United Kingdom... I have had to
:32:16. > :32:22.deal with the fact that the United Kingdom Government has reduced our
:32:22. > :32:32.budget for capital purposes by 33%. One third. That is the
:32:32. > :32:33.
:32:33. > :32:38.irresponsible act that we have had to deal with. That kind of
:32:38. > :32:45.reduction in the teeth of an economic recession. If you listened
:32:45. > :32:49.carefully to my argument, we marshal an argument which is about
:32:49. > :32:53.investment in the long-term future of the economy, which is capital
:32:53. > :32:56.investment. It is the responsible thing to do. It is something I
:32:56. > :33:00.would have thought the Conservative government would have been
:33:00. > :33:03.attracted to in recognising the severity of the economic
:33:03. > :33:07.circumstances. What Mr Brown has to acknowledge is that when his
:33:07. > :33:16.government came to power, the forecast for growth in the economy
:33:16. > :33:20.today was nearly 3%. Now it is less than half a percentage. That is the
:33:20. > :33:29.rationale for investing in capital projects with in this country. Mr
:33:29. > :33:33.Brown asks me what have I done to support the economy. There is �3
:33:33. > :33:38.billion of capital expenditure which has been brought forward.
:33:38. > :33:43.There are more schools which Mr Russell will speak about in the
:33:43. > :33:47.next week. There is an immediate stimulus to the housing sector.
:33:47. > :33:51.There is a stimulus to support the employment of young people in the
:33:51. > :33:56.private sector. There are modern apprenticeships, which the
:33:56. > :34:01.Conservatives voted against. There was the small business bonus scheme
:34:01. > :34:06.which the Conservatives voted against. Mr Brown says, come on. I
:34:06. > :34:15.am afraid these are the facts. The Conservatives voted against the
:34:15. > :34:19.Budget last year and voted against the small business bonus scheme.
:34:19. > :34:23.The First Minister says, bring back Annabel Goldie. It must have been a
:34:23. > :34:27.sensible leadership that was taking the decisions in the last
:34:27. > :34:32.Parliament and the Gloucester way in this Parliament. I hope that Mr
:34:32. > :34:39.Brown, in examining the detail of the Budget, will acknowledge the
:34:39. > :34:49.Government is doing -- is using every revolt at my disposal to
:34:49. > :34:53.invest in the economy and that is what an have done. I would like to
:34:53. > :34:56.thank the Finance Secretary for an advance copy of the statement. He
:34:56. > :35:03.knows that last year the Liberal Democrats worked constructively to
:35:03. > :35:07.deliver changes to the budget. We secured extra funds for colleges,
:35:07. > :35:15.social housing and early intervention. This year, I hope we
:35:15. > :35:23.can work again to protect those gains. In a budget which has
:35:23. > :35:29.increased in cash terms, no matter what he says... Mr Swinney said he
:35:29. > :35:34.wanted the relentless pursuit of economic growth. But his budget is
:35:34. > :35:40.10am. This Government is more focused on independence. If he was
:35:41. > :35:46.committed to doing all he could, he would release �2 billion locked up
:35:46. > :35:52.in the accounts of Scottish Water, to invest in creating 100,000 new
:35:52. > :35:56.jobs. Broadband, science, early intervention and energy efficiency.
:35:56. > :36:00.That is the kind of change that prioritise sees the economy. Will
:36:00. > :36:10.he make those reforms to release the money to create the jobs? Or
:36:10. > :36:13.
:36:13. > :36:19.will he just beat him at? -- be timid. I am grateful for the
:36:19. > :36:23.question. I will engage in dialogue with all the parties. I will
:36:23. > :36:27.happily take forward those discussions. I would have thought
:36:27. > :36:36.that he might have welcomed the steps I was taking to generate
:36:36. > :36:39.maximum impact from the Scottish Water enterprise within our country.
:36:39. > :36:44.It has leveraged out resources to be used and the support of the
:36:44. > :36:47.economy, which previously we do not think we would be able to bring
:36:47. > :36:54.into the Budget. I would have thought he would have welcomed that
:36:54. > :36:58.in the budget. He asked me once again to go through the routine of
:36:59. > :37:04.privatising its Scottish Water. Which has told him on countless
:37:04. > :37:07.attentions -- countless occasions that I will not be privatising
:37:07. > :37:13.Scottish Water under any circumstances. When his idea was
:37:13. > :37:18.put forward by the Liberal Democrats before the parliamentary
:37:18. > :37:22.election in 2011, the Scotsman newspaper reported on putting this
:37:22. > :37:27.proposal to the decision maker on this question, to the Chief
:37:27. > :37:34.Secretary to the Treasury, Danny Alexander. This is what that
:37:34. > :37:38.newspaper reported. Danny Alexander failed to promise that the money
:37:38. > :37:48.the Liberal Democrats' claims would be freed up would not be clawed
:37:48. > :37:52.back by the Treasury from the UK Government. So, it is a kind of
:37:53. > :37:58.strange situation But you sell the family silver and you don't even
:37:58. > :38:03.get to keep the proceeds as a result!
