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George Osborne follows example of hero LBJ in calling Alex Salmond's bluff



Chancellor's decision to press for early referendum on Scottish independence reminiscent of bold move on inheritance tax
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Gerorge Osborne is following in the footsteps of his hero Lyndon Baines Johnson as he attempts to call Alex Salmond's bluff. Photograph: Toby Melville/Reuters


George Osborne regards his pledge in 2007 to scrap inheritance tax for properties worth less than £1m as one of his finest achievements. His bold move unsettled Gordon Brown and was the key factor in persuading the then prime minister to abandon plans to hold an early general election.

The government's decision to call Alex Salmond's bluff and devolve powers to the Scottish parliament, on a temporary basis, to hold a binding referendum on Scotland's constitutional future bears the imprint of Osborne. The chancellor, who briefed the cabinet on his plans on Monday, believes that great leaders embark on bold moves which remake the political landscape. That is the lesson he learnt from his favourite political work, Robert Caro's epic biography of President Lyndon Baines Johnson.

But do Osborne's bold moves work? The chancellor doesn't like to be reminded that his inheritance tax pledge worked brilliantly on a tactical basis by spooking Brown. But strategically it left the Tories open to charges that they were only interested in helping the better off. That may or may not have cost the Tories the election. But Osborne's failure to secure a majority means his inheritance tax proposal is unlikely to be introduced in this parliament.

The Osborne move on Scotland looks clever politically. At a stroke he hopes to kill off Salmond's slowly slowly approach in which the SNP would wait as long as possible to hold a referendum. Even then the SNP would maintain its cautious approach by offering voters the chance of supporting "devo max" – greater devolution that just falls short of independence.

But the atmospherics leave much to be desired, according to the Liberal Democrats and Labour. As I reported this morning, there was surprise that Downing Street thought it was wise for Osborne to take the lead in briefing the cabinet at a meeting held at the site of the London Olympics. The chancellor chairs the cabinet sub-committee on Scotland. It is not unusual for a senior cabinet minister to chair such a group. But the Lib Dems and Labour believe it would have been wise to allow Michael Moore, the Scotland secretary, to lead the cabinet discussion. The Lib Dems have 11 Westminster seats in Scotland. The Tories have just one seat.

It may be unfair but the Conservatives remain an utterly toxic brand in Scotland after they governed north of the border between 1979-1997 with an overall UK mandate but without a mandate north of the border. Memories of the poll tax and Margaret Thatcher are still raw. The Tories can say – excuse the pun – until they are blue in the face that the poll tax was not imposed on Scotland first. The Scottish office pressed for its implementation. But the perception is that an unrepresentative government used Scotland as a laboratory.

This background means that the Tories have to tread with care in Scotland, as they are constantly reminded by their coalition partners. The gung-ho approach of the last 48 hours has therefore identified two weaknesses:

• Cameron and Osborne believe that only one UK politician is in their league. That would be the man they refer to as the Master, Tony Blair. This means they have under-estimated the deft touch of Salmond who was named Briton of the Year by the Times last year. Salmond is blessed with a superb brain, is a distinguished economist and has a silver tongue that lands devastating barbs on his opponents. That makes him a formidable opponent, as the late Donald Dewar found out when Salmond overshadowed the then Scottish secretary in the 1997 devolution referendum campaign.

• Cameron and Osborne appear to have little feel for politics beyond England. Cameron is a staunch Unionist. But his attempts to forge an alliance with the Ulster Unionists failed at the last election. The alliance turned out to be a gift to the Democratic Unionists. As leader of a party with just one seat in Scotland, Cameron will have a delicate job in any referendum campaign in Scotland.

Cameron's attachment to the Union shows his romantic side. Osborne, on the other hand, is no romantic. Could he have spotted the electoral benefits for the Tories if Scotland leaves the UK? The Tories would be in power for a generation if Labour lost its substantial chunk of Scottish seats at Westminster.

Osborne probably believes he has embarked on a win win strategy. He either wins by being remembered as the man who kept the UK together. Or he wins by being remembered as the man who kept the Tories in power for a generation.

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