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Page last updated at 12:57 GMT, Sunday, 15 March 2009

Scotland's major health problem

On Sunday 15 March Andrew Marr interviewed Scotland's First Minister, Alex Salmond.

Please note 'The Andrew Marr Show' must be credited if any part of this transcript is used.

Alex Salmond
We can do within the powers that we have in the Scottish Parliament, but we don't have powers, for example, to reflate the economy
Alex Salmond

First Minister Salmond says alcohol is "a problem we've got to face up to"...

ANDREW MARR:

Well Alex Salmond is with me now. Welcome.

ALEX SALMOND:

Good morning, Andrew.

ANDREW MARR:

Good morning. Do you think that the recession, the crash, has frankly put on ice for a long time any hopes that you may have of independence for Scotland?

ALEX SALMOND:

No, I think actually the contrary. I think what will concentrate people's minds is that when you're dealing with a hugely difficult economic situation, you need the economic powers, the economic teeth in order for your own government to respond to that situation. Now obviously we do everything that we can do within the powers that we have in the Scottish Parliament, but we don't have powers, for example, to reflate the economy, to inject demand and confidence, to have a major fiscal stimulus.

ANDREW MARR:

(over) And all the money, and all the money. Even if you were independent, the balance sheet at RBS was fifteen times the GNP of an independent Scotland. You would have gone under had you, had you been having to deal with this by yourselves.

ALEX SALMOND:

Well can I just point out, Andrew, that you know RBS in its heydays over the last ten years was clocking up 4 billion a year, I think the maximum of corporation tax, which all went to London. Now you know I'm not defending for a second the grievous errors that the Royal Bank of Scotland made. I'm just pointing out that if you take

ANDREW MARR:

(over) I know, but

ALEX SALMOND:

the corporation tax in the London Treasury over the last ten years, whether it be RBS or HBOS, then it's hardly, it's hardly right to complain about having to inject capital as a loan.

ANDREW MARR:

But we are where we are, and had you had HBOS and RBS on your plate as an independent Scotland it would have been a catastrophe.

ALEX SALMOND:

No, we are where we are, Andrew. And if we had over the last ten years the ability to build up a capital fund through Scotland being independent and controlling oil revenues, if you had the corporation tax, then you would have the sort of capital fund that, for example, Norway has used to stabilise its financial sector. So if we go back

ANDREW MARR:

(over) And yet that

ALEX SALMOND:

if we go back in the past, then you've got to take the revenues as well as taking the obligations and liabilities. But we are where we are, Andrew, and right now what we need is economic power in Scotland in order to respond and to overcome the economic crisis.

ANDREW MARR:

And yet that rhetoric that you were responsible for of the arc of prosperity, Ireland and Iceland and Scotland

ALEX SALMOND:

And Norway.

ANDREW MARR:

And Norway.

ALEX SALMOND:

And the Scandinavian countries.

ANDREW MARR:

Yeah, but you mentioned

ALEX SALMOND:

(over) An arc goes right round, Andrew. (laughs)

ANDREW MARR:

Well you talked a lot about Ireland and Iceland and it's glug-glug-glug. And if you look at people, people's reaction in the opinion polls, it's kind of right, that's it, we don't want anything to do with independence for a while.

ALEX SALMOND:

Alright, let's take the two things. Firstly, an arc goes right round and I mean I think the lesson of the financial crisis is that countries large and small are being affected. I mean the UK, as you're well aware, is now forecast to have the deepest recession of any

ANDREW MARR:

Absolutely.

ALEX SALMOND:

major economy in the world, so I mean that's hardly an advert for London financial management. But all countries, large and small, are affected. But, secondly, you know on the opinion poll this morning, let's separate the poll from the interpretation. I mean that poll shows the SNP four points up on where we were two years ago at the Scottish Election in mid-term. Now I don't know how many governments in history in mid-term are more popular than they were when they got elected, but we seem to have pulled that off.

ANDREW MARR:

It also shows that people don't want a referendum and don't want independence.

ALEX SALMOND:

Well actually the case for referendum is 2-1 in favour in that opinion poll.

ANDREW MARR:

It's gone right down in terms of what people find important.

ALEX SALMOND:

Well every single poll which has asked people do you want a referendum to decide the constitutional future of Scotland has shown a massive majority in favour, and the majority in that poll is 2-1. It's always best I mean you mentioned I mean I don't mind the press in Scotland - we live them - but I mean it's sometimes wise to separate the press's own opinion from what the findings of the poll actually show. It's not really surprising. I mean if you ask people 'how do you want to decide the issue of the constitutional future of a country', then surely the right way to do it is by a democratic referendum.

ANDREW MARR:

I'm putting it to you that if they do want a referendum, they want one some time in the future; that the immediate impact of this recession has made people in Scotland feel that they'd like to hunker down as it were, remain part of the union for the time being because of the huge financial cost of trying to bail these banks out.

ALEX SALMOND:

Well it depends how you ask the question. And the question, as far as timing the referendum, led people to say "Look, in view of the recession don't you think that you should postpone the referendum?" If you'd asked, "In view of the urgency of having economic powers in Scotland, don't you think we should have the referendum as soon as possible?", you'd have got a

ANDREW MARR:

(over) You might have got a different answer.

