Former Home Secretary Charles Clarke, however, warned against viewing the economy as a limited pie to be shared between the nation, claiming that dynamism in skills and education were far more important in ensuring equality than regulation of city bonuses. "The truth is we live in a far more competitive economy than at any time in our history and the solution is to build up a competitive skills base".

The annual Fabian Question Time event, held on the opening day of Labour Party Conference and chaired by the Observer's political editor Gaby Hinsliff, brought together Charles Clarke, Ed Balls, social exclusion minister, Hilary Armstrong, and the Fabian Society General Secretary, Sunder Katwala to answer a series of questions submitted by the audience.

Asked which one issue would be under explored this conference, but would be crucial in the next ten years, Ed Balls argued for Europe. "As globalisation becomes a reality, it'll become an increasing issue that we have policies that can cope with that change".

Pointing out that issues such as climate change and frequently didn't recognise national borders, Balls argued for putting Europe at the centre of future policy debates.

But it was not just the expediency of Europe in policy terms that made it an issue for the coming years, said Balls. "The fundamental fact about this conference, and this party is that we're not divided about Europe, unlike the Tories. These debates are going to be happening in Europe, the idea that you can withdraw and align yourself with the misogynists and extremists, is not credible, and over the next few years we need to expose that."

While Charles Clarke made the case for the environment, Hilary Armstrong also warned of the dangers of globalisation, particularly the effect it could have on the most vulnerable. The answer, she claimed, was to keep on reforming public services, personalising them to ensure that they engaged the most disadvantaged, enabling them to reap the benefits. "This is a debate we have been neglecting," Armstrong claimed, "and we can't afford to, or a whole generation will be wiped out."

Reiterating his comments at last year's Fabian/Observer question time, Balls called again for a "stable and orderly transition". Referring to the turbulent summer recess, he went on to recognise that "The last few weeks have not been stable or orderly, or good for transition". Like other senior Labour figures, Balls went on to call for a debate about the future direction of the party, but warned: "Don't use the idea of a debate to say that there is fundamental divide between New Labour and everyone else. There is no reason why mainstream Labour cannot debate without it being factional and divisive. This is far more important than when the handover takes place'.