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Blairism now seems a spent force – the new battle is between Blue and Brown Labour

The tension is between the need to defend Labour’s legacy of public service investment and the impulse to imagine different methods of change.

Labour’s response to coalition policy sometimes reminds me of the old Jewish joke about two elderly diners in a restaurant: “The food here is terrible,” says one. “Yes,” the other agrees. “And such small portions!”

It isn’t always clear whether the opposition hates the ingredients of Tory reform – free schools, elected police commissioners, universal credit – or is just recoiling from the whole spectacle of government on a shoestring; is it the flavour of the dish that is the issue, or the meagre ration? Often it is both but the message is confused.

Britain is getting used to tight budgets. That doesn’t mean people are happy but they do seem grimly reconciled to the idea that politics, which used to be about favours bestowed from the Exchequer, is now about pain selectively inflicted.

National stoicism poses a threat to Ed Miliband, separate from the question of who is responsible for the scarcity in the first place. Many people still think the problem is that Labour spent all of the money but time and the accumulation of coalition blunders will see blame shift to incumbent parties. That won’t automatically ease pressure on the opposition.

Party kvetching

George Osborne may have failed to grow the economy but he has set the terms of debate for what constitutes responsible spending. Every time shadow ministers attack a benefit cut, for example, the Chancellor chalks it up as an item of unfunded expenditure in Ed Balls’s plans. Osborne wants Labour to digitself a budget “black hole” for him to attack at the next election.

Balls can see the danger and tries to impose as much fiscal discipline as he can without endorsing specific coalition measures. It is not an easy balance. Labour is neither acquiescing to austerity nor fighting hard against it. So what the opposition ends up doing is something those old Jewish diners at the restaurant would recognise as kvetching. That is the splendid Yiddish word for complaining about a burden in a way that seems also resigned to it as a curse of fate. Labour is grumbling about the food when it should be writing a different menu for a new restaurant.

That caution expresses an intellectual dilemma for Labour that runs deeper than its quandaries about fiscal policy. Miliband has to decide how good he thinks the state is at fixing society before he can reject (or accept) what the Tories are doing to public services. He doesn’t want to endorse the Conservative argument that centralised services designed in Whitehall can be part of the problem as much as the solution. But nor does he want to play up to the accusation that the only method Labour knows for solving problems is to spray them with other people’s money.

The Tories have the opposite problem. No one doubts their readiness to cut spending, only their motive. David Cameron’s “big society” – charities promoted as nimbler alternatives to state intervention – failed to persuade people that he wasn’t pursuing a vendetta against the public sector. Even many Tories dismissed it as a wheeze to modernise the party’s image.

Yet there are senior Labour figures who think Cameron’s bungling of the big society is a lucky escape. They feel a more credible Tory leader with a stronger grip on his MPs might have succeeded in depicting the Tories as the party of community activism, leaving Labour on the side of the faceless state.

That concern reflects the continuing influence of Blue Labour, the movement that enjoyed something like cult status in the first year of Miliband’s leadership. The group’s profile was forcibly downgraded after incautious comments by Maurice Glasman, one of its founding luminaries, on matters ranging from immigration to Miliband’s strategy (or apparent lack thereof). But the Blue Labour analysis – that the party has historically placed too much confidence in bureaucracy to improve people’s lives and that grass-roots organisation is the antidote to sterile Westminster politics – is still influential. It gets a receptive hearing, if not a whole-hearted endorsement, from Jon Cruddas, the head of Miliband’s policy review. Marc Stears, an old university friend who has helped Miliband develop his “one-nation Labour” thesis, is an alumnus of the Blue school.

Fiscally sustainable

The more sceptical view, held by MPs from across the party and some Miliband advisers, is that too much Blue-note busking by unworldly professors helps the Tories trash the principle of universal services funded by the state. Miliband is instinctively cautious on public-sector reform and not just for fear of souring trade-union relations. There are political dividends for Labour in promises of stability when the coalition offers rolling mayhem. Why, for instance, would the shadow health secretary, Andy Burnham, get bogged down in tricky questions of how to make the NHS more responsive to patients when he can just point at what the Tories are doing and cry: “Oh, the horror!”?

Meanwhile, Ed Balls is reluctant to concede the point that much of Gordon Brown’s spending in the New Labour years failed to achieve the desired social outcomes regardless of whether it was fiscally sustainable.

There is a caricature of Labour’s public-sector debate that pits the frugal, reforming idolators of Tony Blair against spendthrift, reactionary disciples of Brown. The distinction is increasingly meaningless. Orthodox Blairites are a rare and neutered breed and even they accept that Balls, for all that the Tories paint him as Brownism incarnate, is wedded to budget discipline.

The real tension is both subtler and more profound. It is between the need to defend Labour’s legacy of investment in public services and the impulse to imagine different ways of effecting social change. It is the dilemma of how to rehabilitate the abstract principle that government can be the citizen’s friend while also attacking the current government as a menace to society. It is the battle between Brown and Blue shades of Labour which remains unresolved, because Ed Miliband is personally steeped in both.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

This article first appeared in the 21 January 2013 issue of the New Statesman, The A-Z of Israel