Can a Scottish politician lead a UK party in the era of home rule?

The Liberal Democrats' leadership contest will throw the issues surrounding devolution into sharp relief

AT 3.30PM tomorrow the British Chancellor will rise in the House of Commons to deliver his third budget, a statement of profound importance to the entire UK economy. Gordon Brown is 48 and at the peak of his powers. There is no reason to suppose that when, at some point, Tony Blair decides to stand down as Prime Minister, Brown would not be a candidate, perhaps easily the front-running candidate, to succeed him. After all, James Callaghan, another and (to judge by Brown's performance so far) much less successful chancellor, succeeded Harold Wilson, a politician of his own generation, in 1976. Indeed this was a point that Callaghan himself made to Brown when he wrote him a graceful letter after Brown announced he was not standing for the party leadership in 1994.

No reason, that is, except one. Which is that because Brown sits for a Scottish constituency, and because the Scottish Parliament will, by the time the Labour leadership becomes an issue, have been running for several years, there will, so the argument goes, no longer be an appetite in England for a Scottish prime minister. So many issues, from health to education, from local government to law and order, will be decided not by the UK Government but by an executive answerable to the Scottish Parliament, that Brown would either have to transfer to an English seat or give up any hopes of the premiership.

This is a deeply controversial doctrine, advanced, nevertheless, by some people in New Labour as if it were obvious. It has seldom been openly debated for the simple reason that the Labour leadership is not an issue at present, and is unlikely to be for several years, and that of all those currently possible runners in the Tory party, none are Scots.

But it now promises to be thrown into sharper relief by the leadership contest that will follow the departure of Paddy Ashdown, who gave his valedictory Liberal Democrat conference speech in Edinburgh yesterday. There are three potential Scottish candidates to succeed Ashdown: Charles Kennedy, Menzies Campbell and Malcolm Bruce; and two of them - Kennedy, who has decided to run, and Campbell, who will not make up his mind until after the May Scottish, Welsh and local government elections - are front- runners. Suddenly there is a new question in British politics: can a Scottish politician lead a UK party, in the era of home rule?

This is not yet the central issue of the submerged but lively leadership campaign, which is already under way despite the exhortations of the current leadership that it should not be. And given that the Scottish Parliament will not assume its powers until next year, it may not become so. So far the jostling by a dauntingly large number of candidates for a small party is over the question of future relations with a Labour government. Kennedy, currently seen as the man to beat, is widely assumed, at least in Downing Street, to be "coalitionable", despite his criticisms of Paddy Ashdown's frenetic and sometimes rather uncollegiate pursuit of ever-closer links with Labour. Campbell, if he runs, certainly is. The rest of the candidates fall into two other camps: those broadly in favour of the "project" of close co-operation with Labour, but not of a Kennedy leadership - Don Foster and Nick Harvey, who for reasons of ambition has unceremoniously dumped his once highly Eurosceptic views; and those broadly against Kennedy and the so-called "project" - Simon Hughes, David Rendel, Jackie Ballard and Malcolm Bruce.

Nevertheless, the candidates with easily the most attractive and highest profiles among voters outside the party are both Scots: Kennedy and Campbell. Kennedy is something of a media star who can claim an honoured place in the party's history by having boldly - as an SDP member in 1987 - fought his way out of Dr David Owen's clutches to back a merger with the Liberals, while Campbell is a QC and former Olympic sprinter who has a wealth of experience, especially in foreign affairs.

Given that their most serious opponents are English, it would be surprising if their Scottishness did not become an issue once the campaign gets openly under way after the European elections in June - especially if Campbell does disappoint his old friend Kennedy by running. All the more so since only 6 per cent of the party's membership live in Scotland and the heaviest concentration of members is in London, the South and south-west England. The temptation to suggest that Scottish politicians have made their bed in the Edinburgh Parliament and should no longer claim the right to lead a UK party, may prove irresistible. Indeed, mutterings to that effect are already audible.

But while it would not be a surprising factor, it would be a deforming one. For a start it would be especially inappropriate in a party which, in stark contrast to Labour, actually has a policy to deal with the West Lothian question, namely why Scottish MPs should have the right to vote in Westminster on issues exclusive to England and Wales when, in their own country, those same issues are dealt with in Edinburgh. Because the Liberal Democrats, at least nominally, are a federalist party, wishing to see the same decentralisation of democratic government to every part of the UK, it would be especially perverse to stop anyone from any part of it from becoming leader.

But, for reasons much larger than the internal politics of the Liberal Democrats, the preclusion of Scottish MPs from British leadership is a deeply dangerous doctrine. Kennedy, of course, is fortunate that Ashdown has stood down now. For while it may be only half an issue at the moment, it could be much bigger once the Scottish Parliament is operating. If - as still seems likely - he does inherit from Ashdown, stand by to hear people say that he will be the last Scottish leader of a British political party.

But this neither should, nor, I suspect, will be true. First, while it may be the line of least resistance, in dealing with the profound and still - in England - underestimated consequences of devolution, it is a cop-out. It would mean that the English would be ensuring that the downward and slippery slope to separation has suddenly steepened. Labour politicians who pretend that there isn't going to be a UK problem as a result of devolution, and that the West Lothian question is some wispy construct of constitutional theorists, should wake up. There is an urgent need to find ways of answering it - for example, through the Westminster Parliament meeting in English- and Welsh-only sessions to decide English- and Welsh-only issues. That makes sense; keeping Scots out of party leaderships or, for that matter, Downing Street, doesn't. The big decisions which increasingly preoccupy Prime Ministers are economic, European, global - affecting those in Scotland as much as those in England. And, who knows? In a few years, we may need a Scottish Prime minister to save the Union.