>> next, house assistant minority leader james clyburn of south carolina talks about the midterm elections, then david cameron discusses the u.k.'s relationship with scotland. after that, alex salmon gives his final speech as first minister of scotland. house assistant minority leader james clyburn says democrats lost the midterm elections because they spent the time apologizing for being a democrat. during a speech at the national press club, he said democrats should be proud to be the party of the little guy. he also said he supports president obama's use of executive action on immigration,

comparing it to lincoln's emancipation proclamation. he's the third democratic member in the house, a primary liaison to the white house, and the highest ranking african-american in congress. this is about 25 minutes. >> not going to compare to when i knocked the sign down. >> okay, let's do it.

okay, so we're going to start now. hi, i'm bob wiener, i'm the news makers committee of the national press club's event coordinator for this wonderful event today. welcome to the national press club, the world's leading organization for journalists and where news happens. today, we welcome an old friend, congressman jim clyburn, the house assistant minority leader who will discuss governing and the issues in the post-midterm's environment. congressman clyburn was just elected by the democratic caucus as the assistant minority leader, again, for how many times now, jim? third time, great. president barack obama has said congressman clyburn is one of the handful of people who when they speak, the entire congress listens. he is one of the democratic caucus' primary liaisons to the white house. he plays a prominent role in messaging and outreach. he's the nation's highest

ranking african-american member of congress. he represents the sixth district of south carolina. when he came to congress in 1993, he was elected co-president of his freshman class and rose through the leadership ranks rapidly. he was elected chairman of the congressional black caucus in 1999 and built a reputation as a leader and consensus builder. he was elected house democratic caucus house chair in a three-way race and three years later was unanimously elected chair of the democratic caucus. when democrats regained the minority in 2006, he was elevated to house majority whip. he waw elected president of his naacp youth chapter when he was 12 years old, helped organize many demonstrations and marches in college, and met his wife emily in jail during one of his incarcerations. i hope you'll tell us more on that story. well, c-span and others have asked what news will be made. in addition to governing and the

issues in the post-midterms environment, jim will, of course, answer the questions about what is going to happen on the immigration order, the health care law, will it be tweaked, will it stay, what will happen to it? will there be a shutdown threat, government financial threat, and impeachments? and why did the democrats lose and what's the prognosis for the future? so i would like to introduce, all in the space of an hour, i would like to introduce my wife, pat, who puts up with all of this organizing work that we do, dr. patricia byrd, rebecca vanderlin. she'll take the mike to the audience so they'll be able to answer questions because we promised c-span would we have the audience miked so we will. florian, evan, joseph, and our new intern, autumn kelly. okay, and i want to thank your staff, jim.

your scheduling staff and patrick devlin, your communications director. and so we will get under way. jim will presbyterianent a spee. he'll talk for we're going to make it 15 minutes so he can get a couple questions in. take it away. >> thank you very much, bob. pat, thank you for your long friendship. bob and i go back to our young democrat days. when both of us had hair. and i was 40 pounds smaller. he kept his weight. i -- the bell just rang, so we're going to truncate that quite a bit. so i'm not going to get into the speech i was planning. let me take first the more current thing, immigration. we did have a dinner with the president last night. and we discussed the executive order that is going to be

issued, signed some time tonight or tomorrow. he will spoeak to the nation tonight about it. i think he ticked off nevada tomorrow, to discuss exactly what it's all about. now, many of you may know that i have for several years now been urging the president to use his executive authority to deal with immigration, as well as with the debt limit. you may recall, the deal of the debt limit was something i didn't particularly like. i didn't like it being held up. the country being threatened. and i thought that he should use his executive authority. now, there are a lot of people who debate whether or not that's beyond the law, and we have been hearing all these discussions, even this morning. about the lawlessness. let me tell you something.

