Twenty years ago devolution died, now the dream has been resurrected

Once there was a Hungarian journalist called Karinthy, who went for a walk along the banks of the Danube in Budapest and met himself - but 20 years younger. They had an interesting argument, not at all the same as a wrangle between father and son. Last week, attending the Scottish Labour conference at Inverness, I went for a walk along the river and soon caught up with the myself of 1979. We began to argue.

He - or I - was wearing one of those ugly blue anoraks, its hood lined with orange nylon fur, which you never see nowadays. The river Ness, brimming in spate, swept past us silently but faster than a man could run. My younger self seemed a bit drunk, possibly a bit tear-stained. He was trying to absorb the failure of the referendum on Scottish devolution which happened exactly 18 years before to the day.

He asked me if anything had changed. As far as he could see, on his trip into the future, the same disaster could happen again. Here was the Labour Party proposing another devolved Scottish parliament within the UK. Here was Westminster, still in its bones absolutely hostile to this sort of reform. Here, indeed, came another referendum. Why should it not all be like last time: a sullen Labour Party unconvinced by its own scheme, an endless succession of parliamentary ambushes stripping the Bill of its best features, a booby-trapped referendum demanding that 40 per cent of the electorate must vote yes?

His gloom annoyed me. I retorted that almost everything had changed. Back then in 1979, an exhausted and discredited Labour government was facing an election it expected to lose. But behind me now, in the Eden Court Theatre on the Ness embankment, was a party which could see the first dawn glow ahead, the prospect of power again after almost 20 years. And because they were Scottish Labour, this also promised that their country would at last be governed by people it had voted for. Back then, the Scottish Assembly idea had begun as little more than a way of diverting support from the Scottish National Party. This time, as so many speeches had showed, Labour wanted a Scottish parliament for itself - as the instrument for putting every kind of reform into practice.

"Was that the Scottish Labour conference in there?" asked the younger me, astonished. "You must be joking. What happened to all the debates, amendments and composited motions? In my time, people fought like cats - or democrats - for what they believed in. Every year, two Highland rebels - Brian Wilson and Allan Campbell Maclean - would defy the platform and sweep the conference into voting for the nationalisation of crofting land and the big estates. But this is more like a rally, with a few platform motions on non-controversial subjects. Look at those children trouping in as a 'Youth Cabinet' and chanting 'New Labour! New Scotland!'. What has this guy Blair put in their tea?"

Patiently, I explained that this conference had been deliberately kept short and non-contentious because it might have coincided with an early election campaign. Yes, it was true that Tony Blair had imposed his will on the Scottish party. He had forced that party to accept a two-question referendum on devolution, the second question asking the Scots whether they wanted the parliament to have marginal tax powers. And on Friday his supporters had triumphed in the elections to the party's Scottish Executive. But Old Labour - resentful about Gordon Brown's pledge to freeze public spending for two years, and more impatiently nationalist - remained strong under the surface. After all, Tony Blair ended his Friday speech with an almost plaintive appeal: "Have a bit of faith in what we're about, and this country will place its confidence in us!" This was hardly a dictator's language.

It began to rain, and we turned into an Indian restaurant near the bridge. The room was packed with Labour men and women, loud and exhilarated after Tony Blair's speech, but my younger self growled into his chicken dhansak: "It's all a trick. Blair and his mates don't really want a Scottish parliament they can't control, and they put in the second referendum question about tax hoping that it would be rejected. Then they will have a Bill for a powerless talking shop nobody wants, and they can arrange for Westminster to amend it away to nothing."

Not so, I replied. "The man pledged today to campaign in person for a double Yes vote. He means it. The whole point of this referendum, unlike the one in 1979, is that it comes before the legislation and not after it. Assuming Labour wins in May, Blair and the party here will go straight into the referendum campaign and it will rage all through this summer. Robin Cook gave a brilliant fringe-meeting performance last night, utterly committed to this. The Liberal Democrats don't like the second question, but they have agreed to join the double-Yes campaign. People really have learnt from what happened in your time. Have another lager. Lighten up, for God's sake!"

He took out a small Swiss cigar - a habit I gave up years ago - and struck a match. The other diners glared at him as fumes rolled over their poppadoms, but he obviously thought everyone still smoked everywhere. "What about the nationalists? How can Labour win the referendum without SNP support? I suppose Labour still regards the SNP as a northern species of Tory, or bourgeois fascist."

At this, I had to laugh. "The SNP is left of Labour these days. It has just published a thoroughly social-democratic document promising increased public spending on housing, education and a fully-restored welfare state. Alex Salmond, the SNP leader, is aiming to pull over the disillusioned Old Labour voters in Scotland at this election. As for the referendum, he is holding out for different questions offering the independence option before he supports anybody else's campaign."

My younger self looked baffled. Would the SNP break through with a programme like that? I said that it looked unlikely, although they could well stack up between a quarter and a third of the votes. But Salmond's reticence was not such bad news for Labour. "In the 1979 referendum, a huge block of Labour voters who were personally in favour of devolution or even independence stayed at home, because they were afraid that a Yes vote would play into the hands of the SNP. Now they don't have to fear that."

"But suppose there is a massive Labour majority at Westminster after the election. Won't the steam go out of the whole thing? Blair could afford to shelve Scottish devolution at the first sign of difficulty and concentrate on the people who really matter to him: the Middle England voters who will decide whether he gets a second term in the 21st century."

I grew condescending. "You're just drunk on self-pity. Even if he wanted to, Gordon Brown and Robin Cook would not let him. Anyway, Blair has got the message: the whole arena of British politics has to be reconstructed if Labour is to be a party of government in the next century, and Scotland is the place to start. This is going to be a beautiful little parliament in Edinburgh, breaking with all the bad old traditions of official secrecy, minority government and winner-takes-all. It will be the model to show the rest of Britain how democracy can be modernised. I tell you, Tony Blair stands or falls by the success of this."

But he had heard enough. "It won't happen. Labour will betray again. The Scottish voters will chicken out again. It's too good to be true." He blundered out into the rain, and the spark of his cigar flew into the Ness as he headed across the bridge. I shouted after him: "New Labour! New Scotland!" It's good to be older. You can forget the memories that hurt.