The Labour front bench might not welcome advice from retirees, no matter how dignified. But they’ve got some. “Be a little bit more interesting”, said Peter Mandelson, in response to a question at a recent Progress event. National recovery from the major economic crisis of recent years requires big, bold ideas. He wants Labour to rise to this challenge.

This is the stuff of pragmatic radicalism on economic rebalancing. Pragmatism demands workable solutions to national concerns. The support that politicians, of all parties, proclaim for rebalancing the economy indicates that this is such a concern. The persistence of the imbalances in our economy – between domestic consumption and exports; finance and manufacturing; the south east of England and much of the rest of the UK – attest that this support is inadequate to purpose. A dash of radicalism is needed, for not only rebalancing to be achieved, but for Labour’s arguments to cut through the white noise of mainstream politicians professing support and delivering so little.

Many more elected city mayors are the stuff of this radicalism. Our top heavy state is a drag on economic performance. Elected city mayors are the next step on the devolution journey begun by the last government. The centre for cities and the institute of government recently called for their powers to be beefed up – through, amongst other things, chairing integrated transport authorities and co-chairing local enterprise partnerships. The common sense of people in cities voting for their leaders and retaking command of their destinies should be a truth loudly proclaimed by Labour – as should be the common sense of rewarding hard work.

The tax system can further help to make us into a nation of grafters. This means less tax on income and more on wealth. A land tax could form part of this transition. It would do something to dampen the British tendencies towards property speculation and bubbles. It might also form part of a Labour drive towards tax simplification. Because taxation of land is simple, it would be difficult to avoid.

Labour could win friends from UK uncut to the CBI with a considered drive towards tax simplification. UK uncut should appreciate simplifications that make tax harder to avoid and the CBI should value simplifications that support economic growth. A land tax offset by reductions in taxation on employment would reduce the capacity of the rich to avoid taxation and increase the extent to which everyone keeps the fruits of their hard work. Tax simplification should not be owned by the right. Nor should backing for dynamic financiers and entrepreneurs.

Labour should insist that the Vickers review ends with rock solid retail banks. These, and an expansion of our credit unions, are needed to support household saving. This isn’t just important for households themselves, but to generate funds to be recycled by financiers as investment in firms. Alongside this we need a flourishing of nimble financial services firms prepared to provide capital to enterprising SMEs. Such small businesses must be developed in green manufacturing but they will be more likely to do so if a credible price for carbon can be established.

At the moment this price comes from the ineffective EU emissions trading scheme (EU-ETS). Its failure merits much stronger condemnation, which should come from Labour. It either needs meaningful reform or replacement by a carbon tax. Either approach should be taken forward at the EU level, rather than in the form of the cack-handed move towards a carbon price contained in budget 2011. The likes of Bill Cash bar sensible policy from David Cameron on this. The prime minister is unable to lead in Europe but securing a robust carbon price should be part of the more tightly focused Europe that Labour champions.

Most immediately, the eurozone needs to face up to the tough choices of its on-going crisis. The EU also needs to recalibrate itself to our Asian century. The turbocharged development of the BRICs (Brazil, Russia, India and China) and similar does much to explain the expectation of Gerard Lyons, chief economist at standard chartered, that the global economy will at least double in size between now and 2030. Europe, though, will be in the slow lane unless trade links deepen with the rapidly developing world.

This means more EU activity where it can add value – a properly functioning EU-ETS, completion of the single market in energy, and a sticks-and-carrots offer to all Mediterranean countries equivalent in ambition to that given to eastern Europe on its transition from communism – and much less where it provides little but muddle and duplication. Subsidiarity needs to be taken much more seriously. Not just in terms of Brussels deferring to member states, but to regional and local bodies, such as elected mayors, and, in turn, to communities and individuals themselves.

