The SNP phenomenon shows no sign of abating. Scottish opinion polls earlier this week had the party on 49% and 52% of the vote respectively, with the latter enough to secure 56 of the country’s 59 seats. Only Orkney and Shetland, Glasgow North East and Kickcaldy and Cowdenbeath would be out of the nationalists hands.
But what would be the impact of this SNP block at Westminster? Nicola Sturgeon has ruled out any agreement with the Tories and has made it clear that the SNP is not interested in a coalition with Labour or even a supply and confidence arrangement unless Trident is cancelled. Labour is committed to Trident renewal and yet,with Ed Millibands’ party picking up support across England, it still leaves the likelihood of a Labour minority government, supported informally by the SNP.
On fiscal policy there is a deal to be done. There is overlap between the parties on issues such as the 50% tax rate and the Labour party claims it has enough flexibility to meet its own deficit reduction targets while delivering modest increases in public spending.
The issue of further devolution presents the biggest challenge. The SNP want as many powers as possible delivered to Scotland, helping create an independent state in all but name. Full fiscal autonomy would end the Barnett formula, the sharing and pooling of resources across the British Isles, and Scotland would only contribute towards UK defence and international matters.
This would lead to a short to medium term fiscal deficit, however, for the SNP it could neutralise many of the fears about independence in advance of any second referendum. If Scotland is responsible for oil revenues and pensions then supporters of the UK could hardly champion the sharing and pooling of resources as a union dividend.
Would Ed Milliband accept these terms? If he takes office in spite of, rather than because of, Labour’s result in Scotland, it may be that the unionist core in the Labour party is shaken. The question becomes: is Labour’s commitment to the union based on principle or on anti-Conservative pragmatism?
Milliband, much like Cameron and his call for English votes for English Laws, may be happy to use Scotland to shore up his support in England. If so we may find that Scottish independence is all but inevitable.
This piece was first published on the Pagoda blog.