Bailout's Toll Is Higher in Scotland

By Kevin Sullivan
Washington Post Foreign Service
Thursday, October 16, 2008

LONDON, Oct. 15 -- Scottish independence has been dealt a blow by the global financial crisis.

The massive bailout of banks has been widely received as welcome and necessary across the United Kingdom. But it has not been lost on Scots that the largest shareholder in Scotland's two largest banks is now the British government.

And that government, maddeningly for those who believe Scotland's 5 million people would be better off on their own, is based in London, in the heart of Scotland's rival sibling, England.

"They now look pretty silly," Brian Wilson, a Scot and former Labor Party member of Parliament, said of independence campaigners. "In the long term, when a mature judgment has to be made about independence, this episode will be remembered."

Independence from the United Kingdom is the driving force behind the political party currently in power in Scotland, the Scottish National Party, or SNP. Polls show that perhaps 25 to 30 percent of Scots support the idea.

Prime Minister Gordon Brown, a native Scot but an outspoken advocate of keeping Scotland in the U.K. fold, seemed to go out of his way Tuesday to tweak advocates of independence, especially the SNP.

Brown said the $65 billion bailout of the Royal Bank of Scotland and the bank formed by the merger of Lloyds TSB and the Halifax Bank of Scotland (HBOS) proved that the United Kingdom was "stronger together."

"We were able to act decisively with 37 billion pounds; that would not have been possible for a Scottish administration," said Brown, whose own political fortunes have been boosted by his handling of the crisis.

Others have pointed out that the bailout for eight major British banks -- including capital for banks and government loan guarantees -- is worth a total of almost $700 billion, which is about five times Scotland's annual gross domestic product.

Brown particularly seemed to taunt Alex Salmond, the SNP chief and head of the Scottish government, who has said he wants an independent Scotland to be part of an "arc of prosperity" stretching from Iceland to Ireland to Norway.

The SNP Web site speaks admiringly of Iceland as "the sixth most prosperous country in the world," words that were written before last week's massive banking and economic crash, which nearly bankrupted the country.

"We've seen the problems in Iceland; we've seen the problems in Ireland. We were able to put the whole strength of the United Kingdom's resources behind these two banks" in Scotland, Brown said, provoking an irritated response from Salmond.

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