Brown credit crunch success reaps rewards in Glenrothes poll

The bailout of Scottish banks has been seized on by Unionist parties who have been weighing in against first minister, Alex Salmond's plans for Scottish independence this week.

In the cauldron of the Glenrothes by-election, Labour, the Conservatives and the Liberal Democrats have been queuing up to highlight the Union's role in saving Scotland's ailing banking system.

Noting the £1 billion discrepency between the £32 billion UK government investment in Halifax Bank of Scotland (HBOS) and Royal Bank of Scotland (RBS) and the £31 billion Scottish budget, Gordon Brown has been thrilled to point out the benefits of the Union to Scottish voters, while Labour MPs have been similarly excited by the chance to attack the previously surging SNP.

Salmond had previously identified an “arc of prosperity” stretching from Denmark and Norway to Ireland and Iceland – countries he chose as models of successful small economies. However, with Icelandic banks facing bankruptcy and recession-hit Ireland—an economy previously revered as the "Celtic tiger"—passing an emergency tax-raising budget, the arc is now described by many as one of insolvency.

Hitting back through the SNP website this week, Salmond argued that "far from making independence unviable, the banking crisis has shown exactly why it is needed.

"The US, the biggest and most powerful economy on the planet, has seen 17 of its banks laid low by the crisis. Germany, Japan and Russia are also hurting – size has offered them no immunity or protection," he added.

The much-reported failings of the world’s economic heavyweights is, according to Salmond, not matched across every European state: "Norway is forecast to keep growing economically this year and next. So are Denmark, Finland and Sweden – all smaller European nations. The same IMF forecast predicts that the UK will move into recession."

However, Gordon Brown's handling of the economic crisis has allowed Labour to leapfrog the SNP in a recent YouGov poll of Scottish voters, climbing six points to 38 per cent while the nationalists have dropped five to 29 per cent.