Leading article: Radical new thinking required

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Labour's first taste of opposition in 13 years has been a bittersweet experience. Some in the party fear that it will be shut out of power for a generation. Others sense an opportunity for a rapid bounce back. But whichever analysis is closer to the truth, all logic, as far as the Labour Party is concerned, points to internal reform. If Labour is to position itself as the "progressive opposition" to the new Conservative-Liberal Democrat coalition, the first thing it needs to do is jettison the illiberal baggage it has accumulated through its long years in power. The party's support for ID cards, its devotion to the DNA database and all the other authoritarian nonsense it has embraced in recent years need to be ditched. A statist government is bad enough; a statist opposition would be a bad joke.

The leadership question is critical for Labour. The party needs a skilful and nimble performer if David Cameron and Nick Clegg, with their formidable presentational skills, are not to sweep all before them. And here Labour does have reason to be moderately heartened. The Blair-Brown duopoly that has dominated the party for 16 years has finally been broken. This gives a new generation of politicians room to find their own voice. David Miliband announced his candidacy for the leadership yesterday. But others, including David's brother Ed, Andy Burnham, Ed Balls and Jon Cruddas all have something to offer. As that list shows, this is not a party short on talent. And many of those senior figures have valuable government experience. An open contest for the leadership is important, ideally with as wide a field as possible. Labour made a terrible error in electing Gordon Brown by acclamation. An election would have been healthy for the party, strengthening the mandate of the victor and helping to define what the party stood for. Thankfully, Labour is not going to repeat the mistake.

Just as important as personality is policy. There is likely to be pressure for a sharp left turn, as those forces in the party that never accepted the New Labour revolution seek to reassert themselves. That represents a serious danger. There is no future for Labour as the political wing of the public services. Yet radical new thinking is certainly required. New Labour believed in the stealthy redistribution of the fruits of strong economic growth. That was an immensely successful strategy for many years. But it will not work in an era of record deficits and fragile economic growth. Labour also needs to sort out its view on Britain's proper role in the wider world if it is ever to put the debacle of Iraq behind it.

Some in Labour ranks will want to play the waiting game; to sit back and capitalise on the public discontent that will inevitably come when the new coalition begins to cut back public spending. That would be the biggest mistake of all. No one can know what the future holds for this coalition government. It may last, or it may collapse soon. But what we can be sure of is that if Labour hopes to return to power it will need to offer a positive – and rejuvenated – alternative.

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