Episode 2 Scotland and the Battle for Britain

If you had to put some money on it,

do you think Scottish independence is now coming?

I think, certainly, one would say that probably somewhere around a 50%

chance that Scotland is going to vote to leave the United Kingdom

in the next two years.

And that we may, in the end,

discover that September 2014 was but simply the first instalment

of a two-part drama, which,

at the end of the day, resulted in the break-up of the United Kingdom.

Over the past two years, Britain has been rocked

and reshaped by referendums.

We're living through a period of political turmoil

unlike anything since

the Second World War.

This year's Brexit referendum was a revolt by millions of people,

mainly in England, against the failures

of international politics and economics.

It was a rebellion against the elites which willingly gambled

about the economic future and shook off warnings about Britain

being too small and too poor to cope.

And in all those ways, the Scottish independence referendum of 2014

provided striking earlier parallels.

This is an age when contempt for Parliamentary democracy

has spilled over into a new kind of politics.

The next big question is whether that European revolt,

not shared in Scotland,

will produce a second Scottish referendum

and finally break the UK apart.

In the second of these films, I'm going to look back at the Scottish

referendum, the EU referendum,

and the options currently facing Nicola Sturgeon and the SNP.

I believe that Britain will be safer, stronger

in a reformed European Union.

Now, it may have finished in September 2014,

but the independence referendum

still casts a long shadow over Scotland.

Two years on, and Scotland is still dealing

with the after-shocks of that referendum.

And, of course, since then there's been another referendum,

and while England and Wales voted to leave the EU,

every single local authority area in Scotland voted to remain.

Now, before the Brexit vote, there was a lot of loose talk,

and I think I was one of the loose talkers,

to the effect that this would mean an almost inevitable second Scottish

independence referendum and the break-up of the UK.

But, now it's happened, things don't feel quite like that.

In fact, Brexit has thrown up new dilemmas,

new problems for Scottish nationalists to resolve.

And they have to resolve them in an atmosphere which remains a bit raw,

a bit tender to the touch.

So, why did the Scottish referendum

of 2014 on independence

come to seem almost inevitable?

It followed on directly

from the huge success of the SNP in the 2011

Scottish Parliamentary elections, when, for the first time,

they won an overall majority and were able to turn to Number Ten

and say, "Right, give us our referendum."

And, perhaps to many people's surprise, David Cameron said,

"All right, then, I will."

It must have seemed a relatively safe and easy bet to him back then.

Because nobody thought the Scots would actually vote, would they,

for full independence quite so quickly?

What neither David Cameron nor most observers

could have predicted was the extraordinary outpouring

of democratic energy, for good and ill,

that overwhelmed Scotland in the extraordinary,

heady weeks of the referendum campaign.

Something that we have never seen before in Scotland, or frankly,

anywhere else in the United Kingdom.

-THEY CHANT:

-Scotland says yes! Scotland says yes!

Yes - the campaign for independence - hit the ground running,

with star-studded events, glossy manifestos and the First Minister,

Alex Salmond, leading the cry.

I believe on the 18th of September, 2014

the people of Scotland will vote yes to create a better country

than we have now.

'I always believed it was winnable.'

What we were putting forward was something which many,

many Scots found attractive.

They were inherently attracted to that idea of a different,

new style of Scotland.

A different Scotland in terms of its

social policy, it's social complexion.

The idea we could have a better society

in Scotland through independence.

The right honourable Alistair Darling, MP.

The No camp were also confident,

but right from the start they were much quieter,

and initially still looking for a leader.

Alistair, how did it come about that you were made, as it were,

leader of the Remain campaign for the Scottish referendum?

Well, quite simply, because none of the political parties outside

the nationalists were showing any inclination to lead.

If my own party had wanted to lead the campaign

I'd have happily fallen in behind them.

It's the old saying - if you want something doing, do it yourself.

I felt strongly about it.

I feel very strongly, as we all do, about our country.

And, you know, I was damned if I was

just going to see the argument go by default.

You've got to remember, in 2012, there was a feeling that

it was almost inevitable that we were going to break away.

And I just thought all the arguments fly in the face of that.

For the next two years, the vote gripped the whole of Scotland,

young and old, urban and rural, rich and poor.

The Yes campaign became far bigger

than simply people who were supporters of the SNP.

Darren McGarvey grew up in a Glasgow housing scheme and is now a rapper,

writer, and something of an activist.

I believed in independence, because the community that I come from,

it's generational poverty, alcohol abuse, drug addiction.

Complete apathy towards the system.

Violence everywhere.

I attributed a lot of that to the decisions of the British state.

A detached, pragmatic political class

that shirks difficult decisions about radically changing society.

Scotland's poorer working class communities,

the people that conventional politics had forgotten,

would have a big influence on the referendum's voting patterns.

As the campaign went on, and the polls tightened,

both sides launched a hunt to drive down, find,

and register the so-called missing million.

All those Scottish voters who hadn't

voted at the time of the last election.

Where did they go? They went to places like here, Easterhouse,

on the outskirts of Glasgow,

and housing estates beyond, some of the worst,

and poorest housing anywhere in Europe.

And what did those voters think?

Well, most of them voted Yes.

They were utterly disillusioned,

and felt no loyalty to the old political establishment.

To use a good Scottish word,

they were simply scunnered with Westminster.

