Did they foul up my Third Way?

D-Day for British politics - The <em>New Statesman</em> wondered if Iraq and other recent reversals

A few weeks ago, the New Statesman editor, Peter Wilby, asked me to write on the "Tony Blair, should he stay or should he go?" controversy. To date, I have not been impressed with the press coverage of this issue. The Prime Minister and new Labour are going through a difficult period, probably the most difficult in seven years. But I am not convinced that these travails are as yet qualitatively different from similar episodes that Blair has successfully surmounted in the past. Many commentators refer back to the days when Blair was universally loved and admired. But such a time never existed. As someone sympathetic to, and working closely with, the new Labour project, my memory is of insistent attacks almost from day one - from the left-leaning press just as much as from the right. Tony Blair was Bambi; he was phoney Tony; he was simply a frontman for Gordon Brown; his grin was as empty as new Labour's policies were said to be.

So, rather than contribute to the media flurry on this subject, I will answer a selection of Wilby's more precise questions.

(In Wilby's inimitable style): Has new Labour made a Horlicks of the Third Way?

The Third Way, as I have always understood it, is simply a label for the renewal of social democracy. Centre-left parties across the world have revised their doctrines in the light of social and economic changes: the disappearance of socialist utopias, globalisation, the development of a service economy and ageing populations. In the face of these, the First Way - classical social democracy, based on Keynesianism and traditional statism - has become largely obsolete. The Second Way - Thatcherism or free-market fundamentalism - proved a disastrous alternative. The aim of Third Way thinking - revisionist social democracy - is to create policies for the centre left that respond to these changes.

The Third Way is in no sense to be identified solely with new Labour. Social democrats in Scandinavia, for example, have been highly revisionist in their thinking. Active labour-market policies, fiscal discipline for the left, welfare reform, even foundation hospitals were all pioneered there.

Without new Labour's ideological revisionism, there would not be a Labour government in this country, let alone one that has endured for seven years and is on the threshold of a third term in office. No unreformed centre-left party has got even close to power. There have indeed been mistakes and insufficiencies - from the fiasco of the Dome through to transport policy and a failure to move the country closer to Europe. Yet the government's overall domestic record is strong. Since 1997, the UK has had higher growth rates than most other EU countries. Unemployment is low, the rate of job creation high. More than 75 per cent of people of relevant age are in work, compared to an EU average of 62 per cent.

A million people had been lifted out of poverty by 2003. It is generally agreed that by 2005 the government will reach its target of reducing the level of child poverty by a quarter. The money being invested in public services will further widen opportunities for the less well-off.

Labour may fare poorly in the coming local and European elections, and turnout could be very low. Yet its national poll ratings have proved remarkably robust. A recent ICM poll still gives the party a four-point lead over the Conservatives, at what is normally the lowest point of the electoral cycle for an incumbent government.

New Labour has precisely what the Conservatives lack - a distinctive political philosophy. The Conservatives simply have not been able to put together what they need for electoral success: in effect, a right-of-centre "third way". The Tory experience, from William Hague to Michael Howard, shows that changing leaders does not make much difference - it is the policy mix, and the voters' appraisal of it, that count. Which brings us neatly to the next question.

Is Gordon Brown a "third wayist" and would he keep the Third Way going as PM?

Absolutely he is and certainly he would. I defy anyone to find, in Brown's speeches over recent years, more than a slither of difference from Blair. His Third Way credentials are impeccable. In most respects, he is a revisionist par excellence. He believes in entrepreneurship and enterprise. He emphasises the need to foster a dynamic economy and stresses the importance of flexibility in labour markets. He is a believer in welfare reform, discarding passive benefits in favour of tax credits geared to job creation. He rejects First Way views on the role of the state. Old-style social democrats, he argues, saw the state's role as intervening in cases of market failure and propping up or taking over favoured businesses. Today, we must recognise that the state has to intervene in the opposite direction - to make markets more efficient.

