Arc of prosperity

May 31, 2008

The credit crunch. Soaring oil prices. Soaring utility bills. Soaring food bills.

One of the worst affected countries is the UK, but probably the most affected country is Iceland.

Now Iceland is regularly hailed by the SNP as part of the Arc of Prosperity, one of an arc of Scotland’s neighbouring countries that always seems to be doing rather better than us, outstriping the UK economy by miles.

One of the SNP’s goals is for Scotland is to join that Arc of Prosperity and better its economic growth rate. Obviously they claim independence would be the best route to achieve this; it gives Scotland full fiscal control over its own economy.

(Other countries in the Arc of Prosperity:-

Norway. Population 4.7 million
Denmark. 5.4 million
Finland. 5.3 million
Ireland 4.3 million
Sweden 9.1 million

All apart from Sweden have populations in size similar to Scotland; and all have had sigificantly higher economic growth than Scotland and the UK for many years now.)

So whats happened in Iceland? With the country performing so well economically and with a population of only 300 000 people, the banks wanted and got foreign investment. The Icelandic Government even loosened its fiscal policy before the 2007 election. Foreign capital poured into Iceland.

Now when the U.S. subprime mortgage market collapsed and started the credit crunch, foreign investors panicked and the money dried up. Some wanted their money back. All this has devalued the Icelandic kröna and forced the Icelandic bank to set interest rates at 15%. The country is now suffering the worst effects of the credit crunch I mentioned at the start.

Compare this with the U.S. They too are suffering the credit crunch, but are still receiving massive foreign investment. Why? Because they have a vast consumer-led population (around 304 000 000, around 1000 times bigger than Iceland’s). Hence the dollar has weakened recently; but relative to the Icelandic körna isn’t so bad and interest rates arent so bad.

One rate to look at is the current CDS rates of banks. These are Credit Default Swaps, basically a measure of how much insurance the bank needs for its debt. The higher the number the worse off the bank.

For example, when the Northern Rock was nationalised its CDS was at 295. [18 Feb 2008]

CDS have been increasing throughout the banking sector however. The US Bank Bear Sterns was bailed out by the US Government with a CDS of 720. [Mar 2008]

Other March 2008 CDS of banks were:-

Lloyds TSB 133
Barclays 170
HSBC 145
Bank of Scotland 235
Alliance and Lecicester 342

but the British banks were nothing like the Icelandic banks:-

Landsbanki 610
Kaupthing 856

Iceland, with a small population; for years one of the best economies in the world. It made a mistake relying on too much foreign capital. And when that foreign capital ran into problems, so did it. Its tough for the Icelanders, having being used to the good life for years, and now feeling the worst effects of the credit crunch. The credit crunch may be global but Iceland are feeling short term consequences of their own mistakes. Yet had the U.S. subprime mortgage market held up it may have never mattered.

Thats why the Icelandic government is now thinking of joining the Euro. The Euro is strong and the Eurozone – those countries that use the Euro as their currency – is now the biggest economy in the world, after the dollar weakened in March 2008. The Eurozone has a population of 320 000 000 people and is expected to grow as other European Union countries meet the criteria for membership.

So then what of the Arc of Prosperity? Is it in financial ruins?

Iceland may be in trouble now but remember they started from an economic base much higher than the UK or Scotland. Their problems are all relative, and will probably only result in a decline in economic growth for a couple of years, before resuming their position back near the top of the world’s economies. Even if these problems do continue then they always have the Euro to fall back on if needed, although their fishermen probably won’t like joining the EU.

What’s more another Arc of Prosperity country – Norway – has just given them 1.5 billion euros to shore up the Icelandic economy. And if Norway can afford to bail out other countries in the midst of a global credit crunch then the Arc of Prosperity can’t be doing that badly.

The Arc is better placed than most to ride out the credit crunch. I’m sure Gordon Brown and Alistair Darling will try their best for the UK.

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SNP emigration

May 30, 2008

Another FMQs, another failure to lay a glove on the First Minister.

While this leads to much merriment within the SNP quarters, how long can the public put up with such ineffective opposition? The opposition is there for a reason, to scrutinise and debate the Government’s policies.

As principal opposition, the Labour Party are primarily to blame.

