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Independence For Scotland

The most interesting feature of the Scottish elections was the pledge by the Nationalists to cut business taxes. It shows why Scotland and England should both benefit from an independent Scotland.

Representing only 10% of the UK's population, Scotland has long suffered from a dependency culture. While this was dominant, the central aim of politics was to get as much money as possible out of England, either through a heavily biased allocation of expenditure or by claiming exclusive rights to oil revenues.

Whichever route was preferred, it was a world away from the self-help philosophy of Samuel Smiles, which seems, as much for countries as for individuals, to be the long-term winner in terms of economic success. Over the centuries, the achievements of Venice, Holland, Britain, Hong Kong and Japan, compared with the Argentine or Venezuela, suggest that it is an economic advantage to have poor natural resources. This has been so well illustrated in recent years that the debilitating effect of easy wealth on the economies of the Middle East has become known as the curse of oil.

At first, oil enabled the Scottish National Party ("SNP") to call for independence while pandering to a dependency culture. But as hopes fade about the long-term potential of Scottish waters, the clash between independence and dependence has become too blinding to ignore. From being to the left of Labour, the SNP seems to be starting on the long road to Thatcherism.

The current trend towards economic realism is generally attributed to the economist Andrew Wilson, who was previously at the Scottish Office and the Royal Bank of Scotland. He is advocating a cut in business rates and in corporate taxes, in order to encourage companies to "return to Scotland."

Such measures are opposed by Gordon Brown, who has, therefore, been attacked by the SNP for advocating tax-competition within the European Union, while denying it within the British one. The SNP's case is impeccable, but Gordon Brown's dislike of Scottish independence is not likely to depend on economic logic. He stands for a Scottish seat and may not be anxious to give up the world stage provided by Westminster and G7 meetings for the more parochial pleasures of Edinburgh.

While the SNP are to be congratulated on the speed with which they seem to be accepting the economic logic of independence, they run a big risk of leaving their supporters behind. A Thatcherite Scotland is the sensible and natural result of independence. It is not, however, the most likely route to it.

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