THE BLAIR AUDIT

It all seems like yesterday ... but at the start of next month, Tony Blair will celebrate his first year at No 10. How has he performed? And has New Labour kept its promises? Here, the political editor of the `Independent' offers his assessment

ON THE afternoon of Friday 6 February, Bill Clinton and Tony Blair met for a private political chat with senior colleagues in the White House. According to one of those present, a significant amount of time was spent discussing the frustration both men felt about getting their message across, directly to the electorate. Such is the stuff of top-table politics.

One of the complaints made was that the media, particularly the press, was getting in the way - hindering, not helping. With Monica Lewinsky beaming out from many newspaper front pages, the President had reason to be peeved. But Mr Blair has had his problems, too.

Labour celebrates its first year of office at the start of next month, and the personal hitches that have hit the Government since May make a ripping read. There was the pounds 1 million Bernie Ecclestone donation to Labour, and the link drawn with a softening of Government policy on tobacco sponsorship of Formula One motor racing; Lord Simon's offshore stake in BP, and the potential conflict it generated with his new job as a Treasury and Trade and Industry Minister; the Independent on Sunday revelation that Geoffrey Robinson, the Paymaster General, had pounds 12 million in an offshore Guernsey trust; Robin Cook's domestic and diplomatic difficulties; Lord Irvine's expensive tastes in interior decoration; umpteen honest interviews given by Clare Short; and the bag of chips on Gordon Brown's shoulder, about the feeling that he had been diddled out of the Labour leadership.

The Prime Minister's patience and sense of humour have been sorely tried and tested since he glad-handed his way to the door of Number 10 on that euphoric wave last May. There is nothing new in politicians believing that reporters and broadcasters should behave as an arm of government, though the days of empire, Winston Churchill and Her Majesty's Media are long gone. But both President and Prime Minister are developing ways of getting round the problem - going out into the country to talk directly to the people through regional press and television outlets, which do not work to the "metropolitan" agenda of either Washington or London.

Mr Blair has changed his press-reading habits since last May. Where he used to read the papers to find out what was going on, he no longer has to do that. He now knows what is going on because he is at the centre of things. So when he reads a front-page story saying that Mr Robinson is to be hounded out of the Treasury by the Tories in the first reshuffle of Ministers, the Prime Minister knows exactly how accurate it is, who the story has been planted by, and why. He shares the view of Alastair Campbell, his press secretary, that reshuffle stories are "the junk food of journalism".

Mr Blair cannot really know how far the "flotsam and jetsam" of daily journalism is influencing public attitudes to the Government. But he has deliberately set himself two tests that are critical in any understanding of his Government, and the way he works.

The first test is that there is only one thing that really matters: the big picture, the delivery of policies that will make a difference to the lives of millions of real people out there in the country at large. Shorter hospital waiting-lists; smaller classes and better education; relief from the seemingly inexorable rise in crime and disorder; a release from poverty for millions, through an opportunity for breadwinners - mothers as well as fathers - to work; caring welfare for those who really cannot work and therefore cannot exploit that new-found opportunity; economic stability and the encouragement of enterprise; and a constructive, friendly role in Europe and the world beyond.

Privately and publicly - and there is no difference - Mr Blair sums up his ambition as the development of a modern, entrepreneurial country, without class, and with breaks for the many, not the few. And the more classless it is, the more breaks there will be. Those are what he calls his "defining aims". That is what he is for. What few understand, yet, is how steely is his determination to see it through. Cabinet colleagues are not deceived by that ready, boyish grin. No one is allowed to get in the way. Those who fail will be dispensed with.

But there is another, second test - which is that the press will not be allowed to dictate which Ministers survive, and which Ministers dive. Mr Blair learns the lessons of history, and one of those lessons is that the appetite of the press can never be satisfied. As fast as John Major threw one sacrificial lamb to the hack rat-pack, they were baying for more.

There is, of course, a fundamental absurdity in all this. The current level of press criticism of Mr Blair and his Government is but a pimple on the Richter scale of recent political history. If a comparison is made of the Sun's vilification of Ted Heath in 1974, its excoriation of Neil Kinnock in 1992, and its recent adulation of Tony Blair, the current Prime Minister should be thanking his lucky stars - as well as his patron, Rupert Murdoch.

Mr Blair's pet theory is that a significant proportion of the press did not want Labour to win the last election, but they were forced to swim with the overwhelming tide of their readership. Since the election, however, the mood has changed. He believes those same newspapers are now determined to say one of two things: that New Labour is a sham, and Old Labour has not changed its suppurating spots; or that they are just the same as the sleazy old Tories.

