The Week in Politics: 'The more that I think about the Butler report, the more devastating it becomes'

The headline, "Senior minister resigns" screamed across a giant television screen in Parliament's Westminster Hall on Thursday. A gaggle of Labour MPs stopped in shock, assuming someone had quit over the Butler report. Then reality dawned. A film of Geoffrey Howe's resignation speech in 1990 was being screened as part of a Hansard Society exhibition about the workings of Parliament.

The headline, "Senior minister resigns" screamed across a giant television screen in Parliament's Westminster Hall on Thursday. A gaggle of Labour MPs stopped in shock, assuming someone had quit over the Butler report. Then reality dawned. A film of Geoffrey Howe's resignation speech in 1990 was being screened as part of a Hansard Society exhibition about the workings of Parliament.

Under Labour, there is what Lord Butler might call a rather selective approach to resignations. As Tony Blair tried to wriggle off the hook of Iraq after the publication of the Butler inquiry, I couldn't help recalling what a triumphant Alastair Campbell said on the day the Hutton report was published in January: "If the Government had faced the level of criticism that today Lord Hutton has directed to the BBC, there would clearly have been resignations by now, several resignations at several levels."

Although Lord Butler's language was deliberately understated, the more I think about his report, the more devastating it becomes. Lord Hutton identified a collective failure at the BBC over its report that the Government "sexed up" its dossier on Iraqi weapons. Three people resigned - the BBC bosses Gavyn Davies and Greg Dyke and the journalist Andrew Gilligan. Lord Butler discovered a collective failure on the Government's part over the pre-war intelligence. But no one has resigned.

It gets even worse: one of the main players, John Scarlett, is being promoted to head of MI6. That's the equivalent of Mr Gilligan being made the BBC's head of news and current affairs after being found guilty by Lord Hutton. If this is not double standards, I don't know what is.

Downing Street had a well-planned strategy for handling the potentially difficult Butler report. The advance spin on the eve of publication was that Mr Blair had been cleared of deliberately misleading the people over the case for war. In many ways, that was a statement of the obvious. The Butler committee had interpreted its remit as "looking at structures, processes and systems before considering which, if any, individuals should be held accountable. The committee's procedures make clear that this is allowed for, but the committee will not start with the primary purpose of pursuing individuals".

There were differences on the committee over whether to name individuals, but the members agreed it was not their job to bring down a Prime Minister. Instead, they decided to focus on how to stop the "politicisation" of intelligence.

Downing Street took refuge in the "collective" blame for the flawed intelligence and the September 2002 dossier. Its message, repeated ad nauseam, was that Mr Blair had acted in good faith. When journalists found nuggets buried in the Butler report - such as a crucial piece of evidence suggesting Iraq could produce chemical weapons being withdrawn by MI6--No 10 swept away difficult questions with a broad brush. The line was that none of the four inquiries into the Iraq war - by Butler, Hutton, the Intelligence and Security Committee and Foreign Affairs Committee - had doubted Mr Blair's integrity.

Four investigations sounds a lot but they were piecemeal and limited. Some ministers believe Mr Blair might not have survived the scrutiny of a searching investigation into the build-up to war. He may have a presidential style, as Lord Butler noted, but it is a good job Mr Blair is not President of the United States, where Congress has launched the kind of no-holds-barred investigation he has been lucky to avoid.

Mr Blair also rode his luck in Thursday's two by-elections. Labour was resigned to losing Leicester South but just held on in Birmingham Hodge Hill. If the party had lost both, it could have caused a real leadership crisis.

As he plans next week's cabinet reshuffle, Mr Blair could take comfort from the Tories' third place in both by-elections. For him, the main message was that the voters did not want a Tory government. An ICM poll for BBC's Newsnight, which found that, although 56 per cent of people are dissatisfied with the Government, 44 per cent think Labour is fit to form the next government, but only 33 per cent believe the Tories are (and 23 per cent the Liberal Democrats).

Michael Howard is in a much stronger position in his party than Iain Duncan Smith was when the party came third in Brent East last September. Mr Howard told voters in Leicester and Birmingham that the result Mr Blair would have least wanted was a Tory victory. But the Tories were hamstrung by their strong support for the Iraq war.

Charles Kennedy was not. Although he scored a notable triumph on Thursday, the general election will essentially be a choice between two parties and two leaders. That is why Mr Howard is trying to use the Butler report to further erode trust in Mr Blair. " Iraq has become a proxy for wider problems we face," one minister admitted yesterday. " It will not be easy to regain people's trust. We have got to grind away and show we have improved public services."

Mr Blair, who completes 10 years as Labour leader next Wednesday, ends the week badly bruised but still on his feet. "We have had enough 'worst weeks' ," one aide said ruefully. The Prime Minister had hoped the Butler report would help achieve "closure" on Iraq. But the by-elections showed many people regard the issue as still open.