David Miliband: 'I have changed since the general election'

The Labour favourite tells Steve Richards about brotherhood, socialism and the state

I walk into a room at David Miliband's headquarters at Westminster where the aspiring leader is in conversation with an aide. Within seconds Mr Miliband asserts: "The strategic issue in this contest is not how anyone beats David Miliband but how we beat the Tories. That strategic imperative has governed the searching and clear way I have analysed our defeat at the election and the future challenges for Britain". I suggest we begin the interview. He tells me it has already started. I have not at this point asked a question.

Finally party members are voting in Labour's long leadership contest. The result is announced later this month. Looking fresh in a perfectly ironed shirt and crisp suit the favourite to win tells me he has changed since the general election: "Politics has turned inside out. I have discovered what I always sensed, that the energy is found in communities. They provide the people we need and the ideas that will drive our party forward". He urges me to look at a film on his website of a meeting with a thousand local community leaders, all of them Labour supporters, that he had held a few days earlier under the banner "Movement for Change". The film does indeed convey a revivalist excitement. In his speech to the gathering he speaks of recognising a "burning, seething sense of energy". In doing so he tells me he disagrees with Tony Blair.

"This is where Tony is not right about why we lost the last election. We lost because we didn't open up politics".

I ask him what he means.

"Discipline and openness are not the opposite. The challenge for Labour is to have discipline and openness. Labour has to go on a journey beyond the state and at the same time the centralisation of Labour is a pre-devolution view of how to run a party. Now I want devolution in Britain to go much further and I don't want Labour to be running a single campaign from the centre, but a multitude of campaigns in local communities". He cites a campaign in Norwich where local Labour members are joining others to oppose the turning off of street-lights for extended periods.

"There are big things in politics: How can you be egalitarian when there's not much money around? How do you adapt to economic power shifting to China and India? How do you rebuild communities when the traditional ideas of community are not there? There's a lot of thinking to be done, but unless you get the organisation right we won't get the answers right."

I put it to him that some will argue the big questions must be addressed in the contest now. I cite Ed Balls's recent speech on the economy in which he combined a forensic demolition of the Coalition's economic policies with a coherent alternative in which he argued there was no need to halve the deficit in this parliament as Labour had advocated at the election. The speech won plaudits from well beyond the left.

"Ed did a very strong demolition job of the Tories' masochism strategy, but it is not a pale imitation of the Tories' strategy to say we must halve the deficit in this parliament. I am neither in denial about the importance of growth or the deficit."

Does he think Mr Balls is in denial about the deficit? "I'm spending this campaign as the unity candidate. Someone who has got talent like Ed Balls, for me to start slagging him off ... I'm not going to do that. Instead I will defend him against the Tories who say he is in denial about the deficit".

This is an awkward contortion as Mr Balls's position is different. David Miliband is a passionate advocate of Labour's pre-election position: "Look at the figures when we were in charge and growth returned. My view of our economic policy is: If it's not broke don't fix it. We had a credible strategy and we have got to be credible".

On the day we meet The Sun quotes David as insisting "Labour must not go leftwards". He points out this was a summary and not a quote. "The truth is we were too hands-on with the state. I am a socialist and not statist".

In these two answers we get to the essence of the difference between David and both Eds, his brother and Balls. The two Eds have in different ways put the case for the state during the campaign. His younger brother delivered a long speech earlier in the campaign on social democracy, advocating the benevolent power of the state. Mr Balls does so in his arguments about the need for higher public spending. Both oppose some of the Blairite public service reforms that, on the whole and with some insightful reservations, David supports. I ask David whether he wants a smaller state. "I support a state that delivers for people, protecting them from risks beyond their control such as terrorism and crime, giving them more power over their own lives. The argument should not be about the size of the state but its composition."

He expands on this central theme by offering Blair-style juxtapositions (although Blair might not agree with the particular points). "We were too hands-off with the market ... and not clear enough about right and responsibilities in communities. Neither statist social democracy nor Thatcherism is sufficient. We need a new relationship between state and citizen".

He gives some specific examples. "Local government should have more power in key policy areas such as social services and criminal justice. But critically some powers should be devolved to individuals. Individual budgets held by disabled people is a powerful idea. They have the money in their hands. Think about the dignity that comes with that. Public services and the welfare state should be about dignity and not just need."

