Gerry Hassan: Labouring to turn popularity into real power

The state of the Labour Party matters in British politics, with consequences for who will win the next UK election, the dynamic of Scottish politics, and the future of the UK.

Ed Miliband has been leader of the Labour Party for coming up for two years next month and for many the jury is still out: Red Ed to some, Wallace from Wallace and Gromit to others. Labour has recovered significantly from the 2010 election defeat when it achieved its second lowest post-war vote. Yet, with poll ratings and membership up, questions still remain about the prospects for the party.

This matters in terms of the nature of British politics, of how the Cameron-led government is opposed, where disaffected Lib Dem voters go, and the wider contours of political debate – north of the Border it will influence how people approach the 2014 independence referendum.

Ed Miliband’s Labour faces many challenges and dilemmas. First, it has to come to terms with the legacy of the Blair and Brown era and the entire New Labour project. While it is fashionable to see all these in dismissive terms, the record is one of both successes and failures.

Blair did preside over three election victories. Brown did oversee record public spending increases. Significant improvements were made in the NHS and education in England and in reducing child and pensioner poverty.

Secondly, New Labour can only be seen by examining the long-term nature of British Labour and social democracy. Since 1945 there have been 30 years of Labour Government in four distinct periods: 1945, 1964, 1974 and 1997. Over this time with the exception of the Attlee administration, Labour haven’t challenged the forces of the British establishment, power and privilege.

Thirdly, one of Labour’s historic blind spots has been understanding Britain and the British state, seeing the latter at times as an unconditional force for good and progress through planning and redistribution.

It is unclear what the party stands for post-New Labour: what kind of Britain, what kind of Scotland does it want? And, as crucially, where it positions itself in relation to England.

Last week I engaged in conversation with the Guardian’s Polly Toynbee at the Edinburgh International Book Festival on what the future holds for Labour. It was a thoughtful, intelligent exchange. In it Toynbee said that Labour should be “the party of conservatism”, of “preserving and restoring” against the assault of the Cameron government.

There is a role in life for such characteristics but I think Toynbee has put her finger on what has been wrong with Labour and the Left for too long. It has become caught up in preserving the important gains working people have achieved through the ages, and not been able to both support them and cast a critical eye on where they might need improvement.

It is crucial for the Left to defend certain institutions and gains – the NHS, comprehensive education, the minimum wage – but by posing as “the party of conservatism” Labour gives the notion of change and the future to its Tory opponents.

Part of the appeal of Scottish nationalism and independence has a similar motivation; of a widespread revulsion at the logic of the Cameron-Osborne cuts and their plans for regressive social engineering. A large swathe of Scottish society just doesn’t want to go down the privatising, tax cutting route of down south; yet that leaves unanswered what kind of public services, public realm and kind of choices Scotland wants to positively embrace.

A British Labour Party which firmly put the wreckage of New Labour behind it and gave voice to a generous, inclusive coalition against this government could be a powerful force. Ed Miliband has already shown his detractors that he can take a stand against powerful vested interests whether it is Rupert Murdoch or bankers’ bonuses.

However, Ed Miliband has to resist the Blairite elements and their attempts at destabilisation, along with his Shadow Chancellor Ed Balls and his belief in politics as the art of close combat whether it is against Tories or his own side. Then he has to be careful not to alienate the trade union leadership, who aided him in his narrow victory over his brother David, and provide most of the finance of the party.

All of this requires a difficult balancing act. Simultaneously Labour has to strike out and think differently and imaginatively about public services beginning all discussions on expenditure with a blank page.

It has to address anger about the City and banking without being portrayed as anti-business, and tap into anxieties about poverty, inequality and “the struggling middle” while not being seen as wanting to tax aspiration and people getting ahead.

Imagine for one moment that Labour continues to get its act together. This would change the face of British politics and the coalition, with the Vince Cable wing of the Lib Dems planning to distance themselves as much as they can from the Tories.

This would have a major impact on the dimensions and calculations of all parties towards the independence referendum. One of the expectations of large parts of the pro-independence campaign and the SNP has been that the referendum would be fought against the backdrop of the anticipated election of a Conservative Government in 2015. That no longer looks as certain as it once did.

At the moment the next UK election looks too close to call with Labour’s lead not yet large enough for them to be favourites, while the postponed boundary changes make a second hung parliament more likely.

All of this uncertainty will have to be factored into the Scottish debate. But Ed Miliband’s Labour, while having important questions to answer, have shown that there is still life in the party and the idea of the Labour leader as the next prime minister is no longer the outside bet it was two years ago.