Scotland's credit rating becomes an issue

Credit rating agencies warn that an independent Scotland may not inherit the UK's AAA rating.

The report in today's FT that an independent Scotland would likely not inherit the UK's AAA credit rating will be seized on by opponents of secession as further evidence that, in their view, independence would be economically damaging. One unnamed agency told the paper that it could expect to receive an investment grade rating some notches below triple A. As the FT's Martin Wolf noted in a recent column:

A newly independent small country with sizeable fiscal deficits, high public debt and reliance on a declining resource for 12 per cent of its fiscal revenue, could not enjoy a triple A rating.

In an act reminiscent of his pre-election tactics, George Osborne has already warned, with little evidence, that the threat of independence is damaging investment and that Scotland could be forced to join the euro (even without a formal opt-out, Sweden still hasn't joined after 17 years of membership).

Will Osborne now make play of the uncertainty over Scotland's credit rating? He may be wary of doing so, not least because there's an increasing chance that the UK could lose its own AAA rating. Others will rightly note that France and the US have seen little increase in their borrowing costs since their credit ratings were downgraded.

This hasn't stopped both Labour and the Conservatives going on the attack today. Scottish Labour leader Johann Lamont said it was "extraordinary that the SNP have not even approached the credit agencies for a draft opinion."

Scottish Conservative finance spokesman Gavin Brown said: "Ratings agencies are taken extremely seriously by investors all over the world and this warning is therefore deeply concerning: three of the top agencies agree that a separate Scotland would not be guaranteed a triple-A rating."

It's worth bearing in mind, however, that such scare tactics may only work to Salmond's advantage. Those who oppose Scottish independence need to remember that making the positive case for the Union, as Ed Miliband did in his recent speech, is as important.

George Eaton is political editor of the New Statesman.

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The Fire Brigades Union reaffiliates to Labour - what does it mean?

Any union rejoining Labour will be welcomed by most in the party - but the impact on the party's internal politics will be smaller than you think.

The Fire Brigades Union (FBU) has voted to reaffiliate to the Labour party, in what is seen as a boost to Jeremy Corbyn. What does it mean for Labour’s internal politics?

Firstly, technically, the FBU has never affliated before as they are notionally part of the civil service - however, following the firefighters' strike in 2004, they decisively broke with Labour.

The main impact will be felt on the floor of Labour party conference. Although the FBU’s membership – at around 38,000 – is too small to have a material effect on the outcome of votes themselves, it will change the tenor of the motions put before party conference.

The FBU’s leadership is not only to the left of most unions in the Trades Union Congress (TUC), it is more inclined to bring motions relating to foreign affairs than other unions with similar politics (it is more internationalist in focus than, say, the PCS, another union that may affiliate due to Corbyn’s leadership). Motions on Israel/Palestine, the nuclear deterrent, and other issues, will find more support from FBU delegates than it has from other affiliated trade unions.

In terms of the balance of power between the affiliated unions themselves, the FBU’s re-entry into Labour politics is unlikely to be much of a gamechanger. Trade union positions, elected by trade union delegates at conference, are unlikely to be moved leftwards by the reaffiliation of the FBU. Unite, the GMB, Unison and Usdaw are all large enough to all-but-guarantee themselves a seat around the NEC. Community, a small centrist union, has already lost its place on the NEC in favour of the bakers’ union, which is more aligned to Tom Watson than Jeremy Corbyn.

Matt Wrack, the FBU’s General Secretary, will be a genuine ally to Corbyn and John McDonnell. Len McCluskey and Dave Prentis were both bounced into endorsing Corbyn by their executives and did so less than wholeheartedly. Tim Roache, the newly-elected General Secretary of the GMB, has publicly supported Corbyn but is seen as a more moderate voice at the TUC. Only Dave Ward of the Communication Workers’ Union, who lent staff and resources to both Corbyn’s campaign team and to the parliamentary staff of Corbyn and McDonnell, is truly on side.

The impact of reaffiliation may be felt more keenly in local parties. The FBU’s membership looks small in real terms compared Unite and Unison have memberships of over a million, while the GMB and Usdaw are around the half-a-million mark, but is much more impressive when you consider that there are just 48,000 firefighters in Britain. This may make them more likely to participate in internal elections than other affiliated trade unionists, just 60,000 of whom voted in the Labour leadership election in 2015. However, it is worth noting that it is statistically unlikely most firefighters are Corbynites - those that are will mostly have already joined themselves. The affiliation, while a morale boost for many in the Labour party, is unlikely to prove as significant to the direction of the party as the outcome of Unison’s general secretary election or the struggle for power at the top of Unite in 2018. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.