Labour blames humiliating poll defeat on war backlash

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Senior Labour figures blamed a backlash against the war in Iraq and the aftermath of the conflict yesterday for the party's humiliating defeat in the Brent East by-election.

MPs urged Tony Blair to change his policies and style of government, with some warning that the party could lose power at the next general election despite its majority of 163 in the House of Commons.

A senior Labour source told The Independent: "There was a combination of factors but they all relate to Iraq - the war itself, the failure to find weapons of mass destruction, the death of David Kelly and the Hutton inquiry. We have had six months of background noise on Iraq. Without that, we would almost certainly have held the seat."

The Liberal Democrats were jubilant after overturning a 13,047 majority in one of Labour's safest seats with a 29 per cent swing. There was gloom for the Tories, whose embarrassing third place revived speculation about Iain Duncan Smith's future as party leader.

Labour's preliminary inquest into the party's first by-election defeat for 15 years, which will be reported to its national executive committee on Tuesday, will say that Iraq was the decisive factor.

A Labour official said that Iraq became a symbol on the doorstep in Brent for people who wanted to "give the Government a kicking". It was a particularly important issue for Muslims and AB professional workers, he said. Iraq had also undermined people's trust in the Prime Minister, another factor in Brent. A Blair aide said: "Iraq and the Hutton inquiry crowded out our message on, and the reality of, public-service reforms. People think the Government is not concentrating on what they put it there to do." And Ian McCartney, the Labour chairman, admitted that Iraq had caused "difficulties" for the party, which needed to re-focus on domestic issues. "The backdrop of the controversy surrounding the Iraqi conflict, in its many forms, made this the most difficult by-election Labour has fought in the last 20 years," he said.

Glenda Jackson, MP for Highgate and Hampstead, said: "There is a severe breakdown in trust in the Government rooted in issues such as the Iraq war, the death of Dr Kelly." In the public's mind, the Government was associated almost exclusively with Mr Blair.

Frank Field, a former minister for welfare reform, said: "We are in deep trouble and for the first time we see the prospect that we might actually lose the election on a record low turnout."

Stephen Byers, the former cabinet minister and a Blair loyalist, told GMTV's Sunday programme that "self-indulgence" could prevent Labour becoming "the natural party of government". Mr Blair had "to demonstrate he is absolutely focused on the domestic agenda" and stop handing down policies in a "top down" manner.

The message from the Blair camp was that the Prime Minister would change his style by listening to his critics and consulting more before deciding policies. Mr Blair will beef up the national policy-making forum to give it real influence over the general election manifesto. But the Blairites ruled out any substantial change of policy or direction.

Peter Mandelson, a close Blair ally, said: "There is no reason for a loss of nerve. We are travelling through a temporary post-Iraq, pre-Hutton tunnel. There is light at the end of that tunnel and the Government needs to continue to be fully focused on its domestic agenda, its programme for investment and the improvement of public services."

Mr Blair's official spokesman said: "The Prime Minister has made it clear we need to listen and explain. He outlined in his speech [on Thursday] his determination to ensure that the reform and investment programme in the public services continues; and his belief that it is beginning to deliver real change at street level.''

Sarah Teather, who becomes Britain's youngest MP at 29, hailed her 1,118-vote victory over the Labour MEP Robert Evans as a "vindication" of Charles Kennedy's opposition to the Iraq war.

Mr Kennedy said: "We're now on course, steadily and with perseverance, at least in principle, to overtake the Conservatives as a political party in opposition. They are the big, big losers in this contest without any shadow of doubt."

Mr Duncan Smith shrugged off criticism of his performance by Tory MPs. He said: "The lie that the Liberal Democrats are a moderate party of the centre was exposed like never before. I am determined that the campaign which won them Brent will lose them seats all over Britain at the next election."