when abraham lincoln issued the emancipation promlication, he was going beyond the law because law ordered -- mandated slavery. and by executive order, he got rid of slavery. now, the big debate over the movie "lincoln" was all about whether or not after the presidency was over, whether or not we would have an amendment to the constitution to maintain freedom of slaves because executive order would die with the president. so the fight was not over, outlawing slavery. the fight was over putting it in the constitution. let's look at someone more current, truman. the congress did not get rid of segregation in the armed services. in fact, roosevelt wouldn't do it. when truman became president over an incident, isaac woodard,

down in my state, a incident of a gentleman returning from world war ii, going home, and being arrested, beaten by the sheriff and his deputies and blinded. truman saw that. and he decided that he would use his executive order to outlaw such stuff, and to integrate the armed services. that's how the armed services got integrated. so i'm pleased that the president is moving on this. he will take his place alongside abraham lincoln and harry truman and many others in using the executive order to do big things. now, are we going to have the government shutdown? i hope not. will there be rumors of it? rumors have already started. i saw a headline where the senior senator in my state is asking his people to stop talking about impeachment, the

fact of the matter is they are discussing it. and i have always maintained that there's an element that would love to see this president go down in history with an ask risk next to his name, and that's what this is all about. there are going to be lawsuits. you know, what president hasn't been sued? all of this high level discussions of a lawsuit is all about driving a narrative more than doing what they have the authority to do. i used to run a state agency. i can't tell you how many times i was sued. you make executive decisions and you get sued for them. and that's what the courts are for, to determine whether or not the constitutionality or the legality of what you did, and then just move on. i'm still -- i have been in office now for -- in congress

for 22 years, so the lawsuits didn't keep me from getting here, and none of the lawsuits were successful. let's have the lawsuits and go on about our business. now, what happened on november 4th? what happened on november 4th was my party spending too much time, in my opinion, apologizing for being democrats. when you seem to feel there it something wrong with being known as the party for the little guy, the party that addresses middle income issues. i am proud that my party did social security. and a lot of the democrats paid daily for that. go back and read that history, you will see how many democrats

lost their seat because social security was just the worst thing they could possibly do. but today, everybody relishes the fact that we're the party of social security. i'm proud of the fact that my party is a party that gave us medicare and medicaid. and we have heard the other side saying how bad medicare is, how bad medicaid is. in fact, one said i'm not against it, i just want to see it wither on the vine. i don't want to get rid of it, just let it wither on the vine. now, i'm very proud of that. i am proud i am a member of the party that faced up to what was going on in this country back in 1940s with harry truman. and in the 1960s with lyndon johnson. and so where would i be today were it not for the 1964 civil rights act, the 1965 voting

rights act? where would i be living today were it not for the 1968 fair housing law, and would i have ever gone to work in state government in south carolina if we had not outlawed discrimination in 1972 in the public sector? and so that, all of those things were delivered by the democratic party, and i think it's high pa time that we democrats stop apologizing for being for the underdog, being for the little guy, and being for the middle income americans. and for us to sit and spend all of our time in the campaign moving forward, then i find it kind of interesting. i noticed we have a guest today, i think over here, from the russian embassy. i went to the soviet union in 1972. my daughter went back in 1992. now, when she left to go back, to go over there in 1992, i said to her, well, i hope you really

enjoy this trip. i really enjoy ed going to the soviet union. and bring me a souvenir back. so when she got back, she sent me an envelope with a souvenir in it. i open it up, and it was a polaroid picture of her. i look at it and say what kind of souvenir is this? a polaroid picture of you? she said, i thought you might want to see the difference of 20 years, when you went as opposed to when i went. and i'm looking at the picture, i'm saying, what does this picture say? she was standing on the mcdonald's golden arch. she was standing under that. i felt so stupid. that i didn't catch that.

i point that out to say that nothing stays the same. we have to understand that this country is always moving like a pendulum on a clock. this country does not move linearly from point a to point b to point c. the country is always going back and forth, back and forth. the supreme court goes back and forth. jeb scott, to prlessy, to brown. the congress always goes back and forth because the country goes back and forth. i say that to people all the time, the country goes to the left and back to the right, tops out to the right, goes back to the left. always passing through the center. and one of the things we ought to understand is when the pendulum is moving from the right to left, passes through

the center, moves from left to right, the country spends twice as much time in the center as it does in the left or the right. it's the innovation of the voters that determines when it should top out and start back in the other direction. the country moved right this year. i believe honestly that if the voters intervene as i hope they will and sufficiently, it will go back to the left in two years. now, i have truncated this because i want you to ask a couple questions. >> let's try one quick one, first, jim. to the guts of it. do you think that the immigration order will stick and the health law will stick or will be they killed by 1,000 cuts on financing? >> well, i do believe that the