:38:03. > :38:11.Let pick up on some of the main themes of his draft budget. -- let
:38:11. > :38:19.us. 1% pay increase for those and the public sector. The number of
:38:19. > :38:28.schools to be built to increase from 55 up to 67. Scottish Water
:38:28. > :38:33.will see its lending reduced by �45 million. Colleges will see �17
:38:33. > :38:41.million more to maintain student numbers. That is something the SNP
:38:41. > :38:46.have been criticised about in the past. Give us your interpretation.
:38:46. > :38:53.He says this was the tightest settlement since devolution. But it
:38:53. > :38:57.seemed that way? Yes, I does. He has found some money, especially in
:38:57. > :39:05.Scottish Water, and he is distributing that. Housing is
:39:05. > :39:09.getting a lot. It is about homes and it is about jobs. The SNP has
:39:09. > :39:16.been under pressure from Labour over the last year. He has prepared
:39:16. > :39:20.the political ground on that one. In terms of pay, 500,000 people in
:39:20. > :39:29.stock and work in the public sector. How many of those will be directly
:39:29. > :39:37.impacted by the announcement today? It is less than 30,000 who work in
:39:37. > :39:41.the NHS. A lot of people will still have to negotiate. I think he will
:39:41. > :39:49.soon that local authorities will apply the same 1%. Slightly more
:39:49. > :39:54.for those earning less than 21,000 and a cap above 80,000. He is not
:39:54. > :40:01.saying how that is getting funded. How much will have to be squeezed
:40:01. > :40:04.out of other budgets, for example. The unions will be pointing out
:40:04. > :40:10.that bat is still a long way short of the current inflation rate and
:40:10. > :40:16.they have had a freeze for several years. They will continue to lose
:40:16. > :40:21.ground if inflation does not come down. We have the Commonwealth
:40:21. > :40:28.Games coming up. There is a good headline to be had out of this.
:40:28. > :40:35.Elite athletes get him �1 million. They are arguing over the figures,
:40:35. > :40:42.but it is something like �13 billion. �1 million extra for elite
:40:42. > :40:51.athletes doesn't make for much of a difference on the budget, but it
:40:51. > :40:58.will be good on the headlines -- something like �31 billion. There
:40:58. > :41:02.is a will be an issue as well. Thank you very much. Lots more
:41:02. > :41:08.analysis from you to come, Douglas. Our Political Editor Brian Taylor
:41:09. > :41:13.is in Parliament. You predicted there was not much leeway for John
:41:13. > :41:17.Swinney. That has turned out to be the case. The pay rise is
:41:17. > :41:23.interesting, though we should be aware that it is only those
:41:23. > :41:27.employees for and he has direct responsibility. That is quangos and
:41:27. > :41:33.senior NHS managers. But it is probably the beginning of the
:41:33. > :41:39.freeze in pay. The increased capital investment is interesting.
:41:39. > :41:45.There is evidence of political sensitivity. He got a real taking
:41:46. > :41:53.on housing and colleges last year. We have seen a retrenchment since
:41:53. > :41:56.then and I think there is further retrenchment in the Budget today.
:41:57. > :42:02.This is the document. If you go to the back, you get a detailed
:42:02. > :42:08.breakdown of figures. You can see The areas that are suffering and
:42:08. > :42:16.that his local government. A straightforward reduction from 881
:42:16. > :42:22.million to 749 million. Other budgets are going down. Capital, he
:42:22. > :42:31.is trying to burst. The court budget is down, housing, culture,
:42:31. > :42:34.motorways and roads, concessionary fares for buses and the big cut is
:42:34. > :42:42.on local government. That eye- catching announcements he wants us
:42:42. > :42:49.to see, reasonable from his perspective, is this attempt to
:42:49. > :42:53.improve growth. But the overall figures are of squeeze and cuts.
:42:53. > :42:58.There will be fewer people employed in the public sector because of the
:42:58. > :43:05.cuts you have spoken about. Not much from John Swinney on that. But
:43:05. > :43:12.he did talk about the no compulsory redundancies policy of the Scottish
:43:12. > :43:16.Government. And freezing council tax again. Freezing council tax,
:43:16. > :43:20.prescription charges. He is trying to say that for those households
:43:20. > :43:29.were struggling, there is some leeway if they are in the public
:43:29. > :43:32.sector. There are other ways of trying to make life better for you.
:43:32. > :43:36.John Swinney is not trying to pretend that this is anything other
:43:36. > :43:43.than a series of cuts. I thought Ken Macintosh was then trying to
:43:43. > :43:46.say that he had been responsible for 30,000 jobs. John Swinney is
:43:46. > :43:52.obviously sensitive to that and came back extremely vigorously
:43:52. > :44:00.indeed. Probably questioning what Ken Macintosh would do, given that
:44:00. > :44:10.there is a limited budget as described by HM Treasury. Thank you,
:44:10. > :44:12.
:44:12. > :44:14.Brian and a magnificent and braces. -- and your magnificent braces.
:44:15. > :44:18.That's it for this afternoon. The budget debate at Holyrood continues
:44:18. > :44:20.till 3:30pm and can be watched on the BBC's Democracy Live site or
:44:20. > :44:23.follow our live budget coverage at bbc.co.uk/scotlandnews. And if