Cameron government, you are done!

Independence, here we come!

Cameron government, you are done! Independence, here we come!

I think a lot of the reasons why we've seen record levels

of participation from deprived communities was because the Yes

movement was genuinely something fresh and something new.

And there was that sense that we were operating outside of the,

kind of, the official narrative of what was going on

and that there was something rebellious happening.

Out on the streets there was a tremendous amount of democratic

energy coursing through both sides.

But the debates and the messages were also played out

and impassioned through social media.

The point about the referendum campaign, if I held a meeting,

and, you know, virtually, I could go to any hall during the campaign

and have hundreds of people turning up.

But that wasn't like 400 people,

that was 400 people times the 70% of them who were on social media

who were broadcasting it out to their hundreds of contacts.

And all of a sudden you weren't speaking to 400 people,

you were speaking not to 4,000, but to 40,000 people.

And the essence of what is popular and vibrant in social media

is what's real. So you can't just do it without the meeting.

The meeting has to be there to provide the interest, the colour,

the thing that they want to talk about...

-It creates the carnival atmosphere.

-It creates its own momentum,

as you rightly say, a carnival atmosphere.

So, it was a campaign of deliberate spontaneity.

The nationalists do say that this was a great liberation. Actually,

if you're on the other side, it was not.

It was divisive, it was unpleasant.

You know, families, friendships have been disrupted.

And, you know, basically, what they're saying is,

you know, they did well.

But it's a very one-dimensional thing, because, you know,

they haven't accepted the result.

They would like to carry on until the whole of Scotland

accepts what they want.

'The bitterness affected people on the pro-Union,

'Better Together, campaign.

'Some No voters were accused of being somehow less patriotic,

'of not being proper Scots.'

I'm going down to Melrose, in the Scottish Borders,

to talk to a man nobody could accuse of not being a proper Scot.

Alistair Moffat has been a television executive,

he's helped run a university,

he is a very, very highly-respected historian.

He runs book festivals, a close personal friend of Gordon Brown,

and a Labour man.

But I'm really going down to see him because Alistair

is, above anything else, a Borderer.

The Borders are special.

In the Borders, only a third of people voted for independence.

Two thirds voted against.

So I'm going down to hear what it's like

being on the other side of the Scottish argument.

'The beautiful little town of Melrose has deep links

'to Scottish history.

'After Robert the Bruce, Scotland's medieval independence hero, died,

'his heart was buried at the 12th-century abbey.'

Alistair, could we start by talking about this area, the Borders,

and how distinctive that is in Scottish politics?

Well, geography makes the Borders distinctive.

We've got sheltering hills to the south in the shape of the Cheviots

and the Lammermuirs to the north.

And it's a great river basin, the Tweed basin.

And so, geographically distinctive, culturally distinctive,

and also politically distinctive.

I suppose the latest demonstration of that was in the independence

referendum, where the Borders voted emphatically No here.

And the reason for that, Andrew, I think,

was that we are right on the border.

We're right... We know who the English are.

They're our neighbours.

And so there's a sense of our brothers and sisters

across this artificial line.

And the idea of us, somehow, separating from England,

people just couldn't make sense of it.

Why would we do that? You must form alliances, unions,

bigger blocks to take on the problems of globalisation.

If you're smaller, you're more prey, not less.

But it does now look like the EU referendum has changed many minds

on the left in Scotland, perhaps even in the Borders.

The Scots have always been at their best when they are outward looking.

Think of the Enlightenment, think of the great scientists,

the great artists and, so, to withdraw from the European Union,

I think, would go against the historical

and cultural grain of many Scots.

You sound almost as if,

as a No campaigner, you might vote Yes in those circumstances?

I wouldn't vote Yes, but I can understand people who do.

And there are many parallels between the two referendums,

the Scottish one and the EU one.

If Scotland walks away from the UK, it walks away from the UK pound.

Scotland's kind of revolt was different.

More populist, left wing and anti-London,

rather than anti-immigration and anti-Brussels.

It was, however, at least as passionate.

But while Yes Scotland appealed to the heart,

the Unionists went for the head, with a barrage of terrifying,

po-faced warnings about the economy.

Should Scotland become independent

it would start off in life in a worse

financial position than the UK.

When the referendum campaign first got going,

there was about 30% or so of Scottish voters who seemed

uncommitted to one side or another. Up for grabs.

And so, to target them, the pro-Union Better Together campaign

relentlessly focused on Scotland's economic weaknesses.

Scotland was just too poor, too small to go it alone,

so Scottish people would lose their jobs when lots of big companies

hoofed it back over the border to England.

Scottish pensioners would be worse off, because an independent Scotland

wouldn't be able to pay them a proper pension.

And, perhaps most worrying of all,

it wasn't even clear what kind of currency

an independent Scotland would have. The euro - no, thanks.

The pound - no fear.

Today in 2016, this might sound quite familiar,

but this is the first time we met the phrase "Project Fear",

in the Scottish referendum.

When it comes to voting, getting governments you didn't vote for,

I didn't vote for him, but I'm stuck with him!

I just accept that's what happens in a democracy.

We can use the ruble, we can use the yen, we can use the dollar,...

But we're going to use sterling, Alistair.

But you don't have a central bank.

