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IAIN WATSON: It wasn't so long so ago that
they were lining up to get inside Tony Blair's big tent. Back in 1997
the boundaries of Labour's political support were expanded to record lengths.
The charismatic and then youthful-looking leader, won over disillusioned
Conservatives, while managing to hold on to his party's more traditional
vote. All of this sounded pretty good to the other centre left leaders
in Europe who were anxious to gain power themselves. They took great interest
in what Tony Blair called the Third Way - an inclusive kind of politics
which was neither old left nor new right. But critics are now saying Labour
must present a more positive vision at the next election.
MATTHEW TAYLOR: I think the term "Third Way" may
be on the way out. Its always been a bit risible because it's never very
clear what the first and the second way are. And it also speaks to a sort
of halfway point between left and right.
PROFESSOR ANTHONY GIDDENS: Well, the Third Way's taken over the
world more or less, as you wouldn't find a single left of centre government
in the world which isn't in some sense following Third Way policies. In
other words, which has broken away from the traditional policies of the
left.
MASSIMO D'ALEMA: (TRANSLATED) I have always thought that the most
important question was a dialogue between European socialism in its different
experiences and the American Democrats, not a break-up or separation of
European socialism..
WATSON: Labour's ability to assemble
a coalition of voters from both left and right won the admiration of other
centre left parties in Europe. But now they are not so sure that Tony Blair's
brand of Third Way politics stands up to close inspection. But what's more
surprising is that modernisers in the Labour party -those who should be
impressed - are now sounding every bit as sceptical. The Fabian society
isn't exactly a bastion of traditionalists; this Labour think tank is where
modernisers in the party tend to find a convivial home. Downing Street
want them to talk up the Third Way but, at their annual bash last week,
the assembled guests were more interested in the flan than the philosophy.
The Third Way wasn't exactly a major topic of conversation.
BEN JUDGE: "I'm not sure there
is a definition of the Third Way - I think it's a bit of spin."
ANITA CROWE: "I think the Third Way is
marketing strategy, its a way of selling new policies to people who might
have been interested, who might not have been as interested in old labour."
JOHN O'FARRELL: It was actually coined
by Franco I think, the Third Way, believe it or not - that's not to say
new labour has anything to do with Franco - but it sort of means you can
delay your policies as long as you want.
WATSON: Supporters of the Third
Way say it's wrong to brand it as a nebulous or even vacuous concept. They
say the way it balances economic liberalism with social justice is genuinely
new. And they say, it can provide a sturdy framework to meet the challenges
of the global economy. Exponents of the Third Way argue that it offers
an answer to the real-life challenges of the day. When the government intervened
in Rover recently, Labour's traditional wing hoped this signalled a new
policy of more active intervention in the economy. But the government had
other ideas. So Tony Blair has sent out John Reid, a close cabinet colleague,
to explain just what the Third Way means; it's neither laissez faire nor
unlimited state support; but something in-between.
JOHN REID: I've rejected the old
form of state intervention. Because what that used to mean was when everybody
had a problem the state would take over the running of something. Now in
the past, Labour was regarded as a party with a big heart but when it came
to business or running the economy, with a very soft head. Thankfully that
myth has now been destroyed. Not only have we shown that Labour can run
the economy better, far better than the Conservatives could, but that it
is an integral part of delivering social justice.
TAYLOR: I think Labour's failed
to articulate sufficiently a clear industrial strategy. We know the emphasis
upon supply side and upon education, and those sorts of factors. But their
account of how it is the economy goes through periods of transition is
underdeveloped, and that's partly because they were so keen to get rid
of the image that they were going to be supporting lame ducks, and so keen
to say we recognise the rigours of the market, that they've had to develop
in office an account of the importance of supporting people through those
transitions and not just letting people be washed up, because basically
the public won't accept the idea of twenty thousand people losing their
jobs because a car plant closes.
WATSON: Those who expound the Third
Way say we should see the bigger picture. the route to success in the global
economy is not through protecting old industries but by producing a more
flexible and adaptable workforce.
GIDDENS: You need more flexible
labour markets because the pace of technological change is much higher,
because you have plenty of people who want to work in a flexible way because
after all flexibility is often a positive thing. If, for example, you want
part time work, if you're a woman at a certain phase of your career. You
need to get people into some kinds of lower level service jobs as long
as you can ensure they can move up the job hierarchy. What's happened in
some European countries like Germany, is that people have become excluded
from those jobs, and therefore you've got a big unemployment problem,
in that kind of economy.
WATSON: When the centre left met
in Florence last year, flexibility was still the in-thing. But at this
week's gathering in Berlin, even the term the 'Third Way' is off the agenda.
The Europeans realise that too little regulation can be as damaging as
too much. One of Tony Blair's closest allies in Europe -the former Italian
PM, Massimo D'Alema , says that the Left must be able to re-assure their
voters that there's more to life than economic efficiency.
D'ALEMA: (TRANSLATED) I don't think that the societies
of continental Europe should be considered only as bearers of negative
values compared with the Anglo-Saxon experience There are also advantages.
The fact that we live better in Italy is a thing of value, too. The values
of competitiveness are not the only ones: there is also the value of better
quality of life.
