One sobering analysis suggests Holyrood may have no more financial autonomy under independence than under devolution
As soaring patriotic narratives go, a promise that Scottish independence would give Holyrood "access to a suite of economic levers" would hardly be heart-stirring stuff, even if accompanied with a skirl of the pipes – which it wasn't.
Yet the ugly phrase resonated throughout a 200-page publication from the Scottish government last week, whose main thrust appeared to be the all-but-circular argument that independence is a good idea because it would give Scotland more powers.
If the Scottish public is to be convinced to take a leap in the dark and opt for full independence, the Scot Nats surely need to prove, first, that they could use that suite of levers to create a distinctive and successful economy, and, second, that the constraints of whatever financial deal they can strike with the rest of the UK would give them enough room for manoeuvre to yank those levers in the first place.
On the first point, last week's publication – whose title, Building Security and Creating Opportunities, could have been lifted from one of Gordon Brown's vainglorious budget red books – was less than inspiring.
It contained plenty of entirely justified barbs about the UK's economic model: regionally imbalanced, highly unequal, too dependent on financial services. But that's a diagnosis shared by many, including the chancellor of the exchequer in his more enlightened moments, and there was little evidence that the Scottish government yet has a coherent alternative in mind.
There were a few tantalising hints of how the country's distinct political leanings might allow future Scottish governments to create a different corporate culture: by using the tax system to tackle inequality and legislating for improved pay and conditions and more worker involvement in corporate decisions, for example.
And lest big employers be put off this rather lefty-sounding script, the document also envisages future administrations using Irish-style corporation-tax cuts to reel in investors – though given that the coalition is already slashing the UK rate from 28% to 20% by 2015, the SNP would have to be aggressive about it.
Boosting productivity is another, hazier, aim. Launching the document, Alex Salmond pointed out that a 1% improvement could create 23,000 jobs in the long term. But there was little sense of how that goal could be achieved. Simply deriding Westminster's one-size-fits-all approach is not a convincing enough argument in itself.
More importantly, another document published in Edinburgh last week, this time by the Institute for Fiscal Studies, underlined the fact that, in practice, future Scottish governments may find they have far less scope for radical policies than the nationalistic hoopla would imply.
The IFS suggested that even under the most optimistic scenario it could conjure – a flood of eager migrants, a 2.2% improvement in productivity, a sweetheart deal with London over Scotland's share of the national debt and higher-than-expected North Sea oil revenues – the country would still face a long-term fiscal gap – what in Brown's day we used to call a black hole – worth almost 2% of national income. For illustration, that would translate into a thumping eight-percentage-point permanent rise in the income tax rate.
The rest of the UK faces a funding gap too, on the latest long-term assessment from the Office for Budget Responsibility: many of the same factors, including an ageing population and declining oil revenues, are relevant to both. But the shortfall in Scotland appears to be more severe.
These calculations would form the backdrop for negotiations between Scotland and the rest of the UK on the "fiscal sustainability agreement" governing the putative "sterling area" proposed by the SNP, which will allow Scotland to keep the pound.
Westminster may well respond with a flat "no", as Scottish secretary Alistair Carmichael suggested last week; but even if negotiations get under way, London's politicians will have fresh in their memories the turmoil across the Channel in the eurozone, which saw fiscal – and banking – crises in some struggling countries drag every member of the single currency area into the mire.
Just as all eurozone states have been forced to sign up to far more intensive scrutiny of their public finances in a bid to prevent them straying from the path of fiscal righteousness, London is likely to try to impose firm discipline on Scotland, to avoid the risk that it ends up bailing out either Edinburgh, or its banks. As Alistair Darling put it last week, "the rest of the UK could veto any Scottish government proposals in relation to tax, spending and borrowing… That is what a currency union is."
Meanwhile, ratings agencies and bond investors, who bear deep scars from the eurozone debacle, may well decide to charge the fledgling state a premium to borrow, unless finance minister John Swinney strikes a very convincing pose as an iron chancellor. Ironically, then, Holyrood might end up with no more financial autonomy under a complete divorce than under some form of enhanced devolution.
The Scots can rightly argue – though perhaps no more so than other de-industrialised parts of the UK – to have been sorely neglected by the thrust of economic policy over the past three decades. But more than 10 years after production from the North Sea peaked, and five years after much-prized Royal Bank of Scotland fell into the arms of the taxpayer, this seems a very risky moment for Scotland to seek its fortune all alone.