Where now for New Labour? For the last 12 years, this has been an academic question. New Labour was whatever this government did. But, as Tony Blair prepares to go, the question becomes real again because New Labour includes different currents of thought, and could now go in different directions. Britain has changed since 1994, and we need to use this period of transition to assess what has worked, what hasn’t and renew ourselves accordingly.

So, here are seven thoughts about the future of New Labour:

1. There’s no real split between Old Labour and New Labour any more

The media sometimes say that the Labour party could go back to being Old Labour. That’s clearly not true. The core assumptions of New Labour are hard-wired into our party. What in the early 1990s were radical propositions by Tony Blair and Gordon Brown are now so widely accepted that they have become clichés: that we’re for the many not the few; that we’re tough on crime and the causes of crime; that welfare should give a hand up as well as a hand-out; that we must never return to boom and bust; that social justice and economic prosperity go hand in hand.

But that should not mean a sterile uniformity. There are different trade-offs between and within those assumptions. That’s why it’s so important to have a debate about ideas – to work out how to make those trade-offs faced with a new set of challenges, and to come up with our next set of policies.

2. Let’s tackle pressing inequalities, rather than arguing about definitions

Some of our critics say that New Labour doesn’t care about inequality. I disagree. We’ve redistributed income to poorer areas and poorer groups. As Nick Pearce recently identified, household income inequality fell in 2004/5 for the third year running, and post-tax inequality is now back at a level last seen in 1987.

Tony Crosland took the view in 1956 that there was so much inequality in society that socialists could work for years and then pause to see how much further they should go. That’s still true, despite our progress. So, instead of waiting to agree about the right definition of inequality, we should focus on the inequalities that we agree should be addressed first. I think we can build a consensus that those pressing inequalities are persistent poverty and unequal life-chances.

3. New Labour is not just about modernisation, but also empowerment

New Labour’s lodestar has been modernisation. That continues to be important; political parties that can’t help their countries prepare for the future wither. But modernisation is not enough. It needs to be twinned to a moral goal, or risk becoming technocratic. I believe that goal is empowerment. Redistribution of income is not enough, we need to redistribute power too. The fundamental human value is autonomy: being able to pursue your aspirations, your dreams, your own idea of the good life. People don’t want to be done to, they want to do.

But that doesn’t just mean being free to do, it means having the power to do. That’s the enduring dividing line between the right and left. They say they want to set people free; but we want to do more, we want to give people the power to be free. It’s not enough to tell people to get on their bike if they don’t have one.

4. Empowerment means embracing radical devolution

Empowerment is challenging for Westminster politicians and Whitehall civil servants. It means overcoming the natural tendency of all governments to think that they know best. Otherwise, there’s a temptation to talk about giving people power in theory while fearing doing so in each individual circumstance.

To avoid that path of least resistance, we need to adopt fully the subsidiarity principle. Our approach to each policy should be to try to devolve power to the lowest possible level, and then work upwards if that’s not feasible. This would mean starting with the assumption that we can give power to the individual. Our default position should be to give them choice over what government provides for them: where their child goes to school, what kind of medical treatment they get, what kind of support they receive if they are disabled or growing old.

But we should recognise that individual choice doesn’t always work. Where it doesn’t we should escalate the power to the neighbourhood level, then to the council, city or regional level. National government should do only that which only it can do. That will mean getting central government out of the detail of much of people’s lives. This radical devolution is not just right in principle, but also the most efficient way of creating a system that is adaptable enough to today’s rapid change.

5. Choice and competition are important tools, but not the only ones

Choice and competition are important tools for people with Labour values because they put the power in the hands of the individual. This is sometimes seen as a controversial argument within our party; an argument where the onus is on those who want to use choice to show in each case why it won’t be counter-productive.

But I believe that if you start from a belief in autonomy, you should reverse the burden of proof. The public want choice: over two-thirds say so in surveys, and that proportion rises amongst poorer groups, those with lower educational qualifications, women and ethnic minorities. I believe that’s because public services have developed an unintentional bias against the poor, those with less strong voices, weaker networks. These groups want choice as a way of getting their rights.

But choice isn’t a simple panacea. Sometimes we need to help people make choices – for example, giving people advisors about how to exercise choice within healthcare. In pensions, consumers feel uncomfortable making choices between unlimited numbers of pension products, so our plan is to help them make a choice through automatic enrolment in a pension, and then structuring the choice open to them.

Moreover, choice isn’t always possible and is in any case made within parameters set by collective organisations. So, we also need to think about how we give the public power over those decisions – through elections, voluntary organisations, representation, citizen’s panels.

6. Free up the front line, with accountability

We need a double devolution. If we can make public services accountable to users, then they no longer need to be accountable in detail to central government. Central government’s role could increasingly become setting the funding and objectives of public services, but reducing the number of targets and rules that we set.

But that devolution to the front line can only work if there is accountability. Accountability to the individual, through choice or democratic means, is the battering ram to removing centralised rules or targets.

7. The Comprehensive Spending Review should prioritise empowerment

In our first term, we prioritised education and health. That created a reaction, we were accused of caring less about other areas of policy. In our second and third terms, whilst continuing to increase health and education spending, we have been more completist.

The challenge of the next spending review is how much we can prioritise. I would advocate making empowerment a, perhaps the, priority – not because other issues are unimportant, but because empowerment is foundational. It’s both our core value and the springboard to economic success. We are only just starting to feel the effects of competition from China and India, and unless we help people have the skills to compete, then we won’t have the public resources in the future to address all the other policies.

What would prioritising empowerment mean? I think this is a fertile area for debate over the next few months. But my starter for ten would mean a determination to end child poverty, to help people work and to build a world-class education system. We have made real progress on these issues, but we should ask ourselves what we would need to do to meet those goals, rather than make further progress towards them.

First, it might mean reversing the spending review process to start with how much funding would be necessary to meet those goals, and then working out how that can be achieved within the spending envelope that has been set. It would mean being clear-sighted about which of our initiatives have not worked, and stopping them. It would also mean taking a hard look at spending which, while valuable in itself, is a lower priority. And it would mean really grasping the potential of transforming government through new technology and service reorganisation.

The Labour party is going to stay New Labour. The questions we need to debate are which current of thought within that paradigm we should follow, and what our guiding values teach us about renewing policy. I’ve argued that empowerment should be our moral purpose, and that it leads us to embracing radical devolution of public services. That means starting with a default view that power should be devolved to the individual, often but not always through individual choice over their public services. It would also mean making empowerment the priority in the next spending review, and taking difficult decisions to ensure that we have sufficient funding to end child poverty, transform our education system, and help all those who can work to do so.

Is empowerment our big idea? What reforms would we need to match further investment? Can we prioritise in this way? I would be interested in people’s views. You can leave your thoughts and comments below on the Progress website.