Mary Ann Sieghart: Time to call the SNP's bluff

Governments have offered them more money, begged them to stay and tolerated their tantrums. To what avail? No gratitude

If you've either been a stroppy teenager or a parent to one, you'll recognise the pattern. Teenager screams, "I hate you. I wish I could leave home!" Parent tries to mollify teenager, avoids confrontation and hopes for things to improve. They don't.

Sometimes the best reaction is a calm, "You want to leave home? Feel free." Then, instead of raging against parental constraints, the teenager contemplates how awful it would be to find a job, pay rent and have no-one to cook the meals or do the laundry.

For too long, the Westminster political establishment has played the role of pusillanimous parent to stroppy Scottish nationalists. Governments have offered them more money, begged them to stay in the family and tolerated their tantrums. To what avail? There's been no gratitude, just further demands.

Now a couple have decided to call their bluff. Last week, the Lib Dem Scottish Secretary, Michael Moore, asked six difficult questions of the SNP, including what currency an independent Scotland would have and who would pay for future pensions. The next day, the Lib Dem Chief Secretary to the Treasury, Danny Alexander, told his Scottish audience that, if they had been independent, their deficit would now be one of the largest in Europe, and the cost of bailing out the Royal Bank of Scotland and HBOS would have dwarfed their entire budget.

That it was Lib Dems who decided to take the fight to the SNP was no accident. Both Labour and the Tories in Scotland are busy choosing new leaders after their dire performances against the SNP in May's election. But all three parties are facing a wipeout in Scotland at the next general election on their current ratings. The latest Ipsos-MORI survey shows the SNP up a massive 22 points since the 2010 election. That would give them 36 MPs (up from six), while Labour would fall from 41 to 22, the Lib Dems from 11 to one, and the Tories from one to none.

Someone needs to call the SNP's bluff, and actually, it's the Conservatives who have the least to lose. That may be one reason why Murdo Fraser, the strongest contender for the Scottish Tory leadership, said yesterday that if he won, he would reinvent the Scottish party – giving it a new name and distancing it from Westminster. He understands that the brand needs to die and be reborn to have any chance of winning back the right-of-centre voters who have defected to the SNP.

It wouldn't be that revolutionary a move. Until 1965, the Conservatives in Scotland were known as the Unionist Party. They sent no representatives to the party conferences in Blackpool and Brighton but had their own conference instead. It may be a coincidence, but in 1955, the Unionists won 50.1 per cent – the only party ever to win a majority of the Scottish vote – and 36 seats.

Ever since, the Tories have moved in a centralising direction, while Scotland has yearned for more decentralisation. No wonder they lost popularity. Now they have a chance not only to go with the flow but also to sort out the anomaly of Scotland's finances.

Ever wondered how Scotland can afford free university tuition, social care and prescriptions? It's because its funding is based on an anachronistic formula devised by Joel Barnett, Labour's Chief Secretary to the Treasury, in 1978. The Barnett formula was supposed to last only a year.

More than 30 years on, Lord Barnett himself now describes it as "arbitrary and unfair". This week, he plans to put down an amendment to the Scotland Bill, which is going through the Lords, to reform it. According to research at Stirling University, Scotland receives £4.5bn a year more than it would if the distribution were calculated on the basis of need rather than population. So why has the anomaly lasted so long? Any governing party is scared of losing seats if it changes it – but both Margaret Thatcher and John Major kept the formula going and still the Tories lost every seat in Scotland in 1997. Some gratitude.

When the Conservative David Davis chaired the Public Accounts Committee in the late 1990s, he suggested that the Barnett formula should be replaced by the Scottish Executive taking responsibility for raising all the money they spent. They should be given the power to determine their own income tax, corporation tax, whisky duties and most of the tax on North Sea oil.

This would have the benign effect of denying the SNP the chance to whinge about not being given enough money by Westminster. And it would give Scots a reason to vote Tory at Holyrood if they wanted lower taxes. Unfortunately Davis's sensible suggestion was scuppered by the Tory leadership, whose business donors feared higher corporation tax.

A new Anything-But-Tory party could revive this idea as a move to greater autonomy that stops short of independence. It would address the English subsidy grievance: if the Scots want free tuition, they can raise their own tax to pay for it. And it would address the Scottish grievance that they have to rely on Westminster largesse.

To borrow a phrase from David Cameron, what the Scots now need is tough love. Is the Conservative leader brave enough to offer it?