It was Ruth Davidson who drove the final nail into the coffin.

At First Minister's Questions, the Scottish Tory leader mischievously congratulated Johann Lamont for adopting Tory policy themes in her first significant policy speech as leader of the Scottish Labour Party.

The SNP hardly needed to lift a finger last week. Conservative commentators like Murdo Fraser and Spectator bloggers did most of their work for them by crowing at the new Scottish Labour leader's conversion to Conservative principles on public spending and the freebie culture. There can be no worse fate for a political leader in Scotland than to be feted by the hated Tories.

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Lamont wanted to be seen to be redistributing wealth from the rich, who don't need things like free prescriptions or free care for the elderly, to the poor; but somehow it ended up as the Scottish Labour Party entering a rhetorical coalition with the Tories.

As a presentational disaster this ranks alongside John Major's back to basics speech which helped seal the fate of the UK Conservatives in the 1990s. There has been a whiff of decay around Scottish Labour for some years, but I'm beginning to think it has finally popped its clogs. There must now be a significant chance of some kind of breakaway movement on the eve of the 2014 referendum by natural Labour supporters who simply no longer recognise their party.

After an incoherent performance on Good Morning Scotland by the Labour chief whip, James Kelly, who seemed unable to grasp the meaning of "means test", the question on everyone's lips was: why on earth did she do it? What possible political benefit could be derived from threatening to withdraw a raft of popular universal benefits like tuition fees and bus passes while in opposition? It has opened Labour to political attack on a whole range of issues, just at the moment when the SNP government was starting to get into difficulties over the constitution, Nato, Europe.

Lamont offered nothing in return for axeing this chunk of the social wage, thus breaking the very first rule of politics that you have to sound positive even as you lay down hard truths. You simply cannot allow the headlines to be all about taking away and giving nothing back.

The other cardinal rule of politics is to avoid specifics. Ed Balls also laid it on the line last week, promising that UK Labour would be "ruthless" in future about public spending. But the shadow chancellor didn't spell out exactly what this might mean in terms of lost benefits to pensioners or the sick. Why offer hostages to fortune? You don't have to be specific when you are in opposition.

Presumably, Lamont felt she had to launch a policy review to consolidate her leadership of the Scottish party. That is fair enough, all leaders need to stamp their authority. But you don't pre-empt a review before it has even met and you don't insult the voters by accusing them of living in a "something for nothing society". That is Daily Mail speak. Finally, you have to ensure, if you are going to make dramatic policy U-turns, that your party is fully versed on the nature and purpose of these reversals. Clearly, Lamont's people were taken by surprise because they spent the rest of the week contradicting her. Spinners seemed to be saying that free personal care was not on the black list, until the academic advising the review, Professor Arthur Midwinter, insisted that everything was up for consideration.

There was a stunned silence last week from ordinary Labour members in Scotland as they struggled to make sense of this wholesale abandonment of policies they had been campaigning on as recently as the council elections of 2012. Labour won Glasgow on a commitment to freeze council tax for five years – a commitment now presumably in doubt because Lamont says it is unaffordable. In the Scottish parliamentary elections the previous year Labour promised not to reintroduce university tuition fees, promised to defend free personal care and actually claimed credit for helping deliver free prescriptions in Holyrood. You simply cannot turn round barely 18 months later and say this was all "living a lie". How can anyone believe anything Labour says in future election campaigns?

Unfortunately, we can't rely upon Lamont herself to give an explanation of the political logic behind the wholesale abandonment policies she supported only the day before yesterday because, as her appearance on Newsnight Scotland demonstrated, she simply lacks the ability to articulate one. The interviewer, Isabel Fraser, adopted the politely exasperated tone of a social worker trying to understand why a rather confused elderly patient hadn't paid their council tax.

How did it come to this? How did Scotland's greatest party, created by Keir Hardie, end up with a leader who not only appears to lack elementary political sense, but is unable to express herself?

This is the party of Donald Dewar, John Smith, Robin Cook, Gordon Brown. This is the party that created the Scottish Parliament, the most important constitutional change in 300 years, and now seems to have been destroyed by the experience of serving in it.

Say what you like about Jack McConnell, the former Labour first minister, but he was a serious political leader who took on council neanderthals, pushed through the smoking ban and introduced policies like free personal care, concessionary bus fares and even the abolition of upfront tuition fees in 2001. Policies that Lamont now describes as "SNP bribes", revealing an astonishing ignorance of her own party history.

And for what? I think the hapless James Kelly gave some kind of indication in his halting and evasive performance on the radio. When asked repeatedly why the party was attacking popular policies which were either introduced by Labour or supported by them in Parliament, he kept coming back to the need for "flexibility" in funding for local government and the threat of "£500 million of cuts and 14,000 job losses" in Scottish local authorities. I think we get it now. The positive message in Lamont's address was to Labour's clients in local government. Read her lips: Labour will axe benefits like elderly care before council jobs.

Lamont is feeling the pain of all those councils, like North Lanarkshire, who are having to cope with starvation finances after years of living off the fat of the land. Scottish Labour is addressing its own base, which has narrowed to a small group of the electorate dependent for their livelihoods on spending in local government.

Labour, I fear, has given up on speaking to Scotland as a whole, and is speaking the language of council bureaucrats who have long believed that money is being wasted on things like free personal care and tuition fees that could be much better spent by them. It is a language echoed by many Labour MPs in Westminster who resent their friends in the north adopting policies that contradict Labour's UK policy agenda.

But why throw away your best lines? Unable to cope with the SNP stealing all its popular policies, Johann Lamont has elected to steal the clothes off the Tories, to the dismay of thousands of Labour supporters across the country.

In one short speech, she has squandered Labour's inheritance, probably thrown away the next Holyrood election and ensured that large numbers of former Labour voters will consider voting Yes in the referendum on independence if that is the only way they can express their dismay at what has happened to the party they used to know and love.