Eastleigh is now even more of a must-win for the Tories

The Huhne and Rennard scandals mean defeat will be portrayed as a humiliating set-back for Cameron.

Last week the Tories were increasingly resigned to defeat in the Eastleigh by-election but the Rennard allegations, combined with a poll (conducted before the story broke) putting them four points ahead of the Lib Dems, have given the party renewed hope of winning the seat. The odds on a Lib Dem victory have lengthened, while those on a Conservative victory have narrowed. 

My sense, however, is that the Rennard story, like the Huhne scandal, will have little effect on the outcome. As one Lib Dem tells the Times today, "If Chris Huhne lying isn’t going to derail us then a peer that very few people have heard of is not going to harm us". Nick Clegg was almost certainly right when he suggested this morning that local issues such as planning would continue to dominate. 

But this doesn't alter the fact that Eastleigh is now even more of a must-win seat for the Tories. The Huhne and Rennard scandals, notwithstanding their limited influence on voters, give the press every excuse they need to portray any defeat as a humiliating set-back for Cameron. In such circumstances, the only consolation for the Tories will be that Labour, which is set to finish in fourth place behind UKIP, will face some tough questions of its own.

No one ever expected Labour, which polled just nine per cent in Eastleigh at the general election, to win the seat. The swing required would put the party on course for a majority of 362. But as the only large opposition party, not least one which claims to be a "one nation" force, it should be performing much better midway through the parliament. 

David Cameron sits alongside Conservative Eastleigh by-election candidate Maria Hutchings during a Q&A session with workers in the constituency. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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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.