Labour has already lost the next general election. Which gives it time to go away and think

IF David Cameron’s failure to win an outright majority in 2010 was a setback for the Tories, it was a disaster for Labour. The once-slick machine that had coasted to three electoral routs under Tony Blair was by then rusting into obsolescence.

Most of the best people had gone; the good policy ideas had all been tried; the simple fact that all governments have a shelf life had been brutally reconfirmed by the rheumatic coffin-lid scratchings of the Brown administration. In politics, there is a time to lose – but Labour only sort of lost. Catastrophically, just when it needed and deserved a thumping, a sliver of hope arrived in the shape of a hung parliament.

A team was dispatched to negotiate a coalition with the Lib Dems. There was talk of a new progressive alliance – an idea last mooted in the late 1990s before being nixed by the all-conquering Blair. To the death, Gordon Brown thought he might cling on to No 10, only bowing to the inevitable at the very last moment.

That final phone call to Nick Clegg, as Peter Mandelson, Alastair Campbell and others looked tearfully on, lives long in the memory: ‘Nick, I can’t hold on any longer. I’ve got to go to the palace. The country expects me to do that. The Queen expects me to go. I can’t hold on any longer.’

Out of office, but not, in their heads, out of the running. The thinking went like this: if a liberal, modernised Conservative Party with an appealing young leader still couldn’t deliver a parliamentary majority after 13 years in opposition, then this defeat was merely a wrinkle in the Left’s grand plan. A tweak here and there and a grateful public would once more grasp Labour to its bosom.

Ridiculous

Two things happened instead. The Tories slipped into the driving seat, remembered that they had always been rather fond of power, and shamelessly went about doing everything they could to keep hold of it.

Labour, the scent of entitlement lingering in its nostrils, many of the same old faces gathered round the top table, failed to dispassionately analyse what had gone wrong, went for the least suitable candidate as leader and ignored the need to sensibly repurpose a ‘workers’ party’ for a century in which that term means something quite different to what it once did.

Today, David Cameron has the majority that previously eluded him, and in the absence of a compelling, reconstructed argument for modern, moderate measures by modern, moderate men and women, the ridiculous Jeremy Corbyn and his hard-Left gang have nipped in to steal Her Majesty’s Opposition.

Labour is done for a generation. If the Corbynites are successful in their efforts to seize control of every aspect of the internal machinery, to deselect non-hard-Left MPs, and to turn a potential party of government into a puritanical protest movement, Labour is done for good.

But if there is an upside to all this, it is that the pounding received in 2015 was a pounding it badly needed. In the certain knowledge that they will also lose at the next general election – the Tories could stand a prize marrow against Corbyn and still walk it – Labour’s smarter elements finally have space to think, to favour philosophy and strategy over tactics, and to wrestle with the question that currently has no good answer: what, in the 21st century, is Labour for?

They have begun to do so. My friend Stewart Wood was at the heart of both the Brown administration and Ed Miliband’s shadow Cabinet. As Lord Wood of Anfield (his main failings, aside from his choice of boss, are passions for Liverpool FC and Jethro Tull), he has acquired the status of elder statesman at the tender age of 47. Having taught political science at Oxford’s Magdalen College, which saw a fair number of today’s bright young politicians pass through his hands, he has been both theorist and practitioner, thinker and doer, which puts him in a unique position.

Finding himself on the political margins, Wood admits that ‘opposition forces you into easy arguments that don’t do justice to the complexity, long term-ness or seriousness of the problems Britain faces’. This was a failing of the Tories up to 2010 and Labour after it – both sides found it convenient to blame the other for big structural faults that go back decades.

A recent article saw Wood look frankly at the errors of the Miliband project. Its analysis that capitalism needed reform after the crash of 2008 was correct and shared by the public, he said, but its prescription was not.

‘Voters were not persuaded that our strong criticism of the way markets in Britain were working was coming from people who actually wanted the market economy to work well. We came across as having the outrage of sceptics of capitalism, not the concern to sort things out of critical friends of capitalism... If we want to reform the way our market economy works – to channel the public’s anger about Google, Fred Goodwin, energy company profits, zero-hour contracts and inequality into real change – we need answers that match the scale of the problems.

‘We need to acknowledge that our economy is changing and we don’t have all the answers yet. We need to settle the question of the affordability of our policies to get permission to be heard on our reform proposals. And we need to invite business t to share the mission to improve the way we create wealth, share it and compete.’

Fixing the UK’s deep-seated problems, fr from growth being too dependent on debt, t to weak productivity, to turbo- charging R&D and innovation, will require ‘a shared commitment across political parties, and between politicians and business, to sort things out’ and ‘won’t come in one manifesto or one parliament’.

Wood talked of finding common cause with free-thinking Tories such as the columnist Tim Montgomerie, former Cameron adviser Steve Hilton, ex- shadow home secretary David Davis, who has just finished a book on the ‘new capitalism’, and the brilliant MP Jesse Norman, who has long argued for a return to ‘properly governed markets’.

It’s not just Wood who’s showing real pep. Jamie Reed, a clever former shadow minister who resigned after Corbyn’s elevation, believes Labour has failed to adapt to post- crash economics, ever- quicker globalisation, technological change and the rise of identity politics.

Thorny

‘I’ve been going around the country speaking with people,’ he tells me. ‘In Liverpool, one Labour guy said to me “It’s like Corbyn doesn’t understand the modern world and doesn’t want to. Blair stopped being Prime Minister before the first iPhone was released… we’re becoming the New Conservative Party.”

Reed is obsessed with the impact technology will have on the NHS, schools and social services, and on the thorny issue of England and Englishness. As a product of the Industrial Revolution, Labour should understand the world is in the midst of another one, he says, but it struggles to accept the limitations of politics, government and old ways of working.

A number of MPs I’ve spoken to have pointed out that Corbyn hasn’t attended a PLP meeting since the start of the year. ‘It’s a legitimate question to ask: is he frightened of his MPs or does he hate them?’ said one. In the absence of leadership and electoral optimism, the Centre-Left policy debate has been re-energised for the first time since the early 2000s.

MPs such as Pat McFadden, Dan Jarvis, Chuka Umunna, Tristram Hunt, Jon Cruddas, Stella Creasy, Shabana Mahmood, Michael Dugher and Stephen Kinnock are all engaging with gusto.

Too little, too late? Perhaps. But for Labour moderates, the long game is now the only one worth playing. Happily, they’re not going down without a fight.