Having laid the foundations for recovery, Labour must soon set about building a platform for victory

The Labour party which meets in Manchester this month is undeniably politically stronger and more confident than that which met in the city two years ago in the wake of its spring general election defeat.

A strong, if unspectacular, poll lead, sweeping gains in this year’s local elections – including the first indications of the party making inroads into the kind of critical seats in southern England which will decide the outcome of the general election – and, perhaps most importantly, signs that the public are at least willing to hear Labour’s case once again. While victory at the next general election is by no means secured, a Labour win is neither fanciful nor wishful thinking in the way that the prospect of Michael Foot or Neil Kinnock reaching No 10 two years after Margaret Thatcher’s wins of 1979 or 1983 were. All of these are positive reflections on Ed Miliband’s first two years as the party’s leader.

After a rather difficult first year at the helm, Miliband has begun to make his mark as opposition leader. Perhaps most importantly, he has shown – through his talk of the ‘squeezed middle’ and ‘responsible capitalism’ – an ability to capture and articulate the big challenges facing the country. Miliband’s latest ‘big idea’, that of ‘predistribution’ or an attempt to understand and shape how the market distributes its rewards in the first place, was greeted with derision by the Tories, the media and some of his own party when he first discussed it last month. He should ignore such critics, remembering that similar scorn was heaped on his early talk of the ‘squeezed middle’.

We may not agree with all of his analysis, and turning that big picture into practical policies which will resonate with the voters will be the critical test, but Miliband has provided a strong intellectual framework for Labour to develop its alternative to the coalition. This is no mean feat.

But as the effective midterm of this parliament is reached, now is the time to build on the progress made during the first two years of Miliband’s leadership. Three challenges in particular need to be addressed.

First, Labour needs to show a greater understanding of the complexity of the public mood. The latest British Social Attitudes survey underlines this point. Yes, there has been the first rise in support for higher public spending – even if that means higher taxation – for a decade but, at 36 per cent, that figure is well below the 63 per cent recorded in 2002. Moreover, while voters want to see greater support for people with disabilities who are unable to work, the number of people who believe unemployment benefits are too high continues to rise, even in the face of the coalition’s cuts and caps.

Responding to such a mood will not be easy for Labour but it does not have to betray its values in order to do so. Greater conditionality – the kind of ‘something-for-something’ deal Miliband has spoken of in the past – and a return to the social insurance principles which underpinned the early welfare state could, for instance, help to restore public trust and confidence in it. As we have argued before, reform of public services – to show that every pound is well spent and that services reflect the priorities of their users – is the prerequisite of investment in them.

Second, Labour does not yet need a manifesto-like set of detailed policies but it does need to begin unveiling some illustrative ones. Miliband is right to recognise that Labour will need to improve public services during a time of continuing austerity – now it needs to start to show how it would do so.

On the economy, which will undoubtedly decide the outcome of the next election, a drop in confidence in the government’s handling of it has not yet been matched by a rise in support for Labour’s alternative. While the shadow chancellor’s warnings of the risk of a double-dip recession have proved correct – and the case for a stimulus to boost growth remains stronger than ever – the party needs to do more to convince voters that a short-term boost to public spending will be married with a credible long-term plan to bring down the deficit, let alone debt. More broadly, the party needs a more open debate on the level of public spending it believes the country needs, what its priorities for such spending will be, and from whom and where it will raise revenue.

Finally, Miliband’s great strength is his commitment to an open, inclusive and pluralist Labour party. The fostering of such a culture in the party is critical to its ability to respond to some of the challenges outlined above. Given the history of the 1980s, Labour is right to value unity. But the constant attempts by some to delegitimise the opinions of those within the party with whom they disagree – the bandying around of trite and inaccurate labels such as ‘neoliberal’, for instance – does little to move Labour forward. Intellectual curiosity, a desire to re-examine old orthodoxies, lively and respectful debate: these are the attributes of a self-confident and progressive party, one that values its past without being imprisoned by it. And most importantly, these are the attributes of an election-winning party, one attuned to the aspirations of the country it seeks to govern.

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