Mandelson warns Miliband he must lift the grip of unions

The Labour peer said the 2015 election is “for Labour to lose” but warned it also faces the “very difficult minefield” of the findings of the inquiry into the war in Iraq, which are due to be published next year.

Lord Mandelson also gave a pointed assessment of the performance of Shadow Chancellor Ed Balls, who was lambasted over his response to the Autumn Statement earlier this month, suggesting he is “better in government than he is in opposition”.

Labour’s links to the trade unions are a “source of great interest and anxiety” for voters, the former Business Secretary said. The public “remember” that the leadership was “won by Ed on the basis of the trade union vote” and that power over the contest should be lifted from the unions.

He told BBC 1’s Andrew Marr Show: “I think the next election is for Labour to lose. I think they are in a good position but to consolidate their lead they have got some things to do in 2014 and I would identify three things.

“First of all, they have got to convert their very effective skilful tactics on cost of living into a strategy which is rooted in policies for economic growth and rising prosperity for the country as a whole.

“Secondly, Ed Miliband faces a big test of his leadership in relation to the trade unions. He’s effectively got to win the fight that he started quite radically to reform the relationship between the trade unions and Labour.

“Thirdly, I would say too he has to navigate his way through what could be a very difficult minefield and that is the Chilcot inquiry into the Iraq war, which remains a very sensitive issue for many in the Labour party but also many in the public.”