Monday, 23 May 2011

When the SNP are sometimes irrelevant

I read with enormous interest what Vince Cable had to say in the Guardian today.  I also note what Ed Miliband has been saying over the weekend.
We face some enormous issues.
Cable argues that we are facing profound long term change because of the banking collapse, the recession and the changing world economy.

He argues that some fundamentals were wrong with our economy based on consumer spending, a housing bubble, and an overweight banking system where three banks had a balance sheet larger than the British economy.   The deficit was only one of the symptoms of the financial crisis. This is a profound weakness and will take a long time to fix.

He also highlighted some fundamental shifts in the global economy he points out that the UK now takes prices from international commodity markets driven by China and India.  This means we are vulnerable to rising prices on commodity markets in a way we weren't before.

These things will be a challenge for government to put right
Miliband said, “We need a different kind of economy, fairer to the lowest paid and demanding greater responsibility from the higher paid: broader based, less reliant on financial services.”
Interestingly, and correctly, Miliband also highlighted that the problem of tuition fees began with Labour.
I suspect both Cable and Miliband broadly share the same analysis.
Cable pointed out that Labour are in denial that there is a big structural problem with the UK economy. “So we stick to this short-term, tit for tat: why has growth in this quarter been slower, the scale of cuts should be slower - there is genuine debate we should be having about how radical reforms to the financial sector should be - but there is not, from the progressive wing of politics a sustained critique or pressure and argument.”

These are big questions and I think both Cable, and now Ed Miliband, are trying to get to grips with that critique and how we can make a fundamental difference for the better.   

What of the SNP in Scotland?
The SNP administration is not the same as a government at a national level.
The have no direct responsibility for macro economic affairs.
They are not in charge of foreign policy.
The SNP administration is actually quite marginal to many of the most important issues to our lives.
They were actually shown to be powerless and rather on the fringe of events when it came to dealing with the banking crisis in 2008 and 2009.  In many ways I thought Salmond and his administration lost their way at this time.
This, I believe raises some tough questions.
The Scottish economy with its major financial institutions belongs most effectively as part and parcel of a larger national economy, not a smaller one.  And I believe that national structure should be a federal one not an independent one – because it isn’t independent!
And saying we are part of Europe does not fully deal with this conundrum. There is a national dimension in terms of economic cycle, fiscal policy, inflation and currency policy.  We fit into the Pound Sterling zone, not the German based Euro zone.
Don’t get me wrong.  I am a fan of Europe.  It is incredibly important to us now and in the future.  It is an important supra-national building block in a global economy and society.    
I am no Conservative with their Euro scepticism and outright hostility from some quarters.  This seems to me to be an outdated and unreconstructed philosophy in which I do not share.
So long term the re-engineering of the UK’s economy is vital.  In Scotland we badly need a stronger private sector so we are not so reliant on the public sector and the financial sector for jobs.  This is a big issue for the modern Scotland, as it is for all of Britain.
While there is a Scottish dimension and a role to play by the Salmond administration in Edinburgh, this is a problem that I think is best dealt with at a UK level.  The financial services sector for example is on too large a scale and organised on a national UK level and beyond for it to be purely the remit of Holyrood.
I see the potential for the misplaced romanticism of the Nats to be actually quite destructive – particularly if their game is to make believe that they are a national government until it actually becomes so.
Politics is all about context of course, but in the context of the changing world economy and the UK model, what Cable and Miliband have to say is more important than what Holyrood is doing.  The SNP has chosen to largely ignore Westminster and focus on Holyrood.  Just because the SNP has decided to focus on this context and have been swept to a stunning victory in the conditions of 2011 does not make the economic facts of life different.  In just this context, the SNP administration can at times be somewhat irrelevant - #just sayin’. 

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