John McTernan: Can blue really become the new red?

SOMETHING old, something new, something borrowed, something blue. These seem to be the choices that Labour is considering a year after its defeat by David Cameron.

Defeated parties normally fall into one of two massive traps - they blame the voters for their defeat, or they blame each other. Sometimes they do both - at the same time - and they struggle to escape these traps.

Labour from 1979 until 1994, the Tories from 1997 till 2005: both parties shuffled around in front of the public basically talking to themselves, indeed at times shouting at each other. Labour, since May 2010, has avoided these traps. Perhaps it was the closeness of the result - even in a recession, facing Gordon Brown, David Cameron couldn't get a majority. Whatever the cause, there's actually been a swift, and often stimulating, turn towards discussing new ideas, rather than debating who betrayed whom.

There are those who urge a turn to the Left - unconvincing given that Labour lost power, as have many other centre-Left parties, in the midst of a crisis of capitalism. There is no more appetite for socialism in Britain than there has ever been. There are others, with whom I have a lot of sympathy, who suggest that all that is needed is new New Labour. After all, the only successes of the coalition - free schools, Libya - are continuations of Blairism by other means. But the Blair brand, though hugely admired abroad whatever the underlying politics of the country, remains tarnished in the UK.

The field is open, and it has been taken for the moment by Blue Labour.

At first sight, this is just another of the modish colour movements in politics. Orange revolutions in Eastern Europe. Orange books in the UK. Red Tories - Conservatives who want to reclaim the Co-operative movement and mutuals. And now, Blue Labour. But this has really caught the imagination of Labour, not merely because it rhymes conceptually with Red Tory - and with New Labour - but because it has touched a nerve. Why? Because it gets to a couple of central points in modern British politics, and it frames those problems in a productive way.

The centre of the Blue Labour analysis is well put by Ed Miliband in his introduction to The Labour Tradition and the Politics of Paradox, a collection of essays by Maurice Glasman, Jon Cruddas and Jonathan Rutherford, who can lay claim to being the intellectual drivers of this new movement. As Miliband puts it: "One of the central challenges we (Labour] face is revisiting our approach to the balance between state and market." He goes on to state that Labour needs to regulate both state and market well. It needs to reform both as well.But while doing both these tasks, it needs to pay far more attention to the "importance of the aspects of our lives and our communities that must be protected from the destructive effects of both markets and the unresponsive state".

This latter is undoubtedly a powerful critique of New Labour in power. In an over-correction to Old Labour animosity to any form of profitable capitalism, New Labour came - at times almost parodically - to be a booster of turbo-charged hyper-capitalism.

This wasn't necessary, and it was wrong. The forces of capitalism unmoderated by the state are creative, but they are also, as Joseph Schumpeter famously said, destructive. Labour got a lot of regulation right - the minimum wage, rights at work, equalities - but it also neglected, until late in its term of office, the impact of economic forces on families and communities.

It is a core strength of Blue Labour that it gets this point and it makes it well and repeatedly. Not that any government can prevent change, but that all good governments manage, shape and explain change to their people. There was something of the rootless, cosmopolitan elite about New Labour's response to the new economic rules: "We moved away from home, and got degrees and good jobs, why can't you." And insufficient attention paid to the honest response: "If I want live near my Mum and my Gran, why can't I?"

This debate crystallised - catastrophically for Labour - around the issue of immigration. Wrongly and insensitively, some senior Labour figures saw this as a discourse about race. Slightly wiser figures saw it as an economic contest - if a new supply of labour holds down the rate of unemployment and the rate of inflation, it's because wages for workers at the bottom are being held down.

What Glasman gets spot on is that New Labour missed a critical dimension of economics and politics - place. If my town, my neighbourhood and my street are changing and politicians haven't got a clue, let alone an explanation or a story, then I have the right to get angry.

So, the analysis is not just good, it's profoundly important for anyone on the centre-Left to engage with. However, as often with acute political insights shortly after historic political defeats, Blue Labour offers a brilliant sketch of what went wrong, and very little idea of what might be done. One of the traditions it reaches for is mutualism. It is right to remind Labour - and the country - that the Big Society was originally a left-wing idea. However, where does that takes us today? Remutualise the banks? But mutuals like Northern Rock or Dunfermline Building Society were destroyed under mutual leadership. Or how do we strengthen communities? Immigration from the Commonwealth is a fact that has changed our country, and migration from within the EU is changing us again.On this issue, Blue Labour appears to hark back to the fifties, which weren't great for women or minorities, and aren't coming back anyway.

The challenge for this new movement was well put to me recently by Lord Mandelson, who knows a thing or two about winning elections. "You won't campaign at the next election on Blue Labour", he asserted. His point: a blunt one. No-one gets elected on their view of the past, however good. Political parties only win with a vision of the future. Is Blue better than New Labour? We don't know yet.