Inside Story: Killing the Clause: How Tony Blair and his closest advisers plotted their assault on the Labour Party's historic creed

IT WAS the most audacious move ever attempted by a new Labour leader, and it was the best-kept secret in recent political history. When Tony Blair stood up at Blackpool's Winter Gardens last Tuesday to begin a speech which would mark the end of Labour's hallowed Clause IV, he was well aware of the risks. So uncertain was he about how this would be received that he had rehearsed an additional passage to counter any hecklers.

In the event the extra paragraph - which challenged sceptics to justify Clause IV - proved unnecessary. Labour's army of minders had done their work well; the media's copies of the speech were held back until it began and even then the last three pages, which contained the bombshell, were distributed only as they were spoken. Few of the audience knew what was coming and when they heard it many did not immediately grasp its meaning; the loudest sound, said one MP, was that of pennies dropping. But then came a six- minute standing ovation.

Within 48 hours, however, this triumph was called into question when the conference voted, albeit narrowly, in support of a motion recommitting the party to the old Clause IV. Delegates left Blackpool knowing the Conservatives had been handed a propaganda weapon, but unsure what the week meant for Labour. Has the party embarked on another period of in- fighting, or has it merely heard the last roar of the dinosaur?

CLAUSE IV of the Labour constitution (its origins are described below) commits the party 'to secure for the workers by hand or by brain the full fruits of their industry, and the most equitable distribution thereof that may be possible upon the basis of the common ownership of the means of production, distribution and exchange, and the best obtainable system of popular administration and control of each industry or service'.

This has long had the status of a party creed. The left used it as a stick to beat successive leaderships thought too cautious in their approach to economic change, while many mainstream party members cherished it as a link with Labour's historic roots. But although the full text is vague and conditional, the Marxist character of the central phrase - 'the common ownership of the means of production' - has long been seen inside and outside the party as an electoral liability.

Hugh Gaitskell tried and failed to scrap the clause in 1959, and for 35 years no Labour leader repeated the attempt. Mr Blair's initiative, like Gaitskell's, has its origins in electoral defeat. In the aftermath of the 1992 rebuff three separate figures began to argue for the slaughter of Labour's most sacred cow.

The first was Giles Radice, MP for Durham North, who in the summer of 1992 published Southern Discomfort, a study of Labour's problems in the south of England. He conducted a poll among the crucial white- collar and skilled manual voters and concluded that a 'new Labour Party' should appeal to these 'aspiring' voters who did not consider themselves working class. That, he concluded, meant rewriting Clause IV.

Mr Radice was not alone. Jack Straw, the party's local government spokesman, had come to the same conclusion. Although John Smith, the party leader, urged him not to provoke a debate on such a thorny issue, Mr Straw discussed the idea with other senior figures including Mr Blair and Gordon Brown, both of whom supported him privately. Neil Kinnock's thoughts were running in the same direction. He had backed away from such a reform as leader of the opposition but, out of office, he anonymously drafted part of Mr Straw's pamphlet, Policy and Ideology, published in March 1993, which called for abolition. Then in February 1994 he went public in a television series, the Future of Socialism, which said the clause should go.

After the death of John Smith in May, Mr Straw ran Mr Blair's leadership campaign and again they discussed Clause IV. Mr Blair and his ally Peter Mandelson, MP for Hartlepool and former director of communications, agreed that, when asked in interviews about the issue, Mr Blair would be non- commital but should leave the door open to reform.

Mr Radice, meanwhile, was planning another pamphlet and contacted Mr Blair - the new leader - to ask if there were any themes which the new high command wanted to see explored. Back came a rather unspecific instruction: the leader wanted no complacency. Again Mr Radice called for the abolition of Clause IV and this time he sent Mr Blair the raw data from his research among voters in Slough.

IT WAS in August, in the summer heat of the Dordogne, that Mr Blair's determination to scrap Clause IV crystallised. The Blair family stayed with Alastair Campbell, a former political editor of the Daily Mirror and a columnist on Today. During the holiday the Labour leader repeated an earlier offer to Mr Campbell to become his press secretary. Setting out his plans, he said he wanted to push the reform of the party further than his predecessors - by tackling Clause IV. Mr Campbell took the job.

