“…issues of major significance are defined by arguments occurring within the coalition government. Labour may have interesting insights to contribute to each, but very few of us, it appears, are listening.

..this uncertainty translates into an inability to develop clear positions on the big policy questions – and worse still, a tendency to point in different directions simultaneously… Where does Labour stand, and beyond considerations of tactical advantage, why does it take the positions it does?”

The Blairite ultra and former No.10 staffer goes on to slam the toxic “association with fiscal irresponsibility”, resistance to reform and calls for Labour to be “less tribal”. Nowhere is this mess that he alludes to more obvious than with Labour’s position on the Health Bill.

The major problem is that the man who is leading the fight against reform, was singing a very different tune when he was in charge. In May 2007 Andy Burnham told the Commons:

‘Now, the private sector puts its capacity into the NHS for the benefit of NHS patients, which I think most people in this country would celebrate.”

No wonder nobody is listening.

This must be what Mandy meant when he said in November: “I was loyal to Gordon Brown who I didn’t agree with entirely and I will be loyal to Ed Miliband.”

Nothing like a bit of Mandy to liven things up and the master of the dark arts had luke-warm words for Ed on the Today programme earlier. Despite saying that he was “doing well”, there were criticisms too:

“…he’s struggling with two things. He’s trying to oppose the Government on the economy… at exactly the same time, he’s struggling to invent a new left-of-centre political paradigm… It’s a rather unenviable job…”

Well that’s almost better than saying nothing, and more than he could manage at Davos yesterday. CityAM reports:

Sir Martin [Sorrell] mentioned that some commentators haven’t been so kind about Mandy’s current party leader Ed Miliband. “Have they?” said the dark prince nonchalantly. “I’ve been travelling.” Barclays chairman Marcus Agius doubled over with laughter.

Ed will be lecturing this lot about his new capitalism this week. Guido is sure they are going take him very, very seriously…

For the second time in a month Peter Mandelson’s think-tank, Policy Network, has launched a policy salvo against the direction the Labour Party is taking under Miliband. Mandelson privately is contemptuous of young Ed, these high-minded wonkish policy exhortations are the respectable manifestation of that contempt.

Last month his think-tank published “In the Black Labour: Why fiscal conservatism and social justice go hand-in-hand” is a discussion paper in which the authors; Graeme Cooke, Adam Lent, Anthony Painter and Hopi Sen, called for Labour to embrace fiscal conservatism. The paper was an explicit rebuttal of the kamikaze economics of Ed Balls endorsed by Ed Miliband, which poll after poll shows is not seen as credible by the public. Despite the state of the economy Cameron and Osborne are supported by the British public to a far greater extend than Miliband and Balls.

In exactly the same vein shadow pensions minister Gregg McClymont MP and Oxford historian Ben Jackson have written a paper for the think-tank warning that austerity governments often defeat opponents and that historically the Tories have achieved this on multiple occasions. They also urge Miliband to abandon his “predators and producers” rhetoric and ”put forward a more convincing strategy for private sector growth than the Conservatives”. McClymont and Jackson further warn that Ed Miliband must avoid the “tax and spend” trap and “a simple defence of the public sector and public spending”. Alas that is Labour policy in a nutshell..

See also: Labour-Centrists Laying Down Reality-Based Policy Ideas

As Guido mentioned earlier, he refused to rule out joining the Euro one day in the full clip…

Luckily for the UK our cost of borrowing has dropped to a record low. Ten-year gilt yields fell to 2.106% yesterday. If however the UK was in the €urozone and things took a turn for the worse about now the European establishment elite would be forcing Peter Mandelson on us as PM. Or Clegg…

Pitching his stall behind the pay wall over at The Times, the Dark Lord declares that there isn’t much that Labour can do about the riots, given how recently they were in power. Instead of working out a strategy around this, Mandy instead dissects the problems barring the coalition from being a “joined up government”. Looking at the inter, and internal, party problems. Many in Labour will be upset that he looks to be offering the government, not Ed, help to get out of their problems:

“The coalition’s programme will hardly be advanced if every time a Tory minister floats ideas of reform it draws an indignant riposte from a Lib Dem colleague who feels left out of the discussion.

Since May, Mr Clegg has succeeded in looking less meek and hard done-by. He has found a stronger voice and has benefited from this. But if he and his colleagues forget their collective responsibility to make the coalition work, and that government by hissy fit is not the way to make good policy, they will be as much the losers as everyone else.”

