 Rhaid i'n gweithio, ydw i'n gweithio y 14 ym 2014, ac ym mwy oedden nhw'n gwneud o gymrydau a'r cymunedau sefydliadau, ac yn ddod amser ac yn ddiwedd i'n gweithio i'r gael iawn, ac rwy'n i'n rwyf wedyn ni'n deud i ddysgu'n ddod, oherwydd mae'n ei ffordd o'r sgifth o'r ddwylliant, maeth o'r ddwylliant o ddwylliant ymlaen, Tych Nidol Scythesol a phoblwch gyda'r ddwylliant. Ar y dyfodol yma y gallwn hynny yn ôl yn ysgrifwll, yn ysgrifwll yng Nghymru, yn ddwylliant a'r llyfr o'r Ffost 2014. Mae ffwrdd o ddwylliant ar y cyfnod, ac rwy'n ddigon i'n ddwylliant yma. Mae'n ddwylliant ar y ddwylliant, ac rwy'n rwy'n ddwylliant ar y ddwylliant. Am y gondol gweld, mae'n ddweud i'r Prifysgol Michael Keating, Professor of Politics at the University of Aberdeen a director of the ASRC Scottish Centre on Constitutional Change. Dr Mary Hilson, senior lecturer in Scandinavian history at the Department of Scandinavian Studies at University College London. John Nuget, associate fellow of Chatham House and Professor Elsa Henderson, Professor of Political Science at the University of Edinburgh. Welcome to you all and thank you for coming along this morning. We're going to allow maybe an hour and 15 minutes or so for this first panel. So I would ask members if they would to keep their questions short and focused. If we could have responses that are short and focused, that would be very helpful in getting through the subject in the time available. I'm aware we've got a broad range of experience on the panel and looking at different international scenarios. So you won't always have questions that are relevant to your own area, but what I would ask members to do is direct a question initially to a particular panel member. If you would like to come in and comment on something that's directed to somebody else, if you just catch my eye, I will bring you in as best I can as time allows, and that will allow us hopefully to get through the topics in the time available. I wonder if I could start off by asking Professor Henderson a question. I read your paper with great interest about the experience in Quebec. What do you think are the lessons for Scotland and for Scottish politicians and those involved in the Scottish economy from the Quebec experience? I think there's a couple. One is that markets react to uncertainty, but that reaction is not necessarily something to avoid. So markets react to uncertainty before elections, they react to uncertainty before referendums, so trying to eradicate uncertainty in their reaction to it is a bit of a fool's errand. We should expect this reaction is normal. I think that's one lesson. The other lesson is that some indicators react in the short term, some indicators react in the long term, and some indicators don't react at all, so that's something else to look out for. So we know that certain things react to public opinion, tiny changes in public opinion and a 1% increase in support one way or the other affects currency, it affects stock market returns, it doesn't affect the bond market. The bond market reacts in a slower, more sluggish way, bond ratings react in a more sluggish way. The other thing is very hard for us to determine exactly what changes are due to referendum campaigns and what changes are due to wider macroeconomic issues. We can narrow that down a little bit if we look just at the couple months before 1995, then we can really see what's a result of the campaign and what's actually a reaction to large deficits on the part of the Quebec Government, large debt on the part of the Quebec Government in the early 1990s. The other is the relationship between opinion and economic indicators. So some indicators really react to opinion and that works in the reverse. Opinion sometimes reacts to economic indicators, but one of the lessons from Quebec is that voters actually don't pay all that much attention to the negative economic indicators in referendums in a way that they do in elections. They're actually more attuned to economic changes in election campaigns than they are in referendum campaigns, and it's larger because we assume that national identity cuts across, or it trumps all of these things, it's more important. Seeing yourself as British or seeing yourself as Scottish is more important than your view on what's happening with currency. The other is that some of these things reacted very quickly after the referendum. So the very next day currency recovered. The very next day stock market returns of Quebec headquartered companies improved. The bond markets, they were slower to react, but that's rest relevant in this context. There was a recovery, presumably, because there was a new vote. I mean, interesting to speculate what the outcome would have been had the result differently. We don't know. Can I maybe ask you as well, were there particular sectors of the Quebec economy that were impacting more than others? I'm thinking, for example, like financial services. Yeah, there's two distinctions. One is between companies that are multinational or based on local markets. So the ones that restrict themselves to local markets, they reacted differently than those that were insulated from changes that were more international and focused. So there's a location of market issue, and then the other thing we know is that companies whose growth was dependent on infrastructure that could not be readily abandoned. So factories, plants, machinery, their stocks ffaird worse than companies whose growth was dependent on the skills of their employees. And so they were deemed to be more mobile. But it's partly they perceived themselves to be less at risk of uncertainty. And also, in some cases, they were less at risk of uncertainty. So it's location of market and infrastructure versus skills. Can I maybe bring in John Nuget, just to get your perception on this? I think your paper concentrates very much on the issue of currency. And I'm sure you've followed some of the debate we've had here in Scotland around currency issues. I mean, what's your sense of what the optimum currency arrangement for an independent Scotland would be based on your international experience? First thing to say is that currency is clearly very important. It's an emotive subject. It's no coincidence, for example, that the whole question of the coins in the euro area, the states were determined to still have some significant, some emblem of their statehood, so that although the notes are the same, the coins all have one side, which represents the country that issued them. Coins are currency in the whole is where the emotions of nationalism and what do you feel? Do you feel British? Do you feel English? Do you feel Scottish? For the Europeans, do they feel Dutch? Do they feel European? It's where those sorts of things interact with personal well-being and financial well-being. Financial well-being is a relatively hard thought. It's quite a disciplined area of one's emotions. National identity is obviously a much more emotional area, and currency is one of the areas where they intersect, which is why I think it is such an interesting subject, why it's obviously been one which has been discussed at great length in this campaign. You asked me outright the most difficult question of them all. What is the ideal outcome? I will give you an honest answer. I think that Scotland is a rich country which can and should have its own currency. It gives you independence of action, it gives you identity, and it gives you the ability to build a financial sector. That is a positive statement. You asked for short answers, I've given you one. All the other options have downsides. That's not to say that your own currency would not also have challenges. You have to convince your people to hold it. The interesting thing about currency is that, unless you're going to impose exchange controls, which I really don't think you will or should, you always have the option as a citizen of an independent Scotland to keep your assets in London. In other words, you have not just to produce your own currency, but to persuade your population to use it. That requires you to manage it well. I have no doubt that there is the ability in this country to do so. You have the challenge of persuading your people that. Thank you, and thank you particularly for a very clear answer to my first question, which is exactly what we're looking for in this inquiry. Actually, just one follow-up that I'll bring in Dennis Robertson, who wants to ask some questions of the other witnesses. There's quite a lot in your paper, Mr Nugie, about sterlingisation as an option. That is something that has been talked about in this debate. How viable an option for an independent Scotland would that be? Short-term vary, long-term I suggest not optimal. Short-term it offers your people a guarantee of at least one thing is not changing when a lot of other things will be. It gives them confidence that they're not about to lose all their money as well as everything else. That is certainly what it did for the Irish Free State. The Irish Free State was born in a very, very difficult decade, in fact a very difficult two decades. And the one thing that the decision to have first of all sterling and then sterlingisation gave their people was a solid currency when just about everything else in the Irish Free State was for negotiation, if not worse. So I think short-term it is not an impossible option. Long-term I don't think it does the country any favours. It stunts the growth of financial markets. It leaves you dependent on another economy's monetary policy. And let us not ignore the fact that the current linkages between the Scottish and the rest of the UK economies will begin to weaken simply. I mean that's what independence means, you go your own way. But even without that, if this economy is based on oil and the rest of the UK has a much less oil-based economy you will find that to diverge in general and in particular diverge in response to an oil price shock. And you may very well find that your interest rates are not ideal and there's not much you can do about it. That puts an enormous effort and enormous pressure on fiscal policy and the real flexibility of the economy. There are countries which take their monetary policy from outside Hong Kong where I worked for four years is a classic example. Hong Kong has one of the most flexible labour markets in the world and wages go down as often as they go up in Hong Kong. And that is a challenge for a social democratic state. You both have raised very interesting questions and I'm sure we'll explore more of these in detail as we go through the questioning session. I'm now going to bring in Dennis Robertson. Thank you, convener, and good morning all. And can I begin by thanking you all for your statements, a very interesting reading. And as the convener has said, I'm sure that some of my colleagues on the table will be exploring some of what the opening statements went about. Can I maybe turn to Mary Hilson in the first instance? The UK has been stated that the UK is one of the most unequal societies in the modern developed world. And in comparison, our Nordic neighbours sort of feel better in that area. What are the reasons for this? I think, first of all, to say that equality is changing in the Nordic countries. And there have been some very sharp changes in that, especially in Sweden, in the last two decades or so. Inequality has really increased. That, what the reasons are, though, is a, I'm a historian. I look at this in a rather long term perspective. And one could see it in two ways, that the Nordic social model, the Nordic welfare state, is the creation of social policy, of strong social democratic parties that originally gained parliamentary majorities in the 1930s, and were there after able to redistribute social policies. But also, especially from the early 1990s, the interpretation that had a much longer historical trajectory has been a bit more prominent that the societies historically were very equal, sparsely populated, the lack of a strong land-owning class, free-holding peasants. You can look at it in two ways, really. If there were to be a yes vote after the referendum, do you think that affords Scotland an opportunity to reverse some of the decisions that have been taken by the UK government? And we can aspire to be a much more equal society within Scotland. Because, I suppose on the flip side of that, if there were a no vote, do you think that the current austerity system and the welfare reform would probably mean that we'll never achieve that equality that we're looking for? I don't think it's for me to say what Scotland could do or not. Because I'm not really an expert on that at all. But I think the idea of the equal Nordic societies are to some extent idealised. And I think sometimes when one talks about a Nordic model in contemporary political discourse, there's an inference of something that perhaps existed in the past or perhaps never existed. The idea of, this is what I was trying to say on my paper, the idea of the Nordic model is often used very rhetorically. And looking at the very specific, it can be used looking at the very specific detail of it, but it's also used as a utopia and whether that's possible to achieve. I don't know, I really don't know. Professor Kidding, do you want to? Yes, I'd echo Mary's caution about idealising the Nordic model. It is not a perfect utopia. There are all kinds of problems there, but there are some things that we can learn from it. And the number of reasons why they've got greater social equality and one of them is they have more collective bargaining. They have stronger trade unions, much broader membership of trade unions. They bargain to some degree about the social wage as well as individual wages because if trade unions represent almost all population, they take in broader considerations, they're no longer just a sectional interest, but they have a broader interest. They have generous universal services. They don't have particularly progressive taxation, but they do have universal services so that everybody buys into the same services. This is beginning to be freight a little bit certainly in Sweden, but nevertheless they have that principle of universal services and they have the notion of social investment, that is public expenditure is seen as contributing to economic growth, but also to social equality, for example. A big focus on childcare early years, which encourages social mobility and avoids people falling out of the job market. There are problems, particularly at the bottom of the wage scale, particularly of people coming into the labour market. There are growing problems of youth unemployment because there are only these rather well-paid jobs. So there are difficulties there, but nevertheless it remains true that compared with other countries, they have much greater social equality. They also have a notion of social partnership, that again it's fraying in recent years, but there's still the notion that the social partners, unions, employers and governments will share some kind of common interest. As to whether that could be applied to Scotland, I've got a book coming out in two weeks on this. If I can plug that, it's only £9.99. But I argue that it could be, but it would require a whole lot of restructuring inside Scotland. Just becoming independent doesn't do the trick that you have to. What I would say is, if we're looking at, does it afford an opportunity for change? And if you remain within the UK, does that actually harness us in to a current system which is probably broken, but we don't seem to be able to fix it? The important thing is having the powers. Having a seat in the United Nations doesn't make any difference to this. Having more control of welfare and taxation may make a difference. So it's not necessarily independence, it's having those powers. If I can hark back to the case of Quebec, there's a lot of evidence that Quebec, which has a lot of social and fiscal powers, actually has resisted the trend to growing inequality in North America. So some kind of devolution settlement short of independence would give the policy instruments. But what is also required is a change in the institutions, a more sensibilisation of the social partners, the notion that we've got to think of public policy in a broader sense. Now independence might give the shock that would wake us all up and realise we have to do that, but independence in itself would not resolve that problem. That has to come from internal change within Scotland. I think also, can you look at it? I think you need to look at it. I think we're talking a little bit as a top-down change that might come from an independent government. But I'm interested that your next session is on civic Scotland. One of the other aspects that's often talked about is something remarkable in the Nordic countries is the strength of these institutions. That the strong trade unions, strong voluntary associations, especially the Danish case, the agricultural cooperatives, for example, their growth is from the late 19th century, it predates