executive order will stick. one thing about it, the republicans will have two years for their lawsuit to mature or for them to run against it. and the next president will either reauthorize it or get rid of it. but i think we're going to have this for two years. as far as the health care law, the health care law needs to be tweaked. remember, i just laid out a litany of things. when the civil rights act, and i call the health care law the civil rights of the 21st century. when i made my speech, i said this is the civil rights of the 21st century, because all we're doing with the health care law, outlawing discrimination against people who get sick. saying no longer are you going to be allowed to discrimination against a woman as soon as she

gets breast cancer or a man with prostate cancer. we're not going to allow you to discriminate against them. that's what this law is all about. and so i feel sincerely that we just took the first step, this immigration thing. first step. when the civil rights act was passed in 1964, it started out as a big comprehensive law. didn't get passed, so lyndon johnson jettisoned voting. got rid of housing. these were real issued that riled the american people. they didn't want to see neighborhoods integrated and they didn't want to see voting made easy. and so he got rid of all that. now, a lot of people, he even got rid of the public sector discrimination, when the civil rights act was passed in 1964, it only outlawed discrimination

and employment in the private sector. so after passing the law, jettisoned enough stuff to get the votes you needed to pass it, one year later, got the voting rights act. three years later, we got the fair housing law. and then four years after that, he outlawed discrimination. we did not outlaw discrimination in the public sector until 1972. and so the same thing here. when i first said that this law must be done in such a way that it can be implemented incrementally, a lot of my friends on the left castigated me, even had people come to my office demonstrating in front of my office. i laughed at them. said what are you talking about? everything we've ever done, things like this, were done incremental incrementally, and it should be done incrementally, we honor the

fact that you should not bite off more than you can chew, as my grandma would say. >> maybe one or two questions, and pass around the mike. >> can you speak to how the entire leadership party, the heads of the party, both chambers were re-elected despite the record low approval rating of congress and what americans can expect them to do differently? >> the record low approval rating came from the republican congress, even though everybody was rated pretty low. we were significantly above, democrats were significantly above the republicans. but let me say this in terms of leadership. you know, my dad used to tell me all the time, son, experience is the best teacher. i just recently published my

memoirs, and by the way, amazon.com gives it five stars. i had blessed experiences. and what i said in that book is all of my experiences have not been pleasant. all of them i consider to be blessings. sometimes you have to look back on the blessings to see it. now, one of the things we just did on our side of the aisle, we are blending the old with the new. and i put myself among the old. but i'll tell you this. i said to a media person who asked me the other day. i believe progressives, i believe bob, would much rather have a 74-year-old thur wogood marshall than a 30-year-old clarence thomas. >> one more question. go ahead in the back.

>> i wonder if you could comment on the approaching ferguson decision and how this is going to roll out for ferguson in the midwest and the rest of the country? >> well, one of the things i think that should be highlighted about ferguson is the fact that community participation, you cannot just drop out. it is just highlighting the fact that it is important, and to me, much of the atmosphere that has been created in ferguson is because local community people just failed to participate at the level that they should. i'm told, this community, 6% or 7% african-american. but only two african-americans on the police force. of 50-some odd people. that would never happen in my

congressional district. never. i just don't understand that. i don't understand how you have an election, as they did have this past april, and only 6% of the people showed up to vote. and you wonder why you have an all black school. come on. all of us have a responsibility to go out and participate. now, when i said that before, some people said, i'm talking about protecting the elected class. this isn't about the elected class. this is about what decisions are going to be made on that school board. who is going to hire the police chief, and who is going to oversee the police chief when he is refusing to integrate his -- let his police force reflect the community that he represents. 67% african-american. and only two out of 56 or 57

police officers are african-american? give me a break. there's something wrong with that. so i believe this highlights the fact that you just can't vote when there's a presidential election. there's no president goes to your school board meeting. no president makes the determine whether or not the potholes get closed, street lights get installed. these are local decisions and they're just as important in many instances as the decisions in the white house. >> of courskay, thank you. >> thank you so much. appreciate it. >> we are adjourned.