Telling Team Ed that they can do nothing but attack cracks in the government is just what the Labour leader needs in the run up to increasingly difficult looking conference…

In September 2009 Gordon Brown told the Andrew Marr Show “there was no deal” to have the Lockerbie bomber Abdelbaset al-Megrahi released early on compassionate grounds. Two years later the convicted terrorist was seen cheering on Gaddafi from the comfort of sunny Tripoli. “So if you’re suggesting there was any deal, there was no deal. There was no conspiracy, there was no attempt to make anything conditional on anything else” Brown promised. The line was pushed the next day by Ed Balls, when he told the Today program“none of us wanted to see the release of al-Megrahi.” However we know now that this is just not true…

Far from it in fact. A Cabinet Office report in July 2010 revealed that the Labour government did “all they could” to get Megrahi released. And it wasn’t just the Cabinet Office blowing Gordon’s line out of the water. Guido brought you leaked emails from former Blair adviser John McTernan that explicitly mentioned a deal. Jack Straw let slip that British trade had been a major factor in the release. As Guido reported back in February, the Scottish nationalists tried to line their pockets too.

“Scot’s justice was bought and the Scottish Justice Secretary Kenny MacAskill’s price was £100 million. The Labour government in Westminster brought forward legislation to get the SNP government in Scotland off the Somerville judgement hook in June 2009, two months later Megrahi was released.”

Far from Gordon’s line that the decision was made in Scotland and that he couldn’t of possibly have had anything to do with it, a dirty deal was concocted at the heart of the British government. It involved Downing Street, the British intelligence services and BP. In September 2009 Guido brought you the players:

“Nick Butler is the Economic Adviser brought into Downing Street when Gordon became Prime Minister.  Prior to that he was a senior strategist for BP. He joined the firm in 1977 and helped to develop close links between BP and New Labour in the 1990s. 

Incidentally Butler is a mate of Peter Mandelson who has also been treasurer of the Fabian Society for more than 25 years. He helped to bring close to half-a-million into Brown’s coffers from his city chums.

“Sir Mark Allen is a Special Adviser to BP. Before that he was the senior MI6 officer who negotiated with Saif Gaddafi to end Libya’s international isolation in 2003-04…”

It was these two men, one ex-BP then at the heart of government, the other  ex-MI6 and then at the heart of BP, who conspired to give Gaddafi what he wanted for access to Libya’s oil. Less than twenty-four hours after Guido revealed the cast more details began trickling out. Allen had called Jack Straw twice in November 2007 to put pressure on him for a deal. Despite initial denials, BP also coughed that they had lobbied the government over the slow progress of the deal, highlighting that there would be “negative consequences for UK commercial interests”. And what was Peter Mandelson’s disingenuous take on these allegations? “It’s not only completely wrong to make such a suggestion it’s also quite offensive…”

No doubt Mandy had plenty of time to make up his mind as to what is offensive whilst he spent a shooting weekend with Gadaffi’s son and Nat Rothschild. A tight and close gruesome threesome. There is no denying the closeness of the upper echelons of the last government to the murderers currently being hounded out of Tripoli. Just last year Gaddafi was asking the Libyan people to “pray for Gordon Brown”, but it’s the hand of Gaddafi’s “good friend” Tony Blair which is never far away. The deal was concocted on Tony’s watch and he even approved the training of Gaddafi’s special forces by the SAS. So close were they that it was Blair that Gaddafi phoned to seek advice on how to deal with the uprisings. Mandelson was keen to help out too – speaking of Saif Gadaffi’s chilling threats to slaughter the rebels, Mandy thinks he could have spun it better:

 ‘I’d rather have had a couple of minutes with him beforehand to say that you know this sort of performance in a very clumsy and ham-fisted way is not going to get you anywhere.’

Even Douglas Alexander, Labour’s Shadow Foreign Secretary who was so keen to talk down the threat of No-Fly Zone, took to the airwaves to claim Blair was right to make friends with Gadaffi, even after he had begun slaughtering his own people. With such a shameful past you would think the “next generation” of the Labour Party might have been more careful to keep their distance from the Mad Dog of the desert. But no…

As the crisis kicked off in February Guido brought you the Miliband family’s own connections to Saif Gaddafi. LSE Professor David Held, who is seemingly in charge of desecrating Ralph Miliband’s memory, welcomed Saif to LSE as a “representative of the Miliband program” - a series of lectures in memory the Labour leader’s father. Held failed to mention the £300,000 he had taken off Gaddafi in his sycophantic introduction. Showing his trademark judgement, it turns out Ed is a very big fan of Professor Held.

Among the Blairite acolytes (Rentoul was in the chair) was Guido’s old friend Dolly Draper. Westminster is seeing too much of Dolly. Mandelson told the Progress crowd “If I talk about the past it is to learn from it, not to go back to it.”

We can but hope…

*A co-conspirator points out that in an oddly Orwellian piece of censorship this “money quote” is missing from the official report on the Progress website.

Rubbing shoulders with the great and good from the financial and political worlds, Guido was a little surprised to see one of the new intake making the list. What could possibly have secured the enigmatic Rory “not a spook” Stewart an invite?

“I took easily to standing in queues, shopping at the supermarket, doing my own correspondence on my laptop… Bit by bit, I was becoming a more normal human being again. It felt a little strange at first, but it actually began to grow on me.”