Now, it's still not clear whether, in the end,

Project Fear actually worked, whether it tipped enough

Scottish voters, right at the last moment,

into sticking with the Union,

but it caused an enormous backlash in Scotland.

Huge resentment and anger,

and Project Fear is remembered, without a great deal of affection,

in Scotland to this day.

As the campaigns went on, the warnings got darker.

A vote for Yes is a huge risk, a huge risk to jobs,

to the currency and our national health service.

And it went on and on,

even though many within the No camp didn't think it was working.

It was absolutely appalling,

and I was regularly telling George Osborne

to stop running a negative campaign,

to stop telling the Scots

that they were too wee and too poor to run their own affairs,

that they couldn't have the pound.

It simply wasn't credible.

And we started off in that campaign with only 28% supporting

independence, and we ended up with 45%.

And, surprise, surprise, the thing that has astonished me,

is that instead of learning from that lesson, they used the same

playbook in the Brexit referendum

with similarly catastrophic results, from their point of view.

Many people thought, "We're not going to be bullied.

"We're not going to be

"frightened into this."

So, for many people, that sort of weighing in of the establishment

stiffened the resolve.

But, equally for some people, understandably, it made them pause,

and think "Hmmm."

Was there a No campaign that you'd have been worried about,

or frightened of that didn't happen?

Yeah. The No campaign that talked about the great things about being

British, the positive No campaign.

I mean, I could have made a better fist of it than those who ran

the No campaign made.

And that is the campaign that

I think we would have been much more troubled by.

But they never, ever, ever got their act together to do it.

Some of the economic questions in Project Fear

would come back to haunt the SNP.

But support for independence grew and grew.

And then, two weeks before polling day,

an opinion poll suddenly put Yes Scotland in the lead.

-NEWSREADER:

-Supporters of Scottish independence

say they are optimistic that the referendum will produce a majority

in favour of leaving the United Kingdom.

-NEWSREADER:

-Their leaders say they're encouraged

by the first mainstream opinion poll to put them narrowly ahead.

-NEWSREADER:

-A YouGov poll for the Sunday Times suggests

that a narrow majority of Scottish voters

is now in favour of leaving the UK.

I can vividly remember on the day,

how much that poll utterly shocked Westminster politicians.

You could virtually feel the British state rocking on its foundations.

I was on the golf course. I was in the Castle Stuart golf course,

because I was trying to have the occasional game of golf

to stay sane.

And I said, "Oh, dear."

Because I knew, immediately,

that the Saturday I wanted to be ahead was the Saturday

before poll, not the ten, 11 days.

That gave time for the reaction to kick in.

Yeah. As we were expecting, and as I knew there would be.

But, you know, there we were, gradually advancing, you know,

from the 28% where we started towards 50%,

knowing that we had to get there just at the right moment.

And to get there at the right moment was the moment

where it was too late for our opponents in their complacency

in their self-satisfaction, to react.

But shortly after that YouGov poll, another political beast

emerged from his lair in Fife.

Gordon Brown, still a big figure in Scotland,

wanted to make the case for the Union

with both passion and vigour while still remaining a proper Scot.

We are proposing that over the next few months we agree a programme

that the Scottish Parliament should have increased powers,

in welfare, in social and economic policy,

and in finance.

We are also proposing that there is a timetable for delivery.

So, immediately the referendum is over on September the 19th,

we start the process of new laws

to enhance the powers of the parliament.

These are big changes that we are proposing.

To strengthen the Scottish Parliament, but at the same time,

to stay as part of the United Kingdom.

Thank you very much.

Brown wanted to tell people that voting No

to independence didn't simply mean voting for the status quo.

Shortly afterwards, the editor of Scotland's Daily Record

contacted Brown asking him to get the party leaders

in Westminster to sign a declaration on their

front page, the so-called Vow,

delivering new powers to the Scottish Parliament.

-NEWSREADER:

-In the heat of the campaign battle, Labour,

the Conservatives and Liberal Democrats

vowed that Scotland would receive more powers.

I think people still feel let down that the promises that were made

weren't delivered.

And it's part of the reason why we continue to see support for

independence, very strong, and in every poll we've seen

higher than was the case on polling day itself.

-NEWSREADER:

-It's seven o'clock on Thursday the 18th of September,

the headlines this morning.

Polling stations are opening across Scotland.

The date of the Scottish referendum is now marked indelibly on many

Scottish minds.

-NEWSREADER:

-A record turnout is expected as 97% of the electorate

has registered to vote.

-NEWSREADER:

-We'll be here through the night to bring you

the announcement from each of the 32 counts across Scotland,

and the final tally that will decide if it is Yes or No to independence.

As soon as the first results started coming in,

it was clear what the final vote would be.

I was campaigning in Glasgow, and we did win in Glasgow,

so I was high as a kite, convinced we were going to win.

The point at which I realised it was unlikely

we were going to win overall

was the one that came in from Clackmannanshire.

Ladies and gentlemen, could I have your attention please...

You know, that, probably, was a realisation that hit me about one

o'clock, two o'clock in the morning.

-No, 19,000...

-CHEERING

Clackmannan, the wee county, is a barometer,

certainly of the battle between Labour and the SNP.

So Clackmannan was the first result in, and when that went against,

then it was very difficult to see how differential voting

in the cities could take us forward,

so I knew pretty early on that we were up against it.

By the early hours, it was all over.

