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In the second part of his interview with Guardian columnist Polly Toynbee, TMP editor Chuka Umunna puts to her the accusation that she contradicts herself, asks her to justify her claim that the Brown government has left social democracy for dead, discusses with her the electoral viability of the equality and fairness agenda she promotes, finds out what she thinks of all-black shortlists and invites her to speculate on which “young turk” will succeed the Prime Minister.

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CU: Some people say you are a bit all over the place and that you often contradict yourself. For example, on the one hand you claim that the Blair government was one of the best, on the other hand you were highly critical of Blair the man. How do you marry those two approaches?

PT: …..well both things are true. We haven’t had a lot of good governments since the war. I’ve done two books with David Walker [the Guardian’s social affairs editor] assessing Labour’s first and second terms, in which we added up everything that has been done in each department, and it is a pretty impressive record. The amount of money spent, the improvements, the way hospitals, schools and open spaces – everything – just looks so much better! We forget how utterly run down things were in 1997 and how bad it was.

Most of Labour’s ideas have been very good. Most of the things they have done have worked, though some have not and not enough has been spent on the public sector (the result of Swedish ambitions on close to American levels of taxation). I supported Blair, despite the fact of being passionately against the Iraq war right from the start of it. I supported him through the last election because I thought that dumping him and putting Brown in beforehand would have been the wrong thing to do and Blair would probably win – he did.

But after that I thought he ought to go very quickly – quit while he was ahead, having won three elections. The time he stayed was incredibly painful after the 2005 election, at which point I was turning very anti-Blair but I never moved to a position where I was saying “everything the government does is rubbish”. I simply said that Blair should go, the war is a calamity and he ought to realise he’s not in a position any more to be inspiring or to produce new policies.

CU: Were you ever inspired by Tony Blair in a big way?

PT: Erm…well I suppose by things he did, yes. And you couldn’t but catch the enthusiasm of ‘97. What they pulled off between ’94 and ’97 was pretty fantastic. It was pretty amazing what they’d created, it was a huge success and it went on to do a great many very good things.

But there were a lot of things I didn’t like about Blair’s approach. I didn’t like him not being able to speak about inequality and not caring about doing something about the rich. I didn’t like the whole choice agenda and the privatisations, but that was only a fairly small part of what his government did. We’ve had a very competent 10 year government – better than anything since Attlee.

I don’t think any of that is contradictory. It is possible to say how well the government has done, whilst highlighting the opportunities they have missed.

CU: What about Brown? What is your assessment of his performance so far? Two weeks ago you were bemoaning the fact that Labour’s leaders had left social democracy for dead.

PT: I think Brown has decided – and Blair had done so already – that he is not a social democrat (they had both stopped being socialists a long time ago). I think what you see now is a very decent, “centre” government.

CU: When do you think Brown decided to become a “centrist”?

PT: I think its been creeping up on him. Afterall, he has never called himself a social democrat. I think he has a very strong moral conscience and a very strong wish to do the right thing. He’s a thoroughly decent man but I think he’s made an accommodation with a sort of capitalist truism: he thinks there is nothing you can do about globalisation except educate people enough to be able to cope with it; that government doesn’t have power to interfere with the market much beyond a bit of regulation here and there. He thinks you should have very flexible labour markets and that all you can do is “swim with the tide”, hope for the best and keep people in work. He doesn‘t really think you can stand up and say “this [inequality] is too much, this is disgusting”.

CU: But what about his 2003 “best when we are boldest, best when we are Labour” speech or his 2004 address to the Compass national conference, pointing out the limits to the market? Both sounded social democratic…

PT: …but that was when he wasn’t in power….

CU: … he was the Chancellor of the Exchequer!?

PT: The impression that Gordon and his people consistently gave was that he would be, if he could, further to the left. A lot of people at the time said “don’t be deluded, New Labour is their joint project”. I think that has been the case. Although their styles are different, the emphasises different and the things they care most about are different, basically they have made the same pact – they think there is not much you can do about the market or capitalism, and you had better just bow down in front of the City.

I think Brown subscribes to this view point for economic reasons – I don’t think its just a case of political cowardice. I think he thinks you cannot disturb the market and if you try to change it, it’ll just fall apart in your hands and you will destroy everything. I think he genuinely believes what we have now is necessary. For example, Brown admires Alan Greenspan [the former head of the U.S Federal Reserve] and thinks Greenspan is correct in his thinking, but Greenspan is very far to the right by any social democratic standard – Greenspan thought it was okay for Bush to make those huge tax cuts for the rich which resulted in quite serious economic trouble for the U.S.

