A new centre-ground is emerging from Labour’s policy review which will shape the politics of 2015. Liam Byrne tells Richard Angell and Adam Harrison what he has learned from a year of listening to the public, and eight years where New Labour failed to follow its own principles.

Liam Byrne is a man determined to learn the lessons of history and dodge the mistakes of past oppositions. Last year Ed Miliband gave him the job of leading Labour’s policy review. That review, he believes, has uncovered the ‘new centre-ground’ of British politics. And it is on this territory, says the former chief secretary to the Treasury, that the next general election will be fought.

The party’s journey over the past year has not always been a comfortable one. The messages it has received from the public have been, Byrne admits, ‘pretty blunt’, but he sees the process as absolutely necessary: ‘Unless we’re prepared to confront what the people thought about us, then we aren’t going to change,’ he believes. The public think, Byrne suggests, that Labour was too slow off the mark on banks, immigration and welfare. And to those in the party who do not like that message, he has a swift retort: ‘We can’t just all wish the public didn’t think that … they’re the boss at the end of the day.’

Since the general election, opinion polls have indicated that many voters do not know what Labour stands for, a reflection perhaps of the party’s lack of firm policies. Byrne, however, believes the party has approached this period of intense self-reflection in the right way. ‘It took Theresa May five years before she was able to stand up and say “the Tory party is seen as the nasty party” and it took Neil Kinnock eight years before he launched Labour Listens,’ he argues. In contrast, ‘we’ve been able to get straight back out there, on the doorstep and on the phones.’

So when will the policy review start to bear fruit in terms of actual commitments? At Labour’s conference in Liverpool this month, Byrne responds, ‘we’ll be able to put on the table fairly specific, early policy ideas that really show how we’ve listened and how we want to set out a different course for the future.’ Underpinning these ideas, he says, will be a greater self-confidence in ‘active government [which] should be changing the shape of our economy and the way it works’ rather than ‘just taking a hands-off approach and putting in place a few tax cuts, which is what George Osborne is proposing.’

But the ideas emerging from the policy review also have in common the fact that ‘they will be rooted in this new centre-ground, this new centre, which is becoming clearer.’ It is this new centre which, Byrne believes, New Labour failed to appreciate the emergence of.

A key point he hammers home time and again is not that the party in government was too New Labour, but that it ceased to be so when it failed to constantly reassess both itself and the country; it took its eye off the horizon. Indeed, Byrne disagrees with Tony Blair’s recent contention at a speech marking Progress’ 15^th anniversary that we stopped being New Labour in 2007. ‘I think that underestimates how we should have been changing before 2007. I think that we should have been looking much harder at what was happening to the “squeezed middle”, which was a problem that actually started in 2004.’ He is careful, however, not to suggest that he is calling for the abandonment of New Labour. But, for Byrne, New Labour is less about being attached to particular policies from past eras, and more about ‘applying traditional principles in a modern setting’ – the need to move with the times. ‘The issue for those who like New Labour politics is that we have got to get beyond that time … you drop the baggage of policies, but keep the philosophy.’

So if a rolling revision based on New Labour principles might have alerted us earlier to the plight of the ‘squeezed middle’, what are the changes in the country that the party needs to be aware of now? According to Byrne, the emerging challenge is the Gordian Knot of growth, immigration and welfare, which the party will have to find new tools to unpick.

On the issue of growth, the former chief secretary calls for the party to revise the early New Labour approach which was neutral about means as long as the goals of social justice and a strong economy were met. ‘We can’t be neutral any more about where growth comes from, what growth looks like. We have got to have a view of what “good” capitalism looks like and feels like,’ he argues. Means, as much as the ends, matter now. ‘We have to be much more worried about how growth actually raises people’s wages and we have got to be more worried about how growth is greener, we have got to be worried about how growth gives us a more diverse tax base.’

While he quickly dismisses as ‘nonsense’ Maurice Glasman’s claim in a recent Progress interview that Labour ‘lied to people about extent of immigration’, Byrne is also clear that the party should not have felt so insecure on this territory. ‘When you got into an intelligent discussion with the public about immigration actually you could persuade people to sign up to very sensible policies,’ he argues. But what he terms Labour’s ‘radio silence’ on the issue meant that ‘the public couldn’t understand why we were not talking about it more. And so they suspected that we thought the worse of people who discussed it.’ Again, the party should have begun revising its stance much earlier, without fear of causing offence. ‘I got much a harder time about immigration from ethnic minority voters … So you know, that taught me that this wasn’t a race issue, this was just politics.’

By the time he became immigration minister in 2006, Byrne felt he was doing ‘New Labour’s catch-up work, by introducing the points system, creating the UK Border Agency, and introducing earned citizenship laws’. The Conservatives, he says, ‘did get the politics of it wrong under Michael Howard in particular, and they were so desperate to detoxify their brand that anything that sounded vaguely rightwing was something they found hard to deal with.’ Still, Labour as the governing party ‘paid the price for being too slow’.

Large-scale immigration is often blamed for undermining the traditional social welfare contract between state and taxpayer. This, Byrne argues, is the third big challenge facing the country. And, as shadow work and pensions secretary, he believes the challenge of restoring confidence in that contract will require a radical overhaul of the 1945 welfare settlement.

Labour’s approach, Byrne suggests, needs to be rooted in an understanding of how much the world has changed, even since 1997. On the one hand, the nature of work is such that there is a much greater prevalence of self-employment and stop-start jobs, but ‘the welfare state has not kept up with the new kind of risks that people confront in their lives.’ Byrne is looking closely at the idea of Labour introducing a ‘something-for-something’ contributory element to welfare, drawing on experience from other countries. ‘Denmark and Holland give people higher levels of unemployment benefit, for a short period of time, if people have paid more in. Now, for a lot of people that seems fair but economically it’s also a good idea because it gives people with skills more time and space to get a job that better fits their background.’ The principle of personalisation, applied in recent years to other public services, could, he suggests, form the foundation of a new welfare settlement. Providing people with their ‘own kind of lockbox, to which you pay, from where you can draw help for when you need it. People like that element of personalisation.’

Byrne predicts that ‘the politics of 2015 will be pretty different … [they] will be dominated by living standards.’ While all the focus now is on the deficit, and he is clear that ‘you can’t win without fiscal credibility’, the shadow work and pensions secretary thinks the party that wins in 2015 will be the one that understands that ‘trust on the economy … will stretch upon wider than just that because I think people will see that a few tax cuts and some rhetoric about red tape is not going to deliver you a different type of economy’. What emerges could be an ambitious new deal between citizen and state, a restoration of the welfare state’s original contributory principle, a new balance in the economy, and a more open conversation about immigration. This, then, is the new centre-ground that Byrne sees the public converging on. And it is onto this that he hopes to steer the party  – and from which, he believes, it can win.

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