Bill Jamieson: We must answer the killer question AS A ready reckoner to what lies ahead for Scotland in the New Year, the long list of questions posed by CBI Scotland chief Iain McMillan may prove an ominous and troubling guide. It sets out 170 questions for the Scottish Government to address in the run-up to the promised white paper on independence next autumn. They range over the tax and regulatory environment for business, borrowing powers and policies, government welfare spending commitments and, of course, the arrangements for North Sea oil revenues, investment reliefs and decommissioning costs. Urgent answers are needed to prevent uncertainty on all of these fronts and more from turning toxic. I have three observations to make on Mr McMillan's daunting list. The first is that however many of CBI Scotland's 170 questions will be addressed in the white paper, as many more are likely to spring up as the details are pored over. The second is that, in the event of a Yes vote, the subsequent negotiations with the UK government over the sharing of the currency and central bank could extend the period of uncertainty long after 2014 - possibly to 2016 and beyond. And the third is that I fear Mr McMillan's list of questions has left out the killer query. It is one that will dominate policy concerns across the UK and which is central to any economic recovery in the period ahead. What is it, singly or in combination, that would help trigger an upturn in business investment? Because without this, it will not much matter whether Scotland opts for independence or chooses to stay in the UK. We will be trapped in a zero-growth economy with persistent high unemployment for as far ahead as we can see. Why does business investment matter? It is the vital key that unlocks expansion, boosts job creation, lifts consumer spending and sparks further investment and expansion down the supply chain. Every recovery has required an upturn in business investment. And there is no more efficacious way to address our momentous debt and deficit totals than rising government revenues from business activity - whether through corporate taxes or income from PAYE. Rising corporate spending brings benefits for individuals, for welfare recipients and for government. It is not government intervention or infrastructure projects that will deliver a recovery, though they may help at the margin, but a marked rise in private capital investment. The fundamental problem of the UK economy is not a shortage of money for business investment. On the contrary, our leading companies are awash with cash. According to Bank of England figures, the UK's non-financial business sector has accumulated a cash pile of almost £250 billion. The same companies have repaid, since the autumn of 2008, just over £87bn of bank debt. With interest rates at ultra-low levels there is little incentive to keep vast piles of capital on deposit. The rewards of staying in cash have seldom been lower. Yet we have a massive business investment failure. And so long as it continues, we are trapped in a vicious circle of low spending, low growth, low job creation and little progress in relieving a crushing burden of debt. Within two years this debt mountain will be sucking out £60bn from the government's coffers each year by way of debt interest payments. This is by far the biggest economic, political and social challenge of our age. It should be the chief preoccupation of policymakers. But in Scotland policy attention has been overwhelmingly focused on constitutional change and very little on how an independent Scotland would address such a daunting outlook. Indeed, there is little recognition of the fact that politics as we know it has changed profoundly. We can no longer continue to fight elections on the basis of which party can spend more or how many groups of voters can be promised more "free" benefits. This game is over. The money has gone. At the same time, simply calling for "control of the fiscal levers" tells us nothing about how these levers would be pulled, in what direction and what outcome might be expected. In the meantime, corporate investment here has to contend with the extra layers of uncertainty that now surround the business environment. And the longer that this uncertainty persists, the greater the risk of an investment drought stretching years ahead. We know, of course, that there is a much wider confidence problem, extending across the whole of Europe and the UK, with little on the horizon to suggest a revival any time soon. In financial markets this preference for sticking with low-yielding government bonds speaks to this wider confidence failure. But there is a limit to how large - and how long - this preference for bonds will persist before even this apparent "safe haven" comes to be seen as a high-risk bubble. Investors and entrepreneurs will seek and demand more than a slow-motion erosion of their capital and a return that at least offers some protection from inflation. At the same time, technological developments and product and service innovation will continue to change the way we do business and offer opportunities for profitable business investment. The advances in consumer electronics and information technology over the past 20 years has transformed both our working lives and our leisure activities in a way unimaginable when we were mired in the recession of the early 1980s. We critically need an environment that will enable confidence to recover and for the business cycle to turn. This is where the fulcrum of policy attention should come to rest. Everything else is truly second order. What lies ahead if we do not shift policy attention? We cannot expect a domestic spending upturn any time soon. The household saving ratio rose to 7.7 per cent in the third quarter, the highest since the autumn of 2009. Between 2000 and 2007, the savings ratio averaged just 3.8 per cent. The fourth quarter of 2012 is likely to have seen a relapse to negative economic growth. Recent indicators, such as the Markit/CIPS Purchasing Managers" Index, have pointed towards a slowdown in growth in the final quarter. If growth proves negative in the first quarter of 2013 as well then the UK would find itself in the midst of a triple-dip recession. Independent forecasts point to growth of barely 1 per cent over 2013 as a whole - dooming the Chancellor's deficit reduction plans. It remains to be seen whether the Funding for Lending Scheme leads to a pick-up in credit to companies, particularly small firms. That makes it all the more imperative that political attention in Scotland focuses far more on policies that will encourage business investment. A continuing fixation on constitutional navel-gazing could cripple recovery hopes. Iain McMillan's 170 questions are searching enough. It's question 171 that's the killer.