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Thinking the unthinkable when No really means No

There is a mood of subdued triumphalism in the Unionist campaign.

While no-one is writing off Alex Salmond's election winning abilities, most analysts believe the referendum gap remains too wide to be closed in time. I realise it isn't over till it's over and we are in the depths of the summer holiday season. But even committed Yes supporters have been thinking about life after No.

Scots have yet to appreciate, perhaps, the finality of a No vote. As David Cameron and Alistair Darling have started saying, loud and clear, there will be no going back: no second chances, no future referendums, no constitutional ambiguities. No means no. Moreover, while for the last two years we've become used to hearing forecasts of a backlash from "miffed" English voters if Scotland votes Yes, we are now hearing of an English backlash even if Scots vote No.

The leader of the English Local Government Association, David Sparks, says that a No vote in September bringing more powers to Holyrood would "light the fuse" of English resentment.

The commentator Simon Heffer put it more bluntly: "Heads Scots win, tails the English taxpayer loses". The Scots can't be rewarded with all these new powers just for voting No. There must be a reckoning. What David Sparks calls "the huge funding discrepancy" between Scotland and England will have to be addressed, he says, by more powers and funds for English councils.

To forestall a punitive reaction, the Scottish political parties will have to set aside their differences and find a way of working together. Essentially, we mean here the SNP and the Scottish Labour Party since the other parties are electorally insignificant. Can two parties so bitterly opposed to each other possibly coalesce in the interests of Scotland? Haven't prominent Labour people been denouncing the SNP as "fascist collaborators" on social media?

Well these parties might bloody well have to. The Scottish people will expect to see their parties come together, if only to put pressure on Westminster to deliver on its promises of more powers and forestall any attempts to cut Scottish spending. The danger is that Scotland could simply fall off the map, as it did after 1979, and it will be the responsibility of all the elected politicians of Scotland to prevent history repeating itself. Moreover, by common agreement, the referendum campaign has re-ignited progressive politics in Scotland, as shown by the success of the Common Weal movement.

The best way to maintain some post-referendum political momentum, and avoid a raid on Scottish spending, would be for the Scottish Government to convene the constitutional convention proposed by Shadow Foreign Secretary Douglas Alexander earlier this year and implicitly endorsed by the Scottish Labour Party. That would be a token of the SNP's willingness to put Scotland before party advantage and accept the new devolution settlement. It would also put the other parties on the spot.

If Labour refused to join in what was, after all, a Labour-inspired project it would be rightly accused of having been talking hot air for the last two years. Gordon Brown could even be invited as co-convenor since the former Prime Minister has been the leading, some would say the only, intellectual force in the Unionist campaign. There might be an important role for Common Weal in urging Scotland's parties to set aside their tribal rivalries and recognise that they both stand for broadly similar social democratic objectives.

A convention of Labour and the SNP might not be as daft as it sounds, especially with the prospect of a Conservative victory in the UK General Election. The enmity between Scotland's two major parties belies the fact that, in most policy areas they agree, even though Labour's referendum flirtation with the Tories has led to some ideological discrepancies. The Scottish Labour Party used to oppose weapons of mass destruction, at least in principle. Now it seems that Trident is a prime symbol of progressive Unionism. And the celebration of the pound, Royal Bank of Scotland and the Bank of England sounded weird from a party that has traditionally opposed Treasury orthodoxy and wants to break up the banks.

But these postures will largely subside after the referendum. As the parties vie for votes in the 2016 Scottish elections, they will have to readjust to the electoral reality that Scotland votes to the Left on most issues. NHS, youth unemployment, the housing crisis, comprehensive education, tuition fees, opposition to welfare reform - these will be the kinds of issues that dominate Scottish politics in 2016, just as in 2011 and 2007. The referendum won't change that.

Moreover, the SNP, which has been accusing Labour of being in bed with the Tories, might discover that it is a belated convert to the Conservative St rathclyde Report and its call for fiscal devolution. And the Scottish Government will also have to fight for the retention of something like the much-maligned Barnett Formula to preserve Scottish spending levels, even thought this perpetuates Scottish dependency on Westminster. Taxation revenues alone cannot match historic levels of public spending north of the border.

Scotland can only really be self-sufficient, as the Scottish Government has repeatedly argued, if it has access to oil revenues and growth policies that allow for an increase in the Scottish working population.

Remaining in the Union means remaining with managed decline as Scotland's population ages, educated workers leave, tax revenues shrink and hydrocarbon revenues go south. As the Institute for Fiscal Studies has repeatedly advised, there will be an independence budget deficit of some £6 to £8 billion. That doesn't go away just because Scotland remains in the Union; far from it. The deficit becomes locked in, leaving the Scottish Government with no means of addressing it.

As the English backlash diverts more money and power to the English regions, it is likely to get bigger still. Resisting this budget squeeze will be the biggest task uniting the SNP and Labour. They will both have to argue that impoverishing Scotland was not the deal offered by Better Together. Labour cited the so called Union Dividend as one of the key reasons for Scotland remaining in the UK: a pooling and sharing of resources. If this dividend is reversed, as seems likely, Labour would be accused of having sold Scotland short.

What Scots of all parties need to realise is that political life will not just return to normal after a No vote. It will be more difficult for Scotland to command the attention of Westminster after Septemberr. The predominantly London based media will stop seeing Scotland as a threat or a challenge and go back to regarding it as a source of quirky tales of pandas and life on remote islands. If Scotland votes No, expect no rewards from a grateful Westminster. That's not how politics works. The Scotland card will have been played. Scots will have to find another way to shuffle the pack.

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