A 55% victory for Better Together

and agonising for nationalists who had promised

this would be a once-in-a-generation choice.

-NEWSREADER:

-The people of Scotland have said No to independence.

-NEWSREADER:

-Scotland has decided to stay within the Union.

Politics and Scotland will never be the same again.

My colleagues and I will play our part in bringing our country together

to demonstrate that, after this vote, we can remain united.

Scotland has, by majority, decided not, at this stage,

to become an independent country.

I accept that verdict of the people, and I call on all of Scotland

to follow suit in accepting the democratic verdict

of the people of Scotland.

With Scotland voting no, it seemed the Union had been saved,

and very soon David Cameron came to speak

at the lectern outside Number Ten.

I was on the phone to him just before he came sauntering out.

He told me he was going out to make a statement,

nothing at all about what he was going to do.

Good morning. The people of Scotland have spoken.

And it is a clear result.

They have kept our country of four nations together.

And, like millions of other people, I am delighted.

David Cameron was the victor,

but he was already thinking about the pressures within his own party,

and from Ukip.

With the Scottish Parliament now due to receive more powers,

he wanted to wrench the spotlight back to England, and English MPs.

But I have long believed that a crucial part missing

from this national discussion is England.

I was in a room with Alex and we sat there watching

David Cameron make his statement

outside Downing Street, completely dumbfounded.

We've heard the voice of Scotland,

and now the millions of voices of England must also be heard.

Well, that's Scotland back in its box,

now let's talk about English votes for English laws!

And what that said to people in Scotland was, you know,

"See all these promises I made you during the referendum campaign?

-"Forget about them."

-The question of English votes for English laws,

"the so-called West Lothian question,

"requires a decisive answer."

I told David Cameron that it was a huge mistake

to announce new constitutional reform which, frankly,

had been thought up on the hoof.

Thank you very much. And good morning.

It obviously was a huge political mistake by David Cameron,

but an enormous political opportunity for the SNP.

Now, you might have thought that after losing the referendum, the Yes

campaign would be slightly deflated and the SNP would lose support.

Exactly the opposite happened.

Whether out of remorse or defiance, or mere cussedness,

people flocked to the SNP.

A week after that result, the SNP had doubled its membership,

and today, even though Scotland has only five million people,

the SNP is the third largest political party in the UK.

And in the following British general election,

the 45% who'd voted yes gave a massive surge to the SNP.

Well, let's have a look at what the SNP are doing.

The damage they're doing to Labour. Look at that.

It is right up, it's almost breaking our swing-o-meter. 27%.

The nationalists won all but three of the Westminster seats

in Scotland. Scottish politics was moving apart

from the rest of Britain.

What, of course, the referendum did

was to turn the question of whether or not Scotland

should become independent,

into the central defining issue

of Scottish electoral politics.

Now, 45% isn't enough to win a referendum,

but 45% is certainly enough to win a parliamentary election. Crucially,

around 85% to 90% of those people who voted Yes in September 2014

were now, basically, determined to carry on voting for the SNP

in future elections, even if previously they'd voted

for Labour or for somebody else.

So, Scotland now voted differently.

And a year later, the Brexit vote simply underlined that difference.

Shall we now just have a look at the story of what happened

in this referendum?

Yes, David, let's go back to the maps.

And you can see here on the floor, the map of the UK,

as the colours came in during the night.

So, blue for Leave and yellow for Remain.

And in the end it wasn't enough.

Scotland, Northern Ireland and London voting for Remain.

A negotiation with the European Union

will need to begin under a new Prime Minister.

Now the decision has been made to leave, we need to find the best way.

It was a truly historic turning point.

At Westminster, our Prime Minister resigned,

leaving the UK in an awkward period of transition.

While up in Scotland, Nicola Sturgeon seized the moment

and almost immediately started pushing -

forget once in a generation -

for a second Scottish independence referendum.

The Scottish Parliament should have the right to hold another referendum

if there is a significant and material change

in the circumstances that prevailed in 2014,

such as Scotland being taken out of the EU against our will.

'I think it certainly strengthens

'the democratic case for independence.'

That's what I said the morning after the referendum,

nothing has happened to make me change my mind.

'You know, if we cast our minds back to the 2014 referendum.

'One of the central arguments of the No campaign was the fact'

that independence, according to them,

would put our membership of the European Union in peril.

They said that was a key reason to vote No.

Fast forward less than two years,

and we find ourselves on the brink

of being taken out of the European Union,

notwithstanding the fact that a majority who voted,

and 32 out of 32 local authorities, voted to stay in.

So, clearly, that opens up a gaping democratic deficit.

So what does this Scottish difference mean?

There seems to be less fear of immigration in Scotland,

and perhaps Scotland, because of her history,

has always felt more comfortably European.

But if the politics of a second Scottish referendum

excite nationalists, the economic implications were,

and are, much tougher for them.

Once upon a time, Scotland's economic outlook

was very rosy indeed.

Ships were built here in their thousands, steel was forged,

coal was mined, new technologies invented.

The old industries may now have faded, but then, after the 1970s,

the really big money came from North Sea oil.

This is the Cromarty Firth on the north-east coast.

A deepwater, sheltered estuary long used by the Royal Navy,

shipping and, now, the oil and gas industries.

