Leading article: Thanks Roy, it's time Labour started to argue

At last, a real debate about the big political questions. It has taken a while to come to terms with the fact that the future ain't what it used to be, but now the Labour Party is contemplating being in power for a long time. Possibly a very long time. And Lord Hattersley of High Principle is to be congratulated for opening a debate about the nature of this government and the beliefs of our Prime Minister.

Tony Blair dominates British politics in an extraordinary way. He may not be as forceful as Thatcher, as heroic as Churchill or as buccaneering as Lloyd George, but there is an almost total absence of ill will towards him in the country that is quite eerie. In less than three months since the election he has shown such consummate skill in public relations it is hard to find anyone who doubts he will win the next election, too.

Meanwhile the Conservative collapse has been so serious that no faction can blame another; the party is left without excuses and with only the haziest memory of its purpose. The strange death of Conservative England leaves 64 per cent of the population unable to put a name to a photograph of the leader of the Opposition. It is not simply that they do not know - it seems they do not care.

The Liberal Democrats, too, face an identity crisis as New Labour's smothering embrace gathers them in. At least Paddy Ashdown could yesterday list the reasons why, if his party did not exist, it would have to be invented: civil liberties, Europe and higher taxes for higher spending on health and education. But do not dwell on that list for long, or it will become evident what a thin excuse for a separate party it is; New Labour is perfectly capable of assuming all those mantles if it should choose.

Which is why, suddenly, Labour's internal debate matters. After 18 years in which the party's domestic arguments attracted attention in inverse proportion to the likelihood that they would affect anything in the real world, the debate launched by Roy Hattersley at the weekend will influence the course of public policy over the next 10 or 15 years. It reflects the ideological tensions at the heart of the Government.

The central text of Hattersley's criticism (it sticks in the craw to call such an insistent egalitarian "Lord") is what he calls one of Mr Blair's "admirably honest asides" when launching the draft Labour manifesto last year. The Labour leader said: "Consistent with the high-quality services we need, you should be able to keep as much of the money you have earned to spend as you like." This, for Hattersley, is the betrayal of the hope of greater equality that he equates with socialism. He cites the failure to increase welfare benefits or the state pension in the Budget as evidence that the new government is "not a force for a more equal society".

Hattersley's criticism is important, first because he identifies the break with the socialist tradition that New Labour represents, but secondly because, in so doing, he reveals himself simply as an advocate of a better yesterday. True, both Blair and Brown are surprisingly ambiguous about whether the better-off ought to pay a higher proportion of their income in tax simply in order to reduce the gap between rich and poor. But the New Labour analysis - that you cannot reduce inequality in the long term simply by transferring cash from one group of people to another - is right. If the causes of widening inequality over the past 20 years are examined, the part played by the tax and benefit system is relatively small. The growing earnings differentials between well-educated and poorly-educated workers and the changing distribution of work among families are more significant. Better education for all, an attack on disincentives to work in the benefits system and help for lone parents are the answers, and so far the Government has moved in the right direction. There are few signs that it will be as bold as it should be, but it is quite right that the Hattersley prescription should have been left behind.

The other front on which Mr Blair can expect trouble this summer is the trades unions. Hattersley makes the traditional labourist case that governments should intervene in industrial disputes on the side of the weak (workers) against the strong (employers). He makes much of his consistency over the years, but if the dinosaurs had been as consistent as this they would never have survived for as long as they did. Mr Blair is right to have moved with the changes in the labour market and to have abandoned the presumption in favour of one "side" of industry over another. Breaking the institutional link between Labour and the unions is simply a matter of catching up with this change, and Mr Blair must press ahead with it.

However, again the Prime Minister's critics have a point. If the Labour Party is cut off from the unions and seen as "a party of business" what is its ideological anchorage? Suppose the "Blair project" succeeds. Suppose this professional mood-sensing, vote-gathering machine spreads itself permanently across the centre of British politics. Suppose it absorbs the Liberal Democrats. Suppose it even hoovers up leftish Tories. Suppose it responds to all threats and challenges by co-opting them, drawing sharp disagreements into the smiling contentment of government by market research. The result will be no argument. And politics itself may wither.

There must be a strong temptation for Labour supporters to bow down before Mr Blair's astonishing electoral triumph. He may be more right-wing than they would like, but he has been more successful than they dared hope. Now, however, is the time to restore the party's habit of vigorous internal debate - the modernisers must win the argument rather than suppress it - and to put pressure on the Government to open itself up to pluralist debate. Roy was never much of a pluralist as deputy Labour leader, but by his late conversion to the merits of dissent he may do us all a favour.