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Last Updated: Sunday, 1 April 2007, 10:15 GMT 11:15 UK
Nationalists prosper
On Sunday 01 April Andrew Marr interviewed Alex Salmond MP, Leader SNP

Please note "BBC Sunday AM" must be credited if any part of this transcript is used.

Alex Salmond MP
Alex Salmond MP, Leader SNP

ANDREW MARR: The Scottish Nationalist leader, Alex Salmond is known as a cheerful sort and with very good reason at the moment, more during the week showing his party on course for victory in next month's elections here.

(Report from Scotland correspondent Andrew Castle)

And I am joined now by the leader of the Scottish National Party, Alex Salmond. Welcome. Do you believe these polls?

ALEX SALMOND: All politicians believe polls when they're in their favour. It's a new situation for us to be ahead in the polls during an election campaign but I think we've worked very hard to get into this position and we're going to have to work even harder to stay in this position, or even improve it.

ANDREW MARR: Now, if you win, if you're the largest party, you have a choice of trying to find a coalition partner, or governing as the minority. Given that the Liberal Democrats so far seem to be hostile to your policy of putting a referendum in front of the Scottish people, on independence. Which is the more likely?

ALEX SALMOND: Well, the Liberal Democrat leadership might be and leaderships in other parties, but their voters are very enthusiastic about the referendum idea, huge majorities, 80%-90% support the idea of a referendum, of letting the people choose, enabling people to have that choice.

So I'm kind of hoping that the election itself, that the people speaking in the election, taking their opportunity to pass their verdict, will concentrate the minds of politicians because I'd prefer a coalition as opposed to trying...

ANDREW MARR: Right. And the Liberal Democrats the only plausible people for you to do a deal with - as opposed to the smaller parties to the Greens.

ALEX SALMOND: I mean we've already had discussions with the Greens which were very amicable and fruitful. They don't look really to be in government but they are prepared under certain circumstances to support a government from out with it, that's a perfectly fair thing for them to say.

ANDREW MARR: What does independence really mean now, because you'd keep the Queen, you'd keep the currency, which therefore means you'd keep interest rates being set from London. There doesn't seem to be a great division between a Scottish Parliament and old-style independence, it's a spectrum.

ALEX SALMOND: Well I think there's a huge difference, I mean the difference is basically financial. If you're under devolution Scotland controls about 15% of its revenues. If we were independent within Europe we'd control 99% of our revenues, everything except the VAT contribution, you know 99% economic fiscal control is independence, 15% is not.

Now, yes, I mean think that vast majority of people of Scotland would want to keep the Queen, and I'm sure she'd be proud to be Queen of Scots. Sterling, I mean that's basically to provide a platform and at some point we're going to have to decide whether we go into the Euro or not. And of course Europe has great attractions because, well its interest rates are 2% below sterling which is about 2000 for each family. But until we can make that decision then I think it's sensible to keep sterling for the time.

ANDREW MARR: And on the tax and number side, can we be absolutely clear, the SNP wins and everyone in Scotland pays an extra 3p on their income tax?

ALEX SALMOND: No, that's to abolish the Council Tax Andrew, so what the SNP propose to do is to abolish the Council Tax which is the most unfair taxation of all, not really related to the ability to pay it, it oppresses people at the present moment. It's very, very unpopular.

ANDREW MARR: But to find that you have to raise 3p on income tax?

ALEX SALMOND: And that precise question of course was asked by the Daily Telegraph this week, not perhaps the most friendly paper to the IP and I think it was 3 or 4-1, people in favour of getting rid of, abolishing the Council Tax, it's one of our strongest arguments in this campaign and people are very enthusiastic to see an unfair oppressive taxation abolished.

ANDREW MARR: What kind of Scottish economy would you like to see? Because there seems to be a choice between, as it were, going for a tiger economy, slashing corporation tax and trying to get the very fast growth that you'd need to make all the numbers add up, you need fast growth on the one hand, and on the other hand being as it were a high welfare, more Scandanavian style economy. So which way do you go?

ALEX SALMOND: We need fast growth in Scotland because we've had very slow growth over the last generation. At a time, incidentally, with our resource-rich country, we should have been growing very quickly, we've actually been growing slowly. And certainly most countries have gone down the route of getting a taxation edge, a tax advantage, a competitive position on corporate tax. I mean Ireland's got...

ANDREW MARR: But that means you'd have to hold down the welfare side.

ALEX SALMOND: Now, wait a minute, let me make this point, I mean Ireland for example has cut its corporate tax rate by two-thirds in the last 15 years, but increased its revenues because of the flow of investment into Ireland because of Irish businesses expanding, by six fold in real terms.

And not just Ireland, but Finland's had the same experience. So for a small country, getting a competitive edge on corporation tax is a fantastic way not just to have a competitive edge, but to increase government revenue and to pay for the things that we'd like to see in health and education.

ANDREW MARR: The old Alex Salmond who was a man of the left is now a tax cutter.

ALEX SALMOND: No, I'm a social democrat and I believe in a competitive economy and I believe in a real society and supporting people through health, education and direct intervention, that the classic social democracy and it's very much in the mainstream of the Scottish political tradition.

ANDREW MARR: But in the medium, short to medium term, there is a choice - if you're going to cut taxes you're going to have less revenue and you're going to have less to spend on some of your social priorities. Would you be prepared to take that choice?

ALEX SALMOND: No, can I just try it again - the experience in a number of small European countries and not in one single year did the tactic of cutting corporate tax to get a competitive advantage result in a fallen government, revenue has increased as a result of an increase in government revenues.

That's way it's the perfect thing for a small economy to do. I mean, the same position is not available to a large economy in the same way because the initial tax hit is so large, but for a small economy it's very much one of, only one incidentally, because a prosperity just doesn't come from having a competitive advantage.

I mean a real resource is the people of Scotland. But you have to have both, you have to educate your people and have a position where they have the opportunity to use that education and that skill in their own country.

Scotland's biggest economic problem just now is the export of 25,000 skilled, talented degree people, yourself for example, Andrew, each and every year who are not contributing to the Scottish economy. Not because incidentally they just want to travel the world, but because they don't have the opportunity to pursue their skills in their own country. We intend to give them that opportunity.

ANDREW MARR: Well you mentioned overseas, of course one of the hostages at the moment in Iran is a Scot. What do you make of the overnight intervention by George Bush? Is that helpful or is that unhelpful?

ALEX SALMOND: Well I think everybody's interest is in seeing our people come back as quickly as possible and anything I say is going to be designed to do that.

I saw the former British Ambassador to Tehran and he was warning about the decibel level, internationally, and pointing out that the Iranian president who's a pretty extreme sort of guy, is under huge pressure at home because he's lost local elections, and this, you know, ramping up on the situation might be playing into his hands. He's enjoying the situation, so I think whatever we do...

ANDREW MARR: Keep it calm.

ALEX SALMOND: Well I think every one of us must put the interests of our service people first, to get them home safe.

ANDREW MARR: All right, Alex Salmond, thank you very much indeed for coming in.


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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