The SNP’s strategic problem is that independence equals austerity

For much of 2010 a barrel of Brent crude oil sold for under $80.

Graphic from Nasdaq
Graphic from Nasdaq

Then it started to take off, so that in early 2011, it reached $125. Around this time, perhaps not coincidentally, the Scottish National Party (SNP) achieved a stunning victory in the Scottish parliamentary election, allowing them to govern on their own, in spite of the proportional voting system. In the following three years the oil price held at around $110, and it seemed quite reasonable for the SNP to assume that prices would stay there for its financial projections for Scottish independence for the referendum in September 2014. But by the time that referendum was held the price was in free fall. And, again perhaps not entirely coincidentally, the SNP lost the referendum. Now Brent crude trades at under $50. It may be stuck there for some time. Hold that thought in your mind; it is the most important thing to understand about Scottish politics. Scottish nationalism has always been closely linked to oil.

After reviewing the fortunes of each of Britain’s major parties after their Autumn conferences (and one minor one: my own Liberal Democrats) it is the turn of the SNP. Notwithstanding the loss of the referendum, the SNP’s dominance north of the border looks complete. The only way from here seems to be down, but when, on earth, is that going to be?

Commentators on Scottish politics from London, of which I’m one, are notoriously bad at understanding Scottish politics. As, indeed, are English politicians. But surely the same laws of physics apply on both sides of the border? We must try to understand what is happening, and where things might go.

First we need to understand how the SNP achieved its dominance. Nothing could be sillier that the narrative I have heard put about by English leftists that the SNP achieved its success through tapping a popular, anti-establishment mood, and in particular anger at “austerity” to become “a broadly based social democratic party” as one article put it. This is silly not because it is entirely untrue, but because it is so  incomplete that it might as well be. The SNP has achieved its success because it has convinced Scottish voters that it is the best party to look after their interests. This is not based on any particular policy stance, but through an appeal to national identity.

First they destroyed the Conservatives, who used to be a  major force in Scottish politics. They were aided in this by the complete ineptitude of successive British Prime Ministers, Margaret Thatcher and John Major. They managed to make the English look like an occupying power. The SNP were nicknamed the “Tartan Tories” by Labour, because of their appeal to right of centre voters. Their leader of the time, Alex Salmond, sounded distinctly neoliberal, with his wish to turn the country into a corporate tax haven, like Ireland.

But Labour fared better. In New Labour days, that party’s domination of Scots politics started well. The party delivered devolution and won the first two Scottish parliamentary elections, governing in coalition with the Liberal Democrats, who also performed respectably. It no doubt helped that one of New Labour’s architects, and its second Prime Minister, Gordon Brown, was very much a Scottish MP. But doubts were raised about the party’s commitment to Scotland. Its best politicians seemed much more interested in pursuing a career in Westminster than in Holyrood. The party struggled to find a convincing leader after Donald Dewar, Scotland’s first devolved First Minister, died in 2000. Labour’s Westminster “strategists” (as politicos like to call their tacticians) took Scotland for granted. The party’s seats in Scotland were mostly quite safe; there was little understanding of how to handle political competition.

The first cracks showed when Labour lost the Scottish elections in 2007 (by a single seat), allowing the SNP to form a minority government. But the party would not, or could not, understand the implications of giving the SNP such a lift in credibility. After all, Labour did well enough in the 2010 British general election in Scotland. But they should have understood the strategic implications when the party fared badly in Scottish elections of 2011, allowing the SNP to achieve that majority, and a mandate to hold an independence referendum. Labour continued to flounder. To be fair, the party was facing such deep strategic problems after losing power in Westminster in 2010 that it was difficult for them to do other than paper over the cracks and hope for the best. The party’s lack of political skill in Scotland, however, became evident to all in its incompetent leadership of the referendum campaign. The party really seemed to be only about providing careers for talented politicians in Westminster, local jobs for the others, and no use to Scots voters at all.

The SNP, of course, managed to use the referendum to generate a surge of interest in an optimistic brand of politics based on Scottish identity. Its leaders then made a brilliant switch. Mr Salmond stepped down as leader, and handed over to his deputy, Nicola Sturgeon, who had the reputation of being more left-wing. Ms Sturgeon duly turned the focus onto Labour voters. She used the mantra “austerity” in her messaging, to demoralise Labour activists, fed up by their leadership’s more careful line on economic policy. Labour collapsed to just one seat in Scotland (the same as the Lib Dems and the Conservatives) in May’s British general election.

The Labour left hoped that  Jeremy Corbyn’s ascent to the Labour leadership, amid a tide of new members, and his supposedly refreshing brand of “straight-talking, honest politics”, would change the party’s fortunes. Alas no. Scots voters deserted Labour because the party was useless to them. The party has merely turned itself from one form of uselessness to another. A chaotic debating society more interested in policy than power is not an improvement. The next Holyrood election is in 2016. Everyone expects the SNP to increase their majority, mainly at Labour’s expense (the Lib Dems were already crushed in 2011; the Tories have quite a robust core vote).

