For Labour and the country, there really is no alternative

When Mr Blair uses this mantra, he is being more literally correct than Mrs Thatcher was 15 years ago
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The Independent Culture
IF TONY Blair feels even slightly nervous, he is making an outstanding job of concealing it. In his interview with The Independent at Chequers on Friday, he could hardly have been more relaxed, focussed, confident, or New Labour. Whenever you think that Mr Blair might be about to make a concession to comfortable, conventional Labour wisdom, he does just the opposite. Ask him, for instance, whether he agrees that taxes may have to go up in order to meet the need for better public services, and he says thathe is hoping further to reduce them.

In a less strategic Prime Minister this behaviour might seem positively reckless. On the face of it, this conference, despite the changes which will rob it of much of its old time theatricals, promises to be the tensest Mr Blair has faced since becoming leader.

This is not merely because no one quite knows how the new structure will work. Not only are even rank-and-file loyalists worried about jobs and the high level of interest rates; now the outcome of that deeply symbolic annual event, the elections to the constituency section of the National Executive Committee have apparently delivered four seats for left-wing critics, and only two to Blairite loyalists.

Not only does this amount to a public kick at Mr Blair from his own party; (though a limited one given his supremacy over the rest of the NEC) it also casts doubt on the once widespread assumption that the more you let members have a say, the more they will be inclined to back the leadership against its critics on the left. It also casts doubt on the constant gibes about Mr Blair's alleged control-freakery; from the Scottish parliament to Wednesday's NEC results, most of his pressure points, such as they are, stem from being more, not less, democratic than his predecessors.

So as the pound soars, and the Prime Minister warns that "There is No Alternative", are we beginning to see, in embryo form, the tensions over economic policy and the ideological divisions which dogged, in their first two years, the Labour governments elected in both 1964 and 1974 - and which, albeit in very different ways, blew them fatally off course?

The answer - disappointingly for those who cannot enter the Winter Gardens without hoping to see a Chancellor bayed at by enraged delegates - is a resounding "No".

Consider the National Executive elections first. You might think that Drapergate was history. But it is quite a big part of what has come back to bite the leadership. Certainly the most ultra left of the NEC candidates, Liz Davies, fought as a member of the Grassroots Alliance on a prospectus which concealed her true political identity. The decision of The Guardian, in its capacity as the Labour Party's house journal, to back the dissidents did not help. Nor did the belated and pretty hamfisted attempt to promote a rival slate from headquarters.

One or two of the strongly pro-leadership candidates would almost certainly have done better without it. But Derek Draper has probably played as big a part as anyone in ensuring the left-wing victories which will be announced this week. His foolishly boastful taunt that there were only 17 people who counted in the government annoyed party members; much more, for example, than the Ecclestone affair. Party members understand the need to attract funding, however messily. What they deeply dislike is, first, that greedy individuals can pocket large sums just because they have good connections in the government; and second, the notion that a Labour country is run by a clique of mainly unelected individuals rather than the elected MPs and Ministers they worked to see in power.

In future, loyalists should run an earlier, and more transparent, campaign from the bottom up. But the other lesson is clear. To cut - or at the very least formalise - the links between ex-Labour lobbyists and their old muckers in the government; and to curb the euphoric arrogance prevalent among a few of the government's unelected advisers.

This is something several light years short of an ideological crisis. The government is about to have its mettle tested on several fronts; ministers. particularly these ministers, love to give the impression that they have fingertip control; in fact they are peering as fearfully as any of us into a murky future trying to discern the shape of events over which they have barely any. Will the hulk that is the Japanese economy be refloated? Will the US Federal Reserve Bank help to trigger a world recovery? Will the Euro fly?

All this when the strains already imposed by the Bank of England's war against inflation have already caused anxiety in boardrooms as well as unions; among the Cabinet as well in local Labour ward meetings. Tony Blair told us on Friday that it was a "myth" that the Bank did not take into account the real economy as well as the inflation forecasts.

That has not stopped Peter Mandelson, the new Trade and Industry Secretary from arranging a meeting with Eddie George, the Bank's Governor, for an exchange of views on what is happening in the wider economy. But that is not quite the point. The fact is that when Mr Blair uses the TINA mantra he is actually being more literally accurate than Margaret Thatcher was when she coined the phrase more than 15 years ago.

For a start, when Mrs Thatcher used the phrase, a sizeable and quite weighty minority in her Cabinet profoundly disagreed with her. At the recent Chequers "awayday" for the Cabinet it was Clare Short, no less, who commented that she could never remember the party or the Cabinet itself being so ideologically united.

On the central and boldest economic stroke the government has made - making the Bank independent, a retreat is out of the question. Can anyone in the Labour Party imagine what life would be like if politicians were now taking the blame for higher interest rates.

One of the most eloquent summaries of Labour's achievements so far comes from a recent lecture by Chris Mullin, not exactly a leadership stooge: welfare to work, real term increases of around five per cent in health and education, national minimum wage, the Crime and Disorder Bill, prospect of peace in Northern Ireland, land-mine ban - not a bad centre-left record. The government is also largely keeping its promises which is why delaying a PR referendum may be more damaging than some senior Party figures think.

None of this means that life is going to be easy over the coming year. The press, for example, may have been largely neutralised, compared with their counterparts in earlier Labour administrations. But they are not, and perhaps never will be, the cheerleaders for Mr Blair as they were for Mrs Thatcher, carrying her through her worst period, and staying "on message" whatever the temptations not to. Some in the party may indeed be tempted to lose their nerve if the government starts a serious slump in the polls. But I do not think the Prime Minister will be hurling himself off the Big One when the NEC election results are read out on Wednesday.

The Rt Hon Jack Straw, Ken Livingstone MP, Trevor Phillips and Anne McElvoy will debate "What's the Big Idea" tonight at the Labour Conference fringe