Last week, the Labour Party published its consultation document on party reform. Written by Peter Hain, Refounding Labour  is a fine report. Without pre-empting any of the eventual decisions, it sets out clearly the predicament that the party faces and the glimmers of light from the last election, and touches on the modern world of political activism on which the Labour Party is still to catch up.
Despite a bounce in membership of 50,000, the Labour Party still has under half the membership it had in 1997 – or just one-fifth of its 1950s peak. Affiliated union membership has also shrunk – from 6.5 million in 1979 to 2.7 million today. Activism among that diminishing pool of members has fallen, with the exception of phone canvassing and donations, which have risen slightly.
But not all is bad. Against this backdrop, the Labour Party pulled a 1992-style parliamentary outcome from its worst vote share since 1983. In places like Birmingham Edgbaston, Westminster North and Tooting, Labour bucked the national trend and held on to marginal seats. Analysis has shown, according to Hain, that "the seats doing the most local work had results that defied the trend". Indeed, Labour recorded a 37 per cent increase in voter ID compared to 2005.
Into this mix, Refounding Labour discusses the lessons that are to be learned from online and offline civil society groups such as 38 Degrees , which from a standing start during the expenses scandal has grown to a membership of over 400,000, and London Citizens , which successfully co-opted Boris Johnson to the "living wage" cause. The report also reflects on the hundreds of thousands of school governors, community service volunteers and Women's Institute members who give their time for social change.
Less is said about the world of political activism, where two significant changes have taken place since Labour came to power in 1997. The first is the rise of the media-savvy, often single-issue campaign. Jubilee 2000 and Make Poverty History's victories in the development spheres were matched in scale, if not in outcome, by the Stop the War Coalition and the Countryside Alliance.
Second, technology has increased the reach and power of campaigning groups. The Robin Hood campaign for a European-wide tax on financial transactions has organised almost entirely online with active Facebook groups, Twitter feeds and a launch that used a YouTube film featuring Bill Nighy. The work of 38 Degrees stopping the forestry sell-off was all co-ordinated online.
As Hain says, "The Labour Party's basic structure is essentially that adopted in 1918 . . . Society has moved on since 1918, but Labour's institutions and practices haven't always kept up." To truly wake up to the 21st century and counters the pockets of resistance in 2010, the party must use this opportunity to make some fundamental changes. We offer four big ideas to refound Labour.
1. Give local Labour parties the tools to self-organise
The Labour Party has a diffuse, localised structure that is one of its greatest assets. But local organising is often stifled by adherence to the rulebook, deference to older members and a preference for process over pounding the streets.
The central party has an important role here. First it must give all members, and not just CLP secretaries and chairs, the tools to self-organise. Individual members can already use the party's online phone bank to make calls to voters, but the same should be true for door-to-door canvassing and organising fundraisers.
As is already taking place through websites like Labour Values, an online toolkit should be put together to help members emulate successful efforts around the country to increase levels of volunteering, use email and Facebook to contact voters, and develop community organising techniques. But this should not be a one-way street.
As suggested by Peter Hain, the Voter ID incentive scheme should be rolled out nationally to give local parties added resources and freedoms as they increase membership, voter contact and community activity.
2. Use technology to give members and supporters a greater role in policymaking
During Labour's time in government, party members often felt ignored by the leadership on policy. Indeed, Peter Hain accepts that the National Policy Forum has not been "without its problems". The old approach of passing motions at local meetings, compositing at the national level and voting at conference owes its existence to the norms of a previous age. Of course conference should remain a place for debates and networking, but policy can now be formulated using the extraordinary powers offered by ICT.
Labour should invest in a portal allowing members and supporters up and down the country to submit policy ideas for consideration. These could then be voted up or down – as with the like and dislike buttons on Facebook – with those receiving the most support being debated and deliberated by the NPF and shadow cabinet to ensure consistency, legality and cost control. Those activists who proposed the original ideas could then become evangelists in their communities for the agreed policies.
The final manifesto would be one that enjoyed the support of both the membership and the shadow cabinet, who would see through its implementation.
3. Expand membership to Labour supporters
In order to buck the European trend of declining party membership, the Labour Party should reach out to the widest possible group of supporters. All those recording strong support for Labour during canvassing sessions ("L5s", in the jargon) should be invited to join the party on an honesty box basis.
Members should be able to join for £1, which is now the norm for under-27s, but would be encouraged to set up standing orders or direct debit worth some fraction of their salary – say, 0.2 per cent. This would mean that those on median income of £23,000 would pay £46 per year – roughly the same as the current rate – while MPs on £66,000 would pay £50 more than they currently do. Wealthy members would pay a lot more.
The party should then use its longer email list to make specific requests for small donations, as in the US. Requests should be tailored to the interests of party members so that a supporter expressing concern about education would be asked to contribute cash, for example, towards national efforts to lobby coalition MPs who oppose Education Maintenance Allowances. Using these approaches, the party could vastly increase the £7.3m it raised from members in 2010.
4. Take advantage of the coalition's offer to fund 60 Labour primaries
Since Barack Obama's victory against Hillary Clinton in 2008, Labour members have been debating whether or not to adopt primaries. A recent LabourList poll found support for the idea of 34 per cent to 50 per cent among members. Nonetheless, it would be wrong to impose primaries on parts of the party that do not want them.
Instead, Labour should take advantage of the Coalition Agreement's pledge to "fund 200 all-postal primaries over this parliament, targeted at seats which have not changed hands for many years". Labour is entitled to 60 of these contests and should offer the opportunity to local parties that want to take the plunge. Only through experimenting will Labour find out if primaries can further engage members of the public, as has happened in the US and Greece.
Peter Hain's consultation contains more than 50 questions – often covering areas of granularity. There are, no doubt, many small changes that can and should be made to ensure that the Labour Party becomes a better organisation. But big changes are also necessary to improve its chances in the future and mark a break from the past. These four ideas must be adopted if the party is to remove the straitjacket of its 90-year-old rulebook and wake up to the modern world.
Will Straw and Nick Anstead edited "The Change We Need: What Britain Can Learn from Obama's Victory" (Fabian Society) in 2008.