Salmond on the defensive as Scottish banks humbled

Just taking another look at how the financial crisis is affecting Union politics… With the Scots reeling at the scale of the crisis that enveloped their
once proud banks, the tartan editions of the London heavies have renewed their attacks on Alex Salmond.
The Daily Telegraph: “Alex Salmond was counting another likely cost of the unprecedented action – the body blow it delivers to his hopes of achieving an independent Scotland.
The Times: “There has never been a more opportune time, surely, for Unionists in Scotland to intrude as brutally as possible into the private grief of the SNP. Indeed, one might well ask if an argument can still be made for Scottish independence now that the United Kingdom has stepped in so forcefully and, yes, benevolently, to rescue Scotland’s two main banks from themselves. “Thank God for the Union,” RBS, HBOS and their thousands of employees, savers and mortgage-holders are now entitled say.
They echo the line of attack pursued the lively new Scottish Secretary Jim Murphy whose only real job is to save Labour in Scotland, starting with the Glenrothes by-election on November 6.

More serious than the pieces of predictable unionism is the verdict of John Curtice of Strathclyde University, one of the UK’s leading political bean counters whose objectivity is not in doubt..
Giving a balanced view Scotland’s second biggest-selling paper the Daily Record, Curtice notes: “Was not our financial services industry, including our banks, going to be one of the engine rooms of prosperity in an independent nation? Instead, Scotland’s banks – and it was, to a large extent, ONLY Scotland’s banks – had to be rescued yesterday by the UK Government. “

And concludes: Meanwhile, a new hurdle has now been placed in the way of Scotland becoming independent.. Scotland would now be presented with one huge bill for the privilege of hosting the Royal Bank in an independent Scotland – s20billion!…

At the same time, the recent decline in the price of oil has underlined the uncertainties that would surround the ability of an independent Scotland to fund any large bills…. Before Mr Salmond can persuade us of the merits of independence, he may first have to convince us that Scotland’s destiny lies in the euro. But at the moment, that seems a tall order indeed.”

As I noted on Saturday, Gordon Brown has pledged to campaign in the by-election. He now has fresh ammunition to make his case with.

  • Harry Flashman

    Like I said in an earlier post it’s the Darien expedition all over again; the English bail out the idiotic Scots and in return the ungrateful Scots can whinge about it for another three centuries.

  • George

    I really don’t get this Scottish unionist schadenfreude.

    The Union is good for Scotland because although it has managed to ensure the virtual collapse of its once proud banking system the Westminster government has come in and nationalised it?

    So Westminster has just broken Scotland’s nose and nicked its wallet but don’t worry lads here’s a plaster.

    Scots are now even more in hoc to Westminster and more reliant on the English taxpayer than they already were.

    And apparently this is good for the Union.

    Taking what appears tantamount to pleasure in your own country’s economic demise seems terribly short-termist to me.

    Let’s see how people feel in a few years when they realise that the steps that are being taken to revive the economy aren’t designed to revive the Scottish banking sector but protect the City of London.

    Then we’ll have a Scotland with less oil, a smaller banking system and greater dependency on the public purse. Is that what unionists want?

  • Kensei

    And concludes: Meanwhile, a new hurdle has now been placed in the way of Scotland becoming independent.. Scotland would now be presented with one huge bill for the privilege of hosting the Royal Bank in an independent Scotland – s20billion!…

    Is that the case? Surely the UK Government could simply keep the shares it has in the Royal Bank of Scotland (or part thereof) to sell at a later date a la a sovereign wealth fund. There is an asset side to the sheet.

    Brian Taylor was on the money for me.

    http://www.bbc.co.uk/blogs/thereporters/briantaylor/2008/10/bean_counting_on_a_political_s.html

    This has an impact in the short to medium term, and perhaps Unionism should push for that referendum now to kill it. But independence is for life and not just for Christmas. It offers the possibility for better governance and better growth over the long term. Perhaps a more nimble economy can take more initial pain but pull out of it more quickly. Perhaps the increase in deficits will catch up in 5,10 years time. That’d be the timescale to judge. Handily, we have a few natural experiments going on so we’ll likely get to see.

  • When the smoke clears will westminister not get one hell of a berating for letting this shambles happen in the first place.

    If the politicians let the banking executives off the hook(largely they have so far)does it not occur to them that it is they that are going to take the flack for the recession.We humans do like someone to blame for our ills.The politicians had better start putting bankers to the sword or face the repercussions themselves

  • An Lochlannach

    Remarkable how New Labour can be so triumphalist about a disaster that happened during their watch.

  • Tory

    The question for Salmond now is:

    “How will independence work in 2010 if all the Scottish banks our going to be owned by a foreign government?”

    I can see him worm his way out of the Arc of Insolvency case. I can’t see him get away from this more prescient question.

  • wasting time

    So your point is that the union will only hold as long as it’s doing cr@p and everyone doesn’t mind taking handout’s from the English? Rue Britannia!

  • Harry Flashman

    The Scottish banks were held up by supporters of Scottish independence as icons of how the new independent Scotland would be a world class economy.

    When those icons turn out to be busted flushes it is perfectly in order for supporters of Scottish unionism to point the fact out.

