31/01/2012 05:47 GMT | Updated 31/01/2012 05:51 GMT

Liam Byrne: Labour Must Stick To The Centre Ground

A leading shadow cabinet Blairite warned Labour against a drift to the left today, insisting that Ed Miliband must position it as the party of "aspiration, responsibility and community".

Shadow work and pensions secretary Liam Byrne, who is chairing a wide-ranging review of Labour's policies, said Mr Miliband was right to place the party "firmly in the centre ground" in order to attract floating voters.

In a pamphlet for think-tank Progress, Byrne said the party needed to "move on" from the 1990s, when Tony Blair established New Labour and claimed to have found a "third way" between left-wing statism and right-wing laissez-faire economics.

But he said the task now was to "keep the insights of the 1990s, but build on them for a different era".

And he warned those arguing for a focus on the concerns of Labour's traditional core support among the working classes and trade unions: "No-one can win elections trading on old loyalties."

Byrne wrote: "After the third way, we need a new way back to a new centre ground.

"Let's keep the insights of the 1990s but build on them for a different era. Let's keep the best of New Labour, not least the late Philip Gould's basic insight: 'What most voters want is over time and without greed to advance and improve their lives. In short, to become better off'.

"Let's keep the insight that elections are won in the centre ground by building an alliance around the values - aspiration, responsibility and community - that unite traditional supporters with footloose voters who change sides."

Byrne noted opinion poll evidence that support for tax increases to pay for public services has halved since the Blair era and that only one-third of voters now believe government should redistribute wealth.

But he insisted that this was not a "counsel of despair", as the same polls showed little public appetite for a return to the full-blooded capitalism of the type espoused by Margaret Thatcher.

Byrne set out five policy priorities for Labour:

:: "Fiscal realism" on the deficit, combining short-term action to shore up jobs and growth with medium-term ideas to bring down debt;

:: Active partnership with business to rebalance the economy away from financial services and towards hi-tech jobs and enterprise;

:: A renewal of the welfare state to drive up employment, both by providing childcare and social care to enable people to work and by ensuring that claimants take jobs if they are able to;

:: Encouraging social action and innovation to bind communities together;

:: More freedom for public services to innovate, while meeting high standards set by government.

"We need to advance this cause with confidence," said Byrne.

"Progressives win by mobilising an appeal to optimism. Conservatives want voters to feel disempowered and cynical. They want to diminish the appeal of politics.

"Where they are in power, they want a fearful electorate to cling to nurse for fear of something worse. Our task is to offer hope in an age of uncertainty, and optimism in an era of doubt."