Secretary of State for Scotland: Jim Murphy - Scotland, the possible future

The discussion about Scotland's future is too often confined to a debate about our constitution. It is rarely about the future of those Scots still locked out of a Scotland which has just come through its most prosperous decade in our history. Today I want to talk about all three.

We all know that we live in times of transformative and disruptive change. Every age considers itself one in which change advances faster than in preceding times but we have entered a new era of truly revolutionary change. Changes that redraw the rules of the game, that reshape the face of our world, that radically alter who we are and what we can do.

For example we are still at the early stages of a revolution in how we interact. Young Scots and some politicians are today in global social networks with far more members than Scotland has citizens. This Networked Citizenship is ubiquitous. With a membership of over 300 million, if Facebook was a country it would be as big as the USA. These networks are bringing with them political change. Children's videos on YouTube have been used to challenge Chinese state censorship. Twitter was used to organise demonstrations in Iran. And in Burma, blogs and video from mobile phones uploaded onto the internet revealed the aftermath of Cyclone Nargis.

And the pace of political, economic and social change will quicken still further. By the time my children are my age China will be the biggest economy in the world. The sheer scale of the potential Chinese market is conveyed by the comparison that Glasgow, once the second city of the world's greatest empire would today be only the 136th largest city in China.

Allied to this change, more people are on the move than ever before. The UN estimates that the number of people living outside their country of birth has doubled in my lifetime to 192 million.

And the world is getting older. In 2050, the UN estimate that nearly 2bn people will be over 60, nearly the same as the entire global population in 1950.  Think about that fact...

And in this restless ever-changing world we are confronted by threats.  All are international in their nature and global in their solutions.

Our interconnected world is one in which wealth spreads rapidly - free trade has raised hundreds of millions of people from poverty, yet last year that very interconnectedness brought the world to the brink of Depression.

A toxic mix of flawed banking models and defaulted American mortgages was the catalyst for an international banking collapse. This crisis travelled the globe - with no nation immune.

For example, the financial crisis swept the Icelandic economy away.  As the Financial Times said: 'The Island's financial system drowned in debt.  The country found itself without a lifeboat.'  It is worth noting that eighteen months ago Iceland and Ireland were the SNP's model economies - at the heart of their fabled arc of prosperity. Now they never mention them.

Our renowned Scottish banks, nurtured patiently over centuries were hours away from collapse.  The real prospect of bank failure loomed large - with potentially devastating consequences for bank staff, businesses, savers and pensioners.

For the Scottish banks it was Britain or Bust. The recapitalising of the banks cost £50 billion - that's £10,000 for every man, woman and child in Scotland. And the Asset Protection Scheme for insuring toxic debts is worth £585 billion - which equates to six times the annual value of the entire Scottish economy.

It is no surprise that an increasing number of Scots, including some who previously supported independence, are saying TGI Britain - Thank Goodness It's Britain. The economic case for devolution has never been stronger and the case for breaking up Britain has never been weaker.

Because in a global economy there is nowhere to hide. The best protection is integration into a strong economy. Iceland is seeking EU membership urgently. Ireland has had ECB support but has still had to recapitalise its banks from its own public spending. It has been forced to raise taxes and cut spending in a downturn, leading to the IMF describing Ireland as technically in a depression.

In stark contrast, Scotland is a full partner in the fifth largest economy in the world. So on top of recapitalisation of our banks we have had a massive boost to reflate the economy with a £2bn tax cut, £500m invested in getting people back to work, interest rates at a record low of 0.5% for 7 months and a £175bn boost to the money supply. And this effort is paying off.

But despite all of this there are of course still some who claim that Scotland should be entirely separate from the United Kingdom. That the right response to unprecedented globalisation and the economic events of the past year is for Scotland to break away from the rest of Britain. This is to deny the reality of the modern world.  It is a black and white response to an HD conundrum.  Slogans from the 1970s are no answer to the most complicated questions of today.

