Why Cameron's Scotland plan has rattled the SNP

The PM has called Salmond's bluff by demanding an independence referendum sooner rather than later.

Ever since the Scottish National Party's remarkable victory last May, Westminster has been in a state of shock, unsure how to proceed. But now, finally, David Cameron, determined not be remembered as the man who lost the Union, has resolved on a course of action. He will allow the SNP to stage its own binding referendum on independence on the condition that it is held in the next 18 months (any referendum after this date will be advisory, as it would always would have been) and that it offers a straight yes/no question on Scottish secession.

Cameron's move upsets Salmond's plans in several respects. The First Minister has long intended to hold a referendum in the second half of the Scottish parliament, perhaps in 2014 on the 700th anniversary of the Battle of Bannockburn, when he believes that discontent with the Tory-led government will be at its height. In addition, he planned for the ballot paper to feature two questions, one on independence and one on full fiscal autonomy or "devolution max". Aware that there may not be a majority for the former, the SNP leader is eyeing the consolation prize of "devo max", a stepping stone to full independence. But Cameron is determined to deny Salmond these two advantages. To add authority to his stance, he will publish a consultation paper later this week revealing legal advice that the referendum will only be binding if both parliaments agree to its timing and wording.

There is, of course, a risk that all this could backfire. Cameron's intervention could be seen as an attempt by the Tories - not a popular breed in Scotland - to hijack a referendum that the SNP has an electoral mandate to hold. It was an argument made at length by Nicola Sturgeon, Salmond's deputy, on the Today programme this morning. But, as she conceded, there is a potential contradiction in the SNP's stance. It maintains both that Cameron has no right to dictate the terms of the referendum and that his move will backfire. But if Cameron's move will backfire why is the Scottish government so opposed to it? The answer, as Sturgeon will not say, is that the SNP is not convinced there will be a majority for independence in the next 18 months (or ever) and, consequently, is determined to reserve the option of devolution max. Yes, some Scottish voters will resent Cameron's intervention but others will ask, "why doesn't Salmond want an early referendum? What's the big feartie afraid of?"

Set against this must be the disorganisation of the pro-Union side (who will lead the No campaign?) but Cameron has called Salmond's bluff and the initiative, for the first time in months, is with him.

George Eaton is political editor of the New Statesman.

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Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.