Scottish referendum: will we wake to a hangover on Friday?

By Michael White

The genie of nationalism is out of the bottle and politicians will struggle to meet the expectations that have been stirred

On Radio 4's Today programme on Wednesday, Better Together's dour leader, ex-chancellor Alistair Darling said that his fellow Scots had emerged as " a more self-confident country" than it was a generation ago, partly thanks to devolution, and should nurture that confidence within the British union. Half an hour later, Yes's irrepressible chieftain, Alex Salmond, agreed, but draws the opposite conclusion.

Is it an under-remarked fact that radical change often happens when things are getting better, the "revolution of rising expectation", as I was once taught to regard events in France in the 1780s? More recently I remember John Smith, briefly a self-confident Scottish leader of the Labour party before his death in 1994, saying that he'd expected Neil Kinnock to lose the 1992 election, despite the recession, because people play safe in hard times.

It's one of the paradoxes of the current campaign that voters in Scotland are being encouraged to nurse a sense of grievance against Westminster and Whitehall because they've treated Scotland unfairly – notably "stolen" its oil – and held it back, while being simultaneously told what an economically diverse success post-industrial Scotland has become.

"What do you say to living in one of the world's wealthiest nations?" said the placard on the first minister's platform when I watched him speak in Perth this month.

That sounds a no-brainer. Except that people in Scotland already live in "one of the world's wealthiest nations" – it's called Britain.

Ah yes, but we are emerging painfully from a six-year recession in which a lot of people – the unemployed, many pensioners, the low-skilled and badly paid – don't feel very happy or prosperous. No "revolution of rising expectations" for them.

Correct again and a lot of Scotland's disaffected and desperate voters, people whose families have been solid Labour for generations, seem to be backing yes – it can't get any worse, can it ?

Actually yes, it can and quite quickly if credible monetary arrangements can't quickly be put in place to impress global markets if there's a yes vote on Thursday. The yes camp is right to say rUK will have an interest in monetary stability, but no is right to say the cost will be heavier for iScotland. Salmond deceives himself and others to say, "Of course there will be a currency union." After the divorce you don't share the cheque book.

In our corner of the world in 2014, the acute problem economically is two-fold: the need for growth and for less inequality, both in Scotland and in wider Britain. Indeed inequality is also growing in the wider world – from Washington to Beijing via Moscow – for reasons the French economist, Thomas Piketty explained in his recent book, Capital. Without active state interventions, including more progressive tax regimes than current, capital will accumulate faster than incomes. We are reverting to a norm that existed before the social democratic decades that followed the second world war, Piketty argues powerfully – though his thesis is disputed.

Why does this matter to Scotland? Well, the yes camp has promised both higher public spending and lower taxes, notably corporation tax to attract foreign investors in the way Ireland successfully does, including some tech companies which do most of their business in Britain but claim that – for instance – sales are "completed" (and therefore taxed) in Dublin. Yeah, right.

It matters more because, while everyone agrees that Alex Salmond has skilfully run Scotland since taking power at Holyrood in 2007, they can't easily point to the SNP government doing much by way of progressive policies that benefit the poor. Brian Wilson, ex-Labour minister and founder of the radical West Highland Free Press, makes this point in his enjoyable Comment is Free spat with George Monbiot, a pro-yes land reformer. You can read both here.

Whatever set of figures you choose to accept on Scotland's oil reserves, they won't keep the show afloat for ever. Salmond talks of Scottish wind and wave power. Good stuff, we hope, though it currently requires heavy state subsidy from the UK government.

But, hey. Scotland is already the third most prosperous region of the UK – after London and the south-east. Hi-tech industries, biotech, a buoyant cultural scene developed over recent decades, as well as familiar staples such as oil, whisky and tourism – a diversified economy which is clearing away the dirty heavy industrial past.

Let's do even better, says the yes campaign. We can do so if rUK doesn't hold us back. It's the sort of thing London mayors – both Ken and Boris – sometimes say in frustration about the taxes Londoners and their businesses pay to sustain less prosperous regions. I know it's about more than money – a nation's self-belief. But it's unattractive wherever the sentiment is expressed.

Yes or no at the ballot box, the genie of nationalism is out of the bottle and politicians will struggle to meet the expectations that have been stirred. Great excitement on Thursday, a hangover on Friday and tough times ahead.

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