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Good afternoon from Edinburgh. It is my turn this week to fill Peter Foster’s big shoes.
Unlike my colleague Jude Webber, who brought you the newsletter from Dublin last week, I am at present enjoying a bit of summer and did not need a jumper when going out to see off my (slightly embarrassed) daughter on her first day of high school. That is, though, a clear sign that summer will soon be a thing of the past.
While time flies and a lot can change in the blink of an eye, some things have a way of just staying the same. It felt that way during my two visits in the past week to Rutherglen, south of Glasgow, for election events featuring the Scottish National party’s Westminster leader Stephen Flynn, and then Labour leader Sir Keir Starmer.
I wonder how many FT readers outside of Scotland would have heard of the area before 2020 when the then SNP MP for Rutherglen and Hamilton West, Margaret Ferrier, lost the whip after being engulfed in allegations of breaking Covid-19 regulations.
She eventually pleaded guilty to breaching Covid rules, and a by-election to contest the seat, where she was sitting as an independent, was triggered this month after constituents voted to recall her.
That election, expected in October, has put the former weaving and mining village firmly in the national spotlight because it will have huge implications for the SNP’s ability to recover from its recent struggles, and for Labour’s return as a political force in Scotland.
Almost four years after Boris Johnson, the former prime minister, won a “Get Brexit Done” general election for the Conservatives, we could be about to have a “mini-Brexit” race in a small town lying about five miles from Glasgow.
What is clear from the SNP’s campaign is that Brexit is far from done, at least as a political tool with which to beat Starmer’s party, which does not favour a return to the EU single market and customs union. The SNP has used that to paint Labour as a “pale imitation” of the Conservatives.
The Labour leader argued that the SNP was resorting to name-calling because it did not have a record of governance to run on and that voters were focused on the cost of living crisis.
The pro-independence SNP is also battling a financing scandal. Former leader Nicola Sturgeon was arrested in June as part of a police investigation sparked by claims that more than £600,000 raised by the SNP for a referendum was used for other things.
By-elections are often dominated by local issues, as evidenced by Labour’s setback in Uxbridge, west London, where its failure to take Johnson’s former seat last month was attributed to local mobilisation against London mayor Sadiq Khan’s planned expansion of the city’s ultra-low emission zone to tackle air pollution.
That was not the case when Flynn issued trailing notes ahead of a visit to Rutherglen and Hamilton West with the SNP’s candidate, Katy Loudon, last week. The focus was firmly on Brexit, which he blamed for taking “billions” of pounds from Scotland’s economy, increasing inflation and cutting EU funding for the constituency.
On the face of it, the strategy makes sense in staunchly pro-EU Scotland, which in 2016 voted 62 per cent against Brexit. South Lanarkshire, where the Rutherglen and Hamilton West seat is situated, backed Remain by 63 per cent.
There is no indication that Scotland’s affinity for the EU is waning, in line with polling that has shown voters across the UK would favour rejoining if there was another vote. A poll for the pro-independence campaign group Believe in Scotland earlier this year showed that 68 per cent of Scottish voters would support an independent Scotland returning to the EU.
In the past, I have written about the impact of Brexit on labour shortages in Scotland and the concern that a restrictive immigration policy imposed by London will accelerate depopulation in rural areas.
Peter, and George Parker, the FT’s political editor, reported earlier this month about an impending (fifth) delay to plans for a new system of paperwork and checks at UK ports for animal and plant products coming from the EU.
That has not gone down well with Scottish farmers, whose products are subject to such checks when they go the other way, while highlighting another reason Brexit is damaging the Scottish economy. The cause for the delay — concern that extra bureaucracy on imported goods would fuel inflation — is a powerful demonstration for Brexit critics of its cost.
Scotland’s food and farming sector was “angered and appalled” by the decision, which disregarded “the interests of our home food producers in favour of a cheap food policy that encourages asymmetric trade”, said Martin Kennedy, president of the National Farmers Union in Scotland.
What is not clear for the SNP is how much its message will resonate with voters now that the boat has sailed and there is no quick way back to the EU. A couple of voters I spoke to in the area during the visit with Flynn did not mention Brexit, which could indicate that Labour has a point in assuming that voters have other things occupying their minds.
On Tuesday, I spoke to Scotland’s first minister, Humza Yousaf, after his appearance at the Holyrood Sources podcast, and he told me that Starmer had “misread the mood” in Scotland.
They could both have a point, according to Anthony Salamone, managing director of European Merchants, an Edinburgh-based think-tank that specialises in Scottish politics and European institutions.
It would be “unwise” for Labour to assume that Scottish voters no longer cared about Brexit, while the SNP could be guilty of overplaying the importance of the issue, Salamone said.
“While many Scottish voters regret Brexit, they also know that it is done,” he said.
Brexit in numbers
Perhaps Yousaf’s least assured responses in the podcast concerned the issue that will be the most crucial if the SNP ever gets another chance to put an independence vote to Scots — “the economy, stupid”.
The SNP has already said that it wants to make the next UK general election about independence, and a member of the audience asked if the party would publish a full fiscal plan.
Yousaf responded that this was “something we are looking at”. Almost a decade after the 2014 referendum was lost by 10 points, the first minister said he was “actively considering” providing such an analysis. His critics would say it should be out there already if only to show that the SNP had conducted a tough examination of why it lost.
The Scottish government sought some reassurance from data this week showing that Scotland’s budget deficit had narrowed to 9 per cent of gross domestic product in the 2022-23 fiscal year, from 12.8 per cent the previous year. But the improvement was because of record revenues from North Sea oil, the price of which was boosted by the war in Ukraine. Excluding revenues from the North Sea, the deficit would have been 15.1 per cent, compared with 5.2 per cent for the UK as a whole.
Bodies including the Scottish Fiscal Commission have long noted that Scotland’s ageing population means it will have to make tough choices about how it will fund increased demand for health and social care.
Economists at the Fraser of Allander Institute at the University of Strathclyde put it bluntly this week, stating “it is not enough to say ‘everything will be fine’” and that “concrete proposals and ideas” were needed.
Yousaf hinted that his preference for “progressive taxation” could have prevented Kate Forbes, his defeated rival for the SNP leadership, from staying in her old job as finance secretary. But there are not enough high-rate taxpayers in Scotland to plug its fiscal gap.
“It is Humza Yousaf’s duty to explain exactly what he would cut, when and how deeply, to make up this huge deficit in his independence plans,” said Scottish Labour finance spokesperson Michael Marra.
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