What is all the fuss about? A British cabinet minister who was loyal to the Prime Minister has been replaced by someone who is equally loyal. A junior Treasury minister, who was unpaid anyway, has left the government voluntarily. The Chancellor's press secretary, unknown outside Westminster, has gone of his own accord as well.
But for once the media din which accompanies every minor ripple in the Westminster sea has been fully justified. The departure of Peter Mandelson was a huge setback to Tony Blair. Mandelson had been the unofficial deputy prime minister, consulted by Blair on just about every issue.
Recently, when I saw Mandelson after an especially difficult European Union summit (all such summits are difficult for the British government because of the xenophobic hysteria of the media), he went into great detail about what had happened behind the scenes.
"In mid-afternoon the summit looked difficult for Tony, but he turned it around at around half past four, although the French were still being awkward," he said.
Mandelson had been in his constituency in the north-east of England throughout the weekend the summit had been held. But he had been so extensively briefed on every detail by Blair he might as well have been there in person.
For Mandelson was one of the few instinctive followers of the embryonic Blairite philosophy, known as the Third Way, which embraces neither "Old Labour" socialism nor unbridled capitalism. Most of Blair's colleagues, including his Chancellor, have doubts about the Third Way as a political guide, but not Mandelson.
Just days before he resigned he came up with a classic Third Way solution for the state-owned Post Office. He neither privatised it nor allowed it to retain its current privileged monopoly, but exposed it to greater competition and commercial freedom while keeping it in the public sector. Goodness knows whether it will work, but Blair approved fully of the scheme.
Most other ministers would have attempted to anticipate their master's views, but with much greater anguish. Mandelson and Blair were on the same wavelength, which is hardly surprising as they were inventors of New Labour.
The only other person who could make such a claim is Gordon Brown, who was helped along the way by the multimillionaire Geoffrey Robinson and his own spin doctor, Charlie Whelan. With the symmetry of a Shakespearean drama, Tony lost Peter, Gordon lost Geoffrey and Charlie.
But the practical loss of able confidants is only one part of the story. The departures expose the fragile, precarious nature of the New Labour project itself. It is a project without deep political roots and is therefore vulnerable when its leaders fall out. In this limited sense, New Labour is reminiscent of the SDP, which blossomed briefly in the 1980s as a result of star names defecting from the Labour Party. When the star names started to argue the SDP was doomed.
New Labour is different in that it was formed from within the existing Labour party and won a landslide election victory. Even so, support among the party's rank and file is lukewarm. After the 1997 election triumph, Mandelson, who was the main architect of the victory, stood for the party's national executive. He was defeated easily by the left-wing former leader of the Greater London Council, Ken Livingstone.
The potential cracks in New Labour have been papered over by electoral success and continued vindication in the polls. The government, seen as a competent breath of fresh air, continues to command stratospheric levels of popularity. This is the final reason why the events of the last few weeks have been such a blow.
New Labour was meant to be the successful arm of the Labour Party, dragging "old" Labour into the 21st century. It was other leading Labour politicians who were supposed to be the electoral liabilities. Yet those not seen as Blairites - the Foreign Secretary, Robin Cook, the Overseas Secretary, Clare Short, the Health Secretary, Frank Dobson, the former deputy leader, Margaret Beckett - are still in the Cabinet while the most prominent architect of New Labour has been forced to resign. As irony piles upon irony it is the skilled New Labour media manipulators, Mandelson and Whelan, who have been brought down by the media, while those ministers who have just got on ploddingly making policies are still in office.
What prevents these events from becoming fatally damaging is a combination of a weak opposition and the fact that resignations have little to do with policy. The Conservative opposition has become an irrelevant side-show, severely weakened by the election defeat and still divided over its approach to Europe. Not a single newspaper in Britain concluded that the disarray in New Labour meant the Conservatives' moment had come again. The drama has been played out within the government, without the opposition playing even a walk-on part.
Nor do Tony Blair and his Chancellor, Gordon Brown, disagree greatly on policy issues. There is a danger for them in being too cautious. In spite of their huge majority in the British parliament they are too scared to say anything supportive about the euro.
Income tax rates cannot be adjusted for fear of alienating support in Middle England. But the two of them are united in their caution and pragmatism. The Brown camp portrays the Chancellor as being a noble radical in the face of a conservative Prime Minister, but the evidence is hard to find. The rivalries and tension arose from the leadership contest in 1994, when the younger Blair emerged from the shadows of his senior partner. So New Labour will march on, wounded and by no means clear of its final destination. For all its faults, we should be grateful it is still in place. For in Britain at the moment there is no viable alternative on the left or right.
Steve Richards is political editor of the New Statesman