For a handful of decades, oil was the great change maker in British

politics. The volume and the price of Brent crude seemed to matter more

than any pronouncements by prime ministers or anything in a Queen's Speech.

If you look back at history,

every great power system has left its monuments, its relics.

The Egyptian pharaohs left the Pyramids,

the English monarchy left its great castles scattered across Wales and

Scotland. And in a very similar way, moored in the Cromarty Firth,

huge and hulking and massively impressive,

but no longer wanted - big oil has left behind her floating citadels.

My guide on this trip around the dosing leviathans

of the Cromarty Firth is the chief executive

of its Port Authority, Bob Buskie.

Bob, you call this a cold stacked rig, what is a cold stacked rig?

A cold stacked rig is a rig that's come off contract

as a consequence of the low oil price.

So it's come in here to take shelter.

The Port Authority will look after it when it's here,

but it's basically demobilised.

It's de-manned. There's nothing happening.

There's nobody on it, it's just a rusting hunk of steel?

Can you judge the state of the oil market by the number of these things

that are towed into the Cromarty Firth?

Yeah, you certainly can, Andrew.

When the price gets depressed,

the way it's been over the last 18 months,

what you see is a pull-back in development in the North Sea,

a pull-back in exploration drilling, a pull-back in appraisal drilling.

So, generally, what will happen is these rigs

will come off contract and they would be stored here

in the Firth until the market recovers.

To the south-east of the Cromarty Firth,

is the centre of the Scottish oil industry -

the Granite City of Aberdeen.

Back in the day, Aberdeen was a kind of sober, douce city

of intellect and academia, a bit of fishing,

but above all - respectable and quiet.

But ever since the discovery of oil in the 1970s,

Aberdeen has been transformed.

It's become Scotland's boom town.

And the symbol of the huge change in the Scottish economy,

and then the Scottish economic argument that oil brought.

Jim Simpson was a whisky salesman before the boom broke.

He drives an imported Lincoln Continental,

which doesn't even raise an eyebrow

in a city which has had to get used to quick money.

But all this has changed.

The North Sea oil industry has collapsed.

Businesses are closing, properties in the city centre lie vacant,

and unemployment in the oil industry has soared.

I think there's a realisation now that the golden goose is no more.

We had 450,000 jobs,

now, that's across the UK,

more than half the jobs

are actually outside Scotland.

So, very large employer, we think it's now down to about 380,000.

That's a big, big reduction.

The global oil price was, relatively recently, as high as 110 a barrel.

After the referendum, it fell to a low of 30,

and since then it's only risen a bit.

Today, it's 48 a barrel, but it has been slowly climbing.

I think it will vary up and down a bit.

I think 2016 will be a bad year, it will be a very tough year.

There'll be a lot more jobs lost,

because we are still going through a very difficult phase.

Before the collapse in oil prices, its revenue helped balance the gap

between Scottish tax income and public spending.

Oil and gas revenues have always been much more important to Scotland

than to the UK as a whole.

The issue for Scotland is that those revenues have gone down

from over ten billion a year, just four or five years ago,

to essentially nothing.

This inevitably means that, for Scotland to go independent,

it's in an even less strong fiscal position

than it would have expected to have been two or three years ago.

In August 2016, the GERS figures,

that's Government Expenditure and Revenue Scotland to you and me,

were published, revealing that the collapse in oil tax revenues

had pushed Scotland's deficit to nearly £15 billion.

You know, I get very frustrated,

and I'm sure there's a lot of people who feel the same, who, you know,

hear people who describe the status quo in economic terms

for Scotland as somehow an argument against independence.

I've never argued, and I never will argue

that independence is some kind of panacea.

But I believe the best way to deal with these challenges,

to face up to these challenges and, fundamentally, to make sure that we

realise the vast potential of our economy, is to be in charge of the

decisions that shape it. And that is the very essence of my lifelong

support for independence.

But to prepare for independence, you do need an economic plan.

If you rely simply

on the revenues of Scotland,

you are most likely to have less money to spend.

Therefore, the first rule of independence has to be

that you accept an economic shock...

of some dimension.

It may not be that bad,

but until someone takes the trouble to investigate it seriously,

and we discuss that, the case is dead.

So, to put it brutally,

can Scotland survive economically without North Sea oil?

Well, there are other things happening in the Cromarty Firth,

ships delivering blades for Scotland's new wind farms.

And when I was there, there was even a gigantic cruise ship dropping

off tourists to visit the landscape, play golf and buy whisky.

The cruise ship market is absolutely booming around the world,

and ships like this coming into Invergordon contribute at least

£10 million a year to the Scottish economy.

But here's the thing.

This ship was built in Venice.

Now Venice has been making beautiful ships since the 1300s, and still is.

In the 19th century, Scotland was responsible, through the Clyde,

for more than half the ships on the world's seas.

But these days, Scotland has lost that great,

hard-edged engineering exporting tradition.

So I think the question for the future is -

can Scotland re-gain that place as a sharp-elbowed, hard-working,

inventive, highly educated, aggressive country,

going out to grab export markets, that we always were in the past?

Or is it becoming, frankly, a little bit flabby?

Scots do need to remember

just how good we used to be at so many industries.

And if Scotland became independent, we need to build a new economy,

not dependent upon oil.

That's not an option, it is utterly essential.

