'John made a conscious decision not to be seen to be taking sides,' according to a senior Scottish Labour Party source this week. Helen Liddell, who aims to inherit his seat, initially attempted to follow the Labour leader's example, dismissing allegations of malpractice as irrelevant 'tittle- tattle'. But pressure from Kay Ullrich, the SNP candidate, eventually forced her to call local councillors to account.
It is now painfully clear that Mr Smith's reluctance to intervene was an error of judgement. But the Labour leader saw the intra-party dispute as a clash of political cultures rather than a battle between Goodies and Baddies. As a result he felt it his duty to paper over the cracks rather than purge his party of old-style machine politicians.
Jack McConnell, general secretary of the Scottish Labour Party, still argues that the growing accusations of nepotism, patronage and the biased allocation of council funds are in essence a matter of 'political styles'.
To put it crudely, Monklands East Labour Party is going through an agonising upheaval similar to that endured by London Labour parties a decade or more ago.
As in so much of Scotland, the local party and council have been run for decades by an exclusive, macho political machine, dominated by blue-collar trade union activists. The system operated on patronage and discipline.
'I work for the council,' said an elderly man standing outside Airdrie's dour Ebenezer Chapel. 'But I will never be promoted. You need a party card or a councillor in the family to get ahead.' Would he give his name? 'Away wi' ye,' he replied. 'Remember what happened to Tom McFarlane]'
Mr McFarlane, a disillusioned Labour activist, lost his council job after criticising the Labour machine last year. An industrial tribunal eventually forced his reinstatement.
Today, the party has only 590 paid-up members. A pathetically small number that reflects an unwillingness to recruit and build an open, mass party of the type advocated by say, Tony Blair, and other Labour modernisers.
In recent years, as union power declined, the old guard has been challenged by ambitious young middle-class intellectuals. The four rebel Labour councillors who first made allegations of wrongdoing two years ago include a teacher, a lecturer and a social worker. But they tapped into growing discontent among traditional Labour voters at what is perceived as the arrogant and patronising attitude adopted by councillors.
In Monklands East, this clash of political styles has been complicated and embittered by geography and religious sectarianism. If you ask about people's politics here, they tend to preface their replies with 'I am a Catholic . . .', or 'I am a Protestant . . .' before assuring you that religion is irrelevant. There are two towns in the constituency. Both suffer from poverty and high unemployment, and are characterised by endless council estates. But the two towns are traditional rivals, as different as chalk and cheese.
Airdrie, the smaller, is a run- down market town with a strong Protestant character. Orange Order members still parade here in their hundreds on summer weekends. Their headquarters is the run- down lodge building on Baillie's Lane, just off the town centre. It boasts a massive exterior mural of King Billy, on a triumphally prancing horse, and windows protected by heavy metal screens. In this part of town, you find 'UVF' sprayed on walls, just as 'IRA' is the graffiti of choice in Coatbridge. That town, a couple of miles down the road, is a creation of the Industrial Revolution. It mushroomed 100 years ago, as Irish labourers poured in to man the steel mills, the pits and the heavy engineering works. These Roman Catholic immigrants built a closely knit ingrown political culture expressed through unions and the Labour Party. Monklands was effectively a one-party state, and a so-called 'Coatbridge mafia' came to dominate party and council.
Accusations against this 'mafia' fall into two groups. First it is clear that disproportionate numbers of friends and relations of Labour councillors found employment on the council. Until recently, the council actually used special green-coloured forms to expedite applications from those who were 'connected'.
Second, there is evidence - being investigated by the Scottish Office - to suggest that Catholic Coatbridge was favoured over Protestant Airdrie when public money was spent. Over the years, Coatbridge gained agreeable, job-creating projects. They include the Time Capsule, a gloriously batty multi-million pound leisure centre, where you can swim or skate amid flashing strobe lights, surrounded by giant plastic mammoths and dinosaurs. Then there is a heritage park, a visitor centre and a large pedestrianised zone. Airdrie gained precious little.
I asked a leading councillor from Coatbridge how he explained the imbalance. 'Unfortunately there is no' the land available for big developments in Airdrie,' he claimed. As dereliction is widespread in Airdrie and the town is surrounded by green fields, this explanation beggars belief.
These accusations are distressing, but they do not - even off the record - involve political godfathers, multi-million-pound frauds or attempts at gerrymandering wards for political advantage, as allegedly happened in Westminster.
Instead, they are about finding jobs for the boys and doing favour for 'your ain folk'. They are the small-change of local politics in many of those areas of Scotland long dominated by a single party.
As pressure to clean up Monklands council mounts, Mr McConnell told me that the Scottish Labour Party had always seen its task as being to force Monklands East Labour Party to abandon its old ways and adopt a more modern, open and squeaky- clean political style.
'We democratised the local party,' he said. Mr McConnell cited last year's Scottish Labour inquiry into the conduct of Monklands East party. This led to more democratic standing orders and enabled rebel councillors to achieve party office. He also pointed out that Ms Liddell (though part of a shortlist drawn up nationally) had been selected locally by the new one-member, one-vote procedure advocated nationally by John Smith.
Yet the reformist mantle does not sit easily on Mr McConnell's shoulders. The Scottish Labour Party struck from the shortlist all reform candidates nominated locally. Two, Peter Sullivan and Jim Logue, are experienced local councillors and were among those who blew the whistle on malpractices two years ago. But Mr McConnell and his colleagues in Edinburgh ruled that none was able enough to face the rigours of a by-election. The person that Scotland's Labour establishment wanted to succeed Mr Smith was Helen Liddell. On the surface she is very much in the new Labour mould: an ambitious high-flying businesswoman who served for 11 years as general secretary of the Scottish Labour Party.
And yet there is another side to Ms Liddell. She springs from the heart of the old Monklands East Labour Party machine. She was raised in the Catholic mining village of Coatdyke. Her father was a van driver and she joined the party on her 16th birthday.
By pushing her for the seat, the Scottish Labour Party establishment was attempting to reassure the old guard by suggesting that she was one of them. And they supported her candidacy. Yet her glamorous career - and the fact that she is a woman - was supposed to signal reform and modernisation. In short, Mr McConnell and his colleagues wanted to have things both ways.
This week it became apparent that Ms Liddell's attempt to reconcile the reformers and those councillors who represent Scotland's old macho Labour culture is politically impossible. The contradictions are tearing the local party apart, damaging her campaign and providing the basis for a possible SNP victory.
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