Ewan Crawford: George Osborne’s helping hand for independence

The speculation in advance of today’s Budget brings to mind the old political saying: 24 years is a long time in politics.

I might have got Harold Wilson’s famous aphorism slightly wrong, but the pre-Budget briefing in the run-up to George Osborne’s statement seems at first sight to mirror much of the famous Tory Budget of 1988.

Back then, Thatcherism was at its height, yuppies were entering the English language and Scotland still qualified for major football finals.

At Westminster, such was the sense of Conservative dominance that Margaret Thatcher’s “brilliant Chancellor”, Nigel Lawson, felt sufficiently emboldened to announce a series of radical, free-market, tax-cutting measures.

Indeed, these changes proved so controversial that proceedings of the House of Commons were suspended because a young SNP MP called Alex Salmond was said to have created “grave disorder” by loudly objecting to the statement.

Today, if the leaks are correct, another Tory Chancellor will again announce tax cuts for the super-rich at a time when people on middle and lower incomes are enduring real austerity.

There seems something inherently wrong if those earning more than £150,000 are to be looked after, while some families with disabled children have been told their benefits are to be cut by £1,300.

For many public-sector workers in Scotland, further pain appears to be on the cards with the proposal to effectively cut their wages relative to employees in London and the south-east of England.

Looking back, the Budget of 1988, and the sense of injustice it created, was crucial in the subsequent decline of Conservative fortunes in Scotland.

Although the party saw a slight increase in its vote at the next election in 1992, compared with its poor performance at the previous election, Lawson’s Budget fixed for many people, rightly or wrongly, the idea that Tory values were hostile to the more egalitarian ethos north of the Border.

The Conservatives, of course, have never recovered, and if the current Chancellor’s Budget turns out to be as expected, it is hard to see anything other than a quickening of their demise.

The decline and fall of the Conservative Party will not, however, be the big political development for Scotland out of today.

Although this won’t be uppermost in his mind, the voters’ reaction to Osborne’s statement will, I believe, be one of the most important determinants of the outcome of the independence referendum.

Much, of course, has changed in 24 years. In 1988, it was essential for the SNP to prove its relevance by leading the charge against Conservative injustice.

Now, with a Scottish Parliament and with people looking more closely at the prospects of an independent Scotland than ever before, it is the economics as much as the social justice, and the positive proposals as much as the attack on the Tories, that could be decisive.

In this respect, it may be another of the Chancellor’s expected announcements that could prove to be the most important.

After being hit last year, the North Sea oil industry appears to have successfully lobbied for guarantees on tax relief on decommissioning retiring fields.

This is an implicit recognition that oil is going to be a huge earner in the years to come. There are estimated to be up to 24 billion barrels of oil left off the Scottish coast, and if exploited this will lead to many billions of pounds flowing to either the UK or an independent treasury in Edinburgh.

This is important, because anti-Tory sentiment in Scotland is now so ingrained that, unlike in 1988, it is not the expression of outrage that will be important (people are already outraged), but the alternatives on offer.

Labour, presumably, will be hoping that, as in the 2010 Westminster election, voters will “come home” in the face of Conservative cuts. But having fought an election on the basis of a pledge to save Scotland from the Tories and failed, this presumably will be a harder trick to pull off next time.

All this means the opportunity for the SNP is greater than ever before, but only if the arguments over the economics of independence are convincing.

Here, I suspect the Tories have again given the SNP a helping hand. By calling for regional pay differentials, George Osborne will, in effect, advance the concept of “internal devaluation”.

The idea is that in the absence of economic tools, such as the ability to grant tax incentives, the only way to improve competitiveness is through wage cuts.

The obvious response to this is to argue for the ability to offer those incentives, which could boost research and development activity and halt the decline in manufacturing industry.

Westminster Budgets have always had a big impact on Scottish politics over and above the immediate economic measures.

But these were debates primarily about devolution, not independence. One of the lessons of the last Scottish Parliament elections was that, in a devolved context at least, voters now expect politicians not to protest but to govern.

I suspect George Osborne is about to give the SNP its greatest chance to make that case for government, not just in a devolved, but in an independent Scotland.

• Ewan Crawford is a lecturer in broadcast journalism and was private secretary to John Swinney when he was SNP leader.