Banking on victory for the Scottish Nationalists

These days the Scots feel as proud of their banks as they once did of the Clyde shipyards — a macho symbol of economic prowess. This explains why the future of Scotland’s financial sector under a possible SNP government has become a hot issue in the forthcoming Scottish Parliament elections on 3 May.

The Scottish Nationalists, led by ex-Royal Bank economist Alex Salmond, have maintained a lead in the opinion polls for over five months and are currently on course to displace Labour as the largest party at Holyrood. Top of the agenda if the SNP forms the next Scottish Executive is a referendum on quitting the United Kingdom in order to (in nationalist parlance) ‘rejoin the world’.

After the second world war, the family-owned firms of Clydeside turned out a quarter of the world’s shipping by tonnage and kept hundreds of thousands of riveters, steelworkers and miners in work. Rich Scotland voted Tory. But myopic management, under-investment, religious sectarianism (Catholics were persona non grata in the skilled trades) and union militancy put paid to all that. As an alternative economic strategy, the Scots turned to Labour and collectivism. Billions of pounds of state aid were poured into bribing American multinationals to set up assembly plants in Scotland. The plan failed spectacularly with the collapse of the dotcom boom in 2000, which wiped out over 80,000 high-tech manufacturing jobs and cut Scottish exports from £20 billion to just £14.9 billion last year.

Despite an extra 58,000 public-sector jobs, Scotland has had an employment-creation record since 1997 well below the UK average. If employment had grown as fast as in Wales, there would now be 23,000 more people in work. In inner-city Glasgow, four out of every ten people of working age are on benefit.