With Wendy's house in order, now it's time to act

The donations saga appears over and the Scottish Labour leader can focus on leading her embattled party

TELL it not in the streets of the Old Town, whisper it not along the corridors of Holyrood, but, after a careful reading of yesterday's headlines, I think there may at last be a glimmer of light at the end of the tunnel for me, and for thousands like me – that is, for the silent army of Scots who have been paralysed with boredom by the whole saga of Wendy Alexander and her dodgy donations and completely baffled by the ferment of excitement it has caused within Scotland's political and media elite.

It's not, of course, that I hold any brief for the bizarre New Labour approach to political funding; the one where you use any excuse – a failed deputy leadership bid at Westminster, or a non-contest for the doubtful privilege of leading the party at Holyrood – to strengthen your dubious links with that strange class of fat cats who, unlike 90 per cent of British people, can afford to write you a cheque for £1,000 without thinking much about it.

It's just that the whole Wendy affair is so obviously a minor symptom, rather than a disease in itself – a tiny tartan pimple, as it were, on the now-raddled body of New Labour politics – that I find the acres of coverage it has attracted more worrying than interesting. For the truth is that Labour's recent funding woes reflect two major structural problems in current British politics, which deserve much more serious analysis. One concerns the collapse of individual grass-roots party membership as a viable and sufficient source of funding, and the other concerns the consequent tendency for mainstream political parties simply to sell themselves to the highest bidders, with dramatic negative consequences for the range of real political choice they are able to offer to voters.

For New Labour, in particular, this sell-out to wealth – the hobnobbing with plutocrats, the lists of donors from the ranks of the tax-sensitive and barely domiciled – has represented a major betrayal of its political roots, ideological, cultural and historical. The Blairites, in their weird parallel universe, may have managed to persuade themselves that there was no contradiction between schmoozing the plutocratic few and delivering better lives for the many.

But the Brownites know in their hearts that this is tosh; that part of the job of government is to stay clear of powerful vested interests and to stand up to them on behalf of ordinary people. And it's on the sharp, painful knowledge of this contradiction and betrayal, buried deep in New Labour's gut, that the party is now gradually bleeding to death and losing all appearance of coherence, decisiveness, or principle.

And these are the issues, around the long decline of the Labour Party, that people who are serious about the future of Scottish and British politics should be discussing, rather than the personal fate of a politician whom no-one actually suspects of personal corruption. If Wendy Alexander were half as brainy as some of her supporters suggest, for example (and I did once hear some brilliant satirical songsters suggest that "although her brain is planet-sized, it's just not planet Earth"), she would be addressing those profound issues of the party's future herself, with or without the say-so of her glowering overlord in Downing Street. She would, for example, put the current ill-timed plan for a Constitutional Commission of Unionist parties on the back burner, since Scotland is about to find out just how well it can do out of the present constitutional settlement under a confident Nationalist government.

Then – as discussed recently by Bill Gates at Davos and Hillary Clinton on the campaign trail – she would begin to develop a new vision of the balance of power between markets and the state, drawing on the deep tradition of Scottish thought in this area to help to restore the prestige and independence of state institutions and the public realm, while setting clear limits to state power. Secondly, she would address the question of global governance to match global challenges and start to tell the grown-up truth about how national and regional governments really fit into the pattern of 21st-century power. And thirdly, she would begin to develop a 21st-century model of government which truly bases its performance not on the promotion of outdated forms of economic growth, but on a completely different battery of concerns to do with sustainability, conviviality, opportunity and freedom.

Conventional media wisdom has it, of course, that all of that would be boring to the public, compared with the Big-Brother-House game of "voting out" individual politicians, as if their resignation somehow solved the problem. But in the end, there is no pleasure or interest in striking down politicians who never mattered in the first place, so little do they represent any recognisable ideology or programme.

Now, Wendy Alexander has a brief, slim chance to seize her moment in opposition and to begin to make herself into a politician who matters, for the long-term future of social democracy. But to do that she will have to work with new allies and in a 30-year time frame that does not come easily to any politician. And she will have, above all, to leave the Blair-Brown years behind, without a look over her shoulder towards Downing Street, or a single backward glance.