The crisis is not about 'Bev'. It's about Tony's confidence in David

To understand the real significance of the resignation of Beverley Hughes, let me take you back to 19 October 1995. The House of Commons was full and raucous. The career of the Home Secretary, Michael Howard, was in doubt. Few people understood much about the details, but they knew his defence rested on a legalistic distinction between operations and policy. He would take the rap for policy failures, but prison escapes - there had just been one at Parkhurst - were operational matters for prison governors. It sounded as if he were blaming his officials and refusing to take responsibility for his own department.

At the start of that week, he had been humiliated by Jeremy Paxman on Newsnight, asking the same question 14 times in the most famous interview of his career. Now, just before he got up to make his case, Chris Mullin, the brainy Labour MP, reminded the House that William Whitelaw, when he was Home Secretary, had offered to resign when Buckingham Palace security was breached by Michael Fagan, the man who sat on the Queen's bed. "Was Lord Whitelaw wrong?" Mullin asked rhetorically. "Could he have said it was an operational matter and none of his business?" The trap was set. All that was required was for Jack Straw, the shadow Home Secretary, to finish Howard off. Which he failed miserably to do.

"Cheered on by Tory backbenchers, Mr Howard had almost completed his brutal, lawyerly demolition of Straw and Labour's case when Tony Blair intervened," reported The Independent. Blair, who had been Leader of the Opposition for little more than a year, made a silly mistake. Visibly frustrated by Straw's failure to drive the stake through Howard, he tried to do it himself. Howard easily brushed him off, knowing that his intervention only emphasised Straw's embarrassment. (Straw later put his poor performance down to his deafness in one ear.)

For the Prime Minister, the present crisis over east European visas must bring that hideous moment flooding back. The crisis is not about Beverley Hughes; it is about Blair's confidence in David Blunkett. And Blunkett's big problem, just as it was Straw's problem before him, is that the Prime Minister thinks he could do a better job of the home affairs portfolio than the man he appointed to it.

It should be remembered that, for Blair, his period as shadow Home Secretary, 1992-94, was the shining moment of his career. In less than two years, he turned round the perception of Labour as soft on crime and turned himself from callow wannabe to candidate prime minister.

Blair has an almost infinite confidence in his understanding of the politics of social issues; and this is not wholly unfounded. He knows how dangerous people's attitudes to immigration could be to the Labour Party. He does not need "Mystic" Greg Cook, the party's polling expert, to write him memos showing that the Conservatives are 20 percentage points ahead on immigration issues. Nor does he need summaries from Philip Gould, his personal opinion pollster, of the transcripts of focus groups to know what people think.

He explained his strategy with disarming clarity at his monthly news conference last week. "I understand the worry. The worry is: 'I am playing by the rules, I am working hard, I need access to decent services, and here is a group of people that don't play by the rules and come in and take what is rightfully mine.' That is how people feel out there, and what I am trying to say to people is: 'Look, there are abuses within the system. We need to deal with those abuses. But there is also a large immigrant population stretching back through the generations that makes a contribution to this country.'"

That is a better guide than any of the more official explanations for Hughes's departure. She did not resign because she had forgotten a letter she had received a year before. If that were the rule, no minister could last longer than 12 months. She resigned because she failed to follow the prime ministerial script. She did not say, "There are abuses within the system", she said that there weren't. Then she said they were a "rare and untypical" freelance operation by middle-ranking officials in Sheffield. Then she said that "accelerated clearance" to clear backlogs was what all governments did.

Such a wilful refusal to "understand the worry" of the voters was noticed in 10 Downing Street - and by the Conservatives. David Cameron, the Tory frontbencher who is next prime minister but three, observed with mock sympathy: "If the Minister had come to the House to apologise for what had happened, announce a proper inquiry and talk frankly about the problems of dealing with backlogs, the Home Office would not be in the mess that it is in now."

Instead, Hughes was brought down by the killer email from Bucharest. A simple allegation, not yet answered by the Government, that the consulate's objections to visa applications that appeared fraudulent were overruled by the Home Office. And David Davis, the most effective shadow Home Secretary since Blair himself, had his scalp.

Much of the press in this country is hysterical about race and xenophobic about foreigners, but it was not racism or xenophobia that drove Hughes out of office. On the contrary, she went because she had done nothing about abuses brought to her attention more than a year ago. Her defence of the system amounted to: it's in a mess but it doesn't matter because we need cheap labour. The best way to undermine the case for a liberal immigration policy is to administer it incompetently.

Indeed, it was dishonest of Blair to "warn" the Opposition about the language it uses on these "sensitive" issues. And the Prime Minister knows it, which is why he was so cross.

For Blair, this is all about competence. His argument, which is broadly right, is that it is only after the Government has demonstrated it is in control of immigration that it can convincingly make the case for its benefits. And he is a technocratic, managerial Prime Minister, who believes no problem is too difficult to be solved by the sustained application of prime ministerial - or ministerial - attention.

Which is why the present crisis is so serious for Blunkett. He has not delivered, just as Straw did not deliver. When Straw was Home Secretary, for Blair's first four years in office, he failed to gain control of asylum applications that had begun rising under the Tories. The system was only "sorted", as Blair put it last week, because he took over and sorted it. The other routes of immigration remained the Home Office's responsibility and it has made a mess of them.

Now that Blunkett's shield has gone, he has to get a grip, stop seeming to blame everyone else and demonstrate competence. Or Blair may be as ruthless with him as he was last week with the unfortunate Beverley Hughes.