Labour put on a brave front yesterday at what could be the party's last ever conference as a dominant force in Scottish politics.

Ed Miliband even made a rousing socialist speech, one of the best I've heard him deliver, echoing many of the Nicola Sturgeon's recent themes on the impact of Tory austerity, zero hours contracts, welfare reforms, risks to the NHS etc..

The SNP challenge seems to be bringing out the best in the Labour leader. One reason Ed. has been sounding more forthright on issues like HSBC, renationalisation, cash-for-access and tax avoidance is because he knows he needs to consolidate his base in Scotland and the north of England. And it seems to suit him.

But make no mistake, there is quiet desperation behind the scenes in Labour. Ed Miliband may be talking their language, but the Scots voters just aren't listening to him - in fact many seem to prefer David Cameron, according to Professor John Curtice. The latest batch of Lord Ashcroft constituency surveys last week, indicating that even Gordon Brown's Kirkcaldy seat could fall to the SNP, were a heart-breaker.

Hitherto, opinion polls indicating that the SNP could return 40 or even 50 seats have been discounted by most in the Labour Party as wild products of the "referendum effect" - a backwash from an extraordinary and unrepeatable episode in Scottish politics. Surely, things would return to normal. But with only six weeks to go until the General Election campaign, normal service has not been resumed.

Jim Murphy has thrown the kitchen sink at this election, sacrificing his own policy preferences on from everything university tuition fees to fiscal autonomy. Spending policies are hurled out with abandon: 1,000 more nurses; £1,600 for18 year old; mass house building programme It is still possible that the SNP's lead will narrow in a UK general election campaign dominated by the Westminster parties and refracted through a metropolitan media. But it takes a huge effort of will to deny the evidence of these astonishing opinion polls.

What can Labour do? Well, they could stop insulting the intelligence of the Scottish voters for a start. Thankfully they have dropped the constitutional nonsense about the "the largest party getting to form the next government" . But they have replaced it with a mantra that is almost as irritating:: "the SNP haven't had a progressive policy in eight years in office" as Labour's deputy Scottish leader, Kezia Dugdale, put it on Question Time on Thursday.

It is quite legitimate to criticise the Nationalist record in government - on council cuts, bed-blocking, civil liberties, the police - but it is daft to come out with statements like that. This is because everyone knows that the SNP built its support in Scotland by adopting many of the progressive policies that Labour abandoned.

It was the SNP who abolished prescription charges and defended universal benefits - like concessionary bus fares and free personal care - when Labour unwisely talked of "the something for nothing society". It was Alex Salmond who said "rocks would melt in the sun" before the SNP would restore university tuition fees when Labour was still advocating the "graduate contribution". Jim Murphy spent most of yesterday trying to steal free tuition back from the SNP, adding a boost to bursaries.

Ed Miliband's advocacy of free child care echoes the commitment in the SNP's 2013 independence white paper. The call for an £8 National Minimum Wage and for extending the living wage are also SNP policies, as is rail nationalisation.

The most obvious way in which the SNP is more progressive than Labour right now is on austerity. Last month Nicola Sturgeon called for a UK wide infrastructure investment programme of £180bn over the next five years. This mildly expansionary policy is more or less what Labour advocated in 2010 but has now abandoned in favour of matching the Conservative promise to "balance the books" by 2020.

And of course the SNP want to abolish Trident, relax immigration controls and promote gender balance in public sector appointments. Now, you can argue about the merits of these policies, but they are undoubtedly progressive in the usual left-of-centre sense of the term.

Kezia Dugdale says that all this is irrelevant because the SNP wants to cut business taxes and refuses to increase top taxation. But again, this doesn't really hold water any more, if it ever did. The SNP has abandoned the policy of cutting corporation tax to 3% less than the UK figure - it's a pretty pointless policy anyway since UK corporation tax (initially cut by Gordon Brown) is now pretty well as low as it gets.

Nicola Sturgeon made clear at First Minister's Question time in January that the SNP would, if she was making the decision today, restore the 50p rate. She is equivocal about what happens in future, but I don't see this flying as a general election issue.

So, Labour's "Tartan Tories" description of the SNP just doesn't ring true to ordinary voters. And nor does Labour's claim that every vote for the SNP is a vote for David Cameron. It manifestly is not because the SNP has made clear - too clear in my view - that it would never under any circumstances "help the Tories" into Number Ten.

The match between Ed Miliband's policies, Trident aside, and the SNP's is going to be blindingly obvious to anyone who looks at an election leaflet. As this column has argued, there is already the basis for a progressive coalition between the SNP and Labour. Indeed, according to a poll quoted in the New Statesman last week, 75% of Labour's candidates in May agree with the SNP on opposing the renewal of Trident.

This was why Ed Miliband wisely refused to listen to the Scottish group of Labour MPs like Ian Davidson and Labour front benchers like Andy Burnham, who have been urging him to rule out any pact with the Nationalists. Their argument is that, like the rejection of currency union before the referendum, this would give Scottish voters 'an offer they couldn't refuse': vote Labour or get Tories.

But as we saw in the referendum this kind of muscle politics can backfire. Ed Miliband and Jim Murphy have read the runes and realised that if they did rule out a coalition, Scots might turn in even greater numbers to the SNP on the grounds that Labour were tacitly backing the Tories again by allowing them back into power.

Labour is ruling nothing out other than a coalition with the Tories - the Grand Coalition idea that was proposed by the former Tory minister, Lord Baker last week. Surprisingly, this has been discussed quite widely in metropolitan media circles as a possible move if there is not one, but two inconclusive UK general elections. But it would be madness for Labour to discuss this now and Jim Murphy rejected it emphatically to BBC's Brian Taylor yesterday.

No - Ed Miliband has sent a very clear message to Scottish voters: if you really want progressive policies in Westminster accept no substitutes and vote Labour. But if you don't, and you vote SNP, there is still the possibility of something like the Lib-Lab pact of the late 1970s, only with Nicola Sturgeon standing in for David Steel.

No, this wouldn't be a coalition. It would in Labour's view lead to instability and is not something Ed Miliband would ever advocate. But it is a recognition of electoral reality. Westminster has changed: it is now a parliament of minorities, and it makes no sense to rule out of hand the possibility of progressive parties finding common ground.

Far from undermining Labour's popularity in Scotland, I think this open-mindedness will enhance it. We now know where the real red lines lie.