Devolution debate has moved to Scots Nats' ground

The past year in Scotland will always be remembered for the death of Donald Dewar, the first first minister and the man dubbed…

The past year in Scotland will always be remembered for the death of Donald Dewar, the first first minister and the man dubbed "father of the nation".

After a start dogged by criticism and cock-ups, the death of Mr Dewar could have signalled the terminal decline of Scotland's parliament, but instead the next year looks set to fascinate as Holyrood continues to grow.

Interestingly, the key to this process was exposed in Dublin, in Mr Dewar's final public appearance. He was in town to give a lecture at Trinity College to an audience of academics and diplomats. It was part of a conference on Irish/Scottish history and cultural links. True to form, the speech began with erudition and wit as Dewar discussed parallels between the two countries over the centuries. The audience loved it, but then the tone changed. The latter half of the speech amounted to a crude attack on the Scottish National Party.

In an aside to the written text, Mr Dewar said he didn't think devolution would lead to independence unless "my entire political life has been wrong". Some of the Scottish academics at the conference were angered by the speech. They thought it inappropriate for Scotland's head of government to attack domestic opposition while abroad. Sources in the Irish government told The Irish Times they found the speech "bizarre", both for its domestic focus and the assumption that an Irish audience would sympathise with the British union. What it revealed was the fear in Scotland's unionist establishment that devolution would lead inexorably to a further shift in power from Westminster to Edinburgh. Mr Dewar had always conceived of Scotland's parliament being the conclusion of a process, not simply a step along the way.

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Two weeks later he died from a brain haemorrhage and the contest to succeed him as Labour leader revealed a paradigm shift in Scottish politics. It is this shift that makes Edinburgh the most interesting centre of British politics outside Belfast. The coming general election in Britain will probably result in another handsome victory for Tony Blair. The story for England and Wales will be the failure of the Tory recovery.

In Scotland, though, the story will be about how the new parliament has changed the rhetoric of campaigning so that everybody is a small "n" nationalist now. As the obituaries for Mr Dewar were being written, Henry McLeish and Jack McConnel were planning their bids for the vacant leadership. The Labour claim that devolution would "kill the nationalists stone dead" appeared hollow, as both men hinted they would bring more powers to Holyrood and protect Scotland's interests against London. Mr McLeish won and his inaugural speech to Holyrood as First Minister emphasised his loyalty and commitment to Scotland. Now the talk in Holyrood is of what new powers Scottish Labour will demand from London in the proposed Amendment Act to the devolution legislation.

Meanwhile, Mr McConnel has announced he will set up a series of quasi-representative offices working separately from British embassies in key cities. Such talk and actions were once the sole preserve of the SNP. This all points to 2001 being an exciting year for Scotland. Devolution has brought about a quiet revolution in attitudes that the parliament must now try to match. It all makes a pleasant change from the poor beginning for Holyrood. A report out this month from the respected Constitution Unit based at University College London blames devolution's bad start on the "corrosive small-mindedness of the Scottish press". Scottish newspapers spluttered with vitriol and venom during Holyrood's first year.

Trying to explain the bile is difficult. Labour dominates the Scottish media, with every newspaper that expressed an opinion backing the party at the last election. The bile appears to have been the jaded hacks attempt to show they weren't in Labour's pocket. Now there is an open debate about why Scotland has such an in-bred media.

This is part of a wider discussion that is facing up to the fact that Scotland is a squalid village when it comes to the professional classes. In a country where everyone appears to know everyone else's business, there is growing concern that impartial and independent advice and action are near impossible commodities. It will be fascinating, in the way it is fascinating to watch a child grow, to see how these debates develop during 2001. No observer should forget that Scotland's growth has a direct impact on the rest of Britain.

As the Constitution Unit's Robert Hazel says: "This demand for more devolution is the greatest shift in the light of the first year's experience of devolution and the greatest challenge facing the UK government." My predictions (silly me) for the year ahead are these: in the British general election, Labour will lose around five seats in Scotland. As they have 55 out of a possible 71, they will legitimately claim this is merely a correction for a party that still dominates the country. The currently seatless Scottish Conservatives will win a couple and the SNP will win a few more.

The nationalist share of the vote will not rise dramatically but the political debate will continue to shift onto their territory, with all the parties increasingly thinking in terms of boosting Edinburgh at the expense of London. Blair's second term will be ambushed by these questions when he tries to reform housing benefit and other social security spending that is the preserve of Westminster. The nationalists will begin to emphasise "fiscal autonomy" in place of "independence", while their new leader, John Swinney, the embodiment of the Scots stereotype of honest and plain dealing, targets the next Holyrood election in 2003 as his shot at power.

The fascinating question underlying all this concerns the economy. If Wall Street continues to dip, it will mess up Gordon Brown's plans. Quarterly figures suggest parts of the British economy are already in recession. Economic downturn traditionally prompts political conservatism. How this might effect Scotland's political growth is anyone's guess.