I press him on one of his juxtapositions, that he was a socialist and not a statist, hearing an echo with David Cameron's key phrase that there is such a thing as society, but it is not the same as the state. Mr Miliband looks alarmed: "The Cameron contract is that we do less and you do more. Our covenant with the British people is that the state is the partner or a catalyst that helps people to do more themselves." He gives the example of Sure Start and stresses the importance of the term "covenant". He says that it was a "bit of a tell" when Mr Blair offered a "contract" with Britain in 1997, on the grounds that it suggested more of a business agreement rather than a creative partnership.

Mr Blair, who wants David to win, has come up twice in the interview but only for Mr Miliband to highlight slight differences. But I suggest to him that in political style at least he follows the former prime minister, the tendency to put up two opposites and navigate a third way. He dismisses the once fashionable term emphatically: "I am a modern progressive social democrat. This is nothing to do with a third way."

Does he believe the Coalition signals a profound change in British politics, one in which parties work together? He pauses and becomes more reflective. "I don't think the Coalition necessarily means we have moved in to an era of multi-party politics, but it might do. The truth is it really might. But I can also see circumstances where it might not in the sense that two parties could increase their vote at the next election and they are not the Liberal Democrats. So we don't know."

He then makes an invitation, one that he insists goes beyond Blair's in the mid 1990s. "Under my leadership Labour will be a home for all shadows of centre and centre-left opinion. We have not been able to say this since 1981 when Labour split and the SDP was formed. I will reach out to disaffected Liberal Democrats, disaffected Labour voters and disaffected Greens. This is more possible now than when Tony became leader in 1994 when the Liberal Democrats were fairly strong and in opposition to the Tory government."

He makes a further point, an implicit rebuke to those in his party who attack Liberal Democrats with an indiscriminate glee. "The respect we show to those who deserted us is absolutely crucial and the respect we show for those arguments about why they deserted us. We have every right and duty to attack the Liberal Democrats' leadership for their decisions but we must not sound shrill to Liberal Democrat voters. This is very important."

Labour's possible next leader has a direct message for Nick Clegg on electoral reform: "I am strongly in favour of the Alternative Vote, but if the Liberal Democrats want AV they are going about it very oddly. Let us be clear. They need Labour to be in favour of it, yet they support a package that includes other constitutional changes being rushed through to help the Conservatives. It's student politics and not clever politics. If Liberal Democrats want electoral reform they should think very carefully about supporting amendments to the legislation that we are putting forward. Remember we want AV to succeed and there are Tories who oppose electoral reform who are rubbing their hands about the way the Liberal Democrats have gone about this ... if we want AV, which I do, we have to find a way around this."

David is the most senior of the candidates in the sense that he has been Foreign Secretary and yet he has suffered from relatively little media fire. Is he ready for the onslaught that is bound to follow if he wins?

"You think very carefully before doing this. The answer is yes. It's a big decision to stand for leadership and you have to be clear about chances of success and chances of failure as well. Whatever happens I will defend all members of my party and they will defend me."

There will be some fraternal healing required. To my surprise when I raise the issue of his brother's candidacy he is unusually expansive: "I want to say more than I normally do because I have given it some more thought. If you're a small family it makes you very close. There's our mum, Ed and I. and that's more or less it [their father, Ralph, died in 1994]. This is not an extended family and you learn unconditional support. In a BBC interview the other day the presenter said to me, 'we had your brother on and he told us private conversations the two of you had held on Iraq'. I said I'm not discussing private conversations. They then played the tape of Ed's interview and he said the same and I said what a good bloke. We were brought up to believe that you don't breach the most important bonds you've got."

Are they having private conversations during the campaign? "Of course not."

Will they resume once the campaign is over? There's a long pause, unusual for David. "You see we had a lot of security in our childhood and our parents had horrifying insecurity. Now you begin to realise that the unconditional love and security our parents gave us is the rock and that won't change."

He is excited because his wife and two children are flying back from the States after a holiday without him. How long will he spend with them? "Three hours today and three hours tomorrow." There is little time for family as David seeks to defeat Ed.