Certainly there is evidence to suggest that centre-left parties are in difficulty across the continent, with recent electoral defeats in the Netherlands, the UK and Sweden. Progressives are in opposition in all the major countries with the exception of Spain, where the PSOE is clinging to power in conditions of great economic adversity. It would be all too easy to succumb to electoral pessimism and believe that we are in for a period of centre-right hegemony.
Douglas Alexander suggested that the age of austerity could usher in a period of great political turbulence as electorates turn against incumbent governments across the EU. Yet there is no guarantee that the centre-left will be the immediate beneficiary of such dissatisfaction. Populists and the far-right might, by adopting ‘a plague on all your houses’ stance, be able to capitalise on the anger and resentment expressed by those whose living standards are under pressure.

The challenge for Labour is to devise a new and compelling prospectus for the electorate. This has to be both optimistic (offering growth and prosperity) and credible (recognising that reducing the deficit will remain a priority for the immediate future). Far from viewing the period of Labour government as a series of missed opportunities, we should celebrate the record at the same time as we forge a new political settlement for today’s conditions. New Labour, with its message of economic dynamism and social justice was the right approach in the 1990s, but the challenges of an integrating global economy demand a new politics of production, with the state and the market working together. Robust opposition to the coalition is a necessary but insufficient condition for electoral victory.

In endorsing this analysis, Roger Liddle responded to Alexander by observing that New Labour sometimes seemed over-enthusiastic in its embrace of markets. Part of the process of renewal requires that we become more critical of globalisation. More specifically, it has to be recognised that there are winners and losers and too often in the recent past social democrats have failed to pay enough attention to those adversely affected – and have been seen as representing winners, especially in the public sector. Simply focusing on the poor and low paid is unlikely to produce the broad coalition needed for victory. There must be a new theme that draws together the threads of the progressive story into a coherent narrative. Developing a distinctively social democratic notion of sustainable growth could offer a winning formula, allowing Labour to focus once more on school standards, improving the life chances of the unskilled, the necessity of pension reform (to cope with demographic pressures) and the demand for more cooperation across the EU (to deal with climate change and the regulation of the banks). In order to win social democrats must be robust and aggressive in addressing these real challenges.

Will Straw explored whether the left in Europe could learn anything from recent experience in the USA and identified four critical points of both similarity and difference. First, the Democrats are not social democrats and have rather different instincts from those on the left in Europe. Second, contrary to recent experience here (and in the US midterms) there is every sign that Barack Obama will be re-elected in 2012. Third, when the Democrats controlled Congress they failed to deliver on Obama’s legislative priorities – the healthcare bill was less than the president wanted, the new architecture of financial regulation was diluted, the stimulus package was probably too small (and proved unpopular) and finding resources for the ambitious innovation agenda identified in the State of the Union address will be problematic. And finally, the president will find it hard to legislate and hard to spend money until the composition of Congress changes.

There is a strong case for saying that Labour is better positioned than we might think to capitalise on the coalition’s difficulties. This is hardly 1981. The party is united, a comprehensive policy review is progressing well and there is both a healthy respect for New Labour’s achievements and a refreshing willingness to embrace new thinking to rebuild our electoral coalition. The emphasis on a new politics of production (including an active industrial policy) and on work as a political issue (social democracy does not stop when a worker crosses their employer’s threshold) are both important new points of departure. All the speakers recognised that a critique of finance-driven capitalism has to be matched by a social democratic story about good business. Moreover, all the participants agreed that the national process of renewal will proceed more smoothly if the European centre-left exchanges ideas and experiences.

Despite the bleak electoral landscape in Europe there is every reason to believe that a social democratic resurgence is possible if Labour provides an effective opposition, anticipates the challenges the country may face at the time of the next election, rebuilds its economic credibility and offers a compelling story about how to sustain growth, jobs and prosperity in a more competitive world.