In contrast faced with these challenges I believe that there is a premium on connectivity and influence. The UK is the most connected nation on earth. We have always been a trading nation. English is the global language of communication. The UK alone amongst all nations is a member of the EU, the Commonwealth, NATO, the G20, the G8 and a permanent member of the UN Security Council. In an era of interconnectedness we shouldn't break away from the UK in which we are in the fast lane of the power and influence superhighway.   I think of the prominent Scots at the UN meetings in New York this week - the Prime Minister Gordon Brown and the Secretary of State for International Development, Douglas Alexander.  And Alistair Darling as Chancellor has plotted our course through the recession.

Scotland can and must remain a world player of influence as an integral part of our unique and formidably successful social and economic Double Union - the Union of the UK and the Union of Europe.  This interdependence is a bridge to the future. Independence is a pathway to the past.

That's why no successful modern industrial economy has ever separated.   Prosperous states do not leave a successful and mutually beneficial union.

And while of course the arguments for breaking up Britain have never been weaker we do need to strengthen the Scottish Parliament with more powers which is why the Calman Commission is so important. We are refreshing a successful settlement backed by the vast majority of Scots.  I want to maintain cross-Party consensus and momentum and will set out our plans for the future of devolution in the autumn.  Laying the foundations for a settlement fit for the coming decade and beyond.

I believe in Scotland. I love Scotland. My sense is that all Nationalists are Patriots but not all Patriots are Nationalists.

I believe in a confident Scotland as an equal part of the UK making us probably the most influential small nation on Earth.

But it is a Scotland that will continue to change. We've never in the past said - 'stop the world, I want to get off' - and we never should.  

And while I believe that the last year has been tough for Scotland, there remain grounds for canny optimism in discussing our future industrial policy.  Our financial services sector has taken a battering in the last year, but we remain a location of choice for those who want to grow.  I am sure others will follow Tesco Finance, Esure and Virgin to Scotland. 

Because as the Indian and Chinese economies return to high levels of growth we will see a trebling of the world's middle class by 2030. They will provide new markets for savings vehicles and insurance - services in which we remain world leaders. And I know from my meeting with the Chinese Foreign Secretary in Beijing just how much respect they have for our expertise.

While financial services will remain a growth sector, manufacturing will still be a far larger part of our economy. Wherever I go in Scotland I see our country's enormous economic potential.   From the hundreds of new apprentices employed in the building of the Royal Navy's new state of the art aircraft carriers to the design and manufacture of advanced defence components for the MoD.

I've seen Scotland's latest contributions to health and wellbeing worldwide.  From the manufacture of bionics in Livingston to the production of testing kits for the fight against global diabetes in Inverness.

I'm proud we're still such a major manufacturing nation, and our existing skills - in engineering, in the chemical industry, in construction - must be used to build the low carbon economy of the future.

Our wind, wave and tidal potential is vast.  Thousands more green energy jobs are in the pipeline for Scotland, ranging from construction to research.  The wind and the waves, for centuries so perilous for sailors, will be an energy powerhouse for the 21st century.   I have seen it for myself in Orkney and Shetland where the waves of the Atlantic Ocean and North Sea collide.  Geology has given Scotland two energy revolutions - coal and oil.  Geography has given us the third energy revolution - renewables.  But of course, Scotland's renewable energy industry is yet another example of the benefits of interdependence. Onshore and offshore wind are far more expensive ways to generate electricity than traditional high-carbon methods. That's why the substantial subsidy, which is provided by every household and business in Britain, is such a boost for Scotland's green energy sector.

While our energy supply will be increasingly lower carbon, our population will become increasingly higher age.  In many ways the most profound changes we will see in the next decade in Scotland are social and demographic.  They are not disruptive - rather they are gradual - but no less transformative.

Every year, Scotland is getting a little busier and a lot older.  And I want to talk about our population for a few minutes.

