Scotland could match the higher growth rate of other small nations without breaking away from the UK, Nicol Stephen argued yesterday.

Fresh from launching the Scottish Liberal Democrat manifesto, he arrived at the Mitchell Library, Glasgow, for the latest of Scotland Decides events with the major party leaders.

Given that these conversations with The Herald's Alf Young are in association with the Scottish Chambers of Commerce, it was appropriate that he was pinned down on his record as enterprise minister, particularly Scotland's less than stellar economic growth rate.

"Is the glass half empty or half full?" he asked. Yes, long-term growth at 1.8% was poor but now we were looking to 2.3%. "I would like it to be up alongside the other small European nations at, say, 4%.

"I believe we could go further if we had more powers for the Scottish parliament. I don't think it's right that we get a cheque from the Chancellor for £28bn and our only decision is how to spend it."

He argued for a "substantial level" of fiscal autonomy for Holyrood, saying: "I would like to see a new constitutional convention to discuss the next phase of devolution which Donald Dewar said was a process not an event.

"Consensus was not easy but it was achieved by the Scottish Constitutional Convention in the 1990s. I would be astonished if there was not a similar level of co-operation this time or even higher, given that even the Conservatives - shock, horror - are in favour.

"Would the SNP walk away this time? They did in the 1990s but would find that very difficult to do now. I think the real challenge is for the SNP. They talk about the priority they give to education, health and the economy.

"We could work with the SNP on these policies but not if they put this fundamental block on progress. Many nationalist parties in other parts of Europe have moved away from independence of their region or their country."

Mr Stephen had been asked at the outset what defined him as a Liberal Democrat. "At the heart of the LibDems and at my heart over my years in politics is empowering individuals to take decisions about their own lives and their own communities."

Contrasting Labour's trade union history with the Tories' big-business approach, he said: "It is about creating opportunities. We have a reputation for getting things done, such as abolishing tuition fees, providing free personal care for the elderly, or free eye and dental checks.

"These were defining policies of the first years of our parliament. I know Labour would not have done these things. I know how tough it was to deliver free personal care.

"I was there when the phone calls were being made by the Health Minister from Westminster putting pressure on not to do this."

Liz Cameron, executive director of the Scottish Chambers of Commerce, asked about the current fragmented system governing higher education, training and skills, but Mr Stephen said that, while he supported greater co-operation and co-ordination, he did not support the creation of a new body.

But he advocated the creation of a Finnish-style Innovation and Investment Agency.

On incentives to small companies to embrace renewable energy, he told Douglas Millar of Lanarkshire Chamber that his party planned cash incentives to individuals.

"The same opportunities should exist for businesses, but it is not just about investment to save the planet, there are big gains to be made. Companies that are passionate about this have found a great difference to their bottom line. Many more businesses need to do it."