One day the Scottish Labour Party may be grateful for the gubbing it received at the Holyrood elections in May.

As Iain Gray observed in his valedictory address to the Labour Conference yesterday as Scottish leader, in 1999 Labour devolved government without devolving itself. Now it has an opportunity to put that right.

Yesterday the party agreed by an overwhelming majority to full devolution from the UK party on all Scottish matters. The next Scottish Labour leader will not merely head the party’s contingent in the Scottish Parliament but be commander-in-chief of the Scottish party. The mechanics of this arrangement will be decided at a separate Scottish conference next month. Though this stretches out the leadership contest further, it is necessary, in order to avoid the charge that the new arrangement will remain subject to diktat from London. Many will remain to be convinced that the Scottish party will enjoy real autonomy. Though it opens the leadership contest up to Scottish MPs and MEPs, as well as MSPs, it is unclear how relationships between these groups will work, especially in the event of a divergence of views between London and Edinburgh.

The change will move Labour’s political centre of gravity northwards and that should challenge the SNP. To some, it appears the Nationalists are behaving almost as if they have won the independence referendum. This is partly for want of a coherent opposition, capable of laying out a positive vision of a future Scotland standing up for itself within a United Kingdom.

The SNP was able to produce a narrative that gave voice to people’s experience and hopes, without focusing on the mechanics of independence. If Scottish Labour is to regain popular support, it needs a similarly positive narrative that people can identify with. It must be one that stresses the need for Scottish politicians to be able to continue to shape events beyond the Border and the interconnectedness of business and family relationships.

Mr Gray’s speech was a reminder that here is an intelligent, compassionate man with sound political instincts but lacking in leadership flair. It has been his and Labour’s misfortune that he found himself up against perhaps the most accomplished British political leader of his generation and a party laying claim to much of the same political territory as Labour.

The Labour Party in Scotland has been scarred by internal disputes, some going back to disagreements about devolution. These might have been overcome under a powerful leader, capable of knocking heads together and driving the party forward, but Scottish Labour has suffered from a semi-permanent leadership crisis since the death of Donald Dewar in 2000. Labour’s biggest challenge lies in finding a Scottish leader capable of mounting a fightback.