Brown wants Britain to become a society that combines the economic dynamism of the US with the social protection characteristic of Europe. It is not a self-contradictory ambition, so long as economic reforms march in tandem with technological investment and continued welfare restructuring. Brown, like Blair, rightly emphasises the importance of jobs and of getting people into work. A country with high levels of employment can more easily free up revenue to spend productively on health and education.

Isn't Brown rather old Labourish on foundation hospitals, university tuition fees and the principle of choice in public services? I don't think so. He may have misgivings on some policy details, but he would not dream of putting billions into an unreformed state sector. He says there are areas of public activity where market principles cannot operate cleanly and should not be allowed to penetrate too far. But every "third wayer" can agree about that.

I would put it like this. In market situations, we are "consumer-citizens". Choice between products, and the pressure this puts upon producers, is the main guarantee of quality and efficiency. The role of the state is confined to providing an overall regulatory framework. Other areas, especially health and education, are different. Here, we are "citizen-consumers". The state, and not-for-profit agencies, have a much larger part to play. Patients, for instance, can never be simply consumers, because they cannot acquire the specialised knowledge needed to assess the quality of medical treatment.

Is Iraq a logical extension of Third Way thinking, an aberration, a misunderstanding of it, or nothing to do with it?

The Third Way is not some kind of formula that can be applied to any circumstance; it is a debate about left revisionism. Therefore, it has nothing to say on the rights and wrongs of war in Iraq. But I am much more sympathetic to Blair's position, and to his dilemmas about Iraq, than is the editor of this magazine, and probably most of its readers. As he has said on many occasions, Blair is a multilateralist. Globalisation means interdependence, and in an interdependent world, collaboration between nations, and international agencies, becomes of the first importance. But there will be times when collaboration is difficult, or less than complete; and there will be times when the use of force has to be contemplated, even without full UN backing - as in Kosovo.

With the rise of the new terrorism, which is not responsive to conventional containment and deterrence, the use of force will sometimes have to be pre-emptive. The decision of the Bush administration to confront Iraq militarily has to be seen in this context. It was not planned from the beginning, but was a post-9/11 innovation. Saddam Hussein was an international menace because of his possession of WMDs (the firm belief of almost everyone in the world intelligence community) and his clear intention to gain nuclear capability. The coming together of states such as Saddam's Iraq, possessing or seeking to acquire nuclear weapons, and terrorist groups poses the biggest future danger to the west. There was no possibility of removing Saddam by UN pressure or internal political change. We should remember that he let the UN inspectors back only because of the Coalition military build-up.

Blair is in no sense an ideological bedfellow of George Bush, but they both accepted the above scenario - although Blair pushed for UN Security Council backing and sought to insist upon a linkage to the Israel-Palestine issue. What went wrong was not the war, but the "peace". The postwar handling of Iraq by the Bush administration has been disastrous.

Blair is in a cleft stick, because in the nature of the situation, he cannot publicly dissociate himself from the American postwar strategy. But what he is rightly doing is exerting maximum leverage over the Americans to draw them much closer to his own standpoint. As the Times columnist Anatole Kaletsky pointed out recently, Blair probably has more potential influence over the US leadership than he ever had before, given the catastrophe that is threatening to unfold in Iraq. He must deploy it to the full. Real sovereignty must come more quickly; soldiers from other countries should gradually take over from the US military in Iraq; the US must renounce the idea that it will sustain permanent bases there and cut the size of its planned embassy; and there must be a visible and genuine commitment to the Middle East road map.

I do not believe that Brown would have followed significantly different policies in Kosovo, Afghanistan or Iraq. Nor do I believe that Blair should stand down at this point or in the near future. Whether against the war or not, everyone should want to see a stable, sovereign and prosperous Iraq come into being. Blair's leadership is the best bet for achieving such a goal.

Anthony Giddens, former director of the London School of Economics, is the author of The Third Way (Polity Press, 1998)