Blair may regret his stance on the House of Lords

Tony Blair may be losing the argument on war with Iraq, but in Germany Chancellor Gerhard Schroder has been winning his anti-war PR battle - I was in Berlin at the weekend and the only person I met who backed the war was a Brit living there.

It is widely assumed that Schroder won the election because of his anti-war views, but the Germans are now thinking about more important things at home, like the economy. It came as little surprise, then, that as the German economy splutters along the right-wing Christian Democrats defeated Schroder's SPD in Sunday's local elections.

As Gordon Brown pointed out this week, the British economy is in a much stronger state than Germany's, and it will be on the economy that British voters judge Tony Blair at the next election, not his warmongering. I never believed the myth that Thatcher won in 1987 because of the Falklands War. People conveniently forget that the election coincided with an economic upturn.

So while Blair is losing the war PR battle, as opinion polls continue to point out, he should be relatively relaxed - relaxed enough, it seems, to open up yet another front at home.

Blair's announcement at last week's PMQs that he didn't support an elected second chamber was greeted with horror among most Labour back benchers.

Robin Cook, who has been leading the campaign for a more democratic House of Lords, looked angrier than Terry Venables as Blair made his shock statement.

Some people believe this was a deliberate diversion from the war, but if so it was a dangerous one. Were it not for the tragic loss of the American Columbia astronauts, Sunday's papers would have been full of new Brown/Blair splits and even talk of a leadership challenge.

The political hacks could not understand why Number 10 made an unprecedented denial that Brown had been pressing Blair to go early, and all this did was to fuel speculation further. The Labour Party split over the House of Lords cannot be anything but bad for Blair, because although Brown is unlikely to vote differently from the Prime Minister it gives plenty of his supporters the opportunity to do so.

The fact that two of the best and brightest young MPs, Douglas Alexander and Yvette Cooper - both Brown loyalists - are prepared to vote against Blair, is not good news for the PM. What will upset him even more is that one of his closest young allies, David Miliband, is set to defy his old boss. That the 'next generation' is turning on Blair is much more significant than the Cabinet Ministers who are likely to vote differently from him.

Charles Clarke and Peter Hain will be voting on the side of democracy because they still have delusions of becoming the Labour leader themselves, and they know voting against Blair will go down well with the troops.

In deciding to support an appointed second chamber Blair has gone against the mood of the whole Labour Party outside Westminster. Normally this wouldn't matter too much - Blair has never bothered too much about what the party thinks anyway. At the moment though, he has now upset the rank-and-file over several issues at once. They are unhappy about his war stance but also don't like the new higher education proposals, and were particularly angry about Prescott's attack on the firefighters. The Deputy Prime Minister may now be seen as a joke among Labour activists but they know he is only doing Blair's dirty work for him.

Blair may live to regret the fact that he has upset the Labour Party so much all at once, because for the first time since he became leader there is now a growing band of serious opponents, and not just the usual suspects.

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