Today Scotland's average age is younger than me.  In a decade's time it will be two years older than I am now. An apparently small shift, but one that will see a Scotland with more people over 65 than under 16. And the number of older people will continue to grow - it's estimated that medical advances will add ten years to the life expectancy of a baby born this year.  Adding years to life is one of the great achievements of the modern welfare state. The real challenge is can we add life to years?

Too often today I see signs that older people are written off as a burden on our society. That's not true. The fittest, longest-lived generation of Scots built the country we now enjoy - and they should have centre stage in building the sustainable Scotland of the future.

The other major trend is the increasing prominence of women in every field of Scottish life.  Although welcome it has taken too long, particularly if we look at other countries like Sweden, Norway or the US. But we are a better country for the dynamism of Michelle Mone and Ann Gloag matching that of Tom Hunter and Brian Souter. Barriers remain, and the stark fact is that too many potential female entrepreneurs are trapped outside the economy. While only an eighth of Scottish businesses are majority owned by women, two thirds of those on the National Minimum Wage are women. This inequality impoverishes us. More needs to be done to create a fairer Scotland. A more equal Scotland will be a more feminised Scotland.

I don't want to list everything the Labour Party has done - from increasing maternity leave and maternity pay to the right to request flexible working. This is a time for some honest self-examination. Labour, particularly, in the Scottish Parliament has made some progress on gender balance but the fact remains that of 48 Secretaries of State for Scotland only 1 has been a women - Helen Liddell.

I still go to some business events where it is not necessary for me to say 'Good evening Ladies and Gentlemen' because on occasion there are no women there at all. This has to change. The all too sedate march of women through the institutions is continuing.  Our progressive challenge is to accelerate the inevitable and necessary change.

Finally, the Scotland I passionately want to see is one in which where once and for all we have broken the link between life chances and poverty.

Much of the conversation about Scotland's future rightly focuses on the chances for Scotland in China.  I want to see more attention on the chances for Scotland in Scotland.  There are real opportunities in China but there is too much untapped potential here at home.

Despite all the progress in recent years too many children have their future determined by where they are born - or more accurately by where they first go home to when they leave the maternity ward.  For many that is the most influential journey of their lives.

Because inherent social, economic and health inequalities have blighted the Scottish landscape for far too long.  Too many unspoken barriers block social mobility.  Public services must serve all the public.  Poorer communities should not mean poorer public services in the communities.

The lived reality of this is that the difference in life expectancy between where I grew up and where I represent in Parliament is 7 years. That is unacceptable. But even more so when you know that these two areas are only separated by one street and an open field.

So as we come out of this global downturn we must ensure that what we have achieved is not reversed. Previous recessions have scarred whole generations. They have left a lasting legacy of worklessness that has dragged families down into continuing poverty.

This time we must ensure together that a generation of Scots are not abandoned to a lifetime in benefits.  When you reflect that quarter of a million Scots are on Incapacity Benefit, 2.5 million people in the UK and on average people spend 9 years on that benefit. The poorest and their communities came last in previous recessions - and came last in the recovery. That must not happen again.  As we come out of this recession we must put the poor first.

Conclusion

So in conclusion I have always been an optimist. Optimistic about our people, about our country, about our economy and about our future. As Secretary of State over the last year I have seen at first hand a proud and ambitious Scotland is ready to embrace the challenges of the next decade.

I believe that we face a future with the certainty of enormous change. Some is predictable and beneficial - like our ageing population. Some changes compel us to do more to achieve real equality and the eradication of poverty.

And while it is dangerous to predict the future, one thing I am certain of is that it will contain unpredictable disruptive change.

And when that comes I believe that interdependence within Britain in Europe will make us stronger and that independence and isolation would make us immeasurably weaker.

Ours is a great country - we should celebrate it.  From Highlands to Lowlands, from cities to villages. Let's build up Scotland together, not break Britain apart.