2011. Why I think independence is inevitable.

  Spare a thought for Iain Gray this festive season He was by no means a bad politician – as his party discovered when they looked to replace him.  But the abiding image of the 2011 Scottish parliamentary election campaign has to be Labour's Scottish leader seeking refuge in a “Subway” sandwich bar after being pursued by anti-cuts protesters. Mr Gray said he was no 'feartie', and reminded reporters that he had “walked the Killing fields of Cambodia” before entering politics. But the 'meatball marinara incident' helped seal his fate in the subsequent ballot, as Labour suffered its worst election defeat in at least 80 years.

The May 2011 Holyrood election was one of those landmark moments when a nation discovers, almost by accident, that it has 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, 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 North East Scotland. After the bloodbath, the SNP was left with 69 out of 129 seats in Holyrood – a landslide that has turned the debating chamber into a supporter's club. But Alex Salmond, could legitimately claim that the SNP was now 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 thirty 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. Of course, 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 which, contrary to its popular image, avoids confrontation whenever possible. Now I am not so sure.

Scots did not vote for directly for independence, of course, in May 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 SNP majority in a proportional election. It had the look of a watershed. And the political landscape did not just change because of the Scottish 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 resolved 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 now 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 '70s. 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”? Both the former Liberal Democrat leader, Paddy Ashdown, and the Labour First Minister of Wales, Carwyn Jones, have said that Cameron's veto has “strengthened the the hands” of the Nationalists, and they should know. As regional unionists, they see the danger that this new separatist Conservative-led administration poses to the moral integrity of the United Kingdom. How it turns the arguments about Scottish and Welsh independence on their head. After the Cameron veto, does anyone seriously believe that the 26 countries of the greater EU, who 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 Chancellor, Gordon Brown, a Labour son-of-the-manse, 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 70s and 80s. “It's Scotland's Oil” was a political own goal for the SNP precisely because the slogan seemed selfish and narrow-minded. Politics is always about morality rather than material interest, and Scots didn't want to appear grasping. 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. It's difficult for Scots to still feel they have a stake in this Banker's Britain.

But that doesn't necessarily mean they 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 a 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 - 68% in the Times/Mori poll in December. 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 sheer 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 in the New 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 in the New Year. Alex 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 Alex 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 right now, both parliaments may decide that it is best to lay the bill to rest rather than to amend it to death.

But whether the bill stands of falls, the home rule story has already moved on to the next chapter. Figures from across the political spectrum – from the Conservative-leaning Reform Scotland think tank, through the Blairite former minister, Lord Foulkes, to nationalist “fellow travellers” like the former First Minister, Henry McLeish, are calling now for virtually all tax raising powers to be handed over to Holyrood. The SNP call this, “full fiscal freedom”; 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 it might eventually look very like independence. After all, the SNP says that, after independence, it would keep the pound and look to cooperate with England on foreign policy and non-nuclear defence.

Indeed, critics of the SNP question how Alex 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 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 Mr 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 policy now backed by Lord Foulkes and many Conservatives.  The calculation on Mr Salmond's part must be that this measure of “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, widely discussed and debated. I now think it is almost inevitable that Scotland will leave the United Kingdom as we understand it now – 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.