The Year in Review: Labour

For Gordon Brown, the end of his stormy premiership was traumatic, nerve-wracking and humiliating. It could have been much worse. Many Labour cabinet ministers had anticipated a slaughter for their party in May. On the basis of their low expectations, a hung parliament was almost as a pleasant surprise.

Nonetheless for Brown, who had dominated politics for nearly two decades, his final months as prime minister were bleak. His fall had a Shakespearean edge in that he had been the mighty Chancellor for 11 largely successful years. As Chancellor, he had also pulled the strings during Labour's three previous election-winning campaigns. This was the great dramatic twist. Although he had ached to be prime minister, Brown was much more powerful in the Treasury than he was in No 10.

Nowhere was this tragic irony more vividly displayed than during the election campaign that was held under appropriately dark skies and unusually cold temperatures. Brown wandered around the country with his entourage like King Lear banished from his power base. Peter Mandelson pulled the strings at the party's headquarters as a penniless party sought to campaign with a leader who had lost his political touch long ago.

But Brown was a great survivor, one of the few leaders-in-waiting in British politics who became a leader and who then survived three attempted coups, including one at the beginning of this year. He was similarly defiant at the election. While his many enemies in politics and the media predicted a grisly demise, Brown surfaced on the Friday after the election still holding on to power by his much-bitten finger nails. It was not until the following Tuesday that he finally left Downing Street after a failed attempt to form a coalition with the Liberal Democrats. Brown's farewell speech with his two young children by his side touched many viewers. He became human when it was too late.

Labour has still not had a proper debate about why it lost the election, securing only a slightly higher percentage of the vote than its landslide defeat in 1983. As with so much else, the top of the party is divided over the issue. The Blairites believe the party failed to be New Labour enough. Some of those around the new leader, Ed Miliband, are convinced that it had failed to move away from New Labour quickly enough.

Part of the answer is that Labour failed to come up with a coherent story about the economy, the issue that determines the fate of all governments. Gordon Brown and his chief ally, Ed Balls, wanted the focus to be on their epic response to the financial crisis, a fiscal stimulus showing the benevolent power of government.

Others, including Alistair Darling and Peter Mandelson, stressed the need for cuts and what they saw as a more "realistic" approach to the economy. On the whole ,Darling and Mandelson prevailed, but not entirely, which left Labour in the worst of all worlds, conveying two contradictory messages in which the dominant one was a weak echo of their opponents'. If Labour wants to win next time, it needs to have a ruthlessly forensic approach to economic policy-making. On that Brown showed the way, but not last May. He was a brilliantly effective shadow chancellor up until 1997, the last time Labour was in opposition before it won a landslide victory.

The leadership contest that followed Brown's departure highlighted the continuing dominance of the former leader. Ed Balls fought the most effective campaign and yet never had a chance of winning because of his close association with Brown. Ed Miliband managed to beat his brother David partly because he kept a deliberate distance from his past, one in which he was as much a "Brownite" as Balls. The leadership contest was another strange political duel in which two brothers battled it out. Labour struggles to leave behind the intensity of psycho-dramas.

Now Labour's fate is partly dependent on whether Ed Miliband can change perceptions of Labour's economic record in power. After he left office, Brown disappeared from public view to write a book on the financial crisis that dominated his premiership. His account was about the immediate past but will determine his party's future. In the book, Beyond The Crash, which was published towards the end of the year, Brown argued that the financial crisis was global in its origins and can be addressed only by a new set of global rules to govern banks and international finance.

If the argument starts to resonate, it will be harder for the Coalition to blame Britain's economic weaknesses solely on the previous Labour government. So far though, the message of David Cameron and George Osborne that they have no choice but to clear up Labour's mess gives the duo a powerful protective shield. A year ago, Labour looked as if it was going to lose. The path towards a future victory is far from clear.