Darling Emerges to Defend British Unity in Battle Over Scotland

It was at a 2011 charity dinner in Glasgow when Alistair Darling realized it was time to return to the political front line and fight to keep Scotland in the U.K.

The former chancellor of the exchequer, who was in charge of bailing out British banks engulfed by the 2008 financial crisis and is now an opposition House of Commons lawmaker, was sitting next to a local businessman who was reticent about declaring his support publicly for staying in Britain.

“I said ‘why don’t you speak out?’ and he said ‘when you lot are prepared to give me cover I might,’” Darling recalled at his office in Edinburgh. “And that’s when I thought, look, those of us on the side of the argument that says we’re better and stronger in the U.K. need to stand up and speak.”

Prime Minister David Cameron’s Tories have been unpopular in Scotland for decades, so the Labour Party’s Darling is now leading the campaign to defend the 306-year-old union with England before a referendum on independence next year. While polls show almost twice as many voters want to stay in Britain than leave, enough are undecided to set up months of tussling.

The government in Edinburgh led by Scottish First Minister Alex Salmond said last week it plans to declare independence in March 2016, setting out a timetable after the election watchdog decided on Jan. 30 on the wording of the referendum question -- “Should Scotland be an independent country? Yes/No.”

“Darling is saying how rubbish it will be, and Salmond is saying how wonderful everything will be,” said John Grant, who runs the Ferry Boat Inn in the small Highlands town of Ullapool. “Passionately in my lifetime I would like Scotland to be an independent country but I don’t have all the facts.”

North Sea Oil

The arguments for and against Scotland going it alone so far have centered on the North Sea oil industry, debt, budget spending, the currency and defense. Voters may only start getting detailed answers after the referendum, should Salmond’s Scottish National Party win a mandate to start negotiations on a settlement with the U.K. government.

There’s also the issue of Scotland’s European Union status, with Cameron adding his own question mark with plans for a plebiscite on continuing U.K. membership of the 27-nation bloc should he win re-election in 2015.

Cameron’s government will begin setting out its detailed case on Scotland’s position in the U.K. on Feb. 11, Scottish Secretary Michael Moore said yesterday.

Long Debate

“Salmond from my experience is a very sharp debater,” said Christopher Howarth, an analyst in London at Open Europe, which publishes research on the EU. “Darling is a very good man to front the campaign. He is a good example of how as a Scottish politician you can have more influence in the U.K.”

Darling, a Scot who represents an Edinburgh district in the U.K. Parliament, says his “Better Together” drive is based on economics, culture and being part of a larger, more influential country with greater financial clout. He said he’d “never” been tempted by independence.

“I’ve been proud of being Scottish all my life but I’m proud of being British, so I’ve never seen why I have to choose,” Darling, 59, said on Feb. 1. “We’re capable of so much and are far larger than the sum of our parts.”

As chancellor from 2007 until Labour lost the 2010 election to Cameron’s Conservatives, Darling rescued Edinburgh-based Royal Bank of Scotland Group Plc in the largest bank bailout in history. An independent Scotland wouldn’t have been able to afford it and needs to share risks with England, he said.

Salmond’s Response

Salmond, 58, who first entered the Westminster parliament in London in 1987 along with Darling, refutes that.

An independent Scotland would get about 90 percent of the tax income from British oil production and cut company tax to lure employers, he says. It would also be free to spend more on social security and maintain free university education while keeping the pound and the backing of the Bank of England.

Scotland would remain in the EU, according to Salmond, who was the subject of an inquiry into whether he misled lawmakers on whether he’d sought legal advice on the issue.

He dismisses the view of European Commission President Jose Manuel Barroso, who reiterated this month that any new country would need to apply with the consent of all member states before any negotiations could start.

Scotland’s 5.2 million population is similar to that of Finland, the 19th most populous member at the moment.

“We’re starting now on the serious, detailed debate about independence,” Nicola Sturgeon, the deputy to Salmond who is running the “Yes” campaign, said in an interview in Glasgow. “It’s about a new relationship between the different parts of these islands.”

Beating Labour

Salmond’s party won an unprecedented majority in Scottish parliamentary elections in May 2011, trouncing Labour, which had led the polls just months before. That handed Salmond a second term as leader of the Edinburgh government, which currently has control over health, transport, education, justice and housing.

Yet Scots haven’t embraced the nationalists’ flagship policy. Chief executive officers at engineering company Weir Group Plc and mobile-power supplier Aggreko Plc, both based in Glasgow, have said the uncertainty over Scotland’s future might scare off investment.

A poll by TNS BMRB last month found 28 percent of voters supported independence, the same as three months before. Those wanting to stay in the U.K. accounted for 48 percent, down from 53 percent, while the proportion of people who hadn’t made up their mind rose five percentage points to 24 percent.

“The fact that we did persuade people over two elections to embrace the SNP and how we approach government gives us great heart that we’ll be able to do the same on the argument for independence,” said Sturgeon, 42.

Raising Questions

At a speech at Strathclyde University in Glasgow on Dec. 3, Sturgeon spoke to about 100 members of what the SNP calls “civic Scotland.” People want to know about tax, whether the party’s stance against nuclear weapons would be written into an independent Scotland’s constitution and whether the country would continue its commitment to international aid, she said.

“People think the union is rather more benign than they did,” John Curtice, a professor of politics at Strathclyde who attended the event, said in a telephone interview. “You can persuade people that the union can be made to work if we have someone standing up for our interests.”

Darling’s job is to convince Scots of that. The son of a civil engineer, he was educated at the private Loretto School in Musselburgh, a few miles along the coast from Edinburgh, before studying law at Aberdeen University. He worked as a lawyer in the Scottish capital before becoming a member of Parliament.

Scottish Stronghold

Scotland has been a stronghold of his Labour Party for decades, at least at Westminster, with 41 of the country’s 59 seats. Cameron’s Tories have only one seat, while the SNP has six lawmakers in London.

Grant, the innkeeper in Ullapool, where Darling visited last year, is the kind of voter both sides need to win over. The 56-year-old said he voted Labour in U.K. elections and SNP in Scottish parliamentary elections.

“If it’s a big mistake, it’s not going to affect me, it’s going to affect my children,” he said by phone on Feb. 4. “The longer we’re left in the dark, the better it is for Darling.”

There are about 1.75 million votes up for grabs and a lot can change before the referendum, Darling said.

The 140 billion-pound ($220 billion) Scottish economy grew 0.6 percent in the third quarter, the latest comparable data available, less than the 0.9 percent for the U.K. as a whole, the government said on Feb. 1. In the final three months of last year, the British economy declined 0.3 percent.

Then there’s the campaign. As it put forward the referendum question last month, the Electoral Commission set the spending limit for the two main groups for and against independence at 1.5 million pounds each in the 16 weeks before the vote.

“We’re not voting for a government for the next five years, we’re voting for a way of life for the next two or three hundred years,” Darling said. “They only have to win once. They win by one vote and that’s it, there’s no going back.”

To contact the reporters on this story: Rodney Jefferson in Edinburgh at r.jefferson@bloomberg.net; Peter Woodifield in Edinburgh at pwoodifield@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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