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The New Britain: Smith's legacy hailed by Blair

THE PRIME Minister invoked the memory of John Smith yesterday as he said the people of Scotland and Wales had completed the former Labour leader's "unfinished business" by rejecting independence in last week's elections.

In a speech to Labour MPs to mark the fifth anniversary of Mr Smith's death in 1994, Mr Blair said of his predecessor: "He never believed that to be pro-Scotland you had to be anti-Britain, just as he never believed that to be pro-Britain you had to be anti-Europe." The people of Scotland and Wales had now shown they believed this to be true, he said.

Despite allegations that he has interfered in Labour's negotiations with the Liberal Democrats in the Scottish Parliament, Mr Blair appeared to acknowledge that he would not always get his own way in the new politics. "Devolution is a rejection both of separatism and of centralisation," he said. "It is the development of a strong, revitalised and diverse Britain, where government is close to the people."

Mr Blair announced that an annual John Smith memorial lecture would be held and that there would be a permanent recognition of Mr Smith in the new Scottish Parliament building in Edinburgh. He heaped praise on his predecessor, saying that he "would have been a great prime minister" and that "he gave Labour back its confidence ... and its will to win".

Mr Blair was joined at the meeting by Baroness Smith, the widow of the former leader, who said: "Today is a sad one for me in many ways, but I am delighted that the Labour Party has chosen to commemorate John's memory in this way."

Yesterday's anniversary was a sensitive occasion for Mr Blair, since former allies of Mr Smith have accused New Labour modernisers of trying to "airbrush" him out of history.

Although Mr Blair yesterday hailed Mr Smith's introduction of "one member, one vote" in internal Labour elections, at the time he felt that the party leadership should have further weakened the trade union block votes. Mr Blair also wanted to abolish Clause IV of Labour's constitution - as he did after succeeding Mr Smith, who had rejected the idea.

Mr Blair had doubts that Labour would win the 1997 general election under Mr Smith, according to Philip Gould, one of Mr Blair's closest advisers.

"He thought that there was an opportunity after 1992 to have a real symbolic break with Labour's past, but that it wasn't being grasped," said Mr Gould. Mr Blair felt that Labour was about to make the same mistake as it did at the 1992 election, by not showing the voters it had changed.