The policy review: it's sink or swim for Ed Miliband

Liam Byrne's report on voter feedback will give Miliband chance to define his leadership -- but will

Liam Byrne has thrown Ed Miliband a lifeline. Or handed him a noose. Which it turns out to be depends entirely on the Labour leader's response to Byrne's preliminary report on feedback from over 2,000 voters to the party's policy review consultation.

According to the Guardian, a Tuesday presentation from the shadow secretary of state for work and pensions to junior shadow ministers pulled no punches. People care as much about responsibilities as rights, they were told. They want to see a tough, small c conservative response on crime, welfare reform and immigration. When it comes to international aid, they believe charity begins at home.

As I wrote in the New Statesman magazine last week, many shadow cabinet members are of the opinion the policy review has become something of a dog's dinner. They talk of a lack of strategic direction. No clarity over objectives. What one source described as "death by powerpoint".

But there was no ambiguity in the message delivered by Byrne in his presentation on Tuesday, nor in a similar presentation he delivered to the shadow cabinet last month.

"The question is, do we want to listen to the public, or do we want to listen to ourselves", said one shadow cabinet source, "Just as importantly, are we prepared to challenge ourselves as a party, or do we want to lay back and tickle our own tummies. From what I saw of Byrne's presentation, we haven't got much of a choice".

The decision to appoint Liam Byrne to head the policy review was of itself a risky decision by Ed Miliband. Very closely associated with the Blairite wing of the party, to some he can be a polarising figure.

"Anything Liam touches come with a particular slant", said another shadow cabinet source, "There's always the danger of a little bit of wishful thinking in his agenda. If this process is going to mean something we have to come at it with an open mind, not through some New Labour, Purple Labour, Blue Labour prism".

Despite that concern, there is no doubt Byrne's analysis reflects the view of many of his colleagues. One shadow minister told me of an event he recently attended simply to explain to the public the role of an MP; "Within about five minutes the whole thing became a debate about immigration and welfare. We're going to have to face up to some really tough choices on areas like housing access, unemployment and benefits entitlement".

The key question is whether Ed Miliband shares this assessment. Indications from some members of his inner circle are that he might. "Ed is clear we need to face up to some big challenges", said one. Significantly, they are prepared point to issues such as immigration and welfare reform as priority areas. But as ever, they insert a caveat. "What we're not going to accept is any false choices. We don't accept we have to address issues like this at the expense of focusing on the bigger picture".

Allies of Liam Byrne say he is alive to the political sensitivities of the Miliband camp. In particular, they are keen to distance themselves from claims what is being proposed is a rehash of New Labour. "Those who say Liam's just picking up a pre '97 template are wrong", said one back bench MP. "Everyone accepts the world's changed and we have to move on. But we still need to do the basic things well".

Sources close to Miliband themselves point out that Byrne and Miliband have been working closely on the 'responsibility agenda', and on a speech Miliband is due to be giving on the subject in the coming days. Other shadow cabinet sources point to the role of Miliband's policy advisor Greg Beales, and his growing influence; "Greg's a good guy", said one, "he gets this stuff".

But that has not prevented the alarm bells ringing among some Ed Miliband's supporters. "The things Byrne's identified aren't the reasons we lost", said one insider, "and they're certainly not the basis for rebuilding a winning coalition. Lot's of people thought Ed would run to the left then lead from the right. He's resisted doing that, and it's important he continues to resist doing that".

Sources close to Ed Miliband say he will be making clear over the coming days and weeks where he stands on these issues. For those desperate for some political clarity, that's a positive. But we have heard this before.

Liam Byrne has presented Ed Miliband with a chance to begin to define his leadership. If he takes it, it could be a turning point. If he doesn't, it may represent one final, missed opportunity.

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