The next step was more difficult. On his return to London last month Mr Blair broached the subject with his deputy, John Prescott. Mr Prescott greeted the idea cautiously, stressing how difficult it would be for him, as standard-bearer of the centre left and the unions, to support such a change unless safeguards were given. He did not, however, reject the idea outright.

By now a small group of people close to Mr Blair were aware of the plan. They included Mr Brown, Mr Prescott, Mr Mandelson and several members of Mr Blair's office: Anji Hunter, Mr Campbell and David Milliband. For this group these were jittery weeks. One insider said: 'I woke up every morning scared to read the papers, convinced that this would be splashed all over the Guardian.' It never was.

Just how far Mr Blair should go in his assault on Clause IV remained undecided until the eleventh hour. The speech went through 16 drafts, and it was the conclusion that caused the difficulty. Rarely can three pages of text have been fought over so closely. Mr Blair set the framework, but the writing was done by Mr Milliband and Mr Campbell. As late as Monday morning - draft 13 - vital encouragement came from an unexpected quarter: Mr Prescott. Mr Blair should make his objectives clear, said the deputy leader. It would be ridiculous to call for a party which would 'say what we mean and mean what we say', and then go on to do the opposite. On Monday night Mr Blair brought Mr Kinnock in on the secret; the former leader was, said one source, 'exhilarated'. But when Mr Blair rose at 5am on Tuesday in his suite at Blackpool's Imperial Hotel, he was still unsure what words would be used. Two hours later Mr Prescott and Mr Campbell met in the Imperial.

In the meantime Mr Blair ensured that a hint of what was to come reached several union bosses, including John Edmonds of the GMB and Bill Jordan of the AEU. He also personally briefed Margaret Beckett, the former deputy leader, Larry Whitty, the outgoing general secretary, David Blunkett, the party chairman, and Robin Cook, the most senior party sceptic.

But it was not until after a final, lunchtime meeting between the Labour leader and his deputy that the wording was fixed. Mr Prescott then sat down with Mr Campbell and Pat McFadden, from Mr Blair's private office, in a sideroom off the leader's hotel suite and a formula was thrashed out. The speech would highlight John Smith's big reform, one member one vote, and it would contain a commitment to public ownership of several industries including the railways and the post office. But when it came to the promise of further party reform, Clause IV would not be mentioned by name. Instead there was a promise to bring forward 'a clear, up-to-date statement of the objects and objectives of the party' for debate in the coming months. This was a tactical device: if the words were not used there would be less danger of heckling and the leadership would have more options if the reception was poor - briefings to journalists, for example, could be more conciliatory.

In the event the immediate reception could hardly have been better. Mr Blair came off stage elated by thunderous applause and said calmly to his team: 'Right, that went very well. What do we do next?'

IT WAS the secrecy of the operation that prompted Thursday's setback. Mr Blair's team were well aware that there was a motion ('composite' in Labour jargon) on the agenda for Thursday in support of Clause IV, and that this would be debated. The agenda had been settled weeks earlier, and there had been no way to remove the motion without arousing suspicion. One source said: 'It simply wasn't worth the risk of moving that composite and thereby letting on what was in store.' The proposer, it was thought, might just be persuaded to withdraw the motion.

By now the conference had already seen ominous signs of left-wing restlessness. Delegates had applauded Arthur Scargill warmly on Monday, and party members had voted Dennis Skinner and Diane Abbott on to the National Executive Committee. There was no agreement on the significance of these developments. One moderniser dismissed it all as sentimentality - 'a bit like keeping the family dog when it's old and sick, even if it's messing all over the carpet' - but the dog still had a few teeth.

By Thursday, two days after the big speech, many delegates were angry and bemused. Mr Blair's scriptwriters, it seemed, had been a little too clever. Delegates felt, according to one MP, 'as if they had been shafted. They had been wowed by the speech, but then found themselves applauding something whose implications they hadn't understood.'

