Pegging electoral success to the economy is a risky business - as Alex Salmond is finding out

The emotive, victory-clutching style of the Yes campaign is at risk of floundering before the cool, hard realities presented by the UK Treasury.

The last time I had dinner with Alistair Darling was in 1997. Sitting next to him, I suggested that tying your electoral fortunes to the economic cycle was foolish: better to make the Bank of England independent and set targets to deliver the revenue to be spent on ideological grounds. “Oh no”, Darling replied, “We’ve been out of power for thirteen years – we aren’t going to give that up so easily”. Four weeks later, and for the only reason they had planned it all along, the New Labour administration under Tony Blair made the Bank of England independent and inflation targeting followed.

So it was with some trepidation that I approached the “Better Together” dinner with the same Alistair Darling in London last week. Darling has been through the wringer since 1997, having been handed the poison chalice: sorting out the mess left by Gordon Brown in the wake of 2008, while simultaneously having to fend off attacks from his own side, who favoured Ed Balls for Chancellor at the time. Amazingly, Darling, to his credit, has come through the experience without becoming bitter. It is an object lesson in self-preservation – don’t let others in and you will be the stronger for it.

So taking on the task of putting the case against Scottish Independence comes as a sign of energy, and a desire to remain relevant. At the dinner, Darling said little that he hadn’t already said in public – no Chatham House rules need breaking here. But it was good to hear it from his own lips:

  • The polls show an almost constant 30 per cent of Scotland in favour of independence, but 25 per cent of the population remain undecided.
  • The SNP has a war chest of £7m to fight their campaign, while “Better Together” has managed to scrape together £2.5m.
  • The SNP under Alex Salmond has a vice-like grip on the media in Scotland, where no opposition is tolerated and all “victories” are hyperbolically spun.

The “Better Together” campaign has had to confine itself to largely technical issues based on economic factors many of which fly over the heads of all but the most dedicated economics geeks. This makes it difficult to connect territory that Salmond, who refuses to debate with Darling, and the SNP have monopolised: the emotional level. It almost characterises the two men: Salmond the firebrand ideologist, all rhetorical claymore and political intelligence, versus Darling, the cool-headed technician who appeals to the mind. In a world where the phrase “The personal is political” has been raised to the level of a mantra, the emotional will always win.

But there are a number of tricks being missed here. The dinner coincided with Alex Salmond’s triumphal declaration of victory over the UK Treasury – they “blinked first” as he put it – when it announced that a devolved UK would stand by its existing debts. It is Salmond’s aggression and quickness to claim even the most minor victory that is his Achilles' heel. The gap between the evidence and reality increasingly makes Scotland look like a Celtic dictatorship, because, arguably, Chief Secretary to the Treasury Danny Alexander laid an economic trap that Salmond happily walked into.

When it comes to assuming part of the UK’s interest payments the only thing that a devolved Scotland can now do if negotiations about what “fair and proportional” means break down, is walk away. They already have form in being unable to reach any amicable compromise with Westminster - so it is not inconceivable. In that case, nobody will lend Scotland a penny to fund its commitments, except at a punitive rate and with the status of an Emerging Market.

Equally, Salmond’s flip-flopping on the newly independent Scotland’s currency is a red herring. Whether Scotland adopts the UK pound or not it should be made clear it matters nothing to the UK. In the same way that Hong Kong, Singapore and a swathe of Latin American nations peg themselves to the fortunes of the United States and follow their interest rate cycle, the Federal Open Market Committee sets interest rates with reference to its domestic economy. A devolved UK would be no different. “No change there then”, some might say. But in a broken Union it is conceivable the Bank of England will pursue an interest rate policy which is exactly contrary to the economic needs of a new Scotland.

Finally, neither the “Better Together” campaign, nor for that matter, the SNP have ever really answered the question of why Independence needs to happen. There are a series of “wants” on display, mainly those who want a place in history or increased political power for themselves, but need? That is yet to be demonstrated. The Scottish Assembly already has control of health, education, law and order and child care. Scottish independence will change nothing in those areas. It also has its own tax-raising powers – taxes that can be spent exclusively on Scottish priorities – but it has never used them. Scotland already has democracy in abundance – local, national, UK and European representation. How much more democracy and say in its own matters can Scotland conceivably need or tolerate? What is the need that Scottish Independence satisfies?

