As RBS and HBOS, twin pillars of the Scottish economy, fell into the hands of the Westminster Government, Alex Salmond’s rivals were sounding the death knell for Scottish independence. The £32bn given to the two banks is just about the total current budget of the Scottish government, says The Times. The total value of the bailout is, at around £100bn, comparable with Scotland’s GDP. “Political independence was never very likely,” says Doug McWilliams of the Centre for Economics and Business Research. “This makes it pretty much impossible.”
The Scottish National Party’s case for independence has rested on Scotland’s financial sector and the price of North Sea oil, says Jenny Hjul, also in The Times. Salmond, the First Minister of Scotland, believed that once the oil reserves were returned, this would more than offset the loss of revenues from Westminster. Scotland would then be free to blossom like one of his “favourite small-country models” – Ireland, say, or Norway, or Iceland. “How deluded this now looks”. Ireland was the first eurozone country to go into recession; Norway has gone cap in hand to the Fed asking for a £2.9bn lifeline; and Iceland has “gone bust”.
If it weren’t for the Union, the Scottish finance minister would be “seeking reassurances for Scottish deposits from a foreign power”. But Salmond insists he intends to press on with his plans for a referendum on independence in 2010, says Andy McSmith in The Independent. Pete Wishart, the SNP’s constitutional affairs spokesman, says that “in all circumstances, the more economic and financial powers Scotland has, the better placed we will be to succeed and build a strong and competitive economy.” Salmond has lost touch with reality, says Magnus Linklater in The Times.
When the “harsh winds of recession begin to blow, the Scottish people, a canny lot on the whole, tend to keep their heads down”. The stability of a tried and tested Union is likely to look a lot more appealing right now than “the empty rhetoric of Mr Salmond”.