Labour turns tables in war of words

Labour tacticians were yesterday convinced that John Major and Michael Heseltine had made a strategic mistake when they chose to attack Tony Blair's idea of a "stakeholder economy" by saying it would mean a return to 1970s-style union power.

Mr Blair accused the Government of abandoning centrist "one-nation" political territory after it launched an attack on a theme that Mr Major yesterday called "fancy packaging for new burdens in business".

As Mr Major and Mr Heseltine accused the Labour leader of making an error by unveiling the new theme in his speech in Singapore on Monday, the Deputy Prime Minister said: "It is entrenched and steeped in the traditionsof the left, of socialism, of corporatism."

But Mr Blair retorted: "It is perfectly obvious what I am saying. It is that having a group of long-term unemployed people set apart from society, or young people who are without proper work or education, is a social and economic evil that we should tackle. The idea that we are going to give power back to the trade unions is an absurdity."

This fresh battle of ideascame as a new ICM/Guardian opinion poll last night cast a shadow over a bullish assertion by Mr Heseltine that the election was "won for the Tories". Mr Major, confident and upbeat from a meeting with businessmen in London, said also the election was "there to be won".

According to the poll, the Prime Minister should resign and call a general election if he loses his overall majority. Among Conservative supporters, 57 per cent agree that he should fight an election if he loses his majority before the end of this Parliament, due in May 1997. Only one-third believe he should carry on leading a minority government.

The poll shows Labour's adjusted lead over the Tories increasing from 17 to 22 per cent. The widening of the gap is entirely due to a surge in support for the Liberal Democrats in the wake of the defection by Emma Nicholson, Tory MP for Devon West and Torridge, to Paddy Ashdown's party.

The poll shows Labour static at 48 per cent, the Tories down from 31 to 26 per cent, and the Liberal Democrats up from 16 to 22 per cent, their highest level for two years.

The intellectual argumentover Mr Blair's notion of the "stakeholder economy" may prove more important than the poll, or the speech by Baroness Thatcher tonight that the Tory high command are awaiting with apprehension.

Lady Thatcher is expected to attack Labour but also to enter the argument within the Tory party, by making it clear there should be no lurch to the left.

Labour strategists had expected ministers to dismiss the "stakeholder economy" in the terms used on Tuesday by Michael Portillo, the Secretary of State for Defence.

Mr Portillo said in a BBC television interview that the "stakeholder" idea was merely a re-run of Tory thinking from 1979 when the Conservatives encouraged share ownership.

Mr Major and Mr Heseltine have caused dismay among left-of-centre Tory MPs by claiming the new theme means a hand-back of power to the unions.

The sole evidence for this line of attack appears to be that Margaret Beckett, Labour's trade and industry spokeswoman, has referred to the many "interest groups" who have been excluded from some of industry's thinking.

At least two left-wing Tory MPs expressed private doubts about their leadership's strategy. Ironically, both suggested Mr Portillo might have hit the mark. One said: "Blair clearly isn't a socialist. He's using our language; if anything he's actually taking on and developing some of our ideas. What we should be doing is trying to divide him from his party."

Another said: "He's coming on to our ground. The trouble about admitting it is that it helps to reinforce the impression that he's on the right track."

Mr Blair has not committed himself to new "stakeholder" policies, least of all the complex legislative agenda implicit in the use of the term. In a key speech today David Blunkett, Labour's education spokesman, will say Mr Blair's Singapore speech "is a clear indication of our belief that the economic and the social are inseparable and that it is vital that we embrace all the talents of all of the nation".

In contrast to Mr Heseltine's claim that Mr Blair had "lifted the curtain" on a left-wing agenda, Labour believes it is on to a winner by impressing on the public the idea that social cohesion - and eliminating the spiralling costs of crime and unemployment - is not only desirable but contributes to a more successful economy.