The battle not to be left behind

Despite a shared political heritage, Tony Blair's New Labour government is very different from Lionel Jospin's new Socialist one. John Lichfield asks which is most likely to deliver on its promises

President Chirac loves his little jokes, even in defeat. When Tony Blair went to the Elysee palace for lunch in June, the Gaullist President greeted him warmly and congratulated him on his first month in office. But he added: "You must go further, if you are going to keep up with us Socialists ..."

It was a pleasant little joke, which worked on three levels. Mr Chirac was mocking himself, because his centre-right coalition had lost the parliamentary election two weeks before. Second, he was teasing Mr Blair, for having seamlessly and cheerily abandoned the use of the word socialist. Third, he was suggesting that the simultaneous success of the left in London and Paris, for the first time in half a century, might be an invitation to cross-channel competition, rather than brotherly understanding.

On that same day, the newly-installed Socialist Prime Minister, Lionel Jospin, could find no time to see the visiting Labour Prime Minister. There was a flurry of speculation, in both the British and French press, that the two men had conceived an instant dislike for one another. The speculation (including some by the present writer) has since been dismissed by French and British officials as misplaced: Jospin and Blair, they say, get on perfectly well. Although no firm plans have yet been made, the two prime ministers hope to meet informally during their holidays this month, close to Mr Jospin's political base south of Toulouse.

What remains certain is that, whether they like it or not, whether they like each other or not, Jospin and Blair are rivals. They are rivals for the moral and actual leadership of the European centre-left; but also in a perverse way, they are domestic rivals.

If Jospin succeeds, with a more interventionist, more demand-oriented programme than New Labour, the success will be thrown in Blair's face by Labour dissidents and Guardian leader-writers. If Blair succeeds while preserving the market orthodoxies of the Eighties and Nineties, never quite accepted in France, his success will be seized by the French right (is already being seized) as a cudgel with which to beat "Jospinisme".

In one sense, this is inevitable. The two men are trying to answer the same question: what are left-of-centre politics for in a post-socialist world? In another sense, comparison is unfair, or misleading: the two men are sitting examinations with different questions. Britain and France are neighbouring but dissimilar countries which are at different stages in their political and economic cycles.

After the achievements, but also the excesses of 18 years of dogmatic Conservatism, Tony Blair inherited something very rare in politics: a booming economy coupled with a popular thirst for change. Unemployment is low; growth irrepressible. So much so that his chief problem is to prevent heated domestic demand from boiling up into inflation. He has a gargantuan majority and no organised opposition.

Lionel Jospin inherits a series of botched semi-reforms, stretching back over six years and three governments. The domestic economy is faltering; domestic demand is falling; unemployment is still rising (up to 12.6 per cent in June). He has to co-habit with President Chirac, who can pick his opportunities to trip him up. He has a slender parliamentary majority, which includes Communists, Greens and radical socialists, who have very different ideas to his own (and to one another).

The first weeks in office - 100 days for Blair, 60 for Jospin - seem to have produced a clear victory for Blairism. The Prime Minister's popularity has increased; he has made few mistakes; the Government has remained disciplined and, publicly at least, united. Gordon Brown's Budget was a media and public relations triumph (even if the markets still have doubts).

Jospin, by contrast, got himself into a series of muddles over the European single currency, the Renault closure in Belgium and immigration. His ministers contradicted one another publicly. His popularity has declined (but not much).

Partly this can be explained functionally. Blair knew that he was going to win the election: he had several years to prepare for office. Labour was careful to promise nothing it could not deliver. Jospin, like everyone else, thought that he was going to lose the election, which in any case came sooner than expected. The French Socialist programme was an attempt to limit the electoral damage: no one expected to have to implement it. Up to 700,000 jobs would be created through state spending, half in state jobs. Weekly working hours would be reduced from 39 to 35 with no loss of pay. There would be no austerity programme. No tax rises. France would still meet the budget criteria for joining Economic and Monetary Union (Emu). Mr Jospin, like an escapologist throwing away the key to his chains, added a final promise: to keep all his promises.