What makes Brown a centrist is that he thinks you can be entirely up for the capitalist project, absolutely not for taxing people more (particularly the rich who would otherwise flee) on the one hand, and on the other hand you can try to do your best to help the people that get left behind.

CU: So you don’t think you are being premature by claiming that Brown has left social democracy behind?

PT: I would love it if he surprised me! I would love to be in a position to throw my hands in the air with joy and say I was wrong, wrong, wrong – he has now brought in a higher rate of tax for people earning over £100,000 to pay more, he has now decided there should be a quid pro quo for inheritance tax and he is now going to do something else about property (there are now no property taxes, not even after death tax in this country!). There are things he could do which would mean standing up to the top 10% of earners and saying “90% of the country matters more than you do”.

CU: But what do you say to people that say that if we go after the top 10% of earners in this way, it would only raise £4-5bn…

PT: …it’s a lot though…

CU: …okay, it would help us halve child poverty but is that going to change the world?

PT: But that’s pretty good and, okay, its not going to change the world but that’s whats so depressing about not doing it! It makes the right gesture, it brings in a significant amount of money but its not revolution; capitalism is not going to fall apart because you tax what, for most of those high earners, would be a pretty small sum of extra money.

We’re not talking about an 83% rate of income tax and its not that long ago that we were taxing people at 83%. Thatcher kept it at 60% for a hell of a long time until ’86 and there was a higher rate on savings. Capital gains were taxed at 40% and Nigel Lawson [Margaret Thatcher’s second Chancellor] put it there – he wanted capital gains to be taxed in the same way as income tax.

Brown has actually cut income tax from 23% to 20% and taken away the 10% tax band. He has shifted more towards indirect tax than direct tax. You couldn’t call these the actions of a social democrat. In the end tax and spend is what defines what kind of politics you have.

CU: I suppose he could shift the balance of tax from indirect to direct taxation, without increasing the burden, couldn’t he?

PT: He could certainly do that. I think he should increase the burden – we try not to call it the “burden” but a “donation to a good cause”. Paying your taxes is the most communitarian, citizen like thing you ever do and it’s about time people said it was a good thing …and told Lewis Hamilton as much! [who has just announced his relocation to the tax haven of Switzerland]. I am so disappointed in [Hamilton]…

CU: …as am I. For you, what are the three main outstanding challenges for this government?

PT: Hitting the child poverty target is really important and I don’t know how they are going to do it. I assume Brown will find a way of doing it and if he does find some way of raising the money to do it, I may at that point step back and reconsider what I have said about him. Part of what made me say “you are not a social democrat” is that on the current trajectory we are not going to hit that child poverty target.

CU: Do you think its just a matter of increasing spending on credits and benefits to abolish child poverty?

PT: You have to do that as well but it won’t be enough. You have to increase spending to hit your target but if you want, in the long term, to abolish poverty, you don’t just want people living on credits for ever. You have to do other things as well. Sure Start needs twice as much money really – Sure Start centres are loosing their professionals because they haven’t got the money. Extended Schools needs three times as much money too.

CU: On a lot of these measures – poverty in particular – ethnic minorities tend to come off worse, particularly women. Do you think this is a class related phenomenon or a racial issue?

PT: Well I think it’s a class thing but there are certain ingredients. Although money is important, its also about getting people the social programmes they need. There are certain categories of people, like Bangladeshi women, who need particular programmes, specific to them. So to say its “racial” in general, when racial groups are as different from each other, as they are from white groups, is not correct. When people talk about poverty, they often try to lump groups together which doesn’t make very much sense.

Once people are educated and get their 5 GCSEs, then everything begins to change and you see the disadvantage being compounded by – be they African Caribbean kids in South London or Bangladeshi kids in the East End – particular problems that are holding them back. I think it is easier to think about in the round if you try and identify it as a class thing.

I also think it is good for our ethnic minority communities to become more politicised in a way that sees disadvantage in class terms, as opposed to just seeing disadvantage in terms of your particular community. If the Labour Party were willing to indulge in a bit more class politics – if they were prepared to do a bit more rabble rousing on a class basis – Labour might be better at galvanising people who don’t vote to get involved.

CU: Do you think the lack of ethnic minority, front line politicians, affects the political agenda?

