“Welcome Wee One”, reads the twee poem in Nicola Sturgeon's baby box. Its New Year relaunch shows the SNP hasn't lost its flair for the smart giveaway. At a cost of £6 million in public money, this box of free baby products is an ingeniously cost-effective way of winning the votes of the 120,000 parents who are expected have a happy event in 2017.

The exercise has left Labour spluttering in stifled rage at what they regard as a cynical PR exercise that diverts attention from the attainment gap, social service cuts and NHS performance. But it's almost impossible for the opposition to criticise the baby box. To diss it makes it sound as if you’re against babies.

Labour has begun the year as it is likely to continue, in a state of anxious confusion at the loss of its natural working class vote to a governing party that seems to be exempt from the normal rules of politics and is entering its tenth year in office as popular as ever.

Labour internal polling leaked to The Herald at the weekend suggests Labour are currently running at 15 per cent – ten full points behind Ruth Davidson’s Tories and 30 behind the SNP. The local elections in May could be the final nail in the Scottish Labour coffin as their Glasgow citadel finally falls to the SNP.

Labour MSPs don't know whether to look left or right. On the one hand, they seem to be haemorrhaging votes to the Conservatives, which might suggest they should dust down their unionist credentials and start attacking the SNP for putting up taxes on middle earners.

On the other, they're acutely aware that Labour in Scotland has missed out on the membership explosion that has boosted the UK party since Jeremy Corbyn took it to the radical left. This is despite the fact Labour's energetic Scottish Labour leader Kezia Dugdale restored Labour as the party of unilateral nuclear disarmament and taxes on the rich.

But to gain credibility as a Scottish socialist party, Labour really needed to break from London, rebrand itself as the Independent Labour Party and capitalise on nationalist sentiment in Scotland. Such an existential change could only have been achieved during a time of exceptional political turmoil – during or after the independence referendum. That ship has sailed.

But take heart. Labour may have another chance in 2017 to get back in the race. Brexit turmoil is disrupting politics in much the same way as the independence referendum did in 2014. Ms Sturgeon has committed herself to what is an essentially federalist project: remaining in the United Kingdom and the Single Market. She's made clear that there will be no referendum if the UK helps itself by helping Scotland to emulate Norway.

No one seriously believes Theresa May is going to allow Scotland such privileged status, which means Ms Sturgeon has a dilemma: does she carry out her threat of a referendum? Many in her party are desperate for her to do so. Support for independence in the latest Herald/BMG poll is, if anything, higher now than in September 2014. One more heave could do it.

If the First Minister goes for a second independence referendum, then Labour's problems are over. If it's a Yes, Labour becomes an independent party. If No, Ms Sturgeon will probably resign, and the long delayed split in the SNP between fundamentalists and federalists will finally happen. This would leave Labour in a strong position as the party of devolution, the only show in town.

But even without a referendum, Labour has options. The real debate this year will not be about Article 50 or Scotland remaining in the EEA, but about how to prevent Holyrood losing out as powers are repatriated from Brussels. This is Labour territory – extending home rule – not the SNPs. Labour could lead the debate on the new Scotland Bill that must follow Brexit.

The Scottish Conservatives have had a good run, thanks largely to the personality of Ruth Davidson, but it's likely to come to an end in 2017. As Brexit confusion deepens, and Theresa May and her ministers dismiss Holyrood's right of legislative consent, the Scottish Tories will return to their former status as national pariahs.

Labour just needs to hold its nerve, focus on federalism, and fight like hell to get a good Brexit deal for Scotland. It won't finish 2017 rivalling the SNP, but it could become the main opposition again. And that's a start at least.