How the Tories could call the SNP’s bluff

'Scottish Parliament' / Andrew Cowan / CC
'Scottish Parliament' / Andrew Cowan / CC

Something a political party wants desperately is usually one of the key things that defines them. It’s something they have to accept if offered. And thus it can also be the deadliest of traps.

A clever politician who needs support should always be able to lure opponents into the pit they dig for themselves. In the Coalition the Liberal Democrats walked into exactly that dead-end on the AV referendum and on Lords Reform. Due reflection on the coalition negotiation might have said they could have dropped those conditions (in the knowledge they were a poisoned chalice) for a real achievement – a real and serious reform of local government for instance, even PR for local government.

The referendum should have been such a trap for the SNP. Instead, the folly of the range of concessions and abnegations in the Edinburgh agreement made it an opportunity. I would like to think the Tory leadership might have learned painfully that they did not cage a beast but unleashed it. I would like to think so, sadly I fear that the Tory leadership in Sir Harold Acton’s wonderful phrase about the Bourbons of Naples ‘Remembers nothing and forgets nothing’.

But let us assume some glimmer of intelligence lurks in the higher echelons of the Tory party. Perhaps it might think like this…

We roughly know, for all the sound and fury, the results of the General Election. Neither Tory nor Labour party will be able to form a government. The SNP will have gained a large number of seats, the Liberal Democrats lost seats. At the edges UKIP may gain a few, and Plaid and the Greens may colour in a bit more of the map a different shade. We know too that paradoxically the referendum did clarify something. It clarified the Unionist offer as the Smith Commission, it closed down the SNP demand to Full Fiscal Autonomy. So we actually now have two clear offers on the table rather than the vague fuzz of ‘yes’ and ‘no’. The SNP have also clarified that they believe constitutional change should take place by referendum.

We are gambling for very high stakes here but we have little option but so to do. The loathing that the SNP and Labour feel for each other mean that any deal between them on confidence and supply carries little credibility. Labour cannot offer Full Fiscal Autonomy in the knowledge that its power base, weakened and corroded in Scotland would inevitably be lost forever as there would indeed have to be serious adjustments in voting rights in Westminster. For a Tory leader already irrelevant in Scotland this is surely the opportunity to offer what Labour cannot.

If he or she were wise they might choose to address all the issues of English local government, Wales and Scotland and put that to one binding referendum across the UK, a referendum with a time lock before which it cannot be revisited. However perhaps that is too ambitious. If they chose to be more limited they could say to the SNP with perfect legitimacy the following.

•   They will draw up two alternative schemes of legislation, one based on Smith, one on FFA. Either of these is highly complex. Both require full costings and both require radical changes to the way the UK tax system works (at the moment as we know many of the revenue and income projections are exactly that – guesstimates – as the UK does not collect tax data in a way that makes apportionment easy).

•    They should point out that Full Fiscal Autonomy will require the Scottish government to take on board the full cost of all the other hidden subsidies universal service provision gives Scotland. The cost for instance of a country that has 15% of the UK’s rail miles yet only pays its population share of the maintenance of that track – a gap of some £200-£300 million. The cost of a postal service across a landmass half the size of England and Wales with a tenth of the population. The cost of the BBC transmitters. The cost of the electricity grid. The cost of wind subsidy. And so it goes on.

•    Of course Scotland’s aging population will mean too increased pension transfers and contributions which will have to be factored in.  And when the exercise is completed the Scottish government will be obliged to come up with a scheme for how it is going to attain a break-even budget in the new scenario. It cannot of course run a substantial deficit as part of the sterling zone and I am sure the British government would be entirely reasonable and offer a transition period (at a price of course) of perhaps three to five years for the Scottish government to implement the savage cuts and tax increases necessary to get to fiscal balance.

•    At the end of this period – a period of work of at least three years I suspect, given the huge complexity that needs to be resolved – a Tory government will then offer the people of Scotland a further referendum on two fully and independently costed proposals – Smith and FFA. It will offer it on condition that such a result is binding for a period of a generation, that if the people of Scotland vote for Smith the Scottish government is required to implement all of Smith including massive reforms to Holyrood and a full democratic reform of Scottish local government (these parts of Smith to be fully fleshed out).

•    Crucially, it will offer the above on condition that the SNP support – in all divisions – a Tory government in England for the full term of the Parliament.

Come the referendum the Tory party has a wonderful luxury – it can split quite happily between those ideologues of the right who want shot of Scotland in the happy knowledge that the more they campaign for the SNP proposal the less and less credible that proposal seems. And its moderates can campaign for Smith and save the Union. Either way it wins. I would so enjoy George Osborne coming up to Scotland and congratulating the SNP on proposing to inflict a level of austerity on Scotland he, as a Tory, would never dare do.

And what can the SNP do? They are being offered the chance of the thing they desperately want. They cannot reject the idea of the use of a referendum for major constitutional change. It was their idea. And can they reject the Tory offer which gives them the one chance of what they want without losing all credibility?

For the Tories the offer comes with a Westminster price, no one would expect otherwise. And for five years the SNP will have to grit their teeth to support a Tory government on its key measures. The timescale too for this whole process is perfectly legitimate given the scale of what is being undertaken, nothing less than a full overhaul of the operation of the British state.

If Scotland votes for FFA the cause of Union was lost whatever we did and RUK has effectively negotiated a very advantageous financial settlement. If Scotland votes for Smith the cause of Nationalism is this time definitively silenced with the lock on further change for a generation and a Nationalist party who has to face the polls in Scotland having propped up the ‘hated’ Tories.

It is indeed the offer of a poisoned chalice. But it is one they must drink.


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Hugh Andrew 7 Articles
Managing Director of the Scottish publishing house Birlinn Limited.

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