A Labour/SNP deal would be a disaster for Britain and Miliband

by Samuel Dale

It’s May 13th 2015 and Ed Miliband is walking down Downing Street after being asked to form a government by the Queen.

It’s been an unpredictable and gruelling week of horse trading and backroom deals.

Labour and the Tories tied on 285 seats each and Miliband has done a deal with Alex Salmond to seize power.

His pact with the SNP – which won an incredible 45 seats – has put him into Number 10 but he is the weakest prime minister in decades, maybe ever.

As he makes his first speech outside that famous door, Sterling starts to plummet.

The FTSE 100 has already fallen almost 10% in the first part of the week as the likelihood of Miliband in power became clear. It tanks further as he talks.

The creme of Britain’s financial services industry are implementing their plans to leave London.

Hedge funds quickly plan moves to Jersey, big asset managers to the US while big banks look to Asia and New York.

Energy firms instantly scrap investment plans as the price freeze becomes reality while pension funds put their UK infrastructure investments on hold.

The SNP-Labour deal has promised to “end austerity” and increase spending in cash terms every year this parliament. Investors are spooked.

The International Monetary Fund has already warned that the UK must stick to its deficit programme and Angela Merkel has subtley warned London not to turn itself into Paris, or even Athens.

As Miliband speaks the price of UK Government debt – gilts – starts to rocket.

Standard & Poor’s and Moody’s are calling emergency meetings to re-assess the UK’s credit rating. Sources at the agencies say a negative warning on Britain’s rating is imminent.

Meanwhile, Labour MPs are furious at the SNP deal promising devo-max to Scotland including the long-sought after devolved corporation tax. In exchange the SNP will vote to implement all Labour’s policy platform.

Mobile multi-national companies are already discussing relocating to a new business-friendly Edinburgh in the next few years, undermining confidence in London and the City.

Gordon Brown publicly blasts the deal while Tony Blair says it recklessly threatens to break up Britain.

Boris Johnson, the newly elected MP and clear favourite for the vacant Tory leadership after Cameron’s resignation earlier in the day, says Miliband has betrayed Britain.

The new PM finishes his speech and turns to enter Number 10 for the first time as leader, a dream fulfilled.

As he enters a frantic looking permanent secretary brings him up to speed on the unfolding economic crisis and recommends an emergency cabinet meeting, which still needs appointing.

Meanwhile, the political crisis is even worse. There is chaos in his own party as panicked SpAds tell him about the huge schism in the PLP and more grandees speaking out. Some are already calling for his head for putting the union at risk, which they describe as above party politics.

All the while he faces the prospect of Boris, a popular new Tory leader, while leading the most fragile Government in decades.

At just 32% of the popular vote, Labour is the most unpopular government party in British history. The SNP deal has seen the party’s poll share plummet in the last few days to around 25% as English voters desert Miliband.

It makes a quick second election out of the question even if he managed to secure majority agreement to overturn the Fixed Parliament Act.

Meanwhile, the SNP deal raises the prospect of a new independence referendum in the coming years. The break-up of Britain looks closer than ever.

All this within the first hour of a Miliband premiership. This is A Very British Coup for the Twitter age.

As he is shown into his office and considers the multiple chaotic crises, he wonders: what have I done?

Sam Dale is a financial and political journalist

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19 Responses to “A Labour/SNP deal would be a disaster for Britain and Miliband”

  1. Adam Gray says:

    You’re being far too reserved about the catastrophic impact a Miliband Premiership would have on our country, Sam – and far too optimistic about the share of the vote Labour would retain. 25%? Think 15% at most.

  2. Michael Worcs says:

    This is why the Conservative party is saving up for the second election in November.

  3. Dair Allan says:

    Sounds fantastic.

    What’s not to like about this? Scotland gets what it wants and independence within 3 years of the election. Perfect.

  4. Rupert says:

    “As Miliband speaks the price of UK Government debt – gilts – starts to rocket.”

    Surely you mean plummet? If confidence in the government were falling the price of gilts would fall (and their yields would rise).

  5. Robert says:

    This article is a load of rubbish and my only comment is that Labour should concentrate on explaining why it should lead the next government. Ruling out deals with any party is just stupid.

  6. paul barker says:

    This seems to have touched a nerve but of course the idea Labour might get as much as 32% in May is fantasy. Labours poll ratings have been falling for 2 years & the fall seems to be accelerating.

  7. Blairite says:

    @Robert – Load of rubbish? So Robert, you’d like Labour to keep open the prospect of a deal with UKIP or the DUP? What nonsense, of course Labour can rule out deals with other parties.

    Labour should rule out a deal with the SNP. If Labour get’s 285 seats or so and it’s a hung parliament, we can be sure the Conservatives will have won the most votes in England. If Labour – the loser in England – cobbles together a deal with a separatist party from North of the Border, it will do untold damage to the Labour Party prospects in England. In Scotland, it will just encourage more Labour voters in “Yes” areas to switch to the SNP. Not to mention the economic policy will be dictated by the SNP, the left of the party and the unions who will force the govt to abandon deficit reduction for an extremely soft policy which would just frighten the markets, damage the economy and scare the electorate (who’d fear higher taxes and higher interest rates as a result). We’d lose 2020 with a worse result than Michael Foot’s Labour party, it would be an utter disaster.

  8. BenM says:

    Financial Services planning to leave London as Miliband talks?

    Brilliant. Such a possibility shores up my Labour vote!

  9. BenM says:

    @Robert: “Surely you mean plummet? If confidence in the government were falling the price of gilts would fall (and their yields would rise).”

    Indeed! A “financial and political journalist” not knowing this rather undermines their credibility.

