Scottish Labour’s identity crisis

New leader Johann Lamont has to develop a coherent political and constitutional alternative to the S

New leader Johann Lamont has to develop a coherent political and constitutional alternative to the SNP - but what it is?

Johann Lamont woke up this morning leader of a party which has lost all sense of itself. Over the last six or seven years, Scottish Labour has watched as the SNP has gradually appropriated much of its traditional left-of-centre agenda. Now, with a nationalist majority at Holyrood, Labour finds its ideological identity absorbed into a new Scottish consensus, with little or no space to build a distinctive progressive alternative.
 
Lamont's over-arching task is clear. She has to demonstrate that Labour amounts to more than just the anti-independence party; that it has a coherent political and economic vision for Scotland.
 
This will be more difficult than it sounds. If she shifts the party to the centre, she will run it straight into an electoral brick-wall. A large part of the SNP's success can be attributed to the sense of frustration many Scots came to feel with New Labour's neo-liberal project. Alex Salmond understood this and, despite his own baffling fixation with Ireland's low-tax, light-touch economy, developed a package of policies - including free university education and an integrated health service - which adhered more closely to the broad social-democratic instincts of the Scottish electorate.
 
On the other hand, if Lamont tries to outflank the nationalists on the left Labour's support will be reduced to a shrinking core vote in its central belt and west coast heartlands. Lamont has already tested this approach - at the elections in May - and it produced disastrous results. That's not to say there isn't room for Labour to attack Salmond from the left - the First Minister's plans to lower corporation tax and his close relationship to some members Scotland's disgraced financial elite leave him open to charges of fiscal conservatism. In order to be effective, though, such attacks would have form part of a wider strategy which draws in sections of society beyond the party's trade union and public sector base.
 
Lamont faces a similar dilemma when it comes to the constitution. The break-up of Britain terrifies Labour, so much so, in fact, that its response to the SNP's May victory was to retreat into a kind of extreme, reactionary Unionism. In recent months, senior Labour figures have described the nationalists as "neo-fascist", accused them of trying to "rig" the referendum ballot and made repeated - and usually unsubstantiated - claims about online smear campaigns run by pro-independence activists. Yet the angrier Labour has become and the more aggressively it has rejected real constitutional reform, the lower its poll ratings have sunk.
 
What should be absolutely clear is that the status-quo - which here refers to both the current devolutionary settlement and Calman's loaded exchange of fiscal powers - is a non-starter. Scottish public opinion demands more and, by now, Lamont must have realised that. But she must also be aware that were she to embrace either devo-max or full-fiscal autonomy, she would be conceding 90 per cent of the case for independence. A federal Britain would see the Scottish Parliament gain responsibility for all aspects of government in Scotland except defence and foreign affairs. That means the case for the UK would rest on Trident, a seat on the UN Security Council and not much else. Is that the role Labour really wants to play in Scotland, as the principal defender of Britain's dangerous, redundant and hugely expensive nuclear missile system?
 
Whatever road Lamont decides to take her party down, she should be in no doubt that its future hangs in the balance. As her defeated opponent Tom Harris warned during the leadership contest, Scottish Labour has reached a pivotal moment in its history and failure to live up to the challenges ahead will result in "well-deserved obscurity and irrelevance". Serious shock therapy is needed to resolve this crisis of identity - who knows if Lamont is capable of administering it.

James Maxwell is a Scottish political journalist. He is based between Scotland and London.

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What type of Brexit did we vote for? 150,000 Conservative members will decide

As Michael Gove launches his leadership bid, what Leave looks like will be decided by Conservative activists.

Why did 17 million people vote to the leave the European Union, and what did they want? That’s the question that will shape the direction of British politics and economics for the next half-century, perhaps longer.

Vote Leave triumphed in part because they fought a campaign that combined ruthless precision about what the European Union would do – the illusory £350m a week that could be clawed back with a Brexit vote, the imagined 75 million Turks who would rock up to Britain in the days after a Remain vote – with calculated ambiguity about what exit would look like.

Now that ambiguity will be clarified – by just 150,000 people.

 That’s part of why the initial Brexit losses on the stock market have been clawed back – there is still some expectation that we may end up with a more diluted version of a Leave vote than the version offered by Vote Leave. Within the Treasury, the expectation is that the initial “Brexit shock” has been pushed back until the last quarter of the year, when the election of a new Conservative leader will give markets an idea of what to expect.  

Michael Gove, who kicked off his surprise bid today, is running as the “full-fat” version offered by Vote Leave: exit from not just the European Union but from the single market, a cash bounty for Britain’s public services, more investment in science and education. Make Britain great again!

Although my reading of the Conservative parliamentary party is that Gove’s chances of getting to the top two are receding, with Andrea Leadsom the likely beneficiary. She, too, will offer something close to the unadulterated version of exit that Gove is running on. That is the version that is making officials in Whitehall and the Bank of England most nervous, as they expect it means exit on World Trade Organisation terms, followed by lengthy and severe recession.

Elsewhere, both Stephen Crabb and Theresa May, who supported a Remain vote, have kicked off their campaigns with a promise that “Brexit means Brexit” in the words of May, while Crabb has conceded that, in his view, the Leave vote means that Britain will have to take more control of its borders as part of any exit deal. May has made retaining Britain’s single market access a priority, Crabb has not.

On the Labour side, John McDonnell has set out his red lines in a Brexit negotiation, and again remaining in the single market is a red line, alongside access to the European Investment Bank, and the maintenance of “social Europe”. But he, too, has stated that Brexit means the “end of free movement”.

My reading – and indeed the reading within McDonnell’s circle – is that it is the loyalists who are likely to emerge victorious in Labour’s power struggle, although it could yet be under a different leader. (Serious figures in that camp are thinking about whether Clive Lewis might be the solution to the party’s woes.) Even if they don’t, the rebels’ alternate is likely either to be drawn from the party’s Brownite tendency or to have that faction acting as its guarantors, making an end to free movement a near-certainty on the Labour side.

Why does that matter? Well, the emerging consensus on Whitehall is that, provided you were willing to sacrifice the bulk of Britain’s financial services to Frankfurt and Paris, there is a deal to be struck in which Britain remains subject to only three of the four freedoms – free movement of goods, services, capital and people – but retains access to the single market. 

That means that what Brexit actually looks like remains a matter of conjecture, a subject of considerable consternation for British officials. For staff at the Bank of England,  who have to make a judgement call in their August inflation report as to what the impact of an out vote will be. The Office of Budget Responsibility expects that it will be heavily led by the Bank. Britain's short-term economic future will be driven not by elected politicians but by polls of the Conservative membership. A tense few months await. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.