WATSON: Modernisers such as the
Fabian's Michael Jacobs say that Labour has a lot to learn from the way
other European countries protect their workforce.
MICHAEL JACOBS: I think sometimes by emphasising
the importance of competing in the global market we underestimate the extent
to which people want some protection from the effects of the global market.
You only have to see what's happened with Rover to know that people are
not happy simply surrendering to whatever the global market seems to seems
to demand and I think there is something in the rhetoric, perhaps particularly
expressed in France of challenging the forces of globalisation, not necessarily
saying we can turn them back but we can shape them, we can direct them
to some extent, we can say they should be going in this direction rather
than that direction which is I think attractive and I don't think sometimes
the British government perhaps encourages people to believe in the power
of democracy and of government and sometimes I think perhaps we feel it
gives the impression that we are relatively powerless in the face of these
forces.
WATSON: Supporters of the third
way say that parties of the left should acknowledge that taxation is a
tricky business. Proper funding of public services always goes down well.
But, on the other hand, if tax rates are too high, desirable objectives
could be endangered if wealth creators decide to walk away.
GIDDENS: That means sometimes you
need to bring taxes down rather than put them up. In some countries for
example, including this one, tax on business has been too high, it inhibits
business and it inhibits job creation. You therefore need to look for a
decent tax balance which will allow you to spend the money you need to
for social purposes, but that needn't come and shouldn't come wholly either
from corporate tax or income tax.
WATSON: Elsewhere in Europe left
of centre governments don't want to put at risk their public services by
cutting taxes too far. They're proud of the fact that they won't allow
public spending in their countries to fall to British levels.
D'ALEMA (INTERPRETED) I am convinced that public spending
cannot go below a reasonable level. I do not believe that it is possible
to reduce public spending below a certain limit which, for primary public
spending, could be considered as about 40% of the GDP. To go below this
limit would mean, above all, damaging the economy of our country.
WATSON: Similar arguments are
reflected in this country by some of Labour's leading modernisers. They
say the state should never provide merely a safety net. The government
has to be bold in arguing for more spending in universal services, even
if that means more tax.
TONY WRIGHT: It was famously said by Keynes
that taxes are the membership fee we pay for living in a decent society.
If you do want decent health services, decent schools and all the rest
of it they have to be paid for. So I would like Tony to make a speech which
does talk about the civic value of taxes and what taxes do for a society.
WATSON: The pressure is now building
on Tony Blair to better define what the third way actually means. As a
concept it stretches from America to Europe and beyond. But even those
close to Tony Blair are now saying he shouldn't try to be all things to
all people, instead he should clearly draw his inspiration from the parties
of the centre left on the continent.
JACOBS: I think the fact that they're
moving in the same direction or in the direction towards greater flexibility
or lower taxes and spending, doesn't mean that where they're aiming for
is the levels that Americans have or frankly that we have and actually
if we were converging on Europe we would have a bit less flexibility, a
bit more protection for workers, a bit more generous welfare state, slightly
higher public spending even if what's going on in the rest of Europe would
be slightly lower and more flexible.
TAYLOR: The odd thing is that the
whole debate about Europe is couched in terms of the single currency and
what I envy in Sweden and Denmark and Holland and Germany is not their
currency, I envy their transport systems, I envy their education systems,
I envy their commitment to social justice, I envy their more liberal criminal
justice systems. There's a great blindness in Britain to the amount of
successful practice that's going on in Europe, but I think that's going
to change.
WATSON: Labour has been having
problems getting its supporters to sing from the same song sheet. MPs from
industrial areas have been sounding off recently. So Labour's leadership
have responded by making populist noises of their own. Only this weekend
they've been pounding Oxbridge dons for their alleged elitism. But Cabinet
Ministers also realise that if they're to keep as many voters as possible
within Blair's big tent, then they mustn't sound too out of tune with the
middle class.
REID: If the Labour Party
becomes a body that does not appeal to the broad mass of hard working families
in this country, then it will be finished electorally. We should have
learned that lesson twenty years ago; we did learn it; that's what caused
our re-appraisal, our modernisation. That is what's developed - our new
way, which you call the third way - and that is what's so attractive to
the people of this country.
WATSON: But those urging the government
to go further than they might feel comfortable with say there are no real
dangers - Labour's recent middle class supporters won't be scared off.
In fact the government, far from leading public opinion, is now falling
behind. They say that labour mustn't be complacent about winning the next
election - they should see that it's public spending as much as prudence
which will bring them electoral reward.
JACOBS: I think the government
is now in a position, having established the credibility of its basic economic
position and its competence in driving improvement in the public services
to say if we want those improved services we have to pay for them, and
that may mean higher taxes and that I think is a confident message to take
to the British people.
WRIGHT: I think now that we have
to find a way of putting third way discussion into more convincing and
coherently popular terms. So that when people do say, you know what is
this government all about, what is Blairism all about, you've got some
meatier answers than phrases about the third way.
WATSON: So modernisers are saying
Labour needs to take more risks to maintain a high level of support
at the next election. And the term 'third way' may have had its day. But
Labour needs to mark out its territory more clearly otherwise an increasingly
uncertain electorate may make a permanent exit from Tony Blair's big tent.
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