Things are stirring in the Scottish Labour undergrowth. While MP and leadership hopeful, Tom Harris. and the former aide to Tony Blair, John McTernan, continue to insist that Scotland has no future outside the union, and are warning Scots not to get big ideas about going it alone, others are beginning to realise that this is a doomed prospectus. The former Labour First Minister, Henry McLeish, and Malcolm Chisholm, the only Labour MSP who remained standing in Edinburgh after the May massacre, are urging the party not to fall into the trap being left open for them by Alex Salmond. Labour cannot afford to back the No campaign in the Scottish independence referendum. It has no real option but to support "devolution max" or federalism. Otherwise, Alex Salmond will win even if he loses because the SNP leader has colonised the centre ground. Alex will be quite happy to accept fiscal autonomy as another giant step towards full independence. He's a betting man and he likes an each way punt.
The phone rings. It's the Shadow Foreign Secretary, Douglas Alexander, wanting to talk about his forthcoming speech in Stirling. It's a long time since I've had a call from this stellar figure in the Labour firmament, even seen by some as a possible future leadership contender. But this isn't about Ed Miliband, it's about his unfinished business: Scotland. And he's serious.
Mr Alexander was the architect of Labour's most successful Scottish election campaigns and he's credited with having invented the slogan: Divorce is a Costly Business in 1999. He clearly thinks that politics in his own back yard has been allowed to fall apart while his back has been turned and sounds genuinely upset. “Labour were gubbed at the Holyrood election” he says – echoing the celebrated “Gubbed in Govan” pamphlet published by neo-nationalist Scottish Labour Action in 1988 after Labour's defeat in the Govan by-election.
“Gubbed in Govan” urged Labour to start taking home rule seriously and get behind the Scottish Constitutional Convention. Which under Donald Dewar it finally did The SNP lost the plot after 1988 largely because it boycotted devolution as a unionist trap, and allowed Labour to run away with Scottish hearts and minds. The Big Question Alexander addresses is why the party that delivered the Scottish parliament has almost been destroyed by it. Six months on from its worst election defeat in 80 years, Labour is still without a Scottish leader, and the candidates inspire little enthusiasm. Indeed, Douglas Alexander is unprepared, at this stage, to support any of them.
So, if Labour was indeed gubbed in May, is Alexander proposing anything similar the response to Govan 23 years ago? A radical extension of home rule? Well, no. Alexander isn't ruling out changes to Labour's line on devolution - but he isn't ruling anything in either. His analysis is that the SNP got where they are by a: being positive about Scotland, against Labour's 1980s negativity, and b: being competent in office. Both of these are true. But I'm afraid it will take time for Labour to convince Scottish voters that it has either become more positive or more competent – and time is something Labour doesn't have. As soon as the new Scottish leader is in place he or she will have to position Labour for the referendum on independence.
Labour cannot afford to go into a Scottish referendum “No” campaign alongside Tories like Sir Malcolm Rifkind and Liberal Democrats like the Treasury Secretary, Danny Alexander. These are the most politically toxic elements in Scottish politics. But as things stand, Labour will have great difficulty avoiding this radioactive alliance. The No campaign, clearly, will be based on the offerings in the UK Coalition's current Scotland Bill - based on the work of the cross-party Calman Commission in 2009 - which proposes increased tax powers for Holyrood. It was Douglas Alexander's sister Wendy who set up the Calman Commission and it would be very difficult for Labour to disown it. But I fear they may have to.
Alex Salmond has opened the door by offering a multi-opton referendum including the status quo (Calman); independence lite within the UK; and full independence without it. Labour has to colonise what will be the centre ground if it wants to marginalise the SNP. It can only do this by adopting independence lite - a form of federalism that essentially puts Scotland on the same economic and constitutional footing as states like Quebec in Canada or Catalonia in Spain. Labour has spent so long dissing Quebec as a backward nationalist anachronism that it has failed to notice what an egalitarian and prosperous place it has become. Go compare Glasgow and Montreal today. Universal child care for 7 dollars a day?
There can be no half measures any more. No dodgy divisions of income tax that sound like a post-Barnett fiddle. Professor Calman said that, to ensure accountability and responsibility, a parliament needs to raise what it spends. What's the point of making Holyrood half responsible and half accountable? Give Holyrood excise duties and sales taxes if it wants them. Even corporation tax if possible within the EU, which it probably isn't. Sweep away all those petty reserved powers on the Crown Estate, broadcasting, drugs and the like that make it look as if England thinks Scotland cannae be trusted.
Labour should also admit that Scotland is the only country, state, province, region or local authority that has discovered oil and has not directly benefited from it. An apology for that may be in order, given what we know about how Whitehall played dirty over Scotland's oil in the '70s. Scotland doesn't want nuclear weapons and England does – well, it doesn't take a genius to work out what to do with Trident.
Yes, it is true that lots of Scots are married to English people. But don't go around talking as if the SNP is going to repatriate English aliens and erect border posts or that an independent Scotland would be thrown out of the EU, because that kind of thinking arouses scorn and derision. Once all that negative baggage is thrown overboard, only then can Labour start refocussing on what the UK is good at.
The UK has been at is best when it has been serious about fighting poverty, disease, ignorance and idleness: creating the welfare state, the NHS, and offering free higher education. Unfortunately, that UK isn't really on offer at the moment, and New Labour didn't seem all that keen on it when it was in office. Well, Labour has a chance to reinvent social democracy in Scotland. It can start by not equivocating on things like tuition fees, prescription charges, minimum pricing on alcohol.
The Arc of Insolvency? Labour's response to the 2008 crisis was to jeer at “wee Scotland” and how it couldnae save its own banks. This was offensive and intellectually disreputable because,as the former Chancellor, Alistair Darling, knew perfectly well, RBS and HBOS had long ago ceased to be Scottish banks – they were UK behemoths and had to be rescued on a UK basis.
Labour should say this: that Scotland is a nation and should run its own affairs – all of them – except in those areas where UK cooperation is either unavoidable or clearly in the interests of both countries. Finance, currency, foreign affairs, non nuclear defence and social welfare. Only that will 'gub the nats' in 2015. What's the story? The UK is good for some things – for everything else there's Holyrood.