The House of Lords Economic Affairs Committee demands clarity on independence.

The people of Scotland demand clarity, as they made clear in their responses to the Electoral Commission's consultation on the independence referendum. But clarity is the very last thing they can expect, because politicians, Unionist and Nationalist, deal primarily in propaganda. And the Lords are as guilty of this as Alex Salmond.

The latest report from the cross-party Lords Economic Affairs Committee recycles the claim that "while RBS was too big to fail for the UK it would have been too big to save for Scotland alone". This ignores the fact that RBS is also England's biggest bank, and if a joint rescue had not been mounted, England's financial system would have been destroyed as assuredly as Scotland's by the collapse of HBOS and RBS.

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In defence, the committee says there is "not enough information" to make any reasoned judgments, but that doesn't stop it quoting in its summary and recommendations that "up to 25,000 defence jobs would be lost". In fact, fewer than 1500 are directly involved in nuclear defence and it is not at all clear that even all of those posts would go if Scotland abandoned Trident.

Clarity is very much in the eye of the beholder. Possibly the worst piece of obfuscation is over Scotland's debt levels after independence. The report says Scotland's debt upon independence would be 123% of GDP "if future liabilities like public sector pensions are taken into account". But if future unfunded liabilities of the UK state are taken into account, such as public sector pensions, bank bailouts and PFI, UK liabilities would be more than 400% of GDP, according to bodies such as the Institute for Economic Affairs. Their lordships have not compared like with like. An independent Scotland would have equal or lower debt than the UK state – indeed, the Lords calculate the figure after oil as 62%.

Similarly, the assessment that economic policy would be unstable because of the unpredictability of the price of oil ignores the fact that the UK has been bailed out by oil for most of the past 30 years while the price has varied between $10-130 a barrel. By any conceivable calculus, the £1.5 trillion in the North Sea would constitute an extraordinary budgetary support for an independent Scotland of five million people. Countries such as Finland survive very well without any significant natural resources. It takes sophistry of breathtaking proportions to present Scotland's oil wealth as an economic burden rather than a strength.

The cross-party committee chaired by the former Tory Cabinet Minister, Lord MacGregor, appears to accept that after independence England and Scotland should retain a "common single market and a single currency" – which represents something of a breakthrough, since only a year ago spokesmen for the Chancellor were suggesting Scotland might be denied use of the pound. However, the Lords committee muddies the waters by saying it would be "entirely fanciful" for Scotland to have representation on the Monetary Policy Committee of the Bank of England. I don't see any grounds for making such a sweeping statement. There is an argument that, even under the present constitutional arrangements, there should be regional voices heard on the bank's key committee which decides interest rates.

But the logic falls down on its own terms. If there is a single currency after independence, which it concedes is the only sensible solution, then there would be a much stronger case for representation, as is the case with the European Central Bank institutions which represent all the members stakes of the European single currency zone. It would surely be unacceptable for decisions in a monetary zone to be taken without any representation from the countries affected by them.

Inevitably, their lordships question Scotland's future in the EU, warning there is "no precedent" for such a transition. There is equally no precedent for a country being expelled from the European Union after being subject to European law for 20 years. Such an act would be unconscionable since the EU is founded on the principle of self determination for all nations.

There would be renegotiation, of course. The committee says this "might take years". But the UK Coalition Government's own legal expert, Professor James Crawford of Cambridge University, has agreed the SNP's timetable of 18 months for this renegotiation is "about right". And this would involve the UK Government as much as Scotland since matters such as the residual UK's contribution to the European budget would have to be renegotiated.

Perhaps I'm naive, but I expected rather more from the House of Lords than this. What is clear beyond doubt, and recognised in one way or another by all the Unionist parties, including the Scottish Tories since Ruth Davidson's U-turn, is that the present constitutional arrangements are not working, either for Scotland or England. The current arrangement, under which Scotland remains in a state of economic dependency is, as the Calman Commission cogently argued in 2009, unacceptable on grounds of transparency, fairness, democratic accountability and good fiscal governance. A parliament should raise the money it spends.

Equally, the UK cannot just muddle along unreformed while there is a new competing seat of democratic legitimacy. We no longer live in the unitary state of Walter Bagehot, and the means by which this could be addressed are under the noses of their lordships, since the unelected House of Lords is supposed to be undergoing reform to turn it into democratically elected upper chamber. But no one seems to see the obvious opportunity to create a Senate in which federal parliaments like Scotland could be represented.

Certainly, there is vagueness in much of the SNP's independence prospectus as we understand it so far. There are questions about whether a country can truly be called independent if much of its economic regulation and monetary policy is determined by another sovereign state. What constitutes the "social union" with England after independence, and would common welfare and pension policies not imply further co-operation at UK level? How long would it take to remove Trident from the Clyde if Scotland, as Alex Salmond insists, wishes to remain part of Nato? But these aren't the questions the Lords examine. It is the failure of Unionists to generate a positive vision of a reformed Union that is their greatest weakness.