`Defining moment' as Blair wins backing for Clause IV

Labour's long march to electability yesterday passed a critical staging post when Tony Blair secured overwhelming National Executive Committee support for a new Clause IV embracing "the enterprise of the market and the rigour of competition".

Calling yesterday's 21-3 vote a "defining moment in the history of my party", the Labour leader crossed the last hurdle before the special conference on 29 April which is now expected to endorse a new Clause IV pledging to seek a "dynamic economy, serving the public interest" with"a thriving private sector and high quality public services".

Mr Blair at last unveiled his draft 345-word summation of what the new Labour Party stands for yesterday. On the central question of public ownership, the current Clause IV commitment to "common ownership of the means of production, distribution and exchange" is replaced by an economy "where those undertakings essential to the common good are either owned by the public or accountable to them".

The draft had an easy ride at the NEC, with only three small textual changes, and the Transport and General Workers' Union abstaining. The TGWU, the largest union affiliated to the party, has been a resolute defender of the existing Clause IV, but Dan Duffy, one of its two representatives on the NEC, said afterwards that the union "might" vote for the new clause next month. Representatives from the GMB general union, the public services union, Unison, and the Manufacturing, Science and Finance union also abstained, on the grounds that they were consulting their members, although all are expected to support Mr Blair's draft.

Apart from left-wing MPs Dennis Skinner and Diane Abbott, the only vote against Mr Blair's new draft was that of Vernon Hince of the Rail, Maritime and Transport union, which is fighting rail privatisation and is dissatisfied with Labour's unwillingness to promise to return the railways to public ownership.

John Prescott, who campaigned for the leadership last year on the slogan "full employment", denied that the absence of those words from the new clause was a setback for him. "It goes beyond full employment, because it talks about `the opportunity for all to work' but also `to prosper', so it's not at any cost, it's not cheap skivvy labour."

Tom Burlison, of the GMB, which 10 days ago demanded that the phrase be included, said: "I think full employment is there. In my view there is enough there for my own executive council to recommend acceptance."

The new clause was attacked from both left and right. Tony Benn, a former member of the NEC, said: "Labour's heart is being cut out and handed to the City. This is really our promise to the City, `Don't worry, we will never interfere with your right to run the economy'."

Michael Portillo, Secretary of State for Employment, said: "Weasel words will not disguise the truth. Labour's socialist instincts remain. They want higher taxes, more spending, and more government regulation and intervention."

The Defend Clause IV campaign said: "There is little in Blair's proposed new clause to which Liberal Democrats or even many Tories could not subscribe."

This was contradicted by Mr Prescott who told Sky News: "One thing we're sure of is that Mr Major couldn't sign up to it."

Sources close to the leadership expect a "rough ride" in the next seven weeks over what it sees as the "toughness" of the economic section of the new clause, which accepts the "enterprise of the market and the rigour of competition" - even if combined with "the forces of partnership and co-operation".

Mr Blair told a news conference: "Whenever we have changed, we have told the public we have changed, and yet sought to assure the party that we have not changed. Far from being ashamed to admit change, I want the public to know of the changes we have made."

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