Stephen Byers: Labour's succession battles could pull it apart

Loyalty to Tony Blair could be replaced by distancing, as contenders emerge from his shadow

In times gone by, the ministerial reshuffle that followed the resignation of David Blunkett would have been analysed in terms of the balance of power between Tony Blair and Gordon Brown. But this time it was different. This was the first reshuffle to take place since Tony Blair announced in October that if he were re-elected as Prime Minister he would wish to serve a full third term, but it would then be his intention to hand over to someone else.

So the new ingredient was the respective standing of potential rivals in the race for the succession. It is no longer just a question of whether Ruth Kelly is a Brownite or a strong supporter of the Prime Minister, but there is also a consideration of who would be in the strongest position to challenge the bookmakers' favourite to succeed - Gordon Brown.

For Labour this is a dangerous cocktail. At a time when the party needs to be at its most united there is a real danger that, in the succession stakes, potential candidates will set out to stress their differences in order to establish their own distinct political brand. With loyalty to Tony Blair being replaced by a distancing as contenders emerge from out of his shadow.

If this happens, the public will see Labour losing the unity that has served it so well over recent years. Some will view it as Labour reverting to type - going back to the days when it spent more time fighting internal battles than addressing the concerns of hard working parents or vulnerable individuals.

So with the starting gun for the Labour succession effectively having been fired by Tony Blair's pre-announcement of his retirement how can unity be maintained?

This has been one of the most united cabinets in living memory. Ministers basically agree on all the major policy issues. Where there are tensions, they are about scope, pace of implementation and tone rather than any deep-seated, principled objection to a particular policy.

To maintain this consensus through the drawing up of the manifesto, and during a third term, a programme of measures has to be brought forward that reflects Labour's historic values. It will need to build on the firm foundations provided by a strong and vibrant economy. People need to be reassured that security in our homes, on the street and at our borders will be a priority. Once this is done, the government can move on to promote opportunity for all our people and not just the fortunate few.

We can already identify some of the issues that will be key elements of this opportunity agenda: childcare, adult skills and training, extending home ownership. These are areas around which a consensus shouldn't be too difficult to find. It is over the continued need for public service reform that finding an agreed way forward will be most difficult. We need to have modern public services which reflect our position as citizens while meeting our expectations as consumers paying for a service through the tax system.

The aim of providing high-quality public services should be something that unites the Labour Party and brings it together. Yet this is not the case. It is because so many members of the Labour Party feel strongly about public services, and have real concerns about the nature of reforms, that this is the one area above all others that will appeal to potential candidates to succeed Tony Blair to set out their own distinct approach.

In order to court popularity a slowing down in the pace of modernisation and reform may appear attractive to some. While such an attitude might work with the party faithful it would fail the people who depend on our public services. So a consensus as to the way forward for public service reform needs to be found. What might this be?

It was the Attlee government of 1945 that put in place much of the public service provision we rely on today. It was very much a product of its time. There needs to be a recognition that what was right for a time of austerity and rationing no longer meets the demands of a public used to growing prosperity and consumerism. Labour needs to move beyond the 1945 settlement of the Attlee government and not allow itself to be a prisoner of it.

Choice, diversity and contestability must be at the heart of any programme that is serious about the reform of public services. Such measures are necessary in order to provide a more personalised service and to drive up standards.

However, the only way that a broad agreement in favour of such an approach can be achieved is if we put boundaries around the role to be played by the private sector and the operation of market mechanisms in the provision of public services. This can be done without standing in the way of necessary changes but will reassure people so that they are able to take the first steps on the path of reform.

Once a progressive consensus has been achieved - across public service reform and in other areas - then the Labour Party will rightly expect all those in positions of authority to support the agreed position. Any individual who fails to do so will pay a heavy political price.

The writer was a cabinet minister from 1998 to 2002