MONDAY night, February 12, 1979. Prime Minister James Callaghan, who had been buffeted by a relentless wave of industrial action in the Winter of Discontent, has made his way to the McLellan Galleries in Glasgow. He tells a packed hall that the people of Scotland should seize, “with both hands”, the opportunity to set up a Scottish Assembly.

He could not, he warns, see the chance coming around for many years. The alternatives were “stay as you are” or a possible slide into separation.

Callaghan goes further: he assures Scots that they would lose no influence at Westminster if they voted Yes at the referendum on March 1. If the Assembly were rejected, the “issue would become the property of the extremists who advocate independence”.

Much of the fervour over devolution in the Seventies had stemmed from Winnie Ewing’s landmark victory in the Hamilton by-election in November 1967 and the rise of the SNP as an electoral force. At London level, Labour and the Conservatives had been quick to respond to Ewing’s victory, scenting political advantage in offering Scotland some measure of Home Rule and perhaps neutralising the threat from the SNP.

Harold Wilson set up, in 1969, a Royal Commission on the Constitution (the Crowther, later the Kilbrandon, report), taking aback a Labour Party in Scotland that was, by and large, deeply hostile not just towards the SNP but also to any suggestion of Scottish devolution.

For their part, Scottish Conservatives had been aware, even before Hamilton, of the challenge posed by the nationalists, and a policy group chaired by Sir William McEwan-Younger was established in 1967. Its conclusions were sent to Ted Heath, then Leader of the Opposition, who in May 1968 startled delegates at the Scottish party’s Perth conference (the so-called ‘Declaration of Perth’) by saying that if the Scots wanted it, a directly-elected assembly should be set up to deal with domestic matters.

Heath then asked a party grandee, the former Premier, Sir Alec Douglas-Home, to chair a commission to explore the matter further. His detailed report, in March 1970, suggested a directly-elected assembly which would deal with Scottish legislation passed to it from Westminster, though there would be no separate Scottish executive. As is the way of things, Heath won power a few months later, and lost interest in the subject.

The Kilbrandon Commission reported in late 1973, just as the SNP was enjoying further electoral success. Most of the commission’s members favoured the creation of Scottish and Welsh assemblies with legislative powers, elected by proportional representation.

Under Wilson, Scotland and Wales Acts were put forward, providing for the creation of devolved institutions. The Scotland Bill had a particularly complicated birth before it received Royal Assent on July 31, 1978: the Glasgow Herald would later refer to its flaws, “its cynical history, the series of fundamental issues that have been swept under the carpet in the interests of political expediency”.

George Cunningham, the Scots-born Labour MP for Islington, and an implacable opponent of his government’s Scottish devolution proposals, put a spanner in the works of the Yes side by successfully moving an amendment to the Bill. His amendment, which would dominate the campaign, changed the Scotland Act to require that 40% of the Scottish electorate approve the devolution proposals in the referendum.

The assembly, if approved, on March 1, would be housed in the Royal High School, in Edinburgh. Powers devolved to its 142 elected politicians would include education (though not universities), housing, the running of the NHS, social work (but not social security), physical planning and the environment, local government, transport and the arts.

On the morning after Callaghan’s Glasgow visit, this newspaper repeated its support for an assembly. “Devolution, in the sense in which is now proposed ... means giving more control over areas in which Scotland’s needs and problems are distinctive – such as housing, schools and social work”, a leading article said. “These are spheres in which there is already a considerable amount of administrative devolution.

“Setting the assemblymen up as watchdogs over the civil servants of St Andrews House, therefore, would allow political devolution to catch up with administrative devolution, something that seems in principle a highly desirable democratic development”.

As for the referendum campaign itself, the two main characters were Jim Sillars, of Yes for Scotland, and Tam Dalyell, of Labour Vote No. Sillars, who had been a Labour MP for South Ayrshire and a harsh critic of devolution, had gradually come round to the idea of Scotland running its own affairs. He had defected from Labour in 1975 to establish the breakaway Scottish Labour Party, along with other pro-devolution politicians and sympathetic journalists.

Despite the rousing certainties articulated by Sillars and the equally assertive Dalyell, the main parties were divided on the subject of an assembly. As the Herald’s political commentator, Iain Macwhirter, notes in his 2013 book, Road to Referendum, many nationalists of the time saw devolution as a Labour trap, a toothless talking-shop, and decided to have nothing to do with it.

With a few exceptions, such as Gordon Brown, John Smith and Donald Dewar, Labour was just as opposed, with many party members taking the view that the assembly was an over-reaction to the SNP’s Hamilton by-election win of 12 years earlier. When it came to the Scottish Conservatives, people such as Malcolm Rifkind and Alick Buchanan-Smith supported devolution, but both resigned when Margaret Thatcher announced that she would campaign for a No vote.

The No campaign, Macwhirter adds, was better organised and better funded than the Yes side, which was seriously flawed because no-one could convincingly explain what the assembly was for. Moreover, “apathy was the dominant mood in Scotland … Scottish voters could arouse little enthusiasm for an assembly that sounded like a new and superfluous layer of local government, except that it didn’t even have the power to raise its own revenues”. Scots were anyway pre-occupied with other issues, from the industrial chaos to hyperinflation.

On February 24 William McIlvanney, who was for Yes, wrote an article for the Herald, exploring Scottish indifference towards the assembly. “If the Scotland Act has less the aspect of Moses leading us dramatically to a new sense of identity than of a confused policeman vaguely pointing us towards a place he has never heard of, it is still all we have at the moment”, he insisted. Illustrating his article was a cartoon by the Herald’s cartoonist, Turnbull, showing the Scottish lion agonising over his ballot form. “I’m feart!”, the lion concedes.

The result was on a knife-edge up until voting day. Some 1.23m voted Yes, 1.15m No. The Yes proportion of the electorate was 32.8% – far short of George Cunningham’s 40% amendment. Overall, Yes had 51.6% and No 48.4%. Turnout was 64%. “The assembly is dead – killed by the Scots themselves who wrote it off yesterday as irrelevant to their immediate needs”, began the Herald’s report the following morning.

Callaghan, in a precarious position, offered the SNP new talks on devolution, to be finalised by the end of April. Its 11 MPs were not impressed and decided to make a break for an early election. Shorn of SNP (and also of Liberal) backing, Callaghan lost a Commons vote of confidence by 311 to 310 on March 30, and he called an election for May 3. It would be the beginning of 11 years of life under a Prime Minister who was no friend to Scottish devolution: Margaret Thatcher.