Just how significant events at Stormont yesterday turn out to be is open to question. The mere fact that Alex Salmond, the SNP leader and First Minister of Scotland, signed a pact with Ian Paisley, his Democratic Unionist counterpart in the Northern Ireland Assembly and Dr Paisley's deputy, Martin McGuinness of Sinn Fein, is of great import, largely for symbolic reasons at this stage. Northern Ireland has a new government of political partners implacably opposed, in historic terms, to each other. Scotland has in government at Holyrood a party whose core policy is independence.

Who would have predicted yesterday's scenario even a year ago? It was living proof that devolution is, indeed, a process. It is a paradox that Labour, the party that delivered on devolution, should find itself on the outside looking in in Edinburgh, at Stormont (true, it could be only that way in Northern Ireland because of the way political parties are organised) and in Cardiff, where Rhodri Morgan, the man Tony Blair did not want to lead Wales, might well form a partnership with Plaid Cymru. So much for devolution, on Labour's terms, being an end in itself.

As the process unfolds, and new players emerge in leading roles, new opportunities open up. Thus it was at Stormont, where the pact will, it is intended, enable both partners to advance their causes with Westminster from a position of combined strength. The hand will be stronger still if, or when, Cardiff signs up. The mishandling by Downing Street of the memorandum of understanding with Libya demonstrated there is room for much improvement in the way Westminster deals with devolved government. This will require a change in mindset at political and official levels in London to see the devolved administrations as partners to be consulted and listened to on matters that affect them.

This argument could, conceivably, be put more forcibly by means of the pact. Gordon Brown has signalled that, as Prime Minister, he would prefer to have a full-time Secretary of State for Scotland to keep conflict to a minimum and relationships as positive as possible between Westminster and Holyrood. In the context of a pact involving the three devolved governments working more closely together, it is probably worth exploring whether there should be a Secretary of State dealing with all three, supported by ministers of state with discrete responsibilities for each.

The pact must, by its nature, also be inward-looking in the sense of being a forum in which internal disputes are sorted out. An early problem for Mr Salmond to explore is the anomaly which sees students from Northern Ireland and Wales (and England) studying at university in Scotland paying fees from which undergraduates from the Irish Republic and other EU countries are exempt.

This is the nitty gritty of policy, process and compromise which devolution is also about, as Mr Salmond has been reminded. The pact is an exciting and potentially beneficial development. Is there any reason why it should stop with the Celtic fringe? It is normal in federal systems to deal with all the constituent parts. In the British context, that would also encompass the major English cities and English regional government.