Leading Article: Better to lose than buy off the unions

Tony Blair's crusade to change Clause IV - the most potently symbolic of all the changes to Labour's stance that he has undertaken - is acquiring an air of high drama. It is, to date, the key test of his leadership. How he wins will be as important as whether he wins.

The latest twist in the tale has revealed the amount of unfinished constitutional business Labour will still have before it once the old Clause IV has been ditched. For the old Labour methods are having to be used to deliver new Labour to the electorate.

On the indications so far, and it remains relatively early days, those constituency parties and unions that have balloted their membership are voting, in the main, for change. It is the unions and constituency parties that have used the old-style methods of democratic centralism - where executives or delegate conferences decide the issue without any formal consultation with their members - that are clinging to the old Clause IV.

There are already predictable demands from those unions opposed to change for concessions from Mr Blair on other issues as a possible quid pro quo for a change of mind - a clear commitment to a £4-an-hour minimum wage, for example, or a dilution of Labour's promise to close failing schools and reopen them with new governors and staff, or a more full-blooded commitment to oust the private sector from the NHS.

Mr Blair must resist such demands, deciding these issues on their merits rather than as part of any bargaining for the new Clause IV. Yesterday there was an encouraging sign that he will resist - Donald Dewar, a leading member of the Shadow Cabinet, declaring "there is no question of smoke- filled rooms, or compromises or retreats" over the new Clause IV.

This matters because what is being defined in the current battle is not just the wording of a once obscure and largely ignored part of Labour's constitution, which no one is likely to refer to much again after it has been changed, but the public's perception of how Labour will handle the unions once in power. Murky deals now would raise fears of murky deals again under a Labour government.

Internally, the present row shows the need to take Labour's constitutional changes to the logical conclusion that Neil Kinnock foresaw, but which John Smith ducked - to create a party where, on key issues, individual members in both the constituencies and trade unions are balloted, and where the weight of their votes at party conferences reflects the balance of opinion among those balloted. This is an argument about internal party democracy, not simply an argument for those who believe it would make it easier for Mr Blair to get his way. When used for national executive elections at last year's conference, for example, it saw Dennis Skinner restored to the NEC and Diane Abbott elected, a result which almost certainly reflected more honestly the balance of Labour members' views than the constituency section elections the year before, which saw only "modernisers" elected.

At present, Labour cannot enforce such ballots on policy and constitutional issues. Only for the leadership can it insist that unions ballot their members, and only for the leadership and national executive elections that constituencies ballot theirs. As a result, despite the party nationally footing most of the bill, a quarter of constituencies will not be holding votes on the new Clause IV.

Externally, however, Mr Blair needs to win without having been seen to compromise other parts of Labour policy to achieve his goal. Issues that traditionally have plagued Labour governments - public-sector pay, for example - are beginning to boil again under this year's tight public spending round. If the squeeze continues, they may be much higher up the agenda by the next general election. If Mr Blair is to be believed in his promise to deliver a government in the national, not sectional, interest, the public needs to see that he can deliver a renewed party without resorting to back-stage deals with sectional interests. It would be better to lose than do that. He needs not only to win, but to win cleanly. That would be the most symbolic change of all.