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2011 Review 3: The SNP victory march

The May 2011 Holyrood election was one of those landmark moments when a nation discovers that it has, almost by accident, altered the course of history ...

even if it isn't quite sure in what direction. Labour didn't just lose 22 seats – the SNP finally stormed the gates of its west of Scotland heartland, taking Glasgow Cathcart, Kelvin, Shettleston and even Anniesland, seat of the late Donald Dewar himself.

The SNP swept Edinburgh too, leaving only one Labour constituency member in the capital city, the "neonationalist" Malcolm Chisholm, and no Liberal Democrats or Tories. The Scottish Liberal Democrats also lost all their constituency seats in the Highland and Islands and in northeast Scotland. After the bloodbath, the SNP was left with 69 out of 129 seats – a landslide that has turned the debating chamber into a supporters' club. But Alex Salmond could legitimately claim that the SNP was the first political party in modern history to represent the entire Scottish mainland.

All three opposition leaders resigned, and the clock started ticking for the independence referendum which was now unstoppable.

2011 was also a critical year for me professionally and personally. Over 30 years of writing about Scottish politics, I'd always argued that home rule within the UK was the only plausible constitutional destination for Scotland. I envisaged a form of federalism where Scotland would have extensive tax-raising powers within a broad union with England and Wales. I accepted the right of the Scottish people to leave the UK – but I just thought it would never happen. Independence seemed too dramatic, too disruptive, too revolutionary for this small-c conservative country. Now I am not so sure.

Scots did not vote directly for independence in May, of course, but this massive vote of confidence in the Scottish National Party, and in particular its leader, Alex Salmond, was not made lightly. The Scottish voters did what commentators like me said was impossible, delivering an absolute majority in a proportional election.

The second bombshell to hit Scottish politics detonated not in Holyrood but in Brussels in December, when David Cameron vetoed the European Union treaty on the new "fiscal compact" to resolve the euro debt crisis. Cameron has made what looks like a fundamental and irreversible change in Britain's relationship with Europe, delighting his eurosceptic backbenchers, but fatally undermining the Unionist cause at home. The charge against the SNP has always been that they are "separatists", who seek to divide nation from nation, and risk leaving Scotland alone and isolated from the mainstream of Europe. Now it appears as if David Cameron is the separatist and that Britain is isolating itself from the other 26 members of the European Union.

The euro debt crisis has altered the dynamics of the Scottish question in much the same way as Britain's membership of Europe altered it in the 1970s. If the United Kingdom is on its way to the outer fringes of Europe, then what is left of the argument that only by remaining in the UK can Scotland be assured of representation at the "top table of Europe"?

After the Cameron veto, does anyone seriously believe that the 26 countries of the greater EU, which have finally shown England the door, would deny membership to an independent Scotland?

The United Kingdom used to be a humane project for the common good, based on universal principles and embodied in great social institutions like the National Health Service. Not any more. The NHS is being privatised in England. Britain today looks more like a devil-take-the-hindmost union, driven by eurosceptic English Conservatives and dedicated to protecting the financial interests of the City of London. Scots who retain a commitment to those old values have been left adrift and confused. For it wasn't just the Tories who debased the coinage of union: it was a Scottish Labour chancellor, Gordon Brown, who gave birth to the monster that is the City of London through his policy of "light-touch regulation".

Scotland remembers the charge that they were greedy for seeking to benefit directly from oil revenues in the 1970s and 1980s. "It's Scotland's Oil" was a political own-goal for the SNP, precisely because the slogan seemed selfish and narrow-minded. But where did the oil wealth go? To pay for the great industrial recessions of the 1980s that destroyed Scottish manufacturing, and to help make London the investment banking centre of the world.

But that doesn't necessarily mean Scots intend to vote for independence in the referendum pencilled in for the middle of 2014. It remains the case that support for independence rarely rises above one-third in opinion polls – though in an amusing poll for the Scottish Social Attitudes Survey in November, 65% said they would support independence if they were £500 better off as a result.

The vast majority of Scottish respondents continue to say that they want a parliament with more powers within the UK. Scots have difficulty saying they want to "break up Britain" even as they vote in huge numbers for a party dedicated to precisely that.

But the scale of Labour's defeat, and the absence of any coherent response from the Unionist parties, has created a momentum for further constitutional change which will be very difficult to halt. Already, the Scotland Bill, which comes back to Parliament early this year, is looking like an irrelevance. This is the bill which implements most of the recommendations of the 2009 cross-party Calman Commission on devolution, which proposed extensive new tax-raising powers for Holyrood including a 50-50 division of income tax revenue. The tax proposals had been severely criticised in 2011 by Nationalist economists as unfair, inherently deflationary and probably unworkable. But now Labour and the Scottish Liberal Democrats seem to be ditching Calman also.

The shadow foreign secretary, Douglas Alexander, made a dramatic intervention in the autumn of 2011, telling Labour that they had been "gubbed" and that they had to show "an open-minded approach as to how the architecture of devolution can be improved". The Liberal Democrats too have set up a commission under the former leader Sir Menzies Campbell, to look at a new, improved form of devolution as a way of getting back into contention.

The Scotland Bill will require the consent of both parliaments if it is to become law. Salmond has called for the bill to include powers for Holyrood over broadcasting, the Crown Estates, excise duties and corporation tax. The Scottish Secretary, Michael Moore, is making clear that he isn't having any of it, and says that if Salmond wants the increased borrowing powers contained in the bill, he is going to have to lose the rest of his wish list. The way things are looking, both parliaments may decide that it is best to lay the bill to rest rather than amend it to death.

But whether the bill stands or falls, the home rule story has already moved on to the next chapter. Figures from across the political spectrum are calling for virtually all tax-raising powers to be handed over to Holyrood. The SNP call this "full fiscal freedom"; Labour's Lord Foulkes calls it "fiscal responsibility"; others call it "devolution max" or "independence lite". Whatever, it implies a fundamental change in relations with England that might eventually look very like independence. After all, the SNP says that, after independence, it would keep the pound and look to co-operate with England on foreign policy and non-nuclear defence.

Indeed, critics of the SNP question how Salmond can still call it "independence" when the Bank of England is setting interest rates and Brussels is regulating the Scottish budgets. This is the modern Nationalist paradox: they appear to support not one but two monetary unions – UK and EU – at the same time. Salmond has tried to resolve the contradiction by invoking a new, though largely undefined, "social union" between Scotland and England, as if in some way trying to retrieve the best bits of the old UK and a referendum on the euro. But the SNP seems finally to have accepted that true independence is an anachronism – that the world has changed, and that in future Scotland is destined to remain in perpetual negotiation with other supra-national authorities.

Perhaps this is why Salmond seems content to sacrifice formal independence in a multi-choice referendum. For if the SNP leader continues to offer not just independence but also "devolution max" on the referendum ballot paper, he must surely realise that independence would lose. Scots would vote for devolution max. The calculation must be that "fiscal freedom" would be so close to formal independence that, in the modern multinational world, there would be no practical difference. Salmond could win even if he loses. But by the same token, in winning fiscal autonomy he might kill forever the "auld sang" of full independence.

Whatever, in 2011 independence ceased to be a hypothetical and became an immediate and practical possibility. I now think it is almost inevitable that Scotland will leave the United Kingdom as we understand it – though it will almost certainly find itself back in some kind of confederal relationship with England. The two partners in the ancient Union are now on very different political trajectories. It would be well for everyone in Scotland – and the UK – to start preparing for the transition now. It is in no-one's interest for the United Kingdom to disintegrate chaotically.

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