    No need to get your collective knickers in a twist ladies, it’s politics, it’s a tough old game.

  • neil

    Good point George @ 11:57 AM.

    Ok, you’ve brought UK banking to the brink, but you’ve tried to help undo the fuck up that you created. Well done you.

  • Congal Claen

    Agree with Harry on this one.

    However, Scotland may well get independence on the insistance of the English. Afterall, they’re having to bail out Scotland again. Not only that it was a Scot who picked the stupid inflation measure (that omitted house price rises ffs!!!) that resulted in the artificially low mortgage/bank rates that created the ridiculous asset bubble that is at the heart of the whole mess.

  • fin

    To read this article by itself you would believe the large nations are riding the storm well, which is bunkum, the US has the begging bowl out in China trying to sell whats left of the country to stay afloat, Russia is in denial and its stock market in freefall, Japan was just emerging from its last depression and is right back in it.

    Scotlands banks are now part owned by the govt of scotland namely the uk govt. If the arguement is that these banks wouldn’t be handed over to a independent scotland than the logic is neither would any part of the uk public sector, would they dismantle nhs hospitals and state schools and move them south?

    anyway in a future situation like this an independent scotland could do what iceland is likely to do join the EU (if they had left it in the first place)

  • George

    Harry,
    the question is why they are busted flushes. It certainly isn’t the fault of the SNP.

    I can see the slogan in five years now:

    The UK – wasted Scotland’s oil, destroyed our once proud banking industry.

    I know this is an absolutely huge if but what happens if, in five years, Ireland’s policies have worked better and Dublin is the place rebuilding a reputation as a financial services centre and Edinburgh languishes as a result of the UK’s London-centric policies?

    As I said earlier, I can’t understand what is verging on almost unbridled unionist joy at the perilous state of one of pillars of the Scottish economy – its financial services sector.

  • The notion that Scotland will be “presented with the bill” on its way out is hardly novel – they incurred a share of the national debt and they should pay pro rata. If the choice was add a 20bn debt backed by assets in one of their major industries, I don’t see the SNP socialistas worrying too much about that – in fact some of them would probably want to raise more debt so they could nationalise the remainding shareholdings!

  • Congal Claen

    Hi George,

    “destroyed our once proud banking industry”

    Gordon Brown destroyed the UK banking system. He’s also Scottish.

  • Harry Flashman

    “As I said earlier, I can’t understand what is verging on almost unbridled unionist joy at the perilous state of one of pillars of the Scottish economy – its financial services sector.”

    The reason you can’t understand the “unbridled joy” among unionists about the collapse of the financial services sector is because outside of your feverish imagination George such joy does not exist.

    Scottish unionists are merely pointing up how stupid the Scot Nats look all of a sudden and enjoying their discomfiture, like I said no need to get all sniffy about it, it’s politics, it’s a rough game if you can’t take it then you shouldn’t get involved.

  • Dewi

    Yeah – banks collapse under UK Govt regulation and as part of a worldwide regulatory issue and it’s the SNPs fault – makes absolute perfect sense – in a parallel universe.

  • George

    Harry,
    The reason you can’t understand the “unbridled joy” among unionists about the collapse of the financial services sector is because outside of your feverish imagination George such joy does not exist.

    I just got that impression with stories like the Telegraph’s “Scotland’s banking shame is the Union’s gain” and the Times with its “Salmond’s fantasy is exposed – but will Unionists cash in?” headlines.

    Then there was the Telegraph and its “Financial crisis: How the dream of Scottish independence died” and the Glasgow Daily Record’s “Time To Jump Sinking Independence Ship”.

    Congal,
    Gordon Brown is UK PM and I assume working in the interests of the UK rather than Scotland specifically so it’s irrelevant that he is Scottish.

  • neil

    That’s not the way it works round these here parts Dewi. If they keep saying it, it will become true given time.

  • Harry Flashman

    Yes George, and those stories point to political opponents of the Scottish Nationalist Party exploiting a current political issue to advance their own political agenda, it’s not uncommon in politics, the Scot Nats have even been known to do similar things in the past, no need to get all hot and bothered about it, like I say it’s called politics.

  • runciter

    Scottish unionists are merely pointing up how stupid the Scot Nats look all of a sudden

    How does the British government’s destruction of the economy make Scottish Nationalists look stupid?

  • Harry Flashman

    Oh dear runciter, do try to keep up.

    The Scottish Nationalists have put forward the shining example of the Scottish banking system as an example of how well the Scots would run their own economy.

    Now it really doesn’t matter who is responsible for the collapse of that industry, although the dreadful mismanagement of those banks by their Scottish executives seems to be more responsible than the UK government (HSBC and Standard Chartered seem to be doing ok, as is Barclays, just), the fact is that such a collapse allied with the SNP’s desire to emulate the Irish and Icelandic economic models makes them look a wee bit foolish right now, doesn’t it?

    Hope this isn’t too complicated for you to grasp.

  • Congal Claen

    Hi George,

    “Gordon Brown is UK PM and I assume working in the interests of the UK rather than Scotland specifically so it’s irrelevant that he is Scottish.”

