Who would benefit most from a Lib Dem meltdown?

The Tories are in second place in 39 of the Lib Dems’ 57 seats. But Labour could still benefit most.

Yesterday's vote on tuition fees was the Liberal Democrats' Iraq moment, a profound breach of trust for which the party will pay dearly at the next election. In little more than eight months, the Lib Dems have fallen from 34 per cent in the polls to just 8 per cent, their lowest rating for 20 years. They are certain to lose votes and seats at the next election. But who would benefit most from a Lib Dem meltdown?

It is the Conservatives who stand to win the most seats off Nick Clegg's party. The Tories are currently in second place in 39 of the Lib Dems' 57 seats, typically by a considerable margin. By contrast, Labour is in second place in just 16.

As UK Polling Report shows, while 13 of the Tories' top 50 target seats are Lib Dem-held, just six of Labour's are. A poll of marginals by the Conservative Party deputy chairman Michael Ashcroft in July suggested that the Tories can hope to win as many as 30 seats off the Lib Dems.

But Labour supporters can derive much comfort from the fact that a wave of Lib Dem defectors will allow them to win back dozens of seats from the Conservatives. As a Fabian Society analysis pointed out earlier this year, there are 25 seats that would swing back from the Conservatives to Labour if just one in five Lib Dem voters switched to the red team.

In addition, a defection of this size would allow Labour to win 15 seats off the Lib Dems, including all five gains that Clegg's party made at the last election – Norwich South, Bradford East, Brent Central, Burnley and Redcar. Encouragingly for Ed Miliband, a recent ComRes/Independent poll found that more than one in five people who voted for the Lib Dems say they would now vote Labour.

But the risk for Labour is that justifiable anger at the Lib Dems unwittingly allows the Tories to avoid the blame for unpopular decisions. As Ed Balls points out in his latest Tribune column:

The Prime Minister plays the global statesman – travelling around the world and hosting foreign leaders in Downing Street – but rarely allows himself to be dragged into domestic policy controversies. George Osborne is rarely seen in public defending his reckless gamble with the economy.

But week after week it is Lib Dem ministers like Danny Alexander and Vince Cable who find themselves in TV studios defending what are essentially Conservative policies in a predominantly Conservative government. The Lib Dems have willingly become David Cameron's human shields, haemorrhaging support in the process.

Unless Labour begins to develop a more coherent critique of the Conservatives, Cameron's party, not least under the redrawn constituency boundaries, could be in a strong position come the election.

George Eaton is political editor of the New Statesman.

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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.