The power of Scotland

Scotland used to be run from afar by tweedy old men with a whisky in one hand and a fishing-rod in the other. Not any more. As the election campaign launches this week, a younger generation is gathering to form Edinburgh's New Establishment

Some cities just aren't designed to be fashionable. Take Anchorage, for instance, or Spitsbergen. Or Aberdeen, where even the prostitutes wear six layers of sturdy, windproof clothing. And think, for a moment, of the logistics of hipness in Edinburgh. Scotland's capital may be beautiful, but you try wearing a wraparound skirt in the most efficient wind-tunnel on earth. Kitten heels on cobbled streets, slippy dresses in a rainstorm, elaborate curler-work in a force 10 gale - it just doesn't work. No wonder Edinburgh's split personality always used to be characterised as "fur coat and nae knickers".

Scotland's capital has always seemed foreign in its own land. It prides itself on its "cosmopolitan" atmosphere, but - barring the seasonal convulsions of the Festival and Hogmanay - cosmopolitan usually just means anglicised. Despite this, the political, cultural and economic events of the past few years have begun a subtle shift. In less than a year's time, Scotland will have its own parliament based at Holyrood and a set of MSPs who - depending on one's point of view - are either new! fresh! exciting! or alarmingly untried. And with them comes the hint that Edinburgh's weatherbeaten respectability may soon be slipping into something much more revealing.

If nothing else, the promised parliament is already rejuvenating central Edinburgh. Not only does the capital get the pounds 50m parliament building (likened by its architect to a ship, likened by its enemies to a shipwreck), but it gets all the peripheral perks as well. The new National Museum of Scotland has just opened to much admiring fanfare, Sean Connery is currently negotiating with Sony to build a new film studio on the city outskirts and - despite a recent move to Delta House in Glasgow - the Scottish Labour Party "will probably go" to Edinburgh in the near future. The BBC is also debating the site for its new headquarters; rumour is that it will remain in Glasgow, if only because a move eastwards would seem too painfully pointed.

Most lament the "unconstructive" rivalry between Scotland's two main cities; no one pretends it doesn't exist. But if Edinburgh's revival is dependent on the whims of institutions, Glasgow's culture has and will always come up from the street. Edinburgh has finance, Glasgow has commerce, Edinburgh has politics, Glasgow has fashion, Edinburgh has banks, Glasgow has sport, music, art, life. Glasgow has always been cool; the only surprise is that Edinburgh now has pretensions to cool.

Even if one were to take fashion - that old lodestone of economic well- being - something is happening to the city which still regards "sensible" as the greatest sartorial compliment one can pay. For decades, Edinburgh's chief contribution to clothing has been knee-length fawn gabardine; the city gave the impression of considering nice clothes if not quite the work of the devil then somehow morally suspect. If you wanted more than just floodwear and tartan trews, you swallowed hard, bought the train ticket west and went to a place where labels are considered not shameful but gorgeous. It may be some time before Edinburgh becomes the Milan of the North, but it is showing some signs of reconsidering.

The best example is George Street, the sandstone spine of the New Town. Five years ago it was home to a couple of respectable hotels, two bookshops, several banks and one or two clothes shops selling a collection of A-line skirts which looked as if they'd been boil-washed in rainclouds. Now there's a wood-and-aluminium bar every two paces, several of the smarter high street clothes shops have opened branches and the venerable Roxburgh Hotel is being revamped.

Andrew Radford was the first to move into the area, taking a pounds 20,000 loan to start the Atrium six years ago, and in the process began the reinvention of Edinburgh's eating. Previously, the city's food had been as stodgy as its reputation; now the inhabitants can dine in style from one end of the city to the other.

From banks to galleries, asset management to hotels, Robert Smith manages a portfolio of jobs almost as comprehensive as his erstwhile Morgan Grenfell colleague Nicola Horlick. As Chief Executive of Morgan Grenfell Asset Management; Chairman of the Stakis Group and Director of the Royal Bank of Scotland, he spends much of his time airborne, between London and Scotland. Scotland also gets a fresh look at its history. Until 1992, Mark Jones - ex-Eton, Oxford, entirely English - was keeper of coins and medals at the British Museum. Then he was appointed to collect and curate Scotland's history as director of the National Museums of Scotland. In the process, he changed Edinburgh's landscape and gave it back a bit of swagger. Thoughtful, smart and charming, he is modest about his contribution. "The way in which Scottish identity is represented is bound to be controversial, but it doesn't represent my views; you won't see the M Jones version of Scotland in the gallery. I don't think I set the agenda."

James Drummond, a fund manager with an Edinburgh firm, has been watching the changes for some time. "Six years ago, Edinburgh did feel very parochial, very much up its own arse. Now it is genuinely beginning to feel like a capital city. Glasgow had the good years during the Eighties and Edinburgh is having its heyday now. But I think the parliament will be good for everyone, not just Edinburgh; the more decision- making happens in Scotland, the more every- one benefits."