>> on the next washington journal, doris meissner, former commissioner of u.s. immigration and naturalization, will discuss president obama's announcement on immigration, how many unauthorized immigrants will be impacted, and talk about current border protection and previous legalization efforts. as always, we'll take your calls and you can join the conversation on facebook and twitter. washington journal live at 7:00 a.m. eastern on c-span. this weekend on c-span, saturday at 6:30 p.m. eastern on the communicators, tim wong, founder and ceo of fiscal note on their congressional legislation predictor, which uses data mining and artificial intelligence. and sunday evening at 6:30, new jersey governor chris christie talks with newly elected gop governors on what they call the next chapter of their political comeback.

saturday night at 10:00 on book tv on c-span2, former cbs investigative reporter on the obstacles she faced while reporting on the obama administration, and sunday night at 10:00, the 2014 national book awards. and on american history tv on c-span3, saturday night at 9:00, brooklyn college professor benjamin carp tells how leading up to the american revolution, taverns were used as central meeting places to talk about british policies and foster a patriotic spirit. and sunday at 6:00, the curator use articles from their collections to tell the story of house pages. find our complete television schedule at c-span.org and let us know what you think about the programs you're watching. call us, e-mail us, or send us a tweet.

join the c-span conversation, like us on facebook, follow us on twitter. >> on wednesday, british prime minister david cameron appeared before a parliamentary committee to answer questions on the u.k.'s relationship with scotland following the independence referendum. scotland voted in favor of staying in the united kingdom and now the two nations will have to begin discussion s on issues such as social security, health, transportation, and public financing. it's made up of 33 chairman of the house of commons select committees and their questions are not provided in advance. this is about an hour and a half.

>> hello, and welcome. we would like to explore issues about the united kingdom following the scottish referendum. we'll start with scotland and ask mr. davis to begin. >> during these events, we made a clear commitment in the event scotland remained in the uniet d kied kingd kingdom, shortly after the result, there seemed to be a suggestion that additional -- to scotland, would be linked to some reorganization of paris, wales, and ireland. do you accept that the pledge made to the people in scotland was these would be entirely separate and it was freestanding and should not be tied to

anything else? >> effectively, yes. the pledge that was made by the party, i think, is important. and we'll reap the terms of the pledge, i'm confident of that, which is that there should be further, particularly fiscal devolution to scotland, to raise taxes and spend money, and there's a program for delivering that, since we already have that command on paper, shortly we'll get the report, next week, and that will be turned in to draft clauses in january of next year, and whoever forms the government after that, that will be legislated on. scotland has a guarantee. what i said, i think is right, at the same time that there should be a solution to what has become the english question, which is shouldn't there be a way of making sure that when things surely effect england or

england and wales, english and welsch mps should have to give their consent? and i want that settled as well. but one is not dependent on the other. if i win the next action, you get both, scottish devolution, it's the other parties and what they will do. and they will, in my view, make that clear. but i'm clear if you get me, you get both. i think we need to settle both of those issues. >> you started your answer by saying effectively, yes. is effectively yes the same as yes? >> you can see exactly what you get. one isn't dependent on the other. >> will the smith commission's recommendations be accepted by the government, or will there be some further consultation and discussion? >> what we have said is that we received smith's report,

obviously, all our parties are involved in this smith commission. and that should be lauded for the work, it's very important work. i don't see any reason why we won't accept those terms and turn them into draft clauses in january. i mean, every party has to speak for themselves, but during the referendum campaign, and a very long campaign, the conservative party drafted a report which i think set out the case for further fiscal devolution, and i can't prejudge exactly what smith is going to say because i don't know, but i'm very happy with the way it seems to be progressing, and i'm very confident, as i say, that we'll meet both the timetable and the substance. >> can i just get a qualification, it will be based on smith? >> yes. >> and will you, as a

government, then seek if there is some element to smith with which you're not happy or the enthusiasm is less than tall? >> i would hope that isn't the case because i think what we're trying to do is reach consensus between the parties. the good thing about this process is that all of the parties in scotland are taking part, smp included, and hope the pros -- what smith has tried to do is bring together a consensus that everyone can accept and go ahead with. so that's what i anticipate happening. >> if there's not a consensus amongst the people on the smith commission, what happens then? does the government table the majority view from smith? >> i hope that doesn't happen. i don't think that's going to happen. i don't really want to speculate. i think it would be unhelpful. this has been a process of trying to bring the party, you know, different parties together, to deliver a common outcome. and i don't know what would

happen if that wasn't possible. i think it will happen. i'm pretty confident. >> who in this government will be responsible for taking the proposals from smith and seeing them through? >> ultimately, i take responsibility for this, because you have to bring different parts of government to deliberate. in terms of who has had the lead responsibility, it's been the chair of the cabinet committee examining not just the issues around scotland but also issues about devolution to neighborhoods and cities and also looking at the question as well. he has a big responsibility in the government, but of course, you've also got the scottish secretary as well. but lead responsibility will sit right here with making sure that we take this forward. >> thank you.

