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Time to pause for reflection in referendum war of words

First the good news.

Unemployment is down in Scotland again by 18,000 and stands at 6.8 per cent. Just reflect on that for a moment. I was last week interviewed by a Spanish journalist, here for the referendum, who described the despair in his country at unemployment, which has recently topped an astonishing 25 per cent. In Spain, 56 per cent of young people are out of work. "You do not believe how lucky you are," he said, shaking his head. Point taken. We need a bit of perspective, a pause for reflection in the referendum propaganda war.

There is even some evidence that the labour market, the ability to create jobs, is actually stronger in Scotland. The Scottish Government is never quite sure how to spin this since, of course, a large part of the case for independence rests on the perceived failure of the Scottish economy to thrive while remaining part of the UK. The SNP tend to take credit when things are going well while blaming London when they don't.

There is nothing wrong with that, of course; it's just politics. The other lot do it too by suggesting that Scotland would an economic basket case under independence. I was saddened, not angered, to hear the novelist JK Rowling yesterday repeating her view that however "appealing" self-government might sound, it would never work because Scotland would never be able to make it on her own, surrounded by "three bitter neighbours". In or out of the UK, Scotland's main problem is a psychology of defeatism.

The truth is that the industrial challenges facing Scotland would be largely the same in or out of the UK. The question is one of political will to address them. There is consensus about the nature of these problems. Scotland has an ageing population and volatile oil prices, as the Institute for Fiscal Studies reminds us on an almost monthly basis. Scotland is a provincial economy that suffers from a lack of private-sector investment, over-reliance on public-sector employment, out migration of skilled labour and poor infrastructure (the absence of proper broadband outside the Central Belt is a disgrace). Many of the solutions would be possible within the framework of the UK if there was still a regional policy and if the UK state had the determination to address the problems.

Not even the SNP really believe any more that corporation tax is a silver bullet, or that Scotland's tax system could alone deal with the structural problems of the Scottish economy. It might help around the edges but a few pence up or down in business taxes is not going to make much difference either way. Some 20 years ago, Ireland made a great success of undercutting costs in older European countries and attracting tech companies from America, but it was starting from a much lower economic base than Scotland. And, anyway, Scotland doesn't want to become just a tax haven for the Googles and Apples avoiding fiscal responsibilities in their countries of origin.

Alex Salmond's prescription for the "reindustrialisation" of Scotland had relatively little to do with independence as such. He calls for a "massive export drive with the number of overseas trade promotion offices increased from around 20 to 70 or 80". Well, that wouldn't do any harm. He promises "a national plan involving education, a greater commitment to gender equality, skills development, improved access to finance ... and a partnership approach to industrial relations". Those of us with long memories will see remarkable similarities to Labour's national plans of the 1960s and 70s; which doesn't mean they wouldn't work.

Of course, Scotland has many economic strengths already. One of the by-products of the referendum debate has been the discovery that Scotland isn't half as badly off as it thinks it is, despite the baleful influence of the "dark star" of London. GDP per head in Scotland has consistently been higher than in the UK as a whole over the past 30 years and, while there may be debate on exactly where Scotland is located on the OECD wealth-of-nations index, we all know that it is well up there. Even David Cameron accepts that Scotland could become a successful independent country.

It has become a cliche to refer to Scotland's five world-class universities, its vast renewable energy potential, its tourism and food industries, financial sector, life sciences and so on. But that doesn't make the cliches any less true. It's not entirely clear why Scotland has been doing so well, though it cannot be unconnected with the existence of the Scottish Parliament, which has helped re-energise public life in Scotland. Being in a monetary union with the rest of the UK helps, as does being in the European Union.

And, of course, there's the oil. It won't go away, despite attempts by Unionists to suggest that Scotland is somehow cursed by its hydrocarbon wealth. Forget fracking. There is still vast potential in the North Sea and also in the largely unexplored seas to the west. The UK Government is eager to get its hands on the £200 billion of potential revenues forecast by the Wood Report in February. Whisper it, but what the UK Government is doing to bolster the energy sector with a new tax regime is pretty much what the Scottish Government would also do.

Indeed, many of the solutions offered in the White Paper on independence could also be applied within the context of the UK. Low-cost childcare, for example. Scotland needs more immigration, not less, and there is no logical reason why the UK could not amend its immigration policies to suit the needs of the Scottish labour market, though a Tory-dominated UK Government, running scared of Ukip, is unlikely to look kindly on special immigration policies for Scotland.

In trying to make the case for independence, it is a mistake only to bang on about the economic benefits of self-government; what is done with the benefits is much more important. Scotland is already a rich country by any reasonable standards but there remain unacceptable social problems, insecurity, low pay, growing inequality and intractable structural difficulties linked to remoteness from political decision-making in London. This is why I believe the Commonweal approach to the moral economy is more productive than rhetoric about an "industrial renaissance".

It is the choices Scotland could make to improve quality of life that are the great opportunity of self-government. It might mean somewhat higher taxes but this would bring greater security of employment as well as better public provision. It would mean wealth redistribution to promote economic stability, not to punish the rich, with industrial policy linked explicitly to environmental objectives. The Commonweal approach is egalitarian but not class-based; socialist without being centralist or anti-business. In many ways, the Commonweal is a revisiting of Labour's "stakeholder" mutual capitalism from the 1990s. But that doesn't mean it is out of date; just that, given the configuration of power in UK society, it is almost inconceivable to see it implemented this side of independence.

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