what we see as the sort of development of the Nordic social model, and it's been very important in shaping the development of the social bargaining that Professor Keating is talking about. And those institutions, this is more about an organic bottom-up growth, necessarily than a government that's steering things from the top-down. Although the role of the state is important in that, the sort of benign, in the late 19th century, the climate of benign tolerance that allowed such institutions to flourish. Professor Keating, you and your paper actually indicated that inequality has got a negative impact in economic growth. Could you expand on that just a little? There's a lot of evidence accumulating to this effect. There's a book by Wilkinson and Pickett of the work of the American economist Crogman and Stiglitz. There's work coming out of the OECD, particularly OECD work, but even the International Monetary Fund work, that shows at a statistical level that the country's highest levels of inequality don't do particularly well. Now we're not talking about complete equality as being the opposite, but extreme levels of inequality seem to be inimical to economic growth. So that seems to be demonstrated statistically. The reasons for this are less clear. One reason though is that huge inequalities are disincentive to people who are not at the top of the scale. They reduce social mobility. They create inherited wealth, which reduces incentives for people to get on. They create all kinds of jealousies and rivalries, and they inhibit any sense of the public domain of collective action. But we don't really know what the mechanism is, but those are some suggestions. The northern model is probably less constrained in those areas. Do you think that for us to move forward, that we require change, whether there's a no or a yes vote, and if there's a no vote, there's probably a lot of radical change, and if there's a yes vote, perhaps as Mary Hilson was saying, that the involvement of Civic Scotland in a bottom-up approach, in some respects, would afford us that opportunity? One thing that strikes me about this referendum campaign is the huge mobilisation of Civic Scotland on both sides, and whatever the outcome of that, I think we've achieved something already in this debate, because we're actually talking about those questions. This is one of the sort of internal changes that I was mentioning earlier, which might make a difference to social cohesion, and might indeed make a difference to economic growth. But certainly the model that we've had in the United Kingdom and the United States for the last 30 years, which is based upon the idea that inequality is somehow necessary for economic growth, seems to be disapproved by the international evidence. Thank you, convener, and good morning panel. Just carrying on from that sort of same subject around inequalities and wealthier benefits taxation in the Nordic countries, if Scotland were to adopt some of the policies that they have in the Nordic countries, what levels of taxation would there have to be to raise that level of wealthier benefit, for example? Taxation, we have to be higher. There's no doubt about it. This is a costly model, but people in Nordic countries are generally willing to pay those taxes because they appreciate what they get back from it, and because if you've got universal services, everybody feels they're getting something back from that. That is something that I don't see the Scottish Government's white paper facing up to, but that is the implication of this model. It is very costly. So have you got a figure? Is it 60% or 70%? No, it depends what you want to spend, but appreciably higher. And what their taxes would be, well, they tend to have higher levels of value added tax and a very broad base for value added tax without all the exemptions that we have. Income taxes tend to be a little bit higher than ours. Corporation taxes are not particularly high, but the general public pays higher taxes, not just the rich people, but the middle income earners also are required to and seem willing to pay higher taxes than we do in this country. But that has also been politically controversial and this isn't taken for granted. And since the 1970s in particular, we've seen the emergence of anti-tax, anti-bureaucracy, anti-big-state parties, the populist right, which is now on the rise in, well, across Europe. But especially in Norway, the Framerskirts Party, yet the Progress Party very much has its roots in that type of politics. And it certainly became an issue in the 1970s and it hasn't particularly gone away. So it's not universally accepted, I would say, by any stretch of the imagination. Thank you. John. I wondered if I could just add on this. And although Norway and the Nordic countries in general is not my forte, I have family in South Africa and if you ever wanted an unequal country, South Africa pre-1994 was probably the example of them all. And the ability of the government, the new government, the majority government, the ANC government in South Africa to do very much about it is very much based on where they start. I think it's important to, like fellow panellists, we don't idealise the Scandinavians, but we should also realise that they are where they are. And it's not difficult, or it is less difficult to stay a social democratic model than to build one starting from where Scotland starts. And one question for you, I mean, Mr Robertson was raising the question of whether Scotland needed to be independent to change. Well, you do still have a government in London, and that government isn't, it isn't written in the stars that it is always going to be a right-wing government. And I just offer the thought that we have had social democratic governments in the United Kingdom and they have tried to make change. They have had some successes and they have found difficulties. I don't think Scotland is different from, not sufficiently different from, the whole of the United Kingdom in that. And the challenge of maintaining a social democratic model, as the Nordics do, is very, very different from the challenge of building one. And South Africa has proven that that is really a difficult job because you always have to undo vested interests before you build the new Jerusalem. Well, hold on a second. Well, let Margaret ask her next question and then a couple of members will come in with something. Rusing tax and out-of-work benefits is not going to only have limited impact on inequalities. So it's particularly for a small country from my reading. So what would we need to change? I know we've got to change like the income. And we've heard in previous evidence, for example, that in Nordic countries, well, it was stated that a cleaner would earn around £16 an hour. So there is, well, someone did say that. How do we change that within our society, as it is at the moment, because obviously there's a lot of negotiations going on with unions and with governments in the Nordic countries. So how do we change the culture in this country so that we have a more equal income level? I think you'd need to have more national level bargaining and social compromises struck at a national level. I have almost none of this now. And I have almost no Scottish-level collective bargaining. Again, I should say, the Nordic countries are changing in that respect. The old big bargains are gone. But nevertheless, there's a lot of benchmarking. So if a wage is set in one sector, the other sectors do tend to follow it. So not all the national bargaining has been dismantled. There are minimum wage, what we call the living wage. That is the enhanced minimum wage is quite important. And people have talked a lot about culture. And this is a very slippery concept. It's true that in the Nordic countries there is maybe a different culture, but that didn't come from nowhere. That's not primordial. That was a result of practice and learning over time. So these changes in attitudes come because you do things that work and then you build on them over time. That sometimes takes quite a long time to build up those changes in attitudes and changes in practice. But you've got to set that somewhere. And I think you start with the institutions. And whether Scotland becomes independent or has more devolution, we need to think more about the institutions of government in Scotland because they've been given surprisingly little thought since devolution. We've got the parliament. That makes a big difference. But the way that government actually works has not been given enough attention and the way that government relates to society has not been given enough attention. John, just Snowden, then? Yes. As opposed to we have. Yes. Thank you. All right. We've got two more people to ask. Quick supplementaries. Check really then. Dana Thompson. If I may, and as somebody who ran companies and dealt with companies in the Nordic countries, to debunk this high tax myth because isn't it true that the incomes both monetary and social incomes are very much higher? And indeed the growth element which we seem never to discuss will mitigate and has mitigated in the Nordic countries against this so-called high tax system? Yes. If you look at, I don't have the figures with me, but there may be in my paper that somewhere it is clearly the case that overall burden of taxation and public expenditure is higher in the Nordic countries than it is in the United Kingdom. Now, they do have higher standards of living generally. So you might say your point may be well they can afford to pay that. That was my point. They don't like paying taxes. Nobody does. But there's a willingness to pay taxes if you're getting something back from it. And if you see that this is a contribution to investing in the future which people in this country don't seem to see and so they don't tolerate that. So there may be a toleration of high taxes, but there are high taxes. That is inescapable. The first. Just very briefly. You mentioned that we probably might not always have a right wing Government in the UK. I'm just wondering, in terms of the Labour Government they've said they'll continue the other city programme and probably I think the system that we currently have. Is it not right then that we wouldn't be looking at an immediate change if Scotland were to be independent. We'd be looking at a transitional change and that transitional change we'd be looking at income generation, people into employment, the taxation. And, you know, as I say, I wouldn't hold much hope then there would be much change because I don't think that the current Labour I suppose opposition is anything like what John Smith was proposing. I think that's one of a political statement of the question. Perhaps. It was just a point that it was me that you mentioned the government transition. Can I say, we're talking about a Social Democratic Nordic but we don't have Social Democratic parties in government there at the moment. We have quite a right wing government in Sweden but very explicitly right wing. There's an election later this year and it looks like there might be a change of government. There was a change of government in Norway last year from a Labour administration to again a right Conservative party with the support of the populist right and it's the only time the populist right have been in government. In Finland there's a broader coalition. In Denmark they have at the moment a Social Democratic Prime Minister but the big political change of the last 20 years in the Nordic countries has been the really significant decline in the electoral success of once quite powerful Social Democratic parties. Although it's only really Norway and Sweden where we can talk probably of Social Democratic hegemony. Sweden's very well known for a very dominant Social Democratic party but that's not really been the case for a decade or so now. I was hanging in a reply to Mr Robertson and say that the depth of your desire to be separate from us if you also despair of the Labour party in England I recognise the strength of feeling against the blue side of my country but I have to hope because I'm an Englishman that there is somewhere south of the border a politician who knows what he's going to do. Do you despair of us all? I think that's a rhetorical I think that's a rhetorical question Mark will be adding quick supplementary. Dr Halson about the Scandinavian political systems it's fair to say that while the Swedish centre left party Social Democrats have ruled pretty much unbroken for many decades there were changes in other countries like Denmark as you alluded to does that mean therefore that even though there were centre left and centre right governments in that period the broad model largely continued and would you characterise centre right parties in those countries as being more or less right wing than centre right parties in the UK historically? I think this is an example where talking about the Nordic countries as one is actually quite difficult because the political configuration was different and so in Sweden you have this historically very dominant Social Democratic party famous you know Olaf Palmer many people have heard of this and in Norway too which was very much strengthened by the experience of the war it's very comparable to the 1945 Labour landslide in the UK actually in Denmark partly because of a slightly lower threshold for parliamentary representation you have a lot more parties and you have broader governments but there too at least for the post war decades you have a strong Social Democratic party that are always governing in coalition Finland has been very very different partly because the communist left has been much stronger and you tend to get much broader coalitions but also the economic circumstances were different and Iceland is different again so it's at the same time if you look at the development of the Finnish welfare state which happened rather later and was very influenced by the Nordic aspect comes in because this has been a process the Nordic model means most within the Nordic countries the borrowing, the cross the cooperation informing policy the sort of cross border collaboration and that's why the Finnish system shows quite a lot of similar elements to those of the other Nordic countries but it's not necessarily formed by a strong Social Democratic party not in the same way at all there are being changes in Nordic modelling in the early 1990s following a very serious recession there was quite a lot of retrenchment across Scandinavia this was from a very high level but there was a fall in this very high level of public expenditure and taxation in Sweden there was a move towards new public management a bit like new labour in England a lot of contracting out universal services but private provision free schools very important so that's a very different way of delivering public services but nevertheless publicly financed taxation financed very much like the new labour model in England elsewhere centre right parties were coming with radical ideas then being pulled back to the centre again because of this inertia of the social democratic model this is what happened in Denmark so there have been big changes it's not what it was in the 1970s in its heyday there's diversity but nevertheless you can say in general they do have higher levels of public expenditure and more generous levels of public services even into the 21st century than we have in the United Kingdom one thing about that though the Danish case in particular where you really see a political shift 2001 centre right government but with the support of the Danish people's party perhaps most explicitly promoted an agenda of welfare chauvinism welfare nationalism it's quite explicitly anti-immigration as well and that's really shaped the debate very very profoundly especially in Denmark but there are signs of that elsewhere too indeed that's absolutely true there are these right-wing populist parties but they tend to be pro-welfare they want to exclude immigrants pro-welfare but not the universal welfare state no but that's the common feature of the new right in Europe that they are in favour of welfare spending but only for particular groups of people this is great, along with witnesses discuss amongst themselves we're agreeing we can just go away last supplementary thank you very much in terms of what you're talking about about the development of a political consensus John Nugie said earlier about South Africa and pre-1994 and trying to change to a different model but in a sense that's not applicable to Scotland because we're already going down a social democrat road in the sense that universal services in Scotland have been very much part of what the decisions of this parliament has made so in a sense where independence would allow us to move further down that road to entrench it when the culture in the rest of the UK seems to be going in the opposite direction at the moment so I just wanted to go back to this idea of we're not starting from scratch, we're actually continuing a process which perhaps is difficult