ALEX SALMOND:

A totally different answer, of course.

ANDREW MARR:

Do you think that Are you encouraged by the Liberal Democrats in Scotland saying that they might be, they might revisit the idea of a referendum themselves?

ALEX SALMOND:

Well I'm encouraged if other parties in Scotland recognise the right of the Scottish people to determine our own future in terms of having a referendum. I mean I don't

ANDREW MARR:

(over) They're playing footsie with you a bit, aren't they?

ALEX SALMOND:

I don't (laughs) I'm not quite certain that's the analogy I would I mean the vision of that has got me This is a Sunday morning, Andrew. I don't want to go into that sort of thing. (laughs)

ANDREW MARR:

Only footsie.

ALEX SALMOND:

I'm encouraged if people are prepared to accept the principle even in the Unionist parties that the only way to decide these matters, the only proper way is through a democratic referendum of the Scottish people. That seems to me progress.

ANDREW MARR:

Right. What about the kind of social programme that you've put in place here? A lot of people find it nagging and interventionist, not just the smoking ban but now the talk of raising the price of alcohol - it's being discussed in England and Wales too - but, nonetheless, this is government going in places where government should keep out of.

ALEX SALMOND:

Well you know the smoking ban was our predecessors, but it was a united parliament, a largely united parliament introduced that. And I think most people would say that's been an effective measure in terms of health. We had a major health problem that we had to do something about. We also have a major health problem in alcohol. I mean it costs Scotland, the Scottish economy over 2 billion a year. But that's financial. It's the cost in human misery, it's what it does socially. It's about disruption in the streets and communities. It's about the agonising impact of health problems on families. So it's a problem we've got to face up to and this government, the Scottish government, wants to face up to it.

ANDREW MARR:

People have criticised Gordon Brown for not accepting the obvious, which was that he got too close to bankers and was a little bit dazzled by them and that he should at least feel some sense of embarrassment about that. Is the same not true of you?

ALEX SALMOND:

Well I didn't give them knighthoods.

ANDREW MARR:

You couldn't, you couldn't.

ALEX SALMOND:

I worked in the

ANDREW MARR:

(over) But you appointed them to your executive.

ALEX SALMOND:

I appointed them to my council, economic adviser in the case of George Matheson. I mean when George Matheson ran the Royal Bank of Scotland, it was one of the most profitable banks in the world. But I was, I was the economist of the Royal Bank of Scotland and I'm not ashamed of that. I mean twenty years ago, the Royal Bank of Scotland was run in a certain way. Obviously it's made grievous mistakes in the recent past. I mean you know looking at it, you were asking about you know did politicians realise or did regulators realise? I mean I've got an element of shock to find that the treasury department of a bank, which when I worked in the financial sector was there to supply funds for the retail operations of the bank, would be involved in what can only be described as financial speculation. I mean that's not what it's meant to be doing and these are some of the lessons. I mean they say that ground zero of the world financial crisis

ANDREW MARR:

(over) Was here.

ALEX SALMOND:

No, no, they say it was the Mayfair offices of AIG. But the point is that other financial institutions, ones with long histories, bought into that financial speculation because they thought that was the way to make super returns. That was the grievous mistake.

ANDREW MARR:

(over) And yet a lot of And yet a lot of this was hatched here in Edinburgh. I mean you know you said some quite strong things when HBOS was going to be put together with Lloyds, but actually it turns out that HBOS was the toxic bit, not Lloyds.

ALEX SALMOND:

Well I think Lloyds need help as well, Andrew, just as Northern Rock needed to be nationalised. There's two aspects. One: If you take RBS, RBS is unique in the sense of having bought most of its problems from ABN AMRO, which is a huge mistake but you know let's remember it does illustrate the fact

ANDREW MARR:

(over) HBOS managed to make its problems for itself.

ALEX SALMOND:

It does illustrate the fact that we're not dealing here with a Scottish financial crisis or a UK financial crisis. In terms of the financial stability, this is a world financial crisis. And while of course we've got to learn lessons, we've also got to remember that this city, this country has a financial sector which stretches into insurance, life management, fund management - the range of institutions, many of whom are doing extremely well and actually adding to employment at the present moment. So while recognising the mistakes that have been made and hopefully doing something about it, particularly in the way that financial sectors are regulated, let's not get ourselves into the situation of believing that every institution has followed these mistakes because it's not true.

ANDREW MARR:

No sense of embarrassment about too much Scottish swagger in the old days about our wonderful banks and our wonderful bankers?

ALEX SALMOND:

No, what I've got a sense of is that bad mistakes were made and the most important thing is to make sure they don't happen again. And not to while admitting these mistakes, not to get ourselves encompassed as somehow we are uniquely responsible for a manifestation that's taking place around the world and trying to get back perhaps to some of the underlying strengths of the Scottish financial sector - some of the prudence, some of the carefulness, some of the canniness that took us through previous financial crises' much better than other institutions. If we can return to these sort of values in the financial sector, then perhaps the current agony might be worthwhile.

