Wendy Alexander resigns. The End.

“This is actually a good outcome for us” a former Westminster Labour minister told me as Wendy Alexander delivered her resignation statement on Saturday morning. Well, politicians are supposed to put a brave face on adversity, but seeing silver lining in the resignation of Labour’s second Scottish leader in less than a decade over expenses irregularities - the first being the former First Minister Henry McLeish over those constituency sub-lets - was a towering achievement of political optimism.

What I suspect he meant was that Labour could at least blame the SNP for Wendy’s downfall. That it was the result of a politically motivated stitch-up by the nasty nats and their stooges like, er, the Scottish Standards Commissioner, Jim Dyer - who might have his own views about the accusations of political bias. He it was who recommended to the Holyrood Standards Committee that action be taken against Wendy Alexander for breaking the rules on disclosure, rejecting the view of parliamentary clerks that campaign contributions did not need to be registered on the members interest register.

Complex issue it may be, but when Labour complain about these rules on disclosure damaging politics and underming parliamentary democracy they would do well to remember that it was their own government that introduced them. One has sympathy with Wendy Alexander over the apparent confusion and the contradictory legal advice she received - but why did she not just register the damn contributions to her leadership campaign in the first place? Why leave herself open to accusations of a cover up by sitting on them for two months? Surely politicians realise that you cannot take money from business contacts anymore without being transparent and open about them.

Wendy Alexander talked of “vexations complaints” from the nationalists. Actually, as readers of this newspaper well know, the intelligence about Wendy Alexander’s campaign contributions entered the public domain, not via the SNP but through stories in the Sunday Herald from Labour sources. The formal complaints came later from members of the public with nationalist connections. It is worth remembering that the cash-for-questions investigation in Westminster arose out of a legitimate complaint made by a nationalist MP, Angus Brendan MacNeill (check name) after reading press accounts of businessmen receiving peerages after giving secret loans to the Labour Party..

Perhaps the bigger question is whether it was really necessary for Wendy to resign over a one day suspension by the parliament’s standards committee which might well have been rejected by the full parliament in September? Wendy Alexander and her Westminster bosses realised that her leadership simply wasn’t working, that she was being overwhelmed by Salmond, and were looking for a suitable ‘out’. There was a mutual interest in bringing this episode to an end, which is why many Labour politicians at Westminster are as relieved to see the back of her as she is to see the back of the job. It must have been sheer hell for Wendy trying to lead a defeated party with precious little support in Holyrood and and the active contempt of her own party in Westminster.

The collision with Gordon Brown last month over Ms Alexander’s call for a referendum on independence left serious damage on both sides. Westminster Labour MPs and ministers were incensed at Wendy Alexander’s decision to adopt the nationalist policy of giving Scottish voters the right to choose. Gordon Brown still refuses to accept that she actually called for a referendum. Wendy Alexander, for her part, has repeated her call on several occasion, most recently on BBC Question Time a fortnight ago.

When I spoke with her at length shortly before her resignation about her political beliefs, she told me that she had transformed Labour in Scotland. She claimed three achievements: the independence referendum, the Calman Commission and support for tax raising powers. Wendy was confident that she had fundamentally changed Labour in Scotland, and that it didn’t matter that the prime minister, or Westminster Labour MPs, didn’t go along with her. In Holyrood she was the boss, and this was Wendy’s law.

The question now, following her departure, is whether Wendy’s law still rules. Will her successor endorse the independence referendum and a federal Holyrood with tax powers? Cathy Jamieson, the deputy leader who is standing in as caretaker, presumably will. But when it comes to finding a successor to Wendy Alexander, will there be anyone with the courage and determination to continue in this neo-nationalist direction? I have my doubts.

One suspects that Number Ten will want to take a close interest in who takes over from Wendy. Andy Kerr? A safe pair of hands, former health minister, undistinguished. Iain Gray? Only just returned to parliament,did not distinguish himself in the budget debates. Ms Jamieson probably has the best claim to the job, and has performed creditably at question time on the two occasions when she has stood in for Wendy Alexander. She comes from the left of the party and probably speaks more directly to its Scottish soul - or what is left of it.

For there are real questions now about the future of Labour in Scotland. That its fifty year hegemony is over is beyond doubt. But what is left of the movement that used to dominate Scotland at every level of government. They have lost half their councillors and control only two of Scotland’s councils. The party is in financial ruins, with donations drying up and trades unions turning away. The activist base has largely been destroyed by a decade of new Labour policies like the Iraq war and renewal of Trident. Of course a great political party like Labour cannot simply die - though I would expect more than a few defections to the SNP in the coming months, if London Labour reasserts control. But where does it go now?

Wendy Alexander may have lacked many of the skills necessary for political leadership, but her analysis of the political situation in Scotland was sound. To meet the nationalist challenge, Labour has to detach itself from Westminster and become more of a Scottish party - yes, more like the SNP. It can only do this by adopting an explicit federal agenda, calling for an autonomous Scottish parliament, with economic powers. Wendy Alexander would not call herself a federalist as such, but when I last spoke to her she was content to be described as taking Scotland in a broadly federal directionton. She did not rule out broadcasting, for example, being devolved to the Scottish parliament.

Whoever takes over from Wendy will have to accept the logic of her political analysis. There really is no alternative. If she is replaced by a stooge, who rejects the independence referendum, neuters the Calman Commission and tries to play by the London rules, then Labour really is doomed in Scotland. This is their last chance to get it right before they hand the keys of Scotland to Alex Salmond.