to continue as part of the UK which is going in a different cultural direction country has nothing like South Africa and I wouldn't suggest that but I wanted to bring that in because it shows the challenge of bringing all the moving parts of an economy both political and economic financial together and the government in South Africa started with the very best of intentions it had to not only change the mindset of the people but it had to maintain an economy while it was doing so and the lack of progress in South Africa if anything can be laid at the feet of economic reality saying you can't throw it all up in the air at once and I think that is also an issue here in this country you have to change you are changing gradually the challenge will be to maintain the patience of the people while you do so I think there is a danger that the day after independence everybody might say well it's all right now we can do what we want and there is a challenge of changing the political economy while maintaining the ability to pay for it and maintaining the patience of the people has proved the biggest challenge for the South African government and although an independent Scotland would not be in anything like the same position you still have to match expectations to reality and it is that which I think differs between Scotland and the Nordic models if I can just follow up my colleagues on the right of being saying the Nordic model the people are familiar with a social democratic model so governments which currently are not particularly social democratic are finding the inertia of the people is stopping them from changing very much you might find the same the other way around that you have this vision of a social democratic model for the country but you have to work with an inertia in the economy I guess what I'm saying is that it's not a vision for a social democratic model this parliament is already trying to pursue within the powers that it has a social democratic model and there's quite a lot of agreement that that is a consensus within Scottish society and Scottish culture that's why we are committed to these universal services we haven't gone down the road of privatisation in the NHS so we're not moving from one system to another we're trying to hold on to what we have and develop it so it's not actually this huge cultural leap if you like and clearly I'm not suggesting the country is out of South Africa but the inertia of what you start with is important both the inertia of you have a social democratic model in many senses which you don't want to dismantle but you clearly want to build more obviously the parallels between Scotland and Quebec extend beyond economic reactions in the referendum and one of them relates to the arguments that were made at the time and the arguments were very similar we have political values in this province that are completely different from what people in other provinces believe we are far more social democratic we have a Quebec model that is more like a Nordic model we're introducing universal $5 a day care we have lower tuition fees than anywhere else in the country so that argument surfaced as well in Quebec the problem is that if you are a government with a certain level of autonomy and you are able to do something with that autonomy you're able to make positive changes and the typical examples are positive changes to language legislation changing the education system so that it's structured along linguistic boards so you have more people in the French education system than in the English education system if you're able to make those kinds of positive changes while you're remaining within Canada it undermines your argument that you need to be outside of Canada in order to continue on the path that you've begun so the arguments were made exactly the same way but the voters felt you're right you have been working that way and you've been doing such a good job why don't you just continue what you're doing Mary Helson thank you we'll move on Alison Johnson I'd like to address my first question to Professor Henderson I know it's a while ago now but following the referendum on sovereignty partnership in 1995 as a result was 50.6% no and 49.4% yes how did people work together after such a close result what was it like the days and weeks afterwards it's a great question well different sides reacted in different ways but I think one thing that helped tremendously was that there was with very few exceptions unwavering faith in the ability of the the director general of this election that the electoral director general the equivalent of the electoral commission to have run a fair referendum process and I think that was absolutely integral to how how people reacted we talk about losers consent how people who back the losing side positive attitudes to the democratic system and I think because the electoral process was deemed the referendum process was deemed to have been conducted fairly that was absolutely integral the other in the reaction of the no side the reaction of the losing yes side was very different in 1980 than it was in 1995 they lost by a larger margin in 1980 but they were strangely more optimistic about it and so they said this is a defeat but it has the air of a victory we'll just go on and we'll fight another we'll fight it another day whereas in 1995 it was a much more defeatist reaction and I think in 1980 there was a sense we can try again and in 1995 there was a sense I'm not sure if we are going to we are going to try this again and there was very quickly a reaction saying do you know what we are committed to sovereignty we are committed to trying this again but we won't put everyone through this unless we have certain winning conditions so the winning conditions are a leader that people trust solid economic conditions so lower deficits and lower debt and we have a clear lead in the polls and I think that statement as well helped because people thought right another referendum isn't around the corner regardless of whether you were in support of it or not it was kind of emotionally exhausting and I think that helped and then there were other people who started to look into it and say were there any irregularities was there anything that didn't happen properly but it's surprising that that it wasn't more negative I think there was unwavering faith in the ability of the electoral commission the equivalent of the electoral commission to do its job was absolutely essential but we saw the same in Wales after a different scale of issue but we saw the same with devolution in Wales there was not this groundswell of dissatisfaction with devolution it was a close result and it was a change on the back of a close result but the losers consented to that obviously people think things have been run properly that it's more acceptable absolutely part of it and that is always a question about changing the franchise if there's a close result either way people might say well what would it have been had we not changed the rules regardless of the principle behind changing the rules okay thank you thanks very much if I could ask Professor Keating a question John Nugie you suggested that it was more difficult to build a system of social partnership than it was to maintain one and you spoke earlier Professor Keating about the fact that collective bargaining is the norm in some of the countries that we constantly refer to during this debate and you pointed out that trade unions represent almost the entire population in some Nordic countries do you think that is something that we could see here obviously one of the reasons we're having this debate is a significant number of the population are dissatisfied with the status quo and there's a demand and a desire for change not from everyone but from a significant number of people do you think that that is something this collective bargaining mentality this cultural change is something we could achieve here yes it's a difficult one because trade unions are in decline everywhere throughout the world including in the Nordic countries but from a higher level so they're still much higher than we are what is striking about the United Kingdom is the degree to which collective bargaining has disappeared because even in countries where trade union membership is quite low nevertheless people identify with trade unions and collective bargaining still continues and I was looking at devolved governments around Europe in another project recently and most of them have put in place for devolution not for independence structures where you can have some kind of social partnership at the devolved level it varies enormously the business community civil society groups of various sorts the farmers whatever the interests are and the UK and Scotland within the UK are the great exception there we've dismantled almost all of that equipment which we used to have in the 1960s and 1970s and then people called it corporatism and it was a bad thing and neither the Labour government nor the SNP have tried to revive this which surprises me a little but they haven't tried to do so I think there's a gap in Scotland whether we're devolved or not if you look at something like the Grangemouth crisis last year what struck me was there you've got people who weren't able to sit together around a table because there was no place to bring all the interests the unions, the employers and the public interests together that's a big gap here and I think it needs to be addressed it's extremely difficult to rebuild those institutions once they've been dismantled the best way to do it is to start gradually focus on particular tasks so we can deliver something whether it is the education system or whatever, something particularly we need to get together and work on that works and then you build up faith and gradually you build up social institutions that function and there's not been as much of that since devolution as I thought there would be there's been some of it but there's not as much and I think that's an important task of the referendum One more question, convener to Dr. Hylsen with regards to women's participation in the labour market in the Nordic countries obviously part of that participation is possible because of better childcare and so on but what else is it about? Firstly to say that the labour market is still quite segregated on gender lines there are jobs that men do and historically there has been a big division and that continues and so there are much more women employed in the public sector and there are more men employed in the private sector and that has led to some that's one of the reasons why there is a gender pay gap too in some cases there are yes it's often cited though that very generous parental leave and I think one of the big differences last few decades is that's been debated in terms of parental rather than maternal and the recent debate has been about making paternity leave more compulsory and encouraging, not just encouraging but ensuring that fathers take it up and that you don't get differences in men's and women's employment in that way on the other hand though some again what's the role of a sort of much older historical cultural patterns in agrarian economies where men and women have always worked have always shared household tasks on the farm and so forth that those may be very deep rooted and then the Nordic countries also seem to be cited as particularly strong in political representation and also women's representation in the government can I just say something quickly about trade unions the reason why one of the reasons why trade union membership was historically so high was something called the GENT system which meant that unemployment insurance was administered through the trade unions and so you had to be a member to get this and I think it's worth saying as well that we talk about this sort of collective bargaining system and this goes back to some very important in the case of say Sweden and Norway significant agreements in Sweden, the so-called Salskorpad Salftal in 1938 and in Norway a similar agreement in 1935 made between the labour market institutions but those there's nothing inevitable about those those came after a period of tremendous rivalries, bitterness huge divisions I mean 1931 on a workers demonstration in the north of Sweden the Swedish army shot and killed five of the demonstrators and the Norwegian Labour Party had been a member of common turn so those sorts of changes are possible and the 1930s is very interesting watershed period in the wake of the economic crisis in the Nordic countries you can see these much more people do talk about these much more historically rooted aspects of the Nordic model but also I think it's worth pointing out that you also get this sort of big watershed and I'd say in the early 1990s is another big watershed but perhaps in the other direction thank you John McAlpine you got a follow up on Yes it was a supplementary for Professor Keating when you talked about obviously three juniors and collective bargaining all those employment employment law is reserved to Westminster so therefore this Parliament is extremely restrictive in what it can actually do under the current constitutional settlement would you agree in terms of employment law and collective bargaining and trade union legislation that kind of thing Yes indeed there has been legislation passed and government governments in the 1980s that undermined trade unions in certain respects but in other respects they strengthen trade unions because they democratise trade unions and the trade unions now are able to deliver more easily on whatever bargains they make because they are obliged to take their members with them but nevertheless your point is right on the other hand there are all sorts of things that go beyond labour, law, industrial relations law narrowly conceived which could be dealt with through social partnership here and the most important one I think is about training an active labour market policy which we don't do terribly well here some other countries do it well no country in Europe does it very well I should say including the Nordic countries but it's recognised as something that could be done and very often is delivered at a local level or a devolved level in partnership between the employers and the trade unions and this requires a change of attitude on the part of the employers to realise that if they invest in training in the long run they will benefit but that requires that they see that they have their long term interest to do but similarly with the trade unions too that investing in the long run in training is good for their own members and for the children of their own members on that point of social partnership if you could just indulge me a moment convener it has been said that in Scotland being a smaller country the lines of management are shorter and so therefore it is easier for government to participate in social partnership the restrictions that we have in terms of employment law and that kind of thing you mentioned Grangemouth obviously during the Grangemouth crisis the finance secretary and the First Minister you know de-capped to Grangemouth to try to get in about the problem and I think there's a general acceptance within the limited powers that they had they reached a solution with the additional powers of independence could you not see future Scottish governments those shorter lines of management being able to create the kinds of social partnerships that many people would like to see more easily than the rest of the UK well we always tell ourselves in Scotland that we have a small country everybody knows everybody and it's so well networked and so on and then we look at it and then we say well actually it doesn't really work like that at all because we don't take advantage of that sufficiently and there are lots of policy communities in Scotland within education within the law within social services and up terribly well so we don't have the broad social partnership that would be desirable to make these kind of trade-offs and to think about the connections amongst the public policy and certainly being a small country makes it easier but it doesn't mean that it always happens it requires to be worked on right we need to move on I'll bring in the check for you it's interesting to hear your comments on the choice of governments in the Nordic countries unfortunately we haven't had that the ability to choose our government for 35 out of the last 71 years so there is a democratic case that has to be made in terms of being able to choose your own government and one of our can ask Mr Nugie about currency in the briefing that we got we were talking about in the Denverstell organisation now we know what the Scottish government's position is in terms of how it believes we should interact in terms of the currency union with the rest of the UK but I think you made a comment that there are problems with domestic capital markets that would be very limited now if I remember my accounts equation if the UK government continues