As in World War I, Scapa Flow in Orkney served as an important Royal Navy base. Attacks on Scapa Flow and Rosyth gave RAF fighters their first successes downing bombers in the Firth of Forth and East Lothian. The shipyards and heavy engineering factories in Glasgow and Clydeside played a key part in the war effort, and suffered attacks from the Luftwaffe, enduring great destruction and loss of life. As transatlantic voyages involved negotiating north-west Britain, Scotland played a key part in the battle of the North Atlantic. Shetland‘s relative proximity to occupied Norway resulted in the Shetland bus by which fishing boats helped Norwegians flee the Nazis, and expeditions across the North Sea to assist resistance.
Scottish industry came out of the depression slump by a dramatic expansion of its industrial activity, absorbing unemployed men and many women as well. The shipyards were the center of more activity, but many smaller industries produced the machinery needed by the British bombers, tanks and warships. Agriculture prospered, as did all sectors except for coal mining, which was operating mines near exhaustion. Real wages, adjusted for inflation, rose 25% and unemployment temporarily vanished. Increased income, and the more equal distribution of food, obtained through a tight rationing system, dramatically improved the health and nutrition.
After 1945, Scotland’s economic situation worsened due to overseas competition, inefficient industry, and industrial disputes. Only in recent decades has the country enjoyed something of a cultural and economic renaissance. Economic factors contributing to this recovery included a resurgent financial services industry, electronics manufacturing, (see Silicon Glen), and the North Sea oil and gas industry. The introduction in 1989 by Margaret Thatcher’s government of the Community Charge (widely known as the Poll Tax) one year before the rest of Great Britain, contributed to a growing movement for Scottish control over domestic affairs. Following a referendum on devolution proposals in 1997, the Scotland Act 1998 was passed by the British Parliament, which established a devolved Scottish Parliament and Scottish Government with responsibility for most laws specific to Scotland. The Scottish Parliament was reconvened in Edinburgh on 4 July 1999. The first to hold the office of first minister of Scotland was Donald Dewar, who served until his sudden death in 2000.
The Scottish Parliament Building at Holyrood opened in October 2004 after lengthy construction delays and running over budget. The Scottish Parliament’s form of proportional representation (the additional member system) resulted in no one party having an overall majority for the first three Scottish parliament elections. However, the pro-independence Scottish National Party led by Alex Salmond achieved an overall majority in the 2011 election, winning 69 of the 129 seats available. The success of the SNP in achieving a majority in the Scottish Parliament paved the way for the September 2014 referendum on Scottish independence. The majority voted against the proposition, with 55% voting no to independence. More powers, particularly in relation to taxation, were devolved to the Scottish Parliament after the referendum, following cross-party talks in the Smith Commission.