>> prime minister, scotland, is it inevitable wales is also going to get further powers? >> well, there's -- first, i think before we dive into all of the details, i think it's worth standing back for a second. what are we trying to do? what is the aim of the process? to me, the aim is simple, which is we want to make sure that our united kingdom finds a good settlement where there's respect for the devolvement of constitutions and we feel happy and contented and together in our united kingdom. we haven't reached that yet. there have been various pieces of devolution. it's good we have a well established parliament, a well established welsh assembly, but i don't think we have reached that point where this is a settlement that people really bind to, and i think that

matters because i think it's a bit unhealthy in a way whether in welsh or scottish or english politics if we spend a lot of time actually having the discussion we're having today. we should talk about jobs and growth rather than endlessly trying to change and get right. the aim is a settlement that settles down, that makes the united kingdom where we feel there's a good resting place, if i can put it that way. wales, i will answer your question, i promise, in wales, there's a process for examining devolution, and there's sort of two parts to it. all is the idea of wales having a sort of tax raising power and tax devolution that scotland has already had, where legislating for the welsh assembly government to have a referendum on that should they so want in the future, so that's sort of

stage one, to enforce the welsh assembly. stage two is to look at whether there are more powers over things like policing and justice that should be devolved to wales, and the secretary of state has a process that i think he's going to report back in march, to see what is appropriate there. >> could you see those powers being given to wales before the english situation is resolved? >> there's two parts, if i'm prime minister after the next election, what you'll get is you'll get a solution to english votes which i'm sure we'll come on to. you'll get the further scottish devolution, the draft courses turned into a bill. and in my view, i hope that there will be some further moves on welsh devolution, but that will very much depend on the welsh assembly government.

i personally believe it would be good to have a referendum in wales on the tax raising powers, and if you would like, yes, ma'am, i say yes to a referendum and vote on it, or yes to the powers, so i would like to see that happen, but because that depends on the welsh government assembly requesting that, i don't know the timing of that. as for the devolution of power to wales, policing, justice, transport, and other powers, there's a process to bringing the parties together to examine that. i can see arguments on both sides. i have some concern about things like policing because i think there's such a connection between england and wales over policing issues because of the nature of the border. so i think it's slightly different, but you know, i'm open to argument. as i say, the aim -- i think we have to keep going back to the big picture, which is what is

going to make the united kingdom a strong, cohesive, political entity with respect for the devolved nations and something that makes sense. the aim of the debate is to have it completed, and then actually trying to get on to spend more time on the other things. >> and the new secretary of state for wales, which by the way, i think is a very good choice, has said that he will remove the lockstead mechanism as far as wales is concerned. given that we, i strongly supported that, do you not think this might be a little premature? >> i can see the strong argument for it. and i think given that, you know, our party had the commission report that recommended not having a lockstep in scotland, i think it

makes sense not to have one in wales. so i'm comfortable with that. i understand the concerns of people about the marginal tax rates, but i think the whole argument here is really do we think that giving devolved institutions tax raising powers and spending powers and some voting powers, do we think that is going to answer my question on how to settle down the united kingdom? i think it will for the good reason that i think the moment the system doesn't work because the devolved assemblies are partial to spending money rather than raising money. if you have the extra responsibility of raising and spending, that enhances the respect agenda and makes a more responsible political institution. so i think removing lockstep is a good part of that. >> and finally, prime minister, if i may, you said in the past that reform of the 30-year-old,

and frankly in my view, rather out of date bill would have to wait on the stabilization of the public finances. given that public finances seem to be stable, do you not think that the time has come now to look at something and look particularly to understand where is my $300 million pounds a year? >> well, first of all, i think i say while my answer finances h stabilized, there's lot more work to do to eradicate the deficit and pay it back, and that will require further public efficiency. the work isn't complete. the second point is if we go for this process of devolving tax raising powers to the scottish parliament, the welsh assembly, then the importance will reduce because obviously, these institutions will have smaller