to say there will be no participation in sterling and therefore we will not accept any of the liabilities which the UK accept as theirs that means that our assets therefore equal capital so why would the huge assets in Scotland have would there be a limitation in terms of tapping into the capital markets the question here is what the economic agents would prefer to do if you have a full monetary union with the rest of the UK in other words the same currency under joint management then capital markets which used to be distributed there used to be a stock exchange in Glasgow, Birmingham, Bristol all the rest increasingly there is a benefit in centralisation the economies of scale and all of that and in the current sterling area we have one capital market and if you stay within a monetary union I see no real potential for setting one up UK government saying we will not stay in a monetary union that is a sterling monetary area a monetary union if however the rest of the UK government say no there is absolutely nothing to stop an independent Scotland using sterling sterlingisation but the economic agents will look at that and say there is a perfectly good stock exchange in London if I want to raise money and it is a bigger pool of capital and anybody who tries to set up capital markets in Scotland will struggle to find people to participate in I observe that under any system of dollarisation, sterlingisation the smaller country does not lose its financial system altogether by any means you have a very strong financial system in Edinburgh and it focuses particularly on those areas which do not need to be centralised asset management, insurance, life assurance things like that fund accounting very very powerful financial industry here in Edinburgh the one thing which sterlingisation would not do is destroy that it may even grow it may even have renewed vigor what I am saying is that it would be unusual for a country adopting another country's currency to be able to set up vibrant capital markets because given that we would have no liabilities and given the assets that we have we could tap in capital markets could be London, could be New York, could be anywhere but there's assets are already somewhere else they would stay somewhere else if they're financial assets if they're not financial assets no of course I mean they will stay here but the financial assets of your people of your companies and the like are currently invested in markets outside Scotland the physical assets will stay here but I was talking about financial assets and financial markets also in your submission you highlighted it in almost every case of European countries that one independence are the new states of established new currencies but you wouldn't say how it notes that in general the currency they left behind was unattractive or failing given Scotland's superior trade position in terms of having a surplus as opposed to huge deficit given its fiscal performance in relation to the rest of the UK and given the fact that the rest of the UK anything in excess of £1.3 trillion of debt what do you think would happen to Stirling if Scotland wasn't involved in it? I think that most of the rest of the world don't have your intimate insights and would assume that 8% of the United Kingdom was leaving it would have an effect but not an earthquake effect on Stirling it would remain an internationally accepted currency run by an internationally respected central bank and with internationally utilised markets I don't think Stirling would be unaffected but I don't think it would be destroyed Thank you If I may Professor Keating, morning we talked about trade unions and corporateism one of the interesting features that has been happening over recent years is the growth in social enterprise and the participation of employees in the marriage if you like between capital and labour in some organisations do you think that that trend would continue and what advantages would that bring to an independent Scotland? Well in recent years the trend has been that there's only going to be one kind of business firm and the UK and the US have probably gone further in that banks have only got one kind of bank whereas we have a diversity of types of enterprise and certainly countries with a diversity of different types of enterprise I think are more resilient in the face of shocks diversity, social enterprise cooperative enterprise which has got a bad name with the trails of the co-op at the moment but it's a principle it's a different way of organising and joint stock banks we're not considered to be a failure because the banks failed it's not the co-operative principle it's bad management and I think particularly in a small country it is very important to have a variety of different types of enterprise because if you're simply reliant on one sector one type of business and that gets into trouble the whole economy is in trouble so it would be very important for an independent Scotland to have that kind of diversity and to have a very large network of small and medium sized firms on large firms I think diversification is absolutely critical but I think that would be important of Scotland we're not to become independent as well I think it's something that is really important for the country whatever the constitutional position one last question Professor Henderson at the end of your submission it said does any of this matter you would look at bond yields inflation investment etc and the comment is there is also significant evidence that these economic consequences are less influential in determining referendum vote choice than national identity what is the significant evidence what data do we have yeah well we can gather together all the data from all the referendum studies that have occurred we've got different kinds of constitutional referendum so we have referendums that relate to self-determination and we have referendums that deal with significant constitutional change like some people consider electoral reform to be significant constitutional change but also membership of the European Union changing to a different currency the constitutional treaty of the European Union the referendum to change the head of state in Australia so if we look at all of these in general we find that people pay more attention to economic indicators in elections than they do in referendums but specifically on referendums about Euro membership and referendums about self-determination which some people would see as almost some people would see the Euro referendums as self-determination referendums of a different kind national identity trumps your perception of what the economic consequences of the change would be that's it briefly yes one of the examples from the Scottish social attitudes survey the suggestion is that if people thought they were economically better off they would vote yes and that the national identity is already there as being more people feeling Scottish rather than British that's why there's actually the debate is possible but the crucial question in Scotland is whether they would then be economically able to afford it does that have any parallel in Quebec or is that something you would disagree with yourself there's a couple answers to that the parallel there is not the 1995 referendum in Quebec but the 1980 referendum in Quebec and so there was a lot of research saying you know these are the terrible economic consequences that will befall you if you become independent and the finance minister at the time who then became the premier of Quebec and was premier in the 1995 referendum said okay sure yeah it's going to cost you but it's going to cost you the equivalent of a case of beer a month is having your own country not worth a case of beer a month so there's an argument about how you frame economic gains and losses and the thing about the £500 question is that it's it's a number plucked out of the air and so we've got a survey that we're working on now and it's going to go into the field soon where we're taking some of the results of the economic modelling that our economic colleagues are doing who are looking at well what are the actual what do we think the actual costs will be we're putting those into the survey and saying under these circumstances are you more or less likely to vote yes or no and some people they're still likely to vote a certain way but they're maybe less satisfied with their choice or they're certain in their choice so they're moving but they're not necessarily tipping over to a different vote choice but you're not re-emphasising anything you can ask the question if you'd like so a national identity is more important based on that evidence than economic consequences the lesson from Quebec is that people pay less attention to economic indicators their national identity is more important as is their evaluation of the leaders of the different campaigns so trusting the person who is arguing for a no or for a yes is more important and that lesson extends beyond Quebec that's a lesson that extends around other constitutional referendums you have to trust what people are telling you and it's a difference between the messages about risk the message itself and the messenger great thank you in that debate that was had in Quebec but my first questions were for Professor Keating we've had a lot of debate around the desirability this morning about moving to a social democratic model in Scotland now I could debate the social democratic credentials of the current administration and the Scottish government but of course in terms of looking to the future and what is being promised or proposed in terms of the white paper clearly it talks about a more generous welfare system lots of promises in that kind of area but it also talks about a cut in corporation tax for example it's not clear how a more generous welfare system would be afforded within proposals in the white paper so to what extent do you actually believe the white paper offers a move towards a social investment state in a separate Scotland well the economic strategy is absolutely critical to the viability of an independent state so it's not just the constitution it's whether you've got an economic prospectus and whether you've got a social model and there are two ideal types these are not real countries you can go for the low tax model compete on the basis of low taxation attract in with investment that way this is what say the Baltic states and some of the transition states of Europe to or you can go for the social investment model which may or may not be social democratic and egalitarian but involves a lot of investment in the high cost and bring in different types of investment what you can't do is combine the two you have to make a choice and my criticism of the white paper is we see a hybrid of those two models there and they don't fit together very very comfortably so you're saying in that sense that there's lack of coherence in the actual plans being put forward in the white paper in terms of providing a model which works yes and the elect is now then how to decide do we vote for independence and then afterwards we could adopt either model or are they voting for a particular model as part of the independence prospectus that's not clear and that's one reason why the elect is a little bit hesitant at the moment when they say we don't understand what independence would mean because there are different models of independence and within the independence campaign there are different strands about whether we should keep the pound about what we should do with taxation but these are perfectly valid differences in a democracy but it does mean that the debate about independence gets tangled up with a debate about what kind of policies we pursue as an independent state you could say the same about the no side but the onus is on the yes side to explain this because they are proposing the change but from what Professor Henderson said in terms of Quebec people want to have clarity particularly from those making a change about what actually one meaning you're saying that's not actually there really those arguing for a yes vote or certainly in terms of the white paper itself in terms of Ciaran and the citizen then will have to decide do I think the outcome is going to be a balance of forces that's going to give us this model or a balance of forces that's going to give us that model it's a very difficult thing for the elector to do when they don't have packages of policies clearly presented attached to constitutional options crosscut the left right division in all sorts of ways Yes, Dr Hills May I just say that I think this is where the being cautious about how these these foreign models which usually are ideal types are actually used and how they use rhetorically because you can use a the idea of a nodding model to say well yes we see that as a social democratic idea we want to go there we can say well we are there because we are somehow social democratic and that's what we're like so we should be there but then it can also be used by other sides and you know the coalition the UK coalition has been very interested in very many aspects of Nordic policy since 2010 David Cameron had a Nordic Baltic summit in 2011 and there's been a lot to talk about free schools in Sweden for example so you know these devices are used rather rhetorically in different ways and sometimes with the lack of clarity about what they actually mean and there's a long history of that happening because of Nordic politics we should be very cautious of learning lessons from the final question very quickly Professor Henderson in terms of the national debate in Quebec where is it now I mean obviously they've had the two referendums what's the view of people Quebec now in terms of the early do they want another referendum are they still interested in the constitutional change debate to store desire for a separate a separate state in Quebec they just had an election support for independence or sovereignty partnership is down and particularly down among younger people so the reverse used to be the case in Quebec the pattern of public opinion was very similar to what we see here so 18 to 24 year olds more supportive of independence but support decreases with age that is no longer the case in Quebec where we're finding that younger people are more likely to feel Canadian and Quebecois they're they're less supportive of of independence so there's that then the the electoral success of the bloc Quebecois has tailed off significantly the party Quebecois was elected as a minority government a year ago and then polls were suggesting to them that they should have an election because they would win a majority and they were absolutely devastated at the polls last month so partly that's to do with people's views of independence partly there's a third party on the scene that's pulling some of that support away so it's partly the fortunes of the party Quebecois are partly to do with how people feel about independence and partly to where they are on the left-right spectrum and moves there in the appeal of this new coalition of the Quebecois but no there's no sign of the winning conditions and in the recent election campaign there was confusion about whether a majority government win for the party Quebecois would mean that there would be another referendum because one candidate announced and seemed to take everyone by surprise to say well no this would mean we would have another referendum and the Premier said well you know maybe maybe not and so no there's no sign well certainly there's no sign of it anytime soon because they're not in government but the support's not there and if one of the winning conditions was we won't put you through this unless we know we can win it it seems a bit of a way off on the happy news convener Mike McKenzie Mike McKenzie Thank you convener another question for Professor Henderson we know that migration from other parts of the UK to Scotland has been increasing over recent years and we also know that inward investment in Scotland is the highest in the UK outside of London that seems to suggest to me that people view independence as an opportunity rather than a risk would you agree with that? I'm certainly not going to comment on the what's going on in the minds of people moving but what I can say is that from Quebec we know that there was no significant out migration surrounding the 1995 referendum of the Anglophone population in Quebec so we have these different periods of uncertainty in Quebec we have 1976 when the party was first elected so the first election of a separatist party we have constitutional debates and the 1980 referendum that resulted from that we have constitutional debates in the early 1990s and then the referendum in 1995 there was no significant out migration so people weren't abandoning Quebec in the 1990s in the early 1990s or in 1995 the significant out migration did occur but it occurred in that much earlier period when the party was first elected and you had the first referendum and people didn't know what was