This hard edged devolution would be driven by a sense of mission. This is what fires the best of the private and public sectors. It’s making Apple great that motivates Steve Jobs. The profits are a by-product. The Steve Jobses of a reformed British state have to be Labour politicians. The government are u-turning themselves into an ever decreasing circle of failed reforms and unfulfilled ambitions, and not least among these is their commitment to economic rebalancing.

Labour can do better. And we will be very “interesting” indeed when we do so.

This is a shortened version of an essay that appears in the new Pragmatic Radicalism publication.

Jonathan Todd is Labour Uncut’s economic columnist.

Labour has to be the party of optimism. Which should include being optimistic about the ingenuity of business, especially when combined with extraordinarily lax monetary conditions and a low pound. George Osborne anticipates Labour pessimism on this and we should deny him.

We know that the cuts are too deep and fast. We know that the best government response to economic challenges isn’t brutally to minimise government, but strategically to target the state’s resources to maximum effect. Having emphasised these points, we can be confident that the public know that we know this.

But in stressing these points we should avoid creating a blind spot: that our only economic expectation for coming years appears to be unremitting disaster. This would have us seem to be talking the country down, which is never a good thing, and undermine our claims to optimism. Also, if this expectation turns out to be false, it would leave us – to apply Peter Mandelson’s one club golfer analogy – on the 18th green of this parliament with only the driver of big government in our club bag.

Of course I’m not endorsing Osborne’s masochistic cuts.  I’m not convinced that they will lead to a sustained, job-creating recovery. I am, however, stressing the first point of futurists: in an uncertain world, it isn’t a case of the future but the futures. And a future exists, while not the most likely future, in which low interest and exchange rates, as well as possible further quantitative easing, more than compensate for the loss of output and employment wrought by the cuts.

The existence of this future was hailed by Fraser Nelson after the CSR as Osborne’s secret master plan:

“Here’s something you won’t read in the papers: in the fiscal consolidation of the Major years some 700,000 jobs were lost in the public sector (way more, note, than we’re discussing now). But two million more jobs were created in the private sector. The 3-1 ratio worked in Britain last time, and there’s every chance it will do again. But Osborne, I suspect, doesn’t want us to know about this strong likelihood. It would spoil his wee trick. Ruin the surprise.”

The government was hardly hiding its faith – and it is a faith – in this future. The first page of its White Paper on local growth stated:

“We have good reason to be confident that the private sector can lead the recovery. When general government employment fell by more than 0.5 million after the 1990s recession, following a period of transition, private sector employment added almost 1.5 million jobs in four years.”

The Tory-Lib Dem government is playing political-economic poker. Osborne has all his chips on this version of the future. It’s a huge gamble. In this future he’ll be able to argue that his gamble was calculated not based only on his weak hand – the deficit-burdened British economy – but his faith in the cuts and the vigour of business.

While I doubt his vision of the future, there is rarely only one possible future. Given this, it would be as unwise for us to have all our chips on the reverse position.

We avoid this by nuancing our position and giving proper weight to various economic risks. Yes, if we cut too deep and fast we risk withdrawing vital stimuli from a tentative recovery. Osborne’s chips are positioned to place no weight on this whatsoever. However, there is also a risk that if fiscal consolidation were to procede too slowly it would push up interest on government debt. This would raise interest rates across the economy, making it harder for businesses to access credit and households to service mortgages. All Osborne’s chips seek to counter this risk in anticipation of being credited with leading a robust private sector recovery.

We, too, should keep faith in the private sector, acknowledging the importance of monetary conditions to business and the interdependence between fiscal (controlled by the treasury) and monetary policy (determined by the bank of England). This means, in addition to warning about the pace and depth of the cuts, having a strong account of how we would reduce the deficit – recognising that fiscal discipline helps interest rates remain low and that businesses and households benefit from this.

Without this, we risk the perception that we see fiscal stimuli as the only motor of growth and monetary and exchange rate conditions as irrelevant. In opposition, we can only impact how we are perceived, not policy outcomes. So, as well as raging against iniquity, we should kill this perception now.