ANDREW MARR:

And would you like to see Fred Goodwin's knighthood taken away?

ALEX SALMOND:

Well I think he should give his pension back. But I tell you something. One aspect of this is there is a huge joint responsibility in terms of government, in terms of regulators, in terms of the major players in the financial sector; and while, yeah, I don't think for example Fred Goodwin's pension is justified, what I would like to see is people stop saying, "Well it was nothing to do with me and it was all to do with him". That's not going to take us anywhere and it's not right.

ANDREW MARR:

But every time I ask a politician, they say, "Well it was nothing to do with me".

ALEX SALMOND:

Well I don't regulate the banks and the financial sector, Andrew.

ANDREW MARR:

I know.

ALEX SALMOND:

And, listen, I would hope that if we get the financial powers to, the economic teeth to reflate this economy, if we get the financial powers to regulate it, then we'll do a rather better job than has been done in the past.

ANDREW MARR:

Let me ask you about another huge area for the future, which is the whole global warming debate and your hostility to nuclear power. At a time when the scientists are saying we really have to rethink everything very, very radically, isn't that something you should look at again?

ALEX SALMOND:

Well I think every country has to make its own choices and we have the potential in Scotland through our huge reserves of renewable energy not just on shore but even more so offshore, not just offshore wind but in tidal power and wave power, we've got the potential through these types of energy to generate up to ten times our own electricity requirements in Scotland. So what I think we should focus on is getting these things from where they are now into production - and we've done some of that in Scotland already - and also getting the connection lines which will allow this country, our country to become the green powerhouse of Europe.

ANDREW MARR:

And so you would block any nuclear power stations

ALEX SALMOND:

Yeah.

ANDREW MARR:

new nuclear power stations, which you could do because you've got the planning powers to do that?

ALEX SALMOND:

Yes, it's the wrong choice for Scotland, Andrew. And what we're doing is concentrating on these major renewable investments, make licensing a new major investment. I'm not talking about a few windmills. I'm talking about major investments at the rate of one a month at the present moment. I mean just a few weeks ago, an announcement by the Cowan Estates Commission of six gigawatts of offshore wind power. Now that's the entire electricity consumption of Scotland, so that's the area of potential.

ANDREW MARR:

That's the future.

ALEX SALMOND:

And we've got to grab that potential and do what we're best at.

ANDREW MARR:

Alright. For now, Alex Salmond, thank you very much indeed for joining us.

MAIN INTERVIEW ENDS

ALEX SALMOND AND DOUGLAS ALEXANDER - SOFA CHAT

ANDREW MARR:

Douglas Alexander, you know you're, as it were, a child not just of Alexander McCall Smith but of the Labour Party in Scotland. Did you ever think that you would be sitting here alongside a Scottish National Party First Minister. Did you ever think that

ALEX SALMOND:

We're not playing footsie, incidentally.

DOUGLAS ALEXANDER:

Absolutely. Listen it's inherent in devolution that no one party should ever expect to rule in perpetuity. Alec got 33.5%, I think Labour got 33%. Coalitions emerge and deals are done.

ANDREW MARR:

(over) Did Labour get a bit smug and soft in Scotland?

DOUGLAS ALEXANDER:

Oh I certainly think we've always had to be humble about the support of people in Scotland. You know we learnt some pretty tough lessons in Glasgow East last year and that's why we were delighted to come back in Glenrothes.

ANDREW MARR:

Do you think in a way what people in Scotland seem to be saying is that they quite like the cut of your jib in terms of some of the things you do as long as you keep off the policy that matters most to you?

ALEX SALMOND:

No, I think that people do like the cut of a jib, but I think lots of people like and understand the urgency of having a real political and economic power in Scotland. You know it's not just a parliamentary thing, this - I mean the change and the nature of Scottish politics from a Labour monopoly to a much more varied political system. I mean it's likely that Labour after a by-election last Thursday might lose control of Dundee, which would mean only one of the major Scottish cities would be under Labour administration. So this is something at local level as well as national level.

ANDREW MARR:

What would you both say to those people watching who've been looking at this programme from England and worried and maybe lost a lot of their pensions and their money and saying, basically just saying, "Damn Scots!"

DOUGLAS ALEXANDER:

What I would say would be I suppose a rare moment of agreement with Alec - that this is a global crisis and one of the things we've learned is we're stronger off together and we would be much weaker apart. I think if we try and tear ourselves apart over an issue like this, it just simply doesn't make sense. We share risks, rewards and resources in this country.

ALEX SALMOND:

Well I can absolutely promise when Northern Rock was going down, I didn't go round saying, "Damn English!"

ANDREW MARR:

Alright. For now, thank you both very much indeed.

INTERVIEW ENDS


Please note "The Andrew Marr Show" must be credited if any part of this transcript is used.


NB: This transcript was typed from a recording and not copied from an original script.

Because of the possibility of mis-hearing and the difficulty, in some cases, of identifying individual speakers, the BBC cannot vouch for its accuracy


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