backgrounds and will have larger tax bases, and so the importance of it will be less. what i have said is i don't think reform is on the horizon. i said that in 2013 and i stick by that, and whei will say to particularly english colony, but also welsh colonies is i don't think there's any magic formula here of how you work out distribution between the nations of the united kingdom. to english colonies, i don't expect some massive pot of gold at the bottom, can don't think there is, because there are going to be about 55 million people in england and 5 million in scotland and fewer in wales. i think the best thing to do is press ahead with this fiscal evolution that reduced the importance of the formula and to build the institutions of wales and scotland in that way.

>> thank you. i think we all want to see something sustainable and it has to be fair. and i want to draw on some evidence that we got in my committee. >> right. >> where he said to take the simplistic example, to say that it is devolved and the rest of the united kingdom decides to increase the income tax, if it were devolved, the income tax in the country where it's devolved, scotland in this example, would be completely ineffective. however, if you still have a formula, the increase in spending on health service would feed into more money going into scotland. now, in effect, what i think he is saying that if we give the scots control of the income tax

and we keep the formula, we raise tax in the u.k. to pay for, let's say, extra health care, the scots could be said to be gaining an unfair advantage in that there wouldn't be an unsustainable government. they would get the garnet formula without having to pay for it, so i think we have got a difficulty in taking forward the commitment that you all made. on both maintaining the formula, giving a commitment to tax raising powers without disadvantaging either english taxpayers or english users and i don't know how you're going to square that circle. >> i think i followed all that. he's right. he's right, technically, because the way barnett works, if you decide to spend more money on health care in england, scotland

and wales get extra money, and once you devolve income tax, that will be raised and spent in scotland. your point is you increase health spending, that gives scotland more money and they have hadn't to raise taxes to pay for it. i understand the point, i think the only thing i say is if you didn't have barnett, you would have to have another formula for working out how much money to give england and scotland, and it would be a needs based formula, perhaps, and scotland has needs so they would get money for those needs, and barnett has sort of worked in that when you're addressing the needs to spend more money on the health service, it has a consequence in scotland where more money for their health service. i think that way, and also remember, as you devolve tax raising powers, so the importance of barnett gets less because the share of token spending in skocotland would ge

smaller. so it's not a perfect answer, but again, we have to sort of get out of the details for a second into the big picture, which is, you know, why is it so complicated to get it right? one of the reasons it's complicated is because our united kingdom, unlike some systems, is a very large england and a quaite lot smaller scotlad and wales. you daebt do the sort of logical thing which is have a federal state of four equal formulations because they're not the same size. we're living in a world where you have to try to find a solution that works for the way the united kingdom is shaped and the different sizes. i think my argument is working off barnett, having the tax devolution, we can make our united kingdom work, but it's not a perfect world. >> i think the big picture will only be met if the details seem to be found. >> yes, but i think it is fair

to say that, as i say, the size is going to get smaller because the size of the tax raising powers will get bigger. >> let me ask you two other questions. the scots decide to increase scottish income taxes, okay, for some services that they wanted in scotland, that brings down the deficit, but it will add to the expenditure, and if you therefore wish to stay in the public expenditure total, english taxpayers may have to take a further cut in public spending while their scottish counterperts have the freedom to raise money and protect their position. how are you going to -- >> i think i find that much easier to solve. because, look, if you believe in devolution, you have to believe the scottish parliament could spend more and raise more money in taxes. and the consequence of that will

be to put up total spending across the u.k. i think it would be perverse to say as a result, we have to cut english spending because no government would do that because a consequence is to add to public spending in the total united kingdom, there would be more of a problem if the scottish parliament was able simply to spend lots and lots more money and borrow lots and lots of money because at the end of the day you would in the be changing the fiscal position of the whole united kingdom, putting pressure on interest rates and what have you because of borrowing. what we have decided through the scotland act is yes, scotland should have more borrowing powers, but there are limits to the borrowing powers and the borrowing should be, for instance, for capital spending. so i don't think that is a problem. if scotland decides to spend more and tax more, that's a scottish decision. it has a consequence on the whole united kingdom, but it's not costing my constituents any money, not causing them any

problems and not adding to borrowing in an irresponsible way. >> on the current settlement, the capital, they can borrow the capital, i have viewed on the forthcoming settlement, the taxes will pay for capital and health services, something like that. is this a change? if what you're saying to us, total expenditure totals don't matter to the government anymore, they're not going to add to borrowing, that's fine, or i don't see how else -- >> they're not going to add. this is a very important discussion. they're not going to -- they can only add to borrowing in as much as the scottish parliament exercises its power to borrow some money, which is under a limit. but it is a consequence of fiscal devolution is that's part of the new settlement.