David Cameron has argued that our economic fortunes have become “hitched to a few industries in one corner of the country, while we let other sectors like manufacturing slide”. His business secretary, Vince Cable, has since bemoaned “deep-seated problems: a dysfunctional banking system; an economy that is seriously unbalanced”. The previous business secretary, Peter Mandelson, wanted “more real engineering and less financial engineering”. The political consensus seems clear: our economy should be rebalanced away from finance and in favour of manufacturing.

This seeming either/or approach to finance and manufacturing says nothing about business services, which fall into neither category. London’s streets remain, as the Economist notes, “thronged with lawyers, management consultants, accountants and ubiquitous marketing types”. Statistically, these “types” may be classified in our blossoming creative industries, not business services. Concluding that comparative advantage can only accrue to us in finance or manufacturing risks missed opportunities in other sectors. This will be increasingly detrimental as technological advances make ever more goods and services internationally tradable.

 Another problem with an either/or approach is that it presumes finance and manufacturing are substitutes. As we have more of one, it is thought, we must have less of another. The scale of the City of London supposedly explains the decline of British manufacturing. This thinking contains two kinds of misconceptions.

 First, that British manufacturing is in decline. It isn’t. We’re the world’s sixth largest manufacturer. This isn’t to say that performance can’t be improved. But this objective isn’t helped by a false narrative of decline.

 Second, that finance and manufacturing cannot be complements. It makes no more sense to argue that the sectors are inevitably complementary than to argue that they must be substitutes. What we should be asking is: what kind of financial sector would be most complementary to our manufacturing in particular and our wider economy in general? And how can public policy best encourage such a financial sector?

 The passions of political debate on the future of banking generate more heat than light when it comes to these questions. If this were not the case, perhaps, the consensus on rebalancing would give way to divergent views on the proper role of finance in developing manufacturing.

 Green manufacturing is heralded by politicians of all stripes as a manufacturing sector ripe for advancement. Blythe Masters, global head of commodities at JP Morgan, claims: “You can’t have a successful climate policy” – nor, by implication, a successful green manufacturing sector – “without the heavy, heavy involvement of financial institutions.”

 Precisely how heavy and in what form are debates that are being played out on both sides of the Atlantic, particularly in deliberations over carbon trading. Green manufacturers will require capital and ability to manage risk, especially around the price of carbon. These requirements create important roles for financial institutions; no matter what exact form these carbon trading mechanisms take.

 Given the significance of these mechanisms, the relative lack of protest and comment on the highly disappointing European Union emission trading scheme (EU-ETS) by British politicians is as depressing as it is deafening. We are more likely to be treated to glib remarks on the sexiness and potential of biosciences and such like. But, we are unlikely to be told that it is no coincidence the world’s most successful biosciences industry is found in the country – the USA – with the largest venture-capital industry. And we certainly shouldn’t hold out any expectation that the policy implications for British industry of this will be unpicked. Yet, it is this kind of thinking which needs to be spelt out if politicians are to move beyond broad-brush commitments to rebalance our economy.

 The failure, until now, of politicians to move beyond such commitments creates an opening for Labour leadership contenders. The Milibands et al could define this terrain and, in so doing, provide part of the answer to the biggest and most pressing of economic questions: how will we generate the economic growth that will make the deficit more manageable and spread jobs and hope to our communities? Rebalancing the economy sounds good, and in a basic sense is good, but it is an incomplete response to our economic growth challenge. In addition, we require the necessary policy means for the creation of a financial sector that will do most to aid our wider economy, particularly manufacturing.

 It’s easy for Labour politicians to feel good about the provisions of the Climate Change Act 2008 and for Labour activists to cheer wind farms and similar. But without the regulatory infrastructure that will allow manufacturers, through financial institutions, to adequately manage their carbon price risk, we won’t give ourselves the best chance of meeting the emission targets contained in that act, pioneering more advanced technologies than wind farms and really growing employment in green manufacturing. Labour would be best served by a leader who understands that if we want to help manufacturing, we shouldn’t simply bash bankers, but seek to create bankers best able to serve manufacturing – and who is able to convincingly tell their party and country how they would do this.

