More than ever, New Labour must listen to the voice of the people

'If governments think too much about saving money, important policy objectives can be lost'

For me politics is and always will be about people - helping people to improve their lives, building a better society. We all know what we want - more good-quality jobs, less crime, stronger communities, better education, health, housing and quality of life. But with the centralised "nanny" state gone and the Thatcherite explosion of division and inequality almost universally rejected, there is less certainty around today than in the past about how to get there.

For me politics is and always will be about people - helping people to improve their lives, building a better society. We all know what we want - more good-quality jobs, less crime, stronger communities, better education, health, housing and quality of life. But with the centralised "nanny" state gone and the Thatcherite explosion of division and inequality almost universally rejected, there is less certainty around today than in the past about how to get there.

Against this political backdrop, there are a number of long-term trends or themes that I see emerging.

The first is greater democracy. Big structural changes have already happened - especially with the Scottish Parliament and Welsh Assembly. Public pressure for a greater say at regional level and the move to elected mayors in our major cities will mean involvement in political decisions taking a larger part in peoples' lives. And that must mean people become more politically and socially responsible.

Increasing diversity in our society is invigorating in many ways but it does mean that we all need to commit effort to it to make it work. And it is the job of government to help make that process move forward smoothly.

To that end, we need to create a greater sense of involvement, empowerment, and belonging to all human activities. We need to reduce the barriers to the involvement of everyone in society. We are making progress. One of the worst remnants of the undemocratic past - the House of Lords - is going. One of Labour's important challenges now is to establish its successor.

Globalisation is adding to the forces that are alienating people from politics, particularly national politics. This is a challenge that cannot be met by 20th-century politics.

There is much to do at the international level to meet specific issues surrounding globalisation. But at the same time, in order to make politics more relevant to people's lives we must devolve power, empowering communities. We need to apply to our regions and local councils the European notion of subsidiarity; whereby each level of government focuses on what cannot be devolved further.

I have long felt that there is a case for a written constitution in this country - to more clearly define the roles and responsibilities of different tiers of government. While this is not on the political agenda at the moment, I personally believe it may help people further down the line to understand better what different parts of their government do.

The incorporation of the European Convention on Human Rights into UK law has been another landmark change brought about by this Government. It is our Bill of Rights and we should be proud of it.

The second trend that needs thinking about is the role of the modern state - and not simply about big versus small government.

If governments think too much about saving money before achieving policy goals or if the provision of public services is contracted out for dogmatic reasons alone, important policy objectives can be lost in the process. Under the Tories, years were spent unsuccessfully trying to cut government commitments wherever possible without any overall view of how counter-productive that could be, how one cut could lead to a problem with demands on government expenditure elsewhere. This common sense escaped the Thatcherites.

There isn't any quick fix here. But more joined-up government will help. And there we're beginning to make progress. Looking at how budgets cut across departments as part of each spending round is an innovation to help address this. Pooled budgets may be another. If effort and determination is applied over time, institutional change will come - crucial if central government and the Civil Service is to meet the challenges.

Historically, the departmental structure of government has concentrated on the budget process with departments spending money in this financial year as a justification in part for obtaining next year's money. The three-year spending review process, which this Government has introduced, is helping to improve the situation, but more needs to be done.

Globalisation and the astonishing growth of new technology is a major challenge for governments across the world - and my third theme. Reaction to globalisation can be split into two camps: those who embrace change, who welcome the consumer and other benefits expected to flow from greater trade and interaction of ideas: and those who would argue that negative effects on the environment, on jobs, on social exclusion (those who cannot afford computer access), on cultural dumbing down, outweighs the other advantages.

There does not seem to be a lot of noise coming from the middle ground, and that is worrying. I share the optimism and sense of excitement surrounding the new technology and globalisation, there are clearly both social and economic benefits. But I also see these benefits are far from unambiguous and automatic. The problems of dispossessed communities or whole countries are deeply worrying.

We need to start now to make sure that the basic technology is obtainable at a very low price to the more deprived and isolated rural communities. It should be a utility like water and electricity. This will take planning and needs funding jointly between government and the private sector. The Government is making good progress towards our targets of 1,000 new computer learning centres and 100,000 computers on loan from local libraries by the end of 2001. All part of the biggest public education programme ever attempted by a government.

