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Ideas of fairer society tested when it comes to the crunch

There is often a gap between how nations perceive themselves and how they actually are.

The United States is the starkest example, where a strong belief in the American Dream still holds firm in the absence of any supporting evidence.

In Britain, too, there is a sense of toleration and fair play that often does not stand up to much scrutiny.

In Scotland, meanwhile, there is a strong - even dominant - belief the nation (currently stateless) is more egalitarian and committed to social justice than England or the rest of the UK. That this is not supported by social attitudes surveys or a lot (by no means all) of public policy does not prevent that belief permeating the media, political rhetoric and much of public life. It is felt to be so and therefore it is, and those who feel it the strongest usually probe the least.

As the academic David Donnison wrote in an otherwise thoughtful article last week, the Scottish "political class" assume that proposals for new policies "should help to create a fairer and more equal society".

The same, to a large extent, is true of New Zealand, where I've spent the past couple of weeks enjoying what is often referred to as the Kiwi way of life, a combination of the great outdoors, a high standard of living, equality of opportunity, generous social welfare and racial harmony. As with Scotland, that this belief is widely held does not make it true. And in election year inequality, not just between rich and poor but also between Maori and Pakeha, has become a live issue.

The Labour Party, under the fledgling leadership of David Cunliffe, is perceived to have swung to the left in highlighting some uncomfortable truths, and the centre-right National Party, led by the plausible and easy-going Prime Minister John Key, is busy depicting its principal opponents as socialist throwbacks who risk wrecking the economy recovery. The obvious parallels struck all the politicos I met in Wellington cafes.

But here, as in Scotland, the discussion of "inequality" is largely rhetorical. When it comes to proposing tangible ways of reducing inequality, New Zealand's politicians are cautious, unimaginative and acutely aware victory rests in the centre ground, among voters who are aspirational and (perceive themselves to be) hard working. In other words, they aren't terribly keen on high taxes or generous welfare, which is a problem given that both are reasonably good ways of tackling inequality.

When I asked one Labour MP if the electorate was as engaged with the issue as New Zealand's political classes, he flashed me a knowing look. It was, he said in so many words, a case of determining how much voters would tolerate; how leftward they could be nudged in policy terms.

The same, I concluded cynically, is true in Scotland, where the commitment to social justice and reducing inequality is largely rhetorical. In a typically thoughtful speech at St Andrews last week, the Deputy First Minister Nicola Sturgeon explored familiar themes of "fairness" and the oft-quoted factoid about the UK being "one of the most unequal countries in the developed world".

But when it came to proposing means by which independence could reduce inequality, her eloquence dried up. With independence, she said, Scotland could build a welfare system "that supports people who work; provides support for people who cannot work; and fosters a climate of social solidarity", which of course could mean pretty much anything.

The "bedroom tax", meanwhile, would be abolished, taking Scotland back to 2010 in equality terms, and the Universal Credit (which most people accept will increase benefits available to those getting back into work) abolished. The minimum wage would be increased "at least in line with inflation" (although reports suggest the UK Coalition is considering a much larger increase) and, more generally, a "joined-up approach to policy".

Yet when practical proposals do surface they are largely ignored. Last week The Herald reported the conclusion of education expert Brian Boyd that "placing requests" in state schools had increased inequality (for, generally speaking, only middle-class parents take advantage and benefit). In response, the Scottish Government said it was committed to parental choice (which, ironically, the SNP and Labour had staunchly opposed when introduced by Mrs Thatcher).

Similarly, last September the academics David Bell, David Comerford and David Eiser challenged the Scottish Government's assertion that only under independence could inequality properly be tackled by looking at three possible policy changes, to welfare spending, personal taxation and council tax, and the impact each would have on inequality. Not only did they conclude that even under the status quo ministers could "achieve some reduction in inequality", but that with full control of tax and benefits, tackling inequality would still require "radical policy change".

In other words, substantial benefit increases and a greater number of individuals paying upper-rate income tax. Such radical changes, concluded the academics with considerable understatement, would be "politically difficult". Re-acquaint yourself with the White Paper and you'll see the SNP has no intention of doing any of these things. Council tax would remain frozen, welfare tweaked but not made significantly more generous and income tax kept in line with the rest of the UK.

Rather the SNP and Alex Salmond remain convinced they will somehow produce the political alchemy of reducing inequality while pursuing otherwise free-market economics, in other words a sort of Tartan Third Way. History doesn't offer much encouragement in this respect. Indeed, when New Zealand Labour Treasurer Roger Douglas revolutionised the country's economy in the mid-1980s, he also believed it was the only way Kiwis could again "lead the world", "both in standard of living and social justice".

Rogernomics reinvigorated the economy, but as a means of improving social justice it fell far short, thus the aforementioned debate. Not only did Labour start trimming a welfare state established long before the mother country's, but when National returned to office in 1990 it had political consent to chop more considerably. Only Labour's pursuit of a nuclear-free New Zealand, a policy continued more recently by Helen Clark, enabled the party to maintain some veneer of its former radicalism.

The paradoxical nature of this approach is wilfully ignored by many on the left sympathetic to the independence case, and zealously embraced by certain London-based commentators who dearly want to believe the SNP has found a way of making left-wing policies popular. Another part of the problem is the notion that inequality is somehow an English problem. At a recent dinner I heard a senior SNP minister claim Scotland's was a "horizontal society". That he made this point surrounded by privately-educated financiers in an expensive restaurant was ironic.

Most of those listening would have balked at paying a little more tax, forking out for council tax that reflected the value of their homes and funding a more generous welfare state, which is, of course, why the SNP - in common with every other major party - avoids genuinely radical policy proposals like the plague. Genuinely radical policies don't win elections, or independence referendums.

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