John Lloyd: Are we seeing something entirely new in this Blairite government? A government which is no longer social democratic, but not Conservative or Thatcherite either. Does it represent some kind of post-social democratic third way?
Ralf Dahrendorf: I think we are seeing something uniquely British which cannot be translated into any other country, despite the interest of the centre left in some parts of continental Europe. That is to say we are seeing something indelibly marked by the Thatcher years. Is this the start of something new? I think it might be. Curiously, despite all the excitement of the first couple of weeks, what is striking is the lowering of the ideological temperature.
David Willetts: I can see why it is a good electoral strategy to claim to offer a third way. Labour is trying to have the best of both worlds. They are saying: look, you can have Tory fiscal and tax policy but we bring such a different emotional attitude towards the public sector that somehow it will all work out better. At root it is Owenite, you can be tough but caring too. I doubt it is sustainable, but we'll have to see.
John Edmonds: There is certainly an intention to create a new approach. There is a phrase which echoes through the Smith and Blair years about social justice and efficiency being different sides of the same coin: it is efficient to invest in social justice. I think old Labour was always a bit apologetic about social justice, it conceded to the right that justice was inefficient. The policy implication of the new way is that your economic policy is your education policy.
Melanie Phillips: I think the situation is at the moment rather confused; that is to say, I am rather confused. The Blairite communitarian rhetoric is about addressing rampant liberal individualism-both the deformities of the Thatcherite market and the deformities of the libertine individualism of the left. It is confusing because on the one hand we appear to have an enthusiastic embrace of the market, on the other hand we have Jack Straw in the Home Office and Frank Field at Social Security who believe in reciprocal duties and responsibilities, which takes us back to the communitarian agenda.
Michael Ignatieff: Yes, we are, I think, seeing a new political force. Mainly because there is nowhere else to go. What is at stake over the next 25 years is whether there is a European alternative to US capitalism on the one hand, and Asian capitalism on the other. I think that Blair at least understands that challenge. He understands that there is no way back to the social democratic decencies which used to define the European model. And if there is no way back there has to be a way forward to something which is neither Olof Palme nor Margaret Thatcher. Of course Blairism is a bit of a rag bag at present. But I think what is interesting about it, contrary to John Edmonds, is how little stress there is on social justice. The model is no longer egalitarian, it is civic. It says: what will hold us together is decent public services that people can afford. That means when you get on the bus, or go to the NHS, or use the public sphere, it is decent, efficient, perhaps even market-driven. But it can coexist with great social inequalities.
John Lloyd: In his Mais lecture in 1994 Blair explicitly accepted the macroeconomic orthodoxy spelt out by Nigel Lawson in the same lecture ten years earlier. He said, in effect, we will concentrate all intervention on the microeconomy. He reinforced that during the campaign when he told a City audience that "my preference is for private: private production, private ownership of services and so on." So he seems to have given away a great deal of the economy to Thatcherism and be concentrating on the welfare to work and education programmes to make sure everyone has some sort of start in life.
Ralf Dahrendorf: New Labour isn't actually about social justice at all, it is about inclusion. In so far as there is a coherent approach, it is about accepting the competitive conditions which have been created, while at the same time paying more attention to inclusion. And, I repeat, this is very different from the approach of say Oskar Lafontaine in Germany or Blair's friend Walter Veltroni in Italy. In some ways Blair is in a more fortunate position because the brutal economic reform has already been achieved.
David Willetts: Can I suggest some benchmarks for this supposed third way. Take public spending. It is a crude measure of political culture, but it does tell you something. In the US public expenditure is 30 per cent of GDP. In Britain and continental Europe in 1979 it was around 45 per cent. Since then on the continent it has risen to 50 per cent of GDP and in Britain it has fallen to 40 per cent of GDP. That indicates to me that we are not just a mini-America. Thatcherism lay somewhere between the US and continental Europe. But it will be very interesting to see whether British and continental public expenditure trends start to converge again. And I want to take issue with John Edmonds's point on efficiency and social justice. I think most of the welfare state is not to be defended ultimately in terms of economic efficiency. It is not efficient to spend money on disabled people, one of the big areas where the social security budget has gone up since 1979. And fulfilling our obligations to pensioners is hardly investing in the workforce for the future. So I think this can be rather meaningless rhetoric.