So how do we escape from an unbalanced economic position

over reliant on particular sectors and commodities

and produce again, a more diverse,

stable, structured economy,

which will be safer and better for our children

and do that, from, what is, let's be frank,

a position of relative weakness?

One place where the Scottish economy is being reinvented is here, Dundee.

The city is virtually unrecognisable from the dark, black,

industrial seaport I remember when I was growing up.

Dundee is still filled with old factories and warehouses,

but many of them are now home to a relatively new

and extremely lucrative industry - video games.

Chris van der Kuyl, one of the city's leading entrepreneurs,

is developing an old cattle shed on the waterfront.

What's behind me in the next 12 months is going to transform

into one of the most exciting digital media

and commercial spaces in the city.

The dramatic change in the use of home video games, digital media,

new technology businesses,

I think, is a very apt metaphor for what's going on in Dundee

at the moment.

Video games make a titanic amount of money,

it's the kind of industry that might help support

a newly independent Scotland.

The video game market is absolutely massive.

The last numbers I've seen were fast approaching

100 billion of value globally.

And it is utterly remarkable.

I was once quoted as saying I thought the games industry

could make, you know, the oil, the North Sea oil industry

look like a drop in the ocean. Actually, that was before

the oil price hit where it is today.

So I probably feel that even more strongly.

Van der Kuyl's company is a developer

for the hugely successful Minecraft,

a game in which you construct imaginary worlds out of tiny blocks.

4J Studios is best known for being the developer of Minecraft

on games consoles.

We released a game four years ago,

and it's gone on to be the bestselling game on the Xbox, ever.

And it's starting to obliterate all kinds of records.

They've even built a Minecraft version of Dundee.

So you can see, we've used Minecraft to try and give everybody an

impression of what Dundee's going to be like.

We'll start to walk along into the waterfront now.

And see the spectacular new V&A museum.

It's going to be pretty cool.

There are many other new industries that might help Scotland to survive

the initial shock of independence.

'In Glasgow, they may have closed many of the old shipyards

'on the Clyde, but inside the huge warehouses

'they are using cutting-edge technology to

'build Royal Naval warships.'

Wind farms may seem to disfigure classically beautiful,

rural Scotland, but they bring jobs, they help replace the oil industry,

and though Scotland lacks many things, wind isn't one of them.

The prospect of Scottish independence is complicated

even further by the Brexit vote.

I used to think for the UK to vote to leave the EU,

while Scotland took a different path,

'made a second independence referendum almost inevitable.

'Right now, that feels a bit less certain.'

The implications of Brexit, economically, socially, culturally,

I think are potentially severe.

So I've said, and continue to say,

that my priority in this context is to seek to protect Scotland's

interests, independence is one possible way

in which I think we could protect Scotland's interests,

but at this stage I'm exploring all options to do that.

So what are the options facing Nicola Sturgeon?

In an ideal world, Brussels would treat Scotland

as an independent country.

Scotland hasn't voted to leave the EU,

therefore Scotland can stay when the rest of the UK leaves.

Now, this is very attractive to a lot of Scottish nationalists.

It's quite reassuring, perhaps, to Scottish voters.

But there is a basic problem.

As you may have noticed, at the moment,

Scotland is not an independent country.

The EU would have to break some of its own basic rules

to make that happen.

But these rules have been broken before.

Given we're in unprecedented circumstances,

no country has ever tried to leave the European Union before.

We know from other scenarios, within the European Union,

that there has been a flexible approach

taken by Europe in the past.

We can seek to explore whether there are differential outcomes,

or solutions for Scotland within a UK context.

And, of course, we can, as a country, decide to consider whether

independence allows us best to protect those interests.

'Second possibility is that Scotland votes'

to leave the UK

and, as an independent country, joins the queue

to try and join the EU again.

If we think this through, there are obvious problems.

To be part of the EU, Scotland would almost certainly have to accept free

movement of people, but with Scotland sharing

a landmass with England,

where they voted against mass migration,

wouldn't this mean we'd see fences and customs posts going up

along the border?

Most people in Scotland are very intelligent and very thoughtful,

and they ask themselves, "Well, what's the choice here?"

Staying in a UK that you, maybe, don't much like,

or going into a, you know, eurozone,

because all new members have to go into the eurozone,

with everything that entails.

And, you know, if you had the free movement of people in Scotland

and not in England, you have to have a border.

You know, as sure as night follows day.

ARCHIVE: 'I'm a political journalist,

'travelling around the country for a book on whether, and if so, when,

'Britain has died.'

'The idea of a hard border does feel a little familiar,

'because 16 years ago I made a series for the BBC

'looking at globalisation,

'the EU, and Scottish devolution.'

VOICEOVER: 'Imagine for a moment that Britain has fallen apart.'

Back then, to illustrate Scottish independence,

we built a fake border post between Scotland and England

and were savagely criticised for being ridiculously alarmist.

Today, plenty of grown-up politicians

are talking about it as a hard possibility,

even if Nicola Sturgeon herself is very dismissive.

And I've heard Theresa May and other UK politicians

being very categoric that they're not prepared to see a hard border

between Ireland...the Republic of Ireland and the North of Ireland.

If these issues can be resolved in that context,

then there is no reason for anybody to make the argument that, somehow,

we are going to have hard borders between Scotland

and the rest of the UK.

Then there is, of course, the double out option.