I can only wonder at what horrors would be alleged to occur at these parties – if that is the right word – if I made my observations more dedicated and maintained them for a longer stretch. Thankfully I have better things to do.

Nonetheless, I have to ask: What is going on? Can the honour of non-chattering class status be bestowed on me? I do hope so. Or, alternatively, is all of this chattering classes stuff just a term of lazy journalism and thinking?

If the clattering classes do exist, perhaps, we’d all be better off if they could take out their frustrations at “murder cafes”, rather than having their frenzied wrongs spill out at their so-called ”dinner parties” (Is food even served? Aren’t parties meant to be fun?) The “murder cafes” concept is explained 5 minutes 20 seconds into the video below, which also contains many ideas that David Cameron might want to take up as he takes forward the promised beefing up of his policy platform in the new year.

[youtube=http://www.youtube.com/watch?v=qE5sxADDhew]

He referred to wisteria in the midst of a riff on MPs expenses. Now just as clearly as porno video equals Mr. Jacqui Smith, so wisteria brings to mind the leader of the opposition. May be, I’m just being paranoid on Dave’s behalf, but, quite possibly, Boris is doing his bit to try to keep alive this unfavourable image of Dave.

Should Boris fulfil what we are to take as his long term ambition, to succeed Dave as Tory leader, the bedrock of his support is likely to come from those Tory MPs who were annoyed by Cameron’s alleged double standards and poor handling of the MPs’ expenses scandal. So, Boris’ wisteria reference is a shout-out to those MPs; a not so subtle “I am your man.” Yes, somewhat less mega-phone and more subtle than the same such shout-out that Boris gave at Tory Party Conference with his remarks on the Lisbon Treaty. But a shout-out, nonetheless. And a rubber ring for himself; a rubber ring to carry his not inconsiderable girth from where he is now (City Hall) to where he wants to be (Number 10 or at least the Tory leadership). 

At the award ceremony, the Newcomer of the Year, Ken Clarke, described where Boris is now as “the world of buses and bus lanes.” When his current station is put like that, despite affording him the third largest personal mandate in Europe after the French and Portuguese presidents, it is easy to understand why Boris grasps for that rubber ring. After all, any man using a bus over the age of 25 is a failure.

The stage of Brixton Academy has been the pinnacle of many careers but on that stage last Monday night, for People’s Question Time, Boris didn’t cut the figure of someone who has achieved any kind of pinnacle. Indeed, it often seemed so much of a chore for the Mayor. Tony Blair and Ken Livingstone, unlike Boris and Dave, share little in terms of background and inclinations, but when Ken was Mayor they formed a great working relationship. This might be because Blair was confident throughout that Livingstone wasn’t after his job and had achieved his pinnacle. The same can’t be said of Boris and Dave.  Probably the battle of Waterloo was won on the playing-fields of Eton, but a war that began on those same fields has many more bus lanes and rubber rings to travel before it reaches its (inevitably bloody) conclusion.

First, Gordon Brown will lead Labour into the next General Election. The reaction (or, at least, non-resignation) of other leading figures in the party - particularly, Peter Mandelson, Alan Johnson and David Miliband – to James Purnell’s resignation finally confirmed this.

Second, as I have previously said, Labour has three options: 1.) Back Brown, 2.) Replace him, 3.) Allow him to continue without backing him. The third of these is the worst for Labour and choices of Mandelson et al have closed off the second. Thus, the first must be genuinely embraced by the party.

Third, in yesterday’s Guardian ICM poll, Labour only out-scores the Tories on one issue – better protecting public services.

Fourth, as Liam Byrne’s press conference earlier this week illustrated, Labour’s current line on future spending is not the strongest in the world.