It is said that if the press cannot distinguish between Robin Cook and David Mellor; Geoffrey Robinson and Tim Smith; Lord Irvine and Jonathan Aitken, the Prime Minister can. Just as he can distinguish between the family trip he took to the Formula One race at Silverstone, and was censured for not declaring in the Register of Member's Interests, and Neil Hamilton's visit, with his wife Christine, to Mohamed al Fayed's Paris Ritz.

A source close to the Prime Minister told the Independent on Sunday that if any of his Ministers were involved in wrong-doing, he would have no hesitation in sacking any of them. "That is a decision he has taken about himself in a way," the source said, "about how he is going to be Prime Minister. He is going to do what he honestly believes is right. He is not going to end up having the newspapers decide that they're going to get a particular person, and then chuck them out."

Citing an obvious case, the subject of much Westminster speculation, Mr Blair believes that his good friend Derry Irvine has been unwise in some of the things he has done and said, not least in hinting at a privacy law - because Mr Blair thinks that is what has led editors to loose their dogs on the hapless Lord Chancellor. The Prime Minister believes that is the reason Lord Irvine is being pilloried and undermined, in the hope that Mr Blair will, in the end, come to the conclusion that Lord Irvine has become an embarrassment, and it would be easier to get rid of him. Mr Blair will not do that.

He will not do that any more than he will get rid of Robin Cook, whom he considers a first-class Foreign Secretary. Mr Cook is not alone in surprising those, not least the Tories, who suggested before the election that Labour front-benchers were a bunch of learners who would crash at the first junction. In the 1992 election, some Conservative posters had Labour with an "L"-plate initial letter, to underline the message.

Who now thinks that the front-runners of the current Cabinet are a bunch of amateurs? John Prescott, having quickly got on top of his enormous Department of Environment, Transport and the Regions, is showing remarkable confidence; Gordon Brown hit the ground, and the Treasury, running; Jack Straw is rated very strong at the Home Office; David Blunkett is doing supremely well at Education and Employment; and Mo Mowlam has pushed as hard as anyone could have done for a possible Irish settlement.

But much more has been done since May. The additional investments in health and education; the Crime and Disorder legislation; devolution for Scotland and Wales; the release of councils' capital receipts for housing programmes; the European turn-round; the easing of the BSE-related beef ban; a degree of independence for the Bank of England; the Freedom of Information White Paper; the disciplined maintenance of spending restraint; the proposed increase in Child Benefit and the long-term introduction of a Working Families Tax Credit to make a start on reducing the poverty trap - all these form no mean achievement for the first year of a Government that has not held office for 18 years.

One senior Minister recalled: "People said the Windfall Tax would not work, remember? For two whole years they said that." Now, within less than a year, the tax had been introduced and was on course to raise more than pounds 5 billion, which would be invested in helping the young, and the longer-term unemployed, lone parents and others who wanted to move off benefits, to find and get work.

"It's already shifted the terms of the political debate," the Minister said. "We are getting people to acknowledge their responsibilities, saying, `Yes, we'll help you, but you've got to help yourself, and help others.' One of the most debilitating consequences of Thatcherism and Majorism was the insidious idea of rights without duties - `I've got a right to this, I've got a right to that.' Socialism got perverted, to doling things out without expecting something back."

THE IDEA that Blair will trump Thatcher on welfare should come as no surprise. Some of his colleagues believe he has the capacity to be more single-minded than Churchill, more radical than Attlee, tougher than Thatcher, and public expectations have risen to match. He has read all the political biographies; he knows all the failures and all the successes, and he learns from the lessons of history.

Peter Hennessy, Professor of History at London University, says: "Already, his place in history is guaranteed for one overwhelming reason, neglected to an extraordinary extent, which is the remaking of the British constitution in a thorough-going and calculated - in the best sense - fashion, the like of which we have never seen before in this country. Secondly, if welfare-to-work in all its ramifications does succeed, he will find himself at the top of the social-policy pantheon, with Lloyd George and Attlee. Thirdly, if his desire to remake the nature of British politics succeeds, he will find himself alongside Lloyd George, Attlee and Thatcher." Professor Hennessy believes that while the constitutional coup is now guaranteed, the other two will be very, very difficult to pull off.

Blair knows that only too well. He says that the scale of his election victory has left a public expectation that the Government will now deliver paradise, and pronto.

