Blair will use big poll lead to warn party not to relax

TONY BLAIR will go out of his way tomorrow to warn Shadow Cabinet members against complacency over Labour's record 33- point lead over the Conservatives in the opinion polls.

The Labour leader will tell his senior colleagues at a specially convened strategy meeting that Labour's lead could disappear in the run-up to the general election. 'All the levers are in the Government's hands. They could cut interest rates as easily as they put them up,' one Labour source said.

Opinion poll research for the Labour Party echoes Tory findings that, while the Government is deeply unpopular, Labour has yet to consolidate its hold over floating voters.

In an audacious shift of tone, Mr Blair said yesterday that it was Labour who understood how to create 'a modern, dynamic market economy'. Asked on BBC Radio's Today programme whether he was not saying that rather than change the economy radically, Labour would instead manage it better, Mr Blair said: 'Of course we can manage it better. And the reason we will manage it better . . . why we will create a modern, dynamic market economy in Britain is because we understand it.'

The problem with Britain, he said, is 'our industry isn't strong enough and we have neglected our manufacturing base, we are not investing in the skills and training of our workforce, and we have an outdated view, not just of people in the workplace but of the whole relationship between public and private sectors.

'Unless we are prepared to break through that, and get away from some of the old arguments which pit public versus private sector, and instead put them in partnership to regenerate British industry, then our economy will not be as dynamic as it needs to be.' That, he said, was 'the heart of the case'.

Tax cuts, at present, would be 'folly' Mr Blair went on. But unless the Government faced up to the real problems in the economy - structural unemployment and the failure to invest in capacity and skills 'then you are always going to be faced with the situation where you have ever shorter bursts of boom followed by ever longer periods of bust.

'If we are going to break through that cycle we need a new type of economics altogether, that gets away from the old arguments between public and private sector and so forth and constructs a proper partnership, a modern industrial policy, not just between government and industry but between both sides of industry.'

Successful businesses invested in the skills of their employees, Mr Blair added. 'They are not going for the low-wage, low-tech, low- skill approach - and that is no way for us to go either. And that is how Labour does understand how a modern market economy works and can make it work far better than the Conservatives.'

View from City Road, page 25

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