Fifth, this is recognised by people. A new poll  on Politics Home finds that only 16 per cent of voters think that Labour is being most honest on tax and spend, behind the Tories on 37 and the Lib Dems on 28. Not even a majority of Labour supporters think Labour is being straighter on this than other parties.

Sixth, the government genuinely is providing real help now, as the tag line goes, to prevent this recession producing the kind of build up of youth unemployment that recessions under the last Conservative government witnessed in the 1980s and 1990s. Martin Bright recently noted: “There are still some potentially promising ideas knocking about. The Future Jobs Fund, which provides a subsidy for employers willing to take a 14-18 year old at risk of long term unemployment, and the Young Person’s Guarantee, which promises to find work for young people unemployed for over a year, are both attempts to tackle the unemployment tsunami about to hit Britain. The Graduate Talent Pool proposed by DIUS to match graduates to internships is the seed of a good idea and the proposals from the Communities and Local Government department to fill empty high street businesses with creative ‘pop-up’ shops and could also help”.

Sixth, the good work  on youth unemployment lacks co-ordination. Bright goes on to say: “Without coordination, (these policies) risk becoming just another set of eye-catching initiatives … One of the most useful jobs to be carried out by Tessa Jowell in the Cabinet Office or Lord Mandelson in his new Department of Everything would be to coordinate all the work being done to stimulate employment and tackle the recession”.

Ninth, while the economy undoubted still faces major challenges, it has started to grow again. Labour’s activism on tax and spend must have contributed towards this improvement.

Tenth, the British public are far from sold on David Cameron, as Michael White notes.

So, where does this leave us?

The first and second points tell us that Labour has no sensible option but to unite behind the architect of the 2005 General Election campaign: Gordon Brown. A key theme of this campaign was Labour investment versus Tory cuts. The third point might suggest that this strategy should be deployed again but the fourth and fifth points imply that this would not be credible. Instead, the government should build out of the support that it enjoys for protecting public services – the third point – to create support for what can be achieved through public services.

Our story on public services shouldn’t be about how much we invest in public services but about what we can achieve through public services. Our politics and policies should be focused on outcomes, like reduced youth unemployment, not inputs, which discussions about investment always constrain us to. Let us make a make a mission of the outcomes that we prioritise and let us be defined in these terms. The spending choices that we make should reflect these priorities, re-enforcing them both in the minds of Whitehall and the public. Which of our missions, for example, is satisfied by persisting with ID cards? The spending commitments that are not central to our missions should be subjected to the strongest scrutiny.  

The upturn in the economy – the ninth point – is beginning to give a taste of the outcomes that might be achieved when government targets its resources and energies on well-defined objectives and makes missions of them. Youth unemployment must be a mission. Thinking of the other things that should be missions makes me think of something Neal Lawson said recently:

“The story of the last thirty years has been the transfer of risk from the collective, the social and the community to the individual”.  

The risk of being left on the scrap heap of unemployment is not a risk that anyone, least of all the young, should have to face alone. The risks of growing old in an ageing society will be far larger than they should be for far too many people unless we collectively decide to make a mission of improving health and social care for the elderly. The risks of climate change are massive for all of us and can only be tackled by any of us on a collective basis.

This is the stuff of a positive case for government. It is in setting out this positive case that Labour’s best hope for the next General Election resides. This is a different kind of strategy from the 2005 campaign but one which needs to be embraced. It wouldn’t pretend that government can provide the answers to all our problems – this country still needs to have a more mature conversation about what government can and cannot do and what the responsibilities of citizens are and are not - but it would provide a coherent basis for Labour building upon the success which the beginnings of a turn-around in the economy represents. 

The anti-government reaction of the Conservatives to the banking crisis (e.g. opposition to fiscal stimulus, etc) suggests that they may be wrong footed by a strategy predicated on a positive case for government. From George Osbourne’s economic policies to Iain Duncan-Smith’s social policies, they still see government as more problem than solution. Let’s start, however, by building a positive case for what we can use government to achieve, rather than erecting unconvincing dividing lines on spending. 