One of the Prime Minister's close colleagues says: "We are inevitably in a period where particularly euphoric expectations rocketed after the election. Everyone says we were promising the earth. We weren't. Now, we have got to bring people back down to earth and we have got to be prepared to be unpopular to do the right things."

During one of his most recent meet-the-people sessions, at a Southwark school last month, Mr Blair delivered a remarkably frank cri de couer about this - a passage that won warm applause from his audience. Asked what he was going to do about the high-value pound, pensioners' benefits and various other sectional interests, he suddenly dropped the grin and launched into a frank explanation of his intense frustration.

"Let me just break all the rules of politics and lapse into total honesty with you for a moment," he said. "What you have to realise, what happens when you come into government, is that everybody wants everything, and they want it the day before yesterday." Pandering to such demands, the Thatcher Government had talked of economic miracles and then taken the country through two booms and two busts.

"Now I never want to go back to those days ever again. And the decisions that we take now, difficult though they are, are the decisions for long- term strength. That's why, when people make points about the pensions or VAT on charities ... I can tell you, in my job I meet 20 different people a day, and they all want money from me. Now, that's perfectly acceptable. I mean, that's just the way it goes in life. That's what being in government is about. But we've got to set some priorities, and we've got to go step by step. And the truth of the matter is, going step by step is tough sometimes, and it means having the courage to say No as well as Yes."

At that point, the Prime Minister gave his audience the full Monty Python. "I was talking to some people the other day, you know, about the Labour Government, what we've done since the first of May, because we haven't yet been in a year and you remember that bit in the Monty Python film, Life of Brian, you know, they're all sitting around saying, `What have the Romans ever done for us?' And someone says, `Well, you know, they did the viaducts.' `Yeah, oh, all right, but apart from the viaducts, what did they do?' `Well, they made the roads all right.' `Yeah, but apart from the roads and the viaducts ... '

"So, you know, some would say, `What have the Labour Government done for us?' And I would say..." He then went through the lengthy litany of Pythonesque replies on pensioners, pupils and patients, and promised more to come. "But it will take time. What I want to do is get a sense in the country, where, yes, these things are difficult and, yes, it's step by step, but we know the overall destination. And the overall destination is a society where you combine that strong and competitive and enterprising sense of achievement with a sense of decency and compassion from public services for all the people."

The Southwark audience seemed to accept that, but then like Oliver Twist came back for more - with more demands, in the form of questions from the floor. Their impatience is certainly shared by the parliamentary opposition: Liberal Democrat, Labour and Tory. At their spring conference in Southport last month, the Liberal Democrats offered Paddy Ashdown a relatively free hand in exploring the frontiers of co-operation with the Government - short of coalition.

As someone trained in warfare, Captain Ashdown has fought a valiant campaign against the Government - a campaign of constructive opposition. And on the constructive side of the battle, Blair and Ashdown have worked well together to deliver a constitutional package for a Scottish parliament and a Welsh assembly. There is a joint Cabinet committee on constitutional matters; and the Prime Minister has put Lord Jenkins of Hillhead, the former Labour Chancellor who led the breakaway Social Democrats, in charge of a commission to recommend a proportional alternative to the first-past- the-post electoral system.

Freedom of information and incorporation of the European Convention of Human Rights into British law, and the abolition of hereditary peers' rights to sit and vote in the House of Lords are all on the way, along with an elected Mayor for London, and a full-scale reform of party funding. As Professor Hennessy suggests, it is an amazing package. One Cabinet Minister told the Independent on Sunday: "If you compare the time it took in the last hundred years to achieve major constitutional change with the time that it is taking us now, we are doing it at about eight times the pace."

That is something the Liberal Democrats are making a real contribution towards. But they are also adding a zest of stern opposition to the Government's alleged parsimony on health and education spending, and the paleness of its green policies. There are even some who believe that there is now such an alliance of interest between the Liberal Democrats and the MPs who adhere to their Old Labour beliefs that there might come a time when you could get a new kind of defection in British politics - from Labour to the more radical Liberal Democrats.

The idea that all of Labour's new women MPs are Stepford Wives, brainwashed zombies with their politics as neat as their kitchens, is as patronising as the view that most Labour MPs are devoted Blairites. Certainly, there are a significant number of mainstream Labour MPs, some of them by no means left-wing, who are disaffected with Blair's New Labour adventure. They might snipe at the so-called spin-doctors, but in reality it is the substance, not the candy floss, that they cannot stand.

