Stop the ghost of Old Labour from clambering out of its tomb

IT IS not the departure from Government of Peter Mandelson that poses most danger to Tony Blair, but the burning triumphalism at his fall among people who are supposed to be on the same side of the political fence. Sizeable chunks of the Labour Party, from the constituencies to the Cabinet, are crowing indecently at Mr Mandelson's fate and the setback to the ambitions of New Labour.

It is natural to feel a quiver of malicious pleasure when we discover that someone who lectured others about self-discipline has failed to meet his own high standards. Fine: got that over with. But within the Government and its penumbra, the blood-letting continues unstanched. The smears and counter-smears spread. As Tom Robinson once sang in a rather different context: "Forget the oppression from everywhere else while we still do a wonderful job oppressing ourselves."

The epidemic of generalised ill-will represents a lapse into Labour's worse vice, namely the assumption that the natural state of the party is to be a mass of seething factional resentments. Don't these people want the Government to prosper? On their own terms, they have reason to be happy with its performance. The public spending review committed substantial amounts for health and education. The more pessimistic among us would argue that they erred on the incautious side and that these areas need reform before expenditure, rather than the other way round. But that is no problem for Old Labour critics of Tony Blair who love public spending on principle. Within two years of taking power, they have all the constitutional reform their hearts could desire, including the dismemberment of their ancestral enemy, the House of Lords. The minimum wage is in place, as is legislation bolstering union recognition.

But, like the Judaean in Monty Python's Life of Brian who wants to know what the Romans have done for him - apart from the roads, the aqueducts and the clean water - they are cross because it wasn't their brand of Labour that made the radical changes.

These people will not rest content until the Labour Party is unpopular again. They are too bound up in their tribal Bruderbund to see that the Blair Government has made irreversible changes to Britain and was able to do so only because it had most of the country, and not just the die- hard Labour parts of it, on its side.

But even before Mandygate struck, Old Labour was trying to clamber out of the tomb. Its central claim is that John Smith would have won the 1997 election without the reforms demanded by Mr Blair. This argument holds that New Labour was never really necessary and that the party has sold its soul for nothing. I remember the soul of the Old Labour Party, as it happens. It consisted of a machinery understood by the few not the many and an unspecified but robust sense of grievance, underpinned by class resentment. It was riven with distrust and dominated by trade union cliques. It let in Margaret Thatcher in 1979 and took 18 years to get rid of her party.

In the New Statesman, the Labour biographer Francis Beckett has argued that Mr Smith's shadow budget was not a significant factor in losing the 1992 election. He believes that because Labour had stated two years earlier that it would raise the top tax bracket to 50 per cent, the electorate had got used to the idea and so it couldn't have been the "tax bombshell" wot lost it.

Oh but it was, Mr Beckett. If you doubt me, listen to Maurice Saatchi who was running the Conservatives' ad campaign: "The Tories only had one weapon - tax - and Labour gave it to them." Two years before polling day, voters are little bothered by the plans of politicians. Shortly before an election, they ponder what it all means and vote accordingly. Mr Smith was a kind man to his many friends in politics. He completed the structural reform of One Member, One Vote. But he failed to take seriously enough the sensibilities of moderately affluent (and aspirant) voters if Labour were to win power. His instinct was always to strengthen Labour in its heartlands, not to turn Conservative voters into Labour ones.

Blairite converts, according to Roy Hattersley in The Guardian, merely "topped up Labour's plurality and turned inevitable victory into a landslide". I like the "inevitable". The only thing that was inevitable about the Labour Party for most of my adult life was that it always managed to lose.

Mr Hattersley then accuses the Blairites of callousness towards the poor because they believe the problem of poverty cannot be redressed solely by throwing money at it.

At the level of childish simplicity, Mr Hattersley is right. If you gave poor people more money, they would not be so poor. It would not, however, answer the question of why so many people lead deprived lives, regardless of who is in government and how many benefit increases are made. Cathy Come Home, the film that awakened middle England to the terrifying ease with which ordinary people can join the ranks of the homeless, describes a period when Old Labour was in power.

We don't yet know whether the Government's Social Exclusion Unit, lavishly mocked by Mr Hattersley, will make enough of a difference to count as a real improvement. But its existence shows that this government takes seriously the need to examine why poverty arises and persists, rather than taking the easy way out and unleashing Mr Hattersley's recommended "bombardment of pounds 5 notes".

Vast sums of public money have been poured into the worst council estates down the years by all governments, and the results are negligible. Poverty of expectation has not decreased, despite the introduction of the comprehensive schools that Mr Hattersley defends. Yet our state school system is culpably inefficient at raising the horizons of low- and middle-ability children. The NHS offers the illusion of equal access, accompanied by a crisis in recruitment and a bed shortage when the flu strikes. Tell the pensioner gasping for breath on a trolley in a corridor that the NHS does not need reform because it's free.

My concern about this government is not that it is betraying its Old Labour totems, but that it clings to too many of them. Behind the shiny rhetoric, its radical edge has blunted. Further controversial decisions are postponed until "the second term" - the political equivalent of Narnia.

Never mind Euan and Kathryn Blair missing a day's school. It is their father's absence that matters. His unruly Westminster class badly needs him. Yesterday, he dallied in South Africa with the outgoing President Mandela. If he does not hasten back to the more mundane business of restoring order at home, he may find that his own wind of change has blown itself out.