Five years ago, it was possible to condense a list of those who actually ran Scotland from a predictable dozen. At the top of that list would be the Secretary of State for Scotland, who, along with his 15,000 staff, commanded his restive nation from a walnut-panelled room somewhere in the Scottish Office. Next would be his shadow, always in power but never in office. For five years George Robertson administered a mutinous crew of Scottish Labour MPs, before going south to become Defence Secretary.

Below them would be the Lord Justice General, and then a more elusive huddle of men (always men): the head of the Crown Estate Commission, the chairman of Scottish Enterprise, the head of the Scottish CBI; and then, when one looked a little deeper, those names which seemed to be stamped on every letterhead of every major company, bank or quango in Scotland; Bruce Pattullo, the governor of the Bank of Scotland, Lord Younger, the chairman of the Royal Bank of Scotland, and Angus Grossart, the merchant banker. A little further down there were those, such as the leader of the Scottish National Party, Alex Salmond, who were more vocal than powerful, and others - the chairmen of the Old Firm football clubs Rangers and Celtic, religious leaders, landowners - who still held superstitious sway over the hearts and minds of their respective devotees.

Look closely at that well cemented list, and you'd get the impression that the nation was being run by 10 grey men in tweedy breeks sitting round a Perthshire dining table, dispensing favours over smoked salmon and drams.

Even now, many of the big grey men are still in power: Grossart remains, Pattullo and Younger are only just retiring; Andrew Neil has returned to the Scottish media; Tom Farmer, Brian Souter and Sir Alistair Grant still dominate business, while the church, the landowners and football chairmen sail impeturbably on.

Nevertheless, on the night of 1 May 1997 Scotland claimed its own particular Portillo Moment. When the then Scottish Secretary Michael Forsyth went, something changed. That election night also banished every Tory MP from the land, while the September referendum showed the electorate's settled will for a separate parliament. The SNP is not just resurgent but now, in a nice twist for a republican party, fulfils the role of Her Majesty's Opposition up north.

Already tipped as a future SNP leader, John Swinney joined the party aged 15, was National Secretary for six years and is now prospective candidate for North Tayside. Though Alex Salmond still loves the limelight, many of his recent victories have been helped by Swinney's backroom strategy. "I hope the parliament will attract a broader range of people than before, not just politoholics like me."

For better or worse, the parliament will complete the transformation of politics. Labour took 56 of the seats at the 1997 election, the Liberals 10 and the SNP six. Despite the protestations of most Labour MPs that they wholeheartedly support devolution and would be proud to stand for a Scottish parliament, there has been a curious coyness about following through. Many MPs are already ministers; many backbenchers are pleading a sudden interest in defence or foreign issues.

Whatever the reason, only a handful of MPs have so far put themselves forward for election as MSPs. To fill the gaps, Labour has had to find 50 spare candidates for the first-round elections alone to run alongside the equally fresh-faced Tory, Lib-Dem and SNP selections.

There are other signs of a thaw in Scotland's habitual wintry discontent. During the Eighties, it seemed like the only woman who mattered in Scotland was Margaret Thatcher. Beyond her, there were a few formidable characters in business and politics; Margaret Ewing, Jean McFadden, Helen Liddell, Ann Gloag, Kirsty Wark. Now, half of Labour's candidates for the Scottish Parliament are women, and the numbers within general public life - formidable and otherwise - are rising all the time.

If anyone typifies the brave new world beyond Westminster, it is Wendy Alexander, prospective Labour candidate for Paisley North, ex-management consultant, selected to reclaim Paisley from the murk of Tommy Graham's tenure.

She cites the numbers of women moving into senior positions - Bridget McConnell, Janice Kirkpatrick, Elspeth King, Elizabeth MacInnes, Rhona Brankin - alongside well established figures; Seona Reid, Joyce Macmillan, Roseanna Cunningham. "There's been a huge, unnoticed sea change, a wholesale shift towards meritocracy," she says. "It's still very solidly middle- class at the top, but it doesn't have the same sense of being one big grouse moor."

James Drummond also believes that those who hold power are beginning to change. "I think those who hold power have become more fragmented. During the Conservative government, you had the situation where the Scottish Office was having to deal with things through influential individuals because the Tories' own network in Scotland was weak and tended to be skewed towards a very narrow group of people. On the other hand, Labour has always had deep roots in Scotland and a much wider, more diverse support base."

Many are worried that the parliament will not exist for long with the powers it currently has. Already, there are flashpoints; the parliament will also have only limited powers to deal with Scotland's most pressing issues - housing, health, poverty, drugs - and no control at all over defence matters despite the fact that the bulk of Britain's nuclear defences will remain in Scotland.

If the parliament doesn't work, then either it would have to be scrapped, or - more probably, given the strength of the SNP - there would be pressure for full independence. And, while business might have reluctantly come to terms with devolution, it seems altogether less keen on full separation from the rest of the UK.

But change, however centralised and however flawed, is still considered by most to be better than the long, stony years of stagnation under the Conservative government. For tartan trews and gabardine, it's the beginning of a long farewell.