Last year's revolt over lone parents' benefit left some grown men weeping as they went through the lobbies to support the Government they had fought for so long to get into office. Many will not forget the trauma of that night. It has not been erased by Ministers' subsequent retreat, and some MPs who voted with the Government on that night have sworn that they will never, ever betray their principles like that again.

For the moment, they will not have to do so. But the reform of the welfare state on which Mr Blair and Mr Brown are about to embark could involve a number of very hard decisions over the next year or so, particularly when it comes to dealing with the disabled. If that is doubted, there are some people in the Blair Government who say privately: "There are quite a number of people who claim disability benefits who are not disabled, just as there are actually quite a lot of people who [claim they] are single-parent families who are not single parents - they have got boyfriends."

Those who believe that such issues will not be tackled by this Government need to think again. In the early years of this century there was a philosopher who presented the thesis that nothing should ever be done for the first time. "One of the things we're having to overcome in the party is the sense of surprise that people have when they learn for the first time, something they haven't thought of before," one very senior source explained. Many Labour MPs had not even dreamt that they would be asked to penalise lone parents. But this Labour leadership actually likes doing things for the first time.

"What Tony knows is that the party always expresses surprise when it's told something for the first time, reacts about that, and then it gradually comes round," a Cabinet Minister said. The Labour leadership has an experience of tackling sacred cows. "The forces of reaction said, `You must not touch this, mustn't do that.' And when you do touch it you find that people have been waiting all along for leadership." It had happened over the expulsion of members of the Trotskyist Militant tendency from the party; it had happened over the proposals for one-member, one-vote elections; and it had happened over the re-writing of Clause 4 of the party constitution - the deletion of red-in-tooth-and-claw socialism from the party credo. But the party had come round in the end.

The disingenuousness of such talk is breathtaking. Yes, new ground is being broken, but there is much stealth involved. The hidden agenda of welfare reform is written in invisible ink. Certainly, it is not spelled out in last month's Green Paper.

With typical honesty, Frank Field said in a BBC radio interview shortly after he had delivered his bland statement to the Commons: "What we are trying to do is to set a new course so that inside 10 years' time, when people begin to see how fundamental the change has been, they will be able to look back and say, `That was managed without scaring any of us. But it was radical, fundamental change.' " In other words, if someone were to go back to Mr Field's Green Paper 10 years from now, they would be amazed at how little we were told about the 2020 Welfare Vision thing.

GIVEN THE pace and scope of change, William Hague is right to go back to bland, basic principles like the family, tradition, security and country, perhaps in the hope that something goes badly wrong with the economy. Mr Blair has pledged no more boom and bust, and a recession now would be a breach of that promise.

In spite of speculation to the contrary, Mr Hague appears to have decided that he will fight the next election on a rather jingoistic manifesto, defending England and the pound coin from the depredations of Johnnie Foreigner and the Fifth Column of Euro-traitors called the Labour Party. But he will hedge his bets and not close the door forever on joining a single currency, any more than he will promise to reverse the minimum wage, or reinstate the law-making rights of the hereditary peerage, at the next election. Because of the size of Mr Blair's majority, and Mr Hague's youthfulness, the Conservative leader is still very much underestimated. He is not counting his chickens, but he is laying sound foundations for an eventual return to office.

Every day - day-in, day-out - the Conservative Party machine continues to pump out press releases, and every day they are largely ignored by a bored media. Every Wednesday, Mr Hague stands up in the Commons and bashes his head against the Blair brick wall. He quips are often barbed as well as witty, he is determined, he performs so much better than his colleagues, and by and large no one is listening. But Mr Hague knows that things can change, that politics is nothing if not volatile, and like every Boy Scout, he is prepared for the impossible eventuality of Mr Blair falling flat on his face. The impossible so often happens in politics.

And there really are far more potential banana skins out there than might be imagined. Might the Millennium computer bug prove the disaster that some are saying, bringing telecommunications, broadcasting and transport to a standstill, and disrupting essential supplies of food, drink and fuel from the end of next year? Could it really be impossible that the Millennium Dome is not all that it is puffed up to be by the irrepressible Peter Mandelson? When the Government eventually generates an energy policy, will it help the coal-mining industry or will it make a real contribution to the Kyoto Earth Summit targets? Will Mr Blair dare to tackle Mr Murdoch's untrammelled media power? Will the public become increasingly fed up with the "nanny state" syndrome? Will the movement towards mass demonstrations develop from the countryside to the welfare lobby and the trade-union movement? Is it possible that the banana skin that will eventually bring Blair down has not yet been genetically developed?

