FIGHT the cuts with Labour! Kick out the Tartan Tories! Save nursery places, and services for the elderly and children with disabilities! Andy Kerr, the former Labour health minister, told the Scottish Labour conference the SNP are the new "Thatcherites", turning the clock back to the 1980s. Yesterday Wendy Alexander called herself "a socialist" and committed her party to "redistribution of wealth".

It's time to dust off the old songs. "The workers united will never be defeated ... Salmond, Salmond, Salmond, Out, Out Out!" Wendy is swapping PowerPoint for the picket lines, standing shoulder to shoulder with workers of Scotland to demand modern apprenticeships. Evoking the memory of Keir Hardie.

Wendy Alexander is one of Gordon Brown's closest political allies, and owes her job as leader almost entirely to his patronage. The PM is now a leading exponent of the hyper-market Anglo-Saxon economic model - which was why he was so keen to embrace Nicolas "Mr Nuclear" Sarkozy, the latest recruit to the anti-welfare club.

So does anyone buy this new Red Wendy, the people's tribune? Well, perhaps surprisingly, one group that seems prepared to give her the benefit of the doubt is Compass, the respected "inside left" pressure group that has been campaigning for a return to social democratic values in the Labour Party.

Compass's main man in Scotland, Willie Sullivan, has co-written an intelligent analysis of Scottish politics, post-May 2007, which argues that the leopardess really can change her spots. Sullivan laments Labour's lost decade under Tony Blair. "Labour forgot," he says, "what the left has always tried to do - critique capitalism and make markets the servants of society." He thinks the line was just about held in Scotland. "In many cases the Scottish Labour Executive avoided the worst excesses of this choice agenda' but forgot to tell the Scottish people." But why did it forget? Wasn't it because it knew it couldn't talk about this within earshot of Gordon Brown?

Sullivan attacks the SNP as a "party of the right", incapable of promoting social democratic values because "its economic policy is set by an ex-bank economist and a financial analyst". Well, Wendy Alexander fits that description too, but Andy Kerr doesn't call her a Thatcherite. Sullivan goes on to say that the SNP are on the way to becoming the new Scottish Tory Party. "If anything they will eventually become more market liberal than New Labour could ever be in Scotland ... but they the SNP have played a clever political game".

Well this is all too clever for me. It was the SNP government, elected in May, that finally ended private sector involvement in the Scottish health service, after Scottish Labour put it there under Jack McConnell. This minority SNP administration has also abolished prescription charges, saved local A&E units, backdated the NHS pay award, abolished student fees, cut class sizes, begun a pilot for free school meals, given equal rights to the children of asylum seekers, rejected nuclear power, doubled the international aid budget, ended ring-fencing of council spending and condemned the Iraq war. This "right-wing" party seems to have done more to further social democratic values in 10 months than Labour managed in 10 years.

The argument that the SNP are a Tory party manque is based on the cuts in business rates and in local authority social service spending, following the concordat with Cosla. Well, in that case, Gordon Brown is surely a true-blue Tory too, since he has consistently cut UK business taxes during his time in office, at the same time as crafting a personal tax regime which allows the super-rich to pay less than their cleaners.

The PM's conference speech attacking the SNP for cuts in services was a breathtaking exercise in hypocrisy. It was the UK Labour government's own spending review last autumn which set the course for council cuts by turning off the spigots of public spending in Scotland. The Scottish government's headline budget is to grow by less than 1.8% (1.4% with the reduced health baseline) over three years, the lowest increase since 2000 and considerably less than the UK level of 2.1%. Labour-led executives enjoyed annual spending increases of up to 11% in 2003/4.

We are entering, by the Treasury's own admission, the most rapid contraction in Scottish spending in modern history. Cuts and constraints are inevitable. Attacking the Scottish government for this is like King Herod ordering the massacre of the first-born and then blaming the Jews for irresponsible childcare.

As for rebuilding manufacturing, creating a "good society" and challenging the dominance of the market - well, Labour have abandoned the productive economy in favour of financial services, the economy of debt. Brown has encouraged the growth of a low-regulation and often corrupt financial regime that has turned the City of London into the Liechtenstein of global capitalism.

He has enforced the "flexible labour market", used immigration to cut wages, introduced PFI into public spending, promoted economic distortions such as buy-to-let and allowed speculators to make housing unaffordable for 90% of first-time buyers. A generation is in hock to banks, with debts that will cripple them for the rest of their lives.

Brown's first acts on becoming leader were to cut inheritance tax for the wealthy and restore tax breaks for private equity. He is prepared to pour £25 billion in public funds into a bankrupt Northern Rock at the same time as cracking down on incapacity benefit and allowing his ministers to say that the unemployed should be denied council houses.

Gordon Brown isn't remotely interested in "critiquing capitalism", let alone "making markets the servants of society".

And nor is Wendy Alexander. The idea that either of them are latter-day social democrats who can trace their descent from Red Clydeside is preposterous. Her politics is management science, her economic philosophy is choice and her morality is feminist individualism. And like Tony Blair she is destined for a future in investment banking.

All Wendy is doing by raising the scarlet standard high is trying to consolidate the Labour "base" in Scotland - the core vote that still believes in social democratic values. It is a cynical exercise in focus-group politics; a risible attempt to portray Labour as the party of the people, of equality and collective security.

The SNP is not a party that has come from the left. It doesn't have the same folk memory of industrial politics. But somehow it has managed to promote a political agenda closer to the social democratic soul of Scotland than the party of the new plutocracy that calls itself Labour. Thatcherite it ain't.