I think Wendy Alexander tries. Honestly! But perhaps the fight has left her. Its as if she wakes up every Thursday morning knowing that once again she will be bested at the despatch box. The former Labour First Minister Henry McLeish has admitted: “We have had a year of ineffective opposition by Labour while the SNP have confidently governed Scotland and their support has risen. We don’t look like a competent opposition.”

The tragedy is Scottish Labour has no-one else that could do a better job. Maybe Wendy Alexander can console herself with that.

While the opposition lacks conviction, the SNP and Alex Salmond must be enjoying the longest honeymoon in political history. In fact for voters its looking less and less like a honeymoon and more and more like an emigration!

The Poll results of this month back this up, giving the SNP its highest poll rating ever:-

Holyrood TNS / System 3 Poll

Constituency votes

SNP 45 %
Labour 31%
Conservatives 12 %
Liberal Democrats 11 %

Regional votes

SNP 41 %
Labour 29 %
Conservatives 12 %
Liberal Democrats 12 %
Greens 4 %
SSP 1 %
Solidarity 1% has a neat predictor for the Holyrood vote. Enter in these poll results and the Scottish Parliament will look like this:-

SNP 52 Constituency MSPs + 10 Regional MSPs = 62 MSPs.
Labour 18 + 21 = 39 MSPs.
Liberal Democrats 2 + 11 = 13 MSPs.
Conservatives 1 + 12 = 13 MSPs.
Greens 0 + 2 = 2 MSPs.

And unless the opposition learn how to cope with the SNP, the emigration of votes to the SNP will continue.

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Declarations of Independence

May 29, 2008

In 1787 Thomas Jefferson, the author of the Declaration of Independence of the United States of America, wrote:-

“…were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter.”

When Jefferson wrote this he was fundamentally thinking of the First Amendment of the U.S. Constitution safeguarding the freedom of the Press. He felt it important that newspapers provide the function of imparting unbiased information on the government of the day and their policies.

Contrast this with the situation in Scotland. Not one of the many newspapers in Scotland has an editorial policy which supports the policies of the elected and popular SNP Government! All have anti-SNP editorial stances. Freedom of speech is one thing we should all agree on, but are these newspapers properly fulfilling their function of imparting unbiased information on Government if their editorial policy is unashamedly biased in the opposite direction?

It is remarkable then that in spite of these anti-editorials across the board that this SNP Government ever got elected.

And there’s the rub. Newspaper circulation in Scotland is falling at an alarming rate. And until market forces, falling sales and declining revenue finally force change; it seems that they are becoming irrelevant to the people of Scotland today.

So it could be argued that we have a Government without Newspapers in Scotland today. Yet it hardly is the fault of the SNP Government; it must be the fault of the Newspapers. Jefferson could have never envisaged this!

Jefferson became the 3rd President of the United States. The 4th President, James Madison, wrote this a few years after his period of office :-

“A popular government without popular information, or the means of acquiring it, is but a Prologue to a Farce or a tragedy or perhaps both. Knowledge will forever govern ignorance; and the people who mean to be their own governors must arm themselves with the power, which knowledge gives.”

This is as true of the public, as it is of the Government.

So where then are the public getting their information?  – The Internet.

It is the Internet that is now fulfilling this role in Scotland, not the Press. As the newspapers have eschewed the SNP government, it has been left to the Scottish public to fill this vacuum; writing websites and blogs to promote the Government’s main goal: Independence. Without a voice in the Newspapers, Television or Radio, the Internet provides the voice.

One only has to look at the comments section of online versions of Scotland’s two main ‘quality’ Newspapers, The Scotsman and the The Herald, to realise that the public are dissatisfied with their political editorials.

Such commentators are dismissed by the other parties as Cybernats. But without a voice in the media, and a Government without newspapers, people have little other choice but to use the Internet to let their voices be heard.

As Jefferson and Madison proposed Independence for the U.S. from the Westminster Government in Britain, similarly the SNP does for Scotland today. These early U.S. Presidents were the Cybernats of their day!

As long as the Internet provides Freedom of Speech then popular information can be acquired.

I imagine Jefferson and Madison would be pleased.