happening but just on the face of it without asking you to be a mind reader surely migration into Scotland in recent years increasing and inward investment increasing tends to suggest that people see independence as an opportunity rather than a risk just at a simplistic level or it could mean not thinking about it at all it could be that they're not thinking about it at all as a migrant to Scotland I can only speak for my own mind but I mean it could well be that they think well it might happen it might not but I'm going anyway and just to go back understand that you previously told the BBC that when you talk about one risk people pay attention when you talk about two risks they pay attention when you talk about three, four, five risks you begin to lose credibility that seems to me a fairly close description of what the no campaign are doing do you feel that there's a danger that they'll lose credibility by overegging the pudding? The evidence from Quebec is clear that the more you hammer different types of risk the less effective they are so if you go in with one people pay attention you go in with two people pay attention and then it tails off so our survey that we have in the field we're testing that so we've got up to seven risks that we're going to be mentioning and we want to know well where's the shut off do people start paying attention do they start paying attention at three risks or four does it make a difference if they're different types of risk or does it start to bring rather than pushing people away from what you're trying to push them away from do you actually so start to annoy them that you bring them back to what you were trying to push them from to begin with so we're looking at accumulator effects and shut off effects in our in our research so we can come back to you on that later I'm sure there's a book in this and I'll look forward to reading it but my final question can be in the front but when's your research going to be published? We're in the field with the survey this month and so we have a a dissemination event tentatively planned for later this month but I think it's going to be postponed till June I'm looking at Michael because he's in charge of it so soon Okay, thanks, sorry My question my final question community was for Professor Keating you talked about the various different models Nordic models it doesn't mean one thing but I think in general terms there's greater female participation in the labour market in all the Nordic countries is there any economic benefit associated with that? Yeah, absolutely there is and if you look internationally then there's a huge economic benefit for increasing participation in the labour market this particularly affects women who are underrepresented in the labour market similarly excluding young people from the labour market is very costly and this is a problem that Sweden is facing at the moment and this is what part of the social investment is that you may have to pay money up front in order to get women into the labour market or young people but there's a payoff in the long run because it does enhance economic output Thank you very much and last question goes to Michael Piaggi Thank you, can I just ask a quick one to Professor Keating before on to the ones I wanted to ask the research how is that being gathered is that an internet panel survey that was being referred she said you were in charge which is why I'm in charge of the whole program but I'll refer to you on that one Yeah, the survey is an internet poll of 2,000 Scots on the risk and constitutional attitudes That's a company We haven't commissioned it yet we're in negotiation with the two finalists on quotes this week The actual question that I wanted to ask was to Dr Helsen Sweden in 1990 had a major banking crisis that required a 64 billion kronor bailout Did anybody at the time argue that they couldn't afford it or that they were too small to rescue their banking system Not so far as I know The early 1990s was an enormous watershed in Swedish politics and the recession was very severe in Finland as well In Finland it was exacerbated by the collapse of the Soviet Union in their market there and in both countries it was a financial crisis that was caused partly by a credit bubble and deregulation expansion of credit in the late 80s But the response I'm not an expert in these areas of finance policy in the slightest but looking back on it in 2008 the then Swedish finance minister was quite widely interviewed as an example of how to respond to this and in particular the response to the banks and splitting up the bad aspects of the banks and the more stable ones I'm afraid I don't know the details of that so much but the government that was elected in 1991 which was a very centre-right government had a lot of neoliberal rhetoric to it and some welfare state retrenchment but perhaps less than it that actually was in the long-term Did the crisis feed into that election result was it the case that Sweden decided to change its government rather than change its constitution? Yes and a lot of other changes happened about that time so in 1990 the decision to seek membership of the European Union although that's also triggered by the constraint on that before had been neutrality and so many things are changing around them with the end of the Cold War and the collapse of the eastern bloc and the polarised system so it's also a period where many aspects of Swedish recent history are questioned actually and that's part of the change of government as well but they were very short-lived and it was only in 2006 that's quite a significant election because it's the re-election of the non-social democratic government and the very last question the what would your assessment be of the politics of someone in Sweden, Norway and Denmark getting up and suggesting that we are better together that size confers all these advantages that they share a mutually intelligible language and that the Calmar Union should be refounded to create a united Scandinavia? That has been proposed and in 2010 Gunna Vettaberry wrote, well it was actually a debate article in the Swedish Daily Dagens Nyheter and then it was published as a Nordic Council year book proposing a united Nordic Federation and his argument was just that that we would have a seat in the G20 that the Nordic region would be better off and there were a few minor hitches like where the capital would be and a few things to overcome then the reaction to that has been overwhelmingly positive But it hasn't been overwhelmingly negative and what we have seen is a revival of a much greater interest in Nordic cooperation not so much in the Nordic Council but there have been three influential reports on Nordic cooperation in the last few years and there has been especially initiatives in cooperation in foreign and security policy which was never never possible because you had the NATO members and you had the neutrals and in the Cold War that was unthinkable there were shared much more talk about shared interests in the Arctic and the High North for example so Vettaberry had also proposed a currency union I think I don't think anybody seriously is suggesting that we would see a united Nordic Federation but it hasn't provoked outrage perhaps more indifference I think but as I said it sparked a debate about the deepening of Nordic cooperation which had been off the agenda in the early 1990s Nordic cooperation isn't it's all about Europe and the Baltic so these things change they change quickly I think we have to we're slightly over time so I'll call it a day there thank all the panel for coming along that has been an absolutely fascinating session we'll be on a lot longer had time allowed but I'm afraid it doesn't so on behalf of the committee I thank you all especially those of you who have taken a journey to be with us and it's been very useful to the committee having you here I will now have a short suspension if we can reconvene we're now on our second panel on our inquiry into Scotland's economic future post 2014 can I welcome our witnesses we have John Downey director of public affairs the Scottish Council for Voluntary Organisations Kyle Thornton MSYP who is chair of the Scottish Youth Parliament and Danny Boyle who is parliamentary and policy officer for black and ethnic minority infrastructure in Scotland so welcome to you all we've got about an hour and 10, an hour and 15 minutes for this session I would ask members if they would not understand the fact that we have some time in hand to keep their questions short and to the point responses short and to the point would be very helpful in getting through the subject areas in the time available to us and I would ask members if they would please direct their questions initially to a particular panel member and then if you'd like to come in in response to a question directed to somebody I'll just catch my eye and I'll bring you in as best as I can as time allows well if I could just start off and ask you all maybe just start with John Downey and work away along the panel you've all in your written submissions talked about the need for a better economy a more balanced economy we've been through a period of serious economic recession and I think people are seeing the opportunity as we're starting to see economic growth come back in to make some changes do we need constitutional change for that to happen and if so how much maybe start with John Downey Interesting question I think if we can answer that by saying we don't need constitutional change if nothing's going to happen differently I think the key point here about the economy and actually what we want to do to create a fairer and more prosperous Scotland where actually everybody gets a benefit of our collective prosperity is actually to do the economy differently now whether or not constitutional change happens or it doesn't unless we actually make a radical shift and a radical change then we will still consign 870,000 people in Scotland to live in impoverty and I think the key is perhaps not the constitutional change although that's the context we're talking about is actually the Government and Parliament actually really thinking about how they radically restructure our economy I mean I did an event with the Government Secretary for Finance and Sustainable Growth a few weeks ago and his first message was we need to put social justice at the heart of our economic strategy you know it's kind of what he says in terms of putting people at the heart of our public services that is actually the key for it our economy needs to change and we can do that in both contexts whether you know there's a no vote in September the 18th or whether it's a yes vote we can actually but it needs significant structural radical change I mean if you look at today in the FT about lack of trust in big corporate businesses you know it's another indicator that the current economic model which failed us in 2008 needs to change Don't ask people what they think about trusting politicians we just to follow up before I bring in Cal Thornton I mean in our previous panel which was talking about experiences internationally we had a lot about the Nordic model we had a lot about the need for greater civic Scotland engagement in relation to developing the economy presumably something you would agree with I think we would totally agree whether or not you take that in relation to the creation of more social enterprises the creation of more co-ops in terms of you know employee owned but I think part of our issue in terms of addressing the economic issue but also addressing the poverty issue people must we need people to have much more say and control over their own lives now that may be as recently happened in Edinburgh about participation in budget decisions around what was happening in relation to the third sector which is a great innovation but actually that plays part of the reality and the Nordic model for me there's quite a number of Nordic models there and how it works in relation to welfare for example with a very strong conditionality if you look at it in other parts of the Nordic model where the private sector the fire service in Sweden there's a whole I don't think there's one Nordic model you can say is going to work for Scotland I don't think it's that simplistic we need to look at our problems our issues but part of it in terms of dealing with the economy is actually thinking about creating much more resilient local communities in local economies and we've got original economies say Aberdein for example and then we've got our national economy I think we think of the economy as one great big entity when in reality it's not and we also need to use Scottish government spend whether that's through procurement or other strategies to drive economic growth for example the welcome announcement on childcare is great to get more women back into work but where is the strategy alongside that to actually help women in the poorest communities create a social enterprise a small business to deliver those nursery services so actually what we think about is we make this announcement but how do we use it to drive the creation of social enterprises co-ops and drive business in the local community and make sure that local people can create more jobs for themselves so I think there's not an easy answer but it's about a real cultural and dynamic shift in the economy Cal Thornton Yeah absolutely on the first question I think what young people are telling us is I think I would agree with John it's one of those the economy regardless of the constitutional settlement what they're telling us is they want a fairer more equal economy it's about better wages for young people it's also about equality of pay as well because we still at the moment young people are discriminated against in terms of what the government sets minimum wage requirements but what also comes through is a focus on education around investing investing very much in higher and further education but also in apprenticeships employer-led training and really the message that I seem to get from young people is what they're asking in terms of the constitutional debate is they're asking these economic questions to all of those who are participating they want to hear the answer in terms of does the constitution matter I think I'll take the get out clause and say that's for young people to decide themselves about whether that's something that matters but what we get absolutely as regardless of constitution is a fairer more equal economy and I think one where young people are recognised as being equal economic partners and where actually the investment happens to allow young people to reach their full potential Thank you very much initially could I just convey our thanks and acknowledgement from Bemis that we're delighted to participate in this particular committee here today so thank you for the invite just a technicality point to begin with to go back to the name of Bemis as Black and ethnic minority infrastructure Scotland Bemis actually stands for empowering ethnic and cultural communities in Scotland and following the census figures which had been released in 2011 and prior to that Barton a consultation with our membership to clarify their comfortable with the name Black and ethnic minority and it was our members from an African heritage who considered that they would rather be represented by their African heritage and culture rather than the colour of the skin so Bemis actually now doesn't stand for Black and ethnic minority infrastructure Scotland No problem at all I'm happy to clarify that We take a neutral stance in terms of the debate that's going on in Scotland at the moment and our motivation in the terms of the referendum we haven't as such provided a policy memorandum in line a SCBO or the other organisations who have came about the future of Scotland's economy our motivation has been ensuring that Scotland's diverse communities are participating in the referendum debate so we've held a series of white paper consultations which began in January and we have that report which is now finalised and we're happy to share with the committee members over the next couple of days and we'll continue that in the future however it's important to remember that the ethnic minority communities don't exist in isolation of the broader Scottish society and populace in the issues which are out here and discuss the same issues which affect our membership across Scotland as well I think it's there seems to be an ambiguity when we've been hosting these white paper consultations about what are the issues in Scotland on the basis of it we have the two major political parties the SNP and Labour who seem to be stuck in a battle of semantics that the constitutional debate is the backbone of that discussion however the rhetoric from both of those particular camps without being disrespectful to the other political parties represented round the table or part of the yes or better to get at our campaigns as it are both striving for a society which is based upon this foundation