Does ‘no’ really mean ‘no’? In Britain, it’s more complicated than that. By late Thursday night it was clear that the ‘no’ side had handily won Scotland’s referendum on independence, with 55% of voters rejecting the idea of ditching the 307-year-old United Kingdom and declaring their own country. But while the referendum was not the cliffhanger that some expected, neither was it a rousing cheer for the old political system. After months of bitter political combat, the makeup of the United Kingdom might be about the only thing that will remain the same.
As exhausted pro-independence Scottish and unionist British politicians took stock on Friday of how the election had brought Europe’s third biggest economy to the brink of dissolution, both sides found an issue on which to agree: A drastic political overhaul was coming. Both said they would hold British Prime Minister David Cameron to the promises he made over the past two weeks for far-reaching reforms in Scotland. “People are desperate for change,” Alistair Darling, the Scottish politician who led the ‘Better Together’ campaign against independence, told a victory rally in Edinburgh on Friday. “They want more jobs, better jobs,” he said. “Above all they want opportunities for their children and grandchildren.”
Scotland’s First Minister Alex Salmond, who led the independence fight, hinted that the referendum might not even have buried the possibility of independent Scotland battle forever. “The Scottish people have decided, not at this stage, to become an independent country,” Salmond told supporters early Friday, leaving open the possibility that the separatists could fight for another vote sometime in the future, if they do not get the concessions they want.
In fact, although Salmond lost the vote, he has already won big, by squeezing concessions from London that would likely never have happened without the referendum. In a scramble to save the U.K.—and his own career—British Prime Minister David Cameron hurriedly offered the 5.2 million Scots greater autonomy than they have had in centuries; after months of lagging badly behind the unionists, the nationalists in recent weeks gained huge support, spooking Cameron and sending intense nervousness through international markets. Among the rights Cameron offered were far greater control over raising tax and spending revenue, for which pro-independence nationalists who control the Scottish parliament have argued strongly.
Now comes the hard work. Britain’s Parliament will need to work out the details, since the fine legalistic points of Cameron’s offer were largely ignored during the frenetic last weeks of Scotland’s campaign. The debate about how to restructure the U.K. could involve months if not years of wrangling in London, where politicians are bitterly divided over how much power, or “devolution,” to grant to each of the four U.K. nations: Scotland, Wales, Northern Ireland and England. Far different to the federal systems of the U.S. and Germany, political power in Britain has always resided in London, in large part because England is overwhelmingly dominant in the U.K., with 80% of the population. “The word ‘federal’ has been a swear word for years, but no longer,” Stephen Tindale, associate fellow in London with the Center for European Reform, a think tank, told FORTUNE on Friday. He says politicians in Wales will now also push for much greater economic autonomy, having seen the Scots win those rights. “It’s quite possible we are looking at some constitutional crisis, or if not crisis, then messiness,” Tindale says.
The hard-fought Scottish campaign has put power-sharing in play, however. At stake is who controls issues of welfare and public health. Those social services that have been cut back during recent years, and Cameron’s Labor Party foes are vowing to protect them if they unseat Cameron in his reelection bid in May next year. Scottish nationalists pushed for far greater social benefits than Scots currently have; now its regional parliament in Edinburgh could try to raise the revenues to offer those.
The messiness has already begun. With the votes barely in, the fight over devolution is emerging as the key political battle that could help decide whether Cameron wins a second term in office. On Friday Cameron assured the Scots he would not roll back his promises. “To all those who voted for independence: We hear you,” he said, standing outside the Prime Minister’s residence on London’s Downing Street. “We now have a chance, a great opportunity, to change the way the British people are governed and change it for the better.”
But after Scotland’s referendum, Cameron, who is deeply unpopular among Scots, could have a tough fight ahead. Standing alongside Darling in Edinburgh on Friday morning, his contender for Prime Minister, British Labor Party head Ed Miliband, said the issue of devolution would define the campaign. “Change does not end today. Change begins today,” he told a crowd of cheering supporters celebrating the victory of the ‘no’ side in the Scottish referendum. “The next eight months is about how we change our country.”