That is - Scotland leaves the EU with the rest of the UK,

and then Scotland leaves the UK.

Scotland going it alone, with her own currency and her own economy,

in a wider world, as a small country, completely independent.

I don't think it's likely, but we have to include it

as a possible option.

Well, there is no doubt there is an element of support for the SNP,

and support for independence in Scotland

that, frankly, doesn't want anything to do

with either London or with Brussels.

And it certainly looks on all the polling evidence

that around a third or so of those people who would vote Yes

to an independence referendum,

who voted Yes back in September 2014,

actually voted to leave the European Union.

But I think the truth is, that prospect,

the idea of an independent Scotland outside the UK

and outside the European Union, well, frankly,

it's not something that the vast majority of SNP parliamentarians

are going to be willing to campaign for.

But what we're sort of skirting around here

is the small matter of a second Scottish independence referendum.

If the SNP decides to go for it,

they've got some tricky problems over timing.

Nicola Sturgeon is still keeping all her options very open,

but she said she'd want to call one before the UK Brexit.

Look, I'm, at the moment, I've said what I've said.

I think an independence referendum is likely here

and I think the logic would be,

if it is coming about because of Brexit,

that it's in the period before the UK leaves.

But we don't know when that is going to start,

that two-year period is going to start.

We don't yet know whether that two-year period

will both see the UK leave the EU and negotiate its new relationship,

or whether that two years will just be for Brexit.

So there are so many unanswered questions

for the UK as a whole right now.

The SNP won't want to push the euro or a hard border on the Scots

any time soon. But they can't wait for too long either.

Politics runs in cycles, all parties eventually become too settled,

too complacent, and before they know it, too unpopular.

That happened to the Scottish Conservative and Unionists

60 years ago, it happened to Labour,

and it may well yet happen to the SNP as well.

And in the Scottish Parliamentary

elections of 2016,

the Nationalists did

lose their overall majority.

This goes back

to party politics,

and we are still, after all,

a profoundly party political system.

A great joy in reporting politics

is that you never quite know what's going

to come round the corner next.

In the early months of 2016,

what came round the corner in Scotland was a young,

determined, feisty woman.

Ruth Davidson was gay and the leader of the Scottish Tories.

And she took them to a remarkable recovery

in the Scottish Parliamentary elections.

We shouldn't overdo it, it wasn't an SNP-style landslide,

the Tories still only got 22% of the popular vote,

but they more than doubled their representation

in Hollyrood to 31 MSPs and became the official opposition.

Which only goes to show that a mature democracy

contains its own balancing mechanism against swings

that are too big or go on for too long.

Call it the people's gyroscope.

Whatever claims the SNP were pursuing with regard

to constitutional brinkmanship over the next five years,

have now been utterly shredded.

The Scotland that I was born in, as I say, was conservative

with a small C as well as a big C.

Very, very grey, male,

very Presbyterian.

And now it's a country where most of the leaders are gay or female

or both. It's a heck of a change,

culturally.

Yeah, I mean, I think Scotland has changed.

I mean, I'm 37 years old.

When I was born you could still be prosecuted for being in a loving gay

relationship, because we were so far behind other parts of the UK

in terms of legalising, as it was called then, homosexuality.

We've come a really long time, even in my lifetime.

Now, you had a great success.

You have started to bring the

Conservative Party back in Scotland.

You did that by fighting that election and very much,

"As the Unionist party,

"we will be the opposition to the

"SNP in the Scottish Parliament."

In terms of how we fought this election,

we absolutely put ourselves as a counterpoint to the SNP,

because it's a party that's been in government for nine years,

we see that there are a number of issues on which they are not making

progress, or indeed, are going backwards.

But they've been able to use the constitution as a way of diverting

people's attention away from it.

The argument that we ran is, "We will be a strong opposition.

"We'll actually challenge them.

"And we'll ask them to put forward better ideas."

And just as striking as the re-emergence of the Scottish Tories

is the catastrophic collapse of Scottish Labour.

Kezia Dugdale has the hugely difficult and unenviable job

of leading Scottish Labour now.

It's a disaster for Labour tonight.

Yes, it's a very bad night for the Labour Party.

There's no question about that.

I think you heard some of what I had to say when I was elected there

about what I think's happened overnight.

I'll have a much better sense of analysis for you over the weekend,

once I've had some sleep.

What's happened to the party that once reigned supreme,

but has now fallen to third place in Scotland?

I think the Labour Party lost contact with their roots.

They resented the fact that they were not winning elections,

and that they ended up with a Tory government in Labour Scotland.

And so they thought that they would create a Scottish Parliament,

which they thought would put them in power forever.

They said the Tories didn't have a mandate,

that is not a Unionist position.

That is a nationalist position.

And the Tories were presented as anti-Scottish.

But, of course, when Labour came into power

they found themselves having to take a dose of their own medicine,

and they were destroyed by the nationalist tiger

which they created.

Brian Wilson was a Labour MP for nearly 20 years,

and a minister in Tony Blair's government.

The long-term achievement of nationalism

is to make everything about the constitution.

As long as the political dynamic is around the constitution,

then it's very hard to see

where the Labour Party fits into that.

I mean, the Labour Party has to have a confident message, which is of

progressive politics, social and economic change, redistributionism,

strong leadership, confident in that argument,

but saying the best way to do that is within the framework

of the United Kingdom.

