All quiet on the northern front

3 Apr 09
IAIN MACWHIRTER | Peace has broken out in Holyrood.

Peace has broken out in Holyrood.But the new-found consensus between the major parties has simply highlighted Scotland’s lack of power over the major issue dominating voters’ minds — the economy

In the midst of the worst financial crash in 80 years, there has been a curious outbreak of consensus in the Scottish Parliament. Parties that had recently been at each other’s throats over issues such as local taxation and the Scottish budget are suddenly working in harmony — well, almost.

They are collectively raising a toast to increased drink prices, an initiative launched in Scotland that looks likely to be coming to a bar near you in England, if chief medical officer Sir Liam Donaldson has his way.

Last month, the Scottish National Party abandoned its plans for a local income tax. All parties now want to reform council tax but none has a clue what to replace it with.

The row over the Scottish Futures Trust, which the SNP manifesto promised would replace the Private Finance Initiative and public-private partnerships, has died down now that the UK government is actually having to bail out PFI schemes in England.

A lot of SNP election promises have been broken, such as ending student debt, introducing grants for first-time home buyers, and cutting class sizes, but the financial crisis is a convenient get-out-of-jail-free card.

The parties are pulling together on economic policy in a rough and ready way: defending Scottish jobs and apprenticeships; opposing market reforms in the public sector; and supporting social house building and increased spending on, for example, free personal care and free prescription charges.

The opposition parties are all now backing an extension of the Scottish Parliament’s economic powers on borrowing and taxation. These are being investigated by the Calman Commission, which reports this summer. The SNP stood aside from Calman but will now accept any positive proposals for extending Holyrood’s powers.

There has been a degree of dissonance between Labour and the SNP over the winding up of Scotland’s biggest building society, the Dunfermline. First Minister Alex Salmond claims it could have been saved by the Treasury. But neither Labour nor the nationalists wish to go to war over the building society, now part of the Nationwide.

There are 500 jobs at stake, mostly in Prime Minister Gordon Brown’s constituency backyard, and all the Scottish parties are only too painfully aware of the losses that have landed on the UK taxpayer thanks to the misadventures of Scottish financial institutions.

Of course, Labour still insists that the collapse of small countries such as Iceland and Ireland in the ‘arc of insolvency’ confirms that the SNP policy of independence would have left Scotland alone and bankrupt. But they are not saying it very loudly at the moment — not least because people are beginning to realise that the UK finances are not all that secure, with financiers muttering about ‘Reykjavik on Thames’.

The crisis has certainly reined in Salmond’s ambitions and rhetoric. As a former banking analyst with the Royal Bank of Scotland, and a very public supporter of the Scottish financial community, the first minister must surely have been knocked sideways by the banking crash. The reality is, had Scotland been independent right now, her economy would have been obliterated by the collapse of two of the world’s biggest and most toxic banks: the RBS and Halifax Bank of Scotland. But he manages to conceal his shock behind that famed self-confidence.

Salmond is still his rumbustious self at the weekly First Minister’s Question Time. And the financial apocalypse doesn’t appear to have unduly affected his popularity. The most recent YouGov poll shows that Salmond is still twice as popular as Opposition leader Iain Gray. This is perhaps not surprising, since it is really rather difficult for the opposition to oppose right now, with so much agreement on the fundamentals.

All this consensus makes for rather boring journalism. But it is also a problem for the Scottish Parliament. If Holyrood appears to be somewhat irrelevant right now, that is because, in a real sense, it is. There is nothing the Scottish Government can really do about fiscal stimulus, interest rates, quantitative easing or bank rescues. Some ministers are privately rather relieved to be on the sidelines of this particular crisis. However, the Scottish voters might not be so happy to see their Parliament doing nothing to save their jobs and homes.

The recession still hasn’t really hit home in Scotland because of the large proportion of Scots — 24% — who are employed by the state. The public sector is still hiring in Scotland, which might explain why house prices have not fallen as fast as in England.

However, eventually, reality must hit home, and it is scheduled to do so next year as the financial squeeze hits the Scottish budget. The Treasury is determined to push through a £500m drop in spending in Scotland, which will shock Scots out of their complacency. So journalists needn’t worry: the parties will soon be fighting each other once again.

Iain Macwhirter is political commentator on the Sunday Herald

Did you enjoy this article?

AddToAny

Top