Melanie Phillips: I also question this word "inclusion." How can you have a more inclusive society if everything remains based on the market and hostile to collective public institutions. I am not persuaded by any of the piecemeal reforms such as the welfare to work proposals, and the plans for the NHS are incoherent: get rid of the internal market but uphold the purchaser-provider split which is the internal market. Also, if you want inclusion you should strengthen the prime institution of the nation-parliament. In fact power will fly out to a range of other institutions-to quangos, the courts and Europe.
John Lloyd: Let us stick to the economics of the public sector for a moment. Do you, John, believe Gordon Brown when he says he will keep within Kenneth Clarke's spending targets? And, if he does, what will your members be saying with their hopes aroused by this revivalist rhetoric on which New Labour has swept into power?
John Edmonds: I don't think their hopes have been enormously aroused. One of the remarkable things about this election is how it was fought on such a low level of expectation. An interesting example of this is the fact that the local authority pay negotiations, perhaps the most important in the public sector, were effectively settled for the next three years before the election. A negotiator with high expectations of a new Labour government would not have settled just before an election. More generally, I think that for the next two years the likelihood of some great conflict over pay is very low indeed. Especially if there is some easing of the tendering process in local government, the civil service and the NHS. That will buy a lot of goodwill from the workforce. After that it really depends on the levels of growth, and how much more money goes into the public sector. The next two years may be tightly controlled but over the next ten years we will certainly spend a higher proportion of GDP in the public sector.
David Willetts: But if I were a Labour backbencher, newly elected, I would say, we just defeated the Conservatives by this massive margin, why should Kenneth Clarke remain chancellor for another two years? And one of the interesting things about the social composition of New Labour is that, in spite of the modernising rhetoric, there are many more public sector employees or local councillors. New Labour is much more a vehicle for the expression of public sector producer interests than ever before.
Ralf Dahrendorf: I agree with John Edmonds, expectations are low in terms of immediate benefits. But do not underestimate the difference that a new attitude can make. For example, no party has faced up to the profound changes in the world of work, but I have a sneaking feeling that this government could come up with something which adapts the entitlement structure to the new labour market. This is where we need some new thinking on inclusion. Frank Field is in many ways a traditionalist but he knows what is happening on the ground.
David Willetts: Yes, I like the rhetoric of inclusion too, but my idea of inclusiveness is to regulate less and allow a greater diversity of jobs. This brings many of the traditionally excluded groups, like women and young people, on to the first rung of the ladder. The result is that we have a higher proportion of the adult population in work than on the continent. And my worry is that standardisation, which Labour is drawn to, will make the problem of exclusion worse.
Ralf Dahrendorf: I think, David, you have given us just half of the inclusion story. There is the other half: the low pay, the insecurity and so on. In some ways, the unemployed of continental Europe are more included than some employed people here.
John Lloyd: Let us stay on Europe. A tremendous start has been made in the first couple of weeks. Robin Cook meets his opposite numbers and says, more or less, that there is going to be a French German British triptych, much to the distress of the Italians. Suddenly there seems to be no Eurosceptics left, even in the Sun newspaper. But after a few symbolic acts will the basic problems remain the same?
Ralf Dahrendorf: The change of tone is itself important. Lowering the temperature of the debate; not discussing it in terms of ultimate values; not having a metaphysical discussion on Europe; indeed, moving Europe down the political agenda.
Michael Ignatieff: Yes, the tone has improved and that is good but I just think the European project is in the most almighty mess. The French and German elites have put together a project which does not convince their own electorates. I think that one of the risks is that Labour will change the tone and not address the substantive issue, which is accountability. What I hope is that the elite debate in Britain, which was dominated by a section of the Tory party, will now shift in a pro-European direction. But the substance of the issue-will we have accountable institutions in Europe that do not drive our farmers and fishermen crazy-will remain. I think Britain, damn it, has performed a very useful function in Europe, which is to say that what makes Europe specific is the heterogeneity of its political cultures. Cultural identity depends upon the particular political culture of each of these societies, and you cannot finesse that. I am saying this because I am on the left. I hate what the Tory right says, but the substance of the problem will not go away.
David Willetts: I would go a stage further and say that one of the peculiar features of Britain is that our sense of identity is more tied up in a particular set of political institutions than in some other countries on the continent. And that means that the currency in which this new Europe is being created is a currency which is particularly expensive for us. If you buy your postcards in London, the postcards are often of political institutions: you can buy Buckingham Palace or the Houses of Parliament or 10 Downing Street. But you don't go to Paris to buy a postcard of the Assembl?Nationale-it does not convey what going to Paris is about. In 1990 when John Major became leader of the Conservative party we went through some of what is happening now. There was a new, more positive tone but we found that the underlying tensions which Michael has talked about soon resurfaced. This is not just about economics, it is about explaining to your animal welfare activist that it is no longer for the British parliament to determine whether animals can be exported in veal crates or not. There is a strong feeling that decisions like these should not be taken in Brussels.
