[A-List] UK state: no retreat, no surrender!

["Michael Keaney" <michael.keaney@xxxxxx>]

New Labour wisdom: if it ain't broke, try harder.

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The message from No 10: we'll engage, explain and listen but...

Retreat would be suicide

Michael White and Patrick Wintour
Wednesday September 17, 2003
The Guardian

Tony Blair is preparing to use his keynote speech to next month's Labour
conference to warn critics that there can be no retreat from his public
service reforms - or the occupation of Iraq - if the party is to avoid the
fate of past Labour governments that backed down and lost their way.

But the prime minister will concede that the way he debates policy and
reaches decisions must change if he is to rebuild trust with voters, MPs and
even cabinet colleagues. In future he intends to "engage, explain, listen
and trust," he has told his inner circle at No 10.

With many Labour activists and MPs predicting that the end of his six year
premiership is in sight - along with Gordon Brown's inheritance - Mr Blair
looks set to use his Bournemouth conference speech to dispel such talk. He
may change tack, but not his strategic direction. The judgment reflects
discussions inside No 10 on how best to renew the New Labour project after
the past year's battering.

"Retreat would be an absolute disaster," Mr Blair has told aides. He has
been persuaded that the cabinet and the wider party are mature enough in
government to engage in serious debate and stay on course.

On the most divisive issue for the coming November session of parliament,
the £3,000 a year student top-up fees, he plans to ensure that universities
set aside enough of their extra funds to make certain that applicants from
low-income families are not discouraged.

But he will not retreat from the principle of the issue or the
"differential" element that angers many Labour MPs, whereby universities can
choose whether to charge top- up fees, and how much.

MPs fear the creation of a two-tier system. "What counts is what works," Mr
Blair will counter.

A similar message comes across on foundation hospitals at a time when
opposition peers plan to wreck the scheme in the Lords.

On Iraq, a relentlessly optimistic Mr Blair believes it will take at least
six more months for the public to acknowledge that the invasion was the
right course, partly as stability and self-government return to the country
but also because the findings of the Iraq Survey Group will confirm the
much-disputed weapons threat.

To put across his case, Mr Blair intends to make wider use of the full
cabinet to debate and decide policy; to revitalise Labour's much criticised
national policy forum; and to draw party activists and voters into an
understanding of policy options before deci sions are reached.

He admits errors over the top-up fees issue, which is only now being sold to
wary backbenchers, and over NHS foundation hospital status. Upbeat, despite
a personal beating in the polls, he still believes most party activists are
"up for reform".

Among the policy developments taking shape as Mr Blair reorganises his
Downing Street team following Alastair Campbell's departure and the upheaval
over the Hutton inquiry, are:

· a concession on top-up fees to provide more money for university
bursaries. The higher bursary could come from the Treasury, not from the
cash raised by the top-up fees, and should ease fears of elitism;

· a fuller, more inclusive role for the cabinet, like the debate which took
place last Thursday, to create a consensus behind David Blunkett's plans to
introduce ID cards, provided the technology is reliable and the cost to
citizens is modest;

· a drive to increase the availability of treatment for drug-using
offenders, only 13,000 of whom currently get treatment. Half those convicted
of offences are drug-dependant and as many as 100,000 need such help. The
key is inclusiveness: bringing all the agencies - NHS, criminal justice and
other stakeholders - together to find a solution;

· a willingness to admit that the unions were right to make their case
against the two-tier workforce, now being phased out in a local government
code. He will see how the new code works before bowing to union pressure to
extend it across the public sector, including the NHS;

· a more "structured" dialogue over public service reform to make
controversial details clearer;

· greater awareness that voters do not believe ministerial claims to have
halved the asylum application rate. "It's not the No 1 issue, but it's the
No 1 grievance," MPs have reported to No 10.

But Mr Blair's reading of the fate of Harold Wilson's government of 1964-70
is that ministers fatally backed down from radical change, notably Barbara
Castle's trade union bill, after 1968 and went down to defeat in 1970. Past
Labour governments had been "a spasmodic reaction" to years of Tory
dominance.

"You commit suicide as a party if you retreat. We must never do that," he
tells colleagues.

In contrast to his flexibility on the details of key policies, Mr Blair is
adamant that private sector involvement in providing public services offers
enhanced flexibility and choice.

The prime minister will not back down on the "differential" aspect of top-up
fees and will deride Tory and Liberal Democrat calls for a referendum on the
EU's draft constitutional treaty. It would be won, but would paralyse the
government for six months, he fears. Yet he will not rule out the promised
euro-referendum before 2005, despite Sunday's No vote in Sweden.

"If you really believe in what you are doing, you have to overcome the
problems and keep doing it. It's not about losing your nerve," he has told
advisers.

But Mr Blair is accepting the advice of new Downing Street advisers,
including Matthew Taylor, outgoing head of the IPPR thinktank, that there
must be more public debate before sensitive policy decisions are taken. Too
much has been done in a "top-down" manner from the centre, it is now
admitted.

The No 10 analysis, as the new team prepares for the second half of the 2001
parliament, is that the loss of public trust is real - "this is a real
mid-term" dip, they admit - but that it can be restored, both on domestic
and foreign policy.

No retreat on...

· Tuition fees MPs fear the creation of a two-tier system. But there will be
no retreat from the principle of the issue. However, universities will have
to set aside funds to help students from low income families.

· Foundation hospitals Another non-negotiable principle. But in future there
will be a more 'structured' dialogue over public sector reform to make
controversial details clearer.

· Iraq war It will take at least six more months for the public to
acknowledge that the invasion was the right course, the prime minister
believes.

· Asylum seekers It's not the no 1 issue, but it's the no 1 grievance, MPs
have told Downing Street. There must be greater awareness in the government
that voters do not believe that applications have been halved, Blair
believes.