  10. Joe says:

    You claim to be a journalist yet you don’t know that Nicola Sturgeon is the leader of SNP. Alex Salmond is a backbench MSP who is now standing for Westminister. Any deals made will be between Nicola and Milliband.

  11. BenM says:

    @paul barker

    Beginning to sound a bit desperate there.

  12. Sam Dale says:

    @Rupert and @Ben M

    I wrote; “As Miliband speaks the price of UK Government debt – gilts – starts to rocket.”

    This means the yields on gilts starts to increase quickly – reflecting falling confidence in the UK’s ability to pay its debts – making it more expensive for the Treasury to refinance its debt. I thought that was clear but obviously not.


    Alex Salmond will be an MP in May and likely lead the SNP in Westminster so I imagine he will head up any coalition/partnership negotiations while taking instruction from Sturgeon n Edinburgh.

  13. TNL says:

    Exactly. Miliband will struggle to be a decent Prime Minister if he ever did manage to secure a majority; in an alliance with the SNP he is going to unleash forces well beyond his limited powers of control as a coalition PM. A deal with the SNP in May means an outright Tory victory in October or November.

  14. Rupert says:

    @Sam Your explanation of your assertion that gilt prices would rocket is “This means the yields on gilts starts to increase quickly”. It actually means the opposite. Prices are the inverse of yields. If prices rise that means yields must fall, and vice-versa. Yields and prices simply cannot rise together. This is incontrovertible.

  15. uglyfatbloke says:

    Sam, Hosie will be the SNP Westminster leader, not Salmond.

  16. Kenny says:

    Actually, Angus Robertson – current Westminster group leader, ahead of SNP Deputy Leader Stewart Hosie – is fairly likely to retain that post as he did the last time Alex Salmond was at Westminster…when Salmond was in fact the leader of the party.

    Also, Nicola Sturgeon has said herself that she will lead any negotiations on an arrangement for government, not Salmond or Robertson or Hosie. Obviously Robertson and Hosie would be heavily involved as senior Westminster figures within the SNP and Salmond may well have a role to play too, but people need to start grasping the fact that Sturgeon is her own leader and Salmond is not back-seat driving. The caricature of Salmond across all UK media is of a self-obsessed, power-hungry maniac. While I’m sure he enjoys some of the trappings of office, never forget that this is a man who has TWICE, under no pressure from his party, given up its leadership.

    As for any actual negotiations, let’s please stop the nonsense about “vote SNP, get Tories.” The SNP has explicitly ruled out putting the Tories in office. Is Labour willing to do the same? That’s a serious question. If Labour’s campaign is that voting SNP puts the Tories in power, does that mean they’ll take some sort of “principled” if the Tories are the larger party and abstain on the Queen’s Speech vote? If not, and they intend to vote against any Queen’s Speech or confidence vote in a potential Tory (plus UKIP/DUP) minority government, then there is already a de facto co-operation between Labour and the SNP. The only further question is how far that co-operation might extend. Labour will no doubt work with the Tories to get renewal of Trident done, while the SNP would support votes to abolish the bedroom tax nationwide, to tighten up on tax evasion and even to increase conventional military spending, particularly around the Scottish coast where we currently fail to meet our NATO obligations to patrol the North Atlantic Gap.

    Coalition is almost certainly not going to happen. The SNP has laid out red lines on Trident, for example, that the Labour leadership probably can’t stomach. But if anyone down south paid attention to Scottish politics, they’d have noticed four years of SNP minority government and seen that firstly, not many parties want to force an election, especially if the result is not predictably in their favour. The government needs to get its budgets passed, so you agree *something* for your own party’s ends in exchange for abstaining on the vote.

    Labour needs to make a very clear decision if the next parliament does not provide an overall majority for any party, nor an overall majority some weird Tory/LD/UKIP/DUP grouping. It needs to decide whether it’s better to actively back the Tories or to grudgingly negotiate with the SNP. On recent evidence, it looks like the former is the most likely. The only question is whether English voters will then rapidly come to see what so many Scots already have seen…

  17. Mike says:

    Sturgeon would not have the power to sign the agreement since she is not an MP. She could not take any cabinet position and there would be plenty of colleagues who would gain power and authority. Salmond would wield power from behind the throne.

  18. KiwiMike says:


    Well said a much better and informed reply than the ridiculous article.

    Foe almost 300 years English MPs have had the say over Scottish and Welsh affairs.
    Now that some Scottish MPs ‘may’ have an influence on affairs of the UK, (which many in England might find pretty good), the establishment and newspapers are raving like it’s Armageddon.
    Few in the South of England have ever given Scotland or the ‘Union’ a second thought.
    To them the UK was England. Many hardly knew that 2007 was the 300 anniversary of the 1707 Union or cared.
    I grew up when the Union ‘Jack’ (as it was called then) was considered world wide as the English flag.

    Can’t the English Corporate media understand why the SNP are so popular in Scotland.
    Because they are not led by what many would considered a group of privileged public school boys who if one watches Parliament, behave as such.
    What is it 19 Prime Ministers from Eton? Either it is the greatest school in the world (apart from the dress sense) or there’s something wrong with the system.

    When I read articles like this I just wonder how, we in New Zealand can exist as a sovereign nation?
    Remember that small countries have a better quality of life than some larger ones that won’t be mentioned.

    Most prosperous countries are: Belgium, Denmark, Finland, Liechtenstein, Luxembourg, Netherlands, New Zealand, and Switzerland.

  19. Heidstaethefire says:

    what about the angel of death, Sam? When does the angel of death come to smite the first born? And will there be plagues of frogs and boils? ( I like the frogs)

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