Commentators are currently focused on the extraordinary Conservative-Liberal coalition, and whether it will deliver a ‘new politics’. But the emerging contest over Labour’s future may prove even more significant for the long-term shape of politics in Britain.

Labour strategists have long feared that the 2010 election would see a Conservative landslide, and the Party cast into opposition for a generation. There were even concerns that a resulting spell of internecine warfare could spell Labour’s break-up. One scenario was that Blairites would join with David Cameron, who once described himself as the ‘heir to Blair’, with the remainder forming new formations on the left. Some who were disillusioned with New Labour envisaged a merger with progressive Liberal Democrats, who had been to New Labour’s left in a number of policy areas. This aspiration came to a head in the short-lived support for a Lab-Lib coalition following the hung parliament.

But the decision of the Liberal Democrats to join with the Conservatives has torn up this analysis. Labour is now in a curious position. It has suffered electoral defeat and is in opposition. But far from facing oblivion, Labour is now by default the only significant alternative to the Conservatives in England, and the sole vehicle for the centre-left. Which direction will it take? Two polarised positions are likely to frame the forthcoming leadership contest.

The ‘old left’ will seek a return to traditional Labour policies. This will be articulated by those who saw the New Labour project as an aberration, led by a small modernising clique. Gordon Brown’s last minute success in shoring up Labour’s heartlands support with a more traditional message – quite possibly denying the Conservatives an overall majority – will be pointed to as evidence that this is the way to mobilise the country’s centre-left majority.

In stark contrast Blairites will argue that, if anything, New Labour modernisation did not go far enough. Retreat to an old left strategy would be electoral suicide. The task is to present the Con-Lib coalition as an ineffective version of New Labour, whose assumptions still represent the election-winning centre-ground.

Both of these extremes face problems. An old left strategy representing only the most vulnerable social groups would echo Labour’s failure in the early 1980s. But a purely Blairite analysis underplays how public opinion is to the left of New Labour in many areas, particularly in the face of the banking crisis and expenses scandal.

This implies that the task for the next Labour Leader is to maintain the popular elements of the New Labour narrative that appealed to Middle England, but supplement this with a new radicalism in areas such as inequality, the financial system, political reform and climate change. This will need to re-energise Labour supporters, Greens and the critical new unknown quantity: disillusioned Liberal Democrats.

However, if this does become Labour’s strategy, the Con-Lib coalition presents a far greater obstacle than commentators looking for splits in the new government recognise. A Liberal Conservatism championing sound finance and social responsibility – coupled with a commitment to fairness, civil liberties, and the environment – may be on the way to occupying precisely the ground that Labour needs to claim. And it has the head start of doing so from within government.

Dr. Will Leggett
School of Government and Society
University of Birmingham.

Will Leggett is author of After New Labour: Social Theory and Centre-Left Politics, published in paperback by Palgrave Macmillan.