Early test of Blair's radicalism

Analysis
By Nick Assinder
Political correspondent, BBC News website

So, will 2006 be the year Tony Blair finally pushes through the radical reforms he has been promising for eight years - or will it be a year of backing down?

Mr Blair has faced previous opposition to welfare reform

With many predicting it will be Mr Blair's last full year as prime minister, the way he reacts to a series of threatened backbench challenges to his so-called "legacy reforms" may help decide the manner of his departure.

Education, welfare reform and the future of pensions all pose serious difficulties for a prime minister running out of time to carry out the sort of changes he has himself confessed he wishes he had done earlier.

One of the first signs of how he will react will come later this month with the publication of the proposals for incapacity benefit, claimed by 2.7 million people and one of the most sensitive of all Labour issues.

The last time he tried reforming the benefit in 1999 he suffered a rebellion by 67 of his own MPs - just about the size of his current majority - and opposition is currently running high amongst Labour MPs.

Raising money

The opponents fear anything that might be seen as an attack on the poorest in society or an attempt to force people off benefits with threats of their support being cut.

They are particularly concerned that the move might simply be seen as a way of raising money for the Treasury by cutting the £12bn-a-year benefits bill.

Mr Hutton is believed to have dropped some proposals

So, suggestions about introducing a means test and capping the amount of time claimants could remain on the benefit both met with significant opposition.

There was even opposition to some of these more draconian measures from David Blunkett when, as Work and Pensions Secretary, he was responsible for producing the final product.

Still radical

Yet, if recent remarks by his successor, John Hutton, have been correctly de-coded, both have been abandoned.

When the long-delayed Green Paper is finally published towards the end of this month it is believed it will not contain those measures but might suggest a simple, flat rate payment to all claimants, instead of the current, graded payments, and more help to find work.

Downing Street, however, insists the proposals have not been scaled back and will still be radical.

But if that radicalism includes any of the controversial measures already outlined, or anything which might appear to hit the most needy claimants, the proposals will still run into serious trouble.

Once again the prime minister will face the dilemma of either ploughing ahead regardless, even risking defeat, in the hope of building a legacy or of trimming in order to get something through Parliament.