THE FINANCIAL MELTDOWN: Debate of the week

NO. By Jim Murphy, secretary of state for Scotland

IT is two weeks since I became Secretary of State for Scotland. In that time I have emphasised I will work with anyone who puts Scotland's interests first. I hosted a meeting with the SNP finance minister John Swinney and Cosla on the Icelandic banking crisis. I have called a meeting for this Tuesday with the STUC, the first minister and the CBI in Scotland. I have started the way I mean to continue.

But in the past fortnight we have also seen the two competing philosophies about Scotland's future tested. The vision that Scotland is stronger in the UK, one of the largest economies in the globe has been strengthened. The idea that Scotland would be better off going it alone has fewer friends. It's because I love Scotland so much that I want it to be in the United Kingdom to help ensure our prosperity in good times and underpin our security in bad times.

The UK government has promised support of up to £500 billion to recapitalise banks and to underpin bank inter-lending. Of this, £37.5bn has gone to recapitalise Royal Bank of Scotland, HBOS and Lloyds TSB. To put that figure into context, the entire budget of the Scottish government is £30bn a year.

Independent experts estimate that the total support for Scotland's banking system when support for inter-bank lending is added amounts to an incredible £100bn - equivalent to the whole of Scotland's annual GDP. Very few serious commentators believe that Scotland on its own could have rescued our two great banks. The SNP's case for independence is in tatters.

And contrast this with the heartbreaking predicament of some of our nearest neighbours. Ireland is in recession and now with an emergency budget raising taxes and cutting child benefit; Iceland on the cusp of bankruptcy. Norway's oil fund has in recent months lost all the profits it has made in the last decade. Until now these were the economies that set SNP pulses racing.

It is a matter of pride for many Scots that the actions taken by Scottish politicians within the UK are leading the world. Paul Krugman, who last week won the Nobel Prize for Economics, said: "Mr Brown and Alistair Darling have defined the character of the worldwide rescue effort, with other wealthy nations playing catch-up."

With authorities in America and Europe following his lead, the prime minister has rightly turned his attention to reforming the international framework for financial regulation. I am in favour of markets but the weakness of unbridled markets has been exposed to all and must end.

The UK government is working hard to help households. The interest rate cut will lead to lower mortgage bills for the majority. Families are already seeing lower petrol costs and energy prices are expected to fall. We are cutting taxes by increasing tax allowances. We are putting money in the pockets of pensioners by increasing the Winter Fuel Allowance.

This crisis does prove the SNP right in one respect however: Scotland does indeed "sit at the heart of one of the wealthiest parts of our planet." It's called the United Kingdom.

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YES. By John Swinney, cabinet secretary for finance in the Scottish cabinet

THE Unionist case that Scotland cannot and should not be allowed to make its own way in the world has always been, at heart, a fundamentally dishonest one.

It is as patronising and insulting as it is ridiculous. And in more recent times it has had to fall back on those old political standbys of fear, smear and misinformation, in the absence of hard facts and cold logic.

Now, however, the Unionist case has plumbed new depths. Not content with simply insulting the people of Scotland, we are presented with the prime minister of the United Kingdom openly belittling the achievements and successes of some of our closest neighbours and friends.

Gordon Brown and Scottish Secretary Jim Murphy talking down the likes of Ireland and Norway is the ultimate in foot-in-mouth diplomacy.

And in the case of the current occupant of Number 10 it is also an act of breathtaking hypocrisy: it was Gordon Brown who, for an entire decade as Chancellor, presided over the age of irresponsibility in the City which has now ended with such a violent shock.

Let us remember that the current turmoil sweeping the financial system happened on the UK government's watch and happened within the union.

And let us also note that it is actually some of the bigger nations and economies that have fared worst in this recent crisis: the United States has seen 17 banks laid low; Japan, Russia and Germany have also been hit, their size offering them no special guarantees or protection.

But let us return to the embarrassing sight of Messrs Brown and Murphy doing their utmost to trash the reputation of the likes of Norway and Ireland. By seizing on the manifest and particular problems of Iceland, the Unionist tactics of smear and fear have now lapsed into outright slander.

Ireland may have moved into recession, but it comes after years of spectacular growth that has left the Irish 40% better off per head than the UK. They also had the power to act quickly to bring stability to their banks by guaranteeing all deposits.

Norway has a £200 billion oil fund, started in 1995, that guarantees the nation's prosperity forever. If only Scotland's natural resources were used so responsibly.

The age of irresponsibility, sadly, has also given us the mother of all foreign policy disasters: the illegal invasion of Iraq. The financial costs of that debacle are gigantic, the human ones simply incalculable.

And as with finance, so it is with foreign policy - it takes our small independent neighbours to show us the way. Norway has been a shining light of hope in its selfless and unstinting efforts to act as an honest arbiter and go-between in trying to solve some of the globe's most intractable conflicts, including in the Middle East. That is the kind of role Scotland should aspire to.

Norway, along with Denmark, Finland and Sweden, is predicted by the IMF to continue growing economically this year and next. The UK is tipped to move into recession.

The age of irresponsibility has ended. The new age must see Scotland take responsibility for itself with independence.