Categorically not declaring his leadership a la Diane Abbot, Liam Byrne gave a speech at Demos today, centred on how Labour needed to prepare for a “full on fight at the centre of British politics”.

Byrne is sold on the coalition. He believes that “a meeting of motives has very quickly become a meeting of minds and is now fast becoming a merger” and that Cameron will use the coalition to complete a “liberal makeover”.

The former Chief Secretary to the Treasury spoke at length on the economy and the community admitting “I think we were right on some things but on others we were wrong”. He wants clear answers and community involvement in order to get the Party back in power.

One thing Byrne thinks was wrong was the number of people who went back to the same refrain: “I work hard, I pay taxes, I’ve put my dues in but when I’ve asked for help I often put that help beyond reach.” It is these people that Byrne believes have been lost by Labour.

However, as Demos Director Richard Reeves' pointed out when Byrne spoke about Labour’s need to reduce the poverty gap, the party may run into a logistical problem in trying to appeal to these voters. By making a conscious effort to help the 5.3 million people who earn 60% of full time minimum wage, can Labour win back those who “feel squeezed.”

The battle for Labour’s leadership is now fully underway and Byrne has not “made up his mind up” about who to support. Will they be “going back to the organising positions?” as he hopes? We’ll know in time for party conference.