and idea of social justice so really our role in this whole debate is ensuring that we continue these consultations with our membership and engage politicians engage both the yes and better together campaign and also Scottish Government ministers or officials from parties to come out and speak to these communities and outline why exactly the constitutional difference or the change that they're both advocating for will be the best premise for developing this idea of social justice in Scotland Thank you very much for that introduction I'm sure that a number of these issues will pursue in the questioning and over to Dennis Robertson Thank you convener and good morning Basically John Downey you mentioned social justice and I'm really going to direct my question to Carl first because the youth parliament is very keen to see how we engage with specific Scotland at the end of the day the white paper sets out its vision in terms of Scotland's future a guide to independence and talks about engaging all communities whether it be local government, business young people people from minority groups etc in establishing a written constitution the referendum affords that opportunity to do so and take forward an agenda for social justice in Scotland and I take the point that there's maybe not much between Labour and the SNP in looking at social justice as you've mentioned but obviously from a constitutional point of view there is because we believe that we require the levers of an independent Scotland to be able to achieve that So Carl, I mean basically do you agree with what the white paper was setting out that we should engage with our communities to establish a written constitution and if so what would be the first elements of that constitution that you would like to see? I think for us, we don't have a position in terms of responding to Kyle, sorry, my awful responding to the white paper, we're a neutral organisation and we try to represent all of young people's views what I would say is if we were to pursue a written constitution and this youth parliament would obviously want to see young people involved in that we believe really strongly in co-design and I'm sure it certainly would give us an opportunity to see young people more involved to bring about civic action in terms of what would be in that a constitution is such a wide task it's such a varied document that I don't think I would do it justice by outlining but I think for young people again it's around ensuring fairness and equality in terms of rights I think for us what we would be particularly keen is the right to vote at 16 and any constitutional and any written constitution I think for us that would probably be a big plus but again you know what I would say is if we were engaging that kind of task or indeed any other kind of general constitutional, political, public policy task then we are really keen that co-design is a key part of that we're really keen that young people are given the opportunity to play their part Governments have on occasion done it that the Scottish Government's wood commission held a young people's consultation day the Angela Constance the youth employment minister held a special conference for young unemployed young people to feed into government policy and what we tend to find is actually when you do undertake co-design especially on areas where young people are really at the heart of the policy what we tend to end up with is better policy at the end of the day because young people are given the opportunity and for organisations like us that we can go back into our constituencies our communities where we're interacting with young people in the grassroots where maybe a constitution or a consultation document doesn't mean particularly much but we take that we turn it into something that young people can engage with that's more youth friendly that works there and then we feed it back into the general public policy process so I think what I'd say is without going into the constitutional side of it I would certainly be in favour of co-design if that were to happen You see the referendum as affording an opportunity for change regardless of the outcome I think the referendum is giving us an ability to have a national discussion about what Scotland looks like if it's a yes or if it's a no I think what I find is a real positive when we've been engaging with young people through our project through our democracy days in schools colleges, universities with young people in workplaces what I find is that actually yes we're having that debate about should Scotland be independent or not but we're also having a much broader debate about what kind of Scotland we all want to see and I think everybody on all sides can take from the debate that we're having when we look into the future about what the public and what certainly for us what young people want is the hallmarks of Scotland regardless of whether it's independent or within the union I'd also like to comment first John Downey I think I would agree with Kell there I think this has ignited debate about the Scotland we want to see and actually those changes that we want to see and both sides of the debate have published policy documents, papers and I think for us it's good to see that actually it is that engagement with people and giving people more say over their own lives but because we have a democratic deficit here in the Scottish Parliament election just over 50% of people voted the last three local government elections has all been less than 20% most of those people are from our poorest communities who are most deprived communities so that if we're thinking about a constitution it's how we engage people so that they have a voice and actually first of all feel they have a voice and I say but get them to have a say and I think that this has enabled us to do that the referendum debate but I think importantly well it looks like we're heading to a reasonably high turnout I still have concerns that people from our most deprived communities are not engaging the debate as much as they should and the field politics is disengaging of politics and government at both a national and local level so I think we have that opportunity and I think we'll obviously be responding to the written constitution and engaging with that but I think for me it's about how we make sure that the high level principles of the Scotland we want to see and it doesn't end up being you know taking a box for every vested interest having their part of you know Scottish society, the economy in the constitution because it doesn't work like that so I think that will be a welcome debate as we go forward as well Danny Boyle, do you want to comment? Yes, thanks very much Generally, I'm with both what Kyle and John have outlined from a beamers perspective you know the constitutional debate a referendum has been a huge success has proven to be a huge success in terms of re-engaging people with the political discourse you know if we're talking about 16 and 17 year olds 80% of them at this stage already have registered to vote again touching upon the voter turnouts at the previous elections you know they plateaued at around 50% I would you know estimate it would be upwards of 75-80% for this particular vote in the referendum so that has to be championed and celebrated and if we re-engage those people with the electoral process then it is our responsibility to maintain that engagement going forward and not allow them to become disenfranchised from the political narrative or debate and the constitution would play a key element in ensuring that people if it were to come to a written constitution that would be the first signifier of saying to people well you know this is what you voted for and now you are going to participate in shaping and discussing and evolving the future of the nation which you are all participating in so that Is the status quo a barrier to that at the moment? I would be nervous to to consider that question considering our neutral position the status quo at the moment there is evidently a if we take the most simplistic outcome of that which is the percentages turning out at national and local elections then evidently barriers must exist of not to find them perfectly ourselves however if people aren't turning out to participate and the democratic process is at most simplistic level then that is a very clear signifier that there is a barrier there if the referendum acts as a catalyst to re-engage people then that's a major positive from our perspective following on from that in the hypothetical situation of a written constitution it would be highly unusual what I would imagine for people to have the opportunity to vote for independence and not be involved in the development of a constitution so that co-constitutional development would be key to continued success John Daly, I just wondered if you have any other comment the status quo in terms of what's happening and the impact in terms of social justice with welfare reform surely that is a disincentive to have the status quo well yes but only if a future Scottish Government come up with a welfare system that was much more progressive wasn't as it is just now and not one that perhaps is slightly more compassionate than what we've got at the moment so there would need to be you know you can see the status quo as a barrier but only if we do things differently and I think that's the point whether it's about welfare, whether it's about the economy I mean, weird of the view that yeah we want to marry an open and dynamic economy at the same time where everybody has a sense of shared purpose about what we're trying to do with the economy maybe we'll get more people participating we have less inequality now that's great if we could be able to do that but that takes that radical shift and whether or not we have a yes or no we can make some moves towards that after the 18th September it's not going to be easy we're not going to do it in the short term but the status quo is only a barrier if we're really prepared to do something radical whether it's about welfare or whether it's about the economy in Scotland Margaret Wightigill panel Pudist on for example, inward poverty and what's happening around that do you really think that we need to change the constitution to address that or what could we be doing just now for example I think it was John Downey who mentioned that the childcare for example is welcomed in the white paper but there is much that could be done just now likewise with inward poverty around the living wage the procurement bill so I just wonder if you could expand on what you've said in your submission around that John Downey I think for us and I was referring to the event with the cabinet secretary I think this is where we had our disagreement in terms of the procurement bill where actually frankly we should have introduced a living wage well I think that's debatable, I don't think the answer that Europe won't let is actually one we should be prepared to accept we should be testing the ground there and I think for us the procurement bill was an opportunity not just around the living wage but it was I mean I often speak about the fact that when I took a group of members and I see Alec Neil when he was a cabinet secretary responsible for the procurement bill and looking for that bill creating more resilient communities creating more social enterprise local businesses was absolutely buying on the money now obviously through a bill process and we all know what that's like and it doesn't really it's difficult to bring that out so I think it was a bit of a missed opportunity to redirect spend in certain areas but if we've got that spend it's how do we then marry it up to think if we're spending this public money in procurement how do we then create stronger local economies and the debate about the living wage yes they got an answer from Europe and there's obviously been a slightly different perspective from a European spokesman the other week there I think I had issues about which part of the European Commission they asked but I think we know Scottish Government's committed to supporting and introducing the living wage I think what we need to think about is how we can do that quicker under present circumstances I'm often fond of saying if Boris Johnson can do it I'm fond and without a challenge I'm sure we could do it in Scotland as well but I think for us because at the moment talking about inward poverty there is more children living in poverty with parents who are in employment than unemployment and that's a UK figure and that's an absolute disgrace that in something in Scotland we need to try to address but I think the living wage I accept is a contentious and tricky issue but I think from if you talk to the poverty alliance and other organisations who have given the evidence to you we feel it should have been introduced in the bill John, can I just say we've obviously heard from you as a committee before and you're obviously very enthusiastic you could try and keep your answers a little bit short but that would be helpful Margaret Can I just ask Kyle what his views are on that what we could be doing just now we don't need to have a change of constitution I think the Scottish Youth Parliament had pushing for the living wage is our national campaign last year young people were quite supportive and we think there's a range of measures we could do there is obviously procurement bill was one way there's things like the Scottish living wage recognition scheme which Glasgow has a local version London has it as well which we think are real priorities about use what we can do at the moment which is persuading business persuading employers to pay that living wage to get them to understand the benefits of the living wage in terms of do we need constitutional change I mean I think that's a again you know it's a question that I think the politicians that I think you know those at that kind of level need to answer around you know how practical is it for us you know what young people tell me really clearly is they want to see it you know I think regardless of what government there is they really want to see the living wage be promoted they want to see it happen and I think it's the more general point about giving the poorest people in society a bit more money in their pocket you know so that they're not struggling so that actually work always pays I think that's a really key one but I mean on the constitution I think you know I would maybe make the point that you know I think there's parties in all sides that are for it I think there are parties that are not so for it and actually you know I'd whether the constitution is a guarantee of a living wage being brought in you know whether that changes a guarantee I simply don't know we could elect a government we would hope not but at the same time you know we could also elect a government in the union here in Scotland that wasn't so for it either so I think you know it's more of a question about once we've got that constitutional settlement you know sorted once we've got the referendum out the way we then need to keep pushing government you know whoever it is we then need to keep pushing this thing about it should all work should always pay and for us and for young people that's the real priority thank you very much I'll direct my first question to John Downey I think it's fair to say that if we had a blank canvas we wouldn't redesign the complex and inefficient system that is UK taxation at the moment and you speak in your paper about the need to rebalance the economy regardless of the outcome of the referendum do you think it's time that we had a really serious review of the taxation system that we look at ideas like the citizens income yes I mean the short answer to that is absolutely yes I think we need to look at I hate to use the word progressive but you know progressive in a redistribute tax system and actually one that actually has more incentives built in for organisations, businesses otherwise and individuals as well but I think you know whatever happens after that we have an opportunity to look at you know what kind of tax system do we want in the Scotland of the future and I think that there's an opportunity to do more in that debate Do you think we're likely to have that discussion and debate regardless of outcome or do you think there's one outcome referendum that makes that more likely well yes obviously a yes vote you know would make that debate more likely because if there's an old vote we're tied into a current UK system albeit with you know slightly additional tax powers coming in but I think then in that case the Scottish Parliament the Scottish Government should obviously be very strong if there's an old vote pushing for more tax powers and obviously other parties are promising additional powers for the Scottish Parliament so I think we still have the opportunity to debate but obviously it's a slightly different time of debate My next question is for Kyle Thornton you've mentioned earlier the fact that you'd like to