SNP/Labour pact in long-term interests of Tories, says financial paper

A deal between Labour and the SNP would be in the long-term interests of the Conservative Party, allowing it to govern in Westminster “almost uncontested and without much need for coalition” in the years to come, according to a private briefing paper issued by a high profile asset manager.

In an analysis issued to clients of Toscafund, chief economist Dr Savvas Savouri argues a deal between Labour and the SNP would force the Scottish Labour Party to split from the Parliamentary Labour Party, in order to compete with the SNP.

But while leaving the Parliamentary Labour Party would help the Scottish Labour Party north of the border, it would destroy Labour’s ability to win a majority in future UK general elections.

“Only as a party separate from the London leadership can the SLP [Scottish Labour Party] have any hope of credibly fighting the SNP for power in Holyrood, not least when elections are held on May 5th next year. After all, the SLP risks being totally marginalised and/or its members defecting in the wake of a Westminster “pact” with the SNP. As an independent party the SLP will for the first time introduce, a small ‘n’, nationalist rival to the SNP,” the paper reads.

Savouri adds: “For the Parliamentary Labour Party “losing” its strong representation in Scotland – where it has held over forty seats since the mid sixties - would be a structural body blow.”

The paper also predicts renewed calls for the Scottish Conservatives to regain their pre-1965 independence in an effort to win back support in Scotland.

Savouri argues renewed competition facing the SNP in Scotland from a new Scottish Labour Party and Scottish Conservative Party would then push the SNP to break its pact with Labour in order to fight the 2016 Holyrood election.

It says: “For the SNP, the prospect of independent Labour and Conservative rivals in Scotland would hardly be welcome. It will recognise this as the Holyrood elections approach to the point it quickly breaks the ties it might have knotted with Labour in Westminster.”

The paper also argues that, as part of any pact with Labour in Westminster, the SNP would demand further powers being transferred to the Scottish Parliament. This in turn would lead to “English votes for English laws” being established. 

It says: “In effect the SNP will agitate to neutralise the representation of all Scottish Constituency MP’s in Westminster.”

Meanwhile, Savouri argues that a hung parliament would drive UKIP defectors back to the Conservatives.

The paper is based on seat-by-seat analysis carried out by Professor Richard Rose, predicting the Conservatives will win 300 seats, Labour to take 262 and the SNP to increase to 46.