The opportunity of the new politics

The Tories' obsession with party interest looked like it trumped their supposed concern for the national interest. Their unwillingness to cede any ground on electoral reform until tonight's grudging concession on the Alternative Vote suggested that their shrill concerns about the economy amount to nought. Instead they assumed that the Liberal Democrats would be bullied into doing a deal on their terms, where Cameron failed to win over sufficient voters through such an approach. Now they know otherwise, and their offer may be too little too late.

Gordon Brown's brave decision to stand down as leader is right both for the Labour Party and the country. It offers a chance of an alternative government. As I said here on Friday, the 320 votes that it would generally command (including 5 Northern Ireland MPs) means that it would only require the support of one of the DUP, SNP or PC to have a Commons majority given the absence of Sinn Fein and the neutrality of the Speaker.

It is important, however, that any new Government has a clear but minimalist agenda, which reflects the best of both parties' policies. It should certainly prioritise economic stability, with a clear timetable for the savings needed, and political reform, with the Additional Member System for Westminster elections a sensible compromise for a referendum. Labour's NHS guarantees should not be traded, and there must be a rigorous approach to welfare reform. On education, the pupil premium in education is a good idea, but it must be funded, and there should be renewed enthusiasm for academies. However, higher tuition fees for universities will be necessary, despite the Lib Dems misleading pitch to student voters. Where possible, investment in new schools and high-speed railways should continue. Equally, given Labour's losses in the South last week, it is vital that nothing is done to increase income taxes further: there are alternatives like VAT which hit luxuries but not food or children's clothing. A new government may wish to drop ID cards (though as a non-driver, I'd quite like one) but must be wary of losing traditional Labour support on crime or immigration.

A new outward-looking and forward-looking party leader like David Miliband has the chance to revive Labour's fortunes. It is vital that Labour does not choose a leader who has all Brown's faults but none of his virtues. And Gordon had his strengths, particularly on the economy; moreover our results last week were not as bad as many feared, particularly in local government. But equally there is no doubt that his leadership cost us a lot of seats in the South and South West. A new leader with a less statist approach to public services and a more open approach to the public has the chance to reconnect with those voters.

Today's changes offer an opportunity for genuine new politics, even though the odds may still be on a Tory-Lib Dem arrangement. Whether the opportunity succeeds will depend as much on whether the Tories offer a real vote on PR as it will on the ability of Labour to agree the right deal and retain the support of smaller parties through very tough decisions.