PT: Oh it does enormously, as does the lack of women. There is no doubt that agendas change with people. Its always the same – the first few who break through get this huge pressure on them. But once you get the weight of numbers – though each politician is different in their own way – that body of, for example, women changes the agenda

CU: And what about the controversial “shortlists” issue in relation to parliamentary candidate selection. You are on record as being in favour of all women shortlists. Are you an advocate of all black shortlists too?

PT: Absolutely, I would have all black short lists. I don’t see any other way to increase representation. Its been proved that you can’t increase representation without such measures.

CU: How can the government sell ideals of equality and fairness in an electorally viable way?

PT: I think it is much easier to sell if one puts forward a whole framework in which you argue that this country is not fair in all kinds of ways – not fair to the old, not fair to the young, not fair in its distribution of taxes, not fair in its distribution of opportunities.

If you do bring in the old in particular, you begin to get all sorts of people to look at the different ways in which different people get disadvantaged. In some respects the young get disadvantaged because of the weight of ever richer people with pensions – my generation. There is a great danger that as my generation retires, we are hugely wealthy to the great disadvantage of families with small kids who can’t afford mortgages and all of that – there is one form of imbalance. The other form of imbalance is the old and sick, who are not getting nearly enough spent on them in terms of their care needs.

I think one of the problems is the lack of knowledge. I’ve been doing some research on this for a book I’m writing. It is quite extraordinary how nobody knows what anybody else earns – nobody knows where they themselves stand on the earnings spectrum. So you get this pathetic thing where, of the top 10% of earners, only 40% of them put themselves there and the other 60% put themselves somewhere near the middle. And the same is true of the poor, they put themselves up to near the middle.

Everybody knows someone richer or poorer than themselves and so they all think they are much more middling than they are. I think if you could only try and communicate politically what the actual distribution of income is (across the ages, across occupations etc) and then show the trajectory of the way things have been going, I think you can persuade a whole lot of people that not only is it not fair, its not that its always been unfair, but its got a lot more unfair and that unless we do something about it, it is going to get a whole lot worse still. You say “is this the way you want it? Think about your children, your grandchildren, your granny and then think about how we can rebalance this”.

I think the framework of fairness is a perfectly good envelope in which to put all kinds of policies in which all sorts of people say all kinds of things and they don’t just say “I’m not going to give anything to those scroungers on benefits” – you can begin to make the argument make a bit more sense.

CU: Who do you see as the remaining forces of “the Left” in the Cabinet?

PT: I think a whole lot of them individually are left, perhaps apart from the likes of John Hutton and a few others, but somehow collectively they aren’t. If you talk to the younger lot – both Milibands and Douglas Alexander – they are identifiably of the left.

Harriet Harman and some of the other former deputy leadership candidates in the cabinet [Peter Hain and Hilary Benn] certainly are social democratic. I don’t think they were just saying the social democratic things they were saying during that contest to garner votes. I think for the first time they felt they were off the leash and able to say what they thought.

You sit down with almost any Labour MP or any Labour person with talent and you will find their heart is in the right place – they believe in social justice, that’s what makes them get up in the morning. But somehow or other there is something about the mechanism of collecting people together in the cabinet which produces this sense of panic, particularly when you are being lobbied by lots off extremely right wing people (the City, business etc.) who are telling you “if you touch this, it’ll all fall apart”, and they loose their nerve.

CU: Who are the two you’d mark out as future leaders?

PT: The two Milibands. I think they are both great. Which Miliband is better? Ed is the more radical but as he moves up the echelons, we may well find he gets more cautious. David is pretty good too.

CU: To win the next election, what one thing does Labour need to do?

PT: Something extraordinarily bold that says we are for social justice which could encompass a whole lot of different things…

CU: …will that win votes?

PT: Yes, because I think that cowardice doesn’t. I think we’ve reached a point now where you win respect – and Cameron has won quite of lot for doing this – for doing things which seem, from your perspective, scary and brave.

I think that if Gordon Brown could do one really bold thing that seems to symbolise fairness and people knew he was taking a big risk – which takes “courage” (something he has written about) – I think he could earn that respect ….even from people that didn’t want him to do whatever it is, be it pay more taxes or something amazingly green.

If he did this people would say “here is a man who is standing up for what he believes in”. If you do one really good thing like that, somehow other things coalesce around it. If you yourself sees that by doing that bold thing, the ceiling hasn’t fallen in, may be it encourages you to start doing more things like it, but Brown hasn’t tried this yet.

CU: Thanks so much for talking to TMP Polly.