What is Labour's political purpose and strategy? The fault lines are now becoming clear: to go it alone, or build a wider political alliance?

Dan Hodges, in his usual robust and entertaining style, offers the case for the former through the creation of an alliance within Labour of the working and middle classes. Sound familiar? That's because it is. In effect, it's the big-tent strategy of one Mr T Blair, whom Dan so effectively opposed over ten years, for selling out the Labour cause.

But now it's the big tent as one more heave. And Dan and other leftist supporters of this strategy find themselves firmly anchored to other Labourists of the right such as John Reid. They find common cause in saying No to AV and No to anything that doesn't offer the hope of a majority Labour government that can usher in socialism for our people from above.

So why will this big tent be any different from Blair's, especially when Dan would rather the ringmaster was David Miliband? There is no reason to expect it will. To create such an alliance, all the emphasis will again be on the swing voters in the swing seats that Blair courted so effectively and in so doing stopped Labour being Labour.

Remember how in 1997 Labour won 140,000 new AB votes but lost four million Ds and Es. The big tent doesn't work even as an electoral strategy – let alone for social, economic and political transformation.

To be fair, it did once, in 1945, but that moment, along with the class and culture that spawned it, have long gone. The world has moved on, become more fragmented and complex. Centre-left politics will follow or wither still further.

Two things are interesting here. First, the initial New Labour victory in 1997 was based largely on a pluralist approach to politics – with a strong opening-out to Ashdown, Jenkins and the whole Cook/McLennan process. As Labour retreated to a one-party approach, so its vote collapsed and its radicalism shrank.

The second thing that is interesting is that the extreme tribalists like Dan Hodges and John Reid recognised the power of pluralism through their alliance with David Cameron and George Osborne to smash AV. So they practise pluralism to entrench tribalism. Weird, hey?

Holey misguided

These extreme tribalists are in a hole and want to keep Labour in it. They want the trench warfare of old adversarial politics, despite the fact that the poor are getting poorer and it's palpably not delivering for the left. It is based on "getting the right people elected", whoever these people are. The neoliberals in Labour ranks are bizarrely tolerated and much more social Liberals or egalitarian Greens despised.

Through their victory for keeping first-past-the-post (FPTP) they will try to lock the left into the politics of decline as the 1.6 per cent of the electorate that matters in the dwindling number of swing seats will deform our politics still further. A politics that gives all power to Murdoch and the Mail. As the old parties continue to disappoint under a system that focuses on so few, so voters look elsewhere or withdraw.

It's why FPTP will deliver more hung parliaments as the shared vote of the big two parties, but Labour in particular, drops. Yet such defiant tribalism creates the problem but denies the solution as the likes of Reid exercise their veto over voting reform or coalition-building with other parties, as they did so effectively after the general election last year. It is the politics of permanent opposition through self-marginalisation as they dream of a better 1945.

Labour did badly in the recent elections because it is still pursing the failed strategy and politics of New Labour. It is not offering an alternative political economy and it is refusing, because of the likes of Dan and John Reid, to operate in the world as it is, preferring the comfort of past glories. Ed Miliband – far too tentatively for my liking – is at least trying to push at the boundaries of a politics that will make Labour both social and democratic.

We are going to have to chart a course through the complexities of a world in which the politics of Caroline Lucas, Chris Huhne, Charlie Kennedy and others are less pro-market, more democratic and sustainable than John Reid, Margaret Beckett and David Blunkett. It requires the mobilisation narrative of a Good Society to coalesce and spark into life a progressive majority that can be created – and must be created.

Neal Lawson is chair of Compass.