see more participation and engagement and involvement of young people in this debate and indeed in all debates now you're obviously very good at lazing and getting views from your own membership and other young people do you think that we tend to have these debates in silos that we're all very good at discussing the issues with the people that we know but we're not so good at getting out there into the community and finding out how everyone feels I just wonder you know obviously do you think that when people are elected they think hey I have this mandate I can now forge ahead without John Down you mentioned the public participation and budgeting processes how do you think we can get better at making sure we're engaging with everyone I think I would agree that actually young people are often very well consulted on young people's issues but on issues that maybe don't seem that relevant to young people directly we very much either come in at a late stage or don't come in at all you know if you use tax as an example you know I would probably bet how many of our tax consultations you've did you know I could probably count my fingers the number of young people that were probably consulted and talked to about those kind of things but yeah I absolutely agree what we are really keen on is that young people are part of it I think it needs to be systemic though I think government needs to recognise that young people in other stakeholders should be consulted and the consultations aren't just putting a document up on the website for however many months and calling that a real consultation what we tend to do in the youth parliament like I said is we take those kind of documents we turn it into something that young people can engage with in a general sense we do specific engagement work the carer's bill is probably a good example where we care fair share is our national campaign all about more fairness for young carers so the Scottish government's carers bill we ask you know could we run a young people's carers consultation day to actually give young carers directly the chance to feed into a bill that will really affect their lives and so we did that and I think it's part of a more general point that government shouldn't be afraid to use the third sector to use the people that have those grass roots connections because you know we've got 150 elected MSIPs you know they've all had to be elected they all know how to talk to other young people how to get messages across and I think it's really about using those kind of assets using people like us like SVO, you know BMS you know the people that are on the ground talking you know in communities to get that message across and actually you know let's not worry about overlap of different consultations because I would rather people were asked three times what they thought in something that then they weren't asked at all I apologise for my interjection to Mr Downey that he will be aware as I am that free of information request to councils like Glasgow and Renfrewshire have indicated that it just can't be done however the good news is there will be a persuasive element I'm sure on the face of the bill in stage three regarding living wage next week which we all support we're talking about constitutional change we have a situation today where five families in London and the South East have more income than the five million lowest people in the United Kingdom if there is a no vote what persuades you that things will change all of them that's for the parties to articulate for themselves to our membership to the people of Scotland I think we touched upon the issues before about disengagement with politics generally which is based around a number of variables and images of parliamentarians and I suppose the inequality which exists in some respects or is perceived to exist between the people and the issue which you've just pointed out yourself there's a consensus that the status quo is not going to continue I think come September 18 I think that's generally recognised by everybody it's incumbent upon the yes campaign or better together individual parties to articulate exactly what the outcome could possibly be on the 19th, 20th and onwards Can I just say I appreciate all members on all sides of this debate are keen to get witnesses to respond to their leading questions in support of their particular constitutional position and I'm also aware that all the witnesses have made it very clear that organisations they represent do not take a view yes or no so if members just bear that in mind I'm trying to determine the connection between the UK being the 28th and the 34th worst countries with huge inequality gap and I'm not asking them to say whether they're pro or against the debate I'm saying what makes them think things will change Kyle Thornton I mean I think on the question itself I think what the debate has brought out is people are discussing these kind of issues they are discussing what things can be and actually if you like I think I'm a bit of an optimist in these things I think regardless if we're a yes or a no I think people still want to have that discussion I think people will be more prone to asking questions one of the things that's been really good actually in the referendum is that is town hall debates and people coming out to meetings has seemed to have come back with their resurgence I've never seen so many young people go along to public meetings I'm not normally the young person I accept that I'm a great respecter of you and the SYP but in statistics one tends to look at projections based on what's happened and what's happened isn't good what makes us think the projection will be any different I mean I think that young people once they find their voice I think one of the things that is more disengaged from the process but actually if people become more re-engaged then where they perceive things are going on where they perceive things aren't going right then I would hope and we are certainly encouraging and trying to build a foundation for young people that they have that voice they have that method to push for changes that they want things like tackling poverty things like protecting education spends you know we can have that debate and to my knowledge if it is a no vote then I think each of the parties will fuel the pressure you know to come up with answers to people who are now actually starting to ask the questions of them John Downey I think the issue here is what any Government does with its powers now if we do have a yes vote on September 18 and then we have another Scottish Parliament election in 2016 it depends on who's elected and what their policies are and are they going to address that issue amongst any other so it's about the commitment of those parties to actually do something is the key to it now that may happen it may not happen they may commit to do it and be unable to do it but I think the point here is it's about how we have fairer society in Scotland and there's a whole range of different issues in that when we go from Alton's question about tax and how we change that system but I think part of the problem is in a society dominated by wealth we don't want money buying power it's not one person one vote but one pound one vote so lots of opportunities to change but it really depends on which Government's elected what do they want to do and that may happen whether it's constitutional change or not just based on that and without you know pushing a yes vote or confounding a no vote do you think the any constitutional change would allow us to harmonise the tax and welfare systems in such a way that we're there we can establish a fairer a society potentially we have the opportunity to do that I think as part of the issue we have around a whole range of you know areas at the moment is the lack of interconnectness across you know policy areas currently and potentially for changing them in the future and you know there's any number there but actually we do have welfare housing interconnect but then obviously Labour for example and the evolution commission I've actually said we'll have additional powers around that so that may give us an opportunity to you know merge and connect those powers much more effectively obviously in terms of having all the powers more of an opportunity but it's actually then having those powers and doing something with them is the key and really it's a difficult area housing benefits welfare and yes potentially we have the power to do anything okay thank you one last question if I may for Danny sorry one of the comments on the key in the in the running me trust publication mentioned that although this government's commitment to addressing inequalities was evident in its racial equality statement there's still a problem in terms of measuring how effective it is and there's still too many comments regarding Chinese or Muslims or Asians how do you think we can overcome that much more effectively appreciate the question the motivation of the Scottish Government and previous administrations to champion race equality and working with organisations such as Bemis or membership or colleagues within the sector has been entirely positive so we would never advocate and say that we live in a racial utopia however the motivation is there from a Scottish Government's perspective to work with Bemis and work with others in order to change that and you know race equality we work within this idea of the diversity of diversity there's no homogenous group ethnic minorities are not just you know sat in one corner and you know they just continue on with their own lives and within ethnic minorities there's very diverse groups and I think you touched upon Chinese and Muslim I'm not entirely sure why he's talking about those two specific communities however you know there's a multitude of ethnic minority and religious minorities and cultural minorities who are resident in Scotland and while I would say you know the race equality statement is a solid foundation for driving that change forward positively it's by no means to be all in end all in the consultations around the race equality statement are continuing at the moment however the willingness is there from the Parliament from the cross party support as well to progress that positively Thank you Mike McKenzie Thank you OECD produced research a couple of years ago suggesting that inequality has been growing across the UK since 1975 wonder both UK governance both Labour and Tory governments and that it's been growing faster than any other OECD country particularly with UKIP now driving the the political centre of gravity down south to the right are you optimistic that that's going to change across the UK in the near future? Anyone to take that one? John I'll happily try and take it on I'm optimistic it's going to change I've given the issues we've had with the UK government along welfare cuts probably not I think the UK economy is getting better and I think what's happened over the last six months to a year as inequality has come probably to the fore in the economic debate I mean Martin Wolf in the FT a couple of weeks ago was actually talking about international monetary fund paper on this very issue where it actually says in simple terms it says less inequality in an economy the stronger that economy will be and more inequality reduces growth now so we're at a point where it's becoming the top of the debate and I think despite your criticism of the welfare cuts I think there's a recognition now at both UK parties that something needs to be done with this as well now again it's whether or not they do that but my optimistic things will change in the short term probably not because there's a whole range of other factors that need to be introduced here I mean all the research shows from the low pay commission that the minimum wage for example doesn't reduce growth it doesn't affect jobs in terms of creating employment but actually there are issues that any UK government can actually do in terms of things like living wage and a whole range of other incentives we've got a very complex tax credit system we need to be looking at all of this but that takes what the governments want to do and is actually getting people into work getting people out of poverty, reducing inequality if that's a priority for them there are measures they can take but at the moment I try to answer a question I mean I think really for me I think I would be optimistic with conditions I think the conditions would be that for us that young people are including the process I think actually if we had more people who recognise the political system as a way of enacting change then more people would turn it to vote we would actually maybe have governments that what we tend to see at the moment is governments tend to play to who turns out I think pensions are the perfect example of where that's going on while youth unemployment raged a certain amount it's younger people who cuts, who these kind of things are actually disproportionately going for as well in an effort to protect to protect older voters there's nothing wrong with that but at the same time I think there is a tactic recognition actually that it's a bit linked into participation and what we are trying to say to young people is look if you're not happy about what happens turn out to vote engage, ask the questions and I think we could have a UK government that changes these things but that would have to be a government that we'd a lot more participation in I think all governments try to increase that I think anybody who is a democrat in terms of election and electoral democracy believes that more people should play their part but I think what we need is actually I think what we need is a system that includes young people a bit more that's a bit more youth friendly and that is around engagement that is around things like votes at 16 and it's really about government recognising the need to support all the different groups in society and actually what would maybe add as that if you like your condition on that one is we've got no guarantee in terms of our constitution in terms of an independent Scottish government or a UK government if they're going to recognise young people the white paper was positive of bringing in young people I think governments down south have been positive of bringing in young people but it's all about the delivery on the ground and actually whatever way we go young people ourselves we'll certainly be asking about the delivery on the ground but the actual engagement is in a way that you can be optimistic as if we start to have a more inclusive process I wouldn't disagree at all with your statement around the OCD and inequality that has been grown since 1975 and I think Mr Brody touched upon a specific percentage of people in the south-east of England there were four families owning 80% of their wealth or what not within the context of the independence referendum debate there has been an absolute barrage of statistics and analysis and people's perception of different ways to articulate the inequalities which exist in Scotland and there was also the Deputy First Minister in one of the articles I was reading in the Herald this morning pointed out that the wealth was 30% of households owning 80% of all the poverty wealth in Scotland so these issues around about the unequal distribution of the private or natural assets of the country are issues which are faced by Scotland as a nation but also by Britain and the UK as an entity as well so it breaks back down to the crux of the debate and why we're here is that our membership and our people and the people of Scotland have to be told by the yes and better together campaigns exactly why they are constitutional what they are advocating within the constitutional framework would better serve a way of breaking down those inequalities and making Scotland a fairer and more just society OK, thank you and my second and final question convener is for John Downey you said in response to the Labour Party's Devolution Commission interim report that it looks as if Scottish Labour is only prepared to make a few tweaks around the edges what's your view of Labour's final offering? I have to give you quite a long complex answer but I think a very short one I think in some areas I think there was lots of very positive stuff if I had a fringe meeting at the Labour conference with Jackie Baill and Sarah Boyock particularly around community empowerment engaging people and actually the transfer of powers because I think of a lot of our discussions and it links to this whole debate here is when our members talk to both sides in the debate it's actually not about what powers the Scottish Parliament or the Scottish Commission have, it's actually what we're going to do with those powers and I think that's where the positive discussions will be I think any political manifesto or white paper or Labour's Devolution Commission is actually going to be perfect from our point of view the issue is what can we do and what can we take from that as a discussion