Election '97: Privatisation exposed as Labour's Achille's Heel

Anthony Bevins analyses the background to the policy shift within Blair's camp

Labour's problem on privatisation has been slow to break, but it has been aggravated by the party leader's eagerness to keep on creating "new Labour".

When the party manifesto was agreed and published last week, it should have marked the end of all further movement. Unfortunately for Labour, Mr Blair has carried on regardless.

Last Monday, he was making privatisation policy on the hoof, and he has left his colleagues behind. By doing that, he has left himself vulnerable to the Tory charge that Labour is too volatile; it has changed so much that there is no stability - that it cannot be trusted.

For Labour, the pity is that its own message that the Tories could not be trusted on tax - having broken their promises of the last election - was yesterday being deflected by the new Labour conflict.

Gordon Brown told The Independent yesterday that Labour's policy was quite clearly set out in the manifesto.

He was quite right. There is a section on the possible sale of departmental assets - "property, land and buildings" - that are surplus to requirements; there is a section on the Post Office, which says that "Labour favours greater commercial freedom for self-financing commercial organisations within the public sector"; and London Underground would be kept within the public sector.

Beyond that, however, there is the question of National Air Traffic Control Services, which Mr Brown said Labour would consider for privatisation in order to provide essential funding.

Mr Brown told yesterday's election press conference: "We inherited Conservative plans on privatisation proceeds. Once we had the chance to look at the Conservative public expenditure white paper, we decided we couldn't rule it out and Margaret Beckett [shadow trade and industry spokeswoman] made that clear at the end of February."

The Budget Red Book, which sets out the Government's spending projections, came out on 26 November.

Before that, Andrew Smith, the party's transport spokesman, told the Labour Party conference in October: "The Tories have dreamt up a crazy new scheme to privatise the air. They want to flog off the National Air Traffic Control Services... Labour will do anything we can to block this sell off... Our air is not for sale."

More than three months later, another Labour transport spokesman, Keith Bradley, told an air traffic controller who had written to Mr Blair in November: "I would like to confirm that the Labour Party are completely opposed to the privatisation of the National Air Traffic Control Services."

It was not until the end of February that Mrs Beckett told BBC television's On the Record that she was not ruling out privatisation.

But the Conservatives were missing the essential point yesterday - that it was Mr Blair who was not singing from the same song sheet as his colleagues.

On Monday, in the Sun, Mr Blair wrote: "We have no dogmatic objection to services being run in the private sector. They should be judged on a case by case basis."

Later that morning, he repeated that message in a City speech. There is nothing in the manifesto to support that view. Mr Blair has left himself exposed to the charge that he is out of line with his own party.