But, two months into office, Jospin's record is far from disastrous or discreditable. The shillyshallying over whether France would make the Emu guideline of 3 per cent of GNP budget deficit this year seemed like incompetence. Some of the confusion was damaging. But look at the overall effect. It has prepared market opinion to regard a near-miss as a triumph. The stop-gap budget proposals announced last month were a fudge, if you like, but also a brilliant exercise in playing for time. The one-off taxes on the largest and most profitable businesses are broader than Gordon Brown's windfall tax on privatised utilities but little different in principle. For the time being, Jospin, with a very poor hand, has simultaneously appeased the Germans (just), the markets, the Communists, and French public opinion.

Jospin is not as immediately likable as Blair. He may not (yet) have thought so deeply about the future of the left. But he should not be dismissed lightly. He may have the one quality vital to all successful politics: luck. Jospin promised that his programme would rekindle growth; in truth, growth, which is nothing of his making, may rescue Jospin.

Despite the rise in unemployment in June, the outlook for the French economy is now the best it has been in five years. The franc has sunk by 20 per cent against the dollar and the pound in eight months. Inflation remains scarcely perceptible. Interest rates are low. Exports, already booming for months, have now become frantically good. According to a semi- official projection, the French economy should grow at an annual rate of 3 per cent in the second half of this year, the same as Britain's.

It may take a while for domestic demand to respond, and unemployment to fall. But any sustained increase in growth will ease Mr Jospin's task in squaring the circle of his election pledges over the next couple of years.

And here is the rub. A short-term recovery of growth would be welcome but it would do nothing to solve the longer-term ills of the French economy. It may allow Mr Jospin to muddle through his five years without achieving much. On the other hand, it could give him an opportunity to be as creative as Tony Blair; in some ways more creative.

Unlike Mr Blair and President Clinton, Mr Jospin does not follow a Thatcher or a Reagan. The US and British state sectors have shrunk in the last 20 years; in France the state has grown. One in four French people who have a job work, in some way, for the government. This may not, in itself, be as important as the corporatist attitudes in France; the aversion to risk; the lack of productive investment. The export boom is startling but it depends mostly on traditional luxury goods, subsidised farm produce, weaponry and machinery from state-controlled, or state-influenced, industries. Exports are exports are exports. But France, unlike, say Italy, remains poor at creating the kind of small or medium hi-tech and service companies which are rich in new jobs; hence, in part, the stubbornly high levels of unemployment.

The philosophical underpinning to Blairism (but also to the successful social-democratic models in the Netherlands or Denmark) is that you must create wealth before you spend it. The creation of wealth is seen as a matter for individuals and businesses; the spending of wealth, a matter for individuals but also, more than Thatcherism would accept, the state. Blairism, if it delivers its promises, believes in the private creation of wealth but public investment in health and education and training. It believes in public service, although not much in public ownership.

The relative clarity of this vision is possible because Thatcherism went before. France has not been through this revolution, a revolution of attitudes as much as structures. France - and not just the French left - is still persuaded that the state can create wealth or should be part of that process, hence the Socialists' promise to create more state employment and tinker with working hours. There are superficial similarities between Gordon Brown's welfare-to-work programme and Mr Jospin's new-jobs-for-youth. But the British programme is about training; the French programme about creating from thin air new state, or state-subsidised jobs.

In truth, Jospin and some of his ministers do sometimes think more like Blair and his team than the conventional wisdom allows. Jospin in his first speech to parliament made a distinction between public ownership and public service. It now seems inevitable that, partly for budgetary reasons, some degree of privatisation will continue, whatever his Communist junior partners in government might think. Jospin also gave notice that welfare for the middle classes may have to come to an end (aka the abolition of university grants in Britain). The quarter-completed reform of the public health service may be abandoned in favour of something much more radical, perhaps more private insurance for the relatively well-off. Again budgetary need could lead the way. At the same time, the older thinking persists. The plan to reduce working hours is dear to the Communists, and some Socialists, and will be pursued.

Mr Jospin, in other words, is constructing Jospinisme as he goes along. If he is lucky with the economy over the next couple of years, he could re-set his own examination paper and attempt a more ambitious reform. Will he? It is not to be excluded. But he does not have the political freedom of action of New Labour. The similarities between Jospin and Blair may be greater than commentators imagine. The greatest difference, however, is in the countries they have to govern, and that is a big difference.