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Advisory Precedents

May 28, 2008

There has been a lot of talk recently about the upcoming Referendum on Independence scheduled for 2010. Former Labour stalwart Brian Wilson has said that Holyrood has no power to hold such a referendum. That view frankly is tosh.

The proposed Referendum Question issued by the SNP in their manifesto has been carefully worded so that it meets the legal requirements of the current devolution settlement. Whilst Westminster legally retains ultimate control on Scottish independence within the devolution settlement, any Yes vote for independence by the Scottish people would surely force the matter. Not only would United Nations International Law be on the side of the Holyrood referendum result but the International precedents of the Kosovo and East Timor referenda Pro Independence results are strenously backed by the UK Westminster Government. If its good enough for Kosovo and East Timor it must be good enough for Scotland!

In practice, any Pro Independence result must be observed by Westminster. If they refuse to acknowledge the result then they not only would face International derision and sanctions but the democratic will of the people of Scotland would create such political tension to force its hand. In a such situation I would imagine the Holyrood Government would just declare unilateral independence anyway.

It won’t go that far, obviously. Westminster must observe the result. Better that and enter into negotiations with Holyrood regarding oil and gas revenues and Scotland’s share of the national debt. Under UN International Law, Scotland holds 95 % of the oil and gas of the UK. A unilateral declaration of Independence would see Scotland take at least that, perhaps 100 % and leave the UK to face a lengthy battle to get its 5% back. Also Scotland may just ignore the UK’s national debt entirely in such a situation.

Scotland and the UK don’t need to look very far for a precedent on Advisory Referendums. Denmark granted Greenland its own government in 1978, the law coming into effect from May 1 1979. Denmark retains matters of foreign policy in this arrangement.

Greenland remained part of the EU (then EEC) but it formally withdrew in 1985 after an earlier Advisory Referendum voted Against staying in the EEC. Although Denmark had retained foreign policy as part of the Greenland government arrangement, it recognised the Advisory mandate of the Greenland people. As argued with a Pro Independence vote for Scotland, it had little other choice.

This is also the precedent on Scotland remaining a member of the EU after independence. Like Greenland we would need to have a referendum on the matter if we wanted to withdraw.

Similarly, like Greenland, if such a referendum produced a No vote we would need a similar treaty like the Greenland treaty of 1984 to settle any pre-existing commitments Scotland had to the EU before any withdrawal. The EU does not lose it nations easily. There are reports that Greenland is now considering rejoining the EU again.

It may be that Brian Wilson will need persuaded of the Greenland precedent.  He has landed a job as chairman of Flying Matters; an organisation setup to promote the Aviation industry’s views on climate change. In reality, its partisan views are regularly criticised by various climate change groups. Ironically Mr. Wilson was a former Energy minister at Westminster.

It was in July 2007 that he became embroiled in a row with Greenlanders complaining that their views were ”apocalyptic green spin” when an Inuit representative, Aqqaluk Lynge, arrived to give evidence on the Stansted Airport expansion claiming the ice floes of the Arctic were being harmed by global warming, and that holiday aviation flights were one of the causes.

If Mr. Wilson wants to disdain Greenland or its precedents then his views deserve to be ignored.

Frozen out!

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May 27, 2008

At the end of my David Cameron and the Union blog, I suggested that Tam Dalyell believed that the Scottish Parliament would bring about the end of the Union.

Maybe he was reading my blog, as sure enough he comes out in the papers with his evidence to the Unionist Calman Commission:-

“It is in the nature of politicians to go on claiming additional powers and status for the institutions in which they find themselves. ”

“So it is no surprise that not only SNP members but MSPs from every other party are clamouring for more powers.”

“MSPs will not be satisfied until they reach a position indistinguishable from a separate Scottish state. ”

“It might well be that before this point is reached, the patience of people in England will have snapped.

“Thus my submission is that the very existence of a Scottish parliament leads to the dismantling of the British state.”

“If this is what the majority really want, so be it. But in any referendum, in addition to questions on independence, enhanced powers, and the status quo, there ought to be a fourth question – Do you wish the Scottish Parliament to remain in being?”

Mmm. Calling for another referendum on whether we have a Scottish Parliament? Surely that would be a Unionist Neverendum?