i don't think that's a problem. again, it comes back to the scale, because you know, the scale of the additional public spending, all paid through extra scottish -- >> does that raise the amount? >> that would depend on smith. smith will look at the smith report will look at how this is going to work. the principal is a relatively simple one. but again, there will also be limits in political actuality, if scottish government or the welsh assembly government would decide to spend huge amounts of money and taxes, that would be damaging to the economy, and you with get people thinking about relocations and the rest of it. there would be constraints, to say to the scottish parliament, you have the power to raise some of the money that you spend, and if you want to spend more, you can raise more, and that won't affect overall methods in the united kingdom, come back to the

big picture, why are we doing all this? it's to try to find a settlement of respect and understanding that makes the united kingdom stronger in the future. >> my final question, if i may, chairman, is in northern ireland, you're about to give them power to have a lower corporation tax rate. and in that context, are you looking at scotland potentially having a lower corporation tax rate? and my own personal view on that is, you know -- >> we're covering that later. >> are you covering that? okay. >> what you said so far there is you're not going to tear up barnett, and if we didn't have barnett, in any case, we would need some other case of needs assessment. and you have used the word. don't you think there is merit -- everyone is agreed that

the barnett formula is overgenerous at the expense of the english. there isn't a single analysis that has concluded otherwise. don't you think, therefore, there is at least a least the na grand commission of some sort of all the nations to look into the question of how best to allocate resources according to need between them? >> well, it's something i'm sure, you know, it does get examined by experts and commissions and i'm very happy for that to continue. i'm just saying i made a commitment. this is not something that is on my horizon and i'm sticking to that. the most important thing is to deliver this fiscal devolution which in itself is an important thing but decreases the relevance of barnett. i'm sure people will argue about it. >> so the answer to that is no

really? >> as i've said, it's not on my horizon. >> i would just like to ask one question, it's proposal that i think tried to get an interest in as well that you're rejecting just there's one other issue that just needs picking up at this stage which is on borrowing. >> yeah. >> you would agree, i presume that if more fiscal devolution is granted, that there is, therefore, the likelihood of more volatility in tax and spend or tax at least, at least that's the most of the evidence suggests that there will be whatever you do devolve, in which case isn't there a case also for increasing the scope of scottish borrowing according to margaret alluded to. >> well, what we've done -- first of all, let me -- short

answer is yes. when you devolve -- >> that's what. >> no, important for me to understand because some have had this debate as though nothing is happening. in the government there's been the biggest act to devolution in scotland for years. it is important for people to know that ten pence of income tax is being devolved to scotla scotland, land tax, land fill tax, those things will be devolved to the scottish government and the hims will be decreased to an overall count of 2.2 billion. that's already happened. >> the short answer is yes. in any case it's already in transit. in principle and in practice you're already acting on it. in which case for the purposes of scottish borrowing, which may resolve the increased scottish borrowing, would you agree in practice the uk will end up as

the lender of last resort? >> well, effectively, in a unitary system with devolution and limits on borrowing, in the end, the sovereign entity is the uk government. >> so we will remain the lender of last resort, in which case -- >> i think it's important to understand why. we're not creating a system in which the devolved parliaments can spend and borrow without limit. that would be in my view, a dangerous and bad idea. this is taking better responsibility for raising and spending money with some additional borrowing powers to give that sort of flexibility, to make the system make sense. but to not borrow without limit. >> in which case it's accepting, isn't it, that to the extent the markets view the risk of that increased borrowing leading to that lender of last resort facility being active, to the extent of the markets conclude

