The Labour Party’s unexpected by-election victory Thursday in the Glenrothes constituency in Fife, Scotland, followed widespread forecasts that it would lose the previously safe seat to the Scottish National Party.

Glenrothes is one of a number of “new towns” designed in the 1950s, around the then Rothes colliery, which closed in the early 1960s and once employed 1,000 workers. It was replaced by a number of electronics companies, attracted by tax breaks and cheap labour organised by the Glenrothes Development Corporation. These, in turn, are now mostly closed. The local economy now is based on IT-related employers, banks, including Bank of Scotland (HBOS), and local government. A number of former mining villages are nearby.

Labour has previously suffered a series of disastrous by-election defeats, culminating in their humiliation by the SNP in the Glasgow East constituency in July this year. At one point, a defeat in Glenrothes was advanced as the point of no-return for the premiership of Gordon Brown, who is the Member of Parliament for the neighbouring constituency.

Pundits pointed out that a repeat of the 22 percent swing to the SNP in Glasgow East would easily give the party Glenrothes, where only a 14 percent swing was required. 

In the event, Labour held the seat on Thursday with a reduced majority. Labour’s candidate, local headmaster Lindsay Roy, won 19,946 votes against Peter Grant, SNP head of Fife council, with 13,209. Labour won 55 percent of the vote against the SNP’s 36 percent. In 2005 Labour won 19,395 votes, 51 percent against the SNP’s 8,731, 23 percent. 

The Conservatives already small vote was halved and they lost their deposit. The Liberal Democrats collapsed from nearly 13 percent to less than 3 percent, most apparently going to the SNP.

Prime Minister Gordon Brown, his wife and former Labour Deputy leader John Prescott toured the constituency. But even Labour’s large-scale effort was dwarfed by the SNP’s army of as many as 1,200 supporters. SNP leader Alex Salmond, who had predicted an SNP victory and political “earthquake,” visited the constituency eight times.

Labour’s extra votes and its ability to contain the SNP’s challenge has been hailed as proof of a “Brown bounce” and even led to speculation that he may call an early election next spring. 

It is certainly the case that Brown and Labour will have benefited from the favourable media response to his £500 billion bailout of the banks. The largest handout of state funds to the banking system ever seen in British financial history has universally been presented as a serious minded attempt to stabilise a perilous situation in which all, bankers and workers alike, stand to lose equally. 

In reality, Brown’s bailout, like all the massive state handouts organised globally, has allowed the public purse to take responsibility for gigantic levels of toxic debt run up by the speculative operations of the banks and financial elite. The immense cost will be passed onto the working class through cuts in jobs and in the social services and welfare benefits on which many more will be forced to depend as hundreds of thousands are thrown out of work. But at least temporarily it has worked in Brown favour.

In addition, Labour has benefited from a growing discontent with the SNP, which heads the Scottish government in Holyrood. Labour ran its campaign as if it were the opposition rather than the governing party in Westminster, pointing up the SNP’s failings in both Scotland and Fife.

The onset of the banking crisis and recession has been particularly damaging to the SNP. While Brown and Chancellor Alistair Darling have handed over billions to the banks, the SNP and First Minister Salmond have been reduced to making appeals for as much of the bailout cash as possible to be directed to Scottish-based institutions. Numerous media commentators pointed out that an independent Scotland could not have afforded such a bailout. Salmond’s first comments on the crisis were to criticise hedge funds betting against Royal Bank of Scotland and HBOS as “spivs and speculators.” He was made to look ridiculous when it became clear that hedge fund operators were in fact major SNP backers. 

In addition, the SNP’s independence rhetoric was badly damaged by the economic travails of Iceland and the Irish Republic, which it has held up as models and future partners in an “arc of prosperity.” Independence continues to be opposed by the majority of the population in Scotland and the SNP’s supporters were forced to admit that, whereas it had been “sidelined” in Glasgow East, it was “parked” in Glenrothes.

The SNP’s ability to win votes from the Liberal Democrats, who overturned a huge Labour majority in the neighbouring Dunfermline and West Fife by election in 2006, is, however, significant. The swing from the Liberal Democrats suggests that many will vote against Labour under any circumstances. Indeed most voting today appears to be against someone else rather than a positive endorsement of any party.

Further evidence of the SNP’s problems came from Glasgow. Two recent local authority by-elections have been held in the Glasgow East constituency of Baillieston. In one, held in September, the SNP won. The second, held on the same day as the Glenrothes vote, and covering the very same constituency of Glasgow voters, was won by Labour.

Seeking to explain their defeat, the SNP pointed bitterly to Labour’s “relentlessly negative” campaigning and focus on local issues. Labour was able to target the SNP’s role in Fife Council, where it is introducing care charges for vulnerable people and for home alarms. Though Labour is insisting on such cuts and Labour authorities are imposing similar measures, the party demanded that the vote should be a referendum on the care charges. 

The performance of the Scottish Socialist Party (SSP) and Solidarity, Scotland’s Socialist Movement, is also revealing. The two parties split in 2006, with former SSP leader Tommy Sheridan now heading Solidarity. Both stood candidates, who between them polled less than half the SSP vote in 2005, when Morag Balfour polled 705 votes. This time around Balfour polled 212, while Louise McLeary for Solidarity polled 87.

Given their continued boosting of independence, most of their collapsed vote will once again have gone to the SNP. The poor performance of Solidarity raises the possibility that the Socialist Workers Party, which provides a significant proportion of Sheridan’s support, could lose interest and even pull out of the project altogether. It is far from happy to continue standing against Labour, having recently stated, “We want to avoid if possible any bruising election contests.” 

The Socialist Worker’s editorial prior to the by-election declared that polls showing “increasing support for Gordon Brown’s handling of the economic crisis ... reflects more than sudden enthusiasm for the prime minister. 

“As people begin to engage with left wing ideas, they don’t always move straight to the most radical option. Parties which once seemed down and out like Italy’s Democrats, who rallied two million people in Rome last Saturday, or the Irish Labour Party, can shift their rhetoric and so benefit from working people’s anger over the crisis.”

The SWP will no doubt conclude that its view that election contests with Labour are bruising has been amply confirmed in Glenrothes and will act accordingly.