A further departure from the London lefties’ idealisation of the SNP is that the SNP conference was as far cry from the “new politics” they espouse. The Observer columnist Andrew Rawnsley said that it reminded him more than anything of a Conservative conference under Mrs Thatcher. The SNP are ruthless politicians, managing their message with discipline, and extending their hegemony to as many parts of Scottish life as they can. There is no open debate of party policy. This is not good for the quality of government there, but the party can and do blame any problems on the Westminster government. The SNP’s record is not all bad, though: the Scottish economy is more buoyant than any other part of the UK outside London and the English South East. Whether that arises from the SNP’s neoliberal tendency, or from its social democratic one, probably depends on who you talk to.

The SNP’s successful discipline arises from a clear, unifying purpose: their quest for Scottish independence. And therein lies their biggest strategic problem. That $50 oil price. That leaves little left to tax. It causes collateral damage to the oil industry based in Scotland.  It makes much of remaining oil beneath the North Sea unviable. This knocks a huge hole in the SNP’s economic plans for independence, which handed out goodies to all interested parties.

The low oil price is a product of America’s shale revolution, and increased energy efficiency. Meanwhile Iran will re-enter that oil market, and demand from China is tailing off. That $50 price could be around for quite a while. The “peak oil” theory is dead and buried. There is no sign that the SNP have any idea how to plug the gap in their plans for independence between $50 and $110.

And here’s the thing. In spite of this price collapse in oil, the Scottish economy is performing well. It is diversified, and the non-oil bits are doing taking up the slack. The tax revenue damage is being taken by the UK as a whole, which unlike Scotland would be on its own, is big enough to absorb it. You could not have a better illustration of why the Union makes such good sense for Scotland. It acts as a wonderful economic shock absorber. And, as Greece and others have shown, joining a currency union does not solve this problem. Before long, Norway will be providing a clear illustration of the challenge an independent Scotland would be facing. Independence means austerity.

Ms Sturgeon used the conference to manage down her party’s expectations of a second referendum soon. But with a low oil price and deteriorating demographics 2014 may have been their best shot. Unless Britain is mad enough to vote to leave the EU, the case for independence will be more difficult to make in future. It will take some time before the penny drops. But surely the SNP’s days of hegemony are numbered?

But for their different reasons, Scotland’s other parties are unable to exploit the SNP’s strategic weakness. Paradoxically, though they may have won the argument on independence, it may not help to make too much of their unionist views.  Just as England’s middle ground voters are not averse to austerity, Scotland’s middle ground clearly prizes its national identity, and isn’t scared of independence talk. Perhaps the tactic should be to concede the idea of a future referendum, especially in the absence of a proper federal settlement. That might clear the field to examine the SNP’s actual record. But that might take a higher calibre of leadership amongst Scotland’s opposition parties. For now the SNP does not face a serious challenge.

4 thoughts on “The SNP’s strategic problem is that independence equals austerity”

  1. Matthew

    I agree with some of the things you have noted but some things from my point of view, and someone who was once a member of the SNP, miss the point.

    Oil was always portrayed as a bonus by the SNP, the media and the other parties played up oil at every point during the referendum to talk Scotland down. The SNP mainly acknowledged that it was a bonus from which Scotland could build. I don’t know anyone who voted yes because of oil, in fact I cannot remember it ever being mentioned that often here in Dundee. It was about democracy and the lack of in Scotland as far as the United Kingdom is concerned. Westminster is viewed as elitist, remote, for the privileged, run for the south east and anti-Scottish. Cameron’s election strategy demonstrated that all too well to most people up here, you don’t matter was the message. Scottish hordes to run the UK, disgusting racism in the extreme and something that has done very lasting damage to the UK, something that it may not recover from. Also something that Labour and the Lib Dems did nothing to counter.

    The SNP started to grow prior to 2007 but took a surge after that and especially after the referendum. You are correct they were able to convince many Scottish voters that only the SNP would stand up for Scotland and after 50 years of Labour dominance in Scotland and things getting worse, after years of Tory Government where Scotland was badly let down, and more so after so many GE’s where Scottish people’s vote did not matter people decided to go to the party that at the very least will shout loud for Scotland. That is not going to change anytime soon. The Conservatives, Labour and the Liberals are hated now, for us we have fallen to 4% in the polls and it could mean only returning 2 or 3 list MSPs next May. I think based on somethings I have heard Willie Rennie will lose his seat.

    The Carmichael affair does not help, it does not help that he lied for what is viewed up here as personal gain. It does not help that the party have supported him without any sanction in the eyes of the voter and it really does not help that people have had to raise over 100,000 pounds to fight for what they view is their democratic right of recall. He should go, he is damaging the party everyday that he remains an MP, the damage inflicted might not allow the party to ever recover. Add in the poor leadership of Willie Rennie then you have a perfect storm. Willie Rennie may well be a nice man, may well be a good MSP but he is not a leader.

