Scotland’s No victory sets stage for devolution dilemma in U.K.

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The United Kingdom is launching into its biggest constitutional change in three centuries after Scotland narrowly spurned independence while demanding that the Westminster parties make good on their pledge to bless the Scottish parliament with more powers.

(Scotland votes No: What happens next? Read The Globe's primer)

While Prime Minister David Cameron was quick to declare a victory for the union after the official referendum results were released at dawn in Scotland, he was equally quick to promise that the government would move fast to rewrite the union pact and give Scotland considerably more power over taxation, spending and welfare. The new deal, he promised, would be revealed, though not necessarily confirmed, before the British general election in May. A cabinet committee on the issue to be set up immediately.

Constitutional experts criticised the intended pace of the devolutionary process. They said Mr. Cameron's near brush with political death – he would have come under enormous pressure to resign if Scotland had voted for independence – should not encourage the government to erase and rewrite the rules that govern a complex union in only a few short months.

"To rush it is very problematic because constitutional legislation or even new conventions have to be crafted very carefully so that they endure because constitutions are the rules of the game and you have them created so there is stability and predictability built into them," constitutional historian Peter Hennessy told the BBC Friday morning.

Mr. Cameron's pledge came after a tense night that saw the voting results of 32 councils trickle in from early Friday morning until shortly after 6 a.m. local time. While the No vote took an early lead, the result was not certain until the tallies in Scotland's two biggest cities, Glasgow and Edinburgh, where released just before dawn. In the event, Glasgow voted in favour of independence and nearby Edinburgh went in the opposite direction.

At the end, 54 per cent of voters voted No to separation, shattering the independence dreams of Scotland's First Minister, Alex Salmond, and the 1.6 million voters who backed his dream of a country shorn of English influence. In his concession speech, Mr. Salmond was gracious, insisting that "We shall go forward as one nation."

But he put the Westminster parties on notice: "The unionist parties made vows late in the campaign to devolve more powers to Scotland," he said. "Scotland will expect these to be honoured in rapid course."

Mr. Cameron set his own conditions for Scottish devolution, apparently aware that several prominent MPs in his own party are already have threatened revolt if the government showers Scotland with taxpayer-funded riches. On the eve of the Scottish referendum, Conservative Rail Minister Claire Perry warned against "promises of financial party bags for Scotland."

Mr. Cameron said that any reforms would not be exclusive to Scotland: England, Wales and Northern Ireland would also be part of the constitutional debate.

"We have heard the voice of Scotland and now the millions of the voices of England must be heard," he said. "Just as Scotland will vote separately in the Scottish parliament on their issues of tax, spending and welfare, so too England, as well as Wales and Northern Ireland should be able to vote on these issues."

More than a few British politicians already think Scottish devolution, which began in earnest when Scotland opened its own parliament in the late 1990s, is inherently unfair to the rest of the U.K. Nigel Farage, the leader of the euroskeptic U.K. Independence Party, on Friday noted that Scottish MPs can vote on English-only issues at Westminster but have no say in the Scottish parliament. "The English are 86 per cent of this union. They've been left out of all this for the last 18 years," he told Sky News.

The negotiations will present a difficult balancing act for Mr. Cameron and his Conservate-Liberal Democrat coalition government. Giving Scotland even more taxation and spending power might open a can of worms if the other U.K. regions demand equal treatment. Many Englanders and English MPs are already upset that the social transfer payments to Scotland are, relatively speaking, generous. The so-called Barnett formula sees each Scot receive a yearly average of £1,623 ($2,917) more in public funding than their English counterparts.

Some economists think the internal debate over which region gets what powers will dominate the British political agenda for the next year, or longer, at the expense of wider European and global economic agendas, notably Mr. Cameron's vow to hold a referendum on Britain's membership in the European Union in 2017 (assuming he wins the 2015 general election).

"We have a Quebec situation in Scotland now," said Steen Jakobsen, chief economist and investment officer of Denmark's Saxo Bank. "The main take away from macro perspective is the move toward very nationalistic and domestic driven political agendas. The EU and global agendas now play third violin as lack of growth and reforms become [the] real issue."