The trend detected by Lawson implies that the Conservatives’ anti-government tendency is out of kilter with the times. This may explain – the eighth point – the fact that the public remain to be sold on Cameron. Labour successfully presenting a positive case for government over the next year may make him more politically vulnerable than he now appears.

Throughout the debates about Brown’s leadership, I have always maintained that Labour has three options: 1.) Back him, 2.) Replace him, 3.) Allow him to continue without backing him. The third of these options is the worst for Labour but the choices made by key figures in the Party over recent days have placed us definitively with this option, while effectively closing off the first of these options and not quite reaching the second. So, the transatlantic view from Virginia Beach is that of a “wounded elephant” – as a Labour MP described Brown to the Guardian – continuing to lead Labour.

The Conservative performance in the local and European elections wasn’t awfully impressive – less than 30 percent of the national vote in the Europeans. Yet, David Cameron will delight at facing off against this “wounded elephant”. Labour’s Cabinet might lack a killer instinct but Cameron certainly doesn’t. He will relish the prospect of savaging a beast now wounded by blows inflicted by his own comrades.

Labour’s weakness, more than Cameron’s or the Conservative’s strength, opens up the possibility of a victory at the next General Election that will keep the Conservatives in government for a generation. Given this, why have senior members of the Labour tribe chosen to leave us in the third of the worlds described above?

We are told that this is a Blairite resurrection. Ken Livingstone has obliged Number 10 by beating this drum. But it is a funny kind of Blairite resurrection that is beaten off by Peter Mandelson – and how curious it is that Livingstone and Mandelson, once great foes of Brown, should join ranks with an ex-Tory MP, Shaun Woodward, in being Brown’s most reliable defenders. The terms Blairite and Brownite are now as hackneyed as they are meaningless and do not help us understand the events of recent days.

There is no ideological or policy divide between those called Blairites and those called Brownites, as Europe divided the Tories in the 1980s or nationalisation separated Bevanites from Gatskellites in the Labour Party of the 1950s. There are, however, those that doubt Gordon Brown’s capacities as a leader and communicator – in various senses, this was the message of resignation statements not just from Purnell but also from Caroline Flint and Jane Kennedy – and those that do not.

To these resignations Jon Cruddas has retorted: “What I don’t understand is that there are all these resignations and yet there is no difference in policy. Everybody is taking their bat home with them, but they are not staking out different ideological or policy-based ground”. John Harris has dubbed it a “confused rebellion” for the same reason.

But when Labour has suffered its worst result in a national election for 99 years, is it necessary to have a policy difference with the leadership to call into question its effectiveness? Isn’t it enough to say that our message is being lost by the messenger? 

Cruddas and Harris want to say that policy changes are required because they desire policy changes. But, while there are certainly important policy debates to be had within the Labour Party, it seems easier to find evidence in the local and European elections for deficiencies in our ability to communicate our message than in the content of the message itself. 

Slogans that are redolent of past General Elections – Labour investment versus Tory cuts, etc – no longer cut any ice in a much changed fiscal and economic context. The public may not understand the full details of this context. (Who does?) But they sense – and they sense rightly – that the real debate isn’t about investment or cuts but about how much cutting and what kind of cutting. The wisdom of the crowds is too great for the wool to be pulled over their eyes for long. 

We need to be more imaginative in our policies – as I said, there is certainly much room for debate about Labour Party policy. But, even more crucial than this in averting complete and utter disaster at the next General Election is an increased capacity to be more straight-forward, empathetic and emotionally intelligent in how we communicate these policies. Peter Kellner sees in the local and European elections an indication that Labour has lost the ability to persuade ordinary voters that we are on their side. This is both the tragedy of these elections and the challenge that they pose for the next general election. 

