Scottish Labour can begin rebuilding with a focus on the issue of minimum wage north of the Border

With Labour crawling around looking for a successor to leader Iain Gray, it's probably fair to say the party hasn't really begun to look at how it will lead a charge against the "yes" lobby during what is set to be a five-year campaign for independence run by the SNP government.

But part of the answer to Labour's plight could perhaps be found in the calls made by another fallen leader, that of the demand by former first minister Henry McLeish for "devolution max" or full fiscal powers for Holyrood. Mr McLeish has already warned Labour not to jump into bed with the Tories in an unholy alliance of centre-left and centre-right unionist parties in a "no to independence" campaign.

Instead, the former first minister has urged his party to back the "devolution max" option, which he claims would be a "credible" alternative to the various forms of independence likely to be on offer from the SNP in any referendum.

Mr McLeish's friendly advice to his party could potentially offer it a kind of redemption, as advocating full fiscal powers for Holyrood – short of independence – could give Labour a chance to pursue a genuinely left-of-centre direction and improve the lives of many less well off Scots. One example could be that of Labour calling for powers over the minimum wage – currently 5.93 an hour for over-21s – to be devolved from Westminster to Holyrood.

Arguably one of the few coherent policies put forward by Scottish Labour during its ill-fated election campaign was that of a living wage of at least 7 per hour for all public sector employees, with an appeal to private firms to voluntarily pay that rate to employees.

However, with the power reserved to Westminster, firms would be able to ignore these appeals. Scottish Labour, even in its severely weakened state, could outflank the SNP by calling for the devolution of the minimum wage, something that Mr Salmond has paid scant attention to with his focus on calling for corporation tax powers – most likely to benefit big business.

Introducing a minimum wage at UK level was easily one of Labour's best policies in government at UK level.

Pushing for higher wage levels for less well off Scottish workers could be an example of how Labour might use Mr McLeish's "devolution max" to good affect. Others could involve Labour backing a more redistributive tax system, were Holyrood to be handed more fiscal powers. But with Scottish Labour holding a root and branch review of the party north of the Border in the wake of its disastrous election campaign, now could be the ideal

time for new thinking on issues such as "devolution max".