Technological changes are just part of a range of complex, international issues which will require a lot of patience and hard work to resolve. One thing is certain: trying to stop or disrupt international negotiations - like the WTO - is not the answer.

Countries need to work more closely together. But the impression that politicians control the global market is a false one. They do not. We need to be wary of pre-guessing markets. We can work with market forces to take advantage of them. But what is not possible to stop is the bigger process of globalisation itself. Therefore we will have to live with greater risks and volatility, but with greater co-operation between national states we should be able to mitigate some of these forces.

Managing the effects of global change within less developed countries will be an integral part of this. Strong, stable and independent countries are better equipped to cope with change. But in parts of the world where political uncertainty, social chaos, war and poverty reign, the international financial system, the IMF and a multilateral development plan are needed the most.

If we accept that we cannot turn back globalisation and have to live with the volatile world that goes with it, then we need to think about uncertainty a little more. This is my fourth theme - reflecting renewed political interest in risk and how societies deal with it. But most of this has been at a very crude level, merely highlighting the existence of risk. Economists have been defining risk as a quantifiable uncertainty, and hence insurable. But the interesting issue is that some risk is beyond that thinking, and therefore becomes a concern of government and not just the market.

How to marry both full employment and social security protection for those unable to work is a challenge for all governments. Full employment is one of the ends of the political and of the economic process. Work brings self worth and fulfilment, activity and social contact. Better jobs bring more of these things; that is why we want not just full employment but good quality jobs. The way the Government is organised should be geared to delivering this; that means changing the way government works.

Financing poorer areas, encouraging enterprise initiatives and clusters of competitive industries, building infrastructure, and training are important steps in the right direction. Nobody in government is in the business of picking winners, as in previous governments, but we are in the business of creating the right conditions for good quality jobs to be created, and making sure competitive industries are not arbitrarily disadvantaged. We must keep going along the road we are on, be creative, take risks and be ambitious.

We are in the process of acknowledging the changing structures of work and the family to find policies that achieve a fair safety net while encouraging the work ethic and self reliance. We have started in the area of welfare reform acknowledging that social security and employment policies are linked. Which is why reform of the benefits system must happen in parallel with the establishment of the minimum wage, working family tax credits and childcare policies.

The labour market is not like any other market. Labour is a social need, an end in itself as well as a source of income. History is littered with examples of failed policies to square the seemingly contradictory goals of encouraging the work ethic and avoiding poverty. To Tories there is no alternative to poverty other than incentivising the work-force, no avoidance of policies for full employment and social security eroding the work ethic. I strongly disagree with this. Social insurance can be provided successfully but requires social norms to prevent this causing a corrosion of the work ethic. And policies have changed through history as social norms have changed. We need to think about jobs and education as separate but linked goals. And like jobs, education should be seen as an end in itself.

This brings me on to my final theme - education and in particular education about politics. Of course, education should fit in with life choices. A life time of learning - where people change jobs, retrain, achieve flexibility of employment and take greater control of their own lives - is an exciting prospect.

But I also think we shouldn't forgot the function that education has in giving us common values and in creating citizens. We have learnt the enormous social benefits of pre-school education in reducing social costs later in life and improving the effectiveness of subsequent education.

We need to think much more about preparing children for later life, we need to think about the social environments of schools, the participation of parents and the motivation of teachers, not just the mechanics of how to transfer useful skills and knowledge.

We also need to think more about how we educate people in how to change and manage their lives. It is good to give people more control, but we have to deal simultaneously with any potential down sides.

For example, greater use of public referenda via the internet is on the way. Maybe not in my life time, but we ought to start thinking about it now. We need to avoid the risk of politics being captured by market machines for corporate gain, manipulating public opinion and corrupting politics. We must be realistic about how politics is taught now and strive to improve it so that we can make use of technological advances to open up decision making. That can only happen if political thinking and ideas are better discussed and politics becomes more relevant to peoples' lives.

Much has been written about the crisis in participation in politics. Talk of crisis is an exaggeration, but there are changes afoot. Politicians around the world have to address the fall in public interest, trust and involvement. How successful they are will depend, I predict, a lot on how they address some of the central challenges I have outlined.