Morning Call: pick of the papers

The ten must-read comment pieces from this morning's papers.

1. Miliband needs to be bolder on EU and immigration (Daily Telegraph)

Instead of offering a strong lead, the Labour Party leader risks giving the initiative to the Tories, says Mary Riddell.

2. Europe: no more talk of in-or-out. Let's think opt-outs (Guardian)

The EU treaties are not fit for purpose, but leaving makes no sense, says Simon Jenkins. Negotiation is possible without risking free trade.

3. Don’t be the PM who takes us out of Europe (Times) (£)

David Miliband imagines what advice John Major might offer David Cameron.

4. Japan should rethink its stimulus (Financial Times)

The real problem is a return to deflation and an overvalued currency, says Adam Posen.

5. The big chains simply cannot rival the choice or the price of online retailers (Daily Mail)

The high street as we knew it, and perhaps in some cases even loved it, is becoming history, writes Simon Heffer.

6. Towards a fairer capitalism: let's burst the 1% bubble (Guardian)

Talk of a more moral capitalism is just hot air unless we rehabilitate and reward the idea of value creation, writes Mariana Mazzucato.

7. Don't let HMV drown in the Amazon (Independent)

A scaled-down operation that adopts more of the "niche" principles of modern business thinking could yet thrive, says an Independent editorial.

8. Berlin slows down (Financial Times)

It is time for German companies to end pay restraint, argues an FT editorial.

9. The BA Christian case was judged rightly, and a true test of tolerance (Guardian)

Nadia Eweida's religious reasons for wearing a cross at work should not have been trampled on by BA's uniform policy, argues Andrew Brown.

10. We should not pay a penny of RBS’s fraud fine (Independent)

The cost, which could rise above £300m, should come out of the bankers' bonus pool, writes Andreas Whittam Smith.

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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.