Labour is numb following its Glasgow East humiliation. But by-election numbness is not new to ailing governments. What is new is the scale and the source of that numbness: Scotland.

This election was not just about Gordon Brown. It was about Scotland.

Joseph Schumpeter, the philosopher, remarked that “no decade in politics ever contained its own explanation”. The first decade of the 21st century may yet do so. As that of the 18th signalled the uniting of the United Kingdom, so this one may signal its disuniting. From small acorns great oaks grow.

Last week’s by-election defeat for Labour can be dismissed as a classic mid-term flash in the pan. The dominant party locally was also the party in distant government and under a spectacularly unpopular leader at a time of collapsing economic confidence. Any stick will do to beat the dog.

That said, the winner was the candidate of the local Scottish government, so the vote was specifically for one tier of rule and against another.

In those circumstances the best advice to Margaret Curran, the defeated Labour candidate, would be to sit back and think of England and the next election, which on past form at such by-elections she should win.

Besides, in the words of the new Labour anthem, things can only get better. The economy may improve sooner rather than later. Brown may turn a corner. The Olympians may win medals. The Tories may hit a rock. There is always a first time in politics, and Labour is down but, with two years to run, by no means out.

The trouble is that thinking of England is not the point. Scotland is. The phenomenon of Scottish nationalism was widely dismissed last year as boisterous William Wallace indulgence. It was aided by Alex Salmond, the leader of the Scottish National party (SNP) with the calibre of a national leader, who shrewdly decided to make his mark locally. When last year the Scots voted the SNP into office, by the narrowest of margins, it was regarded as a protest against Tony Blair, against the Iraq war, against English centralism by bloody-minded Scots.

What nobody in England – or Scottish Labour – was prepared to accept was that the Scots might have voted quite specifically to be more independent of England, albeit to an unspecified degree. Under devolution, a new spirit of identity was emerging north of the border, into which Salmond and the SNP had tapped. It was not necessarily directed at constitutional independence, but was a clear signal that this ancient country wished to discover a new autonomy and would not be pushed about from south of the border.

Nobody visiting Scotland since devolution eight years ago can be in any doubt of this. Politicians, the media, artists, professions, universities, festivals have been reinvigorated – and have become ever more Scottish.

Edinburgh has the unmistakable air of a national capital. Glasgow is a city transformed. Scotland manifests a mood common across Europe, the increasing assertiveness of sub-national territories.

In places this assertion has been bloodthirsty, notably in Northern Ireland, Spain and former Yugoslavia. It is marked elsewhere in regional movements in Italy and France and in the break-up of Czechoslovakia. In Britain devolution was long dismissed by London as a sop, a comforter to provincial egos bruised by the years of Thatcherism.

This was a serious misreading of public opinion. Devolution has become a process, not a sop. Even Wales, where the desire for autonomy is weakest, has this year sought and been granted new devolved powers. Scotland in turn has moved ever farther from London, taking control of health, higher education, environment and transport. It will doubtless soon cross the Rubicon of taxation.

Salmond has done more than play a provincialist blinder against the Labour government in Westminster. He has made the Westminster parties concede that devolution is now a continuing phenomenon, as ever more powers pass over Hadrian’s Wall and Offa’s Dyke. These are powers which the parties continue to deny to England’s counties or provinces.

All this is but an overture. Across Europe the shift of sovereign power from nations to Brussels has been matched by a move below the national tier towards regions and localities. There is no reason the United Kingdom should be exempt from the latter shift. Scotland is clearly heading in this direction, if Salmond can prevent a process from turning into what he calls “an earthquake”.

He knows that Scottish “independence” carries with it costs and risks. That is why the argument over the wording of a possible independence referendum has become so crucial. How independent is it meant to be?

Whitehall’s McCrone report in the mid1970s may have been suppressed for recording the scale of England’s “theft” of Scotland’s oil, but every economist will attest that oil-royalty economies are unstable. It would be as reckless to use Scotland’s waning oil wealth for current spending as for replacing the Westminster subsidy, which enables £8,623 to be spent per head north of the border against £7,121 south of it. Scotland’s public sector is bloated enough already, at more than 50% of its domestic product.

There is as yet little in common between a fiscally independent Scotland and the “Celtic tiger” of Ireland, albeit now much mauled. The restructuring needed to turn the country into a true “silicon glen” could see former Labour voters flocking back to the party, if not to the union.

Telling the Scots they cannot “afford” independence is daft. Freedom runs stronger than money. Besides, dependence on “Britain” has not made Scottish business more efficient, any more than the National Health Service has stopped the Scots being the unhealthiest nation in Europe. On any showing, independence would be painful, but the lesson of such partitions elsewhere is that eventually they can be an elixir for small new states.

For England a “confederated” United Kingdom would be nothing but gain. The obsession among Westminster politicians with keeping the union is archaic. There will always be a union of sorts, not least of the “kingdom” and under Brussels.

Devolution’s day has come, borne by the contempt shown to the periphery of Britain by the centre. Salmond has reserved his chief scorn for the old Labour machine, which has treated Scotland much as it does provincial England, as colonial lobby fodder.

An autonomous Scotland, a country as big as Denmark, should liberate the English parliament to enjoy a politics freed of the alien encumbrance of Scottish seats. It should liberate English politics, and especially the Labour party, from the distortion of 50 Scottish socialists, most of them indelibly linked to old-fashioned concepts of public spending. It should also liberate England to consider its localism, its neglected Anglo-Saxon history and culture, without having to “take into account” the Scottish (or Irish or Welsh) ingredients of that curious vacuity, Britishness.

Glasgow East has done more than delivera bloody nose to the most Scots of modern British prime ministers. It has accelerated a process that may soon rearrange the political and geographical components of the United Kingdom. This is not just for the best. It is for real.

simon.jenkins@sunday-times.co.uk

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