And when you think about it, if you spend three-and-a-half years

saying to people that the answer to all our problems is independence,

you're not going to give up on that.

You're not going to say the day afterwards, "Oh, well, you know,

"we'll try something else."

I just wish that we could channel some of that energy into dealing

with some of the problems that Scotland has got.

We still, you know,

children of low-income backgrounds don't get to university in Scotland.

What sort of indictment is that on us in a second decade

of the 21st century?

Constitutional questions are sometimes easier to debate

than actually doing things that might make a difference to people.

If the SNP continues to win landslides across Scotland,

it will have a huge impact on politics across the UK.

The British Labour Party's always relied on Scottish votes

to win general elections.

But with the SNP winning in Scotland and Ukip surging in many

parts of England, this could see Labour collapse at Westminster,

and the end of British politics as we know it.

The truth is, I think, that the idea of British politics

has been in decline for some time,

and, frankly, doesn't exist any longer.

By which one means, is there common political space

and a common political argument,

and an electorate that reacts in similar ways across the whole of the

island of Great Britain? The truth is, that's decreasingly the case.

You know, we've got different parties in government in different

parts of the United Kingdom and, you know,

I think this idea that there is no longer a sort of homogenous British

politics is certainly one that I would hold to.

Whether there ever has been, I think, is open to debate,

but I think it's absolutely, unquestionably the case now

that it no longer exists.

So far, the most obvious party political winner

in this new world has been the SNP.

They've been in government for nearly ten years.

But they still have to shake off accusations

of being simply a party of protest and insurgency,

what you might call insurgency with Scottish characteristics.

They're almost opposite in their political views from Ukip, or

indeed, Donald Trump.

But some of the SNP's success does draw on the same deep

political dissatisfaction.

I find it deeply offensive when anybody tries to put the SNP

or the rise in support over a long, long period of time of the SNP

into the same category as Donald Trump or Ukip.

Is the SNP an insurgent party?

The SNP is a party that's 80 odd years old, we have, over a long,

long period of time, decades, long before I was born,

let alone in the SNP, we have built up a credibility and a trust

of the people of Scotland.

And I think people vote for the SNP, because they see the SNP as a party

that stands firmly on the side of the Scottish interest.

Away from the spotlight of the independence issue,

the SNP also faces accusations of being too glossy

an electoral machine, simply too establishment.

The SNP's rise in Scotland was quite similar to the Obama campaign.

Where you have intelligent politicians, skilful politicians,

and they talk in platitudes of hope and all of this vague stuff.

Ultimately, once power is achieved,

the politicians renege on a lot of the pledges that they made.

They adjust their rhetoric to appeal to a whole new audience.

This idea that we have to pander to people

who already have plenty of money,

whose kids are all going to university for free.

This idea, we need to pander to that.

And that's new politics?

That's not new. That's New Labour with the dial turned up!

They make New Labour look like a paddle steamer.

But the SNP is still firmly in the driving seat,

now home rule is being talked about in London,

and some kind of new deal.

They have already changed the terms of debate.

It could be that independence for Scotland simply never happens.

There is no further referendum,

there is no great constitutional crisis,

things just carry on.

But in that circumstance, don't forget,

the Scottish political culture -

different politicians, different parties, different issues,

different scandals, different headlines, different media,

different broadcast - remains very,

very different from the politics of London.

That doesn't seem to me to be particularly stable.

Eventually, things will fall apart.

This is the so-called independence by stealth option.

It's very bad for journalists, because it's slow and gentle,

but it may be the likeliest option of all.

Believe this, something is going to change.

Full independence, home rule inside Britain, independence by stealth,

who knows?

In my lifetime, Scotland has undergone

an extraordinary transformation.

The Nationalists have experienced a drenching baptism from outsiders

and insurgents to the new Scottish status quo.

But the radical dissatisfaction that brought them there isn't limited,

in case you hadn't noticed, to Scotland.

We are now looking at a world in which, first of all,

living standards have not been advancing to any great degree

ever since the financial crash.

Two, where the expansion of middle-class occupations

has narrowed, reduced much more,

so therefore the idea that I may be in a working-class job,

but my kids can go to university and they can get a good job,

that is under challenge.

Now, against that backdrop a lot of people basically feel

that this world of international globalised capital

is one that is out of control, and certainly one where they

themselves don't feel they have sufficient control

over their own lives and their own circumstances.

All across the West, people are revolting against the insecurity,

the unfairness and the sheer speed of change that modern capitalism

brings. All those anonymous, technological and financial

forces that seem so far above us, out of reach.

Everywhere this revolt takes different forms.

In America - Trump.

Across Europe - those new parties

of the radical right and the radical left.

In England - Brexit, but also Corbynism.

In Scotland - radical nationalism.

But here's the problem.

As we tear down the old social democratic parties,

the government and the leaders,

are we also destroying the only shields we might have

against those very same international forces?

This magnificent, powerful building,

the Civic Chambers of a Glasgow that was once the second city of

the Empire is an expression, in riotous marble,

of the raw economic and political power this city once had.

Will a new Scotland, will a different Britain,

have anything like the same ability to act in the world

that the old ones enjoyed?

If you want to find out more about historical

and contemporary Scotland,

just go to the website below and follow the links

to the Open University.