Melanie Phillips: Well, I think that the Labour party and the left more generally in Britain have used Europe in the last few years as merely a means of filling their own ideological vacuum. All good things came from Europe; all bad things were in Britain. The Labour party had no ideas or philosophy of its own. I think it will be very interesting to see how they react on particular issues, when Europe actually prevents them from doing what they want to do. There is a small taster of this in the European commission saying you are not going to reduce VAT on fuel to 5 per cent. This idea that smiling at our colleagues in Europe will somehow cause the European project to accommodate Britain's interests is fatuous. Labour says "we are patriots and we are against federalism" but politely ignores the fact that the EU is now an explicitly federal project.
Ralf Dahrendorf: I don't think you could produce many leading European politicians who say so.
Melanie Phillips: Helmut Kohl says so. Yves-Thibault de Silguy says so, Jacques Santer says so. They say so all the time.
Ralf Dahrendorf: These are commissioners.
Melanie Phillips: They are in European politics.
John Lloyd: Whether one calls it federal or not, there is obviously a push towards a single currency. There is a push towards a common foreign and defence policy and there is a weaker push towards a more integrated labour market. All member states with the possible exception of the Scandinavians are signed up to this. So we either join in or get off the bus. Is that the position?
John Edmonds: Now hold on a moment, this is all getting too bleak. Things are not quite so monolithic. There are substantial differences between European states and we know that the politicians in France and Germany are not necessarily reflecting a majority of their electorate. The single currency project is going to be tested to destruction over the next few years...
John Lloyd: You don't think it will work...?
John Edmonds: I think that if you try to bring it in in 1999 you can do it by an act of political will but it is a damn silly time to do it and it will be damaging.
John Lloyd: But the TUC has signed up to it.
John Edmonds: What the TUC said was, faced with a position in 1999 where the big countries in Europe go into the single currency, and we are between a rock and a hard place, on a very fine balance of advantage, it might be a good idea for us to go in. But the point is that there is a very far from homogeneous political atmosphere in Europe. It is not just a question of getting on or off the bus; you might actually try using the steering wheel from time to time. If you want to influence the direction, you have to make deals and build alliances. Now, I believe that if this attitude had been taken three years ago, it would have been possible to put the single currency project back a number of years. It is probably too late to do it now. And it is rubbish, David, what you say about how John Major tried this change of tone and it did not work. He tried the change of tone but was not allowed to go any further by his own party.
Ralf Dahrendorf: I agree with that, but I think the rest of you just don't know what you are talking about on Europe. It is all falling apart. Nobody in his senses talks about federalism in Europe, it is barely possible to hold together the informal alliances which have been built up on foreign policy. Who believes in a common foreign policy?
John Lloyd: After Bosnia, nobody... but what you are saying is that Europe is a kind of elaborate fa?e which sooner or later, perhaps at Amsterdam or after Amsterdam, is going to pop like a pricked balloon.
Ralf Dahrendorf: Yes, and one of the paradoxes here is that the more pro-European Britain becomes the more this will reveal the deep differences between the other member states. The others will no longer be able to create a spurious unity by ganging up against Britain. The underlying difficulty is that ever since the end of the cold war the fundamental motive for European integration has been very weak. It has become exceedingly difficult to answer the question-why an ever closer union? The only answer which you hear in Europe nowadays is to contain Germany. And that is an answer you get in Germany, too. It certainly is one of the main motives of French, and to some extent Italian foreign policy. But beyond that there isn't much of a case for ever closer union, and people now realise that.
John Edmonds: It is an opportunity for realignment.
Ralf Dahrendorf: It is an opportunity not so much for realignment as for turning to subjects where there are genuine common interests and areas where we can retain accountability.
Michael Ignatieff: There is also a danger. What happened on 1st May? We had a dramatic process of elite substitution, a public sector elite replaced a private sector elite. My worry is that this Labour elite will become rather like the French and German elites. First, they will want to hang on to the old European social model and second they will get sucked into collaborating in the process by which European institutions drift further from the voters.
