The SNP administration in Edinburgh suffered a humiliating defeat on Wednesday 28th January when their £33bn budget proposals were rejected by the Scottish Parliament, with the Greens of all parties holding the balance of power. The SNP government spent a frantic last day or two before the vote throwing money around as sweeteners for any party who might vote with them. Incidentally, this is money which comes mainly from the English taxpayer, which is presumeably why the Nats are so happy to waste it.
The Conservatives gained a £100m concession in return for voting with the administration, while the Greens, with a lowly two MSPs, made ludicrous demands, and then voted against the budget anyway because the demands were only partially met. With the budget defeated, both the SNP and the Conservatives are now casting the blame at Labour. I suspect this is more for public consumption than for the love of truth.
What happens next? The vote for the second attempt at passing the budget is scheduled for Wednesday 11th February, although it is possible that the SNP will wish to bring it forward. If the budget passes the second time (most likely) then it will simply be an embarassing blip for the SNP. If it fails, they have made it quite clear that Alex Salmond will resign as First Minister. Unfortunately such a respite would only be brief. MSPs would have 28 days to choose a new First Minister, failing which there will have to be an early Scottish Election. This is the SNPs trump card. They know that another election would favour them, probably giving them 3 or 4 extra seats, while Labour could be looking at losses of 6-8 seats. This would be a dream come true for the SNP, and a nightmare for Labour.
I very much doubt it will come to that. The likelihood is that the Greens will be thrown an irresponsible sweetener to bring them onside, while Labour will be too afraid of an election to try calling the SNPs bluff. With Labour abstaining and the Greens changing sides, only the LibDems would be left opposing the budget, which will probably have passed comfortably within two weeks. An election would be attractive for the SNP and Conservatives, who could both be looking at gains, but from a Conservative point of view it could be one year too soon. If the SNP government were to fall early in 2010, I believe the Conservatives would be the main beneficiaries at an ensuing election.