Who does David Cameron fear more, the Lib Dems or Ukip?

The PM is using coalition as an excuse not to be more bellicose in Brussels. It could backfire

Nick Clegg has sprinkled adose of salt into the prime minister's European wounds this morning. The deputy prime minister has written an article in the Observer insisting that the coalition will be "measured" in its approach to any proposed changes to Brussels institutions and warns that "retreating to the margins" of Europe would be "economic suicide".

David Cameron, meanwhile, has told the BBC's Andrew Marr that he would like to see further "rebalancing" of powers with regard to Brussels, but recognises that the Conservatives must act as a coalition - an unveiled hint that it is only the Lib Dems that stop him from giving full rein to his own more Eurosceptic impulses. It is obvious why he would want to present that argument - persuading Tory back benchers that his hands are tied with yellow Lib Dem cord. I'm not sure it will do him much good. The Conservative hard core anti-EU faction know perfectly well that the Lib Dems are an impediment to their ambitions and see Cameron's deference tothem as weakness. Hearing the prime minister advertise that problem will hardly placate them.

Part of Cameron's problem here is that he is trapped in an inherently dishonest position. He probably would like the UK one day to have a different relationship with Brussels, but recognises it is impractical - politically and diplomatically - to demand one now. He would almost certainly have come to the same conclusion if he had a majority in parliament. There are, in government, simply better things to be getting on with, especially in an economic crisis. So Cameron will not march into the European Council swinging a Thatcheresque man-bag demanding more control of employment rights legislation or anything else - and not because the LibDems won't allow it, but because it is not a priority for him. The back benchers know it, so there is very little the PM can say that will satisfy them.

One factor that could really change the dynamic is the performance of Ukip - or rather, Nigel Farage's party's anticipated performance in 2014 European elections. Ukip has already beaten the Lib Dems in a couple of by-elections and is a natural repository for disgruntled Tory protest votes. One poll out today puts Ukip within easy striking distance of the Lib Dems nationally. Conservative strategists are, apparently, very worried about what that might mean for a poll that is due just a year before the next general election. It is feasible to imagine that, come 2014, Cameron will be more afraid of Farage's populist, nationalist agitation beyond the gates of his coalition than Clegg's cosmopolitan Europhile hand-wringing within.

 

Rafael Behr is political columnist at the Guardian and former 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.