It seems we have reached the degree zero of Labour politics in Britain. Few on the Left lament the passing of 13 years of New Labour, in part because it was associated with an illiberal style of hectoring micro-management that repelled people of all parties. Labour needs a complete reassessment of its values and purpose. But it is just this, as Neal Lawson pointed out, that is difficult for those closely associated with the old regime. Labour politics in Britain is at a crossroads.
One starting-point for analysis is to ask what explains New Labour's illiberalism. At least three immediate reasons can be found.
First was the unholy alliance between media and government business managers, which reduced debate on policy detours (Iraq) into managing media reaction to the leader's gut instincts, and more generally corroded the process of policy deliberation. Government foreshortened into corporate-style monitoring of media-friendly targets requires an illiberal means of implementation.
Second was the lack of any internal democratic or ideological resources for interrupting this corrosion of the policy process, due to the long-term weakening of the Labour party infrastructure, its accelerated detachment from the trade unions, and Blair's own lack of ideological reference-points. While the first reason is a problem for any contemporary government, as Thomas Meyer argued ahead of New Labour's demise,  the second factor was New Labour's own sad trajectory.
The third reason for New Labour's illiberalism was the distinctive nature of its attachment to the neoliberal market principles that in so many areas became its dominant paradigm. New Labour was a case of conflicted neoliberalism, unable to appeal to supporters' automatic loyalty to market rhetoric and so relying on the artificial imperatives of management culture to impose its will. The result, as I discuss in a recent book, was to expose neoliberal social democracy as an oxymoron.
Labour must, as Anthony Barnett insists, rethink New Labour's illiberalism. Let's not follow Coalitionistas in forgetting that New Labour built on the illiberal state infrastructure that John Major forged when he pushed the early 1990s investment explosion in CCTV surveillance and created the 'world's first' national DNA database for criminals in 1995. But the values of liberalism will not now be enough to reorient Labour: it was not hostility to liberalism that drove New Labour to its illiberal dead-end, but rather a deeper ideological vacuum distinctive to its tortured brand of neoliberalism. The only way forward is to identify the positive values for which Labour might plausibly stand as a political party. Until just recently the contest for Labour leadership has failed to do this.
From one direction, the contest seems to be about whether a metropolitan elite will continue to dominate Labour politics (Andy Burnham). But a metropolitan elite has dominated British politics for a very long time and, if this has got worse, the reasons are not 'metropolitanism' but the collapse of the Labour party as an organization with meaningful local participation, the neglected relations between Labour and a national trade union movement, and the leadership's turn towards London, and specifically City-based, business interests for 'natural' support. Burnham points to a real problem, - a problem implicated in the causes of the 2008 financial crisis - but its roots lie in Labour's shift in what it stood for as a party.
From another direction, the contest has become focussed on whether the new leader gives priority to recovering heartlands working-class support (Ed Milliband) or the authority to speak for the centre-ground of British politics (David Milliband). Since both strategies are clearly necessary, in varying mixes and at different stages, for an electable Labour party, this fraternal dispute seems at most a scholastic wrangle.
The real silence in the election campaign has been ignored: the lack of discussion about the values for which Labour should stand, and the lack of any acknowledgement that for more than a decade in government Labour increasingly distanced itself from values that could resonate with the interests of working people, rather than those of capital. Rumours of Tony Blair's private investment bank for the super-rich are a baroque ornament on a decade-long edifice of pro-wealth rhetoric, of which John Hutton – already advising the coalition – was a leading spokesperson. So Ed Milliband is right to point to the Labour party's dangerous divorce from its former working class supporters, but has fallen short so far of identifying the deeper value deficit within New Labour's project of government. The problem is not whether the new Labour leader has the right election tactics, but whether s/he will lead a party that has a political purpose any more.
Yet as soon as we raise that question – what is the purpose of the Labour party? – we find a ready answer: to challenge the fundamental continuation of neoliberal doctrine that the Coalition's new policies represent
That requires recognising both differences and continuity between the Coalition's policies and those of the preceding three decades. Continuity lies in the orientation of government to dictates of global markets, and the absence of any political strategy that would set other values against the dominance of market functioning. True, the extent of the Coalition cuts, 'is not', as Martin Wolf of the Financial Times noted, 'in response to actual market pressure', but it is undoubtedly designed to allow George Osborne 'to hold his head up high in the select club of "tough" finance ministers'. Meanwhile some see the Coalition's GP commissioning plans as fulfilling, not contradicting, New Labour's vision.
Yet there are ideological differences too. First, a return by the coalition to an explicit suspicion of the state; in the long run, this may be no more matched in a decline in the state's size than was Mrs Thatcher's, but it clearly differs from New Labour's reliance on the state's authority to regulate the social. Second – more surprising, initially - the Coalition's reaching for a social rhetoric to cloak its attempt to shrink the state. What on the face of it could be more removed from Milton Friedman's scepticism about 'the social' than the 'Big Society'?
As yet there is little evidence of what 'society' will emerge from this, and there is good reason to be suspicious. After the conspicuous failure of market fundamentalism in the financial collapse of autumn 2008, the underlying neoliberal consensus needs new room for ideological manoeuvre. Even the old idea that a small state makes room for the private economy is discredited when, to quote Martin Wolf again, 'the deterioration in [governments'] fiscal position is the result of the cutbacks in the private sector's spending, not a cause of it'. So, as the authorisation for drastic cuts in government spending, we get 'big society'. But this apparent move to the left is only surprising if we forget the distortion to the political spectrum that Tony Blair's brand of Labourism achieved.
Whatever rhetoric clothes the coming cuts, it will not address the democratic deficit inherent to all neoliberal politics: that major economic action gets taken, affecting jobs, livelihoods, indeed whole ways of life, without adequate political consultation, under the guise of 'necessity'. The 'post-bureaucratic' sham of inviting people to send in their ideas for where the cuts will fall only diverts us from recalling the fierce debates on the timing and scope of fiscal readjustment by rival ranks of economists just six months ago.
The 'Big Society' will not fill in for the lack of a coalition strategy to encourage investment, stimulate consumer demand, or (most important, long-term) to safeguard the employment skills of what some fear will be a generation lost to the labour market. Nor will it address the Institute of Fiscal Studies' well-publicised concern that even in absolute, let alone relative percentage, terms the poor have lost out more than the rich from the Coalition's first budget. No idea of 'society', however big, can compensate for the absence of genuine consultation about what economic and social policy Britain needs.
Large sectors of the population will soon experience at high personal cost the avoidable 'necessity' of accelerated and expanded cuts. A party is needed that can give voice to that experience, challenge the ends those cuts serve, and argue for practical measures, both national and local, to counter their potentially devastating impacts. That party could be Labour. 'Middle England', along with most of Britain, will soon be suffering: can the Labour party find its voice in time?  To do so it must reorient itself to addressing the needs of the working population, not distant investment capital.
 Thomas Meyer, Media Democracy (Polity 2003).
 Why Voice Matters: Culture and Politics After Neoliberalism (Sage 2010), chapter 3.
 Duncan Campbell, 'April start for DNA criminal database', Guardian 17 March 1995.
 Milton Friedman, Capitalism and Freedom 2nd edition. Chicago: Chicago University Press, (1982: 133-135).
 Colin Leys, Market-Driven Politics (Verso 2000).
 I discuss the need to move beyond the narrow template of neoliberal politics in Why Voice Matters: Culture and Politics After Neoliberalism (Sage 2010).