There is no issue that sums up more subtly the delicate balance of politics than Northern Ireland, and the chances of winning a peace - or losing out, yet again, to the terrorists and another turn of the circuit on the "cycle of violence". There is Mo Mowlam sitting in the middle of a see- saw, with Gerry Adams on one side and David Trimble on the other, and the poor beleaguered people of Northern Ireland caught literally in the political cross-fire. If it works, and peace is gained, history and reputations are made. If it fails, and the gun and bomb again take centre-stage, despair returns and some of the magic inevitably wears off.

But do not underestimate Mr Blair's determination, and his ability to wheel, deal and deliver. He is a formidable operator, and he will do deals with the devil if he believes it can help him achieve want he wants. Explaining why the Prime Minister gave Mr Murdoch the kid-glove treatment, one source said: "One day without Murdoch on his back is a day gained." Similarly, Mr Blair is quite capable of doing deals with Mr Trimble and Mr Adams, and he is also quite capable of playing both sides against the middle.

The most successful politicians have what is known in the trade as a "killer instinct" - a ruthless ability to overcome all impediments. If such blockages cannot be circumvented, they are destroyed. Blair has the killer instinct, which is why he is Prime Minister and Mr Brown is not. That does not mean that Mr Blair does not have a heart, and an intuitive understanding of the public he represents. He has all that in spades, as he showed on learning of the death of Diana, Princess of Wales, and in the days that followed through to the funeral. He has talent, he has ability, but he also has vision; a vision of the way he wants to leave the country when he has finished. It will take time, but that is why he wants to be the first Labour Prime Minister to be elected for two full, five-year terms of office.

Discussing the essence of what Blair was doing, one of his close colleagues in Government rejected as inappropriate words such as "consensus" and "tolerance" - it seemed that they smacked too much of compromise and wet liberalism. The proper description was "even-handed"; Blair was seeking a balance.

One of his friends said of the National Health Service: "Labour used to spend money, but did not apply pressure for a change of the structure. The Tories pressurised for a change of structure but without putting sufficient resources into it." According to him, Blair was creating a balance in which attention was paid to both form and finance. What the source did not say was that he was re-building on foundations already laid bare by the Tories.

The same loyalist source said there was no question of cave- ins or U-turns on trade-union recognition. "He does not think it is in the country's interests to have the TUC and the CBI at each other's throats. We need basic rights without going back to a situation like the Seventies, and we need to keep business on board at the same time. That is not caving-in or U-turning; that is making sense of where he wants the country to be. He does not want the TUC or the CBI at opposite ends of the spectrum. That is not where the future lies. He wants them working together." He then added: "Where those interests stand in the way of what needs to be done, you will find that they are taken on."

That is Blair's killer instinct. The source puts it differently. "That is an enlightened form of patriotism. It is saying we had better make the best use of all our talents and not faff about on things that are no longer important, like class warfare. Consensus is not the thing. It is much more to do with a sense of national purpose."

Some of Mr Blair's critics in the ranks of Government believe that that kind of discipline could lead to his downfall. They argue that his office meddles and interferes too much. They protest that Number 10 even fiddles and quibbles with the language of White Papers, when it should be dealing with the big issues.

"And look what happens when we take our eye off the ball for one bloody minute," one of the Number 10 aides said. "Some bloody fool says we're never going to go back to Blackpool for our party conference, and the local Evening Post carries a front-page with just four words on it, `Blackpool dumped by Labour.' And what did we have to do to put that right? The Prime Minister had to give an interview to BBC North-West Television, repudiating any such suggestion."

Professor Hennessy says Mr Blair's tendency to centralise is his "Achilles heel". He says that the command-and-control premiership could be Mr Blair's undoing. "There are signs, however, that he's learned that he's got to go against all his instincts and be more collegial, and that you cannot just have an inner group working out policy and then have the pros spin it for you.

"If you're going to be a truly, truly great Prime Minister, you shouldn't need that," Professor Hennessy continues. "A court approach to Cabinet government is a sign of weakness, not a badge of strength, and the degree to which he learns this lesson fully - and he's begun to, no more - could determine his longer-term position in the pantheon."

But one senior Cabinet colleague could not disagree more. "Tony is chided for getting a grip on what is happening in Government," he said. "That is what he is paid for. The situation before he came in was shambolic.

"This Government is being led by a guy who is very, very clear on changing the nature of society and he is also making sure that we are re-elected in order to achieve the next steps. He has an iron determination to make those next moves. Not just next year, and not just the next four years. But the five years after that, too." !