Leaders: Westminster cannot brush aside Ukip success | RBS showing welcome healthy signs

David Cameron. Picture: TSPL
David Cameron. Picture: TSPL
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ALL politics is local, said the legendary Bostonian Democrat Congressman Tip O’Neil – and so the local elections, mainly in the rural shires of England, have proved.

Their greater impact on the course of political events is unlikely to be made in the repair of potholes or standards in schools. Their propelling of the UK Independence Party (Ukip) on to the national stage as a significant national political force has seen to that.

The significance of yesterday’s results lies not in the party’s winning of more than 100 of the 2,300 council seats up for re-
election, but in its securing of more than a quarter of the vote at these polls. Having for so long threatened to arrive, it has now unmistakably done so.

At the last sighting of this particular fox, at the Eastleigh parliamentary by-election, Prime Minister David Cameron attempted to shoot it by promising a referendum on renegotiated British terms of European Union membership after the next general election. It seemed a clever shot, as Ukip’s central objective – shared by many voters – is for Britain to leave the EU. Now we know he missed.

So, what will the Prime Minister do now? Bringing forward the promised EU referendum to this side of the election was rejected by leading Conservative ministers yesterday and, since it is dependent on lengthy negotiations with the EU, is not in any case feasible. Nevertheless, the Ukip uprising south of the Border may reverberate in Scotland. It puts greater force behind the claim of Alex Salmond that the best way to ensure continued Scottish membership of the EU is to vote for independence

Commentators agree that Ukip’s success yesterday was not solely based on its anti-EU stance, but on two other matters: voters’ worries about immigration and disgust that Westminster was, in their eyes, wasting time legalising gay marriage.

If Mr Cameron was to do anything to try and meet this right-wing agenda, he would shift his party further to the right than it already is and risk rupturing the coalition with the Liberal Democrats. This would also leave the political centre ground open to Labour, which did less well than it should have if it is to win the next election.

But beneath these three policy matters lies a deeper discontent. It is a belief that the major parties are cocooned in Westminster and do not fully connect with, or understand, the real-life difficulties that people face. Ministers and MPs sound robotically enslaved to party hierarchies, churning out scripts written by spin doctors. Nigel Farage, the Ukip leader, in contrast, is a gifted communicator and is seen by many people as telling it as it is.

If so, the message for all three parties is obvious. It is to work harder at dealing with people’s major concern, which remains jobs and their standard of living, and to talk in plain and unspun language. Politics is not just local, it is also hard work.

RBS showing welcome healthy signs

At last, Royal Bank of Scotland seems to be emerging from the long, dark shadow of failure and returning to health. By pre-crash standards, a first-quarter profit of £826 million would have been cause of sackings, but compared to the billions that the bank lost last year, it is an impressive validation of the work done by chief executive Stephen Hester and his team to bring it back to health.

True, the City was unimpressed, promptly devaluing the bank’s shares. That appears to be because market analysts thought RBS should have much better earnings from its core retail and corporate bank. Customers, however, may reflect that it might mean that the bank is not charging them as much as it might do.

But market verdicts are short term and the long-term future of the bank now looks much better than many would have thought a year ago. Bad loans are greatly reduced and lending to business is up slightly, though mortgage approvals have not risen much.

The bank is not yet out of the woods. The wind-down of the investment bank has some way to go; it still faces fines from its part in the Libor rate-fixing scandal; it has yet to fully repair the damage done to small business customers through the mis-selling of credit default swaps; and its Ulster subsidiary is still a mess.

Nevertheless, chairman Sir Philip Hampton is now talking bullishly about returning RBS fully to the private sector – perhaps some time in 2014. No talks have been held with the government but the Treasury, surely, will be keen to get the shares sold and the national debt reduced before the next general election. The sooner that process starts, the better – and it should not become a political football.