Meryl Streep's extraordinary performance in The Iron Lady has reminded many of us in Scotland of the last era when we were challenged seriously to choose between being Scottish and British.

Under Margaret Thatcher, values that helped to define Scotland's sense of national identity – those of community and of social justice – came under sustained attack, and the autonomy of Scotland's own civic institutions, from our schools and universities to our health service, appeared at real risk.

The author William Mcllvanney caught the mood of those times when in 1987 he said: "If we allow her to continue she will remove from the word Scottish any meaning other than the geographical."

Now, in a different era, the SNP comprises supporters stretching from the fundamentalist right to the far left – held together by their pursuit of a separate state.

Next week, Alex Salmond will deliver a speech in London in which, on past form, he will seek to argue that independence is an enlightened act that should be supported by progressives in England in supposed solidarity with progressives in Scotland.

It is a case that the Scottish left has, for decades, rejected, not least because the break-up of Britain would represent a defeat for progressive ideals and a retreat from a shared vision of a multiethnic, multicultural and multinational state.

With the creation in 1999 of the first Scottish Parliament for 300 years, Scotland's democratic deficit was eliminated and its distinctive institutions became for the first time accountable directly to its people. Given this historic change it cannot seriously be argued any longer that Scotland's culture, its distinctive institutions or its nationhood are today threatened by actions taken by the British Parliament. And in the past three centuries of Scotland's history, the quiet determination to maintain what is distinctly Scottish has never required the abandonment of everything that is British.

The first decade of devolution saw a decade of economic growth in Scotland that resulted in a resurgence of Scottish pride and confidence. And during this decade of transformation, the repository of emotion for many Scots moved from class-based institutions to national institutions.

In part this was because traditional symbols of, and repositories for, working-class identity – such as trade union membership and large-scale industrial workplaces – were declining.

However, simultaneously there remained a strength of national pride, reaffirmed in everything from the music of the Proclaimers' "500 Miles", sung on the terraces at Hampden, to Eddi Reader's musical reinterpretation of Burns's poetry and song.

And while the love and respect for the BBC, the NHS, the armed forces and the Royal Family have stayed strong, other distinctively Scottish institutions grew in the Scottish people's affections. The SNP saw these changes and increased economic strength and sought to annex the sense of confidence it generated to their definition of Scotland and its destiny.

In contrast, Scottish Labour failed to recognise the changed environment that, ironically, it had help to create. The party was left singing the old hymns and warning of the risks of Thatcherism at a time when these songs were increasingly unfamiliar to a new audience with no personal knowledge of the tunes. In truth, Scottish Labour never felt it needed to be New Labour because arguably that process of modernisation was not needed to defeat the Tories in Scotland, but this complacency, in time, left us vulnerable to attack from a different direction from more nimble opponents.

Seen through this light, the SNP's victory in May – historic though it was – came despite, not because of, its desire for independence.

People felt they could vote for the SNP to run the devolved government, comfortable in the knowledge that "the independence question" would be dealt with later, if at all, in a separate referendum. And that helps to explain why the popularity in the polls for the SNP has not over recent years or months translated into a significant and sustained rise in support for separation.

Yet Scotland now faces that momentous choice in the years ahead. And in that time of choosing, our duty is greater and our responsibility is heavier. It's a debate that demands a different quality of imagination. Given the degree of economic integration between the Scottish and the British economies, profound economic questions will be asked. But this debate will, and must, involve more than accountancy. It will involve deep and profound issues about identity in the 21st century.

I am proudly and patriotically Scottish. I don't look at English people and see foreigners. I certainly see sporting rivals, but I also see friends, colleagues, and family. To my mind, just because we are to varying degrees Scottish, British and European, it does not follow that loyalty to one must come at the price of denial of the other.

And this debate will involve questions not just about who we are, but what we believe. Politics is about more than identity; it's also about ideals. Along with millions of Scots, I have long believed we are stronger together and would be weaker apart.

It's not just that our grandparents stood shoulder to shoulder in the fight against fascism, but that they then built the NHS and the system of National Insurance that enshrined the principle that sharing of risks by all of us provides rights for each of us. Those were forward-looking, radical, reformist acts.

To reject now the sharing of risks, rewards and resources among the 60 million people of the United Kingdom and instead spend the coming years erecting new barriers between the nations of these islands would, for me, represent a retreat from that progressive tradition.

Now is the time for progressives on both sides of the border to stand together in rejection of a politics of grudge and manufactured grievance. And to reject a politics that draws its energy from gleeful assertions of difference rather than expressions of co-operation.

In an age defined by greater interdependence and connection, narrow nationalism is the wrong path for Scotland – and for Britain.