Lets look at the 1997 result:-

For a Scottish Parliament: 74.3 %

Against a Scottish Parliament: 25.7 %

In Mr. Dalyell’s West Lothian constituency, the vote was even higher for a Scottish Parliament:- 79.6 % For; 20.4 % Against.

Not really close was it? And its not as if there’s evidence to suggest the Against vote has grown. We’ve got an SNP government elected, for one thing! I’d be utterly amazed if they was a vote now that the Against vote could even come close to a quarter. Any Scots that still argue against a Scottish Parliament are so very few and far between.

Maybe Mr. Dalyell is slightly out of touch? That’s of no matter though. He may be viewing things from his lonely Barony but his predictions of English unrest and of Scottish desires for more powers have proven uncannily accurate; his West Lothian Question still hangs in the air, many Unionists fearing its inevitable conclusions. Mr Dalyell could just have said “I told you so.” to the Commission and left it at that.

I’ve never had any problems with letting the people decide in a referendum though. If Tam Dalyell’s option was added I think it would split the No to Independence vote anyway.

A Neverendum? To quote Wendy Alexander: “Bring it on!”

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Last of the Feeble Fifty

May 26, 2008

When Jim Sillars won the Govan by-election for the SNP in 1988 and derided the Scottish Labour MPs as the ‘Feeble Fifty’ the name quickly stuck. These Labour MPs did little or nothing to prevent Margaret Thatcher decimating Scottish industry and guinea-pigging the Scots with the hated Poll Tax in 1989. Indeed, one Scottish Labour MP, Dick Douglas, disgusted at his party’s inaction defected to the SNP in protest in 1990.

But what of the rest? Only 11 Labour MPs remain from that period; the rest either moved to the Lords or other political sphere; retired; voted out or sadly died.

These 11 are the Last of the Feeble Fifty:-

Gavin Strang

David Marshall

Michael Martin

Tom Clarke

Gordon Brown

John Reid

Alistair Darling

Jimmy Hood

Tom McAvoy

John McFall

Frank Doran

Will any of these lose their seat at the next Westminster election?

Lets look at the runners and riders…

Gavin Strang. MP for Edinburgh East. He was reportedly considering retiring but has since changed his mind, no doubt persuaded by the challenge of the SNP. Kenny McAskill holds the analogous seat for the SNP in the Scottish Parliament. If he stays on Labour hope that his long standing voters will turn out for him no matter the party fortunes. Gavin won the seat in 2005 over the Liberal Democrats easily pushing the SNP to third place. This time it will be much closer, but I expect Gavin’s personal vote rather than party vote will pull him through. Just.

David Marshall. MP for Glasgow East. One of the safest seats Labour has. The analogous Scottish Parliament seat is held by Paul Martin, Labour MSP, son of Michael Martin. Both with comfortable majorities. Would need a SNP landslide to even come close to losing. Expect the gap to tighten but fully expect a Labour win.

STOP PRESS: Now David Marshall has resigned on health grounds – stress and depression caused by investigations over expenses and nepotism – the Glasgow East seat is currently up for grabs. Due to the Labour Party’s current deep unpopularity the SNP may have a chance to cause an shock upset! If this ultra-safe seat falls to the SNP all of my punditry on this page will need revising!

STOP PRESS: SNP have won in Glasgow East! You will need to read this post now with the understanding that the SNP can now take all these seats. On the Labour to SNP swing of Glasgow East only Tom Clarke’s seat would be safe in the whole of Scotland.

Michael Martin. MP for Glasgow North East. Now the Speaker of the Commons. By convention the Speakers seat is usually unopposed by major parties. However Martin is a controversial figure, particularly after he has been implicated in expenses wrongdoing. Though the other parties will probably field a candidate Martin will probably win through.

Tom Clarke. MP for Coatbridge, Chryston and Bellshill. Again a safe seat. The MSP seat is also held by Labour. Another tighten then but not enough.

Gordon Brown. MP for Kirkcaldy and Cowdenbeath. The British Prime Minister. Would be extraordinary if he lost his seat. Has a safe majority and the analogous MSP seat is also Labour. Even with his UK popularity in freefall at the moment should still hold on locally.

