Cameron's state of the union flop

The SNP will be delighted with the Prime Minister's lacklustre speech in Edinburgh.

Even before David Cameron delivered his speech in defence of the union in Edinburgh this afternoon, the Scottish National Party had already dismissed it as "threadbare and outdated". In retrospect, the nationalists could have added "ill-informed" and "underwhelming" and they still would have fallen slightly short of the mark.
 
It's safe to say that the Prime Minister's attempt today to develop a positive case for Scotland to remain within the United Kingdom probably won't be remembered as one of the turning points in the debate about Scotland's constitutional future.
 
On the contrary, Cameron gave the distinct impression of someone who hadn't seriously examined his opponent's arguments. At times, in fact, he gave the impression of someone who hadn't really examined his own. "Scotland", he said, "is richer and fairer as part of the UK". But the facts simply don't back this up. Over the last 35 - 40 years, North Sea oil production has generated as much as £300bn in tax revenues for the UK Exchequer, yet Scottish rates of income inequality have skyrocketed while social mobility has stagnated. Only a Home Counties Conservative could describe that as "fair".
 
The emotive elements of Cameron's address were similarly unpersuasive. "The link between our nations is a precious thing. It's about our history, our values, our shared identity". Well, of course. But just because two nations share some sense of an identity it doesn't mean they should also share a government, a parliament or a constitution. Few would deny the strength of the cultural relationship between Britain and Ireland. Fewer still believe the latter should re-join the UK because of it. Indeed, from a nationalist perspective, Cameron's decision to emphasise the common historical experiences of the Scots and the English will be seen as an indication of the intellectual weakness of unionism. Alex Salmond knows that the referendum will be won or lost on political and economic, rather than sentimental, grounds. Unionists should be worried that their leaders have not yet come to the same realisation.
 
Worse still, in claiming that the provisions contained within the Scotland Bill would give the Scottish Parliament tax raising powers "for the first time", Cameron revealed his poor grasp of the details of the current devolutionary settlement. Holyrood already has the power to vary income tax rates by 3p in the pound.
 
In reality, nationalists are quietly delighted with Cameron's apparent eagerness to be involved in the referendum campaign. The Tory brand remains contaminated north of the border and, since Thatcher, attempts by the Conservative Party to influence Scottish opinion have come across as hectoring and belligerent. What's more, every trip Cameron makes to Scotland serves as a reminder of how thin his mandate in the country is. It is common knowledge that support for the Tories in Scotland has fallen steadily over the last six decades. It less well known that if the coalition survives for the duration of this parliamentary session, Scots will have spent almost as many post-war years ruled by Westminster governments they didn't vote for as those they did.
 
This "democratic deficit" was one of a number of important issues Cameron failed to mention in Edinburgh today. But why would he? Before it became apparent that the union was genuinely under threat, the Tory leader had shown little interest in -- and therefore developed little understanding of -- Scotland and Scottish affairs. That absence of understanding -- on full display earlier -- will do the unionists no favours as the 2014 vote draws closer. Don't be surprised if Salmond is already busy trying to arrange the next the prime ministerial visit.
 

Show Hide image

Budget 2017: What announcements will Philip Hammond make?

What will the first budget after Brexit hold for the economy?

This spring’s Budget - set to be announced on Wednesday 8 March 2017 - will be forced to confront the implications of last June's Brexit vote, along with dealing with issues of reliance on consumer spending, business rates and government borrowing. The government also (quietly) announced on Monday night that it will be asking ministerial departments to outline cuts up to 6 per cent, a potential nod for what’s to come next week.

All these things, along with the fact the Chancellor Philip Hammond is scrapping the spring Budget, meaning this announcement should be an interesting one.

The big story at the moment focuses on borrowing. The Resolution Foundation has predicted that healthier-than-expected tax revenues and the lack of a Brexit effect so far will lower Budget borrowing forecasts by £29bn between 2015-16 and 2020-21. 

The FT reports a possible £3bn reduction in borrowing, to £67bn. They also pin this optimistic prediction to higher-than-average self-assessment tax receipts, after changes in the taxation of dividends.

The Chancellor will potentially stick to the three key changes he made from George Osborne’s former financial commitments, according to The Sun. These consist of not predicting a surplus in 2019/20, slightly relieving the cap on welfare spending and no longer committing to reducing debt. The paper also predicts he’ll announce a change to the controversial business rates that were recently released, that could leave “shopkeepers and publicans clobbered with tax hikes of up to 400 per cent".

What do we know for sure?

The government has announced a few key changes in in advance of the Budget.

  1. The Spring Budget 2017 will be the final Budget held during springtime
  2. Finance Bill will follow the Budget, as it does now
  3. From 2018 "Legislation day" will move to the summer
  4. An Autumn Budget means tax changes will be announced well in advance of the start of the tax year
  5. 2018 will see the first Spring Statement