Michael Gove: Iceland has shown up Salmond as a Darien dreamer
Even the most unlikely figures turn to the Union in tough times
NEVER get into a fight with a chimney sweep, my mother always warned me. To which she might have added, and never get into an economics argument with Alex Salmond.
The First Minister has many talents, but perhaps pre-eminent among them is an ability to spin almost any financial development to his advantage. A former chief economist at the Royal Bank of Scotland and, no less notably, a newspaper tipster with a bookie's eye for calculating the odds, Alex can intimidate even the most self-confident critics. And I should know. When I was a callow reporter for the BBC in the Nineties, I tried to take the SNP leader on in an interview designed to test the robustness of nationalist economics.
After 10 minutes, the producer had to halt the interview for humanitarian reasons. The Buchan Bomber had made mincemeat of me and my arguments. The flower of the SNP sent me homeward, or at least to Queen Margaret Drive, to think again.
Since those days, Alex has, hard though it may be to credit, only grown in confidence. And it would seem that only the brave or the foolish would wish to confront him on his chosen ground of economics.
But these are turbulent times, economically, in which all manner of assumptions are being challenged. The ground is moving beneath our feet. And the position Nationalists find themselves in looks less commanding than even a few months ago. Of course, the SNP retain significant political strengths. The momentum from Glasgow East gives them hope in Glenrothes. The First Minister is a resilient, and practised, performer. The prominence of economic, and financial, news in every bulletin creates a media demand for his particular blend of banking experience and political self-assurance.
But the crisis which is consuming all our attention, global in scope and mammoth in its ramifications, is also undermining the political appeal for any small country of striking out on its own. The reality of the worldwide financial crisis is that economic insecurity now undermines the ground on which the Nationalists had hoped to advance.
It's a historical fact that nationalism has flourished on the back of economic optimism – from the dreams floated on North Sea oil in the 1970s, to the SNP victory last year on the crest of the UK boom. The prospect of constitutional upheaval somehow seems less fraught when other political factors look favourable. The flipside of the phenomenon, however, is that when the economic skies darken, then secession seems a much more risky business.
Nationalist support plummeted as we went through dark times in the late Seventies and early Eighties. The SNP boomlet of the late Eighties – fuelled by the Sillars breakthrough in Govan – died away in the recessionary days of the early Nineties. Indeed it is often forgotten that in 1992, in the depths of economic bad times, a Unionist message of constitutional stability secured electoral gains for the Conservatives in Scotland.
In these difficult times, the case for the Union will again appear stronger. Edinburgh is rightly celebrated as a centre of dynamism and innovation in financial services – and it has grown in importance under devolution – but the future of both HBOS and RBS is more secure this weekend as a result of access to the resources of the UK Exchequer.
Scotland has developed a more diverse and flexible labour market over the last two decades, but with unemployment rising, there is an extra level of security in knowing that the UK-wide welfare system provides a safety net which is as generous in Bathgate as it is in Birmingham. Speed of response matters at these times in getting your policy properly aligned, but when your country's voice needs to be heard, as the EU big four meet, or Washington looks to co-ordinate interventions, then the UK Prime Minister's words carry weight in a way that, for example, no Scandinavian leader's ever can.
And, talking of Scandinavia, the example of Iceland will concentrate minds. The revelation that Scottish local authorities have had millions of pounds worth of savings evaporate in the mid-Atlantic deals a significant blow to SNP plans for frozen council tax and free school meals. The fact that Salmond has already asked Westminster to support the councils in trouble underlines how even the most unlikely figures turn to the Union in tough times.
Iceland's woes do more, however, than just threaten council finances. The bankruptcy of a small Nordic nation, which resisted political union, and which just months ago seemed to have a strong economy based on tourism, energy, fish and finance, will have many reverberations. Few of them, however, are likely to strengthen the case for Scotland seceding from its own union. When the SNP cited Iceland as the sort of nation Scotland should emulate by joining the Atlantic "arc of prosperity", they may have looked smart and visionary. But then so, presumably, did those in 1700 who thought Darien was the investment opportunity of the century.
Most of us who are Unionists support the Union because we think Scotland's strengths complement those of other parts of the UK. The relationship works to everyone's benefit.
It's a positive message, rooted in a belief that co-operation, not division, is the way to advance. But positive as the vision is, the reality of darker times only makes the argument for the Union more powerful. So powerful, in fact, that I suspect even a politician of Alex's ingenuity won't want to make "Let's Go It Alone!" the message of this moment.
Michael Gove is shadow secretary of state for children
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