24/04/2013 09:24 BST | Updated 24/06/2013 06:12 BST

Blair Must Realise That New Labour Is Now Old Labour

Now is the time for the Labour party to create a new discourse and move away from "the Reagan and Thatcher settlement" Ed Miliband knows that he cannot sit back and watch the Coalition unravel, but if he is to win the next election, he has to set out moral and ideological terms for the future of the party.

The master of tone has misjudged the tone

Retired Presidents and Prime Ministers have traditionally stepped into the role of elder statesmen, making benign speeches, opening libraries and foundations and generally avoiding direct criticism of their successors. Not so Tony Blair, who has recently attacked Labour leader Ed Miliband for leading a party of protest rather than a party of specific policies. The former prime minister has recently spoken critically about the party's shift from centre where he had steered the Labour party over twenty years ago. He fails to see that the New Labour he created then is now Old Labour and the world has changed considerably since Blair left Downing Street in 2007.

As Ed Miliband head to Scotland to deliver his annual address to the party faithful, the Labour Party today is undergoing a rigorous reappraisal of its ideals, policies and objectives. The agenda has shifted and political priorities have changed since Blair was leading Britain. His revolution was to steer the Labour Party between Labour's past commitment to social justice with his commitment to better funded public services and an attempt to eradicate child poverty, and an acceptance of Thatcherite ideas such as privatisation and the benefits of low regulation. This is the legacy inherited by Ed Miliband. But rather than accept Tony Blair's argument, Mr Miliband argues that in post banking crisis, austerity-riven Britain, the answers are not the same as they were in 1997. Miliband is actively creating a new liberal-social-democratic consensus.

Britain needs a defined leadership based on ideals and vision. The recent death of Margaret Thatcher has reminded the world of how dated her ideology has become. For all those people whose lives have been impacted by the 2008 financial crash, the virtues of global capitalism and a minimally regulated financial services industry, instituted by Thatcherism, now seem less than desirable. As the late historian and celebrated political essayist Tony Judt wrote" Capitalism will not survive if its workings are reduced to merely furnishing the wealthy with the means to get wealthier."

Austerity budgets have certainly lost their appeal. Governments all over the world are being reminded that it is time to refigure the balance of power between consumers, shareholders and investors. For too long, the culture of knee-jerk suspicion of regulation, especially in finance, has dominated political thinking and Tony Blair was guilty of helping to perpetuate it. The privatisation of energy and transport and the evisceration of the state's responsibilities have - with two to three decades' hindsight - turned out to have enriched only a small number of entrepreneurs and shareholders, and foreign companies, many themselves partly state-owned, such as Electricite de France. The new enterprises and the big banks have taken their profits recklessly knowing they are "too big to fail" and that the government and the taxpayers will pick up the tab anyway.

Now is the time for the Labour party to create a new discourse and move away from "the Reagan and Thatcher settlement" Ed Miliband knows that he cannot sit back and watch the Coalition unravel, but if he is to win the next election, he has to set out moral and ideological terms for the future of the party.

Citizens are understandably becoming disillusioned, even angry, with the failure of their governments to relate to their individual lives. There is a danger that ideals such as balance, fairness and tolerance are considered as weakness. Populist politicians according to Judt are "twittering back to their audience their own fears and prejudices" and are not responding effectively to the crisis of 2008 or the continued feeling of insecurity about the speed of change, fear of the loss of employment, loss of pensions and healthcare, terrorism, crime and immigrants.

European social democracy is still a force, even though it has recently taken a hit from the global economic downturn. There should not be a conflict between state intervention and economic freedom as only a state or government is big enough to respond to our present concerns of poverty, inequality, global warming, and massive corporations dictating national policy.

As mass unemployment eats into the social fabric it is time the political leaders asked how much the British public is prepared to pay for "a good society." Instead of destabilizing or abandoning all that has been achieved by our parliamentary democracy, we should build on the past and strive now for greater fairness. The cult of privatization for efficiency has resulted in the destruction of confidence in ever more privatisation as a means to ever greater efficiency.

The centre ground of Tony Blair's Labour party is now looking as old-fashioned as Margaret Thatcher's policies and the time has come for leadership with the courage to do well the things that only a government can do well. As Ed Miliband said recently, he intends to move the Labour Party forward, not going back to old solutions but adapting to new times and different circumstances. By making the priorities of the British people the priorities of the Labour Party, Ed Miliband is building confidence in a party that stands for job creation and above all, fairness in economic decision making.

Social democracy must remain relevant, based on compromise, incremental change and ideals to underpin the framework of capitalism and parliamentary democracy. There is no going back, no matter what Tony Blair advises. There is a new and bigger set of problems to be solved.

There is such a thing as society and the Labour Party under Ed Miliband's leadership is Britain's best chance of preserving and strengthening it. It is time for Tony Blair to join the elder statesmen of the world, to grow old gracefully and let Ed Miliband forge ahead with defining a new Labour Party for a new generation.

Dr Azeem Ibrahim is the Executive Chairman of the Scotland Institute