Blair's headaches are mere problems of success

IS TONY BLAIR just another ordinary politician after all? The Labour Party, particularly, but by no means exclusively in Scotland, was still in shock last night after a by-election victory over nationalism that no one - even in their gloomiest moments - feared would be so narrow.

Equally surprising was the performance of the infant hard-left Scottish Socialist Party, which pushed the Conservatives into fourth place - raising the possibility that Labour does, after all, have a problem with its core vote. And who would have predicted that a 27-year-old candidate fighting for the local football team to have a home base, would retain his deposit with over 1,000 votes? It would appear that cynicism about mainstream politics still has an alarming capacity to flourish - for all Mr Blair's brave words about ending it when he took office.

If the by-elections at Hamilton - and Wigan, with its poor turn-out of just 25 per cent - have been only relatively minor shocks to the Labour system, they have hardly been the first. It is actually quite easy to compile a litany of problems, setbacks and disappointments that have started to confront Mr Blair in the long summer run-up to next week's party conference in Bournemouth.

Maybe the troubles started with That Tuscan Holiday, which, though no different in kind from any of the Prime Minister's previous vacations, attracted a flow of unwelcome publicity that the others had not. Maybe it was just a case of what in any other government would be predictable mid-term blues. But if nothing else, it has been possible to detect, almost for the first time, just the faintest signs that Labour and its leader, the most phenomenally successful election victor in the party's history, might be no more than mortal.

The fresh embarrassment of the Oratory school's decision to invite its parents, including the Blairs, to pay a levy of pounds 45 per month to compensate for its loss of grant-maintained status, will touch a raw nerve. But this is rather offset by the fact that the headmaster is a right-of-centre former Tory adviser who may well be making mischief and who seems to have been offered some financial help by the local council.

Other problems have been less trivial. The European elections, in which Labour failed to give electors a reason for voting for it, were the biggest electoral setback that Mr Blair has suffered since 1 May 1997.

A settlement in Northern Ireland, despite seeming tantalisingly close, has proved elusive despite the Prime Minister's heroic efforts to broker one. Devolution, the flagship of his constitutional reform programme, has run into potentially serious turbulence, creating the impression that the Scots and Welsh executives have a veto - which they do not - over the Government's desire to end the ban on beef on the bone in England. Worse, the Labour-dominated coalition in Scotland has been threatened with breakdown by the Liberal Democrats' opportunistic pursuit of a campaign against university tuition fees - which yesterday's Hamilton result suggests is not doing them much good. Which in turn threatens the chances - so far kept alive by Mr Blair despite the resistance of some of his most senior colleagues - of a long-term alliance with the Liberal Democrats.

Private Labour research this month, disclosed in The Independent, showed a tendency by voters to think of Mr Blair as arrogant. Arms sales, especially those to Indonesia continue to be neuralgic - and not just among Labour's left-wing traditionalists.

The countryside lobbyists continue to be on the warpath over an anti- fox hunting policy to which Mr Blair has little emotional commitment, but to which he feels obliged, or at least appears to feels obliged, by his own backbenchers to sign up.

The Prime Minister's attempts to export Blairism to Germany are foundering along with the economic and social reforms attempted by Chancellor Gerhard Schroder's shaky looking government. Which in turn makes the job of turning public opinion towards Europe and the euro more difficult. Indeed, he continues to be criticised - most recently, if gently, by his old friend Lord Jenkins of Hillhead, for not taking a clearer lead on the euro.

He has disappointed liberals by refusing to sanction a more open and comprehensive Freedom of Information Act - believing, despite claims to the contrary by at least one senior US administration official, that it would make for less efficient government.

Even the economy, the outstanding success story of this administration, is causing tensions as spending ministers limber up to put pressure on the Chancellor to ensure the so called "war chest" is emptied for their departments and not for tax cuts. And so on.

All in all, quite a formidable - and far from complete - list. Mr Blair has a big job to do in Bournemouth, and - if it weren't said every year - this could probably be earmarked as his most important conference speech since becoming Labour leader in 1994.

However, for all this, some perspective is needed. It is not just a matter of Labour's stubborn opinion poll lead. Mr Blair has a somewhat keener sense of Labour Party history than he is given credit for. And he was pointing out to some of his jumpier colleagues yesterday that at this stage of the 1974-79 Wilson-Callaghan parliament, Labour, unthinkably, lost, in a by-election, Ashfield - a seat so Labour that the party got it back even in the cataclysm of its 1979 defeat at the hands of Margaret Thatcher.

This illustrates a rather wider point; which is that by the standards of most mid-terms - and in particular most Labour mid-terms - this is positively Elysian for the Government.

In particular, Gordon Brown has wholly fulfilled, against near universal predictions to the contrary, his objective of reversing Labour's fatal trend of spending first and paying, fiscally and electorally, later. As a result, the mid-term problems, at least as far as the economy is concerned, are those of managing success.

Mr Blair will stress the importance next week of achieving the full and successful second term of office that has eluded every one of his predecessors as Labour leaders, without squandering the party's new-found reputation for economic competence for the sake of one election.

The second-term argument will play to one of his most frequent mantras in private - that Margaret Thatcher had barely started her reform programme by the 1983 election, and that although he is determined to show improvements in health and education by the next election, it will take much longer fully to transform both services.

In achieving the prize of the second term, Mr Blair has the track record of turning threats into opportunities. Scary by-election results are no more than prophylactics against complacency. Chancellor Schroder's problems leave a vacuum for leadership in Europe which the Prime Minister signally filled over Kosovo - his outstanding international achievement - and can do again, especially if Britain were to enter the euro in the next parliament.

For all the cavils, Mr Blair continues to dominate the political landscape. Problems, yes. Mid-term anxieties, yes. This year's conference will matter to him more than most. But it is too early to bet against another landslide in 2001.