Pugh is pretty clear in his Preface that many Labour Party insiders were never going to like his account, but having read it, I suspect that's because the truth hurts. He's a smart commentator who dutifully covers the whole history of the party, and is willing to do the number crunching of election results and membership numbers necessary to give a balanced account, but also really tries to pull out some continuities and surprising characteristics of the organisation.
In particular, he shows how there has always been a tension between socialist and conservative (with a small 'c') elements in the party, and how this tension has effected issues like foreign policy, equal opportunities, and economic policy. Pugh skewers the party for being unwilling or intellectually unable to offer any alternative to Thatcherite economics from the late-'80s onwards. He also demonstrates a tendency for the Party to pick the wrong leaders at the wrong times, and illustrates repeatedly how the Parliamentary Party has always been a very different beast to the grass roots membership.
As well as this ability to pull out broad themes, Pugh's attention to the personal characteristics of various Labour figures is where the book really excels. He's great on the origins of the organisation in the Edwardian era and the sometimes quite unconventional attitudes of Hardie and MacDonald, and very good at untangling the disputes and infighting of the '70s and '80s, giving sharp pen portraits of politicians like Harold Wilson, Michael Foot, and Tony Benn along the way. This is brought to life by fantastically chosen quotes. My copy ended up full of pencil underlinings.
Much of the criticism of the book has focussed on his account of more recent times. Admittedly, his account is almost polemic at times about the failure of Labour to represent a real alternative post-Thatcher, and he's scathing about Blair, who comes across as a political opportunist with almost no principles. I suppose your opinion of this history will depend in large part on whether you buy into his account or not. To me, it seemed convincing, and it was a fantastically entertaining read. Five stars may be at odds with some other reviews here, but I felt it was a book with a long list of positives and nothing I could really pick out that I'd fault it for.