A speech that shows just how much New Labour dominates the landscape

It mashed the critics and did what all hegemonic ideas do: it colonised common sense. This is how the world is, said Mr Blair

Madison Square Gardens – that's what it looked like. Surrounded by his audience, Tony Blair gave a keynote speech that had been spun in advance as being politically pugilistic. Maybe. It was certainly a strange and effective one-man boxing match, in which the Prime Minister, lonely in the middle, danced around landing a succession of small jabs on invisible opponents. In the centre, the light heavyweight champion of the world and in the right and left corners ... nobody. Nobody at all.

This was the speech that proved that Mr Blair, Mr Brown and their immediate colleagues now dominate politics in a way that no-one has done since the high days of Maggie, and probably not even then. This was the speech of the only act in town. It took the proposition that there was now a growing and more coherent opposition to the Blairite social-democratic agenda, and mashed it, reducing this supposedly nascent force to nothing more than a series of complaints. It eschewed the overblown and windy rhetoric of past addresses, and always linked the specific to the general. Mobilising a strategically placed, mugged 92-year-old here and a struggling but hopeful Mozambican doctor there, the performance was consummate. Above all, it did what all hegemonic ideas do: it colonised common sense. This is how the world is, said Mr Blair. It's interdependent, it requires partnerships, it needs modernisation, choices are tough, eggs is eggs, you know it and I know it. And what we now need to do is not to slow down, but go faster. You turn if you want to, this baby's not for turning. And the conference that was supposed to be the most difficult that Mr Blair has yet faced stood up and cheered him.

Immediately after the ovation had been brought to an end by Mr Blair's departure from the platform (he even decides how long his applause is!), a BBC News correspondent told his anchor back in the studio that although the speech had been well received, in fact Mr Blair had said little that was detailed or new. This analysis, I think, missed the significance of the speech by a mile. In the teeth of the PFI defeats, the PM threw a chocolatey treat to the public sector unions in the shape of promising that there would be no two-tier work forces as a result of private-public partnerships, and then promised that he would turn their world upside down.

He had learned, he told delegates, that bold is best, and unpopular is usually right. So, old one-size-fits-all welfare is over, monolithic provision must depart, and we will remake the public services.

This means not much or it means something, and if it means something then it is big. If we are moving to the "post-comprehensive era" in schools, with enhanced choice for everyone (and here one really does wait to see the detail), and with successful schools growing and – occasionally – taking over less successful ones, then this is the biggest change in school organisation in 30 years. It also suggests reforms that the Conservative Party toyed with, but which they abandoned as being too radical, preferring in the end to play with the idea of returning to the grammar/secondary modern split.

Then there's the desire to move to an NHS in which (and here Blair re-used the old Thatcher quote in a startling act of appropriation and subversion) you can see the doctor of your choice at the time of your choice. Again, central to this is the notion of leading hospitals gaining significant autonomy. No wonder that the part of the PM's reform package that got the loudest cheers was when he promised a new start to a British agriculture that gets far more subsidy than the rest of British industry put together. They must have been glad to hear someone else get it in the neck.

Reformed and enhanced public services, almost entirely paid for by the tax-payer, are the only big idea around. There is, for the time being, little sign of a revival of an ideological anti-statism in Britain, and the government has moved to rope off other areas in which an alternative agenda could coalesce. Areas like crime.

And it is here that the strengths and dangers of the Blair approach are most apparent. In a technically brilliant section of the speech, the PM argued that we had the worst of all worlds in the legal system, with too much prison but not enough conviction. In other words, those who do get punished get punished inappropriately, but vast numbers of the guilty get away with it. This is exactly what I think. It is, 10 to one, exactly what you think ,too. It is half of what even the average Mail reader thinks.

But when Mr Blair promised to "rebalance the system emphatically", he did not allow that this rebalancing was fraught with a significant danger. If the idea is to tip the balance away from offenders and towards victims, then – other things being equal – we will pay a price in an increased number of convictions of the innocent, and in the amount of casual police harassment that the average citizen will face. And one can agree with him that there should be a more effective asylum system, whilst wishing that ministers would exhibit a greater sensitivity to those who, for whatever reason, have left their own homes and seek to live with us.

This last point is important. It is important for what might be called the soul of the Labour Party. For the first time in my lifetime we have an internationalist as Prime Minister (although Edward Heath has a claim too). This is an enormous advance and it puzzles me that those within Labour who call for a "re-enchantment" of politics cannot see what a big thing it is. Unlike some of the Washington hawks, Mr Blair restated that the coalition for peace (and he included climate change and fighting the Aids pandemic in the objectives of peace) needed as much attention and organisation as any coalition for war or any quest for free trade. I cannot imagine this being said by Mrs Thatcher or even Jim Callaghan, let alone Iain Duncan Smith.

The Mozambican doctor that Mr Blair had met in Beira (while most of the press had castigated him for swanning about abroad) had, he said, expressed hope in conditions of despair. "Britain is our hope," the doctor had whispered, both poignantly and (from the point of view of the speech) conveniently. No wonder Clare Short is not in a hurry to leave the government!

The problem is that people find it hard to accept that Mr Blair is really intent on changing the world when he refuses to lay into George Bush and other new order Luddites. You can, however, recognise a strategy here designed – if possible – to ease the reluctant Americans into arrangements that they certainly cannot be shouted into. But it is very difficult, Prime Minister, to buy the full Tony shop, when our officials are still trying to persuade these same Africans to buy our surplus military equipment. We are indeed an interdependent world and, consequently, one in which moral example can have some effect. The arms trade now really would be a proper opponent for the lonely boxer.

David.Aaronovitch@btinternet.com