Indy is essential part of answer to Scotland's economic inertia

It also agrees things are looking up a little after a long period of rather dismal economic indicators. They are still not good enough to make independence easy-peasy, or to ensure entry into a land of milk and honey on the other side of the big day. Even so, the prospects have stopped getting a bit worse all the time and have turned a bit better.

One of the best pointers to the actual economic position is to be found in the figures for the Scottish labour market issued last week by the Office for National Statistics.

It is a creature of the UK Government, of course, but one which is usually dispassionate and objective (at least judged by the wretched standards similar bodies have set in recent times). These figures showed how the total of unemployed Scots towards the end of last year passed 100,000, going down. I would not myself expect the figure to remain below 100,000 for all that long, what with the main effects of Brexit still to kick in. But employment is a lagging indicator, the result of trends already well under way. To that extent, they may soften a little with a coming crunch.

In presenting the results, the ONS highlighted a long-term trend. It was the first time unemployment had fallen below 100,000 since the present statistical series started in 1992, more than a quarter-century ago. In fact an old hand like me can go one better than that, because I remember when it rose above 100,000 (measured slightly differently) for the first time since the Second World War. This was in 1977 and marked the end of the long era of full employment pursued by governments of every hue after 1945. I was economics correspondent of The Scotsman at the time and I got a leak of the impending announcement, much to the embarrassment of the Scottish Office.

It is sobering to reflect how over that whole period, not just a quarter-century but more than four decades in a row, we have never in Scotland had fewer than 100,000 jobless, and sometimes many more. Recall, too, how the period started while Labour was in office, with Jim Callaghan as prime minister and Denis Healey as chancellor, pursuing policies that anticipated Margaret Thatcher’s and proved to be in some respects even fiercer. This was the last time we had real-terms cuts in the actual total of public spending, for example, rather than mere restraint of a previously planned rate of expansion.

This latest milestone marks the end of an era, in other words. But UK public policies may have done less to bring it about than international forces: the stupendous changes that have overtaken every economy in the world during an epoch of accelerating change. Let’s think about how they have been playing out in Scotland.

The traditional industries that dominated the nation at the beginning of this epoch – coal, steel and shipbuilding – have by now almost entirely vanished.

At an intermediate stage we tried to replace them through the official encouragement of advanced technology, much of it in the form of subsidised inward investment.

It often disappointed. New Scottish plants turned out to be for assembly and delivery, not for research and development. These two latter activities went to San Diego or Bangalore rather than to Greenock or Livingston, which could not provide a suitable workforce or sufficient back-up. In any case, this kind of top-down investment strategy seemed to peter out with the great financial crisis of 2007-8.

Ever since then, the Scottish economy has been growing more slowly than in the past, struggling to expand by much above 1% a year compared to the 3% that might once have been expected during periods of recovery. Consistent with this is the snail’s pace of improvements in productivity, in other words, of how much output we get from our inputs.

Workers in some European countries produce as much in four days as Scots do in five. In the public sector, nearly a quarter of the economy as a whole, the Scottish Government runs an employment policy that hinders a better performance by forbidding compulsory redundancies. In a tight labour market they would actually be an aid to faster growth, because they would encourage workers to move more quickly from a less productive job to a more productive one.

Without higher productivity, we will not be able to bring about a sustained improvement in living standards. One proof of this is easy to see. Since 2017 there have been more Scots at work than ever before – over 75% of those aged 16 to 64, with only 3.6% of them idle. People who just “can’t get a job” are a thing of the past. In the old days we would have defined this as an economy of full employment, excluding only those who are swapping their workplace or have some personal reason for withdrawing temporarily from the labour market. Despite the full employment, ever since the great financial crash there has been next to no improvement in living standards.

It is true that just at the moment we see pay rising faster than the inflation rate of 3% or so. Commentators on the ONS figures have put this down to the prospect of a shortage of labour, with wages being bid up by companies unable to get the workers they need. Again, Brexit will be a burden. Tourism and agriculture depend to a large extent on foreign labour. In regions like the Highlands there is no surplus of local workers to be mobilised, and the prospect is for immigration to be slashed. So much for the UK Government’s assurances that in its European negotiations it would take account of vital Scottish interests. There will be little help for living standards from that direction.

And altogether, despite some improvement, Scotland remains bogged down in the newer economic problems that have replaced the older ones. It does not help that we live under a government that too often rests content with outdated thinking, still stuck in the mud of leftist prejudices from the 1970s when a big state was presented as the answer to everything.

As I said at the start, this may be changing a bit, but not by nearly enough. Ministers’ and officials’ displacement activity in quangos otherwise composed of the great and good ignores the fact that the worst difficulties are faced by the huge sector of small and medium enterprises, with difficulties that are hard to understand or address. At the same time, Scottish Government lacks the powers to tackle these difficulties and so has little incentive to think them through.

Independence is, then, an essential part of the answer to the deep-seated problems of Scotland’s economy. Even while happy to acknowledge how things have recently looked up a bit, I fear we are still quite a long way off meeting the challenges.

Meanwhile we should spend less time worrying about how to share out our national resources and more time thinking how we can increase them. In global terms, our degree of inequality is nothing to be greatly ashamed of.

In the light of our own history as a homeland of the industrial revolution, and of the contributions Scots have made to economic progress, our stagnation certainly is something to be ashamed of.