Do not mistake deals for reforms

As the establishment prepares to change sides, Labour must not abandon its radical project for flattery

Is the establishment changing sides? And if so, what does it mean for Labour's "young Britain"? The big business players of the Thatcher- Major era are turning their attention to Tony Blair's new Labour. Rupert Murdoch's News International, Sir Iain Vallance of British Telecom, Richard Branson, Lord Rothermere of Associated Newspapers - all give the impression that they now see Blair as Prime Minister-elect.

They have noticed the pungent, almost sexual scent of coming power and are shimmying instinctively towards it. So are scores of other movers of commercial Britain, now bidding for lunches, briefings and first-name terms.

The voters' verdict is seemingly being taken for granted by the Lords of the Market as they prepare for a change of regime. But this helps make the change happen. The last lot find it harder to make eye contact with private power; the next lot are being fussed over; and the country notices. There is a deal being done here. The big boys make their peace with what they think is the next government. In return, they confer a new status upon Labour. Both sides know what is going on. Both are consenting and active adults.

For the Conservatives, this is humiliating. Ian Lang's anger about the cheeky BT announcement and ministerial angst about Murdoch are only part of the story. There are quiet defections all over the place. If things carry on like this, they'll be left with Cedric Brown and nobody else. For business is disloyal. Business is unsentimental. Business is business.

What, though, does the Labour Party think about it all? After years in the cold, demonising the corporate victors of Thatcherism, how do they feel when they find their leader being courted, apparently successfully, by the same men? I think it's fair to say that alongside a widespread tingling enthusiasm for Blair, there is some worry about new Labour's new mates. Few party workers can feel entirely easy about the arrival of so many glossy famous men in hand-made shoes; none will be happy, either, about the bouquets from Conservative commentators like Lord Tebbit, Sir David English, Paul Johnson and the editorialists at the Sun.

If they weren't uneasy, they would be naifs. Labour is a radical party, and radicalism inescapably involves confrontations with concentrations of power. It is a challenge to the establishment, or it's merely the establishment renamed. A Labour Party that wasn't suspicious wouldn't be true to itself.

Tony Blair is aware of the dangers. As his performance at Brighton showed, he had spent part of the summer studying the Wilson years, including a close re-reading of Harold Wilson's speeches from the early Sixties. He concluded that they were pretty good, and were remembered sourly only because of the failures which followed them.

But why did Wilson's governments fail? The Blair assessment seems to be that Wilson was forced to dissipate his energies trying to hold an ill-disciplined, complex and squabbling organisation together. Wilson lost sight of the grand vision of 1963-4 because his attention was perpetually distracted by the party.

The memoirs and histories suggest there is a lot of truth in this. If it is the full explanation, then Blair must, surely, out-perform Wilson. Unlike Wilson, he has made no compromises with his party. On every vote this week, from the referendum on PR to foundation schools, from Trident to the minimum wage, it sent just the messages he wanted it to. He has created a new structure which ensures that the fiercest internal arguments take place in policy forums, hidden from the media. He has a clearer line of command than any previous leader, owes less to the trade unions, chooses his own Chief Whip. He faces no serious or organised dissent.

Yes, this was a tightly controlled conference, but it was possible mostly because the party itself wanted to be controlled. The floor of the conference reacted with open-throated enthusiasm to Blair's speech; more to the point, I found even left-wing MPs approvingly quoting bits of it round the fringe afterwards. If Wilson's problem was his party, Blair has eradicated it (I mean the problem, of course, not the party). There has been a cultural revolution, not merely an organisational coup.

But there was more to Wilson's failure than the condition of the party. He was a fresh-looking leader who promised national renewal, who used inspirational religious language ("Labour is a crusade or it is nothing") but who turned out to be merely a deal-maker who surrounded himself in office with millionaire cronies.

Left-of-centre politicians have a history of bad judgments about the Lords of the Market. Continental politics is littered with examples. Here, Wilson is the most recent, but not the most flagrant one: that stale palm goes to Lloyd George, an inspirational radical who became infatuated by bad men in fur-lined collars. Had Labour been in power in the Eighties, the Robert Maxwell story would have trumped the Tapie scandal in France.

From the outside, these add up to a simple, dismal pattern, the perpetual recurrence of hope's corruption. But there is a real problem for leftish leaders. To be effective in office requires deal-making; governments cannot simply dictate or hector private-sector power. If you are a practical politician, like Blair, who wants above all to do things, to change things, then you have to roll up your sleeves, take a deep breath and engage. You do so knowing that the most pressing new friends will be worried people taking big risks in sensitive parts of the market where government regulations and contracts matter most. And you do so knowing that the most persistent flatterers are probably creeps. But even so, you engage.

The question is how to do so without letting them blunt your radicalism or corrupt your project. The answer is a triple combination. You must have very clear views about your priorities and your attitude to regulation - deals are always deals, never reforms. Second, you must have numerous and informed sources of advice. Above all, you must be personally incorruptible and retain your highest political ambitions - a matter of character about which I, for one, trust Tony Blair.

This is not a theoretical weekend sermon, nor does it imply that the worm has already entered the rose. It is a moral and political challenge whose urgent reality reflects the likelihood of a Labour government. For this was the week in which new Labour might have started to come apart and the Major revival might have begun. It hasn't been. Never underestimate the Conservatives. But their task is starting to look daunting, which is why, yes, the establishment is changing sides; and why on this occasion, the establishment is probably right.