    Not irrelevent. My point was that the English are going to get sick of the “whingeing” Scottish and they may have independence whether they like it or not. That’ll be grim for the rest of us. Because that’ll be the end of the Union and an unshackled England will wipe the floor with the rest of the home nations, including the RoI, despite the wet dreams of the various nationalists.

    What competitive advantage do any of the other home nations have other than becoming a tax haven?

  • Dewi

    “What competitive advantage do any of the other home nations have other than becoming a tax haven?”

    Quite of lot of natural energy based resource and the potential for more – a pile of water (the next oil) – oh and the general absence of a parasitic, greedy, leech like financial city sector which has just brought us to our knees.
    Apart from that nothing !!

  • Congal Claen

    Hi Dewi,

    Natural energy? Is that the best you could do? It’ll never happen. Too costly and unreliable. It’s window dressing by politicians. We’ll eventually go nuclear – the most natural of all energies. Just like the big nuclear fireball in the sky.

    “oh and the general absence of a parasitic, greedy, leech like financial city sector which has just brought us to our knees.”

    Except that HBOS, RBS and the master of doom himself Gordon Brown are all Scottish.

  • George

    Congal,
    Because that’ll be the end of the Union and an unshackled England will wipe the floor with the rest of the home nations, including the RoI, despite the wet dreams of the various nationalists.

    Beaten before you even step into the ring.

    The world is big place you know and an “unshackled” England can’t hoover up everything.

  • eranu

    “a parasitic, greedy, leech like financial city sector which has just brought us to our knees.”

    surely this is a description of any financial sector! they’re all the same, greed and making money is the name of the game. doesnt matter if you’re in a newly formed independant nation or an existing union nation. the problem is when it all goes wrong. if you’re a small independant nation like say iceland, you’re screwed. if you’re part of a large nation like say the UK, you’re still screwed but its much less painful !!

  • Congal Claen

    Hi George,

    “Beaten before you even step into the ring.”

    Alternatively that could be looking before you leap.

    “The world is big place you know and an “unshackled” England can’t hoover up everything.”

    I only meant in these isles – not the world.

  • DK

    Does it really need to be pointed out that both those banks are about as Scottish as Lloyds. HBOS (which stands for HALIFAX Bank of Scotland – don’t think that Halifax are too happy either) have most of their business/employees south of the tweed; while RBS are dominated by NatWest, which stands for National Westminister – again, only a fraction of RBS’s business/employees are in Scotland (some is even here, in the shape of Ulster Bank).

    These banks are not Scottish Banks, they are multi-branded entities that happen to have local brand HQs in Scotland. HBOS is about to be taken over by lloyds, and end up as a brand within a greater Lloyds group, and there have been persistent rumours about RBS being swallowed by HSBC.

  • runciter

    the fact is that such a collapse allied with the SNP’s desire to emulate the Irish and Icelandic economic models makes them look a wee bit foolish right now, doesn’t it?

    On the contrary, the fact that the collapse was made worse by policy-making in Westminster strengthens the argument for independence.

    It is not clear that the Irish economy is in a worse position than that of the UK, which is a mess. Ireland is definitely in a better position now than it ever was under British rule.

    Norway, the other country to which the SNP had pointed as an example, is currently doing quite well.

  • Llamedos

    It is ironic that the Scots come with the begging bowl to the rest of the UK taxpayers to protect their Edinburgh jobs at the expense of English jobs particularly. It reinforces the claim for an arrangement that English MPs vote on leglislation appertaining to England only.

  • borderline

    I’m not sure where I read it, I think it was Scientific American, but it rung true with me.

    We like to think we make decisions on logical grounds, but we actually make them on emotional grounds, and use logic to justify them. 90% of Slugger is testimony to this in my view.

    So, according to the brain studiers, Scots won’t decide on independence because of financial calculations; they’ll do it out of gut feeling.

  • Dewi

    “Scots won’t decide on independence because of financial calculations; they’ll do it out of gut feeling. ”

    And I’d love to run the campaign – it should start in the Northern isles with those Viking ceremony things and then:

    And I’ll sail her up the west coast
    Through villages and towns
    I’ll be on my holidays
    They’ll be doing their rounds
    They’ll ask me how I got her I’ll say I saved my money
    They’ll say isn’t she pretty that ship called dignity

    Deacon Blue too cool for school:

    and then we’d go to Arbroath on the night before voting:

    “it is in truth not for glory, nor riches, nor honours that we are fighting, but for freedom — for that alone, which no honest man gives up but with life itself.”

    Wonderful – bring it on !

  • frustrated democrat

    Am in many things big is better or in other words size does matter in a crisis, small nations don’t have the spread of activities and resources to fall back on that large ones do.

    Ireland and Iceland are good examples so I suspect independence for Scotland is a long way off.

  • Congal Claen

    Hi DK,

    “These banks are not Scottish Banks, they are multi-branded entities that happen to have local brand HQs in Scotland.”

    Halifax was bought by BoS. Natwest was bought by RBS. They weren’t mergers. Therefore they are Scottish banks. Similarly HSBC is a British bank despite what the name suggests.