The hard left, moreover, had been quick off the mark in organising a fightback. Even as delegates streamed from the hall on Tuesday afternoon, pickets were in place urging them to sign a petititon demanding no change in the party constitution. Now attempts to persuade Jim Mearns, the delegate from Glasgow Maryhill, to 'remit' or effectively withdraw his composite failed.

So the debate took place and, by a very narrow margin, the leadership lost. By Friday morning, as Mr Blair's team winced at the sight of headlines about the old Labour striking back, the streets outside the Winter Gardens were thronged with militants handing out copies of a Socialist Campaign bulletin inviting activists to take part in the inaugural conference of the 'Defend Clause IV Campaign' hastily called in London for 12 November.

A Campaign Group statement warned: 'If Tony Blair and his 'modernising' friends believe that they can rely on the honeymoon period for the new leadership to change the party from one of social change into one of status quo, they have miscalculated. The vote on Composite 57 showed how ill- judged was the party leader's unexpected proposal to tamper with the basic plank of the party's constitution.'

But the victory for the traditionalists was more apparent than real. The left is poorly organised and its old machine is unable to deliver votes the way it used to. The Campaign Group can muster no more than a dozen MPs. Peter Hain, the MP for Neath, seemed at first to be the most vocal of the parliamentary figures who were unhappy about the proposed changes. But yesterday he appeared more circumspect: 'I think the majority mood is, let's seize the opportunity provided by this debate and consultation and achieve a clear commitment to public ownership, but not of the old state-socialist, Morrisonian nationalisation model.' There is nothing there that Mr Blair need feel uncomfortable about.

The unions are more important, since they continue to wield 70 per cent of the conference votes, albeit in a tastefully redecorated version of the block vote. Many union delegates who voted against Mr Blair only did so because they had been mandated to do so long before the conference.

As last week ended, the big trade union battalions sounded a conciliatory note. The Transport and General Workers is clambering aboard while John Edmonds of the GMB urged Mr Blair to move quickly and decisively on the formula to replace Clause IV. 'I hope he comes back with something well before December,' he said. 'For party morale and reassurance we really need that form of words very quickly indeed.'

The precise form of the words to replace Clause IV will be critical. Even right-wing Labour loyalists such as Paul Gallacher, the electricians' leader, insist on retaining a commitment to public ownership in some circumstances. He argued: 'Public ownership and control must be in there. We are all agreed that we don't want to nationalise everything, but I want to see the words public ownership and public control in the revised statement.'

Beyond the wording, Blair must also address the unions' unease about the shift of public services into the private sector, and the blurring of the divide between the two. Rodney Bickerstaffe, leader of the biggest union, Unison, said: 'Public services must remain in public hands: the NHS, local government, the Post Office, the railways,' he said. 'We were reassured from the platform that these areas will continue to be publicly controlled. It is all a matter of degree.' The 'spirit and intent' of the old Clause IV, he thought, might be carried forward in more modern words.

Mr Scargill may have made a lot of noise at Blackpool, but his NUM delegation could be comfortably accommodated in a taxi. The big unions of the kind led by Mr Bickerstaffe and Mr Edmonds carry the clout.

Hence the Blair team's optimism that they can succeed where Hugh Gaitskell failed 30 years ago. True, Mr Blair may still have to tread carefully. While the unions seem ready to stomach a more 'modern' statement of political objectives, they are non-committal about the prospect of a 'consultation ballot' of the membership some time in the new year. Such a referendum would certainly head off, or at least minimise the impact of, a summer round of trade union conferences with activists attacking the Blair package. On the other hand, it would arouse fresh fears of an 'individualised' party in which the leader ruled by periodic ballots, thus sidelining the conference - and the unions.

Yet Mr Blair has entered the battle on favourable terms. Mr Prescott is full square behind him and Mr Cook patched up his differences with the Labour leader over a drink on Thursday. As a result Mr Cook will aid Mr Prescott with the consultation exercise.

A triumph at next year's conference looks almost certain, and the Blair revolution continues. According to one MP the lesson is that leading Labour is like driving a bus: 'put your foot down and the passengers sit tight, it's only if you stop that they get out and start arguing with the driver'.

(Photograph omitted)