A lesson in home economics Why Scotland won't find all the answers to a better economic future across the Irish Sea

One of Ireland's attractions for me is its marked difference from Scotland, based as it is on a very particular history and culture. Not surprisingly, the Irish economy is also very different from that of Scotland.

Cherry-picking, as the Scottish National Party appears to do, is not an appropriate approach. Alex Salmond's suggestion that corporate taxes in Scotland should be cut to low Irish levels begs some serious questions. Most directly, what to do about the #1500m of revenue Scotland would lose.

But first let us establish the differences in our historical development. When Scotland was forging a new industrial age, Ireland was largely agricultural. As recently as 1970, a quarter of all employment was on the land. Today at about 10% it is still three times that of Scotland. Visibly, Ireland is still a rural country.

After independence, Ireland languished for most of this century. This explains for me the vital factor in the country's recent rapid growth - Ireland is simply catching up, but doing it in great style. Mr Salmond should be aware that low tax incentives were in place for an uncomfortable number of years before Ireland's relatively recent take-off.

The SNP argues that the loss of #1500m in Scottish tax revenues would quickly be made up by income from increased economic activity. It cites Alex Laffer's famous curve, which encouraged Ronald Reagan to cut personal taxes. Laffer was of course theorising about the behaviour of individuals. Where is the evidence that his curve would have immediate effect on corporate migration. ''Cut it, and they might come,'' seems a decidedly chancy policy.

UK rates of tax have already been reduced by the New Labour Government to 30% for large and 20% for small companies - the lowest rates of any major European economy. In the right economic circumstances the Chancellor would no doubt want to lower them further. Reduction to Irish levels of 12% in Scotland might force us to address other aspects of compensatory tax.

Income tax rates in Ireland are higher than the UK and they bite in earlier at 26% and 48%. Ireland also has a higher base rate of VAT which pushes up the price of goods in the shops.

Ireland has also achieved its admirable growth with some singular factors absent from Scotland's experience. Despite its dynamism, unemployment is still higher than in Scotland. Significantly only 56% of its population is in employment against 71% in the UK. Again we see the historical and cultural differences.

Where Scotland's population has been stable at around five million for 40 years, the Irish birth rate has been higher than ours, emigrants are returning home, and fewer Irish women work. The large pool of new labour has helped restrain wage levels and keep inflation low.

Additionally, because of underdevelopment, the European Union has pumped in subsidies equivalent annually to 5% of Ireland's Gross National Product (GNP). With the expansion of the EU to poorer areas of Eastern Europe, this level of subsidy will be unsustainable. Again it is not a factor of the ''Irish Miracle'' that will be available to Scotland.

The Irish Government's special pleading with Brussels points to much investment still to be made in its infrastructure outside growth areas like Dublin. They also argue that Ireland is not as successful at it seems since a significant slice of its rapidly rising GNP is repatriated abroad in profits by foreign inward investors who dominate its manufacturing base.

I am unclear about the SNP's attitude to inward investment having read recently that they wished to cut back on incentives. Scotland's success in attracting inward investments (without rock bottom corporate rates) runs close to that of Ireland. Foreign firms employ about 80,000 workers and last year Locate in Scotland created or safeguarded 18,000 jobs by bringing in over 80 firms and about #1bn of investment.

The Scottish Enterprise strategy of encouraging hi-tech inward investment, while also ensuring that 80% of companies assisted are indigenous, has built a stronger, broader economic base than that in Ireland.

For most Scots people the stark difference between Scotland and Ireland would not be in economic statistics but in take home wages and welfare. Wages are lower and taxes higher in Ireland. Visiting a doctor would cost on average #20, stays in hospital are charged at a daily rate, no rebate on drugs charges up to #360 per year, a #12 charge if you are forced to go to the accident and emergency department. For children there is little by way of state pre-school care. Ireland's higher education cannot yet match Scotland with its deep academic tradition and 13 universities.

Education is one area where we are as one with Ireland. They see investment in education as the key to economic prosperity.

The Government's recent Comprehensive Spending Review earmarked #1.3bn for this vital area. We will be investing at all levels creating more pre-school places, providing 5000 classroom assistants for primary classes to get the ratio of adults to children down to 15:1 and we are also determined to keep improving standards as the recent increase in numbers of pupils gaining Highers has demonstrated.

Crucially, we are also creating 42,000 extra student places in Further and Higher Education.

That level of investment is vital to the ''knowledge based economy'' we are building in Scotland.

Hopefully, the SNP would not want to challenge the priority being given by New Labour to education, health and training for work.

Nor should it want to emulate Irish taxation policy or expect European subsidy.

That seems to leave separatism as the magic ingredient of SNP economic policy. That is surely a high risk option for a mature economy such as Scotland in an increasingly global economy.