Patrick Diamond: Labour must start taking Cameron seriously

Dismissing him as ideologically indistinguishable from Mrs Thatcher won't do

Some party strategists - among them advisers, as I was, in No 10 - have convinced themselves the revival in Tory fortunes is an orchestrated presentational facade, an act of media spin of which New Labour would once have been proud.

They argue Cameron won the leadership, not because the Tories have changed, but because they have recovered an appetite for power. He might look like a winner, but Labour tacticians argue Cameron's downfall is imminent. His strategy for moving the Conservatives from the right to the centre will not convince a sceptical electorate. Like Hague, Duncan-Smith and Howard, the instincts of his party will force him back to the right.

Dismissing Cameron as ideologically indistinguishable from Margaret Thatcher wont do. According to a recent ICM poll: half of Liberal Democrat voters and a third of Labour voters say Cameron is someone they would consider voting for. His appeal is almost as strong in the north-west as the south-east of England. Tory support is rising among women and younger voters.

Since the general election, Labour has been obsessing about the leadership question: Blair or Brown? It risks being mesmerised by it at exactly the moment it needs to open its eyes to the Tories.

Two big assumptions underpin the Cameron strategy. The first is to set the terms of the electoral contest not as policy substance, but personality presentation. The second is to detach Labour from its role as the party of the future and of reform.

We must resist this; there are two big tasks ahead.

Labour has to start by setting the terms of political argument again so that policy prevails. It needs to escape the hold of momentum politics and the daily cycle of spin. Instead it must seek to win the big debates of the day. From tax to redistribution and Europe, the Conservatives are weak because they are unsure. It is the Tory leader, rather than Blair, who will be divided from his own ranks: Cameron is a Notting Hill head on a Tory body infused with neo-liberalism.

Cameron's pledge to divide the proceeds of growth between tax cuts and additional public spending will not reassure voters fearful of the Tories commitment to public services. Sustained improvement in education and health requires spending to rise consistently ahead of the trend rate of growth in the economy. The Tory impulse to cut taxes has become an ideological obsession.

So Cameron's Conservatives remain vulnerable to the charge of lacking a coherent strategy. But Labour must now pursue them relentlessly - tirelessly picking through each Tory proposition and pronouncement.

The second task is for Labour to offer an inspiring agenda for the future. Britain is tiring of the New Labour mantras of the 1990s. In some cases, the party is stuck with the defensive positions it carved out in the 1980s, not least on tax. It has failed to launch big public debates, for example on the injustice of the gap between rich and poor. It needs to be candid where Labour's ambitions have so far been constrained.

New ideas and fresh policy energy are needed. The central theme of politics in the coming era will be expanding freedom - enlarging the scope for individuals to exercise greater control in their lives at a time of unrivalled affluence but also unprecedented insecurity.

Three things could be done immediately. First, give education rather than the NHS priority in the 2007 expenditure review. Second, launch a Progressive Tax Commission to assess the fairness and efficiency of the tax and benefits system ahead of the next election.

Finally, Labour must encourage a wider spread of asset ownership: increasing home owning to 80 per cent is laudable. But greater incentives for employee share ownership and profit sharing are needed: where corporate profitability is strong, it is right to encourage the spreading and sharing of wealth.

The Tories will claim that greater personal freedom is best achieved when the state gets out of the way. Social democrats argue through collective provision and an enabling state security and opportunity will be afforded to all.

The way forward for Labour lies not in reverting to the familiar comfort blankets of the past, or in denying Cameron's appeal, but in thinking afresh. The great progressive causes require Labour to remain the party of the future. This is the ground on which David Cameron's Conservatives must be beaten.

The author is Senior Visiting Fellow at LSE and a former Special Adviser in No 10