that the risk is nonnegligible, there will be an increase in uk borrowing as a whole. >> yes, but within the limit, as i said. >> thanks. >> thank you. on the issue of cooperation tax devolving it to northern ireland, you did indicate a number of months ago you'd look at this after the scottish referendum. i know we touched on it briefing during questions yesterday. but perhaps you could give some indication as to what you're considering doing on this respect? >> well, what i've said and what the government said is in the sort of economic pact that we came to with northern ireland to devolve more powers and to seek greater economic resurgence in ireland, we said that we would set out a path on this which is coming up in a couple of weeks

time. and i remain committed to that. i think it's worth sort of, again, trying to ask why are we -- why is this an issue and what's the right way to -- there's a case that the northern irish parties made, which i think is strong, is that there is a difference in northern ireland on two grounds. one is there's a land border with the republic of ireland that's got a very different rate of tax, and that makes it unique in the united kingdom so different to devolving corporation tax in wales or in scott land. and the second thing they say is because of the troubles and difficulties over many, many years, the public sector in northern ireland is so -- is absolutely huge and the private sector is too small and we need to find ways to regenerate the private sector. what's interesting is you get this as strongly from martin mcguinness as you do from peter robinson. so i think it's absolutely right for the government to consider

this. obviously, there are all sorts of considerations to take into account. but i do think their argument in northern ireland is one that we should properly engage with. >> you gave a number of reasons to do it and creating jobs through and investment and that's obviously one of the big issues which you've touched on in the more general points you make. i'm not sure you've given any assurance to when it's going to happen. >> i said there is a process. that's what's going to happen. so i think it's important we stick to that approach. but let me be clear with all these issues of tax devolution because it sounds like the westminster is sitting there throwing out you have this tax, but devolving a tax power has very serious consequences. for the devolved authority. you've got to work out how much brawn you take away as you give this power.

and what the future consequences are. so there's a lot of very difficult work that has to be done. as i said, this government in good faith has been discussing the parties of northern ireland just how important they think this is, and they make this very strong case that it is different in northern ireland. one of the other things we need to do is make sure in the republic of ireland the tax rate is -- they have a corporation tax rate, a problem is a lot of businesses pay 2% because they've done a double irish deal foll funneling profits through god knows where. we have to you through the international tax exchange and the treaties, the work i've been doing with the g-20 and g-8 and the eu, we need to sort this out. in our case 20% should mean 20% and in the irish case 12% should mean 12%. >> indeed a difficult thing to consider for all the reasons you've given. yesterday, though, in your answer, you said that we need to look at northern ireland to see that the budget is working and the government of northern

ireland is working. of course, in westminster, we have a very different system. a government, we have an opposition. in northern ireland, we don't have that situation. it was set up, as you well know, to bring about peace not to bring about efficient decisionmaking. i just hope that like agreements on very many issues in the assembly in northern ireland, i hope that's not going to be the sort of thing that prevents any devolution. it's not set up to be efficient but to bring people together. very different than westminster as you well know. >> you have a long record of working with and supporting the devolving institutions in northern ireland. as prime minister i want northern ireland to be a successful prosperous part of the united kingdom, but we do need responsible government. and you know, at the moment, there have been real issues in northern ireland, as you know,

about sorting out their budgets. and i don't think -- it's difficult to argue you should have more responsibility in terms of tax raising powers if you're not adequately sorting out the current budgets for northern ireland and making sure the government is delivering for people in northern ireland. and we should be discussing with them how best to do that. and so i think there is a link between these things. >> thank you very much. >> mr. betts. >> thank you. scott land, wales, northern ireland on to england. i think it was generally great that devolution should happen in england, that we don't want another level of political organizations created. so devolution will happen to local authority ors to a combination of local authorities, hebs tnce the rece deal with manchester authorities. the manchester deal and the sheffield and leeds deal will

all be about spending power, but in scotland we're talking about spending and taxation. why in england are we appearing to rule out devolving fiscal powers as well? >> well, first of all -- i don't want to get too, but there should be devolution to scotland and to wale and you need equivalent devolution to english laws. i don't think we can have a situation where we forever ignore this question. >> i was just going to attend to that. >> i thought we were jumping. in terms of should we give lots of new tax raising powers to local authorities -- >> or combinations of authorities. >> in the interests of candor, i've tried to give straight answers so far, my answer, that would be no. i think we've got enough taxes in our countries. i don't want to