Page last updated at 00:15 GMT, Friday, 6 March 2009

Success and challenge for Labour

Gordon Brown and Iain Gray

By Andrew Black
Political reporter, BBC Scotland news website

Ask anyone their opinion on the most important story of the day and they will probably all give the same answer - the global financial crisis.

The Scottish Government says its budget will bring economic stability, support thousands of jobs and get the economy moving again.

Yet, some of the key powers being used to tackle the problem rest not at Holyrood, but in Westminster.

Labour in Scotland says Gordon Brown's action to save the UK's historic financial institutions - including Edinburgh-based Royal Bank of Scotland - and his drive to claw back some of the 693,000 pension of former RBS boss Sir Fred Goodwin, are among the policies which are making the real difference.

But it could have been very different.

Scottish Labour faces several challenges - one of the most pressing being what to do about council tax

The SNP's victory in the Glasgow East Westminster by-election, an event which saw Labour lose one of its safest seats, prompted questions about Mr Brown's political future - a future thrown even more under the spotlight by a seemingly resurgent Conservative Party.

Then came another UK parliament by-election - Glenrothes.

Commentators predicted Labour would again lose to the SNP. With the Fife constituency next door to Mr Brown's Kirkcaldy and Cowdenbeath seat, the implications of such an outcome did not need spelling out.

But Labour pulled through to win with a decent majority, seeing off a strong SNP challenge.

The result came down to more than one factor, but some argued that it showed Mr Brown was the man to steer Britain through tough economic times.

While the Scottish Government does what it can while arguing things would be better under independence, Labour argues that effective action is being taken now by the UK Government.

At Holyrood, Iain Gray's first task as the newly appointed leader was steadying the Scottish Labour party ship, following Wendy Alexander's tenure.

She quit after continued questions over donations to her leadership campaign.

'Common-sense decision'

Mr Gray and his band of MSPs were instrumental in the unprecedented defeat of the Scottish Government budget, using the argument it would not help Scotland through the economic downturn.

Labour stuck to its guns and, a week later, the 30bn spending plans were passed after ministers agreed to the party's demands on boosting apprenticeships.

Scottish Labour still faces several challenges though - one of the most pressing being what to do about council tax.

Holyrood ministers have shelved their plans to replace council tax with a local income tax, partly because of a lack of parliamentary support.

Labour said this was a common-sense decision but, amid a growing consensus the tax needs to be reformed, the party must decide what to do about it.

The Scottish Government has also been battering away at Labour for inflicting a claimed 500m-a-year cut on the Scottish budget, as part of the Treasury's 5bn efficiency savings drive.

Again, Labour says a tightening of the belt is for the greater good.

On that, and so many other issues in politics, it really all depends on which side of the argument you choose to come down.

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