John Reid. MP for Airdrie and Shotts. In 2007 he announced he would not stand forward for re-election. He is currently the Chairman of Celtic Football Club. So another of the Feeble Fifty bites the dust. The analogous Scottish Parliament seat was last time a surprisingly tight affair between Labour and SNP in what had previously been a safe seat. With a new Westminster candidate to put forward, Labour could be in trouble here. If the SNP win they should smash through their twenty seat target.

Alistair Darling. MP for Edinburgh South West. The Chancellor of the Exchequer. This is a very tight seat. The analogous Edinburgh Pentlands is held by the Conservative David McLetchie MSP. Labour and the SNP were tight for 2nd place. In the 2005 Westminster election, the Conservatives and Liberal Democrats were tight for 2nd place. This fracturing of the vote may just save the Chancellor. If he’s extremely lucky. If I had to pick a winner now its between the Conservatives and SNP, with the SNP just edging it.

Jimmy Hood. MP for Lanark and Hamilton East. Another safe seat at Westminster, but the Clydesdale seat at Holyrood considerably tightened. Karen Gillon just managed to hold off Aileen Campbell of the SNP, though Aileen was then elected as a list MSP to become the youngest MSP in the parliament then aged 26. Labour shouldn’t lose this seat at Westminster, but the way the polls are going they just might.

Tom McAvoy. MP for Rutherglen and Hamilton West. Again a safe seat at Westminster. The Holyrood seat of Glasgow Rutherglen needs a 9 % swing to go the SNP which going on current polling is achieveable. Much much tighter then but should survive only just.

John McFall. MP for West Dunbartonshire. Again safe, but the Holyrood seat was just won by Jackie Baillie from the SNP. Jackie has not had her troubles to seek in the Scottish parliament given the uneviable task of trying to back her leader Wendy Alexander after the Labour campaign team admitted breaking the law and throughout several policy U-turns. Her reputation has taken a bit of a battering after trying to defend the indefensible. How much will this and Labour’s freefall in the polls affect the result here? This seat is all to play for.

Frank Doran. MP for Aberdeen North. Frank was originally MP for Aberdeen South in 1987, before getting voted out in 1992. He returned in 1997 and won Aberdeen North in 2005 with a decent majority. He is mainly remembered in the Commons for saying that MPs should queue jump in the canteen. Staff have complained they have been treated as second class citizens. The Holyrood seat was handsomely held by the SNP’s Brian Adam. The Westminster seat should go the same way. I imagine the Commons staff will be pleased to see him go.

So what then of the Last of the Feeble Fifty? John Reid is definitely going. Unless Michael Martin retires he should stay. Most of the others should be safe, but there’s at least two or three Feebles that will be sweating come election night.

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May 25, 2008

Last again then. Least it wasn’t Nil Point! is an interesting site. You type in your postcode and get all sorts of information on what your local MP is up to.

I found it last year about this time. I was shocked to discover that my MP since November 2000, John Robertson, was busy signing Early Day Motions on the Eurovision Song Contest. (EDM 1453 on 14.5.07)

Hasn’t he anything better to do I wondered? Like representing people from his constituency? Trying to improve the local area? Are Scottish Labour MPs so bored since the establishment of the Scottish Parliament that they feel the need to have their say on the Eurovison Song Contest? I was surprised to say the least.

Now Scotland has been given permission to break from the UK and submit its own entry by the EBU, the European Broadcasting Union, the organisers of the event. This was prompted by questions from Alyn Smith, an SNP MEP.

Am I surprised by the SNP’s stance? No. They always want to promote Scotland on the world stage. A philosophy so aptly summarised by Winnie Ewing in her 1967 Hamilton By-election win: “Stop the world! Scotland wants to get ON!”

But its just as well for the SNP that they have been improving Scotland and are riding high in the polls otherwise Scots would be asking the same questions as I asked of my local MP earlier.

OK. Back to to check my MP. Has Mr Robertson been standing up for Glasgow North West? I typed in various towns in the constituency and searched his 8 years of speeches:-

No. of times towns of Glasgow North West have been mentioned in speeches by local MP John Robertson since 2000 in the House of Commons:-

Knightswood 4 (last mentioned 2006)

Blairdardie 1 (last mentioned 2006)

Yoker 3 (last mentioned 2007)

Anniesland 34 (last mentioned 2007)

Drumchapel 2 (last mentioned 2006)

Old Drumchapel 0

Peterson Park 0

Scotstoun 18 (last mentioned 2007)

If I missed any towns in the area, try it yourself on the website.

