Prescott defends private-funding paper: Labour 'spin doctors' and 'priests' attacked. Colin Brown reports

BATTLES over Labour's traditional commitment to public ownership were dismissed as 'irrelevant' yesterday by John Prescott, its spokesman on employment.

Launching a discussion document proposing private finance for public services ranging from health to the inner cities, Mr Prescott accused some in the party of acting like 'priests' over the commitment in clause four of the party constitution on public ownership.

'Since we don't believe everything should be publicly owned, why do we want an argument about it? Why do we want a holy war about it? If you were to ask me, 'Should we take all these industries into public ownership?', I am bound to say we are not a party of confiscation.

'I am more concerned about getting people back to work than compensating some of those industries. But that does not rule out clause four. It is only people who want to get into being priests in their later life who want to get into this argument,' he said.

Labour remained committed to retaining public control over British Rail and the Post Office, which would be given greater freedom to raise more private investment. Mr Prescott blamed 'spin doctors' - Labour aides - for the way in which the document had been presented as a move to abandon key policies.

However, it was one of his own senior colleagues who described it as stealing a march on the Tories. Mr Prescott said 'the spinners' had thought of a phrase to present it as more Thatcherite than the Tories.

Stephen Dorrell, the Financial Secretary to the Treasury, sought to embarrass Labour by welcoming the document as clear endorsement of government policies. 'They have changed their mind. They are expressly in favour of the private sector delivering public services, locally managed services, trust hospitals - all the things they have been arguing against for 14 years,' he said.

The document - jointly signed by Mr Prescott, Gordon Brown, the shadow Chancellor, and Robin Cook, Labour's spokesman on trade and industry - will be debated at a London forum on Thursday. It endorses a policy for transport pioneered by Mr Prescott before the 1992 general election.

It proposes setting up a task force to overcome the main obstacles to more private investment in public services, including the allocation of risk. Treasury controls on overall public expenditure would remain, but some forms of private sector investment which would carry risk, would not count against the public sector borrowing requirement.

'Our concept of public-private partnerships is ambitious and expansive. We see the scope for new partnerships not simply in the provision of rail and infrastructure, but also in inner city and regional developments, in training, in housing, in child care and in defence diversification work,' the document says.

It added that there was limited scope for private finance in the NHS and education.

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