Why my admiration for Tony Blair is growing (even as I fear for his future)

This is why Milburn's return is so significant - he is nearly the only exception to the one-way traffic away from the PM

Day by day my admiration for Tony Blair grows. Unfortunately for him, this admiration takes an unhelpful form. As time passes, the more I wonder, not that he ever became a Labour MP - all kinds of oddballs manage that - but that he became leader of his party, and its most successful prime minister. Nor is that all, but he managed to do it without ever being fundamentally dishonest about what he wanted to achieve.

Day by day my admiration for Tony Blair grows. Unfortunately for him, this admiration takes an unhelpful form. As time passes, the more I wonder, not that he ever became a Labour MP - all kinds of oddballs manage that - but that he became leader of his party, and its most successful prime minister. Nor is that all, but he managed to do it without ever being fundamentally dishonest about what he wanted to achieve.

He did not, of course, tell his party before it elected him leader that he wanted to scrap the bit in its constitution that committed it to the social ownership of everything. But he didn't say he wouldn't, either, and his view was pretty clear. Nor did he tell his party, before 1997, that he wouldn't put up income tax on the better off; or that he thought benefits encouraged some people who could work not to; or that he favoured internal markets in state-funded health and education services. But he said as much as was prudent to point in the direction understood as "New" Labour, even if the specifics sometimes came as a shock.

What is remarkable now is that he continues to carry his party with him towards that surprisingly blank space marked "third election victory". Because the Labour Party is so obdurately determined to be an unpopular sect, this is an increasingly surreal achievement. As my colleague Steve Richards remarked in this space yesterday, the present division in the Labour Party is not between Old and New, but between those who all regarded themselves as "new" in 1997.

A gap has been growing over the past seven years between those who thought being "new" was a trick to get elected and those who thought it meant something. Almost everybody in the Labour Party belongs to the first category. They thought that, once the voters had been reassured that Labour ministers did not want to leave the dead unburied as a matter of policy, it would be safe to go back to the Seventies: tax the rich, no more war, free universities, generous state pensions and a new shiny NHS.

That is not, of course, what the "New" Labour critics of the Prime Minister say they want. Most will say that they support Tony Blair on this or that but that he has just gone, is just going or is about to just go, too far. One of the more intellectually rigorous of them, Neal Lawson, the editor of the journal Renewal that was once a powerhouse of Blair's own modernising faction in the party, admits that he is still looking for a form of politics that will deliver an alternative to market capitalism. That's fine: he can let us know when he finds it. Meanwhile, though, the other "New" Labour critics say, right, now we've won two elections, surely we can raise income tax on those earning over £100,000 a year. Or: now we can raise the state pension, or ban fox-hunting.

It is only now, however, that the clamour is growing, because many of the so-called "New" Labourites accepted the argument, sometimes fostered by Blair himself, that the "trick" of persuading the electorate that Labour was safe would take some time. It was, after all, Blair who formulated the private strategy for the 1997 election of "reassurance, reassurance, reassurance", while telling a left-wing newspaper, "I'm going to be a lot more radical in government than many people think." It was Blair who often suggested that the first two years of spending restraint were a price the party had to pay to be trusted with the nation's finances. "I can't wait for the two years to be up so that we can get on with the real job," said John Burton, Blair's agent - in more senses than one - in his Sedgefield constituency.

By extension, though, this message of restraint and waiting for the ripe moment to implement the full socialist programme extended to cover the whole of Blair's first two terms in office. The implication was always: we are building the foundations; Jerusalem to follow. Hence the momentum that grew behind the notion that Gordon Brown might take over this summer. It fitted in with a comforting fable the Labour Party told itself: that Tony was softening up the electorate for Red Gordon. Hence the sense of anomie in the party as it became clear over the summer that Blair was staying on and promising more of the same instead of "and now for something completely different".

Brown is not, of course, as left-wing as many of his admirers imagine. He is the co-architect of New Labour; the differences between him and Blair are as much of tone as policy, and the policy divisions are not always what might be expected. It was Blair, for example, who won the argument for a higher minimum wage in 1999.

That is why Andrew Smith's resignation as Secretary of State for Work and Pensions is not a simple matter of New Blair versus Old Brown. Welfare reform is one of the big pieces of unfinished New Labour business. The rebellion of 67 Labour MPs in the first term was over cuts in incapacity benefit by Alistair Darling, supposedly a Brownite, who took over from Harriet Harman, supposedly a Blairite.

Since then, economic inactivity among older men especially has continued to be a problem. Despite record levels of employment, a quarter of men aged 50-64 are not working, many of them classified as long-term sick. Two weeks after he moved Andrew Smith, definitely a Brownite, to Work and Pensions, Blair gave a speech on welfare reform, saying: "It is a scandal that 2.7 million on incapacity and disability benefits are written off, left to drift into long-term incapacity and unemployment."

These are deep and technical waters, yet both Blair and Brown believe that long-term benefits destroy work incentives, and the non-appearance of the Department of Work and Pensions' five-year plan suggests that not enough is being done about it. But Blair is braver than Brown, and less inclined to play faction-boss politics with policy.

The Prime Minister's "New Labour" critics accept that he has made much progress towards social justice, but complain that he has not done more. I agree, but put the failure to achieve more down to the Government's being insufficiently New Labour, rather than too much. All along, Blair has been held back by the shortage of ministers who can shake up creatively the old assumptions of both left and right and deliver moderate social democracy in ways that work.

That is why the return of Alan Milburn is so significant. But it is also why my admiration grows for Blair. Milburn is virtually the only exception to the one-way traffic away from the PM. Blair never had much support in his party; now his base is perilously narrow. The opposition is only so weak because so many members have left. Weakened by an unpopular war, increasingly stripped of the supporting cast of ambitious advisers who cling to a leader on the rise, Blair more than ever looks as if he intends to do it all himself. My admiration grows, but so too does my fear that such an improbable project cannot continue to fly.

j.rentoul@independent.co.uk

The writer is chief political commentator for 'The Independent on Sunday'