    I do agree with you that the SNP do not allow for much debate within the party, this has gotten worse since they have achieved a membership of over 100,000. However it is also one of the reasons I left, the lack of debate and accountability at the top, add on all women short lists, another mistake Willie Rennie is making up here with the Scottish Liberals, I felt I could not be a part of a party that I viewed as undemocratic in the Labour mold, just not as bad.

    Nicola Sturgeon won’t go for another referendum until she is sure she can win, oil will play little part in it because as I have noted it is just not what people are basing their vote on. The next referendum will be won, whenever that may be, but the one thing that I think could change that is a truly federalized UK. While I remain a committed Liberal Democrat I am also a committed YES voter and that won’t change as long as the third question is not on the ballot and oil will play no part in my decision. With or without oil I have absolute faith that an independent Scotland, should the country decide it wants that, would be a successful and vibrant nation. I also suspect that after 10 years of the Tories, and with another five on the horizon in 2020 the Scottish voters will have had enough.

    The simple reality is that many think that the SNP have done ok, they have made mistakes, Police Scotland being one, but overall the general view is that they have done ok. I know Liberal voters who will vote SNP next May because they have no faith in the Scottish Liberal Democrats under Willie Rennie and can see no alternative vision. A Liberal vote is viewed as a wasted vote, I really can’t see the SNP not winning a majority, even here in Dundee where we might be facing compulsory redundancy from the local council, myself included, the SNP will take Dundee because there is no credible alternative. Sad but true.

    There is a need for a Liberal vision though, the party need to take on board why they are losing, which they are not. Too many take Liberal Voice as being the Liberal view when it is clearly not. The SNP bad mantra won’t work and is viewed by many as an attack on the Scottish people, rightly or wrongly. The only way we can even start to recover is if we put things that matter to the fore, electoral reform, devolution to the lowest level and alternative policies. It is not good enough to say the SNP are crap on this or that, run a few surveys to members and then be selective in what you report back while not coming up with any costed alternatives, it shows poor leadership and a party that has lost its way and has no vision.

    When I talk to people about being a liberal it is about decision making, it is about accountability, it’s about holding people to account and having a different vision that talks to people and asks them what they want. I am a social liberal and I tell people that there can be balance and fairness, but we have to believe it, we have to stand up and fight for it. We have got to move away from talking down, from being a part of the system and of being middle class want to be elitists who don’t reach out. I’m sorry for sounding gloomy, and I do think we can come back but we have to be honest and stop making stupid mistakes. The voters are not stupid, even if Westminster takes them for that.


  2. Thanks for your invaluable perspective from north of the border. I do miss a lot from down here. But I also think it is important for English politicos like me to try to understand what is going on in Scotland. And I can’t gainsay you on the Scottish Lib Dems, about which I know practically nothing.

    But I would challenge you on the oil thing. It may not be a direct issue, but it’s there. It gives nationalists the confidence that Scotland can go its own way without major damage to taxpayer-funded services and benefits. it was very evident from the Scots government’s economic prospectus for independence – which did not envisage any of what we would now call austerity. Now for many Scots, including you perhaps, austerity, or the risk of it, is a price worth paying. But for others it is important, notwithstanding their low opinion of the Westminster government. No did win by a comfortable margin in the end after all, for all the momentum of the Yes campaign. I think if the SNP had to explain the implication of $50 for an independent Scottish economy, support for independence would fall. Especially since the SNP seems to be making such a big deal of being opposed to austerity. It wouldn’t stop them voting for the SNP though, which is about promoting Scottish interests.

    Also, going back to the 1970s, it was the discovery of North Sea oil that got the modern SNP going in the first place – I remember it well. Their slogan was “it’s our Oil”. They are too smart to make such an open play on it now, but I am convinced it is a critical issue in the background.

  3. Matthew

    Thanks for getting back to me, I will defer to yourself on oil as i just don’t know enough on the economics of it or the SNP prior to 1990’s to be honest.

    I don’t think the no victory was very big to be honest from a lead of over 40% with less than 18 months from the end. If the campaign had went on a couple of months more many are convinced YES would have won but all history now. The real question is how we move forward as a UK and as four nations within it.

    I really hope that we can get some momentum going I the debate as we need opposition across the country and I certainly believe that the lib Dems can be that principled 3rd parry and can grow. I am going to conference this week, my first ever and I am looking forward to it a great deal and hearing how we might move forward.

    Thanks for letting me rant and also learn from your excellent insights, you really do help me understand liberalism a lot more and I agree with a lot of what you say.


    1. Thanks Bruce. I will be interested to know how you get on at the Scottish Lib Dem conference. I think your view that the party should be less dogmatic about union makes a lot of sense.


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