Irish figures make a good case for Scots fiscal independence

LAST year, when the ironically Irish sounding Jim Murphy described the Irish economy as being part of an "Arc of Instability", this paper kindly allowed me to respond, although Jim wisely declined a live debate on the BBC with me.

Now, as an Irishman, the debate about whether Scots should govern their own economy should, of course, be none of my business.

But as English – sorry, Unionist – politicians keep commenting on the Irish economy, it's hard to stay on the sidelines.

On 16 December last year, it happened again. This time Labour shadow finance spokesman Andy Kerr made a disparaging reference to Ireland as one of the SNP's "models of aspiration". Like Jim, I suspect Andy will give a live debate with me a miss.

This is because any comparison between Ireland and Scotland's experience in the last four decades – even after the savage recession Ireland has had – shows an iron truth: even if the last four years of Ireland's economy are no model to follow, Ireland's experience in the last four decades are, in comparison with Scotland, a resounding endorsement of the idea of Scottish fiscal independence.

Right now, it doesn't seem so. Out in the cold, Ireland faces the harsh wind of Europe's worst recession, while warm inside the maternal embrace of union, Scotland suckles on subsidies and quantitative easing.

The logical conclusion of this is, of course, that Ireland should have stayed within the Union herself. But if that's true then Northern Ireland's status as the poorest region of the UK – and with living standards set to remain far below the Republic's – is a strange proof of it. Sadly, Scotland's position isn't much better.

Even if not the self-reversing result of quantitative easing – and even if Scotland participates in it – the end of the UK's recession will leave Irish living standards a third higher than in Scotland and 15 per cent higher than the EU average.

It will also leave Ireland's debt to GDP ratio at EU average levels. Not bad for a country with one of Europe's youngest populations.

Which reminds me: while Scotland's population is set to decline (something I take no joy in – the more Scottish people there are, the better place this world will be) Ireland's has grown by half a million in a decade.

And healthy child-birth rates mean that even a few years of net emigration won't stop the republic's population from surpassing Scotland's population of five million by 2020. And our growth rate is projected to exceed the EU's within two years.

Of course we have much to learn about reducing volatility in our economy. But that is what the journey of self,governance is all about; growing, making mistakes, learning and maturing.

And it seems Ireland is learning faster than the UK. The only G7 country with negative growth in the third quarter of 2009, the UK recovery is too dependent on monetary stimulus whereas Ireland's is based on the durable foundations of lessons learnt hard and well.

Believe me, there is no Schadenfreude in what I say. As our nearest and dearest neighbours, I wish only the best for the Scots, the English and the Welsh.

So here let me reciprocate Andy Kerr's comment on Ireland's affairs by allowing me in return to comment on Labour's plans for Scotland.

Coleman's take on Calman is this: Scotland's geographic position and underperformance can only be corrected by fiscal autonomy. By liberating English taxpayers from permanently subsidising Scotland and by making Scotland the low-tax, viable, free enterprise dynamo that it should be, full fiscal independence will be a win-win situation for all the people of these islands.

• Marc Coleman is economics editor of Newstalk 106-108fm in Ireland.