John Lloyd: Several of you seem to be saying that there was a large element of Eurosceptic debate which was treated insultingly in the election campaign, but which is deeply serious and may yet have to happen in the Labour party. But let us move on to that other charged issue-constitutional reform. David, you identified the constitution as one of the great themes in the campaign. It did not actually seem to come up much. But will devolution now mean the break up of the United Kingdom? Or, on the contrary, is it something which is long overdue and will strengthen the union by taking power away from an over centralised, over powerful parliament?
David Willetts: Tony Blair is now in an odd position. He has this massive majority in parliament and the most radical part of his agenda on the constitution is something which I suspect he would rather be without. For the Conservative party it is, of course, vital that we do not become a party of little England, but there is this legitimate worry which was raised by Tony Benn in parliament-the Labour front bench had not been expecting it and everyone else so enjoyed it: how are the relations between these different parliaments and assemblies supposed to work? This ties in with the broader question of whether Labour's constitutional agenda has been properly thought out and whether it threatens instability.
John Edmonds: I don't see how the United Kingdom can stay together unless the very considerable desire in Scotland for some level of devolution is accommodated. The feeling is nothing like as strong in Wales, and even less strong in the English regions. But I think we are headed towards some sort of regional government, which may end up being rather messy.
David Willetts: One of the complicating factors is the large number of English Labour MPs. If Labour was more dependent on the Scottish contingent one would have expected devolution to go through without any internal dissension on the Labour side. But a lot of Labour people might now be raising the issue of public expenditure and Scottish over-representation and the West Lothian question.
John Lloyd: So what you are both saying, John especially, is that having pulled the Scottish thread, more could unravel than anyone intends?
Michael Ignatieff: I am shocked by the conservative, cautious, worrying tone of this discussion. It is the most anti-euphoric discussion I have had all week. I just think the Scottish case is unanswerable and I can't see that this weakens the United Kingdom in the slightest. It seems to me that the Scots, like most people in the United Kingdom, want it both ways, and the test of political wisdom is to give it to them!
Ralf Dahrendorf: There is one country in Europe which has tried to cope with a similar situation and that is Spain. What has happened in Spain is that many of the new regions are just unreal. But one region-Catalonia-is more than a region, and it holds the rest to ransom. I like the heterogeneous, large nation state with a parliamentary democracy, and I dislike the return to smaller, homogeneous units, because they will soon be intolerant within and aggressive without. I am one of those who can't get over the Czechoslovak story. I hope it can be avoided. I don't quite know how.
Melanie Phillips: The risk in Scotland is surely of unfulfillable expectations. There has been all this rhetoric of cultural and political expression, but then the Scots will discover they merely have another tier of local government-then the pressure for real secession will rise.
John Lloyd: But one of the interesting polls which got little attention in England was that support for the constitutional status quo has been steadily going up, even as the Conservative vote has collapsed.
John Edmonds: There is a simple explanation for that. Scots wanted devolved power because they thought those bastards in England were always going to vote Tory, but as the prospect got a little bit closer that those bastards might see the light, then the enthusiasm for devolution got that much less.
David Willetts: I think the law of unintended consequences will apply on constitutional matters. Labour does not know exactly what it wants to do on the House of Lords and elsewhere. This could dominate the political agenda for years to come.
John Lloyd: I am sure you are right. But do you think the status quo was an option in Scotland? Would it have been possible with a Conservative victory?
David Willetts: I think we would have had to do something to give a greater sense of local decision-making in Scotland. Zero change was not an option.
John Lloyd: What about Labour's use of the bulldog? Michael, you wrote an article saying you liked it.
Michael Ignatieff: I simply want to have a non-religious, non-sectarian politics in this country, in which all parties have equal access to all the old stuff in the cupboard. Labour is also the party of Ernest Bevin and has a deep vein of attachment to traditional British symbols. Why should the Tories claim privileged access to certain national registers? It would be very nice to move into the next century with both parties having access to this register. If the symbols cease to be a source of competitive advantage, they also lose some of their power. The bulldog just stays in the back garden.
Melanie Phillips: No, the bulldog was cynical and duplicitous because underneath, many of the ideas of the left are still based on a very deep national self-loathing, a deep dislike of what Britain stands for.
John Lloyd: And what about the moral dimension?
Melanie Phillips: Well I think in the end the moral dimension played virtually no role in the election at all. When Blair was elected as party leader there seemed to be a very explicit moral platform. But during the electoral campaign, if you asked about any matter of principle the reply was always, what works is what is right. To me the family is the crucial issue. Is the Labour government going to support marriage or not?
