On the Politics Show, Sunday 12 October 2008, Jon Sopel interviewed Scotland's First Minister, Alex Salmond
JON SOPEL: Mr Salmond, thank you very much for joining us on the Politics Show.
ALEX SALMOND: Good afternoon.
JON SOPEL: Good afternoon. In the midst of this financial crisis, you must be mighty relieved that Scotland isn't independent yet.
ALEX SALMOND: No, I think the more levers you can have in a country the better, when you face both good or tough economic times. However I believe that action has to be concerted, it has to be coordinated, because this is a world wide crisis which is affecting all countries large and small.
JON SOPEL: Well you say you need coordinated action, so isn't it marvelous that you've then got Gordon Brown as Prime Minister, Alistair Darling as Chancellor, able to pull those levers effectively for the whole of the United Kingdom.
ALEX SALMOND: Well, I've given support to the Prime Minister, because I think it's important that the approach to stabilizing the financial systems are general and not specific to individual institutions. I think more has to be done. I think more has to be done with some more reassurance for depositors for example, it would be best that that was done on a coordinated basis, but it has to be done.
And secondly, there has to be further coordinated cuts in interest rates, I think that that's important as well. But one of the things that is important for all economies, but let's look at the Scottish economy right now, is to focus as soon as we possibly can on what's going to happen to the real economy and how we're going to inject demand and confidence in to that economy and that's something we'll be pressing very hard for and I wish I had the economic levers to, to just announce it, as opposed to press for it.
JON SOPEL: Yes, I think you were planning to call for a billion pound rescue package for the Scottish economy (interjection)
ALEX SALMOND: ? (overlaps) ?not a rescue package Jon, but a package to inject demand and confidence. Now, let me give you an example. Right now, sitting in a bank account, I hope in a safe bank incidentally Jon, there's a hundred and twenty million pounds of Scots money, it's the fossil fuel level payments that's held by OFGEM. It can only be paid in to the Scottish Consolidated Fund, it's no use to anybody else but us.
Now the only reason we can't access that and use that money now for investing in renewable energy, injecting demand and confidence, is that under the current treasury rules, it would be deducted from the overall spending limit across the Scottish government. So there's an easy example with no disadvantage to anyway, how we could access in these extremely difficult times, when we need demand and confidence in spending, a hundred and twenty million pounds at no disbenefit to anyone, but would be of substantial benefit in Scotland at the present moment.
JON SOPEL: You talk about the real economy and you say this money is needed to avoid Scotland going in to recession. Is Scotland in recession?
ALEX SALMOND: Well I think the key thing is to avoid recession. I mean three weeks ago Jon, we had the lowest unemployment figures on the ILO measurement in Scottish history. 4.2%. We were doing extremely well, relative to other places, but of course, events have moved very, very sharply since then and it would be extraordinarily foolish not to understand the impact of this global financial crisis, will be felt and demand and confidence in the real economy, as credit and money supply freezes up. Now the task of politicians is not just to go on about how difficult the problems are, folk know how difficult the problems are, the task of politicians is to try and find the solutions and answers to lead the economy out of it, to avoid a deep recession, not accept that one is inevitable.
JON SOPEL: Yes, I just wondered whether your judgment now is, as First Minister, that Scotland is in recession.
ALEX SALMOND: Well, I think when the figures come through for the current period, then it would be extremely difficult for Scottish output to continue increasing. The last three quarters we have figures for, we've either matched or exceeded UK output. But listen, we're not immune from these global financial trends, that's why I'm focusing intention on how we can inject demand and confidence in to the economy and avoid a deep recession.
JON SOPEL: You've repeatedly talked about your model for independence has been this sort of arc of prosperity and in that arc of prosperity you have Iceland. It's an arch of insolvency isn't it?
ALEX SALMOND: Well I wouldn't repeat phrases from some of our Unionist opponents Jon. I mean Iceland is (interjection)
JON SOPEL: This was your phrase.
ALEX SALMOND: ? well, Iceland, not the one you just quoted to me Jon. Iceland as a population half the size of the City of Glasgow. Listen, we had a game against Norway at football yesterday and well, we drew nil nil. But listen, the real mess was not Chris Iwelumo's miss at Hampden? the real mess is not having an oil fund backing an economy like our friends across the North Sea have, who look like a sea of prosperity in the international chaos at the present moment, so would we were in the position that Norway was, is at the present moment, with access to our natural resources, to be able to take the decisions that our Norwegian friends are taking, not just on the football field, but in terms of the economy. So look, all countries are affected, large and small, but it's easy enough to look at some examples of countries harnessing their natural resources to survive things, much better for example than Britain is at the present moment.
