Alistair Darling tells SNP to hold independence vote now

Published on Wednesday 18 May 2011 17:42

FORMER chancellor Alistair Darling has called for an immediate vote on Scottish independence to stop the SNP "stoking up a sense of grievance" ahead of its planned referendum.

In a keynote lecture tonight, he will say there are "more pressing problems" than constitutional change, including the future of Royal Bank of Scotland.

However, the Edinburgh Labour MP accepts the constitution will be "top of the agenda" in Scotland for the next five years and warns the SNP he is "not afraid of the debate".

Mr Darling, the first senior figure in the Labour Party to back an early referendum since its crushing defeat in the Holyrood elections, will call for an independence vote "now" to find out the "settled will of the people" over an issue he claims "was hardly raised" by the SNP during the election campaign.

He will also suggest that handing corporation tax and borrowing powers to Holyrood - a key SNP demand - could lead to a shake-up of the way "the bulk of Scottish public expenditure is funded" through the Barnett Formula.

Giving the annual Hume lecture in Edinburgh, he will warn that the UK and Scotland "can't have a functioning, successful economy without a functioning and successful banking system".

He will also warn of a "damaging period" for Scotland during a lengthy run-up to an independence vote, which he will say is being held later in the parliament because of an SNP "fear about the result."

He will say: "Now we are going to have a referendum on independence, I am not sure why - except for the Nationalists' fear about the result - we have to wait until the second half of the parliament. Why not hold it now? Let's find out what the settled will of the people is. The question has been asked, so let us answer it.

"I fear, however, the plan is to spend the next two and a half years deliberately provoking trouble with Westminster, stoking up a sense of grievance."

Support for an early referendum from one of Labour's most high-profile figures has clear echoes of the call from the party's former Holyrood leader Wendy Alexander, who told the SNP to "bring on" a vote on separatism three years ago.

The former chancellor will go on to talk about how devolving corporation tax powers to the Scottish Parliament could lead to changes to the Barnett Formula, which calculates the block grant given to the UK's devolved administrations. He said: "The First Minister is already demanding more borrowing powers and the devolution of corporation tax.

"The issue of corporation tax immediately raises the future of the Barnett Formula. I don't think you can continue to demand more and more powers to raise money without looking at the way in which the bulk of Scottish public expenditure is funded here."Mr Darling, who approved the taxpayer bailout of RBS in 2008, will also warn it would be "very bad indeed" for Edinburgh's economy if the bank's headquarters does not remain in the Scottish capital. "I was responsible for taking control of RBS," he said. "I also want to see control returned to Edinburgh when the shares are sold."