Labour leadership hopeful Andrew Little would be the first List MP to lead the Labour Party if he is successful in his bid as leader, but says that is not necessarily damaging to his chances.

Mr Little is the last into Parliament on Labour's List and has now been beaten twice in the New Plymouth seat by National's Jonathan Young, who increased his majority from 4,000 to 10,000 this election.

Mr Little conceded that was not a good look but the seat had swung to National long ago back in the 1990s. "I beat myself up for a period about that. I've kind of got past it. We've got a big task ahead of us in terms of rebuild and I think a List MP who doesn't have the extra responsibilities of electorate and constituency work is freed up a little more to pick up those challenges. So I don't think it's an impediment and it's potentially an advantage."

Mr Little said his background as party president meant he was the best option to unite the party and caucus and to get back voters he claimed were 'scared' by Labour in the last two elections.

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Mr Little took care not to directly criticise David Cunliffe or Grant Robertson. However, he indicated leadership and morale were issues. He said talk of factions and splits within Labour's caucus were exaggerated.

"But I do know having now had three years in that caucus and from feedback from caucus colleagues, we operated as 34 individuals in the last three years and we don't want to operate as 32 individuals for the next three years. So it is about esprit de corps. It's about having a uniting purpose and getting everyone behind that. That's crucial." He pointed to his previous role as party President which gave him "the track record and the skills" to deal with Labour's internal issues.

He said there were clearly "some strains" between the caucus and wider Labour party membership which his experience as party President would help him address. Labour also had to work out how to get its voters back, including reviewing policies voters were "scared by" or did not understand - such as the capital gains tax, raising the retirement age and the NZ Power proposal to help reduce energy prices.

"The feedback I've had was that a lot of big policies that people were a bit scared by, confusion about what coalitions might look like and in the end I think the total proposition was just a bit too scary for people and they went elsewhere."

He said Labour also had too much policy - it had released more than 120 separate policies in the last election. Many of those were small - such as banning trucks using the passing lanes on large motorways.

He said that was not intended as a criticism of Labour's current finance spokesman David Parker who had done most the work on the policies in question. Nor did it rule him out staying in the finance role if Little was leader. He said he had supported Labour's policies and all of caucus had signed off on the manifesto. "But the reality is the feedback you get on the street and on the doorstep is they are not very popular. We need to have a look at those things."

"We all have to be honest and bold enough to say there are some things we have been doing that haven't been the right thing to do. Amongst those things are some of our policies. I think David Parker is big enough and bold enough to be part of that process that asks questions about it and challenges it."

Mr Little would not say how much support he believed he had in caucus or name the two MPs who had nominated him. "He said he had spoken to all but two of Labour's caucus members. "They were very constructive conversations. I wouldn't have put myself forward if I didn't think I could offer something in terms of caucus leadership."

He had also spoken to Mr Robertson and Mr Cunliffe but would not say whether either of those had tried to persuade him not to stand.

If Mr Little was to become leader as a List MP, It would not be completely without precedent - the only List MP to lead National so far has been Don Brash - who took the party from a disastrous 22 per cent result in 2002 to 39 per cent in 2005 - and within a whisker of Labour, although it was Labour who formed the government that year.