Stoking the tension is that everyone knows that, in the Labour leadership contest that would follow a defeat at the next election, those who are ‘on the side of workers’ will benefit. Harman’s positioning on this issue has been key to both her increasing popularity with the Unions and Labour members. Her internal opponents mutter bitterly about her irresponsibly playing to the gallery on this.
But the debate also reveals something fundamental about New Labour and its limits. As Nick Cohen has said, the economic boom New Labour inherited and kept going allowed this government to be both left wing and right wing. The economy was strong enough that it was possible to place more and more social requirements on business without actually raising unemployment (these measures did, though, obviously limit employment). But, now that the boom has turned to bust, this is no longer possible. It seems doubtful that the New Labour coalition can survive in these circumstances, when to govern is to choose.