There is both hope and despair for Darling and the “Better Together” campaign: hope that the polls will hold and despair, like in the Canadian experience when there was a never-explained last minute 10 per cent surge in support for Québécois independence, that things could swing disastrously the other way. One thing is for sure: if there isn’t a decisive rejection of independence this time, the SNP will be back again in five years' time.

Johann Lamont, Alistair Darling, Ruth Davidson and Willie Rennie at the launch of the "Better Together" campaign in 2012. Photograph: Getty Images.

Head of Fixed Income and Macro, Old Mutual Global Investors

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Calum Kerr on Governing the Digital Economy

With the publication of the UK Digital Strategy we’ve seen another instalment in the UK Government’s ongoing effort to emphasise its digital credentials.

As the SNP’s Digital Spokesperson, there are moves here that are clearly welcome, especially in the area of skills and a recognition of the need for large scale investment in fibre infrastructure.

But for a government that wants Britain to become the “leading country for people to use digital” it should be doing far more to lead on the field that underpins so much of a prosperous digital economy: personal data.

If you want a picture of how government should not approach personal data, just look at the Concentrix scandal.

Last year my constituency office, like countless others across the country, was inundated by cases from distressed Tax Credit claimants, who found their payments had been stopped for spurious reasons.

This scandal had its roots in the UK’s current patchwork approach to personal data. As a private contractor, Concentrix had bought data on a commercial basis and then used it to try and find undeclared partners living with claimants.

In one particularly absurd case, a woman who lived in housing provided by the Joseph Rowntree Foundation had to resort to using a foodbank during the appeals process in order to prove that she did not live with Joseph Rowntree: the Quaker philanthropist who died in 1925.

In total some 45,000 claimants were affected and 86 per cent of the resulting appeals saw the initial decision overturned.

This shows just how badly things can go wrong if the right regulatory regimes are not in place.

In part this problem is a structural one. Just as the corporate world has elevated IT to board level and is beginning to re-configure the interface between digital skills and the wider workforce, government needs to emulate practices that put technology and innovation right at the heart of the operation.

To fully leverage the benefits of tech in government and to get a world-class data regime in place, we need to establish a set of foundational values about data rights and citizenship.

Sitting on the committee of the Digital Economy Bill, I couldn’t help but notice how the elements relating to data sharing, including with private companies, were rushed through.

The lack of informed consent within the Bill will almost certainly have to be looked at again as the Government moves towards implementing the EU’s General Data Protection Regulation.

This is an example of why we need democratic oversight and an open conversation, starting from first principles, about how a citizen’s data can be accessed.

Personally, I’d like Scotland and the UK to follow the example of the Republic of Estonia, by placing transparency and the rights of the citizen at the heart of the matter, so that anyone can access the data the government holds on them with ease.

This contrasts with the mentality exposed by the Concentrix scandal: all too often people who come into contact with the state are treated as service users or customers, rather than as citizens.

This paternalistic approach needs to change.  As we begin to move towards the transformative implementation of the internet of things and 5G, trust will be paramount.

Once we have that foundation, we can start to grapple with some of the most pressing and fascinating questions that the information age presents.

We’ll need that trust if we want smart cities that make urban living sustainable using big data, if the potential of AI is to be truly tapped into and if the benefits of digital healthcare are really going to be maximised.

Clearly getting accepted ethical codes of practice in place is of immense significance, but there’s a whole lot more that government could be doing to be proactive in this space.

Last month Denmark appointed the world’s first Digital Ambassador and I think there is a compelling case for an independent Department of Technology working across all government departments.

This kind of levelling-up really needs to be seen as a necessity, because one thing that we can all agree on is that that we’ve only just scratched the surface when it comes to developing the link between government and the data driven digital economy. 

In January, Hewlett Packard Enterprise and the New Statesman convened a discussion on this topic with parliamentarians from each of the three main political parties and other experts.  This article is one of a series from three of the MPs who took part, with an  introduction from James Johns of HPE, Labour MP, Angela Eagle’s view and Conservative MP, Matt Warman’s view

Calum Kerr is SNP Westminster Spokesperson for Digital