Nigel Farage speaks at the UKIP spring conference in the Riviera International on February 28, 2014 in Torquay. Photograph: Getty Images.
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UKIP is a threat to Labour - but not in the north

Miliband's northern fortresses are safe but Farage's party could prevent Labour winning southern and eastern marginals off the Tories in 2015.

After initially being viewed as a threat to the Tories alone, much has been written recently about the challenge UKIP poses to Labour. The academics Matthew Goodwin and Robert Ford, whose book Revolt on the Right: Explaining Public Support for the Radical Right in Britain is published next week, have studied this issue more than anyone else. As they point out in today's Guardian, it is wrong to view the typical UKIP voter as a retired colonel enraged by EU directives and gay marriage. Rather, the party draws much of its support from working class voters (many of whom voted Labour in 2005 before defecting to the Tories in 2010) alienated by the collapse in living standards and the lack of good jobs. Goodwin and Ford write: 

Don't think of Ukip as just a party; think of them as a symptom of far deeper social and value divisions in Britain. Farage is winning over working-class, white male voters because they feel left behind by Britain's rapid economic and social transformation and left out of our political conversation; struggling people who feel like strangers in a society whose ruling elites do not talk like them or value the things which matter to them.

This should ring loud alarm bells on the left. In a time of falling incomes, rising inequality and spending cuts, such voters should be lining up behind the party that traditionally stood for social protection and redistribution. Instead, they are switching their loyalty to a right-wing party headed by a stockbroker and staffed by activists who worship Thatcher. Those who are getting hit hardest by the crisis and austerity are turning not to Labour, but to Farage for solutions.

They and others point to UKIP's impressive by-election performances in Labour-held northern seats such as South Shields, Rotherham and Middlesbrough as evidence that Ed Miliband, as well as David Cameron, should be looking nervously over his shoulder. It is indeed impressive that a party many dismissed as irrelevant after its failure to win a seat in 2010, has become the de facto opposition in parts of the north. But as far as 2015 is concerned, none of this matters. If UKIP does win any seats (and it may not), they won't be in the north. At worst for Labour, its huge majorities will be reduced to merely large ones. More likely, UKIP will struggle to repeat its by-election performances (which are a poor guide to general election outcomes) and Miliband's party will increase its dominance. 

Goodwin and Ford suggest that the real threat to Labour (assuming it wins power) will come in 2020 when the party will face "an ageing population; straining public services; high migration from poorer EU states; persistent inequality; and the economic and fiscal overhang of the worst crisis for 80 years", and when UKIP "will be a known alternative". But this argument involves many too unreliable assumptions. UKIP would almost certainly suffer from the return of the Tories to opposition (nearly half of its supporters voted Conservative in 2010) and the replacement of Cameron as leader. It will struggle to maintain momentum if and when Nigel Farage (who has pledged to resign as leader if the party fails to win a seat in 2015) steps down, and will have to work for decades, not years, before it can dream of taking seats off Labour. 

It's for reasons like these that some Labour supporters dismiss the alleged "threat" to the party as non-existent. But this view is similarly mistaken. UKIP is a threat to Labour's election chances, but not in the way most people think. Rather than Miliband's northern fortresses, the seats to watch are the Tory-held marginals in the south and east of England (Lincoln, Ipswich, Thurrock, Northampton North, Harlow, Norwich North) that Labour needs to win to achieve a majority. As psephologist Lewis Baston has noted, "In some of them, where either Ukip is exceptionally strong or there is a close contest between the Conservatives and Labour, Ukip topped the poll in 2013. In others, such as Ipswich, the Ukip surge of 2013 seemed to reduce Labour’s lead over the Conservatives." 

The danger for Labour is the possibility that Tory defectors could return home in 2015, while Labour defectors stay put. By successfully appealing to the working class voters Miliband needs to win, UKIP could create a split in the opposition vote that allows the Conservatives to hang on. Forget 2020 and fantasies of UKIP replacing Labour as the northern party of choice, the two are locked in a struggle right now that could determine whether Miliband enters Downing Street at all. 

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.