John Prescott was scathing about the European campaign. It seemed to me like a sorry hangover from the 2005 general election campaign, which was itself a little brother to the 2001 general election campaign. Massively improving upon this seems more important than policy revisions, irrespective of who is our leader, though my instinct now is that our leader will remain the architect of the 2005 general election campaign: Gordon Brown. However, what worked in 2005 will not work now.

These are desperate times, indeed, for Labour and while the expenses revelations “will hurt the reputation of all politicians”, argues Andrew Rawnsley, ”the damage is likeliest to be greatest to Labour at the next election”. Another poll supports Rawnsley’s view. There have been many highs and lows under PM Brown. But each low seems lower and more desperate than the last one. I didn’t think it was possible to go any lower than the McBride affair but recent days have probably managed it.

It may be that everything that has been revealed in recent days was “within the rules”. What McBride was up to certainly was not. Nonetheless, Brown’s response in both cases was to blame the rules and insist upon their reform. But people, especially public figures, have to take responsibility for their actions, irrespective of what the rules may or may not say. While the McBride affair was undoubtedly depressing in the extreme, there is something even more depressing about the expenses revelations because the people concerned are people who are widely respected and admired within the Labour Party, in contrast to McBride.

Of course, as I have heard Tessa Jowell and Ed Miliband say on TV, we should avoid making judgements on the basis of partial information and Ben Bradshaw and Phil Woolas also challenge the versions of events that have been reported about them. I am afraid, however, that, whatever the reality of the situation may prove to be, the damage has already been done and the dye has been cast for Labour. The party can now only, to mix metaphors, walk into the hurricane of public anger.    

What a prospect. It must make the most battle hardened Labour campaigner nervous about door knocking. Those lions have been lead to this by the expenses claims of the donkeys that lead them. Alan Johnson, however, doesn’t appear quite so donkey like. According to Rawnsley, he, along with Hilary Benn and Ed Miliband emerges ”as acmes of frugality who make modest and entirely reasonable claims for performing their duties”.

James Forsyth argues that this increases the likeihood of Miliband “winning the leadership after the next election”. But the question will increasingly be asked whether, if this were to happen, this would make him the next leader of the Labour Party. Even before the expenses story broke The Mirror did not seem disinclined to the prospect of the frugal Johnson, who has recently appeared to indicate more of willingness to take on the top job than previously, replacing Brown before the election. That frugality must have been good for his conscience at the time and now also appears a smart career move.

 Matthew D’Ancona speculates that he ”may yet be the first person to become Labour leader by going on television and radio repeatedly to deny that he is either capable of the job or interested in it”. These denials mean that Johnson is considered to lack a steely, Michael Heseltine or Brown like determination to accede to the very top. Given this and past experience – the lack of any challenge to Brown either when he became leader or last summer – D’Ancona seems justified in his view that “for all the sound and fury we can expect over the summer”, in terms of plots against Brown, ”the PM will still survive and fight the general election”. But D’Ancona was writing prior to the expenses story. Is this story a game changer? And, if so, how will the game end?

Martin Bright is right think to that there is a “distinct possibility that (it may end with) the Labour Party (going) into terminal decline as a credible political force”. He argues that the best way to avert that outcome is for “the younger generation of Labour politicians … to take control now”. Who can he have in mind? I don’t think Johnson or Harriet Harman, another potential successor to Brown, can be considered part of the younger generation. But James Purnell and Jon Cruddas could. Allegra Stratton has them down as a ‘dream ticket’.

“Why don’t James and Jon grow some balls and get together and challenge GB”, a “Labour grandee” apparently recently told her. The “grandee” will presumably hope that the expenses story has made these balls grow. At this stage, however, I am not sure whether it is certain that Purnell, nor Ed Balls or Yvette Cooper, either of whom (but surely not both?) might well consider standing in any contest that featured Purnell, is out of the expenses wood - though, this is far from the only question that might be raised about the supposed dream ticket. They are usually considered, for one thing, to be on opposing wings of the party. David Miliband – another member of the younger generation with leadership ambitions – certainly hasn’t come out of the expenses story as well as his brother or Johnson.    

