Blair states party's claim to power

John Rentoul examines the Labour leader's speech to Rupert Murdoch's executives on Hayman Island; 'There have been changes on both sides'

Tony Blair opened his speech early today to NewsCorp executives with an indirect reply to critics in his party of his decision to fly to Australia to speak to Rupert Murdoch's formerly hostile barony.

"I am here ... for one simple reason. This is one of the largest media organisations in the world. It is at the forefront of change in media and technology. It is important you understand the changes in the politics of the left-of-centre, and in particular the nature and character of today's British Labour Party.

"I know relations between the News International press and Labour have been poor in the past. There have been changes on both sides. The past should be behind us. Neither of us are in the business of trading policy or editorial support. But we should know where the other is coming from."

The Labour leader described the changes Labour had made, implying - despite his insistence that he was engaged in "updating" timeless principles - that the party was completely different from what had gone before. "My leadership is based on this central belief: that to become a serious party of government again, the Labour Party required not a series of adjustments but a quantum leap ... This is a process of change that marks the long march back from the dark days of the early Eighties when, frankly, we were unelectable," he said.

"My politics are simple, not complex. I believe you can have a country of ambition and aspiration with compassion and a sense of duty to others. The individual prospers best within a strong, decent, cohesive society. These are the real ends of the left-of-centre. The means of achieving them will, of course, vary from generation to generation and should be pragmatically, not ideologically, driven."

Mr Blair claimed that the extent of global economic change required his audience to rethink past prejudices and old ideas. "Jobs are displaced through advances in technology and global competition. Traditional values are displaced by rampant mass culture and universal media. The family unit - the bedrock of stability - is, at least in parts of the West, almost collapsing.

"The central question of modern democratic politics is how to provide security during revolutionary change. That is what people look for from the governments they elect. And I don't just mean economic security. They want social stability too. They want some sense of rules, boundaries, parameters, reorganised and accepted by society as a whole, and enforced."

In a departure from what he has said before, he laid claim to the radical strand of politics with a sharp attack on "outdated establishment attitudes". He criticised hereditary peers; described the British legal system as "a nest of restrictive practices"; attacked the "old boy network", especially in the City of London; and complained that the "intake at Oxford and Cambridge from public schools" (of which he was one) had "barely shifted in 30 years".

He claimed Labour was the party of "true meritocracy" in an attempt to appeal to Margaret Thatcher's former supporters, including the Tory newspapers. "Many of those who supported the British Tories during the Eighties were not really Tories. They were anti-Establishment."

Positioning himself as a potential leader comfortable on the world stage, Mr Blair said: "There is one other advantage of the left-of-centre over the politics of the Conservative right. The Conservatives are in danger of becoming narrowly and insularly nationalistic. There is no future for that in a world of change ...

"Ten years ago who would have believed that Labour would be the party of Europe and the party of free trade? The right argue that further integration in Europe would lead to the loss of Britain's separate identity, sovereignty and freedom of action. Britain, they say, should retreat from Europe and be a separate player and base its strength on its relationships elsewhere in the world - the Commonwealth, the US. This argument has popular appeal but it is based on delusion.

"The real patriotic case, therefore, for those who want Britain to maintain its traditional global role is for leadership in Europe. And to revert to domestic politics for a moment, the position I have outlined is where any government, left or right, would in the end be driven.

"You can have it honestly under new Labour, with some chance of influencing the process; or you can have it larded with anti-European rhetoric about 'defending Britain to the death', and arrive there in any event with the Conservatives. But in their case without influence, where Europe is something that happens to us rather than something we shape."