If lived anywhere but Anniesland or Scotstoun I’d be furious. Scotstoun got the mentions primarily because of the shipyard. Anniesland got the mentions primarily because he used to be the Member for Glasgow Anniesland before the boundary changes and he was namechecking his constituency.

IN 8 YEARS! A few token mentions. Call this representation?

John Robertson. NIL POINT!

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David Cameron and the Union

May 24, 2008

The Conservatives have only 1 Scottish MP. Their current electoral good fortune if projected to the next Westminster election may bring them a couple more in Scotland, but it is England where their real targets lie; and where it seems the current revival will push them forward to victory in that election.

What to do about Scotland then? For years it has sent down to Westminster a glut of Labour MPs propping up (or even giving) the Labour party victory in the Westminster election. Any Conservative election victory was in spite of their standing in Scotland not because of it. Although current polls suggest the Labour vote is now crumbling in Scotland, people are switching to the SNP not the Conservatives; making the 20 seat target at Westminster set by First Minster Alex Salmond now look pessimisticly prudent.

The Conservatives are a Unionist party. Yet David Cameron knows if he can get rid of Scotland, the Conservative chances of winning at every Westminster election will be markedly improved. If only he could look as though he is standing up for the union while simultaneously passing policies that lead to its breakup he could be in power at Westminster for a very very long time.

The first step in this process is English votes for English matters. This will sideline the Labour and Liberal MPs. SNP MPs routinely abstain in matters not affecting Scotland anyway as a point of principle. Cameron has already suggested this at the latest Scottish conference.

This will have 2 effects:-

1) To begin to quell any English resentment of Scotland. It will effectively end the griping over the West Lothian Question. Thus Cameron will claim that he is protecting the Union.

2) As all Scottish MPs will now be sidelined – remember that the Conservative party currently has 1 MP out of the 59 Scottish MPs – it means that it will be easier for Conservatives to pass their policies or vote against future Labour governments on English matters.

This answer to the West Lothian Question brings up various anomalies. For instance, it seems unlikely that a Scottish MP could ever again be Prime Minister of the UK. The current Prime Minister Gordon Brown would be banned from English votes in this setup. Could the Scots be happy to send MPs to Westminster knowing that they were denied the chance ever to be PM?

And once the Scots are excluded, what then of the Welsh or Northern Irish?

Tam Dalyell may very well be right that that devolution and the attempt to resolve the West Lothian Question will lead to the breakup of the Union.

David Cameron. The man who said he wanted to save the Union. The man who proposed policies to break the Union. The man who lessened Labour’s chances of victory in every subsequent General election. The man who could run England for a very, very long time.

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Lesson from History

May 23, 2008

My old history teacher used to say that the Liberal party had made a grevious mistake in opposing the Conservative policy of protectionism and thus allowing the Conservatives to decline government and let in the newly formed Labour Party into government by the back door in 1924 as a minority administration.

The Labour Party was thus given a chance to prove itself fit to govern. The Liberal party, or its current denomination the Liberal Democrats, has never been in power since.

Now in the Scottish Parliament the SNP, albeit the largest party, are in government for the first time. They have also a minority administration; the Unionist parties could in theory team up and successfully vote down every SNP bill.

Yet Labour has proven so shell shocked at losing Scotland that it has lost any direction it once had. The Liberal Democrats having once shared power with the Labour administration has seemed petty in their dealings with the SNP. Incredibly for a party that only clings to Scotland by its fingernails, it is the Conservative party that is showing a maturity for dealing with minority administration and dealing with the SNP policies on an issue by issue basis.

The SNP government is now overwhelming popular; not least because the opposition Unionist parties are so fragmented. There is no doubt that they have proved themselves fit to govern. They are now a serious party of government.

As the Conservatives and Liberal Democrats seem incapable of winning in Scotland, so Scotland becomes a straight two horse race between Labour and the SNP. The problem for Labour is that right now they are seen to be directionless in Holyrood and feeble in Westminster. The SNP can only lose the next Scottish election.

These could be the last days of the Union.

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