JON SOPEL: And Norway's economy is slowing, Ireland is in recession and Iceland, goodness knows that position it's in. I mean let me give you your original quote, 'Scotland can change to a better future and be part of Northern Europe's arc of prosperity. We have three countries, Ireland to our West, Iceland to our North and Norway to our East, all were in the top six wealthiest countries in the world'. Admittedly, that was a couple of years back but those are small independent countries who are now struggling because of their size.
ALEX SALMOND: Yes, well they're not struggling because of their size Jon, it's affecting all countries. But let's look to our east Jon, Norway's latest forecast in the last few days for growth next year, is just under 2%. There's nobody thinks that growth in the UK or Scotland is going to be 2%. Norway is doing extremely well in extremely difficult economic circumstances across the world. I mean would we were in the Norwegian position, not two years ago, but right now, at the present moment. Ireland of course is badly affected by the economic crisis, but at least they were able a couple of weeks ago, ahead of the game, to take action to stabilize their banking sector and reassure depositors - something else I think that we should be doing at the present moment. So this idea that the current economic circumstances are an argument against small countries, I think is totally misplaced and certainly belies the fact that any Scot can glance across the North Sea and see what happens when you've got an economy, not just backed by prudent management, but one backed by two hundred billion pounds of natural resources in oil revenues. Would we had such an oil fund in Scotland at the present moment.
JON SOPEL: Let's move on to the banking crisis itself because of course, huge banking interests in Scotland. The Liberal Democrats at their conference yesterday said that you should stand up for Scotland and the Scottish people and stop the merger between HBOS and LloydsTSB.
ALEX SALMOND: Well I'm not in a position to stop the merger. I'm in a position to argue for Scottish decision making and Scottish jobs. I mean I think right now in the circumstances we have, since nobody I think even a few weeks ago could have forecast - I think we should just let the dust settle before we chart the way forward. There is no doubt of two things - one, that circumstances are changing all the time and secondly, that jobs and decision making and the Scottish economy are an absolute priority and it is of tremendous concern, in addition to the general concern, that our oldest financial institution is losing its independence at the present moment. You know, hardly an argument for the safety net of the United Kingdom at the present moment. So let's argue for the position of jobs and decision making in Scotland and we'll be able in perhaps the not too distant future to be able to make announcements and arguments and decisions depending on what happens in the financial markets.
JON SOPEL: I'm not sure you answered the question. Do you want the merger between HBOS and Lloyds TSB to go ahead.
ALEX SALMOND: Well, I've made it clear that my preferred position for HBOS is as an independent bank. I think most sensible people would argue that would be the best position. We have to see if the financial circumstances, which emerge over the next wee while, will allow that to be the case. Clearly, events in the last few days have changed, I suspect they'll change over the next period of time. What you can be sure of is that this government in Scotland will stand up for jobs and decision making in the Scottish economy.
JON SOPEL: We saw a catastrophic fall in the share price of RBS at the end of close of play on Friday. What about the position of the Chairman, Sir Fred Goodwin, can he carry on.
ALEX SALMOND: Well I don't actually think it's the most sensible thing in the world right now, when we're trying to stabilize the financial sector, and that is a coordinated effort to speculate as your, incidentally, as your correspondent did again this morning on the future of individuals. I would have thought that you would want the people who are doing the negotiations to guide the institutions in to safer times and I cannot think that it is helpful in any sense in any way, to turn this in to who should go and who should stay. Let's let the people in charge guide their institutions in to safer times and let's get behind that effort, as opposed to speculating on things which might undermine it.
JON SOPEL: You'd understand that people in times like this, wanting to have a wee drink to cope with what's happening in the markets. I just want to ask you about one policy area of the SNP at the moment, which is that I gather that if you're eighteen, you can go to a restaurant or go to a club and you can go to a bar and buy as much alcohol as you like but you're going to have to be twenty one before you can buy alcohol in an off-license. Lots of people, even the young SNPs, think it's ridiculous. Are you pressing ahead with that policy.
ALEX SALMOND: Well, I think it's very popular with people in Scotland Jon, particularly those in the areas where it's been experimented and trialed like Stenhousemuir and other areas, which have seen a 50% drop over the weekends in recorded breach of the peace incidents and other reports to the police. Now, it seems to be having an effect and therefore, we should look at that proposal very favorably, it's one of a whole range of proposals that the SNP are making in terms of trying to tackle Scotland's relationship with the booze. Now, it's a serious problem and it requires a serious approach and that's why we've put a battery of proposals forward in an issue which hasn't been tackled for the last generation in Scotland. Now listen, as to popularity, ? it moves up and down, but I do notice in this morning's YOUGOV poll, which was seen as good news for the Labour Party across the UK, it's the SNP who are ahead in Scotland.
JON SOPEL: Okay, Alex Salmond thank you very much for joining us.
END OF INTERVIEW WITH ALEX SALMOND
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The Politics Show Sunday 12 October 2008 at 1200 BST on BBC One.
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