going forward because there's obviously lots of different interests in any political party before the final docking comes out I think there was areas we thought were positive there were areas we were disappointed in but then we'll take that up with Labour and further policy discussions with them Explain just a bit further about what areas you were disappointed in I think in terms of engaging people in democracy that was a positive side I think for us it didn't go far enough in terms of some of the more devolved powers particularly around welfare for example and housing and benefits and how we connect that more so I think it was a missed opportunity which I'm sure we will continue to engage with Labour as we go forward because none of these things are a done deal I don't think that was a manifesto it was a discussion paper that we can then engage with them on and make our case that they slightly more radical in what powers they propose given to the Scottish Parliament as those changes and I think we're doing an event with the Labour leader at the end of this month and I'm sure some of those questions will be put to her there so I think that provides an opportunity for debate Thank you Richard Becker I'm glad that Mr Darnley found positive things in our devolution commission I'm sure that productive conversation will continue we've talked a lot today though about international comparisons we've had international comparisons on inequality though I note that actually inequality's been growing much faster in Sweden and Finland than in mytto kingdom which is perhaps an interesting statistic but amongst all those debates and debates on whether powers reside in Hollywood or in Westminster and I'll ask John Daniel his question in the first instance is there a danger then that we have all the debate on those areas and not enough debate on third evolution of power to a community level I mean not just a local authority level important as that is but in terms of community groups, community organisations whether they be young people's organisations cooperatives, third sector organisations and isn't there a need for a more sophisticated debate around where power lies in Scotland and a more local level as well I would totally agree with that and I think that's the debate we've been having we obviously have a community empowerment bill coming up which I think again when it was first proposed was actually quite radical I don't think the current bill as it stands is as radical as perhaps it could be there and we've said that to the minister very clearly so I think it is about where power lies and I think we need to be pushing powers down to log into the debate about numbers of local authority and what their role is but actually we need to be putting it out because one of the issues addressing poverty and equality in Scotland is actually giving people more of a say over their own lives and over their community now that presents difficultly sometimes because all politicians and particularly ministers and government don't like the postcode lottery but people might make natural vote for something their community they want that you don't get elsewhere and that wouldn't actually happen but I think that's where the interest in this debate lies is what powers should people have them say because we often find with our members where they are consulted on by a local authority for example right this is the budget we've got 15 things which ones do you want us to cut whereas actually what you should be saying is taking a different approach some local authorities have done is saying here's what we can afford, here's the options which ones do you want and turning the debate around and giving people a genuine say and I think that's at the heart it's where power lies My final question and could we never be for Danny Boyle just in terms of the referendum debate on both sides of the argument how effective do you think politicians and campaigns have been engaging people from ethnic minorities in the referendum debate how willing are they to take part in that and do you think that they will be taking part in a vote in sizeable numbers Yes, absolutely as we touched upon earlier ethnic minority communities don't live in isolation of the broader populace particularly around issues surrounding this major major event via consultations the discussion and the debate is replicated as we have seen in every other setting which I'm sure everybody around this table has been at one shape or form of another in terms of engagement with ethnic minority communities I would be quite clear in saying this and I don't want to perceive my words with the wrong intention but from our perspective the yes campaign has been the most proactive the most organised and the most positive and available for engaging with our membership that's not to say that better together or individual members within better together or particular parties haven't been keen to participate but as a body the yes campaign has been performed significantly better Thank you Mark Bergey I want to ask you've been covered I'd like to go back to Kyle's talked quite extensively and eloquently about partnership and being able to shape legislation and you mentioned the carers bill which is obviously an issue devolved to this parliament when I speak to young people in my constituency one of the things that they're very concerned about is the sanctions if they're on benefits citizens advice research that young people are much more likely to suffer from these sanctions and be left effectively destitute what engagement have you had as an organisation to be able to stop that I think I mean for us as an organisation welfare is due to our nature as it's devolved you know kind of body welfare is one of those ones where there's eggs in both you know the Scottish Government's basket and the UK Government's basket what we would see kind of say on the kind of sanctions is that there does need to be good work on ensuring that young people don't lose out and actually I think I would maybe focus on those young people who don't have that parental or parent guardian support to allow them to navigate that system because very often it's those young people that we tend to find lose the most are the people who don't have a parent parent guardian who's able to advise them help fight their corner is able to signpost them but actually one of the things we're finding is that the number of young people who are not employment education or training is coming down it's actually quite encouraging but I think you know what we would say is you know any welfare system and I was just the UK Government needs to recognise that there are changeable circumstances what I get from young people is frustration sometimes around the system i.e. they're doing lots of volunteering they're being really proactive but they haven't turned up for an obscure course that doesn't really help them terribly much so they're getting a sanction because of that when actually they're doing so much good work outside of it they're engaging themselves they are being the type of if you like good citizen that the system is trying to get over to people who are unemployed but I would certainly say that the system needs to work on it but we don't have absolute policy on that area so as much as I can say as the system needs to be flexible and accommodating that's the feel that I seem to get in terms of if we just stick to these sanctions and indeed the other welfare cuts you mentioned about welfare between two Governments but although maybe the Scottish Government can come in and mitigate the welfare cuts really welfare is in the hands if welfare was in the hands of this Parliament do you think you as an organisation would have been able to work in partnership more to stop these kind of things that leave young people destitute and hurt the most vulnerable young people in terms of welfare cuts would it have been easier for you if all these powers were here I think we've found engaging with the Scottish Parliament certainly as an organisation based in Scotland is much easier the Department of Work and Pensions has got a slight notorious reputation around being and I can see people laughing at that one around being able to engage but what I would say is as an organisation proactive and engaging with whoever holds that power now whether they listen whether they act on what we say is a different story I might note that the UK Government has engaged with us well in terms of the powers it has around registration around the voting age yes they don't agree with us in the voting age but they've been very proactive in assisting us with and listening to us on registration so I think what's key for us is if the powers are here then when powers are more local it is much easier to engage but I don't think it's an impossible task if they are further away I just think it takes a bit more work on both sides to get it to come together but if both people are willing to have happen but clearly it hasn't been effective the current situation hasn't stopped you it hasn't helped you be able to prevent welfare cuts that hurt young people and things like sanctions you haven't been able to with the best world in the world you haven't been able to stop those things happening no we haven't been able to stop them right that's fine just another question to John Downey this time this morning the British Chamber of Commerce printed published results of a survey of its members on the constitution and it was its members in the rest of the UK not Scotland and one of the findings of that was that the majority of those asked believed that Scotland's budget should be revised in the event of an old vote in other words they thought that Scotland money should be cut is there anything that concerns you I think it goes back to I think the question earlier on from Alison Johnstone about in terms of the discussion we would have whether it's yes or no around a whole range of issues including taxation and clearly the Barnett formula would be one that would come up after that debate because obviously the different parties are talking about more powers for the Scottish Parliament and obviously any UK Government going into an election next year particularly with different manifestos maybe playing to certain constituencies yeah I mean obviously I think for us it's about what what Scottish Government does with the money it gets is the important thing and actually yes the amount is significant and any changes to Barnett but then the Scottish Government's got to argue its case within that system if there was a known vote and they were negotiating with the UK Government and Scottish organisations whether business or whether civic society would have to make that case as well. I think that's a natural consequence of people seeing you know if Scotland is going alone or if we have more powers for the Scottish Parliament to raise taxation here that there needs to be a debate with Barnett and I think obviously the Welsh Government have made comment in parties on that as well so I think that would be up for debate well the outcome of that debate would be you know is very much depends on the representation we would all be making you mentioned Wales obviously the Hultham commission in Wales came up with a formula that some people have supported right across the different unionist parties which would result in a four billion cut to Scotland's budget presumably you wouldn't be supportive of that well I mean under the you know if we go on and we're in the stage quo we wouldn't be supportive of that but again organisations and parties are there's a lot of negotiation there's a lot of talk at the moment and I think if Scotland would remain within the UK then there's a negotiation if the other countries want to be part of the UK then we need to have just an equitable system that suits part of the UK and there's big differences and there's obviously issues with Northern Ireland as well in terms of things like co-operation tax a whole range of things so I think the debate is opening up there and it would be post referendum quite an interesting scenario and just finally sorry in that point there I think this is worth considering when we go all the way back to the one of the first points we made about the development of the democratic franchise and about the independence referendum and that voter turnout should plateaued around 50% going into this we're talking about upwards of 75-80% if in the event of a no vote and there isn't a quite significant devolution of powers which alongside that from our perspective would be an increase in the budget rather than a decrease in the budget then that element of the voters who have turned out the danger is they will immediately feel that they've been hoodwinked by the whole process and remove themselves and ostracise themselves again from a political system which they will have perceived to have let them down so I think that's a really crucial point to make when we're talking about a yes vote in the potential constitution and involving as many participants as possible and defining and developing that then equally in the event of a no vote we can't lose that momentum within a 2015 general election campaign and the voices which have been heard within this evolution or this process that we're going through at the moment will have to be maintained and listened to and just in terms of what you've just said there the only option on the table in terms of extra powers has been from Labour's devolution commission which leaves about 80% of the taxes with Westminster and doesn't devolve welfare at all so it doesn't give us the opportunity to counter the kind of cuts that have hurt vulnerable people so much is that a disappointment to you as well? Well I think just to reiterate that's why it's incumbent upon the yes and better together campaigns and parliamentarians and political parties to come out and explain what's reading between the lines of the question. Given the other parties the Conservatives I'm not sure we're going to get anything particularly radical from them so that's the offer that's on the table in the event of a no vote plus the possibility of a £4 billion to Scotland's budget that must concern you? I think you know from an individual citizens perspective as well as a voluntary sector organisations perspective that's something we would like to engage in conversations with the Labour Party or other political parties to ensure that in the onset or the potential of a no vote that there's an actual rather than a tokenistic devolution of powers a realistic Commission is a tokenistic devolution of powers? Well no I wouldn't say that I think you know without putting words in my mouth I think there's a lot still to be debated and said aligned prior to September 18 and post September 18 Thank you Can I just ask John Downey one more question cos we touched on this briefly he was talking about in response to Richard Baker further devolution down to local government communities I noticed last week Cosla published their report on strengthening local democracy did you think that was an interesting set of proposals? Actually I probably did put my sentences on my side from what I had because I thought when it was first tonight it seemed to be the answer was Government equals local democracy but I think actually the report was much more positive and actually it's a very good report in terms of where it could take us within that debate and I think that's where our members where with all the parties in the Labour Devolution Commission and others and with government is about where powers lie in what we do with them so I think alongside the Community Empowerment Bill it does give us an opportunity in a forum to talk about what's the role of local government, how do we improve local democracy and get people more of a say so I'm fairly optimistic around some of that debate I think we're out of time so can I thank on behalf of the committee all three of you for coming along and for assisting us it's been very useful to the committees inquiry and at this point we'll have a short suspension Thank you We're still on public session is consideration of the electronic documents Scotland Regulations 2014, SSI 2014 slash 83 papers been circulated from the clerks in relation to the purpose of this document which relates to the requirements for electronic documents and electronic signatures I've referred to in the requirements for writing Scotland Act 1995 hasn't been amended by the Land Registration at Centre of Scotland Act 2012 and these are subject to negative procedure Do any members have any comments about what's raised in relation to this? Nope, if not are members content not to make any recommendation or the content of the instrument comes into force content of the instrument comes into force Thank you very much Item three on the agenda at our next meeting next week we are due to take a paper on our future work program our members content to discuss that in private Thank you very much In that case we now move into private session