If Brown can be prised from Downing Street – and that definitely remains a big if – then the number of names discussed here (Johnson, Harman, Purnell, Cruddas, Balls, Cooper and both Milibands) would seem to open up the spectre of an unseemly scramble for Number 10 – if they all were to grow balls, as it were - at a time when we face challenges so grave that Frank Field has been talking about the need for a national unity government. Peter Mandelson may insist that Brown is focused on these challenges, not his cleaner, but polls of 23 percent cannot fail to darken Labour’s mood music. It may now be the Tories turn to hold the expenses spotlight but David Cameron senses enough weakness around Brown to be edging towards a confidence vote, via the Royal Mail vote.

The chances are that Brown will avoid a confidence vote by giving enough concessions to Labour backbenchers to win the Royal Mail vote with Labour votes, while losing Cameron’s support for his Royal Mail plans. But how many concessions can Brown give without losing the support of the responsible Minister, Mandelson, a potential Geoffrey Howe in this drama if ever there was one? It’s bizarre that Brown has ended up in a position of such dependence upon his old foe – The Sunday Telegraph speculates that Brown may reduce this dependence, in respect of the Royal Mail vote at least, by moving Mandelson to the Foreign Office, “a post he has long coveted”. How these once bitter rivals play their cards on the Royal Mail vote may go some way to determining whether everyone’s favourite ex-postie, Johnson, ends up as PM. The Sunday Telegraph also suggests that Brown may try to prevent this happening by making Johnson Chancellor and, thus, “binding him in” to Brown. This creates the risk, however, as Peter Hoskin notes, that Alistair Darling will play Howe.

All of this, however, is just fluff and hot air – or “sound and fury” to use D’Ancona’s term. Not only is it fluff and hot air, it is fluff and hot air at a time of crisis. Shuffling deckchairs on the Titantic is the right expression. Martin Bright correctly grasps the depth of the crisis facing Labour. The worst thing Labour could offer now (and I have stopped assuming that things can’t get any more desperate, as that assumption has proved sadly, too unrealistic) is more fluff and hot air. That is to say more talk of a challenge to Brown. Talking about challenging Brown but not actually challenging Brown, i.e. not growing balls but pretending to, is the worst of all Labour worlds. It is worse than growing balls and challenging Brown. It is also worse than not growing balls and supporting Brown.

This is a crisis of fluff and hot air in a deeper and more dangerous sense than this, however. Brown promised the country a vision but, frankly, this only came into view with the credit crunch. This gave his government a sense of purpose that it otherwise lacked. Once a government and a party becomes so lacking in purpose that it needs a global crisis to give it one, it is little surprise that the public have little sense of what the party’s purposes, motivations and convictions really amount to. I fear that those battle hardened Labour campaigners, who are newly nervous about door knocking, would struggle to give a convincing answer as to what the point of a fourth Labour term would be, if asked on the doorstep. These lions have again been let down by the donkeys that lead them. And just as badly let down as they have been in respect of expenses.

The Labour Party, whoever leads it, desperately needs a stronger sense of direction. Until the party rediscovers, re-imagines and revivifies its purposes, it cannot complain about these purposes being unclear to the electorate. The most encouraging thing about the latest ‘date‘ between the ‘dream ticket’ is that it occurred at the launch of an exciting new Demos pamphlet. The Liberal Republic is a great publication by Richard Reeves and Phil Collins, which is likely to appeal to Alan Milburn, a name sure to be mentioned among the plotters. The likes of Milburn, Purnell and Cruddas are intelligent and bright enough to think through the thoughts that will need to be thought through for Labour to really rediscover its sense of direction. They should have the balls to do so and not to get distracted by the fluff and hot air. Only one of these pursuits, ultimately, will make a real difference. We were promised vision and we were promised substance. That is still what is required, whoever leads Labour.