The surest thing to emerge from Labour’s surprise victory last week in the Glenrothes by-election is that Alex Salmond doesn’t walk on water any more. The leader of the Scottish National Party (SNP) and first minister of Scotland has dominated politics north of the border for the past few years.
He has done so through a brilliant balancing act that has combined portraying the SNP as a more authentically social democratic party than New Labour and at the same time not breaking with neoliberalism.
Salmond pulled this off partly through selectively introducing social provision that was more generous than in England. But he also painted a vision of an independent Scotland that could join an “arc of prosperity” of small, flourishing European states, such as southern Ireland, the Baltic republics – and Iceland.
You can see the problem. All of these, and Iceland above all, have been hit hard by the global economic crisis. Moreover, the two Scottish (or part-Scottish) banks, Royal Bank of Scotland and HBOS, have been the main recipients of government money in the bank rescues mounted from London.
Gordon Brown has ruthlessly exploited the disintegration of Salmond’s “arc of prosperity” and the role played by the British state in saving Scottish banks. New Labour also benefitted from the fact the SNP is now the incumbent party both at Holyrood and in Fife.
The second thing that Glenrothes demonstrates is how volatile mainstream politics remains. It was Brown who walked on water after he replaced Tony Blair in June 2007. Then, after he had built up the idea of a snap general election and then ran away from it that autumn, he was reduced in general regard to a bungling, dithering saddo.
The financial crash has led to another reversal in Brown’s fortunes. This is for two reasons. Brown and Alistair Darling were the first to introduce the policy on which most leading capitalist states have since converged – pumping money into, and partially taking over, the leading banks.
Secondly, the crash has thrown the Tories into disarray. Before the collapse of Lehman Brothers they were preparing a Thatcherite programme of small government and tax cuts that the banking crisis has rendered irrelevant.
David Cameron and George Osborne attacked the bankers and their bonuses but everyone can see their heart isn’t in it – not surprisingly, since they’re busy turning on their own tribe. Osborne tried to take Peter Mandelson on in a game of who’s sleazier and came out worse.
Now, in a particularly cruel twist of fate, both the US and Britain are moving towards trying to prevent a full-scale economic slump by backing up the sharp reductions in interest rates with tax cuts. In other words, Brown and Darling may be about to pinch the Tories’ clothes.
None of this means that New Labour is going to win the next general election. An ICM poll published in the Sunday Telegraph still puts Labour at 30 percent, 13 points behind the Tories on 43 percent.
This means that talk of a snap election before Christmas is just that – talk. The election expert John Curtice of Strathclyde University says Brown would be “a fool” to call an election unless Labour were five percentage points ahead in the polls.
Brown has a long way to go before the present bounce could deliver anything like that. And he may well never get there.
For the past couple of years people have suffered a sharp squeeze in their living standards.The last time this happened was under Labour’s James Callaghan in the late 1970s and the Tories’ John Major in the early 1990s.
In both cases they were punished in the subsequent general election – even though, by the time this happened, the economy was recovering.
This time instead of a recovery, a severe recession looks likely, not just in Britain, but globally. Brown may get some kudos for his statesmanlike performance on the world stage, but the slump may undermine electoral support for New Labour.