When Parliament reconvenes next week, there will be many new faces among the throng of MPs being sworn in. For the first time, with no fewer than 56 representatives, the third largest party in the House of Commons will be the SNP. What will that mean for the City’s relationship with Westminster?
On the one hand, there will be relief. Relief that the Conservative Party has won an outright majority – meaning the scenario of an interventionist Labour administration, or indeed any form of coalition including the SNP, has been avoided.
On the other hand, there will be concerns. Primary among these is the UK’s relationship with Europe, of course. But lingering not far behind is the prospect of a more complex operating environment for those banks, asset managers, insurers and others operating across the UK market.
The City has well-developed relationships with Westminster’s established powerbrokers, but less experience working with Scottish nationalists. Some might feel concerned that a party with such populist support, which has won hearts and minds in traditionally working class, left wing areas, will now be so prominent in Westminster politics.
And make no mistake, influential they will be. The SNP was already represented on the Treasury Select Committee and will now be seeking places on the Business, Energy, and Defence Committees among others.
So what exactly can the City expect?
First, the SNP group will not be a destructive force at Westminster, as some commentators have suggested. They may not believe in the institution they’ve been elected to, but under leader Nicola Sturgeon, her deputy Stewart Hosie MP, and Westminster leader Angus Robertson MP, they respect Parliament and will seek to play a constructive role in holding the government to account.
They recognise the need to be responsible and will speak to business to understand the matters of state they now have to scrutinise. The party’s Holyrood track record shows that it is keen to work with business in order to support economic growth, and so doors should be open both ways.
Second, the new caucus of SNP MPs contains some experienced businesspeople like former Deutsche Bank executive Ian Blackford and ex-Standard Lifer Michelle Thomson, while economist George Kerevan, lawyers Joanna Cherry QC and Tasmina Ahmed-Sheikh, and of course former first minister Alex Salmond bring intellectual rigour. They, and others in the party, can be allies for business.
Salmond will inevitably be a major figure, possibly chairing a Select Committee such as Energy, which would meet his own political interests and would also give Scottish energy businesses a voice at Westminster, albeit not in government. But make no mistake. Sturgeon is the SNP leader, so overlook her at your own risk.
The SNP will seek early implementation of the Smith Commission recommendations for further devolution and additional powers over welfare, employment policy and taxation – possibly including scope to reduce National Insurance rates to stimulate job creation in Scotland. The Prime Minister pledged on Friday to stay true to his word on implementing the devolution all parties agreed last year, but his own Scottish colleagues view Smith as a floor rather than a ceiling.
Underpinning all of this is a recognition that the SNP needs to establish and maintain its credibility at Westminster, especially on business and economic issues. The party needs to assure the Scottish electorate and the international markets that Scotland is in safe economic hands – and will continue to be so as devolution is extended or if full fiscal autonomy is ever achieved.
There is also an onus on the new UK government and the Scottish government to show they can co-operate constructively – as the previous UK government did on most matters outside the constitution. The two governments are more diametrically opposed than before, but – as an increasing number of business regulation and policy issues straddle the border – neither can afford to be dragged into continual dispute. They need to demonstrate that the UK remains a viable and attractive marketplace for investment.
And what of the “i” word? A second independence referendum did not feature in the SNP manifesto and Sturgeon has carefully avoided committing to one during the campaign, not least because her party cannot afford to lose another. The SNP would prefer to hold a future referendum at a point of optimal conditions for a Yes vote, but the huge surge in MPs and votes alone doesn’t equate to that.