Michael Ignatieff: These moral issues have to be disaggregated and one has to make clear distinctions about what moral issues government can have any conceivable impact upon. Labour tapped into a sense of the decline in public standards, and its new rhetoric of probity will have some impact on the conduct of public business and the behaviour of public officials. I don't think the previous government was that crooked, they had just been in too long and they got sloppy. But there is also this bigger sense of moral malaise and a sense that something disturbing is happening to core institutions such as the family. But there is no consensus on what to do about it. One lot of people favour tax and benefit changes to make it easier for mothers to stay at home, another lot favour more nursery education to make it easier for them to work. And these divorce statistics, said to be the worst in Europe, are misconstrued if they are simply regarded as symptoms of moral decline. They may also represent a whole set of moral choices by the individuals involved which you can approve or disapprove of, but they are not a sign of social collapse. I am overjoyed that the moral rhetoric was at a minimum in Labour's appeal, because I think nothing promotes empty sanctimony and false expectations in politics so much as claims by government that it can address deep-seated shifts in the social structure.
David Willetts: On probity, I note that Labour has rewritten the rules on political appointments-putting Alistair Campbell and others in Whitehall jobs. We would have been crucified for doing that.
John Lloyd: But how will we judge the success or failure of the new government?
Ralf Dahrendorf: By its effect on social cohesion and access to opportunity. It is a mistake to look at the actual distribution of wealth. It is a question of access, how we measure that with any accuracy I do not know. If they don't change their policies and win the next election they will have been a success.
Michael Ignatieff: One of the difficult things about putting social cohesion on the political agenda is that it is not only difficult to measure, it is also difficult to define. It often signifies a strongly conservative agenda in a non-political sense. It may be that if you want to have a radical reforming government you should have less social cohesion because if you want to change things you have to create enemies. I think I would rather have the Blair administration judged by the quality of its enemies than by its success in putting us all to sleep. That doesn't mean to say that I don't value social cohesion. I would like to see more money spent on the public services that create the public sphere. I will judge social cohesion by what I see on the tube.
Melanie Phillips: As indicators of improved social cohesion I will be looking at the state of the people we call the underclass. I will want to see a drop in the real rates of crime, not the manufactured statistics, and a slowdown in the rate of family dislocation. Most of all I want to see an education system which conveys to its children that there is a common national project of which they are all part. At present most education-alists reject the idea of a common culture but there cannot be any cohesion without a common culture.
John Lloyd: Last question. We started by considering whether New Labour is a new sort of political force. But are we also living in a new political era in which we see volatile swings every few years and more or less permanent political discontent?
Ralf Dahrendorf: Yes, support for political parties these days is shallow and I don't think Britain is different from other European countries in that regard. The trend seems more pronounced here because of the electoral system.
Melanie Phillips: I think that the electorate is very volatile and I think we are in quite a dangerous situation, because although Blair has tried to depress expectations he is still weighed down with a lot of people's hopes. And if he fails, the Conservative party is not really in a position to offer an alternative.
Michael Ignatieff: I think the electorate is less traditional, that means you cannot count on unreflective support at the polls in any of the established democracies. That does not mean the support is shallow. It does not necessarily mean it is volatile. You have to remember that over the past 50 years the average voter has become progressively better educated. You could argue that it is a more reflective electorate, an electorate that wants to be convinced of something, wants to have an argument, doesn't want to be treated like a fool. I don't want to overpraise the British electorate but I am generally struck by the sophistication of the ways in which they decode messages, pick up trends. I think the voters looked very hard at Labour in 1987 and very hard at Labour in 1992, and said, close, but no cigar, guys, we don't believe you. They looked closely at Labour in 1997 and they said yes, on very rational grounds. I think that one can exaggerate the Mandelsonian manipulation. There was a change of conviction, people said let's give this lot a try now. As to the future, what is at stake is creating a politics that is less ideological, less dogmatic-a rational political system with two equally viable parties of government. As for the Conservatives I trust in their preternatural animal instinct for power. I think it is going to be difficult to get back in under ten years, but this is a party with a kind of genetic instinct for power. They may experiment with a bit of ideology, but they will return to being a brilliant party of power. As they are reduced to their English heartlands we ought to remember 1983 and 1987 when we thought that there could be no Labour MPs south of the Watford Gap, and now suddenly Labour is the national party. Will there be a crisis of disillusionment for Labour? I think that mistakes the mood. People had no expectations ex ante, had a certain amount of euphoria ex post, but people's excitement about Labour is very measured. Blair just has to deliver on some low ticket items and give honest, decent, competent government for five years and he is in for ten.
Ralf Dahrendorf: A tall order.
